Delhi District Court
The Matter Relates To The Credit ... vs . on 25 October, 2019
IN THE COURT OF MS. ANJU BAJAJ CHANDNA,
SPECIAL JUDGE, (PC ACT) (CBI)-02,
ROUSE AVENUE COURT COMPLEX, NEW DELHI
CC No. 37/2019
RC NO. 1 (E)/99
PS : CBI/BS&FC/ND
Central Bureau of Investigation (CBI)
Vs.
1. Rakesh Sharma (Accused No.1) (convicted vide order dated 24.01.2013)
S/o Late Satyadev Sharma
R/o 78/16, Smalka, New Delhi & 268, Village
& Post Office, Smalka, New Delhi,
Managing Director, M/s SOL Ltd.
2. M/s SOL Ltd., (Accused No.2) (Exparte)
R/o 78/16, Smalka, New Delhi-37
(Formerly known as M/s Stan Organics
India Ltd.) through accused No.1.
3. Subhash C. Hans (Accused No.3)
the then Vice President
(Corporate) & Company Secretary,
M/s SOL Ltd.
S/o Late Gian Chand Hans,
R/o A-15, First Floor, Inder Puri,
New Delhi-110012.
4. Sh. B. Ramesh (Accused No.4)
S/o Late A. Gummanna Bangera the then
Sr. Branch Manager, Industrial Finance Branch,
Vijaya Bank, New Delhi,
R/o House no. TV/128/379,
Shobhas (Upstairs),
Thavakkera, Kannur-67001, Kerala
& Kangi Hitlu House, Ambady Village,
Post Madankaup,
Bantwal Taluk, Karnataka.
CBI Vs. Rakesh Sharma & ors. Page 1 out of 130
5. Sh. Chunni Lal (Accused No.5) (Since deceased)
S/o Late Balu Ram,
R/o 322/4 Krishna Colony,
Behind Bus Stand,
Rohtak, Haryana
6. V.N. Abhilashi (Accused No.6) (Since deceased)
S/o Late Bharat Ram
R/o 230, State Bank Nagar,
Paschim Vihar, New Delhi-63 &
Village & P.O. Mahla, Tehsil Dera,
Distt. Kangra, Himachal Pradesh
7. Kulwant Singh @ Surinder Singh (Accused No.7) (Since deceased)
S/o Late Damodar Singh
R/o S-1/195, Old Mahavir Nagar,
Tilak Nagar, New Delhi-110018.
8. Satbir Singh (Accused No.8)
S/o Late Pritam Singh,
R/o 5-A, Nav Natraj, 2nd Hasnabad Road,
Santa Cruz (W), Mumbai-400054.
Instituted on : 25.09.2001
Charge framed : 20.12.2007
Arguments concluded on : 18.10.2019
Decided on : 25.10.2019
Appearances : Sh. V.K. Pathak, Ld. PP for CBI.
Inspector Ramesh Kumar, Holding IO.
Sh.Rakesh Tiku, ld. Senior Counsel with Sh.Lokesh Bhardwaj
and Sh.Tushar Mahajan, Ld.Counsels for accused No.3.
Sh.Lalit Kumar, Ld. Counsel for accused no. 4.
Sh.K.B.B. Singh, Ld. Counsel for accused no. 8.
Accused Subhash C. Hans (A-3), B. Ramesh (A-4)
and Satbir Singh (A-8) on bail.
JUDGMENT
1. The matter relates to the credit facility availed by M/s SOL Ltd. (Company) represented by its Managing Director, Rakesh Sharma from Industrial Finance Branch, Vijaya Bank, New Delhi. The CBI Vs. Rakesh Sharma & ors. Page 2 out of 130 case has been registered on the basis of complaint dated 26.03.1999 filed by Chief Vigilance Officer, Vijaya Bank, Bangalore. Facts:-
2. The zonal office, Vijaya Bank sanctioned the credit facility in favour of M/s SOL Ltd. on 23.10.1996 on the basis of loan application dated 30.04.1996 submitted on behalf of company along with balance sheets of the company and other relevant documents seeking credit facility of Rs.50 lacs. It is the case of the prosecution that B. Ramesh, the then Senior Branch manager, IFB, Vijaya Bank and Smt. Jayashree Parthasarthy, the then assistant manager, while processing/forwarding the proposal, failed to collect particulars of loan/facilities availed by the company from other non-
banking financial institutions nor the said information was sent by A.P. Singh, the then Senior Manager, Zonal office, Vijaya Bank with the result the credit facility was sanctioned in favour of the company M/s SOL Ltd. The information has been suppressed about availing of loan facilities of Rs.1.20 Crores from M/s Haryana State Industrial Development Corporation and default of the company in payment of interest.
CBI Vs. Rakesh Sharma & ors. Page 3 out of 130
3. The company (M/s SOL Ltd.), also applied for enhanced limits i.e. ILC of Rs.225 lakhs and BG limit of Rs.75 lacs and the same were also sanctioned by Zonal office on 26.04.1997. M/s SOL submitted forged sale deed in respect of property S-551 Greater Kailash-II, New Delhi-110048, to the bank as collateral security. Sh. Ravi S. Dhavan, the then sitting judge of Allahabad High Court has been the title holder of the property and holding original documents but forged sale deed was presented to the bank through impersonation.
4. Subsequent to the sanction of limits, M/s SOL Ltd. submitted forged documents such as delivery challans, invoices and transport receipts under the Letters of Credit opened by IFB, Vijaya Bank and limits fraudulently obtained thereby causing wrongful loss to the bank to the tune of Rs.89,50,422/- and corresponding wrongful gain to the company.
5. It has been revealed through the investigation that accused Rakesh Sharma, managing director of M/s SOL Ltd. applied for sanction of Letter of Credit (DA) of Rs.25 lakhs and bank guarantee facility of Rs.25 lakhs for purchase of Penicillin-G, despite CBI Vs. Rakesh Sharma & ors. Page 4 out of 130 having no requisite infrastructure or expertise for utilization nor the company was holding necessary license for purchase, sale, storage and utilization of Penicillin-G as raw material.
6. The loan application dated 30.04.1996 submitted to the bank without signature and without filling up the details pertaining to godowns and branches of the company, net means as per wealth tax, assets and liabilities statements of the professional directors, details relating to bank guarantees, details of land proposed to be mortgaged. The recommendation was done by accused B. Ramesh(A-4), the then Senior Manager in conspiracy on 31.08.1996 despite irregularities/deficiencies which were violative of the instructions as mentioned in Manual on Credit Management and Book of Instructions, Advances Volume I-III of Vijaya Bank.
7. It has been alleged that accused B. Ramesh in pursuance of criminal conspiracy did not call for the requisite/relevant information from M/s SOL Ltd. as per the rules and regulations of the bank and the same resulted in wrongful loss to the bank.
8. The property S-551, Greater Kailash-II, New Delhi-48 was CBI Vs. Rakesh Sharma & ors. Page 5 out of 130 offered as collateral security wherein present and permanent address of Sh. Ravi S. Dhavan was recorded as that of the property itself which was described as a vacant plot of land. Besides the documents were forged and executed by accused Chunni Lal impersonating Ravi S. Dhawan. The accused B. Ramesh (A-4) without verifying the authenticity of the facts and in gross abuse of his official position, recommended the same for sanction. Also the IT particulars of Sh. Ravi S. Dhawan were not obtained, despite having noted the same in credit investigation report dated 17.10.1996, submitted to Zonal office.
9. The limits were sanctioned in favour of M/s SOL Ltd. [25 lakhs ILC (DA) and 25 lakhs of BG] vide letter dated 24.10.1996. Subsequently, M/s SOL Ltd. vide its letter dated 18.11.1996 offered property plot No. 25, road No. 40, Punjabi Bagh to be taken as collateral security in place of S-551, G.K.-II, New Delhi and accused B. Ramesh recommended the same to be considered favourably. Also the statement of assets and liabilities of Ajudhia Nath dated 27.11.1996 was forwarded to Zonal Office. The residential address of Ajudhia Nath (C-23 Shivaji Park, Punjabi Bagh, New Delhi) mentioned therein was false and not verified.
CBI Vs. Rakesh Sharma & ors. Page 6 out of 130
10. M/s SOL Ltd. submitted a loan application in January 1997 for sanction of letter of credit of Rs.200 lakhs and BG of Rs.100 lakhs to IFB, Vijaya Bank through its managing director Rakesh Sharma, which was submitted by accused B. Ramesh (A-4) to the Zonal office, New Delhi. The LC limits had been changed to Rs.225 lakhs and BG limits to Rs.75 lakhs without receiving any request for change from the applicant/borrower. The funds were required by M/s SOL Ltd. for purchase of raw material i.e. Penicillin-G and Vitamin AD3 and collateral security of property S-551, Greater Kailash-II, New Delhi-110048 was offered. The requirements of the company were not need based and plants/factories of the company were either non-operational or yet to commence production. The company did not have the requisite infrastructure or drug license to utilize Penicillin G as raw material. Accused B. Ramesh(A-4) did not carry out inspection of the plants of M/s SOL Ltd. and in pursuance of conspiracy, recommended the proposal of the company as need based. The earlier limits that stood sanctioned in favour of M/s SOL Ltd. were not even utilized, hence there was no justification to recommend for enhancement. As per the records, balance sheet of the company showing audit through M/s Dinesh Chandra and Associates, Chartered Accountants were containing false CBI Vs. Rakesh Sharma & ors. Page 7 out of 130 particulars/date and certificate dated 31.05.1997 was fabricated.
11. The information about previous borrowings of the company were not collected deliberately. The defaults committed by M/s SOL Ltd. towards credit facility from M/s Haryana State Industrial Development Corporation (M/s HSIDC) were communicated to Vijaya Bank as copies of letters dated 21.03.1997 and 11.04.1997 were endorsed to the bank, but accused B. Ramesh did not forward the same to the Zonal office where proposal for sanction of enhanced limits was under consideration.
12. According to the facts collected during the investigation documents deposited by M/s SOL Ltd. with IFB, Vijaya Bank for availing credit facilities were false and fabricated. Accused Chunni Lal impersonated as Ravi S. Dhawan/Dhavan and executed the affidavit, memorandum and letter of guarantee and submitted forged documents including sale deed of the property. The prosecution has alleged that accused B. Ramesh was knowing that Ravi S. Dhawan/Dhavan was not residing at the given address as letters sent to the address of Ravi S. Dhawan were received back undelivered and Sudhir Batra, the then clerk, IFB, Vijaya Bank after CBI Vs. Rakesh Sharma & ors. Page 8 out of 130 conducting personal inquiry had informed about this fact to accused B. Ramesh but the fact was deliberately suppressed from the authorities of Zonal office. The bank account dated 14.08.1997 was opened in the name of Ravi S. Dhawan with IFB, Vijaya Bank by impersonation and accused Chunni Lal at the instance of Rakesh Sharma and Subhash C. Hans visited the bank for opening the account. Accused Chunni Lal had on earlier occasion impersonated as Baldev Krishan Kumar before Small Industries Development Bank of India (SIDBI) and loans were availed also on the basis of forged sale deed. The documents submitted before SIDBI were also false and fabricated and prepared under the instructions of accused Rakesh Sharma and Subhash C. Hans.
13. Vide sanction letter dated 28.04.1997, ILC (DA) of Rs.225 lakhs and BG of Rs.75 lakhs were sanctioned by Zonal office of Vijaya Bank in favour of M/s SOL Ltd. to meet the working capital requirements for purchase of Penicillin G and Vitamin AD3.
14. Investigation has revealed that accused Rakesh sharma subsequent to aforesaid sanction of enhanced limits, vide letter dated 16.05.1997 had requested to the branch that names of the CBI Vs. Rakesh Sharma & ors. Page 9 out of 130 following companies may be included in the list of suppliers for the purchase of raw materials:
• M/s Warm Impex Pvt. Ltd.
• M/s Gold Mine Marketing Pvt. Ltd.
• M/s S.S. Mercantile Corporation.
• M/s R.S. Enterprises.
15. Similarly, it has been revealed that various LCs without actual transactions were issued at the request and at the instance of Rakesh Sharma and forged transport receipts were submitted to avail the credit facility. The credit facilities were not utilized for the purposes for which they were sanctioned.
16. According to the prosecution, also before SIDBI accused Rakesh Sharma on behalf of M/s SOL Ltd. requested and validated direct discounting of bill scheme without any actual transactions, by forging papers relating to transactions and also for forging papers of collateral security and through impersonation.
17. Investigation has revealed that as M/s SOL Ltd. did not clear its dues, as per the recommendation of Head Office, SIDBI, CBI Vs. Rakesh Sharma & ors. Page 10 out of 130 Lucknow, and recall notice dated 26.12.1997 was issued to M/s SOL Ltd. Subsequently, on 11.02.1998 personal guarantee of accused Rakesh Sharma was also invoked, as the company did not respond to aforesaid recall notice. Finally, suit was filed by SIDBI against M/s SOL Ltd. with Debt Recovery Tribunal, Delhi on 22.12.1998.
18. Prosecution has alleged that bills were discounted by SIDBI in respect of M/s Chick Feed Pvt. Ltd., M/s Paramount Pharmaceuticals Ltd. and M/s Chemcon Industries through the forged documents executed at the instance of Rakesh Sharma and under the guidance of Subhash C. Hans without actual transactions/movement of goods taking place and the bank/institutions have been cheated by accused persons in conspiracy.
19. It is asserted on behalf of CBI that on the basis of evidence and documents so submitted with the charge-sheet, offences of criminal conspiracy, cheating, forgery and criminal misconduct punishable u/s 120B IPC r/w Sections 419, 420, 467, 468 and 471 IPC and u/s 13 (2) r/w 13 (1) (d) of Prevention of Corruption Act 1988 (PC Act) and substantive offences thereof are made out and CBI Vs. Rakesh Sharma & ors. Page 11 out of 130 accused persons be proceeded against accordingly. The accused persons Rakesh Sharma (A-1), M/s SOL Ltd. (A-2), Subhash C. Hans (A-3), B. Ramesh (A-4), Chunni Lal (A-5), V.N. Abhilashi (A-6), Kulwant Singh (A-7) and Satbir Singh (A-8) have been sent for trial.
20. The sanction order has been issued for prosecution of accused B. Ramesh (A-4) being public servant.
21. The charge sheet was submitted on 25.09.2001 and on the basis of the same, cognizance was taken by the court on 05.02.2002.
22. Accused Kulwant Singh (A-7); Chunni Lal (A-5) and; V.N. Abhilashi (A-6) expired after the cognizance and proceedings against them were abated vide orders dated 14.04.2005, 08.02.2006 and 22.06.2006 respectively.
23. Vide order dated 10.08.2007 M/s SOL Ltd. (A-2) was proceeded exparte as none appeared on its behalf.
CBI Vs. Rakesh Sharma & ors. Page 12 out of 130
Charge:-
24. Vide order on charge dated 03.12.2007, formal charges were framed against all the accused on 20.12.2007 as under:
• Accused Rakesh Sharma (A-1) has been charged for the offence punishable u/s 120 B IPC r/w Section 419, 420, 467, 468, 471 IPC and Section 13 (1) (d) punishable u/s 13 (2) of Prevention of Corruption Act, 1988 and substantive offence punishable u/s 420 and 471 IPC.
• M/s SOL Ltd. (A-2) has been charged for the offence punishable u/s 420 and 471 IPC.
• Accused Subhash C. Hans (A-3) has been charged for the offence punishable u/s 120 B IPC r/w Section 419, 420, 467, 468, 471 IPC and Section 13 (1) (d) punishable u/s 13 (2) of PC Act, 1988. • Accused B. Ramesh (A-4) has been charged for the offence punishable u/s 120 B IPC r/w Section 419, 420, 467, 468, 471 IPC and Section 13 (1) (d) punishable u/s 13 (2) of PC Act, 1988 and substantive offence punishable u/s 13 (2) r/w Section 13 (1) (d) of PC Act, 1988.
• Accused Satbir Singh (A-8) has been charged for the offence punishable u/s 120 B IPC r/w Section 419, 420, 467, 468, 471 IPC and Section 13(1)(d) punishable u/s 13(2) of Prevention of Corruption Act, 1988 and substantive offence punishable u/s 420 IPC.
25. All the accused persons pleaded not guilty and claimed trial. On behalf of M/s SOL Ltd. (A-2), the charge has not been CBI Vs. Rakesh Sharma & ors. Page 13 out of 130 explained or read over as the accused company was not being represented by any person.
Prosecution Evidence:-
26. During the trial, prosecution examined 105 witnesses. The sum and substance of prosecution evidence is as follows :-
26.1. PW1 B.R. Chander Shekhar has been the General Manager and Chief Vigilance Officer of Vijaya Bank, Head Office, Bangalore.
He proved complaint Ex.PW-1/A and deposed that he made this complaint on the basis of inquiry and investigation made by the officers of the bank and documents available on record. 26.2. PW-2 Vijay Kumar Basetha was probationary officer with Vijaya Bank in the year 1998. He was deputed to carry out investigation of directors of SOL Ltd. by Senior Manager S.R. Bhandari, but on visit to the site Vishwakarma Industrial Estate, Sikar Road, Jaipur, he could not locate M/s SOL Ltd. He submitted the report to senior branch manager Sh.S.R. Bhandari about this. He proved the relevant documents by identifying the signatures of S.R. Bhandari Ex.PW-2/A. 26.3. PW-3 Sh. K. Amarnath Shetty, General Manager (Personnel) CBI Vs. Rakesh Sharma & ors. Page 14 out of 130 of Vijaya Bank granted sanction for prosecution with respect to accused B. Ramesh and proved the sanction order Ex.PW-3/A. 26.4. PW-4 Sh. Amrit Lal Jain employed with M/s DLF Housing Construction Pvt. Ltd. deposed about sale deed of plot no. 551, Block No.S, Greater Kailash-II, New Delhi dated 23.10.1972 bearing his signatures as well as signatures of officers on behalf of M/s DLF United Ltd. The witness also deposed about sale deed (D-12, Ex.PW- 4/X) and stated that same is forged sale deed and deposed that signatures of DLF officials are forged. The witness had also given his specimen signatures to CBI vide Ex.PW-4/B1 to Ex.PW-4/B12. 26.5. PW-5 Narinder Kumar, resident of 282, Anand Vihar Colony, Sri Nagar, Hapur stated that since 1987 no person with the name of Ravi S. Dhawan resided at the aforesaid address where he has been residing there with his family since 1987. The letter Ex.PW-5/A respectively has not been written by the witness or any of his family members.
26.6. PW-6 T. Jayant Pai Senior Manager Zonal Office Vijaya Bank, Delhi since 1997 deposed about sanction dated 24.10.1996 in favour of M/s SOL Ltd. Ex.PW-6/A. The witness also deposed about CBI Vs. Rakesh Sharma & ors. Page 15 out of 130 notings, endorsements and clarifications, Ex.PW-6/B and Ex.PW-6/C. The witness deposed about sanction letter dated 24.10.1996 Ex.PW-6/D, forwarding letter Ex.PW-6/E, another letter Ex.PW-6/F, clarifications and endorsements Ex.PW6/G, Ex.PW-6/H; letter dated 07.02.1997 Ex.PW-6/I, Endorsement Ex.PW-6/J, sanction letter dated 28.04.1997 Ex.PW-6/K and other relevant documents about sanction of the credit facilities including notings and endorsements. 26.7. PW-7 Trilok Chand Singhal, officer of Punjab and Sind bank deposed about bank drafts Ex.PW-7/1 to Ex.PW-7/6 in favour of M/s Paramount Pharmaceuticals Pvt. Ltd. and cleared by the bank. 26.8. PW-8 M.S. Sadashiv, Senior Manager with Vijaya Bank deposed that he was deputed to carry out investigation of collateral security in relation to M/s SOL Ltd. on property plot no.25, Road No.40, Punjabi Bagh, New Delhi. The witness was also directed to ascertain market value of property S-551, Greater Kailash-II, New Delhi. The witness proved seizure memo Ex.PW-8/A vide which he had handed over the documents to Deputy SP, CBI and also proved his report Ex.PW-8/B. The witness also stated about account opening form of accused Rakesh Sharma opened on behalf of M/s SOL Ltd. Ex.AW-1/4, loan application submitted on behalf of M/s SOL CBI Vs. Rakesh Sharma & ors. Page 16 out of 130 Ltd. Ex.PW-8/F and about compliance report Ex.PW-8/G, letter dated 26.05.1997 Ex.PW-8/H. 26.9. PW-9 N. Devadas, officer of the Vijaya Bank, was posted as Senior Manager during the year 1998. The witness has deposed in relation to the banking record and processing of credit proposal in favour of M/s SOL Ltd. and proved the related documents including official notings Ex.PW-9/A to Ex.PW-9/K. 26.10. PW-10 Sidheswar Patra, officer/Manager, Vijaya Bank, handed over documents relating to M/s SOL Ltd. to CBI vide memo Ex.PW-10/A and the file is exhibited as Ex.PW-10/B. The witness also deposed about relevant bank record which are letters and official notings.
26.11. PW-11 Maheshwar Rath, employed as officer with Vijaya Bank since 1981, deposed about documents/bank record and primarily identified the signatures of V.K. Bhushan (who was working as Assistant Manager at Chandni Chowk Branch). 26.12. PW-12 Jaya Parkash Rai joined services of Vijaya Bank in November 1976 and remained there till 1999. The witness deposed about savings bank account in the name of Ravi S. Dhawan CBI Vs. Rakesh Sharma & ors. Page 17 out of 130 introduced by Rakesh Sharma who was maintaining his account in the bank. The witness signed on the account opening form and also identified the signatures of other bank official on the same (account opening form Ex.AW-1/5).
26.13. PW-13 K. Sadanand Shetty, joined Vijaya Bank in 1972 and was promoted as Senior Manager in the year 1998. The witness has identified the signatures of Smt. Jayashree Parthasarathy on various banking documents/records Ex.PW-13/A to Ex.PW-13/F. 26.14. PW-14 K. Jogappa Shetty, joined Vijaya Bank in 1975 and during the period 1998 to 2001, he was working as Manager Regional Inspectorate Vijaya Bank, Delhi. He was appointed to investigate into the irregularities of loans advanced to M/s SOL Ltd. He examined the matter and the documents in detail and after thorough investigation, he specified the irregularities committed by accused B. Ramesh. The witness also proved various documents relating to the matter and also the documents received by him in the process of inquiry/investigation.
26.15. PW-15 Darshan Gera, Officer, Regional Collection Centre, Punjab and Sind Bank, Connaught Place, New Delhi deposed about CBI Vs. Rakesh Sharma & ors. Page 18 out of 130 six drafts cleared by him Ex.PW-7/1 to Ex.PW-7/6. 26.16. PW-16 R.S. Bhatia deposed about various LCs opened by Vijaya Bank in favour of M/s Warm Impex Private Ltd. on behalf of M/s SOL Ltd. and has given complete details and exhibited the relevant documents.
26.17. PW-17 Sudhir Batra was posted with Zonal office, Vijaya Bank. He carried out address verification of M/s SOL India Ltd. at Punjabi Bagh at the instance of branch manager B. Ramesh. He had to verify the address of Ravi S. Dhawan and on 27.02.1997, on visiting the address, people there started misbehaving with him and it was informed that address was wrongly given. The information was given by him to the branch manager. The witness also deposed about dispatch register and entries contained therein as Ex.PW 17/A and Ex.PW-17/B. 26.18. PW-18 Nirmala Sridharan joined Vijaya Bank in the year 1983 and was promoted as Senior Manager in 2001. She worked with B. Ramesh, Senior Manager and being in a position to identify his signatures, identified the same on the relevant records relating to the proposal and sanction of credit limits to M/s. SOL Ltd.
CBI Vs. Rakesh Sharma & ors. Page 19 out of 130 26.19. PW-19 Murli Dharan, Manager, IFB Branch, Vijaya Bank has also deposed about the relevant record of the bank in respect of the account of M/s SOL Ltd.
26.20. PW-20 Vijay Kumar Raina, remained posted with Chawari Bazar Branch, Jammu & Kashmir Bank deposed about accounts of M/s Chemcon Industries, M/s Paramount Pharmaceuticals Private Ltd. and of Anil Kumar. Witness further deposed about credit vouchers relating to the above accounts.
26.21. PW-21 Darshan Singh Anand, Senior Executive from bank of Punjab deposed about current account maintained by M/s Warm Impex Pvt. Ltd. and about discounting of LCs opened by M/s SOL Ltd. in favour of M/s Warm Impex Pvt. Ltd. and related bank documents.
26.22. PW-22 Ashok Kumar Sagar, Assistant Drug Controller with drug control department, deposed that Penicillin G is an antibiotic drug and license is required for its manufacturing, sale and distribution and license is required from State Drug Control Authority. M/s SOL Ltd. was not having license for sale/distribution of drugs and the witness proved the letter addressed to CBI Ex. PW-
CBI Vs. Rakesh Sharma & ors. Page 20 out of 130 22/A bearing his signatures.
26.23. PW-23 H.K. Bharti, Food and supply officer stated on seeing photocopy of ration cards Ex.AW-1/6 that the said ration card in the name of Ravi S. Dhawan was never issued as per their official record.
26.24. PW-24 Mukul Manrai, Sub-registrar, Darya Ganj, stated that certified copy of sale dated 23.10.1972 relating to plot no.S-551, measuring 1140 sq. yards, Greater Kailash II, executed in favour of Ravi S. Dhawan is Ex.PW-24/A. The witness stated that Ex.PW-4/X is not a genuine document.
26.25. PW-25 Ravinder Yadav resident of C-23A, Shivaji Park, Punjabi Bagh, New Delhi deposed that the property has been in their continuous possession and the same was never sold to anyone including Ravi S. Dhawan. The property was never sold to Ajudhia Nath.
26.26. PW-26 Saurabh Yadav resident of C-23, Shivaji Park, New Delhi also deposed on the lines of statement of PW-25 Ravinder Yadav.
CBI Vs. Rakesh Sharma & ors. Page 21 out of 130 26.27. PW-27 K. Swarup, Vice President, Legal, DLF Universal Ltd. deposed about procedure for executing sale deed on behalf of DLF and proved the replica of sale deed retained in their office Ex.PW- 27/A. Witness deposed that D-12 appears to be forged sale deed of the property No. S-551, Greater Kailash, Part-II, New Delhi. 26.28. PW-28 Govind K Jaju employed with Ranbaxy Laboratories as Senior Manager stated that Penicillin G was never purchased by them from M/s Warm Impex Pvt. Ltd., M/s Goldmine Pvt. Ltd., M/s S.S. Mercantile Corporation and M/s R.S. Enterprises nor they heard the name of such companies nor any vitamins etc. were purchased from these companies.
26.29. PW-29 Rohit Hurria joined HSIDC (Haryana State Industrial Development Corporation Ltd.) in 1991. He deposed that M/s SOL Ltd. (erstwhile M/s Stan Organic India Ltd.) was sanctioned loan of Rs.120 lakhs under the equipment refinance scheme. Witness further stated that subsequent to disbursement of loan company defaulted in repayment of interest and letters were issued for clearance of the amount. Subsequently, show cause notices were also issued to the company and for getting the machinery verified. The witness deposed about notice dated 21.03.1997 Ex.PW-29/A, CBI Vs. Rakesh Sharma & ors. Page 22 out of 130 reply received on behalf of M/s SOL Ltd. dated 04.04.1997 Ex.PW- 29/B, another letter dated 11.04.1997 issued by the Corporation (HSIDC) Ex.PW-29/C. The witness also deposed about the copies of letters so endorsed to other banks including Vijaya Bank. The witness also proved letter Ex.PW-29/D dated 25/26.02.1997 addressed to branch manager Vijaya Bank.
26.30. PW-30 Dinesh Chandra, Chartered Accountant, stated that he knows Rakesh Sharma who came to him for company incorporation. The official address of the company was 17/18 Samalkha, New Delhi-37. The witness stated that he had explained to Rakesh Sharma about the process of taking over of the company. The witness was however cross-examined on behalf of prosecution during which he denied having prepared balance sheet of M/s Stan Organics India Ltd. The witness has no knowledge if the name of M/s Stan Organics India Ltd. was changed to M/s SOL India Ltd. in the year 1995. On showing auditor's report and balance sheet Mark- 1 and Mark-2, witness stated that his name has been unauthorizedly used by the company without his knowledge and consent. The witness has also disowned document Mark-3 as it was neither issued on his letter head nor bearing his signatures. According to the witness, he was never associated with preparation CBI Vs. Rakesh Sharma & ors. Page 23 out of 130 of balance sheet, auditor's report, annual report, corporate statement either of M/s Stan Organics India Ltd. or of M/s SOL India Ltd. for any year.
26.31. PW-31 N.M. Sudhir, branch head of M/s Maharashtra Apex Corporation Ltd. at 10/19, East Patel Nagar, New Delhi-110008, deposed that the company was basically non-banking finance company and credit facilities were advanced to M/s SOL Ltd. The letter Ex.PW-31/A dated 19.10.2000, containing the details of credit facilities extended by M/s Maharashtra Apex Corporation to M/s SOL Ltd. was sent to Director, CBI.
26.32. PW-32 Bharat Bhushan Batra, financial controller-cum- company secretary with M/s TRC Financial Services Ltd., C-11, SDA Commercial Complex, New Delhi deposed that lease finance of Rs.40,78,250/- were extended to M/s SOL Ltd. A letter addressed to Manager, Vijaya Bank, Darya Ganj Branch, Delhi was issued vide Ex.PW-32/A dated 06.06.1997 whereby legal proceedings about default to be issued against M/s SOL Ltd. was mentioned. 26.33. PW-33 Amit Sharma, Manager, Credit and Development with Muthoot Leasing and Finance Ltd. deposed that credit facility CBI Vs. Rakesh Sharma & ors. Page 24 out of 130 was extended to M/s SOL Ltd. under hire-purchase scheme for water pollution control equipment for Rs.23 lakhs. After paying three installments, M/s SOL Ltd. defaulted. The letter written to CBI is proved as Ex.PW-33/A. 26.34. PW-34 R.V. Sudhakar, remained posted with defence colony branch of Vijaya Bank during 1999 to 2002. Ms. Jayashree Parthasarthy was already working there. The witness further deposed about original credit investigation report Ex.PW-14/A, advance proposal Ex.PW-4/E, process note Ex.PW-4/E-1 and advance proposal Ex.PW-13/D, memorandum Ex.PW-13/F. All bearing the signatures of Ms. Jayashree Parthasarthy. 26.35. PW-35 Harbans Lal Dhingra testified that no person with the name of Ravi S. Dhawan resided at premises 282/283, Sri Nagar, Railway road, Hapur, District Ghaziabad. The letter Ex.PW-5/A has been stated to be not a genuine letter.
26.36. PW-36 S.N. Malik joined M/s SOL Ltd. as General Manager, Business development in March 1996. The witness deposed about M/s Paramount Pharmaceuticals Pvt. Ltd., particularly that the company was not involved in any trading business nor any CBI Vs. Rakesh Sharma & ors. Page 25 out of 130 manufacturing activity was being carried out. The witness stated that M/s SOL Ltd. was having premises at Samalakha, Bahadurgarh and Bulandsahar. The plants at Samalakha and Bahadurgarh were under construction and were not producing anything. M/s Warm Impex Pvt. Ltd., M/s Goldmine Marketing Pvt. Ltd., M/s S. S. Mercantile Corporation and M/s R.S. Enterprises were never manufacturing Penicillin G and therefore no question of dealing with these companies arises. According to the witness, he has no knowledge that M/s SOL Ltd. was having a plant at Vishwakarma Industrial Estate, Jaipur. The witness visited Mumbai at the instance of Rakesh Sharma to collect six drafts (Ex.PW-7/1 to Ex.PW-7/6) valued Rs.48 lakhs in favour of M/s Paramount Pharmaceuticals Pvt. Ltd. The witness however, could not recall that the drafts were handed over to him by accused Satbir Singh.
26.37. PW-37 R.K. Hasija, joined M/s SOL Ltd. in the year 1995 as Accountant at the office International House Safdarjung Enclave, New Delhi. According to the witness he used to report to Subhash C. Hans, (who was Company Secretary) and he was performing his duties as per instructions of Subhash C. Hans. No instructions were given by Managing Director Rakesh Sharma who was having over all administrative control of the company. The witness deposed CBI Vs. Rakesh Sharma & ors. Page 26 out of 130 about various documents such as delivery challan pertaining to M/s Warm Impex Pvt. Ltd. Ex.PW-37/A, Ex.PW-37/B; bill/cash memo dated 26.03.1997 in the name of M/s SOL Ltd. Ex.PW-37/C; challan dated 26.03.1997 Ex.PW-37/D; bilty receipt dated 26.03.1997 Ex.PW-37/E; challan dated 18.03.1997 Ex.PW-37/F; challan dated 11.12.1996 Ex.PW-37/G; related Bill Ex.PW-47/H, challan dated 18.11.1996 Ex.PW-37/J and similarly the witness has deposed about various bills/challans and stated that he has been filling up the same at the instance of Subhash C. Hans and MD Rakesh Sharma (A-1).
26.38. PW-38 Suresh Kumar Dua, employed as Drugs Inspector/Deputy State Drug Controller deposed about letter Ex.PW- 38/A written to CBI by State Drug Controller K.R. Jain. According to the witness, no drug license with respect to utilization of Penicillin G as a raw material, or for sale, wholesale etc. was issued in favour of M/s SOL Ltd. for its factory premises at Bahadurgarh. 26.39. PW-39 Vinod Bihari Verma, Asstt. Tax Superintendent with Nagar Palika Parishad, Hapur, stated that as per the record, address WZ-282, Sri Nagar, Railway road, Hapur (U.P.) never existed.
CBI Vs. Rakesh Sharma & ors. Page 27 out of 130 26.40. PW-40 Dinesh Kumar Devgan was employed with M/s SOL Ltd. as Assistant in Accounts Department. He used to prepare vouchers on the instructions of accountant who was guided by main person controlling the company namely Rakesh Sharma. The witness deposed about bill/cash memo dated 18.11.1996 in the format of M/s Paramount Pharmaceuticals Pvt. Ltd. PW-40/A, challan dated 18.11.1996 Ex.PW-40/B. The witness never worked with M/s Paramount Pharmaceuticals Pvt. Ltd.
26.41. PW-41 Indra Bali Singh, office assistant with M/s SOL Ltd. deposed about various invoices and challans Ex.PW-41/A to D in relation to Chick Feed Pvt. Ltd and deposed that he filled the same at the instance of Subhash C. Hans who used to act on the directions of Managing Director Rakesh Sharma. 26.42. PW-42 Sanjeev Kumar, deposed that telephone number 5564393 later changed to 5064393 was alloted to him and he has not authorized any person, firm or company to use this number for their business (Yadav Transport Co., Warm Impex Pvt. Ltd.). According to the witness on Ex.PW-16/P6 (GR Builty through which Warm Impex Ltd. in the format of Yadav Goods Transport Company has shown having delivered 67 numbers of packages to M/s SOL CBI Vs. Rakesh Sharma & ors. Page 28 out of 130 Ltd.), the phone number has been unauthorizedly mentioned. The witness has similarly deposed about various other GR Builties. 26.43. PW-43 Ashok Chug, proprietor of M/s Treenity Press (established in the year 1982), 119 A, Humayun Pur, Safdarjang Enclave, New Delhi deposed that after 1997 printing press was wound up in the year 2000. During the year 1996-97, material pertaining to M/s SOL Ltd. like printing of stationary including cash vouchers, printing of format of field staff expense report and printing of letters of various share holders and visiting cards used to be printed at their press. PW-43 further stated that material like letter head, delivery challans, transport receipts and invoices were not printed by them. Similarly transport receipts and invoices of other companies like M/s Warm Impex Pvt. Ltd. and M/s Yadav Goods Transport Company were not printed at their press. 26.44. PW-44 Ashish Sharma was associated with M/s Everest Roadways Corporation, 206 Transport Nagar, Indore. The witness stated that they used to bring builty of Kalwania Carrying Corporation which was running its business from Mumbai. The transport receipt through which transport of goods from S.S. Mercantile Corporation Mumbai to M/s SOL Ltd. has been reflected CBI Vs. Rakesh Sharma & ors. Page 29 out of 130 (consignee copy Ex.PW-44/A), was purchased from Kalwania Carrying Corporation in unfilled condition in April 1997 by them and thereafter sold in the same condition to Abdul Habib Ghori who was carrying the business in the name of M/s Ghori Freight Carrier. The witness categorically stated that goods mentioned in Ex.PW-44/A were never transported by them. Kalwania Carrying Corporation was an IBA (Indian Bank Association) approved transport operator and their receipts were acceptable in the matter of discounting of LCs. The witness also stated that register Ex.PW-44/B was being maintained at the office of M/s Everest Roadways Corporation and same was handed over to CBI during the investigation (although on the top cover Kalwania Carrying Corporation Mumbai is written). The witness also proved seizure memo Ex.PW-44/C. 26.45. PW-45 Niranjan Lal Sharma, proprietor of M/s Everest Roadways Corporation has also deposed on the lines of deposition of PW-44.
26.46. PW-46 Abdul Habib Ghori, owned transport business on commission basis. The witness deposed that he used to purchase blank unfilled lorry receipts of M/s Kalwania Carrying Corporation through Niranjan Lal Sharma. The witness deposed about receipts CBI Vs. Rakesh Sharma & ors. Page 30 out of 130 Ex.PW-46/A, Ex.PW-46/B on the letter head of M/s Ghori Freight Carrier. According to the witness LRs (Lorry Receipts) were purchased and then sold to M/s Rani Sati Steels Ltd., Bhagirath Pura, Indore, M/s Dhar Industries, Bhagirath Pura, Indore, M/s National Steel, Tukoganj, Indore. The witness further stated that no goods were transported to M/s SOL Ltd. on behalf of M/s. S.S. Mercantile Corporation.
26.47. PW-47 Vinod Bidasaria, MD with M/s Rani Sati Steel Ltd. stated that he used to supply the materials to different companies. He handed over the documents vide memo Ex.PW-47/A and stated that LRs Ex.PW-47/1 to Ex.PW-47/13 and Ex.PW-47/14 to Ex.PW- 47/31 belonging to M/s. Kalwania Carrying Corporation were blank given to them by Abdul Habib Ghori. As regards Lorry Receipt Ex.PW-44/A, the witness stated that the same was handed over by him to J.P. Singh Mago, financial consultant for the use of his brother namely Satbir Singh.
26.48. PW-48 Pramod Joshi joined M/s Rani Sati Steel Ltd. as Commercial Manager. The witness also deposed about purchase of blank Lorry Receipts and the same were utilized by them. According to the witness, Lorry receipts were given by them to their financial CBI Vs. Rakesh Sharma & ors. Page 31 out of 130 consultant J.B. Singh Mago. The witness also handed over the documents to CBI vide memo Ex.PW48/A. 26.49. PW-49 Lalit Kumar deposed that tempo registration No.DL- 1L-8515 was purchased by him in the year 1994-95. On seeing Ex.PW-42/B, Ex.PW49/A, Ex.PW-49/B, Ex.PW-49/C, Ex.PW-49/D wherein registration number of his tempo has been used, witness deposed that he has no knowledge about M/s. SOL Ltd., Chick Feed Pvt. Ltd., Tata Tempo Goods Carrier and Tata 407 Tempo goods carrier.
26.50. PW-50 Sh. Rahis Ahmed owner of vehicle No. DL-1-LA-0989 deposed that he did not transport the goods through his tempo outside Delhi area vide receipts Ex.PW-50/A and Ex.PW-50/B, Ex.PW- 50/C, Ex.PW-50/C1, Ex.PW-50/C2 and no goods were transported through these receipts.
26.51. PW-51 Vijay Kumar, was running transport business through partnership firm. According to the witness, transport receipt Ex.PW- 42/B does not bear his signatures nor belongs to his firm and same is forged. Similarly, the witness has deposed about various other transport receipts. The witness also handed over hard bound CBI Vs. Rakesh Sharma & ors. Page 32 out of 130 register of his firm to CBI vide Ex.PW-51/A and register is Ex.PW- 51/B. 26.52. PW-52 Mirza Kamran Baig, Managing Director of Kamran Ice Factory and owner of tempo DL-1L-7449 (TATA 407), denied having transported any goods through his vehicle in relation to invoice Ex.PW-52/A of M/s Chemcon Industries. Similarly vide other receipts Ex.PW-52/B, Ex.PW-52/C, Ex.PW-52/D, Ex.PW-52/E, Ex.PW-52/F, Ex.PW-52/G and Ex.PW-52/H, no goods were transported. 26.53. PW-53 Jameel Ahmed owner of vehicle no. DL-1L-3096 denied having transported any goods through M/s Paramount Pharmaceuticals Pvt. Ltd. to M/s SOL Ltd. by the above mentioned vehicle.
26.54. PW-54 Dayal Chand purchased vehicle no. DL-1L-3096 in the year 1993 from Jameel Ahmad (PW-53). Witness also denied having transported any goods from M/s Paramount Pharmaceuticals Pvt. Ltd. Gautam Nagar to M/s SOL Ltd., Samalkha. 26.55. PW-55 Manmohan, also recorded his denial with respect to transportation of the goods to M/s Paramount Pharmaceuticals Pvt. Ltd. Gautam Nagar and M/s SOL Ltd., Samalkha, through his three CBI Vs. Rakesh Sharma & ors. Page 33 out of 130 wheeler No.DL-1RC-9303.
26.56. PW-56 Gulshan Kumar deposed about property plot WA-31, Punjabi Bagh, New Delhi and stated that said plot remained with him from July 1996 to September 1996 and during this period the same was not pledged as collateral security to any bank or financial institution including SIDBI. He or any of his family member did not know Rakesh Sharma or M/s SOL Ltd.
26.57. PW-57 N.M. Kumar, sold the plot no.31, WA, Punjabi Bagh, New Delhi to Bishan Dass Pahwa in July 1996 and at no point of time same was furnished as collateral security to any bank/financial institution nor he knew Rakesh Sharma.
26.58. PW-58 Anoop Alwadhi deposed about M/s Chemcon Fabrication, partnership firm of his wife and wife of Hardev Singh. The firm has being looked after by the witness. He deposed that firm ceased to exist in the year 2004 to 2005. According to the witness no supply of corrugated boxes were made to M/s SOL Ltd. The invoices have been denied in the manner that they do not bear the signatures of the witness or of his partner Hardev Singh although, they bear signatures of Rakesh Sharma.
CBI Vs. Rakesh Sharma & ors. Page 34 out of 130 26.59. PW-59 Hardev Singh has also deposed on the lines of testimony of PW-58.
26.60. PW-60 Amrit Pal, purchased property i.e. Plot No.31, West Avenue Road, Punjabi Bagh, New Delhi alongwith Rajinder Mittal, but same was never pledged as collateral security to any bank or financial institution. Vide seizure memo Ex.PW-60/A, attested photocopy of the documents were handed over to CBI. 26.61. PW-61 Rajinder Mittal has also deposed on the lines of testimony of PW-60.
26.62. PW-62 P.K. Dabas, Sub Registrar-II, Janak Puri stated that vide seizure memo Ex.PW-62/A certified copy of the sale deed was handed over to CBI in respect of property No. 31, WA, Class-C, Punjabi Bagh. The witness on examining sale deed Ex.PW-62/C, came to the conclusion that same is not the genuine sale deed. 26.63. PW-63 Dinesh Mehto has given affidavit with respect to three wheeler No. DL-1L-3096 to the effect that no goods belonging to M/s.SOL Ltd. transported therein or that of M/s Paramount Pharmaceuticals Pvt. Ltd.
CBI Vs. Rakesh Sharma & ors. Page 35 out of 130 26.64. PW-64 Nirmal Saraswat officer of Union Bank of India deposed about cheques Ex.PW-64/A1 to Ex.PW-64/A-17. Cheques were cleared under the signatures of the witness and the amount was paid to M/s Paramount Pharmaceuticals Pvt. Ltd., Chick Feed Pvt. Ltd. and Chemcon Industries.
26.65. PW-65 Ravi Mehra, Officer from Oriental Bank of Commerce, Vasant Lok Branch, deposed about current account opening application form of M/s Chick Feed Pvt. Ltd. and the related record Ex.PW-65/A to Ex.PW-65/C, Ex.PW65/D1 to Ex.PW-65/D3 and Ex.PW-65/E1 to Ex.PW-65/E4.
26.66. PW-66 Rajesh Gupta, remained posted with Oriental Bank of Commerce, Vasant Lok Branch and had handed over the documents to CBI vide production memos Ex.PW-66/A, Ex.PW-66/B and Ex.PW- 66/C and also proved the other record of pay-in-slips through which various amounts were deposited in the account of M/s. Chick Feed Pvt. Ltd.
26.67. PW-67 Manoj Rana also remained posted with Oriental Bank of Commerce and has proved pay-in-slips already proved Ex.PW-
65/E and Ex.PW-66/D.
CBI Vs. Rakesh Sharma & ors. Page 36 out of 130
26.68. PW-68 Kanwaljeet Singh remained posted with Punjab and Sind Bank, Pahar Ganj Branch, during 1991 to 1997. The witness had passed credit vouchers Ex.PW-68/A to Ex.PW-68/D in the account of M/s Paramount Pharmaceuticals Pvt. Ltd. The witness also deposed about other credit vouchers and current account opening form of M/s Paramount Pharmaceuticals Pvt. Ltd. and Chick Feed Pvt. Ltd Ex.PW-68/G and Ex.PW-68/H. 26.69. PW-69 Dharampal Aadhram Kalwania has been partner of M/s Kalwania Carrying Corporation. The witness stated that consignee copy of the goods carried for M/s SOL Ltd. Mark PW-69/A was not issued by their company. The documents were handed over to CBI by the witness vide production memo Ex.PW-69/1. The witness has referred to relevant documents and stated that Niranjan Lal Sharma proprietor of M/s Everest Roadways Corporation received blank LR book belonging to M/s Everest Roadways Corporation for transporting builties from them. 26.70. PW-70 Ajay Kumar Kapur, remained posted with SIDBI. The witness deposed about file of M/s SOL Ltd. maintained at the head office of SIDBI at Lucknow and file is exhibited as Ex.PW-70/A. The witness has deposed about the contents of the file including CBI Vs. Rakesh Sharma & ors. Page 37 out of 130 documents, notings and endorsements. The proposal for sanction of credit limit under "Direct Discounting Of Bills (components)"
scheme was received from M/s SOL Ltd. and limit of Rs.150 lakhs was sanctioned. On receipt of fax message dated 17.03.1997 (Ex.PW-70/A5) regarding default being made by the company, approval for regularization was granted, sanction for discounting up to 90% was allowed, limit was reduced to Rs.100 lakhs. The witness has similarly deposed about various proposals and fax letters received from Regional office and decisions were taken vide Ex.PW- 70/A-10. Another proposal dated 03.12.1997 Ex.PW-70/A11 was received in the head office for taking legal action and for recalling the guarantees against M/s SOL Ltd. The legal action was approved by the managing director on 18.01.1998.
26.71. PW-71 Dalbir Singh Sethi, an Officer with Punjab and Sind Bank, Paharganj Branch, New Delhi deposed about documents earlier proved by PW-68.
26.72. PW-72 Gurcharan Singh, an officer with Punjab and Sind Bank, Paharganj Branch, New Delhi has also deposed about documents earlier proved by PW-68.
CBI Vs. Rakesh Sharma & ors. Page 38 out of 130 26.73. PW-73 Raman Mehta, has been into the business of export of garments and came across Mr. Abhilashi in the year 1997 or 1998. The witness opened a bank account with Punjab and Sind Bank, Scindia House, Connaught Place, New Delhi and submitted proposal for his loan requirements and was required to give some collateral security for loan purposes. Witness further deposed that Mr. Abhilashi assured to make some arrangement for collateral security and asked for Rs.2/3 lakhs for this purpose, but he (PW-73) was not able to arrange such money, however, by giving some money Mr. Abhilashi gave photocopy of sale deed of the property, which the witness submitted for processing of his loan application. The loan was however not sanctioned as owner of the property could not be produced. The said photocopy of sale deed Mark A-73 (pertains to property S-551, Greater Kailash, Part-II, New Delhi). Witness further deposed that Abhilashi has arranged original sale deed of this property and handed over the same to the witness. Later, the witness (PW-73) got the information that documents so produced by Abhilashi were forged and the witness was advised to destroy the original sale deed of the property and accordingly he destroyed the same.
26.74. PW-74 Y. Nageshwar Rao, Manager (Operation) Global Trust CBI Vs. Rakesh Sharma & ors. Page 39 out of 130 Bank, Fort Bombay deposed about discounting of bills of M/s. S.S. Mercantile Corporation, Mumbai on receiving confirmation from Vijaya Bank.
26.75. PW-75 O.P. Aneja, the owner of KD-306, Pitampura, Delhi entered into lease agreement (Ex.PW-37/U) with company M/s SOL Ltd. The lease continued for a period approximately 1 to 1½ years and thereafter flat was vacated. PW-75 did not visit the flat to know as to who was residing therein during the tenancy. The documents were handed over to CBI by the witness during the investigation. 26.76. PW-76 Shailendra Mahalwar, Deputy General Manager (Legal) with SIDBI New Delhi deposed that M/s SOL Ltd. was granted bill discounting limit by SIDBI worth Rs.1.50 Crores. Dealings were done with Managing Director Rakesh Sharma and Mr. Hans, vice president, used to visit for discussion on behalf of the company. The collateral security was given by way of mortgage of the property situated at Punjabi Bagh, belonging to Baldev Krishan.
(Examination of this witness has not been completed) 26.77. PW-77 Rajender Aggarwal remained posted as Assistant Manager, SIDBI, YMCA, New Delhi and deposed that an application CBI Vs. Rakesh Sharma & ors. Page 40 out of 130 was received from M/s. SOL Ltd. for seeking bill discounting limit for Rs.3 crores and bill discounting limit of Rs.1.50 Crore was granted. The witness deposed about application dated 15.04.1996 Ex.PW- 77/A. 26.78. PW-78 Mohan Singh, Managing Director of M/s Paramount Pharmaceuticals Pvt. Ltd. having formed the company in the year 1993-94 and used to manufacture bulk drugs, deposed that he met Rakesh Sharma who offered to purchase M/s Paramount Pharmaceuticals Pvt. Ltd. on payment of Rs.76 lakhs plus financial liability of loan from Punjab Financial Corporation and agreement was accordingly executed. The advance of Rs.10 lakhs was paid and balance amount was to be paid within three months. However, Rakesh Sharma did not pay the balance amount and time was extended till June 1996 for making the payment. In May 1996, notice from Punjab Financial Corporation for default was received and the information was accordingly given to Rakesh Sharma. The payment was offered by Rakesh Sharma to Punjab Financial Corporation on the last date mentioned in the notice but officials declined to accept the cheaque telling that payment is to be made through demand draft. The witness further deposed that his factory at Dera Bassi was taken over by Punjab Financial Corporation. There CBI Vs. Rakesh Sharma & ors. Page 41 out of 130 was no production in the factory. The documents were handed over by the witness to CBI vide production memo Ex.PW-78/A. The witness has also proved documents relating to the transactions relating to M/s Paramount Pharmaceuticals Pvt. Ltd. The witness also deposed about account opening form of M/s Paramount Pharmaceuticals Pvt. Ltd. and related record. 26.79. PW-79 Rakesh Devgan used to work with Rakesh Sharma since the year 1986 and deposed about formation of M/s SOL Ltd. The Vice President of the Company was S.C. Hans(A-3). The witness used to work as per the directions of S.C. Hans and Rakesh Sharma. 26.80. PW-80 P. Rudran, Chief General Manager, SIDBI at MSME Development Center, Mumbai has deposed about applying and sanction of limit for discounting of bills in favour of M/s SOL Ltd. The witness has proved various documents relating to this credit facility such as application dated 15.04.1996 Ex.PW-80/B, accompanying balance sheet Ex.PW-80/J, auditor's reports and balance sheets Ex.PW-80/K, Ex.PW-80/L and Ex.PW-80/M. The witness has deposed about processing notes recorded by various officers deputed with SIDBI and sanction of limit of Rs.150 lakhs in favour of M/s SOL Ltd. on 17.07.1996 through FAX Ex.PW-80/6 and letter dated 18.07.1996 CBI Vs. Rakesh Sharma & ors. Page 42 out of 130 Ex.PW-80/7. The witness also deposed about guarantee executed by managing director Rakesh Sharma with collateral security. Plot No.31, West Punjabi Bagh, New Delhi belonging to Baldev Krishan Kumar vide Ex.PW-80/11. Various communications exchanged between bank and M/s SOL Ltd. with respect to the facility of discounting of bills has also been proved by the witness.
PW-80 further deposed that Baldev Kishan Kumar was introduced to SIDBI by accused S.C. Hans being Vice President (finance) and Company Secretary of M/s SOL Ltd. As per the information, it was revealed that Baldev Kishan Kumar had died in the year 1985 and on the basis of his Will, property plot no.31, Punjabi Bagh, devolved upon Narender Mohan Kumar. The witness further stated that accused S.C. Hans had accompanied the person and introduced him as Baldev Kishan Kumar for creation of mortgage and the person was identified in the photograph affixed on Ex.PW-80/32 (Photograph of accused Chunni Lal).
PW-80 further stated that loan was recalled on 26.12.1997 vide Ex.PW-80/32A. A suit for recovery was also filed before DRT in December 1998 and criminal complaint before CBI Ex.PW-80/33. The witness also deposed about corrigendum to the complaint and CBI Vs. Rakesh Sharma & ors. Page 43 out of 130 stated that facts mentioned in para 5 were infact clarified in corrigendum about introduction of Baldev Kishan Kumar. The witness proved various bills of exchange availed by M/s SOL Ltd. in favour of other companies.
26.81. PW-81 Chander Shekhar Verma, posted with Canara Bank, Nehru Place, Circle Office, New Delhi, has been the witness to the search conducted by CBI team at the house of Kulwant Singh. Witness deposed about search list Ex.PW-81/A. The witness also deposed about specimen handwriting and signatures of Rakesh Gupta, Bhupinder Singh, Rakesh Sharma, Chunni Lal, Virednernath, obtained at CBI office.
26.82. PW-82 Jai Kumar posted with Syndicate Bank, has been a witness about search conducted at Smalkha, Delhi and proved search list Ex.PW-82/A. 26.83. PW-83 Onkar, posted with Syndicate Bank, has been a witness to the search conducted at Samalkha, Delhi and also proved search list Ex.PW-82/A. 26.84. PW-84 DSP T.K. Roy, was posted as Inspector CBI in the year 1999. The witness deposed about giving notice and about CBI Vs. Rakesh Sharma & ors. Page 44 out of 130 production-cum-seizure of documents related to the account of M/s SOL Ltd. from SIDBI. The witness also seized the documents from Sub-Registrar-II, Kashmere Gate, Delhi.
26.85. PW-85 Shashikant Joglekar, was posted as an officer with Dena Bank, Mumbai. He has been a witness of search at the house of Satbir Singh and proved the search list Ex.PW-85/A. The witness has also given the details of other recovered articles from the house of Satbir Singh.
26.86. PW-86 Kamal A. Siddiqui, was posted as officer in Credit Policy Department, Dena Bank at Cuffe Parade, Mumbai and also deposed about search conducted at the house of Satbir Singh. 26.87. PW-87 Sandeep Mehra, was posted as inspector with CBI in December 1999 and deposed about the search conducted at house of Satbir Singh.
26.88. PW-88 D.N. Chaudhary, Deputy Superintendent, CBI conducted search at the house of Ashok Sharma (brother of accused Rakesh Sharma), Village Samalkha and has given the details thereof.
CBI Vs. Rakesh Sharma & ors. Page 45 out of 130 26.89. PW-89 Dinesh Chand, Deputy Registrar with office of Registrar of Companies, Delhi and Haryana, handed over the documents to CBI after certifying the same concerning M/s Stan Organics India Ltd. and M/s SOL Ltd.
26.90. PW-90 Rajesh Kumar, Motor Licensing Officer, Headquarters, Transport Department, Rajpura Road, Delhi has given details with respect to various vehicles.
26.91. PW-91 Ravinder Bhatia, Senior Manager, Regional Inspectorate, Inspection Department, Canara Bank deposed about search at the house of Kulwant Singh and search list Ex.PW-81/A. The witness also deposed about specimen handwriting and signatures taken during the investigation.
26.92. PW-92 Mehar Singh Gandhi, posted as clerk with Registering Authority, Motor Vehicles, Gurgaon deposed about communications with CBI vide letters Ex.PW-92/A to Ex.92/C. 26.93. PW-93 Fakruddin, clerk with Registering Authority, Ballabhgarh, Haryana brought the record relating to registration of motorcycle HR-29-5713 registered in the name of Jai Singh Yadav.
CBI Vs. Rakesh Sharma & ors. Page 46 out of 130 26.94. PW-94 Richa Kukreja, deposed about handing over of documents to CBI vide Ex.PW-89/A. 26.95. PW-95 Harish Chander Sub-Registrar (Birth and Death), Karol Bagh Zone, Zonal Office, NDMC, New Delhi brought the relevant record about the death of Baldev Kumar and also proved his death certificate Ex.PW-95/B. 26.96. PW-96 Ramesh Chander Arya, was posted as Deputy General Manager, MTNL in May 2000 and handed over the documents to CBI during investigation.
26.97. PW-97 P.L. Malik, Assistant Registrar of Companies, Punjab received the letter from CBI and sent the documents referred in the said letter through registered post. The documents have been proved as Ex.PW-97/A1 to Ex.PW-97/A17 relating to M/s Paramount Pharmaceuticals Pvt. Ltd.
26.98. PW-98 S.S. Kishore remained associated with investigation of this case under DSP Sameer Rawal.
26.99. PW-99 Rajesh Grover, joined M/s Pansy Research Laboratories which initially was the partnership firm but later CBI Vs. Rakesh Sharma & ors. Page 47 out of 130 converted into private limited firm and was operating from Safdurjung Enclave. Rakesh Sharma and his brother Ashok Sharma were the directors of the company. According to the witness, he signed Ex.PW-79/H but had not taken delivery of any goods and signed the same as per instructions. The witness could realize irregularities as cheque book of M/s Chick Feed Pvt. Ltd. used to be available with the company, but he signed the same due to pressure of the job. Mr. Rajender Prasad Sharma who signed on behalf of M/s Chick Feed Pvt. Ltd. also used to work in the accounts branch of the company. The witness also signed challan Ex.PW-79/J without delivery of goods. The goods transport receipt Ex.PW-52/B is in his handwriting and was written as per the instructions of S.C. Hans, Corporate Vice President of the company. The witness also deposed about other challans and invoices and goods transport receipts and stated that documents are bogus. The witness has also deposed about various other bills of exchange, communications etc. 26.100. PW-100 Ankush Ghuge, from RTO office, Mumbai brought the record with respect to vehicle No. MH-01-9134 (Ambassador Car).
26.101. PW-101 T Joshi, Scientist, Grade-B, CFSL, Sector-36, CBI Vs. Rakesh Sharma & ors. Page 48 out of 130
Chandiragh, while posted with GEQD, Shimla as Assistant Examiner received letter Ex.PW-101/A along with documents Q1 to Q-760 and specimen handwritings and signatures of 21 persons. Subsequently, vide letter dated 16.04.2001, he received questioned documents and specimen writings and on examining the entire documents furnished his detailed report Ex.PW-101/C and supplementary opinion Ex.PW-101/D, forwarding letter Ex. PW-101/E and reasons for supplementary opinion Ex.PW-101/F. 26.102. PW-102 Jitender Kumar Dogra, posted with Circle Office, Canara Bank, Nehru Place deposed about specimen handwriting and signatures taken in his presence during the investigation. 26.103. PW-103 Subhash Chaudhary, Law Officer, DLF Ltd. is also the witness of specimen handwriting and signatures taken during the investigation.
26.104. PW-104 Sameer Rewal was posted as Deputy SP during 1999 to 2003 with Bank Securities and Fraud Cell, CBI, and during that period he took over the investigation of the present case. He collected relevant documents from different banks and authorities, examined witnesses, obtained specimen signatures and CBI Vs. Rakesh Sharma & ors. Page 49 out of 130 handwritings, sought GEQD opinion and collected circumstantial evidence and filed the charge sheet Ex.PW-98/F. The witness also deposed about searches conducted during the investigation and about process of seeking sanction. The witness proved various production memos drawn during the investigation Ex.PW-104/A to PW-104/Z and Ex.PW-104/Z1 to Ex.PW-104/Z4.
26.105. PW-105 Ravi Kumar, Chief Manager with Punjab and Sind Bank, Mumbai deposed about production memo Ex.PW-104/G vide which set of documents were handed over to CBI during the investigation.
26.106. The above witnesses have been cross examined at length on behalf of defence.
Statements u/s 313 CrPC.
27. After closure of prosecution evidence, statements of accused persons were recorded u/s 313 CrPC wherein entire evidence appearing on record has been put-forth in question answer form to seek explanation from accused(s).
28. In response to various questions based on evidence accused S.C. Hans (A-3) stated in his statement u/s 313 CrPC that CBI Vs. Rakesh Sharma & ors. Page 50 out of 130 he left the company (M/s SOL Ltd.) in September 1997. The finance matters in the company used to be handled by MD Rakesh Sharma or by Vice President (finance). Sh. Anil Rajvanshi, who subsequently became the director. The bank operations used to be done by Rakesh Sharma on behalf of company, who was authorized to operate the bank accounts individually as per board resolution of the company. Accused claimed having no knowledge with respect to the credit facility so obtained from Vijaya bank and other financial institutions although admitted that M.S. Sadashiv and B. Ramesh from the Vijaya bank visited the office of M/s SOL Ltd. and accused explained to them that he had no knowledge about Ajudhya Nath or about the plot. The financial matters used to be handled by Mr.D.Nanda. The sanction of credit limit is a matter of record. Accused however claimed that documentation was done by Rakesh Sharma, MD and papers were handed over to him for getting the needful for creation of charge for filing with the Registrar of Companies. With respect to the collateral security of property belonging to Ravi S. Dhawan, accused claimed having no knowledge but admitted that he accompanied bank officers and visited the property and found that plot was vacant. In context with the deposition of PW-37 R.K. Hasija, accused S.C. Hans submitted CBI Vs. Rakesh Sharma & ors. Page 51 out of 130 that R.K. Hasija was working in accounts department and used to report to him occasionally. The instructions used to be given by Rakesh Sharma, Managing Director who was independently dealing with them and on the instructions of Rakesh Sharma, the officials used to work. Anil Rajvanshi was also there in the accounts' department. At no point of time, instructions were given by accused (S.C. Hans) to R.K. Hasija to fill the delivery challans or invoices, which used to be handled by Rakesh Sharma along with Vice President (technical) Dr. Bishnoi and Sudhir Choudhary (vice president) who was subsequently designated as director of Warm Impex. Accused S.C. Hans asserted that he had no interest in the company and was employed for a limited period and was having no knowledge of technical terms/medicines mentioned in the delivery challan/bills. Accused also denied giving any instructions to PW-40 Dinesh Kumar Devgan or to Indra Bali (PW-41). With respect to depositions of PW-43 (Ashok Chugh, Trinity Press), accused stated that Ashok Chug met him once or twice in the office for getting details of visiting cards. As to the bond of guarantee, Ex.PW-78/B6, accused admitted having signed the same as a witness in favour of Punjab Financial Corporation executed by MD Rakesh Sharma and was also signed by Mohan Singh Giddha, Director of M/s Paramount CBI Vs. Rakesh Sharma & ors. Page 52 out of 130 Pharmaceuticals Pvt. Ltd. Accused further asserted that PW-79 Rakesh Devgan was having association with Rakesh Sharma and his brother Ashok Sharma since the inception of business and Rakesh Devgan used to act only on their instructions. Accused (A-3) however, admitted that Rakesh Devgan used to report to him occasionally but the top level officers of the company used to give him instructions individually and in reward Rakesh Devgan was made director in M/s Paramount Pharmaceuticals Pvt. Ltd. According to the accused, he had never given any instructions as deposed by the witnesses. Accused has admitted signing letter Ex.PW-80/14 dated 12.03.1997 on the instructions of Rakesh Sharma.
29. Accused further stated that he never introduced Baldev Krishan Kumar to SIDBI. The guarantor was relative of promoter of the company. Rakesh Sharma only introduced him as Baldev Krishan Kumar and corrigendum by PW-80 is manipulated. Accused stated that being an employee, he might have accompanied Rakesh Sharma and the person concerned as the charge/mortgage so created by the company was to be registered with ROC as per law.
CBI Vs. Rakesh Sharma & ors. Page 53 out of 130
30. With respect to the evidence to the effect that PW-99 (Rajesh Grover) used to prepare bills/invoices/bills of exchange, challan, transport receipts etc. in the name of company including transport companies, as per instructions of the accused being vice president, accused S.C. Hans denied giving any such instructions and stated that Rakesh Sharma, MD and Director (technical) used to give such directions. Witness Rajesh Grover was closely associated with activities of Rakesh Sharma. Accused has no knowledge about the challans/delivery notes etc. or the contents thereof. Rakesh Sharma has been involved in another case of fraud relating to Indira Vikas Patras along with Rajesh Grover (PW-99) and they have also been held guilty. With respect to board resolution Ex.PW-99/F2, vide which it was resolved that Ravi S. Dhawan, relative of director be requested to offer the property S-551, Greater Kailash-II, New Delhi as collateral security to Vijaya Bank in connection with credit facilities being extended to the company, accused stated that board resolution was mooted at the behest of Rakesh Sharma and he signed the same unknowingly that Ravi S. Dhawan was the relative of Managing Director and it was only certification of the resolution. To various other questions accused further recorded his answers in the manner "having no knowledge".
CBI Vs. Rakesh Sharma & ors. Page 54 out of 130
31. According to accused S.C. Hans, witnesses have deposed against him because of lack of knowledge/understanding and for their association with Rakesh Sharma and/or being under his influence and pressure. He was only an employee of the company and remained in the service of SOL Ltd. during the limited period from October 2015 to September 2017 and to show his appointment, accused has placed copies of Forms 32. Accused is a post graduate and also qualified company secretary examination in June 1978 and LLB course in 1989. Accused had worked as Company Secretary in different companies.
32. When accused (A-3) joined M/s SOL Ltd., there were two vice presidents working, besides other staff. The company was headed by Rakesh Sharma, Managing Director. One VP from technical side was a veterinary Doctor Dr. Bishnoi and other VP was from commercial side Sudhir Choudhary. Thereafter, another VP in the area of finance D. Nanda was appointed by the company to take care of finance. In addition, a general manager Mr. Malik (who retired from IDPL) had joined the company.
CBI Vs. Rakesh Sharma & ors. Page 55 out of 130
33. Accused Subhash C. Hans pleaded innocence and false implication and that he has been dragged into the case without any reason. All acts, deeds and things were conceived by Rakesh Sharma and other vice presidents in the company namely A.K. Bishnoi (Technical) and Sudhir Choudhary for himself and on behalf of Chick Feed Pvt. Ltd. and Anil Rajvanshi for himself and on behalf of the Warm Impex Pvt. Ltd. also who had signed the documents from time to time as well. Rakesh Sharma remained instrumental in getting the orders executed by all the concerned Executives in the Company. At no point of time, any other Director including Vipin Shah were inducted into the company as also confirmed by him. Accused admitted that he accompanied Rakesh Sharma and Chunni Lal @ Ravi S. Dhawan to Vijaya Bank (not known to him during proceedings) as introduced to him by Rakesh Gupta and Rakesh Sharma. Being a legal person, accused got the bank credit facility documents executed on behalf of the company to offer security to the loan facilities extended to the company. Since he left the company his name being wrongly dragged in the charge sheet as his name was not there in the original FIR, even thereafter misfeasance activities were continued to the company.
CBI Vs. Rakesh Sharma & ors. Page 56 out of 130
34. Accused was pressurized/induced to be granted bail in order to become an 'approver' and in this regard, CBI officials had produced him before the court of Ld. Metropolitan Magistrate where the Ld. Metropolitan Magistrate after recording his statement, sent the matter for trial.
35. Accused informed the Court about further sanctions/availing of credit facilities by Rakesh Sharma in his new company and the said company had also resorted to borrowings from various banks and financial institutions, which exceeded Rs.800 Crores in aggregate. Similar defaults in repayment of loans had also taken place, for which accused S.C. Hans along with co- accused filed a complaint with Secretary banking, Government of India, Ministry of Finance vide letter dated 23.02.2015.
36. Accused S.C. Hans stated that he had never taken any pecuniary benefit from Rakesh Sharma or from the company except his salary during the period of his employment and that the last two months' salary arrears have not been paid to him. Accused stated that since 2001 he is working with Rail Tel Corporation of India and discharging his duties as protector of law besides his professional CBI Vs. Rakesh Sharma & ors. Page 57 out of 130 duty as a company secretary. Accused preferred not to lead any evidence in his defence.
37. In his statement, accused B. Ramesh (A-4) stated that he has not committed any irregularity and allegations against him are false. The sanction for prosecution is illegal. With respect to sale deed of plot no. S-551 Greater Kailash-II, New Delhi, accused submitted that bank had obtained search report from the authorized advocate. The search and valuation reports and legal opinions were given by the authorized persons (empaneled advocate and valuer) and there was no other mechanism available with the branch. The loan was sanctioned by the competent authority on the basis of reports and he had no role in between being not the sanctioning authority. According to the accused, he has been victimized and false case has been foisted upon him. Neither the loan was sanctioned by him nor he was involved with the search report of the collateral security or the valuation report thereof. Accused stated that he left the branch on 10.05.1997, although admitted that account of M/s SOL Ltd. was opened while he was branch manager, but the same was opened by following bank rules and regulations. The application form seeking loan was CBI Vs. Rakesh Sharma & ors. Page 58 out of 130 signed by vice president D. Nanda of M/S SOL Ltd. The regional office sanctioned the loan and if the application had been incomplete, same would have been returned by the regional office. With respect to the address of Ravi S. Dhawan, who gave collateral security in favour of M/s SOL Ltd., accused B. Ramesh submitted that it was a printed form and address was not the consideration as the same pertains to the assets and liabilities of the parties. The documents were considered by the concerned officers when proposal was processed and sanctioned. The sanction was granted by regional office with their satisfaction. Accused (A-4) further asserted that loan was processed and sanctioned at the Zonal/Regional office and he was not involved. The statement/deposition of PW-8 is incorrect. The letters dated 09.12.1996, 03.06.1997, 17.02.1997 have been stated to be matter of record. Various other facts and documents put-forth to the accused are termed as matter of record, but maintained that sanction was given by regional office and loan processing was done by Mr. A.P. Singh, Senior Manager (Credit). Accused claimed that he has been made scapegoat in the matter. Accused recorded his ignorance with respect to various documents by stating that he has no knowledge having left the branch on 10.05.1997.
CBI Vs. Rakesh Sharma & ors. Page 59 out of 130
38. The prosecution witnesses are termed as interested witnesses. Accused B. Ramesh further contended that he has not committed any offence and he is innocent. No rules and regulations of the bank have been violated by him. The loan was sanctioned by regional office through processing officer Sh. A.P. Singh, Senior Manager, Credit. The loan papers were dealt with by Shashidhar Shetty, Dinkar Shetty and Ramesh Shetty and finally loan was sanctioned by Deputy General Manager K.P. Hegde. Accused further stated that he opened only one LC for Rs.46.40 lakhs and same was paid by the party on due date and no liability was due. No pecuniary advantage has been obtained by accused. The bank has already settled the liability by full and final settlement with the company M/s SOL Ltd. and its directors. Rakesh Sharma has been habitual cheater who cheated various banks and financial institutions. The CBI has let off other officers of the bank, who were actually responsible for sanctioning of the loan and for opening of LCs.
39. Accused further claimed that he had obtained independent legal opinion and valuation report from empaneled advocates.
CBI Vs. Rakesh Sharma & ors. Page 60 out of 130 There was no material in the said reports raising any suspicion. The property was physically verified by M.S. Sadashiv field vigilance officer and he submitted a report confirming genuineness of the property and its valuation. According to the accused, this is a false case.
40. According to the statement of accused Satbir Singh (A-8), he is innocent and has been falsely implicated. To most of the questions, accused answered in the following manner:
(i) "it does not pertain to me"
or
(ii) "I have no knowledge".
41. With respect to the specific role attributed by prosecution to the accused, concerning letter dated 19.06.1997 received from M/s. S.S. Mercantile Corporation for discounting of bills, accused stated that letter was got signed from him by his brother-in-law J.B. Mago and he only submitted the letter in the bank. Similar responses has been given by accused in response to the testimony of PW-74 and in respect of the documents brought in evidence of PW-74. With respect to house search, accused admitted that CBI team along with witnesses came to his residence on 14.12.1999 but claimed that he was assaulted due to which his wife became CBI Vs. Rakesh Sharma & ors. Page 61 out of 130 unconscious and he remained busy in her treatment and therefore, he has no knowledge what documents or material were seized by the IO. Accused claimed that he was asked to sign certain papers which he signed in disturbed state of mind. He is not aware about the stamps seized from his house but admitted some of the stamps kept in his room were seized by the IO. With respect to specimen signatures and handwriting accused admitted having given the same during investigation in the presence of IO, where no other witness was present. In respect to the testimony of PW-100 Ankush Ghuge, who brought the record of Ambassador Car MH-01-9134, accused stated that he is not aware about the story of the vehicle as his brother-in-law J.B. Mago had been dealing with Rakesh Sharma. With respect to bank account of S.S. Mercantile corporation and record thereof as deposed by PW-105, accused admitted that he submitted application for the issuance of demand drafts on the asking of brother-in-law J.B. Mago and in good faith he wrote and signed the said letter Ex.PW-101/B-55 (D-218). Accused further stated that he has been misused. He has been doing business as a commission agent and on the request of his brother- in-law J.B. Mago, chartered accountant, he helped him. Accused claimed that he has not committed any wrong intentionally and CBI Vs. Rakesh Sharma & ors. Page 62 out of 130 never been involved in any civil and criminal misconduct and his antecedents are clean. Accused preferred not to lead any evidence in his defence.
Defence Evidence
42. On behalf of accused B. Ramesh D4W1 Vittaldass Shetty has been examined in defence. The witness stated that he retired from Vijaya Bank as General Manager on 31.03.2008. He became DGM in the year 2004 and has been aware of functioning of the bank at the top management as well as lower management level. The witness explained the procedure at the branch level as well as at the regional office level as he has personally dealt with loan cases, their sanction and disbursement in the official course of his duties and also worked with accused B. Ramesh during 2001 to 2002. According to the witness, he did not notice any practice or procedure adopted by accused B. Ramesh contradictory to the practice and procedure of the bank.
43. At the branch level, loan applications are received by credit officers of the branch and due diligence is carried out while preparing detailed process note. The property to be mortgaged CBI Vs. Rakesh Sharma & ors. Page 63 out of 130 against the loan, is required to be verified as well as valuation of the property is got done. Thereafter, credit officers put up a note to the branch manager recommending the sanction of loan. The due diligence is conducted through empaneled advocate who has to go to the office of sub-registrar to verify the property related documents. The witness is not aware that in the event of furnishing a false report empaneled advocate can be prosecuted. The decision as to the sanctioning of loan is taken on the basis of two reports i.e. report of advocate and valuer which are not appointed by the branch. According to D4W1, the branch manager does not have the power to appoint any advocate or property valuer of his own choice to submit the due diligence and property valuation report. The witness further stated that there is no procedure whereby branch manager would himself visit the proposed mortgaged property in order to satisfy himself.
44. It is admitted that regional office would not accept any proposed loan application recommended by branch manager unless it is appended with a small note in this regard i.e. recommendatory note. The credit officers at the regional level would carry out their own independent valuation of the property so submitted and are CBI Vs. Rakesh Sharma & ors. Page 64 out of 130 also at liberty to seek any clarification/deficiency of papers. Before sanctioning of loan, concerned AGM, DGM and CM would cross- verify and check whether the papers of applicant and the application are in proper order. After the loan was sanctioned, the terms and manner of disbursement of the said loan is forwarded to the branch manager for compliance. The witness further stated that he never came across any branch head being prosecuted for only making a recommendatory note to the Regional Office. During cross-examination on behalf of CBI, D4W1 admitted that in cases of commission of frauds in various branches of Vijaya Bank, charge sheets have been filed against branch managers and officers of Regional office. He admitted that Chief Vigilance officer in the regional office of Vijaya Bank would inquire into the various frauds and submit his report. The witness is not aware as to what documents were placed before sanctioning authority on behalf of CBI. The witness has not gone through the charge sheet and documents of the case. It is admitted that branch manager is to go through the loan applications and various documents showing credibility of the proposed borrower and to satisfy himself before making recommendatory note. The witness further admitted that branch manager used to visit the site to assess the value of the CBI Vs. Rakesh Sharma & ors. Page 65 out of 130 property in question which is offered as collateral security. The witness denied to have given false statement being known to accused B. Ramesh.
45. During the course of prosecution evidence, accused Rakesh Sharma (A-1) moved an application seeking to plead guilty whereby his statement u/s 313 CrPC was recorded on 24.01.2013. On the basis of the same, accused Rakesh Sharma was held guilty for the offences punishable u/s 120 B IPC r/w Sections 419, 420, 467, 468, 471 IPC and u/s 13 (2) r/w 13 (1) (d) Prevention of Corruption Act 1988 and for the substantive offences punishable u/s 420 and 471 IPC. Relevant portion of the order reads as under:-
"7. Statement of accused Rakesh Sharma u/s 313 CrPC recorded. Entire prosecution evidence put to accused. Accused in presence of his counsel voluntarily pleaded guilty to the charge.
8. Accordingly accused is held guilty for the offence u/s 120B read with Section 419, 420, 467, 468, 471 IPC and Section 13 (2) r/w Section 13 (1) (d) of the PC Act 1988 and for the substantive offence punishable u/s 420 and 471 IPC.
Announced: (V.K. MAHESHWARI)
Dated 29.01.2013 SPECIAL JUDGE: DELHI"
46. Vide order dated 31.01.2013, order on sentence was passed whereby convict Rakesh Sharma was sentenced to CBI Vs. Rakesh Sharma & ors. Page 66 out of 130 imprisonment (for the period) already undergone with a fine of Rs.2 lakhs each (in default Simple imprisonment for one year each) for the offence of criminal conspiracy as well for substantive offences with the order that sentences would run concurrently. On Arguments
47. Arguing for the prosecution V. K. Pathak, prosecutor for CBI, submitted that sufficient evidence have been brought on record to prove the case in the form of oral and documentary evidence. Accused Rakesh Sharma(A-1) already stands convicted on his plea of guilt whereas the trial continued qua the remaining accused. It stands established through the evidence as well as through the conviction of Rakesh Sharma (A-1) that large scale cheating and forgery was committed and wrongful losses have resulted to Vijaya Bank and SIDBI and wrongful gain to M/s SOL Ltd.
48. Accused Subhash C. Hans (A-3) has been vice president (corporate) with M/s SOL Ltd. and was actively involved in commission of offences through conspiracy punishable u/s 120-B IPC. The employees of M/s SOL Ltd. have appeared as witnesses and confirmed that they used to prepare bills/invoices/delivery CBI Vs. Rakesh Sharma & ors. Page 67 out of 130 challans etc. on the instructions of Subhash C. Hans (A-3) while no actual transactions took place in respect of such documentation. It has also been proved through expert evidence that account with Vijaya Bank was opened in the name of Ravi S. Dhawan through impersonation and the form was filled up by accused Subhash C. Hans (A-3). Accused himself admitted in his statement recorded u/s 313 CrPC that he had accompanied Chunni Lal and Rakesh Sharma to Vijaya Bank for this purpose. The prosecution witness PW-80 P. Rudran has also deposed about cheating and forgery committed on behalf of M/s SOL Ltd. with SIDBI and therein also the collateral security documents were forged through cheating and impersonation. The corrigendum Mark A was brought on record during the cross-examination of PW-80 and it clearly shows the involvement of accused Subhash C. Hans (A-3).
49. With respect to accused B. Ramesh (A-4) (public servant) ld. Prosecutor has pointed out various irregularities and lapses while forwarding the proposals and in disbursement of credit facilities through opening of letters of Credit. It is strongly contended that the lapses were committed only because of the conspiracy and to cause wrongful gain to M/s SOL Ltd. Referring to the statements of CBI Vs. Rakesh Sharma & ors. Page 68 out of 130 officers of bank (prosecution witnesses) ld. prosecutor strongly argued that case against accused B. Ramesh stands fully proved. With respect to accused Satbir Singh, Proprietor of M/s S.S. Mercantile, ld. prosecutor referred to the testimonies of prosecution witnesses (PW-6 T. Jain Pai, PW-7 Trilok Chand Singhal, PW-15 Darshan Gera, PW-19 Murlidharan, PW-36 S.N. Malik, PW-44 Ashish Sharma, PW-45 Niranjan Lal Sharma, PW-46 Abdul Habib Ghori, PW- 47 Vinod Bidasaria, PW-48 Pramod Joshi, PW-49 dharampal Adharam Kalwania, PW-74 Y. Nageshwar Rao, PW-85 Shashi Kan Joglekar, PW-87 Sandeep Mehra, PW-91 Ravinder Bhatia and PW- 100 Ankush Ghuge) to assert that forged lorry receipts were submitted for opening the LCs and for getting the payment from Vijaya Bank and shortly thereafter the amount was transferred in favour of Rakesh Sharma. In this way, accused Satbir Singh played active part and facilitated availing of credit facility by convict Rakesh Sharma on behalf of M/s SOL Ltd.
50. It is stressed that conviction of all the accused persons be recorded in view of sufficient and cogent evidence of the prosecution.
CBI Vs. Rakesh Sharma & ors. Page 69 out of 130
51. Arguing on behalf of Subhash C. Hans (A-3), Ld. Senior Counsel Sh. Rakesh Tiku submitted that accused worked as vice president (Corporate) with M/s SOL Ltd. during October 1995 to September 1997. The accused has been charged for the offence of conspiracy punishable u/s 120 B IPC. Although direct evidence for conspiracy may not be available and inference can be drawn from the circumstances of the case, but the conspiracy must be well founded in the given situation. Accused Subhash C. Hans has not been named either in the complaint Ex.PW-1/A or in the first information report (FIR) Ex.PW-98/A. PW-80 P. Rudran has deposed about offences against SIDBI but the complaint Ex.PW-80/33 dated 02.08.1999 does not contain the name of Subhash C. Hans rather the name of Managing Director Rakesh Sharma has been mentioned. The witness deposed about corrigendum (Mark A) of September 2001 whereby the name of Subhash C. Hans was added/substituted, but no such corrigendum is the part of charge sheet. The statement of PW-80 was recorded u/s 161 CrPC in July 2000, but while giving his testimony before the court, witness stated that he had given the corrigendum Mark A to CBI during his statement. This could not have been possible as corrigendum is of September 2001 and the clear conclusion comes out that PW-80 is CBI Vs. Rakesh Sharma & ors. Page 70 out of 130 giving false statement. The genuineness of Mark A is questionable.
52. Accused Subhash C. Hans was only a salaried employee of M/s SOL Ltd. and no benefit has been availed by him at any point of time. The ultimate benefit has been availed by the company M/s SOL Ltd. and its Managing Director Rakesh Sharma (A-1). Prosecution witnesses have been inconsistent in their statements about the involvement of Subhash C. Hans (A-3) and on properly reading through the evidence of witnesses, invariable conclusion comes out that accused Rakesh Sharma has been solely responsible for committing the offences and in conspiring with officers of the bank. Accused Subhash C. Hans (A-3) had no independent role to play and he has been made scapegoat and victimized by falsely implicating in the matter. There was no occasion for accused Subhash C. Hans to enter into conspiracy either with the officers of the bank or other financial institutions or with the transporters who arranged fake lorry receipts, invoices and challan etc. for M/s SOL Ltd. The entire documentation was prepared at the instance of accused (now convict) Rakesh Sharma and only on his instructions accused Subhash C. Hans was working in the company being an employee without any knowledge of forgery and fabrication of CBI Vs. Rakesh Sharma & ors. Page 71 out of 130 documents. Rakesh Sharma has been let off with mild sentence and his plea of guilt wherein he shifted blame upon Subhash C. Hans (A-3) has been unjustifiably accepted.
53. The following judgments have been relied upon by senior defence counsel on behalf of A-3:
• Raj Kumar Singh @ Raju @ Batya Vs. State of Rajasthan 1; • Sharad Birdhichand Sardha Vs. State of Maharashtra2;
• Gulam Sarbar Vs. State of Bihar3;
• Surender Kumar Khanna Vs. Intelligence Officer Directorate of
Revenue Intelligence4 and;
• Esher Singh Vs. State of Andhra Pradesh5
54. On behalf of accused B. Ramesh (A-4), Ld. Counsel Sh.Lalit Kumar argued that case is based on complaint Ex.PW-1/A, but no irregularities have been specifically detailed in the complaint particularly against accused B. Ramesh. There is no mention about opinion of previous lenders or about loans from NBFCs. So far as loan from OBC in favour of M/s SOL Ltd. is concerned, the opinion has been that borrower was good. Infact, A.P. Singh, the then Senior Manager, Zonal office, Vijaya Bank has been substantially responsible for the sanction of the credit facility in favour of the 1 AIR 2013 SC 3150 2 AIR 1984 (1622) 3 Crl. Appeal No.1316 of 2012 decided on 07.10.2013. 4 Crl. Appeal No.949 of 2018 decided on 31.07.2018. 5 Crl. Appeal No.1363/2003 decided on 15.03.2004.
CBI Vs. Rakesh Sharma & ors. Page 72 out of 130 company M/s SOL Ltd. Accused B. Ramesh was transferred from Vijaya Bank, Industrial Finance Branch on 12.05.1997, while the loan was sanctioned and disbursed after his transfer i.e. on 30.05.1997. Accused had no responsibility to check stock position of M/s SOL Ltd. as the same was done by PW-2, after loan disbursement. Accused B. Ramesh was mainly concerned with first proposal where LC/BG limit of Rs.50 lakhs was sanctioned and in that respect no loss has resulted to the bank as the loan amount has been repaid on behalf of M/s SOL Ltd. The investigation into the irregularities has been conducted on behalf of Vijaya Bank, but no report has been placed on record. The enhancement of the credit facility amounting to Rs.300 lakhs (LC of Rs.225 lakhs and BG limit of Rs.75 lakhs) was disbursed after the transfer of accused B. Ramesh and the credit facilities have been sanctioned at the level of Zonal/Regional office where accused B. Ramesh had no control.
Accused had no independent authority to sanction the loan in favour of M/s SOL Ltd. and has been made scapegoat in the matter to save the senior officers of Vijaya Bank. The recommendation of proposal has been done by accused on the basis of legal search report and valuation report with respect to the collateral security of property S-551, Greater Kailash-II, New Delhi. Even the inspection of CBI Vs. Rakesh Sharma & ors. Page 73 out of 130 property was carried out at the instance of Zonal office after the proposal was forwarded and no illegality could come to the notice of Zonal office. Accused B. Ramesh has been victimized through false implication in the present case.
55. In his written synopsis, accused has contended that no witness from prosecution has deposed against the accused and charged offences have not been proved. The prosecution has failed to bring any evidence showing motive with the accused (A-4) to commit the offences.
56. The following judgments have been relied upon by senior defence counsel on behalf of A-4:
• State of Madhya Pradesh Vs. Rameshwar and Others6; • Rajeev Kumar Goyal Vs. State through CBI7; • Jahid Shaikh & Ors. Vs. State of Gujrat and another 8; • Dinesh Puri Vs. State (Govt. of NCT of Delhi) 9 and; • State through SPE & CBI, Andhra Pradesh Vs. M. Krishna Mohan & Another.10
57. On behalf of accused Satbir Singh (A-8), ld. Counsel Sh.K.B.B. Singh submitted that accused Satbir Singh had no 6 (2009) 11 SC 424 7 2014 SCC Online Del 4036 8 (2011) 7 SCC 762 9 (2016) SCC Online Del 5551 10 (2007) 14 SC 667 CBI Vs. Rakesh Sharma & ors. Page 74 out of 130 connection with accused Rakesh Sharma (A-1) nor had any knowledge about the forgery of documents. It is admitted that accused Satbir Singh (A-8) was proprietor of M/s. S.S. Mercantile Corporation, which was a trading company and Letter of credit Ex.PW-74/A dated 16.06.1997 amounting to Rs.51,50,000/- was opened. However, it is pleaded that on the request of brother-in-law J.B. Singh Mago, Satbir Singh proceeded with respect to Letters of Credit while the transport receipts were also procured by J.B.Singh Mago. Accused Satbir Singh had no knowledge about the illegal acts of accused Rakesh Sharma and therefore no conspiracy can be attributed to him. It is further argued that only on the instructions of J.B. Singh Mago, Satbir Singh (A-8) issued bank draft of Rs.48 lakhs in favour of M/s Paramount Pharmaceuticals Pvt. Ltd. as he was informed that Rakesh Sharma wanted to purchase pharmaceutical products from M/s Paramount Pharmaceuticals Pvt. Ltd. The amount of Rs.1,67,000/- (remained with Satbir Singh), was used for discounting and payment of charges of letter of credit and bank charges for issuance of demand drafts for Rs.48 lakhs. No gain has resulted to accused Satbir Singh in these transactions. It is also pleaded that charge of forgery of transport receipts has not been proved. PW-69 admitted that transport receipts were sold to other CBI Vs. Rakesh Sharma & ors. Page 75 out of 130 transporters and in this process were given to M/s Everest Roadways Corporation, M/s Ghori Freight Carrier and M/s Rani Sati Steels Ltd. which finally gave transport receipts to J.B. Singh Mago at Indore. The CBI has failed to implead J.B. Singh Mago as an accused in the present case. The main culprit has been convict Rakesh Sharma who was involved in large scale cheating and forgery, while accused Satbir Singh (A-8) is innocent and the name of his firm and bank account has been misused. Accused Satbir Singh (A-8) has clean antecedents without any other criminal involvement. According to the defence counsel prosecution has failed to prove the charge of conspiracy against accused Satbir Singh and therefore he deserves to be acquitted.
58. I have given due consideration to the contentions raised by both the sides and also examined the facts and evidence of the case brought on record.
Findings
59. Since, accused Rakesh Sharma has pleaded guilty to the charges and stands convicted and sentenced, there is no need to give any detailed findings as to his role in the transactions through CBI Vs. Rakesh Sharma & ors. Page 76 out of 130 which banks and institutions have been cheated, however, as trial against other accused(s) continued and prosecution proceeded to examine each and every witness relating to the case, it is proper if brief summary of evidence and its conclusion is detailed qua Rakesh Sharma, to properly appreciate the role of other accused(s).
60. According to the prosecution, credit facility from Vijaya Bank was obtained by M/s SOL Ltd. on the basis of forged and fabricated documents and more particularly collateral security i.e. sale deed of property No.S-551, Greater Kailash-II, New Delhi was forged and mortgaged through impersonation. The credit facilities were got released on the basis of forged discounting of bills, invoices, cash memos, transport receipts and other documents in order to defraud and cheat Vijaya Bank, New Delhi. M/s SOL Ltd. also obtained credit facility from Small Industries Development Bank of India (SIDBI) on the basis of forged and fabricated documents and defaulted in repayments. Even before SIDBI, guarantor Baldev Krishan Kumar was impersonated and also the sale deed with respect to collateral security of property No. 31, West Avenue, Punjabi Bagh, Delhi was forged. The credits were availed through discounting of bills and opening of LCs showing CBI Vs. Rakesh Sharma & ors. Page 77 out of 130 transactions with the companies controlled by Rakesh Sharma himself without their being any actual transactions. The company M/s SOL Ltd. obtained credit facility from Vijaya Bank for purchase of Penicillin-G despite the fact that company had no requisite infrastructure or expertise to utilize Penicillin G as raw material nor it was holding any license in that respect. Details given on behalf of M/s SOL Ltd. with respect to its factory/units also turned out to be false.
61. It is an admitted position that convict Rakesh Sharma was Managing Director-cum-Chairman of M/s SOL Ltd. An application for obtaining LC/BG limit was preferred to Vijaya Bank on 30.04.1996. The property S-551, Greater Kailash-II, Delhi was offered as collateral security by placing forged sale deed Ex.PW-4/X to the bank. The real owner of the property has been Ravi S. Dhawan but accused Chunni Lal (since deceased) impersonated while executing and submitting documents (Ex.PW-101/B8) as guarantor to the loan application. This also stands confirmed with expert evidence and report Ex.PW-101/C. PW-4 Amrit Lal Jain and PW-24 Mukun Manrai have clearly testified that sale deed so presented to Vijaya Bank (Ex.PW-4/X) has been a forged document. The employees of M/s CBI Vs. Rakesh Sharma & ors. Page 78 out of 130 SOL Ltd. namely PW-36 S.N. Malik, PW-37 R.K. Hasija, PW-40 Dinesh Kumar Devgun, PW-41 Inder Bali Singh and prosecution witness PW- 78 Mohan Singh have deposed in detail about the facts of the case leading to the clear conclusion that entire documentation with respect to opening of LCs to avail credit facility has been on the instructions of Rakesh Sharma without their being any actual transactions taking place. The supplier companies were infact not manufacturing Penicillin G and therefore, the question of supply of such material to M/s SOL Ltd. did not arise. The documents were prepared by the employees of M/s SOL Ltd. at the instance of Rakesh Sharma. It has further been proved through the statements of witnesses (PW-44 Ashish Sharma, PW-45 Niranjan Lal Sharma, PW-46 Abdul Habib Ghori, PW-47 Vinod Badasaria, PW-69 Dharampal Aadhram Kalwania), that the transport receipts showing supply of such material have been forged and fabricated and were procured from the transporters only for the purposes of availing credit facilities. Infact, the goods shown to have been sold by the beneficiaries of LCs were never delivered and entire paper work has been fabricated to defraud the bank.
62. It has also emerged in evidence that M/s SOL Ltd.
CBI Vs. Rakesh Sharma & ors. Page 79 out of 130 concealed material information from Vijaya Bank by not disclosing credit facilities previously obtained from HSIDC, SIDBI, Muthoot Leasing and Finance and M/s TRC Finance services Ltd. and about the defaults. It is clear that from the very inception convict Rakesh Sharma had dishonest intention to defraud Vijaya Bank in applying and availing credit facilities and ultimately defaulted and caused losses to the bank. It has also been proved in evidence that accused Rakesh Sharma (A-1) committed fraud in respect of credit facility (for discounting of bills) obtained from SIDBI vide application dated 15.04.1996 (Ex.PW-80/B). Even in this matter forged collateral security of property flat No.31, West Punjabi Bagh, New Delhi was furnished through impersonation, as actual owner Baldev Krishan had already expired. PW-80 P. Rudran, Chief General Manager, SIDBI, has proved all the related facts and evidence in his deposition.
63. The prosecution witnesses have remained consistent and cogent while deposing about the facts and circumstances of the case and also duly proved the relevant documents. The records of the evidence were collected from genuine sources during the investigation and there is no reason to doubt its credibility.
CBI Vs. Rakesh Sharma & ors. Page 80 out of 130
64. To conclude, the prosecution has been able to sufficiently prove on record that accused (now convict) Rakesh Sharma (A-1) cheated Vijaya Bank, IFB branch in availing credit facilities and in conspiracy committed forgery and used the forged documents.
65. In view of aforesaid observations, I now proceed to decide about the role played by remaining accused(s) in the entire transactions.
66. Conspiracy is the main offence attributed to the accused persons and therefore it is essential to reproduce the concept of conspiracy.
Criminal Conspiracy (concept)
67. The relevant legal position as regards, what constitutes conspiracy may be noted at the outset. Section 120-A defines criminal conspiracy as under:-
"When two or more person agree to do, or cause to be done, (1) An illegal act, or (2) An act which is not illegal by illegal means, 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 CBI Vs. Rakesh Sharma & ors. Page 81 out of 130 besides the agreement is done by one or more parties to such agreement in pursuance thereof.
Explanation:-It is immaterial whether the illegal act is the ultimate object of such agreement, or is merely incidental to that object."
68. Thus, ingredients of the offence of criminal conspiracy are:
(i) an agreement between two or more persons;
(ii) an agreement must relate to doing or causing to be done either
(a) an illegal act;
(b) Act which is not illegal in itself but is done by illegal means.
69. To establish a charge of conspiracy, indulgence in either an illegal act or a legal act by illegal means is necessary. The definition of 'illegal' is provided for in section 43 of the Indian Penal Code.
"43. The word 'illegal' is applicable to everything which is an offence or which is prohibited by law, or which furnishes ground for a civil action; and a person is said to be 'legally bound to do' whatever it is illegal in him to omit."
70. The word 'illegal' as defined u/s 43 of Indian Penal Code has been given a very wide meaning. It consists of three ingredients:
a) everything which is an offence or ;
b) everything which is prohibited by law; or
c) everything which furnishes ground for civil action.
71. With regard to conspiracy, Section 10 of the Indian CBI Vs. Rakesh Sharma & ors. Page 82 out of 130 Evidence Act comes into play which reads as under:-
"10. Where there is reasonable ground to believe that two or more persons have conspired together to commit an offence or an actionable wrong, anything said, done or written by any one of such persons in reference to their common intention, after the time when such intention was first entertained by any one of them, is a relevant fact as against each of the persons believed to so conspiring, as well for the purpose of proving the existence of the conspiracy as for the purpose of showing that any such person was a party to it."
72. Analysis of Section 10 of Indian Evidence Act would show that it envisages:
(1) prima facie evidence affording a reasonable ground for a court to believe that two or more persons are members of a conspiracy; (2) if the said condition is fulfilled, anything said, done or written by any one of them in reference to their common intention shall be evidence against the other;
(3) anything said, done or written by the alleged conspirators should have been said, done or written after the intention was formed by any one of them;
(4) it would also be relevant for the said purpose against another who entered the conspiracy, whether it was said, done or written before he entered the conspiracy or after he left it, and it can only be used against a co-conspirator and not in his favour."
73. Four well known fundamental requirements for proving conspiracy by way of circumstantial evidence are:
(I) circumstances from which the conclusion is drawn be fully established;
(II) all the facts should be consistent with the hypothesis of guilt;
CBI Vs. Rakesh Sharma & ors. Page 83 out of 130 (III) circumstances should be of a conclusive nature and tendency; (IV) circumstances should, by a moral certainty, actually exclude every hypothesis but the one proposed to be proved;
74. It may be noted that criminal conspiracy in terms of Section 120B of the Code is an independent offence which is punishable separately. Conspiracy requires an act (actus reas) and an accompanying mental state (mens rea).
75. Legal position is well settled that in order to constitute a single general conspiracy there must be a common design. The evil scheme may be promoted by few, some may drop out and some may join at a later stage, but the conspiracy continues until it is broken up. The conspiracy may develop in successive stages. There may be general plan to accomplish the common design by such means as may from time to time be found expedient. When the ultimate offence consists of a chain of actions, it would not be necessary for the prosecution to establish to bring home the charge of conspiracy, that each of the conspirators had the knowledge of what the other collaborator would do, so long as it is known that the collaborator would put the goods or service to an unlawful use.
76. Direct independent evidence of criminal conspiracy is CBI Vs. Rakesh Sharma & ors. Page 84 out of 130 generally not available and its existence is a matter of inference, are normally deduced from acts of parties in pursuance of a purpose in common between the conspirators. It is not always possible to give affirmative evidence about the date of the formation of the criminal conspiracy, about the persons who took part in the formation of the conspiracy, about the object, which the conspirators set before themselves as the object of conspiracy, and about the manner in which the object of conspiracy is to be carried out, all is necessarily a matter of inference.
77. Meeting of minds of two or more persons for doing an illegal act or an act by illegal means is sine qua non of the criminal conspiracy but it may not be necessary prove the agreement between them. The existence of conspiracy and its objectives can be inferred from the surrounding circumstances and the conduct of the accused involved. Incriminating circumstances must form a chain of events from which a conclusion about the guilt of the accused could be drawn. A conspiracy may further be a general one and a separate one. A smaller conspiracy may be a part of a larger conspiracy.
CBI Vs. Rakesh Sharma & ors. Page 85 out of 130
78. Court while drawing an inference from the materials brought on record to arrive at a finding as to whether the charges of the criminal conspiracy have been proved or not, bears in mind that a conspiracy is hatched in secrecy and it is, thus, difficult, if not impossible, to obtain direct evidence to establish the same. The manner and circumstances in which the offences have been committed and the level of involvement of the accused persons therein are relevant factors. For the said purpose, it is necessary to prove that the pro-pounders had expressly agreed to or caused to be done the illegal act but it may also be proved otherwise by adducing circumstantial evidence and/ or by necessary implication. To establish an offence of criminal conspiracy, it is not required that a single agreement should be entered into by all the conspirators at one time. Each conspirator plays his separate part in one integrated and united effort to achieve the common purpose. Each one is aware that he has a part to play in a general conspiracy though he may not know all its secrets or the means by which the common purpose is to be accomplished.
79. Cumulative effect of the proved circumstances has to be taken into account in determining the guilt of the accused rather CBI Vs. Rakesh Sharma & ors. Page 86 out of 130 than adopting an isolated approach to each of the circumstances and each one of the circumstances has to be proved beyond reasonable doubt, while appreciating evidence relating to the conspiracy, Court takes care to see that the acts or conduct of the parties must be conscious and clear enough to infer their concurrence as to the common design and its execution.
80. (As regards the afore noted legal position, following precedents are referred : Mohammad Usman Mohammad Hussain Maniyar & Ors. v. State of Maharashtra 11, Jagannatha Shetty, J in Kehar Singh and Ors. v. State (Delhi Administration12, State of Maharashtra v. Som Nath Thapa 13, K.R. Purushothaman v. State of Kerala 14, State (NCT) of Delhi v. Navjot Sandhu @ Afsal Guru 15, Ram Narayan Popli Vs. CBI16, Yogesh @ Sachin Jagdish Joshi v. State of Maharashtra17, Nirmal Singh Kahlon v. State of Punjab and Others18) Role of accused B. Ramesh (A-4)
81. The charge against accused B. Ramesh (A-4) is primarily 11 (1981) 2 SCC 443] 12 1988 (3) SCC 609 at 731 13 (1996) 4 SCC 659 14 (2005) 12 SCC 631 15 (2005) 11 SCC 600 16 (2003) 3 SCC 641 17 (2008) 6 SCALE 469 18 2008 (14) SCALE 639 CBI Vs. Rakesh Sharma & ors. Page 87 out of 130 for criminal conspiracy punishable u/s 120B r/w Section 419, 420, 467, 468, 471 IPC and Section 13 (1) (d) punishable u/s 13 (2) of PC Act 1988 and substantive offences punishable u/s 13 (2) r/w Section 13 (1) (d) of PC Act. Qua offences punishable u/s 13 (2) r/w Section 13 (1) (d) of PC Act, the first question in respect of accused B. Ramesh that arises is of Sanction u/s 19 of PC Act as he has been a public servant.
82. The law on the question of sanction has been deliberated by the Apex Court in State of Maharashtra through CBI Vs. Mahesh G.Jain19 and the court culled out the principles of law relating to sanction. The relevant portion of the said judgment is reproduced hereunder:
i. It is incumbent on the prosecution to prove that the valid sanction has been granted by the sanctioning authority after being satisfied that a case for sanction has been made out.
ii. The sanction order may expressly show that the sanctioning authority has perused the material placed before him and, after consideration of the circumstances, has granted sanction for prosecution. iii. The prosecution may prove by adducing the evidence that the material was placed before the sanctioning authority and his satisfaction was arrived at upon perusal of the material placed before him.
iv. Grant of sanction is only an administrative function and the sanctioning authority is required to prima facie reach the satisfaction that relevant facts would 19 (2013) 8 SCC 119 CBI Vs. Rakesh Sharma & ors. Page 88 out of 130 constitute the offence.
v. The adequacy of material placed before the sanctioning authority cannot be gone into by the court as it does not sit in appeal over the sanction order. vi. If the sanctioning authority has perused all the materials placed before him and some of them have not been proved that would not vitiate the order of sanction.
vii. The order of sanction is a pre-requisite as it is intended to provide a safeguard to public servant against frivolous and vexatious litigants, but simultaneously an order of sanction should not be construed in a pedantic manner and there should not be a hyper-technical approach to test its validity.
83. In this case, PW-3 K. Amarnath Shetty, General Manager Personnel of Vijaya Bank has granted sanction for prosecution against accused B. Ramesh (A-4). I have examined the testimony of the witness as well as order granting sanction. It is clear that sanction has been granted by PW-3 who was competent authority and on the basis of documents received by him and therefore there was sufficient material with the sanctioning authority to evaluate issue of grant of sanction. The sanction order itself shows that it is passed with due application of mind and therefore, I conclude that sanction has been properly granted. I do not find any meaningful defence taken by accused in this regard.
84. It is not in dispute that accused B. Ramesh (A-4) has been CBI Vs. Rakesh Sharma & ors. Page 89 out of 130 Senior branch manager of Vijaya Bank, Industrial Finance Branch, New Delhi where the loan applications on behalf of M/s SOL Ltd. were filed and then forwarded with recommendation under his signatures. On behalf of prosecution following lapses/allegations against accused B. Ramesh are detailed in the chargesheet:-
i. The Letter of Credit facility was not to be normally sanctioned to the parties who did not enjoy other credit limits with the said bank. M/s SOL Ltd. was not enjoying any facility with Vijaya Bank.
ii. The necessary documents were not enclosed/obtained along with the said loan proposal:-
a) Industrial licence relating to unit proposed to be financed.
b) Drug licence for purchase/utilization of Penicillin G as raw material. Moreover, the unit was also manufacturer of Veterinary Pharmaceuticals.
c) Allotment of required power in the name of the company.
d) Project appraisal report.
iii. Detailed particulars of Ravi S. Dhavan whose landed property situated at S-551, G.K.-II, New Delhi-48 was offered as collateral security by M/s SOL Ltd., were not verified. The CBI Vs. Rakesh Sharma & ors. Page 90 out of 130 same was vital for determining credit worthiness of the guarantor.
iv. No technical appraisal report was called for in order to confirm that the company's raw material (Penicillin G) requirement being need based or otherwise. Accused B. Ramesh himself was not technically qualified in the aforesaid field and therefore it was all the more his duty to call for a technical appraisal report in order to establish the genuineness of the Company's requirement of raw material proposed to be purchased through the limits sanctioned by the bank. v. In this proposal assessment of permissible bank finance (MPBF) was worked out to be Rs.95.37 lakhs and Rs.200 lakhs for the year ending 31.03.1996 and 31.03.1997 respectively. As against which non-fund based limit of Rs.50 lakhs was recommended. Thereby the proposal was silent about, how the difference between the MPBF assessed and the limits proposed would be arranged by the company as on 31.03.1997.
vi. The proposal lacked information as to how the bills arising out of LCs were proposed to be honoured by the company and on whose behalf the LCs were to be opened.
CBI Vs. Rakesh Sharma & ors. Page 91 out of 130
vii. The proposal did not indicate for which unit mentioned in
the proposal the branch had recommended sanction of non- fund based credit limits.
viii. In the audited balance sheet of M/s SOL Ltd. as at 31.03.1995 and 31.03.1996 term loans from NBFCs against hire purchase of certain machineries and equipments was mentioned at Rs.319.93 lakhs and Rs.449.01 lakhs respectively. In the said loan proposal term liabilities for the year ending 31.03.1995 and 31.03.1996 was shown as Rs.199.14 lakhs and Rs.766.74 lakhs respectively. Details pertaining to aforesaid term loans were not called for. Investigation has revealed that M/s SOL Ltd. had started defaulting during the said period in respect of loans taken by it from various NBFCs viz. M/s. Muthoot Leasing and Finance Ltd., M/s Maha Rashtra Apex, M/s Asman Investments Ltd. and M/s T.R.C. Financial Services Ltd.
85. During the trial, PW-14 K. Jogappa Shetty, Manager Regional Inspectorate Vijaya Bank, Delhi deposed that he investigated into the irregularities of loans advanced to M/s SOL Ltd. and examined the matter and documents in detail. The CBI Vs. Rakesh Sharma & ors. Page 92 out of 130 irregularities detailed by the witness are as follows:
1. Loan proposal was received even before the party opened its account with the branch;
2. Information filled in the loan proposal were not corroborated with the facts;
3. Credit information regarding the company was not conducted and information regarding the companies borrowings and borrowings of its sister concerns were not collected;
4. Information regarding the guarantor for the loan was not cross-examined to find out the genuineness of the person and his assets;
5. The LC/BG limits were sanctioned to the party when the party was not enjoying any funds based limits;
6. When the loan proposal was considered for sanction the party had already defaulted in payment of dues to several other financial organizations;
7. The collateral security offered by Mr.Dhawan did not belong to him and someone in fact impersonated by the name Mr. Dhawan who was then sitting High Court Judge of Allahabad;
CBI Vs. Rakesh Sharma & ors. Page 93 out of 130
8. The LC were opened in favour of few firms the antecedents of which were not verified.
86. During cross-examination, PW-14 confidently maintained that fraud has been played upon the bank by the borrower M/s SOL Ltd. The defence counsel on behalf of B. Ramesh raised the question of producing his (PW-14) report but the said objection was overruled. No further cross-examination of the witness was conducted on behalf of accused B. Ramesh. The clear conclusion comes out that testimony of PW-14 has not been challenged and irregularities pointed out by the witness in his examination-in-chief have not been questioned. The merits of the findings and conclusion of PW-14 have not been brought in dispute. Thus, the statement of PW-14 goes to prove the lapses committed by accused B. Ramesh while dealing with the matters of M/s SOL Ltd.
87. I have also examined the documents relating to the proposals and their recommendation dated 31.08.1996 Ex.PW-13/B and dated 05.02.1997 Ex.PW-13/D in favour of M/s SOL Ltd. on behalf of Vijaya Bank.
CBI Vs. Rakesh Sharma & ors. Page 94 out of 130
88. It stands proved through oral and documentary evidence that documents furnished on behalf of M/s SOL Ltd. (borrower) were forged and fabricated and even property documents of collateral security were forged.
89. The property offered as collateral security S-551, Greater Kailash-II, New Delhi belonged to Ravi S. Dhawan but the forged sale deed was presented and even forged bank account was opened with Vijaya Bank in the name of Ravi S. Dhawan by affixing photograph of Chunni Lal through impersonation. It was the duty of manager of the bank to carry out due diligence before forwarding the proposal and to get the documents properly checked and verified and also to verify the credentials of the borrower and of the purpose for which the loans were sought. The address and other details of Ravi S. Dhawan were not found proper and according to PW-17 Sudhir Batra, he visited the given address to verify and on finding the address incorrect informed about this to B. Ramesh. No substantial cross-examination of the witness is done so as to render him unreliable. No steps were taken by B. Ramesh to inform the regional/zonal office about incorrect address of Ravi S. Dhawan. On all the counts, accused B. Ramesh failed and ultimately account of CBI Vs. Rakesh Sharma & ors. Page 95 out of 130 M/s SOL Ltd. turned out to be Non Performing Asset (NPA). It is also clear that from the very inception, borrower has been playing fraud upon the bank and never had any intention to repay the loan.
90. M/s SOL Ltd. had given the details of its units situated at Smalkha, Bahadurgarh and Jaipur. No proper inspection or investigation of these units were carried out as otherwise the truth would have been discovered about these units being non-
operational.
91. M/s SOL Ltd. has been availing loans from various other institutions during the relevant period and even defaulted but no such information was collected by branch manager to ascertain the credit score of the borrower. The balance sheet of M/s SOL Ltd. disclosing previous borrowings were not taken into consideration although even balance sheets were fabricated as deposed by PW- 30 Dinesh Chandra.
92. It is evident from letter Ex.PW-29/A dated 21.03.1997 that M/s SOL Ltd. defaulted in repayment of loan to HSIDC and notice was accordingly issued with copy to Vijaya Bank, Industrial Finance CBI Vs. Rakesh Sharma & ors. Page 96 out of 130 Branch, New Delhi. Similarly, the letter dated 11.04.1997 Ex.PW- 29/C was written on behalf of HSIDC to M/s SOL Ltd. recalling the outstanding loan and requiring the company to clear the outstanding loan and copy of this letter was also endorsed to Vijaya Bank. Through the letter Ex.PW-29/D dated 25.02.1997, branch manager, Vijaya Bank was informed that M/s SOL Ltd. was in default in respect of term loan of Rs.120 lakhs granted by HSIDC. From these letters it can be known that M/s SOL Ltd. availed credit facilities from other banks/financial institutions and defaulted in repayments. These letters have been proved by PW-29 Rohit Hurria in his deposition and the contents of the letters are self explanatory. These letters were not forwarded to Regional/Zonal office to inform about the credit worthiness of M/s SOL Ltd. If these letters were brought to the notice of Regional Office, the enhancement of credit facility could not have been sanctioned on 26.04.1997. There is no proper defence put forth on behalf of accused B. Ramesh (A-4) as to why these communications were not placed on record before Zonal Office and Regional office, Vijaya Bank and the obvious inference is that it would have been owing to the conspiracy.
93. It has also been proved through sufficient and cogent CBI Vs. Rakesh Sharma & ors. Page 97 out of 130 evidence on record that M/s SOL Ltd. had no genuine purpose to have credit facilities as the company was not holding any drug license in respect of Penicillin G nor it had requisite infrastructure to use Penicillin G as raw material. The plants of M/s SOL Ltd. were not producing anything and the trading business shown with respect to other companies namely M/s Warm Impex Pvt. Ltd., M/s Gold Mine Marketing Pvt. Ltd., M/s S.S. Mercantile Corporation and M/s. R.S. Enterprises were never into manufacturing of Penicillin G and therefore, the transactions shown were not actual.
94. PW-36 S.N. Malik (employee of Ms/ SOL Ltd.) has categorically stated in his deposition that no such manufacturing activities were being carried out either at plants of M/s SOL Ltd. or by the other (above mentioned) companies and therefore, no question of dealings in Penicillin G could arise. No cross- examination of the witness was conducted on behalf of any accused and in this way the prosecution has been able to successfully show that basis of filing loan applications for obtaining credit facilities on behalf of M/s SOL Ltd. was not justified. The requirement of obtaining technical appraisal report to confirm the purpose for which the credit facility was being availed, was not fulfilled.
95. In the result, the proposals moved on behalf of M/s SOL CBI Vs. Rakesh Sharma & ors. Page 98 out of 130 Ltd. failed on all counts and were not worth for sanction and this large scale cheating could not have been possible without conspiracy with the officers of the bank.
96. I have also given due consideration to the pleas raised in defence on behalf of accused. It is true that besides accused B. Ramesh (A-4), some other bank officers must have also been involved as the proposals went through various levels before they were finally sanctioned. It is also true that relevant officers at Regional/Zonal level have not been charge-sheeted but this fact itself does not absolve accused B. Ramesh as he played an active part in the entire conspiracy and favourably recommended the sanctioning of proposal in favour of M/s SOL Ltd. despite shortcomings on every count. Not only forged documents were created and used, but also forged bank accounts were opened. The necessary verifications were not conducted and the same resulted in sanction of credit facilities to M/s SOL Ltd. causing wrongful loss to the bank. The cheating and forgery of this magnitude could not have been possible without active connivance of the officers of the bank including B. Ramesh (A-4).
CBI Vs. Rakesh Sharma & ors. Page 99 out of 130
97. Accused has been branch manager of Vijaya Bank from where the credit proposals of M/s SOL Ltd. were initiated and forwarded to Regional office. The important documents such as balance sheet of M/s SOL Ltd. and sale deed of collateral security were forged and no infrastructure and credentials of the borrower were checked to find out the genuineness of loan applications. Even according to the defence witness D4W1 Vittaldass Shetty, branch manager has to go through the loan application and various documents showing credibility of the proposed borrower and to satisfy himself before making recommendatory note. The job of forwarding the proposal with recommendation is not a mechanical job and the onus lies upon the branch manager to duly verify the credentials of the borrower as well as of the documents annexed in support of the loan application. The responsibility attached to the post of accused B. Ramesh was not discharged properly and the proposals were not worth recommendation.
98. In view of the aforesaid observations, I conclude that accused B. Ramesh misused his official position and made recommendations in favour of M/s SOL Ltd. ignoring large scale irregularities and forgery of documents and the element of conspiracy is strongly visible.
CBI Vs. Rakesh Sharma & ors. Page 100 out of 130 Role of accused Subhash C. Hans (A-3)
99. The charge (for the offences punishable u/s 120B IPC r/w Section 419, 420, 467, 468, 471 IPC and Section 13 (1) (d) punishable u/s 13 (2) of Prevention of Corruption Act)against accused Subhash C. Hans (A-3) reads as follows:
"You accused Subhash C. Hans, the then Vice President of M/s SOL Ltd. in pursuance of criminal conspiracy fraudulently and dishonestly along with co accused Chunni Lal and Rakesh Sharma appeared in Vijaya Bank and filled in account opening form of co- accused Chunni Lal (since expired) showing his name as Ravi S. Dhawan and other false details, you also got prepared false and forged invoices, transportation receipts, bills etc."
100. Primarily, the allegations against accused Subhash C. Hans (A-3) are that he has been the Vice President of M/s SOL Ltd. and has been instrumental in getting the forged documents prepared for the purposes of sanction of credit facility in favour of M/s SOL Ltd. and also he facilitated cheating and impersonation inconnection with mortgage of collateral security S-551, Greater Kailash-II, Delhi and allegedly accompanied the impersonator to the CBI Vs. Rakesh Sharma & ors. Page 101 out of 130 bank. It is important to note that Rakesh Sharma (A-1) while recording his plea of guilt (in statement u/s 313 CrPC) contended that loans were arranged by Subhash C. Hans (A-3) along with chartered accountants and he (A-1) has been made an accused just because he was managing director of the company.
101. In this background, I have analysed the statements of prosecution witnesses to ascertain the specific role played by accused Subhash C. Hans (A-3) in the matter.
102. PW-37 R.K. Hasija accountant with M/s SOL Ltd. deposed that he used to receive vouchers and bills in account section and was performing his duties as per instructions given by Subhash C. Hans. Rakesh Sharma (A-1), Managing Director never gave any instructions to him although was having over all administrative control of the company. The witness deposed about various bills/cash memos/vouchers/delivery challans etc. However, the witness (PW-37) also deposed that he signed bill/cash memo Ex.PW- 37/C on the instructions of Managing Director Rakesh Sharma and about various other such documents which he prepared/signed on the instructions of Managing Director Rakesh Sharma. During cross- examination on behalf of accused Subhash C. Hans, PW-37 CBI Vs. Rakesh Sharma & ors. Page 102 out of 130 admitted that directions were directly given by managing director to him and to other persons working in the accounts' department. He further admitted that he was not receiving any directions from any other person.
103. Analysing the whole statement of PW-37, it is clear that he failed to remain consistent on his initial stand that he was preparing forged documents only on the instructions of Subhash C. Hans. In the cross-examination, witness clearly admitted that it was only managing director Rakesh Sharma who was giving instructions in respect of such documents.
104. PW-40 Dinesh Kumar Devgan also an employee of M/s SOL Ltd. confirmed in his testimony that Rakesh Sharma used to hold controlling position and used to give instructions to the accountant for preparation of vouchers.
105. PW-41, Indra Bali Singh was also involved in preparation of forged documents and stated that directions were given by Managing Director Rakesh Sharma and accused Subhash C. Hans used to act on the directions of Managing Director. According to the CBI Vs. Rakesh Sharma & ors. Page 103 out of 130 witness, he signed on all these papers according to dictates of authority for his survival.
106. Another important witness is PW-58 Anoop Alwadhi being the partner of M/s Quality Steel Fab. (India). The witness deposed about various documents which do not bear the signatures of partners of the firm but bear the signatures of Managing Director Rakesh Sharma (Ex.PW-52/A and Ex.PW-58/A to Ex.PW-58/F) and from these documents it is clearly proved that forged documents were prepared by Rakesh Sharma, Managing Director of M/s SOL Ltd. and accused Subhash C. Hans (A-3) has not been involved.
107. It is also evident from the statement of PW-78 Mohan Singh, Managing Director of M/s Pharmaceuticals Pvt. Ltd. that he had dealings with Rakesh Sharma (A-1) and the name of the company was used by Rakesh Sharma for fabricating the documents in respect of the release of credit facility from Vijaya Bank through letters of credit.
108. PW-79 Rakesh Devgan was associated with Rakesh Sharma since the year 1986 and even worked with erstwhile company of CBI Vs. Rakesh Sharma & ors. Page 104 out of 130 M/s SOL Ltd. namely M/s Stan Organics India Ltd. The witness stated in respect of forged documents (Ex.PW79/P1 to Ex.PW-79/P- 32 and Ex.PW-79/Q, Ex.PW-79/R-1 to Ex.PW-79/R-3) in the manner that these documents were prepared and signed by him at the instance of Rakesh Sharma and also were signed by Rakesh Sharma and were used for availing the credit facility from Vijaya Bank. According to the witness, printing work relating to M/s SOL Ltd., M/s Paramount Pharmaceuticals Pvt. Ltd., M/s Warm Impex, M/s Chemcon Industries and M/s Chick Feed Pvt. Ltd., i.e. transport receipts, letter heads, visiting cards, vouchers etc. used to be printed at the press on the ground floor of the building as per the directions of Subhash C. Hans (A-3). The name of the press was "M/s Trinity" owned by Ashok Chugh. During cross-examination, PW- 79 admitted that Rakesh Sharma told him about other group of companies formed by him like M/s Paramount Pharmaceuticals Pvt. Ltd., M/s Warm Impex, M/s Chemcon Industries and M/s Chick Feed Pvt. Ltd. Prior to April 1995, instructions used to be given to him by Managing Director Rakesh Sharma, Dr. Bishnoi, Vice President (Technical) and Dr. A.K. Sharma (earlier to the joining of Subhash C. Hans). The accounts' department of the company consisted of Anil Rajvanshi, Rajesh Grover and R.K. Hasija. The brother of the witness CBI Vs. Rakesh Sharma & ors. Page 105 out of 130 Dinesh Kumar Devgan was also appointed with M/s SOL Ltd. Rakesh Sharma (A-1) used to give instructions to everyone working in the Company. The witness denied the suggestion that Subhash C. Hans (A-3) had not given any oral instructions to him for signing the documents, rather the witness said that Subhash C. Hans used to make him sign the documents in his presence. It is admitted that some of the documents had been signed by the witness as director of M/s Paramount Pharmaceuticals Pvt. Ltd. along with Rakesh Sharma. Witness denied the suggestion that no instructions were given by Subhash C. Hans (A-3) to check the proofs of the printed material.
109. On analysing the nature of statement and cross- examination of the above witness, I am of the opinion that he has not been strong and confident enough while deposing against Subhash C. Hans (A-3). It is evident that PW-79 Rakesh Devgan has been associated with Rakesh Sharma, much before joining of Subhash C. Hans. The owner of Trinity Press, Ashok Chugh (PW-43) also controverted the prosecution case as he denied that printed material (so used for committed forgery) was printed at his press at the instance of Subhash C. Hans. The statement of PW-79 is CBI Vs. Rakesh Sharma & ors. Page 106 out of 130 contradicted with the statement of PW-43 Ashok Chugh. Also PW- 79 Rakesh Devgan can be termed as interested witness in favour of Rakesh Sharma on account of his loyalty with Rakesh Sharma. The invariable conclusion comes out that Rakesh Sharma, Managing Director of M/s SOL Ltd. has been in controlling position with respect to preparation and use of forged documents and all other officials of M/s SOL Ltd. were acting on his instructions.
110. PW-99 Rajesh Grover although has deposed in his statement that he has been signing papers about taking delivery of the goods (without any such delivery taking place) due to pressure of the job and as per the instructions of Subhash C. Hans, Corporate Vice President of the company, however, it is also evident that the witness was associated with Rakesh Sharma, Managing Director, even prior to the joining of Subhash C. Hans (A-3). The witness also admitted that he was co-accused in a case relating to Vikas Patra along with accused Rakesh Sharma and was also convicted. It is therefore, clear that witness is interested in favour of Rakesh Sharma and has not been giving the true facts before the court because of his long association with MD Rakesh Sharma.
CBI Vs. Rakesh Sharma & ors. Page 107 out of 130
111. Coming to the issue of forged collateral security of property S-551, Greater Kailash-II, New Delhi, there is no sufficient evidence on record to prove that same has been done through accused Subhash C. Hans (A-3).
112. The account (Ex.PW-80/32) dated 14.08.1997 with Vijaya Bank in the name of Ravi Shah Dhawan was opened and Rakesh Sharma has been the introducer thereof as he was already holding the account in the bank. The documents bear signatures of Rakesh Sharma as introducer. PW-12 Jaya Parkash Rai has deposed about the account opening form and stated that he was called in the chamber of B.S. Sunder Ram Rai, Manager and on his instructions the account was opened. Rakesh Sharma, Managing Director of M/s SOL Ltd. and two more persons were present at that time. During cross-examination, witness clearly denied that Rakesh Sharma was not present when the account was introduced. The witness has nowhere stated that accused Subhash C. Hans (A-3) was present at that time or that he introduced for opening the account of Ravi S. Dhawan by impersonator. It is important to note that even before opening of the account Ex.PW-80/32 dated 14.08.1997 the guarantor Chunni Lal had appeared before the Vijaya Bank and impersonated as Ravi S. Dhawan to offer property S-551, Greater CBI Vs. Rakesh Sharma & ors. Page 108 out of 130 Kailash-II, New Delhi as collateral security (as evident from letter of guarantee Ex.PW-101/B-8 dated 21.02.1997). Therefore, it cannot be concluded that only at the instance of Subhash C. Hans (A-3) the act of impersonation was committed or completed. It is although true that accused Subhash C. Hans (A-3) has admitted in his statement u/s 313 CrPC that he had accompanied Rakesh Sharma and Chunni Lal for the purposes of opening of account (Ex.PW- 80/32), but at the same time he also stated that he was not knowing about the real facts.
113. As per settled legal position, statement u/s 313 CrPC cannot be the basis of conviction. In Raj Kumar Singh @ Raju @ Batya Vs. State of Rajasthan (supra), the court held that:
109. In view of the above, the law on the issue can be summarised to the effect that statement under Section 313 Cr.P.C. is recorded to meet the requirement of the principles of natural justice as it requires that an accused may be given an opportunity to furnish explanation of the incriminating material which had come against him in the trial. However, his statement cannot be made a basis for his conviction. His answers to the questions put to him under Section 313 Cr.P.C.
cannot be used to fill up the gaps left by the prosecution witnesses in their depositions. Thus, the statement of the accused is not a substantive piece of evidence and therefore, it can be used only for appreciating the evidence led by the prosecution, though it cannot be a substitute for the evidence of the prosecution. In case the prosecution's CBI Vs. Rakesh Sharma & ors. Page 109 out of 130 evidence is not found sufficient to sustain conviction of the accused, the inculpatory part of his statement cannot be made the sole basis of his conviction. The statement under Section 313 Cr.P.C. is not recorded after administering oath to the accused. Therefore, it cannot be treated as an evidence within the meaning of Section 3 of the Evidence Act, though the accused has a right if he chooses to be a witness, and once he makes that option, he can be administered oath and examined as a witness in defence as required under Section 315 Cr.P.C.
114. PW-75 O.P. Aneja owner of KD 306 Pitam Pura, leased out the property in favour of M/s SOL Ltd. and as per the lease deed (Ex.PW-37/U) Ravi S. Dhawan, Executive of the company would stay in the flat. The witness has not stated anything incriminating against Subhash C. Hans (A-3). Another important witness in this context is PW-73 Raman Mehta and according to the statement of witness, Mr. Abhilashi gave him a photocopy of sale deed of property S-551, Greater Kailash-II, New Delhi, which was forged. It is evident that Abhilashi was working in the accounts department of M/s SOL Ltd. and was receiving instructions from Rakesh Sharma, Managing Director only.
115. In these circumstances, it is clear that for the purposes of forgery of sale deed of collateral security (S-551, Greater Kailash-II, CBI Vs. Rakesh Sharma & ors. Page 110 out of 130 New Delhi) only Rakesh Sharma Managing Director has been instrumental and controlling all the links. Also as per resolution of the company Ex.PW-99/F2, Ravi S. Dhawan has been mentioned as relative of the director.
116. The fact cannot be ignored that convict Rakesh Sharma (a-
1) has been involved in various instances of cheating and fraud and on the basis of forged documents he obtained credit facilities from the banks and other institutions. On behalf of M/s SOL Ltd., Rakesh Sharma took various loans through misrepresentation and by misleading the concerned authorities. Before Small Industries Development Bank of India (SIDBI), the credit facility of Rs.150 lakhs was availed and there also forged property documents were used to offer collateral security. Before SIDBI, property of Baldev Krishan Kumar (who was deceased), plot no.31, West Punjabi Bagi, New Delhi was given as collateral security through impersonation and forgery. PW-80 P. Rudran, Chief General Manager, SIDBI has testified about the relevant facts relating to the credit facility availed by M/s SOL Ltd. from SIDBI. The witness deposed about the role of Subhash C. Hans (A-3) to the effect that he accompanied the guarantor (who impersonated Baldev Krishan Kumar) for creation of CBI Vs. Rakesh Sharma & ors. Page 111 out of 130 mortgage and also admitted filing of complaint Ex.PW-80/33 (dated 02.08.1999), wherein the name of Rakesh Sharma has been mentioned for attending the office on 29.08.1996 for creation of mortgage and introduction of Baldev Krishan Kumar by Rakesh Sharma. The corrigendum dated 12.09.2001 to the complaint Mark A substituting the name of Subhash C. Hans (A-3) for having attended the office on 29.08.1996 and introducing Baldev Krishan Kumar, cannot be given any importance as no such corrigendum has been placed on record with the charge sheet nor the prosecution has relied upon the same. In this situation, the corrigendum cannot be relied upon as it has been created much after filing the original complaint and it is doubtful whether any such corrigendum ever filed with CBI. Therefore, the statement of PW-80 cannot be relied upon to hold that Subhash C. Hans (A-3) has been responsible for introducing accused Chunni Lal as Baldev Krishan Kumar before SIDBI.
117. The investigating officer of the case is an important witness and can bring forth important facts of the case. The testimony of PW-104 Sameer Rewal, Investigating officer of the case, is not strong enough qua accused Subhash C. Hans (A-3) CBI Vs. Rakesh Sharma & ors. Page 112 out of 130 despite the fact that he thoroughly investigated the case. PW-104 is not even aware whether Subhash C. Hans (A-3) was responsible for day to day affairs of the company or whether he was holding any stake therein or that Subhash C. Hans (A-3) has anything to do with other companies like Warm Impex, M/s Paramount Pharmaceuticals Pvt. Ltd. etc. In the result, the IO has failed to bring out element of conspiracy qua accused S.C. Hans.
118. It is clear that Rakesh Shama, Managing Director of M/s SOL Ltd. has been holding top position in the company and controlling entire affairs of the company and he only formed other companies in whose names the credit facilities were obtained. He has been responsible for large scale forgery of documents and for using the said documents in committing fraud with the banks and other financial institutions including SIDBI. The entire benefits have resulted in favour of M/s SOL Ltd.
119. The conviction of Rakesh Sharma (A-1) on his plea of guilt leaves no scope of doubt that he has been guilty for committing serious offences of cheating and forgery. Although in his plea of guilt, accused Rakesh Sharma has tried to shift the blame upon Subhash C. Hans (A-3) but on giving proper consideration to the CBI Vs. Rakesh Sharma & ors. Page 113 out of 130 entire evidence, I am of the opinion that accused Subhash C. Hans (A-3) was only working as an employee with the company and had no independent authority or control over its affairs. Accused Subhash C. Hans (A-3) was working on the instructions of Rakesh Sharma, Managing Director-cum-chairman of M/s SOL Ltd. in the same way, the prosecution witnesses (PW-37 R. K. Hasija; PW-40 Dinesh Kumar Devgan; PW-41 Indra Bali Singh and; PW-99 Rajesh Grover) have been working with the company. There is no strong evidence so as to separate the role of accused Subhash C. Hans (A-
3) from that of prosecution witnesses, who all were working on the instructions of Rakesh Sharma.
120. The entire benefits have been availed by convict Rakesh Sharma and the company M/s SOL Ltd. and there is no material to show that any special benefit has resulted to accused Subhash C. Hans. The entire documentation of loan applications and for sanction and release of letters of credit were prepared and submitted at the instance of Rakesh Sharma. There is no incriminating evidence to infer or discern the element of conspiracy from the conduct of accused Subhash C. Hans (A-3), who had no direct dealings with the banks or financial institutions. The specific charges framed against Subhash C. Hans have not been proved CBI Vs. Rakesh Sharma & ors. Page 114 out of 130 beyond reasonable doubt. Merely because accused Subhash C. Hans (A-3) worked as vice president of M/s SOL Ltd. or wrote or signed some documents in that capacity, is no ground to hold him guilty for large scale cheating or forgery in conspiracy. Role of accused Satbir Singh (A-8)
121. Coming to the role of accused Satbir Singh (A-8), it is an admitted position that he has been the proprietor of M/s. S.S. Mercantile Corporation, Bombay. It is also not in dispute that letter of credit no.13/97 dated 16.06.1997 worth Rs.51,50,000/- was opened in favour of M/s. S.S. Mercantile Corporation on behalf of Vijaya Bank as evident through letter Ex.PW-74/B and annexed document Ex.PW-74/A. There is a letter dated 19.06.97 Ex.PW-74/F signed by accused Satbir Singh (A-8) on behalf of M/s. S.S. Mercantile Corporation (written on the letter head of M/s. S.S. Mercantile Corporation) enclosing therein Bills for supply of Vit. AD3, Vit B2, Cattle and Poultry feed to M/s SOL Ltd., Delhi. The invoice Ex.PW-74/J1 and delivery Challan Ex.PW-74/J2 have been annexed. On this basis, bankers cheque, Ex.PW-74/C was issued favouring account of M/s. S.S. Mercantile Corporation. Also transport receipt Ex.PW-44/A of Kalwania Carrying Corporation has CBI Vs. Rakesh Sharma & ors. Page 115 out of 130 been annexed to show the delivery from M/s. S.S. Mercantile Corporation to M/s SOL Ltd.
122. PW-44 Ashish Sharma, PW-45 Niranjan Lal Sharma (the owners of M/s Everest Roadways Corporation) deposed that goods mentioned in Ex.PW-44/A were never transported and transport receipts were purchased from Kalwania Carrying Corporation in blank/unfilled conditions and thereafter sold to Abdul Habib Ghori (PW-46). Both the witnesses were cross-examined on behalf of Satbir Singh (A-8) but the authenticity of their statements to the effect that blank transport receipts were purchased by them, have not been brought into question. PW-46 Abdul Habib Ghori has stated in his testimony that he used to purchase blank/unfilled transport receipts of Kalwania Carrying Corporation from Niranjan Lal Sharma (PW-45) and then were sold to M/s Rani Sati Steels Ltd. During cross-examination PW-46 Abdul Habib Ghori admitted that they used to procure blank lorry receipts and also used to supply the same in blank conditions. PW-47 Vinod Bidasaria, MD of M/s Rani Sati Steels Ltd. deposed about Ex.PW-44/A, in the manner that he handed over the same to J.B.Singh Mago, financial consultant for use of his brother-in-law Satbir Singh (A-8).
CBI Vs. Rakesh Sharma & ors. Page 116 out of 130
123. PW-69 partner of Kalwania Carrying Corporation has also confirmed in his testimony that PW-45 Niranjan Lal Sharma, Proprietor of M/s Everest Roadways Corporation used to receive blank lorry receipts book of Kalwania Carrying Corporation and the transport receipt Ex.PW-69/A (original of Ex.PW-44/A) was not issued on behalf of their company and accordingly no goods were so transported. During cross-examination, witness remained consistent and firm and nothing favourable for defence could be elicitated.
124. The clear conclusion from the evidence of above witnesses comes out that forged transport receipts were used for cheating the bank in order to get the credit facilities released. Even the invoice and delivery challan (Ex.PW47/J1 and Ex.PW-47/J2) have been drawn without any basis or justification and without any such actual transaction taking place.
125. It is further proved in evidence through cheque Ex.PW- 101/B-54 and account opening form Ex.PW-101/B-50 that from the account of M/s. S.S. Mercantile Corporation (account no.3151) CBI Vs. Rakesh Sharma & ors. Page 117 out of 130 maintained with Punjab and Sind Bank, Masjid Bunder Branch, Mumbai) six drafts Ex.PW-105/A(colly.) and also (Ex.PW-7/1 to Ex.PW-7/6) amounting to Rs.48 lakhs were issued favouring M/s Paramount Pharmaceuticals Pvt. Ltd. on 27.06.1997. In this way, accused Satbir Singh (A-8) on behalf of M/s. S.S. Mercantile Corporation facilitated the opening of letter of credit and thereafter routed the amount back in favour of Rakesh Sharma, who was also controlling M/s Paramount Pharmaceuticals Pvt. Ltd. It is therefore clearly proved that no actual transaction about supply of material shown through Ex.PW-74/J1 and Ex.PW-74/J2 had taken place and the documents were fabricated to cause wrongful gain to Rakesh Sharma. The expert evidence has also confirmed that the documents were so signed by Satbir Singh (A-8).
126. Accused Satbir Singh (A-8) has pleaded in his defence that he signed and forwarded the documents in goodfaith and at the instance of his brother-in-law J.B. Singh Mago. However, in criminal law there is no justification or exemption available, even if, illegal act is committed at the request of another person. Accused Satbir Singh (A-8) was carrying on his business under the name and style of M/s. S.S. Mercantile Corporation being the proprietor of the same CBI Vs. Rakesh Sharma & ors. Page 118 out of 130 and was conscious and aware enough about the illegalities committed in this regard. No concession can be granted in favour of Satbir Singh (A-8), even if, he has committed the offences of cheating and forgery at the request of his brother-in-law.
127. To constitute the offence of conspiracy, it is not necessary that each and every accused should come in contact with each other. It is sufficient if the accused has played a small role in the larger conspiracy in order to facilitate the commission of offences. The defence plea of accused Satbir Singh (A-8) is therefore not acceptable. For the illegal acts committed by accused Satbir Singh (A-8), the benefits have been obtained by convict Rakesh Sharma (A-1) and in this way accused Satbir Singh (A-8) is guilty of committing cheating and forgery in conspiracy and complicity. Corporate Liability/Role of M/s SOL Ltd. (A-2)
128. So far as company M/s SOL Ltd. is concerned, the charge was framed for the offences punishable u/s 420 and 471 IPC. Although there has been no representation on behalf of company either at the time of charge or during the trial, (since it was proceeded exparte) however, the summons were duly served upon CBI Vs. Rakesh Sharma & ors. Page 119 out of 130 M/s SOL in terms of Section 63 Criminal Procedure Code through accused No.1, who submitted that company has gone into liquidation. The notice was then sent to official liquidator who appeared on several dates (02.09.2003, 19.09.2002, 14.11.2003, 22.12.2004, 25.02.2005, 21.02.2006), but thereafter failed to appear and thereafter vide order dated 10.08.2007, it has been ordered as under:
10.08.07 Present : Sh. S. Islam, PP for CBI, Accused Rakesh Sharma, Subhash C. Hans, B. Ramesh and Satbir Singh are present on bail.
None is present on behalf of A2 M/s SOL India Limited. Counsel Sh. K. Madhvan and Sh. P.K. Sharma, advocates for A.4 B. Ramesh.
Sh. Mayan Bhargava, Adv. as proxy for accused Rakesh Sharma.
A.2 was appearing through Sh. R.K. Dalmiya, Official Liquidator for A.2. However, on 21.02.2006 an application was moved by said Sh. R.K. Dalmia stating that Ms. Richa Kukreja has been appointed as Official Liquidator. My learned predecessor had preferred to issue a notice on the said date to the successor Official Liquidator. Honestly speaking there was no necessity as the successor official liquidator was to take all the steps in the interest of the company, which was required to be taken and to cause his/her appearance. In any case, notice was issued to Ms. Richa Kukreja for 4.4.06. However, she did not appear. Subsequently, four notices were served and undated application purported to be written by Ms. Richa Kukreja is on record that she is on maternity leave w.e.f.29.05.06 to November, 2006. It was the duty of the official liquidator to find out the date and to make arrangements CBI Vs. Rakesh Sharma & ors. Page 120 out of 130 for representation of the company. Since no official liquidator is present on behalf of the company, A4 M/s SOL Ltd. company is proceeded exparte.
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Special Judge: Delhi:10.08.07
129. The procedure to proceed against an incorporated company is provided u/s 305 CrPC, which reads as under:-
305. Procedure when corporation or registered society is an accused.
(1) In this section,"corporation" means an incorporated company or other body corporate, and includes a society registered under the Societies Registration Act, 1860 (21 of 1860 ).
(2) Where a corporation is the accused person or one of the accused persons in an inquiry or trial, it may appoint a representative for the purpose of the inquiry or trial and such appointment need not be under the seal of the corporation. (3) Where a representative of a corporation appears, any requirement of this Code that anything shall be done in the presence of the accused or shall be read or stated or explained to the accused, shall be construed as a requirement that that thing shall be done in the presence of the representative or read or stated or explained to the representative, and any requirement that the accused shall be examined shall be construed as a requirement that the representative shall be examined.
(4) Where a representative of a corporation does not appear, any such requirement as is referred to in sub- section (3) shall not apply.
CBI Vs. Rakesh Sharma & ors. Page 121 out of 130 (5) Where a statement in writing purporting to be signed by the managing director of the corporation or by any person (by whatever name called) having, or being one of the persons having the management of the affairs of the corporation to the effect that the person named in the statement has been appointed as the representative of the corporation for the purposes of this section, is filed, the Court shall, unless the contrary is proved, presume that such person has been so appointed.
(6) If a question arises as to whether any person, appearing as the representative of a corporation in an inquiry or trial before a Court is or is not such representative, the question shall be determined by the Court.
130. The only person who could represent the company was the official liquidator who was even summoned and notice duly served. The liability of the company notwithstanding its liquidation continue since offences were committed at the point of time when the company was functioning properly. In the absence of official liquidator in the present proceedings, the trial against the company proceeded by virtue of Section 305 (4) CrPC.
131. In view of above provisions, the trial against M/s SOL Ltd. continued in absence as no authorized representative appeared u/s 305 CrPC. In accordance with judgment of High Court of Calcutta in case Dhanraj Bagaria Vs. S.C. Chatterjee and ors. 20, the 20 1997 Cr. LJ 823 CBI Vs. Rakesh Sharma & ors. Page 122 out of 130 directors are not required to represent the company once official liquidator has been appointed.
132. On merits, the prosecution has been able to establish that illegalities have been committed by convict Rakesh Sharma (A-1) in the name and on behalf of M/s SOL Ltd. The loan/credit applications were submitted on behalf of M/s SOL Ltd. and forged documents of collateral security were presented before Vijaya Bank and guarantor (Chunni Lal, since deceased) impersonated as Ravi S. Dhawan. Entire illegalities have been done by Managing Director Rakesh Sharma (now convict) on behalf of company M/s SOL Ltd. The company had no infrastructure or drug license to purchase Penicillin G or to use the same as raw material. The entire credit facilities have been got sanctioned from Vijaya Bank on the basis of mis- representation and forged documents on behalf of M/s SOL Ltd. and similar kind of cheating and forgery has been committed before SIDBI and in both the cases in the name of M/s SOL Ltd. The discussions in earlier part of the judgment with respect to the facts and evidence are sufficient to hold that the offences have been committed by convict Rakesh Sharma in the name and on behalf of the company M/s SOL Ltd.
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133. A corporation is a separate legal entity and considered a legal person. The liability in the criminal law is required to be fastened against the company for unlawful acts done by its agents when they are acting within the scope of their authority. The criminal acts should be committed in furtherance of the benefit of the company as well as the benefit of the agent. The doctrine of corporate criminal liability is a recognized principle in India especially after the landmark judgment of Standard Chartered Bank Vs. Directorate of Enforcement21.
134. The question, whether the company can be prosecuted for an offence which requires mens-rea has been considered in Iridium India Telecom Ltd. v. Motorola Inc22. The important observations of the court are as under:-
"59. The courts in England have emphatically rejected the notion that a body corporate could not commit a criminal offence which was an outcome of an act of will needing a particular state of mind. The aforesaid notion has been rejected by adopting the doctrine of attribution and imputation. In other words, the criminal intent of the "alter ego" of the company/body corporate i.e. the person or group of persons that guide the business of the company, 21 (2005) 4 SCC 530 22 2011 (1) SCC 74 CBI Vs. Rakesh Sharma & ors. Page 124 out of 130 would be imputed to the corporation.
60. It may be appropriate at this stage to notice the observations made by MacNaghten, J. in Director of Public Prosecutions v. Kent and Sussex Contractors Ltd. 1972 AC 153: (AC p. 156):
"A body corporate is a "person" to whom, amongst the various attributes it may have, there should be imputed the attribute of a mind capable of knowing and forming an intention --
indeed it is much too late in the day to suggest the contrary. It can only know or form an intention through its human agents, but circumstances may be such that the knowledge of the agent must be imputed to the body corporate. Counsel for the respondents says that, although a body corporate may be capable of having an intention, it is not capable of having a criminal intention. In this particular case the intention was the intention to deceive. If, as in this case, the responsible agent of a body corporate puts forward a document knowing it to be false and intending that it should deceive, I apprehend, according to the authorities that Viscount Caldecote, L.C.J., has cited, his knowledge and intention must be imputed to the body corporate."
61. The principle has been reiterated by Lord Denning in Bolton (H.L.) (Engg.) Co. Ltd. v. T.J. Graham & Sons Ltd. in the following words: (AC p.172):
"A company may in many ways be likened to a human body. They have a brain and a nerve centre which controls what they do. They also CBI Vs. Rakesh Sharma & ors. Page 125 out of 130 have hands which hold the tools and act in accordance with directions from the centre. Some of the people in the company are mere servants and agents who are nothing more than hands to do the work and cannot be said to represent the mind or will. Others are directors and managers who represent the directing mind and will of the company, and control what they do. The state of mind of these managers is the state of mind of the company and is treated by the law as such. So you will find that in cases where the law requires personal fault as a condition of liability in tort, the fault of the manager will be the personal fault of the company. That is made clear in Lord Haldane's speech in Lennard's Carrying Co. Ltd. v. Asiatic Petroleum Co. Ltd. (AC at pp. 713, 714). So also in the criminal law, in cases where the law requires a guilty mind as a condition of a criminal offence, the guilty mind of the directors or the managers will render the company themselves guilty."
62. The aforesaid principle has been firmly established in England since the decision of the House of Lords in Tesco Supermarkets Ltd. v. Nattrass. In stating the principle of corporate liability for criminal offences, Lord Reid made the following statement of law: (AC p. 170 E-G) "I must start by considering the nature of the personality which by a fiction the law attributes to a corporation. A living person has a mind which can have knowledge or intention or be negligent and he has hands to carry out his intentions. A corporation has none of these: it CBI Vs. Rakesh Sharma & ors. Page 126 out of 130 must act through living persons, though not always one or the same person. Then the person who acts is not speaking or acting for the company. He is acting as the company and his mind which directs his acts is the mind of the company. There is no question of the company being vicariously liable. He is not acting as a servant, representative, agent or delegate. He is an embodiment of the company or, one could say, he hears and speaks through the persona of the company, within his appropriate sphere, and his mind is the mind of the company. If it is a guilty mind then that guilt is the guilt of the company. It must be a question of law whether, once the facts have been ascertained, a person in doing particular things is to be regarded as the company or merely as the company's servant or agent. In that case any liability of the company can only be a statutory or vicarious liability."
63. From the above it becomes evident that a corporation is virtually in the same position as any individual and may be convicted of common law as well as statutory offences including those requiring mens rea. The criminal liability of a corporation would arise when an offence is committed in relation to the business of the corporation by a person or body of persons in control of its affairs. In such circumstances, it would be necessary to ascertain that the degree and control of the person or body of persons is so intense that a corporation may be said to think and act through the person or the body of persons. The position of law on this issue in Canada is almost the same. Mens rea is attributed to corporations on the principle of "alter ego"
of the company.
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64. So far as India is concerned, the legal position has been clearly stated by the Constitution Bench judgment of this Court in Standard Chartered Bank v. Directorate of Enforcement (2005) 4 SCC 530. On a detailed consideration of the entire body of case laws in this country as well as other jurisdictions, it has been observed as follows: (SCC p. 541, para 6) "6. There is no dispute that a company is liable to be prosecuted and punished for criminal offences. Although there are earlier authorities to the effect that corporations cannot commit a crime, the generally accepted modern rule is that except for such crimes as a corporation is held incapable of committing by reason of the fact that they involve personal malicious intent, a corporation may be subject to indictment or other criminal process, although the criminal act is committed through its agents."
135. The above settled principle was also confirmed by the Apex Court in Sunil Bharti Mittal Vs. Central Bureau of Investigation23, and it was observed that the criminal intent of the "alter ego" of the company, that is the personal group of persons that guide the business of the company, would be imputed to the company/corporation. The legal proposition that is laid down in the aforesaid judgments is that if the person or group of persons who control the affairs of the company commit an offence with a 23 Crl.Appeal No.34 of 2015 decided on 09.01.2015 CBI Vs. Rakesh Sharma & ors. Page 128 out of 130 criminal intent, their criminality can be imputed to the company as well as they are "alter ego" of the company.
136. It is, thus, well recognized principle that company does not act of his own, but through its directors/officers and the company is also liable for those acts of criminality committed in the name of the company. Since convict Rakesh Sharma being the managing director-cum-chairman of M/s SOL Ltd. committed criminal acts on behalf of the company, the company is equally liable and accordingly I hold the company M/s SOL Ltd. guilty for the charged offences.
Conclusion :-
137. In view of my aforesaid observations, I conclude that prosecution has successfully proved its case against accused company M/s SOL Ltd.(A-2), B. Ramesh (A-4) (public servant) and Satbir Singh (A-8) beyond reasonable doubt. I accordingly record their conviction in the following manner:
• M/s SOL Ltd. (A-2) is convicted for the offences punishable u/s 420 and 471 IPC.
• Accused B. Ramesh (A-4) is accordingly convicted for the offence punishable u/s 120 B IPC r/w Section 419, 420, 467, CBI Vs. Rakesh Sharma & ors. Page 129 out of 130 468, 471 IPC and u/s 13 (1) (d) punishable u/s 13 (2) of PC Act, 1988 and substantive offence punishable u/s 13 (2) r/w Section 13 (1) (d) of PC Act, 1988.
• Accused Satbir Singh (A-8) is convicted for the offence punishable u/s 120 B IPC r/w Section 419, 420, 467, 468, 471 IPC and u/s 13(1)(d) punishable u/s 13(2) of Prevention of Corruption Act, 1988 and substantive offence punishable u/s 420 IPC.
138. The case against accused Subhash C. Hans (A-3) is not proved beyond reasonable doubt and therefore he is entitled to the benefit of doubt. Accordingly, Subhash C. Hans (A-3) is acquitted of all the charges.
139. Let the convicts be heard on the point of sentence. Digitally signed by
ANJU ANJU BAJAJ
BAJAJ CHANDNA
Date: 2019.10.25
CHANDNA 12:22:30 +0530
ANNOUNCED IN THE OPEN COURT ANJU BAJAJ CHANDNA
on 25 October 2019
th
Special Judge (PC Act) CBI-02,
Rouse Avenue Court Complex
New Delhi
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