Delhi High Court
Rita Handa vs Cbi on 1 August, 2008
Author: Sanjay Kishan Kaul
Bench: Sanjay Kishan Kaul
* IN THE HIGH COURT OF DELHI AT NEW DELHI
+ CRL. REVISION PETITION NO. 965/2006
Reserved on : 11-07-2008
% Date of decision : 01-08-2008
RITA HANDA ... PETITIONER
Through: Mr. H.S. Phoolka, Sr. Adv.
with Mr. M.S. Ahluwalia
and Mr. K. Faisal,
Advocates.
Advocates.
-VERSUS-
CBI ... RESPONDENT
Through: Mr. Ashiesh Kumar, Adv.
for CBI.
CORAM: HON'BLE MR. JUSTICE SANJAY KISHAN KAUL
1. Whether the Reporters of local papers
may be allowed to see the judgment? No
2. To be referred to Reporter or not? Yes
3. Whether the judgment should be Yes
reported in the Digest?
SANJAY KISHAN KAUL, J
1. The Ministry of Health and Family Welfare, Government of
India (GOI) selected M/s Rail India Technical and Economic
Services ("M/s RITES" for short) as a consultant for services
including procurement and supply of Vitamin 'A' solution to
various states of the country, finalizing of tenders and
other related activities during the year 1997-98. M/s RITES
invited bids and accepted the tender of M/s Reliance Bulk
Drugs and Formulations Ltd. (for short "M/s RBDFL") and
Crl. Rev. P. No. 965/2006 Page No. 1 of 19
entered into a contract for the supply of 33136 units @ Rs.
419.64 per unit of a specified quality.
2. It is stated that at the initial stage itself M/s RBDFL
submitted forged bank guarantee B.G. No. BG/1219 dated
19-09-1997 along with forged BG extension covering
letters signed by one Shri V.K. Chawla, Managing Director,
M/s RBDFL (accused no. 3) and Atul Gupta, Assistant
General Manager, M/s RBDFL (accused no. 4) on behalf of
M/s RBDFL (accused no. 5) to the Ministry. The aforesaid
documents were marked to Ms. Rita Handa/ petitioner, the
then Joint General Manager, M/s RITES (accused no.1) and
Shri Rajesh Sehra, Accountant, M/s RITES (accused no. 2)
for proper verification which is alleged to have not been
carried out.
3. It is stated the Ministry issued inspection notes for 17362
units to be supplied to various consignees in Tamil Nadu
but M/s RBDFL supplied only 6666 inspected units and
supplied sub-standard uninspected units to 8 districts of
Tamil Nadu. For the said purpose, it got forged signatures
and stamps of the consignees on the inspection notes to
show that the supplies had been made and claimed
payment from M/s RITES on the basis of the same. It is
contended that the petitioner and accused no. 2 who were
responsible for processing the said documents on behalf of
M/s RITES, released the payment of Rs. 72, 85,790/-
without making any verification about the delivery of the
Crl. Rev. P. No. 965/2006 Page No. 2 of 19
goods to the consignees and also released the balance
10% payment without prior confirmation from the Ministry.
4. Consequently, on 05-10-2000 on the basis of a source
information the respondent registered Case RC
2(A)/2000/CBI/ACU-VII against all the accused persons and
after the completion of the investigation, a charge sheet
was filed. The Learned Spl. Judge, CBI after taking note of
the factual matrix of the case and hearing the parties,
framed charges against the petitioner and other co-
accused vide order dated 28-03-2006 and 31-03-2006 u/s
420/ 120B of the Indian Penal Code (IPC) and section 13(2)
r/w 13(1)(d) of the Prevention of Corruption Act (the PC Act
for short). The petitioner assailed the aforesaid orders on
charge before this Court by way of a Revision Petition and
vide order dated 10-08-2006, this Court set aside the Trial
Court's order and remanded the matter back to the Trial
Court to consider the submissions made on behalf of the
petitioner afresh and directed that it shall be open to the
petitioner to raise all issues before the Trial Court hearing
the question on framing of charges.
5. In compliance with the direction by this Court, the Trial
Court after hearing the arguments afresh in respect of the
petitioner, found against the petitioner and passed an
order dated 05-12-2006 on charge and framed charges on
12-12-2006 u/s 420/ 120B IPC and section 13(2) r/w
13(1)(d) of the PC Act. The petitioner thus by way of this
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present petition seeks to challenge the aforesaid orders on
charge.
6. It is stated that the case is at the stage of prosecution
evidence and 11 witnesses have been examined so far.
7. The learned counsel for the petitioner vehemently argued
that there is no evidence placed on record to prove the
case against the petitioner. The attention of this court was
brought to certain paragraphs of the sanction order dated
08-09-2003 relevant to the case of the petitioner which
show that it was one Shri A.K. Varshney, the then Addl. GM,
MSM division, RITES who was responsible to check the
genuineness of the bank guarantee but he did not check
the same in pursuance of the criminal conspiracy with
accused no. 3 and 4 and issued supply orders in favour of
M/S RBDFL and facilitated M/s RBDFL to obtain the said
contract.
8. It was contended that out of the 11 witnesses examined so
far, the testimony of only four witnesses relate to the
petitioner and all such witnesses have clearly stated that
the verification of the bank guarantee was the
responsibility of Shri A.K. Varshney and the role of the
accounts department in relation to the BG was only to keep
the same in safe custody.
9. Learned counsel for the petitioner relied on the statements
of PW 69, 70 and 71 to show that the verification of the
documents and co-ordination with consignees was the
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exclusive role of the MSM Division and Shri A.K. Varshney
being the co-ordinator on behalf of RITES was solely
responsible for the same. In so far as clearance of
payments from the accounts department is concerned, the
statement of PW 70 shows that it was not mandatory to
take clearance of MSM division before releasing payments
which had to be made directly to the suppliers by the
accounts department. As for the inspection notes, they
were received by the MSM division and as per the practice
in RITES retained by MSM division itself, thus it was
contended that there was no question of verification of
these inspection notes by the accounts department.
10. The argument raised by the learned counsel for the
petitioner was that the petitioner was falsely implicated in
this case where as Shri A.K. Varshney, the overall in charge
of the procurement project who was identified as the main
accused has been left scot-free by the CBI. Learned
counsel further relied on a letter dated 01-03-2004 written
by RITES to CBI wherein it is stated that the petitioner was
caused gross injustice especially in view of the fact that
there has been no case made out by the CBI against A.K.
Varshney while the petitioner is being prosecuted even
though her role was limited to only providing logistic
support to A.K. Varshney.
11. It was stated that no mens rea can be imputed to the act of
the petitioner since the petitioner working in her official
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capacity as Joint Accounts Manger, Accounts, RITES was
merely responsible for signing the cheques which had to be
duly processed by accused no. 2/accountant. In this regard,
the learned counsel for the petitioner placed reliance on
the judgment in Anil Kumar Bose v. State of Bihar (1974) 4
SCC 616 wherein it was held that a failure on the part of
the concerned employees to perform their duties or to
observe the rules of procedure laid down in the duty chart
in a proper manner may be an administrative lapse on their
part and may be at the highest, a case of error of judgment
or breach of performance of duty which per se, cannot be
equated with dishonest intention. It was observed that
mens rea is one of the essential ingredients of the offence
of cheating.
12. It was submitted that there has been no material placed on
record to show that the petitioner got any pecuniary
advantage to herself or to the supplier so as to bring her
within the ambit of section 13(2) of the PC Act.
13. It was also pointed out that the petitioner was exonerated
in a departmental preliminary enquiry conducted and that
she is maintaining consistent outstanding service records
and high integrity in the office whereby the department
has promoted her. In Surkhi Lal v. Union of India 2005 (3)
JCC 1788, the court held that if the departmental
proceedings end in a finding in favor of the accused in
respect of the allegations which also form the basis for the
Crl. Rev. P. No. 965/2006 Page No. 6 of 19
criminal proceedings then the departmental adjudication
will remove the very basis of the criminal proceedings and
in such situation the continuance of the criminal
proceedings will be a futile exercise and an abuse of the
process of the court.
14. On the other hand, the allegations made by the
prosecution against the petitioner are two fold. The first
one being that the petitioner did not verify the said bank
guarantee alleged to be forged, submitted by accused no.
3 and 4 on behalf of accused no. 5 company purported to
have been issued by PNB, Chandigarh as a performance
guarantee. It is also contended that at the time of making
payment to accused no. 5 against the bills raised, the
petitioner released the said payment on the basis of forged
signatures and stamps of the consignees without verifying
the same from the consignees as also that the balance
10% of the payment was released without receiving a
confirmation from the Ministry. It was thus contented that
pursuant to a conspiracy hatched amongst the petitioner
and the other co-accused, the petitioner abused her
position as a public servant causing a wrongful loss of
Rs.72,85,790/- to the GOI and a wrongful gain to herself
and the other co-accused.
15. The learned counsel for the CBI in support of its
contentions submitted that the case is at the initial stage of
evidence as also that there is sufficient material on record
Crl. Rev. P. No. 965/2006 Page No. 7 of 19
to sustain the charges framed against the petitioner. The
testimony of PW1 and PW 4 shows that the said Bank
Guarantee appeared to be forged and PW 2 in his
statement submitted that accused no. 3 or accused no. 5
did not have a bank account in the concerned PNB Branch.
It is contented that other than this, there is enough
documentary evidence to strengthen the case of the
prosecution. D-10 proves submission of fake bank
guarantee by RBDFL for seeking said contract. D-11 proves
the fake confirmation letter for the BG submitted by
RBDFL. D-12 to D17 proves the fake extension letters of
BG. D-18 to D-20 proves that the cheque submitted by
RBDFL in place of the BG was returned unpaid by the bank.
D-23 & D- 24 are files of the Ministry regarding complaints
from Tamil Nadu regarding non-supply of Vitamin A. D-26
proves claims of payment by RBDFL on the basis of fake
inspection notes. D-29 proves payment made to RBDFL by
RITES. D-31 proves that the BG was not issued by PNB,
Chandigarh. D-78 proves that the inspection notes issued
by accused no. 4 were forged.
16. It was submitted that the testimonies of PW 69, 70, 71 and
72 are of much relevance in order to make out a prima
facie case against the petitioner. PW 71, Shri N. Narayana
Swami working as DGM, RITES in his statement stated that
all the accounts matters pertaining to the procurement by
RITES, MSM Division on behalf of the Ministry were dealt
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with by the petitioner and accused no. 2. It is stated that
the petitioner had not sought any kind of guidance from
him in this regard. It is further stated the alteration of the
date of issue of inspection notes, the impossible nature of
delivery to far of places in Tamil Nadu within a span of two
days (which should have raised a suspicion) were over
looked by the accounts department and the bills were
passed without any application of mind. The testimony of
PW 70 Shri Shivendar Kumar, Group General Manger MSM,
RITES shows that the accounts department in case of any
doubt was at a liberty to consult the MSM division before
releasing the payment as also that there was nothing on
record in the MSM file to show that such guidance was
sought for. Such payment was released by the accounts
department without seeking clearance from the MSM
division due to which it became difficult to realize the
performance guarantee amount from the account of
accused no 5 for unsatisfactory performance of the
contract for the bank guarantee submitted turned out to be
fake.
17. The statement produced in evidence of PW 69 Shri Rajnish
Gupta, Joint General Manger, MSM, RITES shows that it was
the duty of the accounts department to see that the
conditions of the contract have been met with by the
supplier and that some percentage of the payment against
the supply bills is withheld which portion is released only
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after final acceptance of the goods by the consignees. PW
72 in his affidavit of evidence has stated that the logistic
support included the co-ordination with the consignees by
RITES as per the agreement with the Ministry.
18. The learned counsel to further substantiate its case
referred to the decision of the Apex Court in Soma
Chakravarty v. State through CBI (2007) 5 SCC 403 and the
relevant portion of the said decision is as under:
"13. In our opinion once a person signs on a
document he or she is expected to make
some enquiry before signing it. In fact,
accused Soma Chakravarty was never
assigned any duty in respect of processing or
signing the bills for ad hoc advertisements,
and she was assigned duty only of regular
advertisements. Moreover, these bills were
not sanctioned/approved by the competent
authority i.e. the Chairman/Executive
Director.
14. No doubt Soma Chakravarty contended
that she signed these fake bills by negligence
but without any mala fide intention, but this
is a matter which in our opinion, is to be seen
at the time of the trial. There are serious
allegations of misappropriation of a huge
amount of money belonging to the
government, and it cannot be said at this
stage that there is no material at all for
framing the charge against her. Hence, we
agree with the view taken by the High Court
in this connection."
19. In so far as prosecuting Shri A.K. Varshney is concerned,
the learned counsel submitted that the law prohibits his
prosecution without sanction from the competent
authority. The learned counsel for the CBI referred to the
case of Prakash Singh Badal & Anr. v. State of Punjab &
Ors. 2007 (1) SCC 1 wherein it was held that the distinction
Crl. Rev. P. No. 965/2006 Page No. 10 of 19
between the absence of sanction and the invalidity of
sanction on the ground of non application of mind is that
the former question can be agitated at the threshold but
the latter is a question which has to be raised during trial.
20. It was argued that there was no regular departmental
enquiry conducted against the petitioner and thus the plea
regarding exoneration from a charge has no bearing effect
on the trial of the accused/petitioner in the case. The
learned counsel relied on the judgment of Iqbal Singh
Marwah & Anr. v. Meenakshi Marwah & Anr. (2005) 4 SCC
370 to contend that even otherwise the mere fact that the
petitioner has been exonerated in the departmental
enquiry is of no consequence and will not effect the
criminal proceedings initiated against the petitioner. The
relevant portion of the above said judgment is re-produced
hereunder:-
"24. Coming to the last contention that an
effort should be made to avoid conflict of
findings between the civil and criminal
Courts, it is necessary to point out that the
standard of proof required in the two
proceedings are entirely different. Civil cases
are decided on the basis of preponderance of
evidence while in a criminal case the entire
burden lies on the prosecution and proof
beyond reasonable doubt has to be given.
There is neither any statutory provision nor
any legal principle that the findings recorded
in one proceeding may be treated as final or
binding in the other, as both the cases have
to be decided on the basis of the evidence
adduced therein."
Crl. Rev. P. No. 965/2006 Page No. 11 of 19
21. The plea raised by the learned counsel for the CBI was that
at the stage of framing of charges, the accused cannot rely
on any document to prove its case and thus the letter
dated 01-03-2004 and its subsequent correspondence
cannot be accepted or relied upon by the petitioner as a
material piece of evidence in its favour and in this regard
referred to the decision of the Apex court in Hem Chand v.
State of Jharkhand 2008 (5) SCC 113:
"12. The learned Special Judge, however,
considering the documents on record opined;
...But at this stage I find that unless the
documents filed by the defence are not
formally proved no finding can be given,
because it would amount to discussion the
merit of the case before conclusion of trial.
However, the materials collected in the case
diary by the prosecution reveals that there
are ground for framing charge under the
aforesaid sections against the accused
petitioner. Hence, the above petition stands
rejected."
22. The Apex court on many occasions has had the
opportunity to reiterate the well settled principles on the
law governing framing of charges. In Niranjan Singh Karam
Singh Punjabi, Advocate v. Jitender Bhimraj Bijjaya & Ors.
(1990) 4 SCC 76; Union of India v. Prafulla Kumar Samal &
Anr. AIR 1979 SC 366; Dilawar Balu Kurane v. State of
Maharashta (2002) 2 SCC 135; Soma Chakravarty v. State
through CBI (2007) 5 SCC 403; Om Wati (Smt) & Anr. v.
State through Delhi Admin. And Ors. (2001) 4 SCC 333;
State of Orissa v. Debendra Nath Padhi (2005) 1 SCC 568;
Neeraj Gupta & Ors. v. CBI 2007 V Ad (Cri.) (DHC) 517 the
Crl. Rev. P. No. 965/2006 Page No. 12 of 19
court has repeatedly held that the Court at the stage of
framing charges has undoubted power to sift and weigh the
evidence for the limited purpose of finding out whether or
not a prima facie case against the accused has been made
out. Where the materials placed before the Court disclose
grave suspicion against the accused which has not been
properly explained, the Court will be fully justified in
framing a charge and proceeding with the trial. The test to
determine a prima facie case would naturally depend upon
the facts of each case and it is difficult to lay down a rule of
universal application. By and large, however, if two views
are equally possible and the Judge is satisfied that the
evidence produced before him will give rise to some
suspicion but not grave suspicion against the accused, he
will be fully within his right to discharge the accused. In
exercising his jurisdiction under Section 227 of the Code
the Judge cannot act merely as a Post Office or a
mouthpiece of the prosecution, but has to consider the
broad probabilities of the case, the total effect of the
evidence and the documents produced before the Court,
any basic infirmities appearing in the case and so on. This
however does not mean that the Judge should make a
roving enquiry into the pros and cons of the matter and
weigh the evidence as if he was conducting a trial.
23. It cannot be lost sight of that Section 401 CrPC conferring
powers of an appellate court on the revisional court is with
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the limited purpose. The provisions contained in Section
395 to Section 401 CrPC, read together, do not indicate
that the revisional power of the High Court can be
exercised as a second appellate power. Thus, the High
Court in revision while exercising supervisory jurisdiction of
a restricted nature is justified in refusing to re-appreciate
the evidence for the purposes of determining whether the
concurrent finding of fact reached by the Ld. Trial Court is
correct. The revisional power of the High Court merely
conserves the power of the High Court to see that justice is
done in accordance with the recognised rules of criminal
jurisprudence and that its subordinate courts do not
exceed the jurisdiction or abuse the power vested in them
under the Code or to prevent abuse of the process of the
inferior criminal courts or to prevent miscarriage of justice.
24. The aforesaid aspect have been emphasized to make it
clear that this Court shall not go into the detailed scrutiny
of this case so as to derive a different conclusion.
25. I have given my thoughtful consideration to the present
matter and in my considered view, the Ld. Trial Court has
failed to appreciate and examine the material and the
evidence placed on record so as to frame charges against
the petitioner. The petitioner was working as Joint General
Manager (Accounts) in RITES at the time of commission of
the alleged offence. A perusal of the evidence proved on
record shows that it was exclusively the duty of Shri A.K.
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Varshney, MSM division to check/verify the genuineness of
the said bank guarantee and the role of the accounts
department was restricted to keep the same in safe
custody. The statement of PW 85 apart from the others
clearly shows that PW 85 working as a consultant in the
MSM division, as per the direction of Shri A.K. Varshney, in
course of discharge of his duty prepared a covering letter
dated 22-10-1997 signed by Shri A.K. Varshney vide which
the said bank guarantee and confirmation letter were sent
to the accounts department to be kept in safe custody.
Hence, the question of verification of the genuineness of
the bank guarantee by the petitioner does not arise.
26. The primary duty of the petitioner in respect of the said
contract was to release the payment after the receipt of
vouchers signed by the consignees with an official seal as
per the provisions of the agreement. However, it cannot be
lost sight of that the task of co-ordination with the
consignees to ensure receipt of the said supply and
verification of the documents/vouchers was to be
performed by Shri A.K. Varshney and not the accounts
department. The duty of the accounts department was
limited to the release of the payment after the receipt of
vouchers signed by the consignees. The processing of
these vouchers was the duty of accused no. 2 and the
petitioner was only required to release such payment on
receipt of such vouchers. It was only in case of any doubt
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that the accounts department was at a liberty to consult
the MSM division before releasing the said payment which
means that it was not mandatory for the petitioner to seek
any kind of guidance/clearance from the MSM division
before releasing the said payment.
27. It may also be taken note of that the contract agreement
provided for the terms of making the payment as also the
lists of documents based on which such payment was to be
released but it no where specified that such documents
required verification to be done by the accounts
department which was solely the duty of the MSM division.
It is here that the case of Soma Chakravarty (Supra) can be
distinguished from the present case whereby it can be said
that it was Shri A.K. Varshney who was expected to
conduct an enquiry into the same and not the petitioner.
28. The petitioner is being put in the dock on the ground that
the impossibly of delivery to far off places in Tamil Nadu
within a span of two days should have raised her suspicion.
In my considered view, this is stretching the duty of care
on the part of the petitioner too far. If the converse was to
be taken as true, even then the statement of PW 70
clarifies that co-ordination with the consignees did not
mean independent verification of receipt of materials by
them against the supply contracts for the reason that there
were about 500 consignees in this case. Individual
verification therefore would have been substantial work. If
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this was to be intended, it would have been included in the
items under logistic support of JPO (Joint procedure Order).
The JPO did not lay down independent verification of
receipts by the consignees as one of the items. Be that as
it may the same by no stretch of imagination can be
equated with the petitioner having a dishonest intention/
mens rea. The prosecution has failed to bring on record
any evidence so as to prove the same as also that the
petitioner in abuse of her official capacity as a public
servant got any pecuniary advantage for herself or the
supplier. I find myself in full agreement with the view taken
in Anil Bose's case (Supra) wherein it can be said that there
has been an administrative lapse (if at all) on the part of
the petitioner in performance of her duty. The worst that
can be imputed to the petitioner is an error of judgment
and that cannot give rise to a criminal liability. Thus even
after painting the worst scenario as set up by the
respondent for the petitioner, there is no criminal
culpability made out.
29. The extent of proof required in criminal proceedings is
distinct from departmental proceedings. The degree of
proof beyond reasonable doubt does not apply to a
departmental enquiry. Despite this, there is a finding in
favour of the petitioner in the departmental proceedings in
respect of the allegations which form the basis of the
criminal proceedings. No doubt, there was no regular
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departmental enquiry but this aspect is being emphasized
to show that even the much lesser degree of proof in a
departmental enquiry was not met in the case of the
petitioner.
30. The settled legal position in law is that at the stage of
framing of charges, the documents filed by the defence
unless formally proved cannot be relied upon and no
finding can be given on the same because it would amount
to discussing the merit of the case before conclusion of
trial as was held in Hem Chand's case (Supra), therefore
the letter dated 01-03-2004 and its subsequent
correspondence produced before this court cannot be
accepted or used as a material piece of evidence in favour
of the petitioner. The whole approach of the prosecution
appears to be faulty as sanction has not been obtained for
prosecution of Shri A.K. Varshney who is responsible for the
acts but on the other hand his subordinate (the petitioner)
is sought to be prosecuted even though she hardly had any
role in respect of the fraudulent transaction.
31. In view of the aforesaid, the charges so framed against the
petitioner are not made out and there is no prima facie
case against her. Hence, the impugned orders on charge
dated 05-12-06 and 12-12-06 are set aside and the petition
is accordingly allowed. The petitioner stands discharged.
Crl. Rev. P. No. 965/2006 Page No. 18 of 19
32. The Trial Court Record be sent back.
August 01, 2008 SANJAY KISHAN KAUL, J.
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