Delhi District Court
Central Bureau Of Investigation vs Rajiv Jain on 16 November, 2011
1
IN THE COURT OF MS. BIMLA KUMARI
ADDL. SESSIONS JUDGE (NORTH):DELHI
Crl. Appeal No.21/10
I.D. No. 02401R 0210302010
IN THE MATTER OF
Central Bureau of Investigation ... Appellant
Versus
1. Rajiv Jain
Son of Prem Chand Jain
R/o 890, Chawri Bazar
Delhi.
2. R.K. Goyal
Son of late Lala Ram Goyal
R/o 260, Bank Enclave, Laxmi Nagar,
Delhi. .......Respondents
Date of Institution:19.5.10
Date of reserving judgment:5.10.11, 19.10.11 & 9.11.11
Date of pronouncement:16.11.11
JUDGMENT
By the present order, I shall dispose of the appeal filed by the CBI U/S 378 Cr.P.C against the impugned judgment dated 14.1.10 passed by C.M.M, Delhi in Case No.RC7(E)/2000/EOW1/DLI. Vide the said judgment, ld. Trial Court acquitted the respondent/accused R.K. Goel Crl. Appeal No.21/10 1/30 2 in respect of offence U/S 477 A IPC. Respondents/accused Rajiv Jain and R.K. Goel were also acquitted of the offence U/S 120B IPC. Respondent/accused Rajiv Jain was acquitted of the offence U/S 471 and 465 IPC.
2 Ld. Director of Prosecution, CBI and the Ministry of Law and Justice, Department of Legal Affairs agreed with the findings of Ld. Trial Court, so far as acquittal of respondents in respect of offences U/S 477A, 465 & 471 IPC was concerned. The agencies have opined that the order of acquittal of respondents by Ld. Trial Court under sections 120B & 420 IPC was erroneous. Since, Central Govt. has directed the CBI to file an appeal against the order of acquittal, so far as the order, related to offences U/S 120B & 420 IPC only, I am of the considered view that appeal filed by the CBI against the respondents in respect of offence U/S 477A, 465 and 471 is not maintainable and the present appeal filed by the CBI is being entertained against the respondents, in respect of the offences U/S 120B & 420 IPC only.
3 Brief facts giving rise to the filing of the present appeal are that that respondent Rajiv Jain floated a proprietorship company under the name and style of M/s Arihant Enterprises at Loha Mandi, Narayana, New Delhi showing his employee Vijay Jain as the proprietor of the said company. On 12.3.91 current account No.C172 was opened in Citizen Crl. Appeal No.21/10 2/30 3 Cooperative Bank Ltd. (hereinafter referred to as bank), Paharganj, New Delhi in the name of M/s Arihant Enterprises. The said account was introduced by Rajiv Jain himself as he was having current account No. 106 with the said bank in the name of his other company M/s Jain Steels, at X14, Loha Mandi, Narayana, New Delhi. Rajiv Jain obtained a letter of authority dated 13.7.92 from Vijay Jain in his favour to operate the account No.C172 of M/s Arihant Enterprises. On the basis of that authority letter dated 13.7.92 the respondent Rajiv Jain issued following cheques from his own concerns namely, M/s Shipra Steels Corporation and M/s Jain Steels and deposited the cheques for crediting into the same in the account of M/s Arihant Enterprises.
Sl.No. Cheque No. Date of Amount of the Account from which
issued of the cheques the cheques issued
cheques and drawee bank
1 832837 9.11.92 Rs.3,00,000 M/s Shipra Steels
Corpn., Current A/C
No.32797
Oriental Bank of
Commerce,
Connaught Place,
New Delhi
Crl. Appeal No.21/10 3/30
4
2 777051 11.11.92 Rs.2,50,000 M/s Jain Steels
Current A/c No.921
The Jammu &
Kashmir Bank Ltd..
Narayana, New Delhi.
3 777052 11.11.92 Rs.2,50,000 M/s Jain Steels
Current A/C No.921
The Jammu &
Kashmir Bank Ltd.
Naryana, New Delhi.
4 965949 31.10.92 3,50,000/ A/C No.32797 of M/s
Shipra Steels
Corporation drawn on
OBC Connaught
Place.
4 Respondent Rajiv Jain is the proprietor of M/s shipra Steels
Corporation and M/s Jain Steels, from where the abovesaid cheques were issued. The case of CBI was basically for the first three cheques and the fourth cheque i.e 965949 dated 31.10.92 for Rs.3,50,000/ was not traceable. It was the case of the CBI that cheque No. 832837 dated 9.11.92 for Rs.3,00,000/ Ex.PW3/D (D22)was deposited in the bank with payinslip Ex.PW3/A (D5) for crediting the amount in the account of M/s Arihant Enterprises. The Cheque No. 777051 dated 11.11.92 for Rs. Crl. Appeal No.21/10 4/30 5 2,50,000/ Ex.PW3/H(D8) and Cheque No.777052 dated 11.11.92 for Rs. 2,50,000/ Ex.PW3/I (D9)were deposited by payinslip Ex.PW3/C(D6). On two payinslips Ex.PW3/A(D5) and Ex.PW3/C(D6) endorsements (Ex.PW1/D1 and Ex.PW1/D2) were made stating the cheques as "Purchase DD/P.O". These endorsements were initialed by respondent R.K. Goel, the then Chief Executive Officer of the bank. Thus, the three cheques were purchased/treated as 'Demand Drafts'/'Pay Orders' instead of cheques and payments of the three cheques were released to M/s Arihant Enterprises, without awaiting for clearance of cheques from the accounts of drawing companies and amounts were also withdrawn by Rajeev Jain, being an authorised person for M/s Arihant Enterprises. However, when the cheques were presented for clearance, they were returned unpaid by the drawee bank on account of insufficient funds. Since, the cheques were purchased as 'Pay Orders', all the entries in the relevant registers of the bank, were also made treating the cheques as pay orders. After completion of investigation, chargesheet was filed by the CBI against respondents Rajiv Jain, R.K. Goel and J.N. Aggarwal (Dead), Devender (Dead) and Vijay Jain (Dead).
5 Ld. Trial Court framed the charge against the respondents R.K. Goel, Rajiv Jain and coaccused J.N. Aggarwal(dead) in respect of offence U/S 120B IPC. Respondents Rajiv Jain, R.K. Goel and co Crl. Appeal No.21/10 5/30 6 accused Vijay Jain and J.N. Aggarwal were also charged in respect of offence U/S 420 IPC. Respondent Rajiv Jain had also been charged in respect of offences U/S 465 and471 IPC. Respondent R.K. Goel was charged for the commission of offence U/S 477A IPC. All the accused pleaded not guilty to the said charge and claimed trial. 6 The grounds taken by the appellant in the appeal are that the ld. Trial Court failed to appreciate that since, the conspiracy is always hatched in the secrecy, the prosecution need not necessarily prove that the perpetrators expressly agreed to do or caused to be done the illegal act and such agreement may be proved only by necessary implication; that Ld. Trial Court erred in ignoring the established circumstances and passed the judgment on the basis of cross examination of PW1, Moti Lal Bansal and PW3 Azad Singh, who had deposed that they never heard and saw accused persons namely, Rajiv Jain R.K. Goel and J.N. Aggarwal talking/discussing about the purchase of the cheques in question; that ld. Trial court has failed to appreciate the evidence, led by prosecution, which included the resolutions also, passed by the Board at the relevant time; that as per the resolutions, the power, to purchase/discount the cheques, to grant clean overdraft facility, was within the domain of Bank's board; that the resolutions passed by the bank's board were binding on the employees and officers; that ld. Trial court has Crl. Appeal No.21/10 6/30 7 failed to appreciate that there was material on record to conclude that the category of instruments, from cheque to pay orders, was changed by accused persons on the reverse of the payinslips by mentioning the cheques as demand drafts; that ld. Trial court failed to appreciate that there was evidence to establish that payinslips(Ex.PW3/A & Ex.PW3/C)related to cheques bearing No.832837 dt.9.11.92, 777051 dated 11.11.92 and 777052 dated 11.11.92 respectively; that the court has erred in concluding that the witnesses PW1, Moti Lal Bansal, PW3 Azad Singh and PW6 P.K. Khanna have admitted that the cheques in question do not correlate with the Payinslip in question; that ld. Trial court has failed to appreciate that PW3 Azad Singh, PW4 Nancy Kaul, officials of J&K Bank, Naraina Branch, New Delhi have deposed that their respective banks had received cheques and not "pay orders" form M/s Citizen Cooperative Bank; that ld. Trial court has failed to appreciate that the drafts/pay orders were not sent for clearance; that ld. Trial court failed to appreciate that there was evidence to establish that the cheques were issued by accused Rajiv Jain fraduently, as he was fully aware that sufficient money was not available in the accounts; that there was evidence that accused Rajiv Jain used the cheques as Demand Drafts/Pay orders; that the court has failed to appreciate that the statement of account of M/s Arihant Enterprises proved that the Crl. Appeal No.21/10 7/30 8 discounted amounts were transferred and were withdrawn by accused Rajiv Jain; That there was evidence on record that accused R.K. Goyal initialed the payinslips with intent to defraud the bank and respondent R.K. Goel also initialed the Cheques Purchase Register(Ex.PW1/A1 to PW1/A5).
7 I have heard arguments from ld. Spl. PP for CBI and Ld. Counsel for respondents. I have perused the trial court record as well as appeal file.
8 To prove its case, CBI has examined six witnesses. They were Moti Lal Bansal (PW1), Sh. S.K. Gupta (PW2), Sh. Azad Singh (PW3), Ms. Nancy Kaul (PW4), Sh. Kaushal Talwar (PW5) and Sh. P.K. Khanna (PW6).
9 PW2 S.K. Gupta had expired before his examinationinchief was complete. Therefore, testimony of PW2 was not considered by Ld. Trial Court.
10 Statements of respondent R.K. Goel, Rajiv Jain and co accused J.N. Aggarwal were recorded.
11 Respondent Rajiv Jain has examined Kapil Vashist in his defence. Coaccused J.N. Aggarwal did not examine any witness. Similarly, R.K. Goyal did not examine any witness in his defence. 12 During the pendency of case, accused J.N. Aggarwal expired Crl. Appeal No.21/10 8/30 9 and proceedings against him were abated on 11.2.09. 13 After conclusion of trial, ld. Trial court acquitted the respondents Rajiv Jain and R.K. Goel in respect of the offences they were charged with by holding that prosecution failed to prove the existence of any criminal conspiracy between the accused persons as prosecution was not able to prove the existence of an agreement between the respondents to do an illegal act or an act by illegal mean. Ld. Trial Court was also of the view that allegations of cheating were also not established as cheques in question were not corelating with the payinslips. 14 In S.Ganesan V. Rama Raghu Raman & Others, (2011)1 SCC (Cri)607 it has been observed by Hon'ble Supreme Court that It is a well established principle of law, consistently reiterated and followed by this Court that while dealing with a judgment of acquittal, an appellate court must consider the entire evidence on record, so as to arrive at a finding as to whether the views of the trial court were perverse or otherwise unsustainable. Even though the appellate court is entitled to consider, whether in arriving at a finding of fact, the trial court had placed the burden of proof incorrectly or failed to take into consideration any admissible evidence and/or had taken into consideration evidence brought on record contrary to law; the appellate court should not ordinarily set aside a judgment of acquittal in a case where two views are possible, though the view of the appellate court may be more probable one. The trial court which has the benefit of watching the demeanour of the witnesses is the best judge of the credibility of the witnesses.
Crl. Appeal No.21/10 9/30 10 15 In Sidhartha Vashisht @ Manu Sharma V. State (NCT of Delhi), (2010)6 SCC 1, it has been observed by Hon'nle Supreme Court that following principles have to be kept in mind by the appellate court while dealing with appeals, particularly, against an order of acquittal:
(i) There is no limitation on the part of the appellate court to review the evidence upon which the order of acquittal is founded and to come to its own conclusion.
(ii) The appellate court can also review the trial court's conclusion with respect to both facts and law.
(iii) While dealing with the appeal preferred by the State, it is the duty of the appellate court to marshal the entire evidence on record any by giving cogent and adequate reasons set aside the judgment of acquittal.
(iv)An order of acquittal is to be interfered with only when there are "compelling and substantial reasons"for doing so. If the order is "clearly unreasonable", it is a compelling reason for interference.
(v) When the trial court has ignored the evidence or misread the material evidence or has ignored material documents like dying declaration/report of ballistic experts etc. the appellate court is competent to reverse the decision of the trial court depending on the materials placed.
16 Now, the question that arises for consideration is whether the view of Ld. Trial Court was perverse and unsustainable and whether ld. Trial Court has ignored the evidence or misread the material evidence or has ignored material documents.
Crl. Appeal No.21/10 10/30 11 17 Section 15 of the Evidence Act is reproduced here for ready reference: When there is a question whether an act was accidental or intentional, or done with a particular knowledge or intention the fact that such act formed part of a series of similar occurrences, in each of which the person doing the act was concerned, is relevant.
Illustrations:
(a) A is accused of burning down his house in order to obtain money for which it is insured.
The facts that A lived in several houses successively, each of which he insured, in each of which a fire occurred, and after each of which fires A received payment from a different insurance office, are relevant, as tending to show that the fires were not accidental.
(b) A is employed to receive money from the debtors of B. It is A's duty to make entries in a book showing the amounts received by him. He makes an entry showing that on a particular occasion he received less than he really did receive.
The question is, whether this false entry was accidental or intentional.
The facts that other entries made by A in the same book are false, and that the false entry is in each case in favour of A, are relevant.
(c) A is accused of fraudulently delivering to B a counterfeit rupee.
The question is, whether the delivery of the rupee was accidental.
The facts that, soon before or soon after the delivery to B, A delivered counterfeit rupees to C,D and E are relevant, as showing that the delivery to B was not accidental.
Crl. Appeal No.21/10 11/30 12 18 In the present case, PW1 Moti Lal Bansal has deposed that during the period 199192, the Chief Executive Officer of the bank had no power to purchase cheques and to grant clean over draft facility. He has only power to grant clean over draft facility only against pay orders/drafts as per board directions. After going through the Cheque Referred Register Ex.PW1/A (consisting of pages 34 to 38 Ex.PW1/A1 to 5). PW1 has deposed that during the relevant period, the Chief Executive Officer discounted cheques stating them as Pay Orders/drafts in favour of M/s Arihant Enterprises. The discounted cheques were passed by R.K. Goel, Chief Executive Officer, who initialed against relevant entries . He has identified the signatures of R.K. Goel the then Chief Executive Officer in the relevant entries as he was working in the bank from November 1989 to Feb.92 as CEO of the bank. He has further deposed that R.K. Goel was Incharge of the Current Account Section, including the banking business of the branch. Only the Board of Director had the power to release the clean over draft facility. R.K. Goel has exceeded in power and abused his official position to facilitate Vijay Jain by releasing the clean over draft facilities against the cheques instead of Pay order/draft. In the board meeting, which was fixed for 13.11.91, the matter of irregularities about unlawfully releasing the clean over draft facilities in the Crl. Appeal No.21/10 12/30 13 account of M/s Arihant Enterprises was discussed. The extracts of 'Proceedings Register' of the branch are Ex.PW1/C1 to C8. He has further deposed that Board of Directors by passing a resolution, had constituted a committee, consisting of himself, Sh. S.K. Gupta and Sushil Gupta, the then ViceChairman, to find out irregularities in connection with this case. After going through the Cheque Referral Register Ex.PW1/A1 to A5, he has deposed that cheques No. 832828 and 832829 drawn on OBC/CP have been shown as pay orders, in the aforesaid register, although they are cheques. Cheuqes no. 964805 and 964806 in favour of M/s Arihant Enterprises drawn on OBC/Connaught Place have also been shown as pay orders instead of cheques. They were purchased by Sh. R.K. Goel stating them as Pay order/drafts instead of cheques. Cheque No. 964619 and 964620, drawn on OBC, Connaught Place have also been shown as Pay orders instead of Cheques. Cheque No.964805, 964806,310209, 965949, 965650, 966104, 966105, 967149, 967150, 967205, 967206, 01038, 601038687, 290281, 290380, 3819770515253.92090 all the aforesaid cheques fraudulently have been shown as pay orders.
19 He has also deposed that it was the duty of R.K. Goel, Chief Executive Officer to verify the category of instruments, whether they were pay order/draft or cheques. He cannot tell the handwriting Crl. Appeal No.21/10 13/30 14 of the person, who has filled in Payinslilp dated 31.10.92 but the same has been approved by Mr. R.K. Goel at points A and B on Ex.PW1/D1 to 4. All these exhibited documents bear signature of R.K. Goel, CEO as passing officer. These exhibited documents have been shown as pay orders instead of cheques. Near about Rs.18 lacs has been cheated in the account of M/s Arihant Enterprises by Vijay Jain to the bank.
20 In crossexamination by ld. Counsel for accused Rajiv Jain, PW1 has deposed that M/s Arihant Enterpises was a member of the bank. Vijay Jain was the member of the bank by way of Arihant Enterprises. When an application is made by a member, for overdraft facility, his application is put up before the board, through loan committee, and if it is approved then only the overdraft facility can be granted. He cannot say as to when the overdraft facility was granted or not to Arihant Enterprises or Vijay Jain. Normally banking transactions were within the power of the CEO. Overdraft facility could be granted after approval of the board. Davender was also an employee at their bank. He was clearing clerk. He has deposed that bank charges the discount on Hundis, Drafts, Pay orders and Cheques etc. discounted by bank. He (PW1) has deposed that he cannot say as to in whose handwriting the endorsement Ex.PW1/D1 on Ex.PW3/A is. It is possible Crl. Appeal No.21/10 14/30 15 that they are in the handwriting of Devender Singh. He deposed that on the front portion of Payinslip Ex.PW3/A, cheque number, which was filed in the payinslip is not mentioned, as there is no column for the same in the format and cheque No. is mentioned on the backside. On the back of payinslip Ex.PW3/A Pay Order numbers are mentioned but cheque numbers are not given. He cannot say as to in whose handwriting the endorsement Ex.PW1/D2 on Ex.PW3/C is. It might be in the handwriting of Devender Singh, (the deceased clerk). Same is his reply to Payinslip Ex.PW3/A. He cannot say that the endorsement on the back of payin slips PW3/A and PW3/C are in the handwriting of Rajiv Jain or not. He cannot say in whose handwriting these are. The Resolution No.7 dt. 31.7.92 was passed by the Board Of Directors and Sh. S.K. Aggarwal was authorised to keep a check on such irregularities and report to the bank promptly.
21 In crossexamination by ld. Counsel for accused R.K. Goel, PW1 has further deposed that he had stated before the CBI that all the three said cheques were deposited under two Payinslips and instead of showing proceeds of these cheques, Rajiv Jain in collusion with R.K. Goyal, deliberately showed these three cheques as pay orders to enable to purchase without the approval of the board. He has seen the Banks Purchase Register (D26)Ex.PW1/A1 to A5 but cannot tell that Crl. Appeal No.21/10 15/30 16 in whose handwriting and under whose signature the entries therein have been made. He has volunteered that these entries must have been made by different employees on different dates and it was for the C.E.O to rotate and instruct the staff to do a particular assignment/duty. A cheque filed in the bank, with the Payinslip was required to be sanctioned by the CEO for purchase/sanction and thereafter the entry of the transaction, if approved by the CEO was required to be made in the 'Purchase Register'. There used to be one and same format of Pay inslip to deposit cheques for clearance and purchase etc. in the bank. He has denied that J.N. Aggarwal and R.K. Goel have not signed the Payinslip in question and the Purchase Register. The bank had treated the transactions of the purchase of cheques as pay orders as irregularities.
22 PW3 Azad Singh has deposed that he is working in Ctizen Cooperative Bank. The Chief Executive officer is the Incharge of day to day business of the bank. During the period 1992, Chief Executive Officer was also incharge of day to day business of the bank. During 199192 Sh. R.K. Goel was Incharge and Mr. J.N. Aggarwal was posted as Director Incharge/Treasurer. There was no provision to allow clean over draft facility to current account holders. During that period there was also no provision to prove cheque purchase/cleanover draft facility Crl. Appeal No.21/10 16/30 17 against cheque. As per Board resolution, which has been passed by the board of directors, no person, other than the director incharge had power to provide clean overdraft facility. After going through the Cheque Purchase Register Ex.PW1/A1 to 5, he has deposed that it is certified by him on every page as per banker's evidence. He is carrying the original cheque purchase register with him. He has compared the Cheque Purchase Register entries mentioned in Ex.PW1/A1 with the original and deposed that the same are true and correct as per official record. He has also identified the signatures of R.K. Goel, certifying the entries, at every column against every amount. It indicates that clean over draft facility has been frequently granted to M/s Arihant Enterprises in current account against cheques. Entries are reflected on encircled portion of Ex.PW1/A1 to Ex.PW1/A5, which were against pay orders. He has also identified the signatures of R.K. Goel at point A on Ex.PW3/A and Ex.PW3/B. R.K. Goel has signed as 'passing officer'. He has also identified the signature of R.K. Goel at point B on Ex.PW3/A and Ex.PW3/B as he 'allowed' to purchase the pay order. Payinslip dated 11.11.92(Ex.PW3/C) is passed by R. K. Goel and also allowed by R.K. Goel on the request of Rajiv Jain to purchase the pay order. After seeing the back of cheque Ex.PW3/D, PW3 has deposed that it was mentioned as pay order in the Crl. Appeal No.21/10 17/30 18 Payinslip. Ex.PW1/D1 as well as in the Cheque Purchase Rregister . On being shown cheque no.777051, dt.11.11.92, Ex.PW3/H issued by Rajiv Jain in favour of M/s Arihant Enterprises and cheque no.777052 dt. 11.11.92, Ex.PW3/I issued by Rajiv Jain in favour of Arihant Enterprises both amounting to Rs.2,50,000/ each, PW3 has deposed that both cheques were bounced, for which cheque return memo is enclosed. On document Ex.PW1/A4 at Sl.No.8&9 dated 11.11.92, the entries in this effect are reflected. He has further deposed that cheques Ex.PW3/H & I were deposited on 11.11.92 at Citizen Coperative Bank with deposit slip Ex.PW3/C for the clearance in the account of Arihant Enterprises. Both the cheques were issued by Jain Steels in favour of Arihant Enterprises. Both cheques are related to J&K Bank, Naraina, New Delhi. Another cheque Ex.PW3/D issued by Shipra Steel Corpn. was also deposited in their bank for clearance in the account of Arihant Enterprises. This cheque related to Oriental Bank of Commerce. The document D22 is the return memo of Oriental Bank of Commerce with reference to cheque Ex.PW3/D. All cheques, mentioned above, were returned to the bank without clearance. He has deposed that he had given all the certified copies, as per record, and has brought the original record. 23 In crossexamination by ld. Counsel for accused R.K. Goel, PW3 has clarified that there was no cheque purchasing facility but Crl. Appeal No.21/10 18/30 19 there was provision for the purchase of draft and pay orders. His statement that no person other than Director Incharge had power to provide clean over facility, is not correct in respect of the cheques. Draft is issued against security i.e deposit of money and purchase of cheque, is subject to realization of cheque. After seeing Ex.PW1/A1 to A4 (D26), he(PW3) has deposed that the detailed entries in these exhibits are in the handwriting of Sh. Davinder Kumar @ Rajinder Kumar, who has since died. The entries in the Purchase Register D26, is firstly made by the clerk concerned and then entries are initialed by the officers. After going through the endorsement Ex.PW1/D1 on D5 (also Ex.PW3/A) PW3 has deposed that encircled portion is 'D/D PO'(Demand Draft and Pay Order) is in the handwriting of Davinder Kumar @ Rajinder Kumar, who has died. On Payinslip Ex.PW3/A cheque number is not given either on the front side or on the back of it. He has volunteered that on the back of it, pay order is mentioned. Portion/Endorsement Ex.PW1/D2 "Please DD/PO'on Ex.PW3/C is in the handwriting of deceased Davinder Kumar @ Rajinder Kumar. On the front or on the back of this Payinslip, cheque numbers are not mentioned. He has no knowledge that Rajiv Jain or R.K. Goel had been in any manner whatsoever discussed about the purchase of the relevant cheques as nothing to that effect had taken place in his presence. He has deposed Crl. Appeal No.21/10 19/30 20 that in the document Ex.PW3/D3, it is mentioned that R.K. Goel CEO was authorised to purchase discount cheques of certain parties up to its certain limits, fixed separately in each case, and the resolution was got signed by R.K. Goel. He (PW3) cannot tell, up to what limit R.K. Goel was authorised to purchase/discount of cheques and of which of the parties and to what extent.
24 In crossexamination by ld. Counsel for accused Rajeev Jain. PW3 has deposed that the Bank takes security in the form of property or FDR when it releases the amount against over draft or credit faciltities. In case of release of payment to M/s Arihant Enterpries no property was mortgaged as a security by the concerned officer. Whenever, over draft facility was provided to the known members or the members, the matter used to be put up before the Board of Directors for mortgage of property. The matter related to Arihant Enterprises for grant of overdraft facility was never put up before the Board of Directors. The disputed cheques, were made as pay orders by R.K. Goel and not by Davender . The word M/s Arihant Enterprises on Ex.PW3/A was written in the handwriting of Davender Kumar and same is the reply in respect of Ex.PW3/B. The amount and description are also written in the handwriting of Davinder Kumar. Paying slip Ex.Pw3/C is also filled up in the handwriting of Sh. Davinder Kumar. Crl. Appeal No.21/10 20/30 21 Same is his reply with regard to Ex.PW1/D1.
25 PW4 Ms. Nancy Kaul has deposed that cheques No.777051 and 777052 of Rs.2.50 lacs each were returned by J & K Bank for want of funds in the current account No.921 of M/s Jain Steel vide return memo Ex.PW4/J. 26 In crossexamination by ld. Counsel for accused, PW4 has deposed that the amount mentioned cheques were received in the bank and not the demand drafts or pay orders.
27 PW5 Khushal Talwar has deposed that cheque No. 832835 for Rs.3,50,000/ Ex.PW3/J and cheque No. 832837 of Rs.3,00,000/ Ex.PW3/D were returned to Citizen Bank due to insufficient funds in the account No.3279 of 'Shipra Steel' vide cheque returning memo Mark A. Both the cheques were in the name of 'Arihant Enterprises'. 28 In crossexamination by ld. Counsel for accused he has deposed the procedure for clearance is that from the bank in which the cheque is submitted, the cheque then goes to RBI and from there it comes to the bank for clearance.
PW6 P.K. Khanna is IO of the case.
29 Section 120B IPC is reproduced here for ready reference.:
"Whoever, is a party to a criminal conspiracy to commit an offence punishable with death, imprisonment for life or rigorous imprisonment for a term of two years or upwards, shall where no Crl. Appeal No.21/10 21/30 22 express provision is made in this Code for the punishment of such a conspiracy, be punished in the same manner as if he had abetted such offence."
The term 'Criminal conspiracy has been defined under Section 120A of Indian Penal Code which is reproduced here for ready reference:
When two or more persons agree to do, or cause to be done (1)an illegal act, or (2)an act which is not illegal by illegal means, 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.
In State Vs. Nalini (1999)5 Supreme Court Cases 253 it was held by Hon'ble Supreme Court that the Offence of criminal conspiracy is committed when two or more persons agree to do or cause to be done an illegal act or legal act by illegal means. When it is a legal act by illegal means overt act is necessary. Offence of criminal conspiracy is an exception to the general law where intent alone does not constitute crime. It is intention to commit crime and joining hands with persons having the same intention. Not only the intention but there has to be agreement to carry out the object of the intention, which is an offence. The question for consideration in a case is did all the accused had the intention and did they agree that the crime be committed. It would not be enough for the offence of conspiracy when some of the accused merely entertained a wish, howsoever horrendous it may be, that offence is committed.
It was further held that Conspiracy is hatched in private or in secrecy. It is rarely possible to establish a conspiracy by direct evidence. Usually, both the existence of the conspiracy and its Crl. Appeal No.21/10 22/30 23 objects have to be inferred from the circumstances and the conduct of the accused.
It was also held that when two or more persons agree to commit a crime of conspiracy, then regardless of making or considering any plans for its commission, and despite the fact that no step is taken by any such person to carry out their common purpose, a crime is committed by each and every one, who joins in the agreement.
It was further held that a charge of conspiracy may prejudice the accused because it forces them into a joint trial and the court may consider the entire mass of evidence against every accused.
It was further held that it is the unlawful agreement and not its accomplishment, which is the gist or essence of the crime of conspiracy. Offence of criminal conspiracy is complete even though there is no agreement as to the means by which the purpose is to be accomplished. The unlawful agreement which amounts to a conspiracy need not be formal or express, but may be inherent in and inferred from the circumstances, especially declarations, act and conduct of the conspirators. The agreement need not be entered into by all the parties to it at the same time, but may be reached by successive actions evidencing their joining of the conspiracy.
30 In the present case, after going through the evidence of PWs examined by the CBI in support of its case, I am of the considered view that there was criminal conspiracy between respondent Rajiv Jain and R.K. Goel to cheat the Citizen Bank. It is significant to note that from the testimonies of PW4 & PW5 it becomes crystal clear that there was not Crl. Appeal No.21/10 23/30 24 sufficient amount in the account of M/s Shipra Steel Cooperation and Jain Steel Enterprises. Despite that the cheques were issued by the respondent Rajiv Jain in favour of M/s Arihant Enterprises. In other words, it was in the knowledge of the respondent Rajiv Jain that there was no sufficient amount in the accounts of firms namely, 'M/s Shipra Steel Corporation' and 'M/s Jain Steel' and despite that he issued the cheques in favour of the firm M/s Arihant Enterprises. These facts show that there was an dishonest intention on the part of the respondent Rajiv Jain to cheat the bank by causing wrongful loss to Bank. It is further significant to note that from the testimony of PW1 Moti Lal, it is proved on record that the respondent R.K. Goel, the then Chief Executive Officer of Bank has abused the official position by treating the cheques as pay order. Further, the bank had to issue several directions in that regard to the respondent R.K. Goel from time to time. The Bank has also passed various resolutions and constituted various committees to check the irregularities about the releasing the clean over draft in favour of M/s Arihant Enterprises. The resolution and directions in that regard are Ex.PW3/P4(resolution No.5 dt.25.5.90), Ex.PW3/P5(resolution No.10 dt.25.10.11),Ex.PW3/P6(resolution No.7 dt.28.2.92)Ex.PW3/K(resolution No.8 dated 13.11.92)etc. 31 It is significant to note that in Resolution No.10 dated Crl. Appeal No.21/10 24/30 25 25.10.91 Ex.P3/P5, it has been directed by the bank that C.E.O will work within the limits set up against FDRs and will not allow the drawal beyond the limits set up. It was further directed that C.E.O will refer the matter to Honerary Secretary/Directorincharge for sanction, who will not go beyond 10% of the sanctioned limits.. It is further worth noting that vide Resolution No.5 Ex.PW3/P4the bank had directed the CEO to exercise necessary precaution, while purchasing the discounted cheques in respect of certain firms. It is further clear from the resolution that C.E.O was authorised to purchase the cheques of Jain Steels upto the amount of Rs.50,000/ only. Further, vide the letter Ex.PW3/P2, the bank had given the directions to respondent R.K. Goel for not making any purchase of cheques and not to allow over draft facility beyond the sanctioned limits. When, it was observed by the bank that in some cases respondent had exceeded his powers by allowing the over draft facility and by purchasing the cheques, an explanation was sought by the bank from respondent R.K. Goel, as to why he had done these acts, in violation of the Board Directions. 32 Further, from the testimony of PW1, it is proved on record that respondent R.K. Goel, had purchased so many cheques in the past also and treated them as pay orders. He (PW1)has categorically deposed that the cheques shown in the Cheque Referral Register were fraudulently Crl. Appeal No.21/10 25/30 26 purchased by R.K. Goel stating them as Pay orders. PW1 has further deposed that it was the duty of R.K. Goel, C.EO to verify the category of instruments, as to whether they were pay orders or cheques. It is significant to note that PW1 in his testimony has given a number of cheques, which were treated as pay orders by the respondent R.K. Goel. It is true that the endorsements on the Payinslips, in question, were made by the deceased Devender Singh, but it does not mean that respondent R.K. Goel was not a party to the conspiracy to cheat the bank alongwith Rajiv Jain. It is significant to note that the respondent R.K. Goel has not only cleared the Payinslip on several occasions in the capacity of 'passing officer' but has also allowed the Payinslips to be treated as pay orders/demand drafts.
33 Moreover, PW3 Azad Singh has categorically deposed in crossexamination by ld. Counsel for accused Davender Choudhary that the disputed cheques were treated as pay orders by R.K. Goel and not by Davender. Further, PW3 has also deposed that draft is generally issued against some security in form of property and deposit of money and the cheque is purchased, subject to its realisation. In the present case, cheques issued by respondent Rajiv Jain in favour of M/s Arihant Enterprises were not only purchased by respondent R.K. Goel, even before their clearance and amount of cheques was also got Crl. Appeal No.21/10 26/30 27 released in favour of Arihant Enterprises. It is worth noting that the cheques issued by respondent Rajiv Jain were not capable of encashment as there was no sufficient money in the account.
34 In the present case, an objection was raised by ld. Counsel for accused R.K. Goel on the exhibition of certain documents being the photocopies of the documents. I am of the considered view that the objection raised by the ld. Counsel is devoid of merit, as PW3 has produced the original record during his testimony and the record on judicial file was tallied and was stated to be true and correct. He has categorically deposed that he had given all the certified copies as per record and had also brought the original record. He had certified the documents as per the Banker's of Evidence Act. Further, testimonies of material witnesses can not be disbelieved and discarded only because that cheque numbers are not mentioned in the Payinslips and there is mention of pay orders on them. It is worth noting that on the earlier occasions also, pay orders were mentioned on certain Payinslips, instead of cheques by the respondent R.K. Goel in collusion with the respondent Rajiv Jain and other persons. It is significant to note that PW1 Moti Lal Bansal has deposed in crossexamination by ld. Counsel for accused R.K. Goel that there used to be one and same format of Pay inslip to deposit cheques for clearance and purchase of cheques. Crl. Appeal No.21/10 27/30 28 Moreover, as per testimony of PW1, there was no column on the pay in slip, wherein cheque number could be mentioned as cheques number used to be mentioned on the back of payinslip. Thus, the findings of Ld. Trial Court that there was no evidence to establish that the payinslips Ex.PW3/A, B & C, related to cheques bearing No. 832837 dated 9.11.92, 77051 dated 11.11.99 and cheque No.77052 dated 11.11.92 is not sustainable. It is significant to note that on the back of payinslip Ex.PW3/C cheque No.777051 & 777052 have been mentioned as pay orders. Moreover, the testimony of PW6 P.K. Khanna, IO of case, to the effect that numbers of cheques and category of cheques have been distorted and changed with the sole intention of purchasing the cheques as pay orders/demand drafts, by Sh. R.K. Goel, to bring the same under his power to purchase. It is significant to note that the endorsement Ex.PW1/D1 on payinslip Ex.PW3/A and the endorsement Ex.PW1/D2 on payinslip Ex.PW3/C are in the handwriting of deceased Davender Singh, but it cannot be ignored that the respondent R.K. Goel has not only cleared the change of category i.e from cheques to pay orders, in the capacity of 'passing officer' but also has allowed the cheques as pay orders by putting his initials as the payinslips in question. Thus, the findings of Ld. Trial Court that respondent R.K. Goel had put his initial on the payinslip in a routine manner and thus, no criminality can be Crl. Appeal No.21/10 28/30 29 attached to his acts, also does not sound, good and cannot be sustained. I am of the considered view that keeping in view the past conduct and acts of respondent R.K. Goel it cannot be said that he initialed the payinslips in question in routine manner and there was no intention on his part to cheat the bank.
35 In view of the above discussion, I am of the considered view that all the necessary ingredients for the commission of offences U/S 120B IPC and 420 IPC are found present in this case as conspiracy between the conspirators has to be inferred from the circumstances and by the acts and conduct of parties. I am of the considered view that prosecution has successfully proved on record that the respondents have cheated the bank in pursuance of their conspiracy as cheques in question were deposited by respondent Rajeev Jain with the bank despite the fact that they were incapable of encashment and respondent R.K. Goel purchased those cheques as Pay orders without waiting for their clearance and the amount of cheques and was released in favour of M/s Arihant Enterprises. I am of the considered view that prosecution case will not be materially affected, if PWs have deposed that they did not hear the respondent about the purchase of cheques issuedby Rajiv Jain 36 In the present case, acts and conduct of respondents and other circumstances discussed above, clearly show that both Crl. Appeal No.21/10 29/30 30 respondents conspired together to cheat the bank by illegal means. 37 Since, Ld. Trial Court has misread the material evidence and has not taken into consideration the material documents and evidence, I am of the considered view that the impugned judgment of ld. Trial court is perverse and unsustainable and therefore, is liable to be set aside. Thus, the Judgment dated 14.1.10 passed by ld.Trial Court is set aside. Both respondents are convicted in respect of offence U/S 120B read with Section 420 IPC and also in respect of offence U/S 420 read with Section 120B IPC, as these offences are proved against them beyond reasonable doubt.
ANNOUNCED IN OPEN COURT TODAY on 16.11.11. (SMT. BIMLA KUMARI) ADDL.SESSIONS JUDGEII(NORTH):DELHI Crl. Appeal No.21/10 30/30