Delhi District Court
Cbi vs Lila Krishna Seth(Maharani Avanti Bai ... on 27 March, 2026
IN THE COURT OF SH. RAJESH MALIK
SPECIAL JUDGE (PC ACT)CBI-14, ROUSE
AVENUE DISTRICT COURT, NEW DELHI
CNR No. DLCT11-000285-2019
CBI Case No. 65/2019
FIR No. : RC BD1/2006/E/0008/CBI/BS&FC/New Delhi
U/Sections : 120(B) IPC read with Section 420, 468, 471 IPC &
Section 13 (2) read with Section 13 (1) (d) of PC
Act, 1988 and substantive offences u/s 420, 471
IPC and Section 13(2) r/w 13(1)(d) of P.C. Act, 1988
Central Bureau of Investigation (CBI)
Versus
1. Lila Krishna Seth (A-1)
S/o Late Purushottam Das
R/o 9/8, Old Rajinder Nagar, New Delhi
(The then Assistant Registrar, O/o RCS, New Delhi)
2. Zafar Iqbal (A-2)
S/o Sh. Iftekhar Ahmed
R/o N-63, Batla House, Okhla, New Delhi
(The then Inspector Grade-III, O/o RCS, New Delhi)
CBI Case No. 65/2019 CBI vs. Lila Krishna Seth & Ors Page 1 of 124
3. Ram Narayan Aggarwal (A-3)
S/o Sh. Raghu Nath Prasad Aggarwal
R/o A-1/31, Janak Puri, New Delhi
4. Bhim Singh Mahur (A-4)
S/o Late Khushihal Singh Mahur
R/o FF-1, Laxmi Nagar, Delhi
(Procedings Abated on 13.05.2019)
5. Subhash Gupta (A-5)
S/o Late Dr. Narayan Krishna Gupta
R/o D-1/29, Rajouri Garden, Delhi
6. Om Prakash Aggarwal (A-6)
S/o Late Gajanand Aggarwal
R/o RZ-D-1-326, Gali No. 5,
Mahavir Enclave, Dabri Palam Road, New Delhi
7. Madan Sharma (A-7)
S/o Late Ram Karan Sharma,
R/o Plot No.1, Site No. 7,
Old Rajendra Nagar, New Delhi-60
8. Ramesh Chand Bansal (A-8)
S/o Late Sh. Badri Prasad
R/o C-4-C/22, Janak Puri,
New Delhi
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9. Sujata Chauhan (A-9)
D/o Late Sh. Muni Pal Chauhan
R/o Flat No.11, Manocha Apartment,
Vikas Puri, New Delhi
(Proceedings Abated on 05.12.2020)
Date of institution of the case : 22.10.2007
Arguments concluded : 23.02.2026
Date of pronouncement of judgment : 27.03.2026
JUDGEMENT
Allegations against the accused persons in the charge-sheet:-
1. According to the prosecution, the accused persons entered into a criminal conspiracy to take control over a society namely Maharani Avanti Bai, which should have been wound up, in order to get the allotment of a piece of land admeasuring 5000 sq. mts. from DDA. After completion of investigation, the CBI filed the charge-sheet under Section 120-B read with Section 420, 468, 471 IPC and the Section 13(2) read with Section 13(1)
(d) of the Prevention of Corruption Act, 1988 and for the substantive offences under Section 420, 471 IPC and under Section 13 (2) read with Section 13 (1) (d) of The Prevention of CBI Case No. 65/2019 CBI vs. Lila Krishna Seth & Ors Page 3 of 124 Corruption Act, 1988 against the accused persons. The following persons have faced the trial before this court:-
i) Sh. Leela Krishna Seth (L.K. Seth), Retired Govt. Servant, then Assistant Registrar;
ii) Zafar Iqbal, Govt. Servant, Inspector Grade-III;
iii) Ram Narayan Aggarwal, Private Person;
iv) Bhim Singh Mahur, Private Person;
v) Subhash Gupta, Private Person;
vi) O.P. Aggarwal, Private Person;
vii) Madan Sharma, Private Person;
viii) Sujata Chauhan, Private Person and
ix) Ramesh Chand Bansal, Private Person
2. The C.B.I has alleged the following facts against the accused persons :-
➢ That they entered into the criminal conspiracy to cheat the DDA and fraudulently obtained letter of allotment of land of 5000 sq. meter from DDA by submitting forged letter purportedly signed by Bhupender Kumar, the then Secretary of Maharani Avanti Bai CGHS;
➢ That the society was dormant from 1990 to 2000 and no correspondence was made with the Registrar, Cooperative Society as the promoter members were not interested in running the society due to high cost of flats; ➢ That the accused Subhash Gupta fraudulently took over the record of the society from the accused Bhim Singh Mahur and handed over the record to the accused Ram Narayan CBI Case No. 65/2019 CBI vs. Lila Krishna Seth & Ors Page 4 of 124 Aggarwal who lateron became the President of the society in 1998;
➢ That the address of society was changed from FF-1, Laxmi Nagar, Delhi to No. 303, 3rd Floor, C-15, Vasant Tower, Community Center, Janak Puri, New Delhi without any intimation to the Co-operative Registrar Office; ➢ That in the General Body Meeting dated 15.11.98, 46 members were shown resigned during 1996 to 1998, but the resignation letters were not sent to the RCS office; ➢ That in the GBM dated 23.01.2000, ten other promoter members were shown resigned. Both these proceedings bear forged signatures of Sudhir Aggarwal, the Executive Member of the society;
➢ That both the public servants namely L.K. Seth and Zafar Iqbal did not verify the proceedings and did not check the authenticity of elections of the society from 1990 to 1998; ➢ That the accused L.K. Seth accepted the false report of Inspector Zafar Iqbal and certified the members of Managing Committee - which was used for processing the building plan before the D.D,A;
➢ That Bhim Singh was not enrolled as the member of the society, but he remained the secretary of society and he signed various bank documents as the secretary till the year 1989 and controlled the society through his wife and his son who were made members in the society; ➢ That Mishri Lal and Bhupender Kumar were President and Secretary of the society from 1989 to 1998 but all the CBI Case No. 65/2019 CBI vs. Lila Krishna Seth & Ors Page 5 of 124 record of the society were kept in the office of the society i.e. at the residence of the accused Bhim Singh Mahur; ➢ That the President Mishri Lal resigned from the society on 13.05.1998 and gave his resignation to Bhim Singh Mahur;
➢ That as on 13.05.1998, there were only 100 members bearing Serial No. 1 to 100;
➢ That the Managing Committee of the society did not enroll any other member till 1998;
➢ That promoter member of society were not interest in running the society as they were belonged to lower income group;
➢ That the society became dormant and the promoter members started resigning from the membership of the society;
➢ That in the year 1998, the accused Bhim Singh Mahur dishonestly transferred the society document to the accused Subhash Gupta for Rs. 2,25,000/- in cash. The deal was done through Satya Prakash Garg;
➢ That Bhim Singh Mahur handed over all original documents of the society including resignation letters of original members of the society to Subhash Gupta. ➢ That forged letters under signatures of Bhupender Kumar, Secretary of society, were sent to DDA, requesting for allotment of plot to the society;
➢ That Subhash Gupta further illegally transferred the documents of the society to Ram Narayan Aggarwal through Madan Sharma and Ramesh Chand Bansal at the CBI Case No. 65/2019 CBI vs. Lila Krishna Seth & Ors Page 6 of 124 rate of Rs. 5000/- per resignation letter of the promoter members;
➢ That the accused Ram Narayan Aggarwal in order to regularise the society fraudulently prepared false documents such as proceedings of GBM dated 15.11.1998, proceedings of GBM dated 23.01.2000 and proceedings dated 22.11.1998;
➢ That false facts were recorded in the proceedings of GBM dated 15.11.98 and false elections were shown to be held to elect Managing Committee to regularize the dormant society;
➢ That false proceedings in the subsequent GBM were recorded to take over the society which had become otherwise dormant;
➢ That Mishri Lal Lodhi (then President) and Bhupender Kumar (then Secretary) had not approved resignation of the promoter members and enrollment of new members during the year 1996-97 as shown in the GBM dated 15.11.1998; and ➢ That the accused Zafar Iqbal and L.K. Seth facilitated submission of false documents by accused O.P. Aggarwal and R.N. Aggarwal to issue certified copy of members of the Managing Committee dated 07.06.2001.
Charge against the accused persons:-
3. After hearing the accused persons, the court framed the charge under Section 120-B read with Section 420, 468, 471 CBI Case No. 65/2019 CBI vs. Lila Krishna Seth & Ors Page 7 of 124 IPC against all nine accused persons. The accused L.K. Seth was separately charged for the offence under Section 13 (1) (d) read with Section 13 (2) of PC Act. Accused Subhash Gupta was separately charged under Section 406 IPC. The accused Bhim Singh Mahur was separately charged under Section 406 IPC.
Accused Ram Narayan Aggarwal was separately charged under Section 406 IPC. Accused Zafar Iqbal was separately charged for offence under Section 13 (1)(d) read with 13 (2) of PC Act. For a better understanding, the charges framed against the accused persons are shown in tabular form: -
Name of the Accused Charge
Leela Krishna Seth;
Zafar Iqbal;
Ram Narayan Aggarwal;
Under Section 120-B read
Bhim Singh Mahur;
with Section 420, 468, 471
Subhash Gupta; IPC
O.P. Aggarwal;
Madan Sharma;
Sujata Chauhan and
Ramesh Chand Bansal
Leela Krishna Seth Under Section 13 (1) (d)
read with Section 13 (2) of
PC Act, 1988
Subhash Gupta Under Section 406 IPC
Bhim Singh Mahur Under Section 406 IPC
CBI Case No. 65/2019 CBI vs. Lila Krishna Seth & Ors Page 8 of 124
Ram Narayan Aggarwal Under Section 406 IPC
Zafar Iqbal Under Section 13 (1) (d)
read with Section 13 (2) of
PC Act, 1988
4. Before examining the merits of the case to determine whether the prosecution has successfully established the charges against the accused persons, it is important to first recount the history and development of the society from its inception through to the stage at which the alleged forgery was committed by the accused persons.
Formation of Maharani Avanti Bai Co-operative Group Housing Society:-
5. An application was moved to the Registrar of Cooperative Societies for registration of the Cooperative Society namely Maharani Avanti Bai Cooperative Group Housing Society at FF-1, Laxmi Nagar, Delhi for the purpose of acquiring land for residential houses/flats for the members of the cooperative society. The application was accompanied with proposed names of 60 members. Accordingly, the cooperative society namely Maharani Avanti Bai Cooperative Group Housing Society at the registered address i.e. FF-1, Laxmi Nagar, Delhi was registered at the serial no. 1179/GH. The bylaws of the society were duly registered and the certificate was issued on CBI Case No. 65/2019 CBI vs. Lila Krishna Seth & Ors Page 9 of 124 31.12.1983. The certificate is Ex. PW-22/B. Members of the First Managing Committee of the Society:-
6. At the time of inception of the society, the following members were chosen as the members of the Managing Committee:-
i) Sh. Mahavir Singh Verma (President)
R/o D-99, Laxmi Nagar, Delhi -92;
ii) Sh. Babu Ram (Vice President)
R/o H.No. 49, Babar Pur East, Chajju Pur, Shadara;
iii) Sh. B.S. Mahur (Hony. Secretary) R/o FF-1, Laxmi Nagar, Delhi-92
iv) Mishri Lal Lodhi (Treasurer) R/o F-16/B, Laxmi Nagar, Delhi-92
v) Jawahar Lal Verma (Member) R/o FF-1, Laxmi Nagar, Delhi-92
vi) Phool Singh (Member) R/o 6/180, Lodhi Rajpur Mohalla, Shahdara, Delhi-32
vii) Anand Kumar (Member) R/o 9/111, Shastri Gali, Vishwas Nagar, Shahdara, Delhi CBI Case No. 65/2019 CBI vs. Lila Krishna Seth & Ors Page 10 of 124
viii) Smt. Sunita Malhotra (Member) R/o F-186, Laxmi Nagar, Delhi-92
ix) Sh. Ramesh Kumar Mahur (Member) R/o 12/393, Lalita Park, Laxmi Nagar, Delhi-92
7. Thereafter, the society started maintaining the membership register i.e. D-5. The first membership register i.e. D-5 contains the entry of 100 members. The initial proceedings of the society were recorded in the register (D-7). This register (D-7) contains the record of the proceedings till 29.07.1990. The Managing Committee opened the bank account with the Delhi State Cooperative Bank, Darya Ganj Branch and also enrolled the new members in the society. After the first meeting, some new members were joined from time to time by the Governing Body of the society. In the meanwhile, the Registrar (Cooperative Societies) approved the list of 90 members to send the same to the DDA for allotment of plot to the society. As per the proceeding register (D-7), new members were inducted from time to time in the following minutes of meeting:-
a) Eight (08) members were newly inducted in the society by the Managing Committee of the society vide minutes dated 17.06.1984;
b) Ten (10) members were inducted on 09.09.1984;
CBI Case No. 65/2019 CBI vs. Lila Krishna Seth & Ors Page 11 of 124c) Six (06) members were inducted on 16.12.1984;
d) Six (06) members were inducted on 24.02.1985;
e) Five (05) members were inducted on 21.04.1985;
8. Thereafter, four members resigned, and in place of the resigned members, new four members were inducted vide Managing Committee meeting minutes dated 08.07.1990.
9. The office of Registrar, Cooperative Society scrutinized the initial list of 60 members and the list of newly added members. Thereafter, the final list of 90 members was approved on 17.01.1989;
10. The Delhi Cooperative Societies Act empowers the Registrar Cooperative Society to monitor the working of the cooperative societies. Pursuant to that, the notings were also being recorded in the file being maintained by the Registrar Cooperative Society by the respective officers and the noting dated 23.12.1988 from the file maintained in the cooperative society is reproduced as under to show the final approval of 90 members:-
"Society was registered on 26.12.1983 vide registration No. 1179 (GH) with 55 promoter members. Thereafter, the society enrolled 35 new members as on 21.04.1985. The new enrollments were passed in the Managing Committee meetings CBI Case No. 65/2019 CBI vs. Lila Krishna Seth & Ors Page 12 of 124 held on 17.06.84, 09.09.84, 16.12.84, 24.02.1985, 21.04.1985 respectively, which can be seen at flag- A. The break up of the membership is as under :-
1.Number of Promoter Members - 55
2.Number of New members enrolled - 35 TOTAL - 90 The society has submitted an affidavit in respect of the members enrolled. The fresh list of society was received in the office vide Serial No. 787 dated 12.06.1985 consisting of 90 members, which can be seen at Flag-C. The final list has been tallied with the register bylaws in case of promoter members and with the resolution of the MC meeting as well as the affidavit duly filed by the secretary of the society.
The election of the society was held on 12.04.1987. The society circulated the agenda notice to the members for 1988 - 89, General Body Meeting which will be held on 22.01.1989. The audit of the society has been conducted upto 1984-85. As per PNP, if agreed the 90 members final list may be approved and sent to the DDA for land allotment. "
11. The aforesaid noting was sent for approval. The Registrar, Cooperative Society raised objection for not holding the elections regularly. However, it was observed that since the society was going to hold General Body Meeting for election on 22.01.1989 and visualizing the factual position that societies are waiting for land since 1983, a lenient view was taken and the final list of 90 members was approved with directions to get the elections conducted. The final list was given to Mr. Satish Kumar, member of the society. The society was asked to submit the photocopy of the General Body Meeting to be held on 22.01.1989. Thereafter, the society produced the photocopies of all Managing Committee Meetings and Annual General Body CBI Case No. 65/2019 CBI vs. Lila Krishna Seth & Ors Page 13 of 124 Meetings and accordingly, the proposal was moved by the Assistant Registrar to call the society. However, the same was objected to by the senior officer of the Registrar Office as to why the society did not conduct the election under Schedule-2. However, this lapse was condoned by stating that the society had conducted the election as per Schedule- 3. However, the society had promised that General Body Meeting would be called to conduct the election as per amended Schedule - 2.
12. All these notings regarding approval of 90 members and direction to the society to conduct elections under Schedule - 2 of Delhi Cooperative Society Rules, 1973 are present in the file maintained by the Registrar, Cooperative Society and marked as the D-2. Further notings are at the page No. 13/N, wherein it was recorded that the society was asked to furnish the details of the resigned and enrolled members by producing relevant record in the registrar office, but the society did not comply with the same. That noting was recorded on 06.11.1991. It is pertinent to mention here that after 06.11.1991, no correspondence was done by the society with the registrar till 21.11.1997. The file of the society was lying idle in the registrar office. It is worth mentioning here that as per the communication available in this file (D-2), the society was directed to hold future elections in accordance with the Schedule 2 of the Delhi Cooperative Society Rules, 1973. In-fact, society reverted back to the Registrar, Cooperative Society, promising that the next election would be held under Schedule -2 of the Delhi Cooperative Society Act. All CBI Case No. 65/2019 CBI vs. Lila Krishna Seth & Ors Page 14 of 124 these facts have been noted in the note-sheet lying in the file D-2 from page no. 2/N to 13/N. General Body Meetings and Election from inception of society till 29.07.1990:-
13. The first General Body Meeting was held on 09.10.1983 at FF-1, Laxmi Nagar, Delhi. As per proceedings register, 59 members participated in the said meeting, and Mahavir Singh Verma was unanimously elected as the President and B.S. Mahur (deceased accused) was elected as the Hony.
Secretary. It is relevant to mention here that B.S. Mahur was not the member of the society. His wife namely Smt. Kela Mahur was the member.
14. The second General Body Meeting was held on 22.01.1989. In the said General Body Meeting, Mishri Lal was elected as the President, Mahender Kumar Jain as Vice President, Kamal Nain as Secretary, Kela Mahur as Treasurer, and other five members were elected as Executive Members namely Bhupinder Kumar, Phool Singh, Padam Singh, Sheela Devi and Satish Arora. In the said meetings, the said all the members were informed that DDA might allot the land shortly and therefore, all members were called upon to give their contribution.
15. The third General Body Meeting was held on 01.10.1989 under the Presidentship of Mishri Lal. In the said meeting, the Secretary Kamal Nain resigned and in his place, CBI Case No. 65/2019 CBI vs. Lila Krishna Seth & Ors Page 15 of 124 new Secretary namely Bhupender Kumar was elected.
16. The fourth General Body Meeting was held on 29.07.1990 under the Presidentship of Mishri Lal. In the said meeting, election was again conducted. Mishri Lal was elected as the President, Aanchal Kumar as the Vice President, Bhupender Kumar as Secretary and Padam Singh as Treasurer. The members were V.K. Tondon, Kanta Devi, Bhopal Singh, Babu Ram and Shri Kishan. In the said meeting, the concern of the Managing Committee that they had no fund to make the part payment for the plot to be allotted very soon by DDA during that year.
17. Thereafter, no communication was given by the society to the Registrar.
Allotment of Land:-
18. The offer of land was made by the DDA to the society on 31.03.1995, asking the society to deposit 35% land premium for allotment of land. However, the letter could not be delivered to the society and the society did not pay the demanded cost of the land on account of non-delivery of demand-cum- allotment letter. Consequently, the offer of allotment was withdrawn vide order dated 29.08.1995.
Society becomes active:
19. The order sheets of DDA department shows that the CBI Case No. 65/2019 CBI vs. Lila Krishna Seth & Ors Page 16 of 124 representative of the society appeared before the DDA Director on 27.10.1997 in the public hearing. They explained that the offer letter and the cancellation letter were sent at the wrong address by the DDA and therefore, the same could not be delivered.
20. The DDA took up the matter on letter addressed to Lt. Governor exhibited as Ex. PW-25/F by Secretary Bhupender Kumar seeking allotment of land to the society. The DDA file also contains another undated letter to Lieutenant Governor exhibited as Ex. PW-20/G. The letters were sent to the DDA by the Lt. Governor for consideration of the DDA. Bhupender Kumar also wrote a letter to Principal Commissioner, DDA. The same was received in the office of Principal Commissioner, DDA on 15.07.1998 regarding cancellation of allotment to the society. Thereafter, the DDA processed the request and found that the allotment letter was sent at the incorrect address. Having admitted its mistake, the offer letter was re-issued to the society. The society was asked that building department of DDA shall process the building plan only after the following documents were submitted by the society in the Cooperative Group Housing Society branch:-
i) List of members duly verified by the RCS;
ii) List of Managing Committee;
iii) Resolution regarding appointment of Architect;
iv) Resolution regarding authorisation of member to make correspondence;CBI Case No. 65/2019 CBI vs. Lila Krishna Seth & Ors Page 17 of 124
v) An undertaking regarding payment of any pending dues/interest to be pointed out by the audit and as and when demanded by the DDA
21. Since, the certified list of Managing Committee was required, therefore, the letter dated 24.05.2001 was moved by the secretary of society, requesting for issuance of certified list of Managing Committee demanded by DDA for approval of layout and building plan sanctions. Thereafter, notings were written by the officials of the Registrar, Cooperative Society. These notings are relevant to observe as to how the office of Registrar, Cooperative Society proceeded with the request of the society. These notings shall be re-produced at the relevant stage. Thereafter, the society communicated with the registrar number of times.
Observations of this court:-
22. Now, this court shall discuss the role of each accused. The evidence and the relevant documents qua each accused shall be referred to while analysing his role. To analyse the case of prosecution, the accused persons are categorised in two categories:-
A) Public servant B) Private persons
23. The evidence is also categorised qua the public CBI Case No. 65/2019 CBI vs. Lila Krishna Seth & Ors Page 18 of 124 servants and the private persons as:-
A) Evidence against public servants; and B) Evidence against private persons Evidence against the public servants:-
24. The following witnesses have deposed the facts pertaining to the public servants: -
PW Name Deposition
Number
PW-8 Dushyant He dealt with the file D-2 as Assistant
Kumar Registrar Dwarka and East Zone. He
(Former identified his initial at Page-17/N of the
Assistant file D-2. He deposed that there was no Registrar, correspondence of the society since RCS Office) 1990. He also identified his initials on the note-sheet at the Page No. 18/N to 19/N. He identified the file of RCS as Ex. PW-8/Y. PW-20 Virender He identified the DDA file and Singh Verma exhibited the same as Ex. PW-20/A (D- (Assistant 42). He exhibited the various Director, documents lying in the said file. DDA) Notably, he identified the letters of Bhupender Kumar as Ex. PW-20/G, Ex. PW-20/R (D-43); Ex. PW-20/T (D-
43).
He also identified the letter sent by O.P. Aggarwal, wherein he intimated that the sum of Rs. 53,90,000/- had been deposited by the society through bank CBI Case No. 65/2019 CBI vs. Lila Krishna Seth & Ors Page 19 of 124 challans available at page 40 to 46 of the file. The letter is exhibited as Ex.
PW-20/V (D-43). He also exhibited letter dated 10.06.2000, whereby Secretary of the society intimated about deposit of Rs. 66,88,750/- through bank challan as Ex. PW-20/Z-1 (D-43).
PW-21 Madan Pal He was posted as Assistant Registrar, Sharma Policy in the office of Registrar of Co- (Assistant operative Societies from April 2006 to Registrar,Poli September 2007. He deposed that the cy) accused O.P. Aggarwal and R.N. Aggarwal were not eligible for becoming the members of the executive committee as they had not completed one year as member. He further stated that the minutes of meeting dated 15.11.1998 were not sent to office of Registrar, Cooperative Society.
PW-22 M.S. Vats, He identified the file D-2. He identified Assistant the final list of 90 members initially Registrar, approved by the Registrar of West Zone Cooperative Society vide letter dated 17.01.1989. He also exhibited the request letter made by the society for issuing certified list of Managing Committee. He also saw the notings in the file D-2 from page No. 19 to 24/N and exhibited the notings. He worked as Assistant Registrar, West Zone till 20.05.2007.
PW-31 Amar Dass He handed over the file (D-2) (Assistant containing pages 1-31/N and 106-
Registrar, 369/C and other files pertaining to
West) Maharani Avanti Bai Society to Mr.
M.K Bhatt, Suptd. Of Police. The letter
is Ex. PW-31/A.
PW-32 Ravi Dutt He handed over the audit report to the
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(LDC, Audit investigating officer vide memo Branch) exhibited as Ex. PW-32/A (D-37). He identified his signatures on the said memo.
PW-37 C.M. Sharma He gave the sanction under Section (Retd. Chief 19(1) of P.C. Act, 1988 to prosecute the Controller of accused Zafar Iqbal.
Account) Arguments on behalf of both the public servants:-
25. It is argued that both the public servants were performing their duties in accordance with the rules and regulations of Delhi Cooperative Societies Act and Rules. It is submitted that before the file was transferred to the West Zone, the inspection about the functioning of the society had already been done by Mr. P.L.Khera, Inspector, East Zone. Ld. counsel has referred to the inspection report of Mr. P.L. Khera i.e. Ex.
PW-8/C and submitted that there was nothing negative in the said report. It is submitted that the accused Zafar Iqbal did the inquiry diligently and his report is not different from what Mr. P.L. Khera had observed. It is argued that Mr. P.L. Khera has not been arrayed as the accused. Therefore, the accused Zafar Iqbal has been falsely implicated. It is further argued that the accused L.K. Seth issued the certified list of Managing Committee on the basis of the inspection carried out by the accused Zafar Iqbal. It is submitted that Mr. L.K. Seth took all precautions and even appointed Mr. Zafar Iqbal to do the field inquiry before issuing the certified list of the Managing Committee. It is submitted that it is for the prosecution to prove affirmatively that the accused CBI Case No. 65/2019 CBI vs. Lila Krishna Seth & Ors Page 21 of 124 persons have abused their position with dishonest intention. It is submitted that there is no evidence of bribe or any pecuniary advantage taken by the accused persons and the present charge- sheet is based upon conjectures and surmises of the CBI.
Appreciation of circumstantial evidence:-
26. Apparently, there is no direct evidence of bribe against the public servants. Therefore, the case rests on circumstantial evidence. This court is conscious of the five golden principles enunciated in long line of cases including Sharad Birdhichand Sarda vs State of Maharashtra, (1984) 4 SCC 116, wherein it was held as under:-
"153. A close analysis of this decision would show that the following conditions must be fulfilled before a case against an accused can be said to be fully established:
"(1) the circumstances from which the conclusion of guilt is to be drawn should be fully established.
It may be noted here that this Court indicated that the circumstances concerned "must or should" and not "may be" established. There is not only a grammatical but a legal distinction between "may be proved" and "must be or should be proved" as was held by this Court in Shivaji Sahabrao Bobade v. State of Maharashtra [(1973) 2 SCC 793] where the observations were made:
"Certainly, it is a primary principle that the accused must be and not merely may be guilty before a court can convict and the mental distance between 'may be' and 'must be' is long and divides vague conjectures from sure conclusions."CBI Case No. 65/2019 CBI vs. Lila Krishna Seth & Ors Page 22 of 124
(2) the facts so established should be consistent only with the hypothesis of the guilt of the accused, that is to say, they should not be explainable on any other hypothesis except that the accused is guilty.
(3) the circumstances should be of a conclusive nature and tendency, (4) they should exclude every possible hypothesis except the one to be proved, and (5) there must be a chain of evidence so complete as not to leave any reasonable ground for the conclusion consistent with the innocence of the accused and must show that in all human probability the act must have been done by the accused."
27. This court shall approach the facts of this case, keeping in mind the principles of circumstantial evidence. In the present case, the role of the public servants begins with processing the applications dated 24.05.2001 and 29.05.2001 for issuance of the certified copy of the managing committee. At this stage, it is important to clarify the definition of criminal misconduct by a public servant under Section 13(1)(d) of the Prevention of Corruption Act. The relevant portions of Section 13 of the Prevention of Corruption Act, which provide the definition of the criminal misconduct by a public servant read as under:
"13. Criminal misconduct by a public servant. --
(1) A public servant is said to commit the offence of criminal misconduct,--
*
(d) if he, --
CBI Case No. 65/2019 CBI vs. Lila Krishna Seth & Ors Page 23 of 124*
(ii) by abusing his position as a public servant, obtains for himself or for any other person any valuable thing or pecuniary advantage; or * (2) Any public servant who commits criminal misconduct shall be punishable with imprisonment for a term which shall be not less than one year, but which may extend to seven years and shall also be liable to fine."
28. The Section 13 of the Prevention of Corruption Act in general lays down that if a public servant obtains for himself or for any other person, any valuable thing or pecuniary advantage he would be guilty of criminal misconduct and sub- section (2) thereof prescribes the punishment for such misconduct. Further, the clause (d) of this section of which the accused persons namely L.K. Seth and Zafar Iqbal herein have also been charged deals with a similar kind of a situation. The public servant must in this case by abusing his position as a public servant, obtain for himself or for any other person any valuable thing or pecuniary advantage to be liable for criminal misconduct under this section.
29. Here, it is apt to refer to the judgment of the Hon'ble Supreme court of India in the matter of State of Punjab v. Ram Singh (1992) 4 SCC 54, wherein the term "misconduct" is defined as under:-
'5. Misconduct has been defined in Black's Law Dictionary, 6th Edn., at p. 999, thus:CBI Case No. 65/2019 CBI vs. Lila Krishna Seth & Ors Page 24 of 124
"Misconduct. --A transgression of some established and definite rule of action, a forbidden act, a dereliction from duty, unlawful behavior, willful in character, improper or wrong behavior; its synonyms are misdemeanor, misdeed, misbehavior, delinquency, impropriety, mismanagement, offense, but not negligence or carelessness."
Misconduct in office has been defined as:
"Misconduct in office. --Any unlawful behavior by a public officer in relation to the duties of his office, willful in character. Term embraces acts which the office holder had no right to perform, acts performed improperly, and failure to act in the face of an affirmative duty to act." '
30. In P. Ramanatha Aiyar's Law Lexicon, 3rd Edn., at p. 3027, the term 'misconduct' has been defined as under:-
'Misconduct. --The term "misconduct" implies a wrongful intention, and not a mere error of judgment.
The word "misconduct" is a relative term, and has to be construed with reference to the subject-matter and the context wherein the term occurs, having regard to the scope of the Act or statute which is being, construed. "Misconduct" literally means wrong conduct or improper conduct.'
31. In the matter of Neera Yadav v. CBI, (2017) 8 SCC 757, it was observed that the Section 13 of the PC Act in general lays down that if a public servant, by corrupt or illegal means or otherwise abusing his position as a public servant obtains for himself or for any other person any valuable thing or pecuniary advantage, he would be guilty of "criminal misconduct". Sub- section (2) of Section 13 speaks of the punishment for such CBI Case No. 65/2019 CBI vs. Lila Krishna Seth & Ors Page 25 of 124 misconduct. A perusal of the above provision makes it clear that all the three wings of clause (d) of Section 13(1) are independent, alternative and disjunctive.
32. Another landmark judgment on the interpretation of section 13(1)(d) of the P.C Act is the matter of M. Narayanan Nambiar v. State of Kerala. This judgment gives a broad interpretation to Section 5(1)(d) of the Prevention of Corruption Act, 1947, which is in pari materia with Section 13(1)(d) of the P.C. Act,1988 and held:-
"10. ... First taking the phraseology used in the clause, the case of a public servant causing wrongful loss to the Government by benefiting a third party squarely falls within it. Let us look at the clause 'by otherwise abusing the position of a public servant', for the argument mainly turns upon the said clause. The phraseology is very comprehensive. It covers acts done 'otherwise' than by corrupt or illegal means by an officer abusing his position. The gist of the offence under this clause is, that a public officer abusing his position as a public servant obtains for himself or for any other person any valuable thing or pecuniary advantage. 'Abuse' means misuse i.e. using his position for something for which it is not intended. That abuse may be by corrupt or illegal means or otherwise than those means. The word 'otherwise' has wide connotation. ... The juxtaposition of the word or 'otherwise' with the words 'corrupt or illegal means', and the dishonesty implicit in the word 'abuse' indicate the necessity for a dishonest intention on his part to bring him within the meaning of the clause. Whether he abused his position or not depends upon the facts of each case; nor can the word 'obtains' be sought in aid to limit the express words of the section. 'Obtain' means acquire or get. If a corrupt officer by the said means obtains a CBI Case No. 65/2019 CBI vs. Lila Krishna Seth & Ors Page 26 of 124 valuable thing or a pecuniary advantage, he can certainly be said to obtain the said thing or a pecuniary advantage; ... On a plain reading of the express words used in the clause, we have no doubt that every benefit obtained by a public servant for himself or for any other person by abusing his position as a public servant falls within the mischief of the said clause."
33. Thus, this celebrated judgment of the Hon'ble Supreme court lays emphasis on the dishonest intention of the accused at the time of conducting the alleged act.
34. In the matter of Major S.K. Kale v. State of Maharashtra (1977) 2 SCC 394, the Hon'ble Supreme Court held that this Court held that the abuse of position by a public servant must necessarily be dishonest and it must be proved that the accused caused deliberate loss to the department. The Hon'ble Court observes that-
"9. ... The abuse of position, as held by this Court, must necessarily be dishonest so that it may be proved that the appellant caused deliberately wrongful loss to the Army by obtaining pecuniary benefit for PW 2."
35. In the matter of S.P. Bhatnagar v. State of Maharashtra (1979) 1 SCC 535, the importance of the element of dishonest intention was again reiterated.
36. In the matter of Chittaranjan Shetty v. State, (2015) 15 SCC 569, it was held that in order to prove the offence under CBI Case No. 65/2019 CBI vs. Lila Krishna Seth & Ors Page 27 of 124 Section 13(1)(d)(ii) of the Act, it must be established that a public servant has abused his position in order to obtain for himself or for any other person, any valuable thing or pecuniary advantage, and that, in this context, the "abuse" of position must involve a dishonest intention. In the present case, it is not disputed that the appellant is a public servant. As regards the element of "obtaining a valuable thing or pecuniary advantage" for himself or another person, the courts below have made concurrent findings that the appellant, by permitting the accused No.2 to divert the overdraft facilities towards payment to DW 1, has obtained a pecuniary advantage for DW 1 and we concur with the same. The Hon'ble Supreme Court held as under:-
"24. The crucial fact that needs to be determined is whether the appellant, with dishonest intention, abused his position in order to obtain for DW 1, the said pecuniary advantage. It is our considered opinion that, in the present case, there is sufficient evidence on record to prove that the appellant was acting with a dishonest intention. The terms and conditions of the loan granted to the appellant categorically state that the overdraft facilities could be utilised only for the purpose of meeting working capital requirements and for furnishing performance guarantee in favour of the said Corporation and the same could not have been utilised for payment of the debt owed by Accused 2 to DW 1. The courts below have relied on the testimony of PW 18 to conclude that the appellant knowingly and willfully disregarded the objections of PW 18 and permitted Accused 2 to divert funds from the overdraft facility towards payment to DW 1 and that this fact is proof of dishonest intention on the part of the appellant. We concur with the courts below in this regard. The testimony of PW 18 has been corroborated by the testimony of the Sub-Manager of Karnataka Bank (PW 9) who has CBI Case No. 65/2019 CBI vs. Lila Krishna Seth & Ors Page 28 of 124 stated that a cheque of Rs 3,60,000 was deposited in the current account of DW 1 as well as that of the Senior Manager, Corporation Bank, Car Street, Mangalore (PW 10).
25. Furthermore, the appellant's dishonest intention can be inferred from the facts and circumstances of the case and from the conduct of the appellant himself. During the course of these transactions, the appellant has committed several irregularities in order to favour Accused 2 and has acted in blatant disregard of the rules and regulations of the Bank and the terms and conditions of the loan issued to Accused 2 and in fact, even compelled PW 18, an officer under his supervision, to do the same. Therefore, it can be concluded that the appellant has acted with dishonest intention and has abused his position as a public servant. Thus, it can be concluded that all of the necessary elements of the offence under Section 13(1)(d)(ii) of the Act have been proved in this case."
37. In Ram Krishan v. State of Delhi [1956 SCR 182] the appellants were prosecuted for offering bribe to a Railway Officer for hushing up the case against them. In that context Section 5(1)(d), peri materia to the section 13(1)(d) P.C Act was construed by the Hon'ble Supreme Court in the following manner:-
"Apart from 'corrupt and illegal means' we have also the words 'or by otherwise abusing his position as a public servant'. If a man obtains a pecuniary advantage by the abuse of his position, he will be guilty under sub-clause (d). Sections 161, 162 & 163 refer to a motive or a reward for doing or forbearing to do something, showing favour or disfavour to any person, or for inducing such conduct by the exercise of personal influence. It is not necessary for an offence under clause (d) CBI Case No. 65/2019 CBI vs. Lila Krishna Seth & Ors Page 29 of 124 to prove all this. It is enough if by abusing his position as a public servant a man obtains for himself any pecuniary advantage, entirely irrespective of motive or reward for showing favour or disfavour."
38. Again, in Dhaneshwar Narain Saxena v. Delhi Administration [AIR 1962 SC 195 (V 49 C. 36)], it was observed that the section 13(1)(d) P.C Act casts a wide net to put down corruption. There the appellant was an Upper Division Clerk in the office of the Chief Commissioner of Delhi. He knew one Ram Narain who was a fireman serving in Delhi Fire Brigade. The latter sought the assistance of the appellant who had nothing to do with the issuing of licenses of firearms which was done by the office of the Deputy Commissioner, Delhi. The appellant took a bribe in order to get the license for him. It was argued that as it was not the duty of the appellant to issue licenses or do something in connection therewith, he did not commit any offence within the meaning of Section 5(1)(d) of the Act. The Court rejected his contention. Sinha C.J. speaking for the Court observed at p. 198: "The legislature advisedly widened the scope of the crime by giving a very wide definition in Section 5 with a view to punish those who, holding public office and taking advantage of their position obtain any valuable thing or pecuniary advantage".
Dishonest Intention is must:-
39. The aforesaid judgments on Section 13(1)(d) delineates that dishonest intention is must to prove the accused CBI Case No. 65/2019 CBI vs. Lila Krishna Seth & Ors Page 30 of 124 guilty under Section 13(1) (d) of PC Act. In the matter of Major S.K. Kale v. State of Maharashtra, (1977) 2 SCC 394, it was held that-
"7. Normally this Court in special leave against a concurrent judgment of the High Court and the trial court does not reappraise the evidence, but unfortunately in this case we find that both the courts below have drawn wrong inferences from proved facts and have made a completely wrong approach to the whole case by misplacing the onus of proof which lay on the prosecution on the accused. Both the courts below had proceeded on the footing that it was for the accused and not for the prosecution to prove that the accused made enquiries from the local market or that he knew about the rates, etc. This approach was obviously and manifestly wrong. It is plain that it was for the prosecution to prove the ingredients of Section 5(1)(d), which runs thus:
"5. (1) A public servant is said to commit the offence of criminal misconduct
(a) * * *
(b) * * *
(c) * * *
(d) if he, by corrupt or illegal means or by otherwise abusing his position as public servant, obtains for himself or for any other persons any valuable thing or pecuniary advantage ...."
In other words it was for the prosecution to prove affirmatively that the appellant by corrupt or illegal means or by abusing his position obtained any pecuniary advantage for some other person. In view of the clear defence taken by the appellant it is obvious that it was for the prosecution to prove that the accused made no enquiries, that the accused made a departure from the normal procedure with oblique motive, and that the accused knew that PW 2 would make a profit of 45 CBI Case No. 65/2019 CBI vs. Lila Krishna Seth & Ors Page 31 of 124 per cent whereas others would be satisfied with a profit of 10-15 per cent. The High Court, to begin with, started with the presumption that the accused led no evidence to show that he made any enquiries. We might state at the risk of repetition that it was not for the accused to prove the prosecution case but it was for the prosecution to disprove what the accused said, namely, that he had made enquiries. The prosecution could prove this fact only by producing satisfactory and convincing evidence to show that the accused in fact made no such enquiries and he knew about the margin of profit which other dealers would have made. We shall immediately show that there is no legal evidence to prove this fact. What the courts below have done is to disbelieve the case of the appellant because he led no evidence to show that he made any enquiries regarding the availability of goods or the rates, and therefore the courts presumed that the accused had a dishonest intention."
40. In the matter of S.P. Bhatnagar v. State of Maharashtra, (1979) 1 SCC 535, it was held as under-
22. In cases where the evidence is of a circumstantial nature, the circumstances from which the conclusion of guilt is to be drawn should in the first instance be fully established, and all the facts so established should be consistent only with the hypothesis of the guilt of the accused. Again, the circumstances should be of a conclusive nature and tendency and they should be such as to exclude every hypothesis but the one proposed to be proved. In other words, there must be a chain of evidence so far complete as not to leave any reasonable ground for a conclusion consistent with the innocence of the accused and it must be such as to show that within all human probability the act must have been done by the accused.
23. The principle that inculpatory fact must be inconsistent with the innocence of the accused and incapable of explanation on any other hypothesis CBI Case No. 65/2019 CBI vs. Lila Krishna Seth & Ors Page 32 of 124 than that of guilt does not mean that any extravagant hypothesis would be sufficient to sustain the principle, but that the hypothesis suggested must be reasonable."
Mere violation of rules, regulations and lapses are not sufficient :-
41. This court is conscious about the settled legal principle that mere departmental lapses or violation of codal formalities and irregularities or ignorance of departmental order may not be termed as misconduct under Section 13(1)(d) in absence of dishonest intention and this principal has been recognized by the Hon'ble Supreme Court in the matter of C. Chenga Reddy v. State of A.P., and Abdulla Mohd. Pagarkar v. State (Union Territory of Goa, Daman and Diu) [(1980) 3 SCC
110. The relevant extract from both the judgments is reproduced here as under for a ready reference.
42. In the matter of C. Chenga Reddy v. State of A.P., , it has been held as under: -
"On a careful consideration of the material on the record, we are of the opinion that though the prosecution has established that the appellants have committed not only codal violations but also irregularities by ignoring various circulars and departmental orders issued from time to time in the matter of allotment of work of jungle clearance on nomination basis and have committed departmental lapse yet, none of the circumstances relied upon by the prosecution are of any conclusive nature and all the circumstances put together do not lead to the irresistible conclusion that the said circumstances are compatible only CBI Case No. 65/2019 CBI vs. Lila Krishna Seth & Ors Page 33 of 124 with the hypothesis of the guilt of the appellants and wholly incompatible with their innocence".
43. In Abdulla Mohd. Pagarkar v. State (Union Territory of Goa, Daman and Diu) [(1980) 3 SCC 110 under somewhat similar circumstances, the Hon'ble Supreme court held that mere disregard of relevant provisions of the Financial Code as well as ordinary norms of procedural behaviour of government officials and contractors, without conclusively establishing, beyond a reasonable doubt, the guilt of the officials and contractors concerned, may give rise to a strong suspicion but that cannot be held to establish the guilt of the accused. The established circumstances in this case also do not establish criminality of the appellants beyond the realm of suspicion and, in our opinion, the approach of the trial court and the High Court to the requirements of proof in relation to a criminal charge was not proper. That because of the actions of the appellants in breach of codal provisions, instructions and procedural safeguards, the State may have suffered financially, particularly by allotment of work on nomination basis without inviting tenders, but those acts of omission and commission by themselves do not establish the commission of criminal offences alleged against them.
Doing the analysis of the circumstantial evidence to find out the misconduct:
44. Following the decision in M. Narayanan Nambiar v. State of Kerala (Supra), it was held by the Hon'ble Supreme Court in Major S.K. Kale v. State of Maharashtra( Supra) that the CBI Case No. 65/2019 CBI vs. Lila Krishna Seth & Ors Page 34 of 124 abuse of position in order to come within the mischief of the section must necessarily be dishonest so that it may be proved that the accused caused deliberate loss to the department. It was further settled in S.K. Kale case that it is for the prosecution to prove affirmatively that the accused, by corrupt or illegal means or by abusing his position, obtained any pecuniary advantage for some other person. It would, therefore, be necessary to find out in this case as to whether the accused abused their position and acted dishonestly or with a corrupt or oblique motive. Further, it would be well to bear in mind the fundamental rule relating to the proof of guilt based on circumstantial evidence which has been settled by a long line of decisions of constitutional Courts.
45. It is apposite to refer to the observations in Major S.K. Kale case that the rule is to the effect that in cases depending on circumstantial evidence, there is always the danger that conjecture or suspicion may take the place of legal proof. In such cases the mind is apt to take pleasure in adapting circumstances to one another, and even in straining them a little, if need be, to force them to form parts of one connected whole; and the more ingenious the mind of the individual, the more likely it is, considering such matters, to over-reach and mislead itself, to supply some little link that is wanting, to take for granted some fact consistent with its previous theories and necessary to render them complete.
46. Now, the stage has been set to find out as to whether CBI Case No. 65/2019 CBI vs. Lila Krishna Seth & Ors Page 35 of 124 the accused public servants acted dishonestly by abusing their power to issue certified list of Managing Committee the society and thereby committed the offence under section 13(1)(d) of the Prevention of Corruption Act.
Authenticity and Chain of Custody of the File D-2 containing note-sheets written by the accused Public Servants and the communications done by the private accused persons in the file D-2:-
47. The file labeled as D-2 contains records of the proceedings written by various public officials while performing their duties in the Registrar's office. It also contains the communications sent by the private accused persons.
48. To prove the contents of this file, the PW-8 namely Dushyant Kumar has deposed that he was posted as the AR in the office of RCS from the year 1998 to September 2000. He was looking after the area of East Zone. During his disposition, he saw the file D-2 volume -1. He deposed that he had dealt with the said file and had seen the note sheets identified as page 16-N. He identified his initial at the page 17-N. He identified the noting dated 24.07.2000, wherein it was recorded that there was no correspondence of the society since 1990 and the society had already shifted its address from Laxmi Nagar to Janak Puri without any intimation. He identified the file of RCS and exhibited it as Ex. PW-8/Y. He identified his signatures at Page No. 17/N, Page No. 18/N and the Page No. 19/N of the file D-2.
CBI Case No. 65/2019 CBI vs. Lila Krishna Seth & Ors Page 36 of 124He also identified the note sheets written on these pages. His testimony proves these official notings and rules out any manipulations in these note sheets.
49. Further, PW- 22 namely M.S Vats deposed that he was posted as Assistant Registrar West Zone in the year 2007. His testimony is relevant to an extent that the investigating officer seized the file i.e D-2 from the office of Registrar of Co- operative society and showed the same to him while he was working as the Assistant Registrar in the said office.
50. It would thus be seen that the testimonies of these two witnesses are relevant to corroborate the fact of seizure of the file D-2. As officers within the Registrar Cooperative Society, they possessed comprehensive familiarity with relevant files including the file D-2.
51. The prosecution has also examined the officer who had handed over the file to the investing officer. The PW-31 namely Amar Das deposed that he was working as Assistant Registrar (West) office of RCS, Delhi. He saw the letter dated 15.06.2006 (D-26) and identified his signatures at Point A. He has personally handed over documents mentioned in the said letter from Serial no. 1 to 6 to Sh. M.K Bhatt S.P CBI New Delhi. He exhibited the said letter as Ex. PW31/A. The perusal of the letter dated 15.06.2006 shows that the Assistant Registrar (West) handed over the Maharani Avanti CBI Case No. 65/2019 CBI vs. Lila Krishna Seth & Ors Page 37 of 124 Bai CGHS file to the S.P CBI namely Sh. M.K Bhatt on 15.06.2006.
52. It is also important to highlight that both accused persons, in their statements recorded under Section 313 Cr.P.C., acknowledged their presence at the RCS office. Specifically, the accused, L.K. Seth stated that he served as the Assistant Registrar (West) in the RCS office and officially handled the relevant file, while Zafar Iqbal confirmed that he joined the RCS West Zone office in February 2001. Notably, neither of the accused denied having written the note sheets concerning the issuance of the cer- tified list of the Managing Committee. Furthermore, the hand- writing expert, examined as the PW-33, testified that he received the questioned signatures numbered 186 and 187 from the file D-
2. He compared these with the specimen signatures of Zafar Iqbal, marked as S-121 to S-125, and provided a supplementary opinion (Ex. PW33/D1), confirming that the questioned initials Q-185, Q-186 and Q-187 were consistent with the standard ini- tials S-121 to S-125. Importantly, during cross-examination, the accused did not dispute the witness's findings regarding the pres- ence of Zafar Iqbal's initials on the notings in the file D-2 at pages 23N and 24N. Similarly, the questioned signatures of L.K Seth marked as Q-69 (page 274, D-2) and Q-80 (page 335/C, D-
2) are matched with the specimen writing of the accused L.K Seth. Thus, it is conclusively established that the questioned sig- natures at the page 23/N, page 24/N, page no. 274 and page no.
CBI Case No. 65/2019 CBI vs. Lila Krishna Seth & Ors Page 38 of 124335/C of the D-2 were indeed written by the accused persons, namely Zafar Iqbal and Lila Krishna Seth respectively.
53. Accordingly, the testimonies of PW-8, PW-22, and PW-31 collectively establish that the file D-2 was maintained in the regular course of official duties, and the note-sheets and doc- uments contained within were duly recorded as part of official duties. There is no evidence indicating any break in the chain of custody of the file. In addition, the signatures on the note sheets have been positively identified by the PW-8, further demonstrat- ing the continuity in the recording of events related to the func- tioning of the Maharani Avanti Bai Society. This unbroken chain of custody, positive identification of signatures and the report of the handwriting expert (PW-33) affirm the authenticity and relia- bility of the documents maintained in the file D-2.
54. Now, this court shall proceed further to discuss the role of the accused Lila Krishna Seth & Zafar Iqbal.
Discussion on the role of accused Lila Krishna Seth & Zafar Iqbal:
55. For issuance of the certified list of the Managing Committee, the applications dated 24.05.2001 (Ex. PW-33/A39, Page No. 337/C, D-2) and 29.05.2001 (Ex. PW-33/A-33, D-2) (Page no. 307 of D-2) were filed before the Assistant Registrar, West.
CBI Case No. 65/2019 CBI vs. Lila Krishna Seth & Ors Page 39 of 12456. Pursuant thereto, nothings were made in the official file i.e, D-2. These notings are relevant and need to be reproduced herein as under:
"Note-sheet dated 25.05.2001:
Diary No. 1218/AR(W)/24.05.01 "May kindly peruse the opposite placed PUC received from the secretary of the society regarding certified list of MC. The secretary of the society stated that 'The Maharani Avanti Bai CGHS Ltd. having its registration no. 1179 (GH) hereby request you to issue the list of the Managing Committee as demanded by DDA for approval of layout and building plan sanction at Plot No. 15-B, Sector-22, Dwarka, New Delhi'. In this connection, it is submitted that as per the latest election, record has not been furnished by the society alongwith its intimation letter dated 24.05.2001 and before certifying the list of the Managing Committee of the society, if agreed, we may depute Sh. Zafar Iqbal, Area Inspector to verify the election record and present functioning of the society and submit his report early.
Submitted for further necessary orders Please."
57. On this noting, the accused L.K Seth AR(West) gave the following finding on 25.05.2001 itself:
" Before any action is taken on the request of the society, it is to be ascertained as to how the society shifted its office from FF-1, Laxmi Nagar, Delhi to 303, 3rd Floor, Vasant Tower, Janak Puri Community Center, Janak Puri, without intimation to this office and confirmation from this office. The clarification be sought from the society on the first instance."
58. Thereafter, the accused O.P Aggarwal, Secretary, appeared in the Registrar office on 30.05.2001. The presence of CBI Case No. 65/2019 CBI vs. Lila Krishna Seth & Ors Page 40 of 124 the accused namely O.P Aggarwal has been noted in the note- sheet dated 30.05.2001. At this juncture, it is relevant to reproduce the note-sheet dated 30.05.2001 for a better understanding of the nature of the documents filed with the application for issuance of the certified copy of the Managing Committee as under:-
"Present : Sh. O.P. Aggarwal, secretary of society had submitted a letter dated 29.05.2001 alongwith the photocopies of the following records of the society
1) Copy of agenda notice for the GBM held on 15.11.1998;
2) Copy of minutes of the GBM held on 15.11.1998, elections of the society were also held in this meeting. The shifting of the office of society was also approved in the GBM held on 15.11.1998;"
3) Copy of service proof of society's intimation dated 24.11.1998;
4) Copies of Minutes of GBM held on 23.01.2000. The elections of society were held in this meetings;
5) copy of the audit compliance report for the year 1989-90 to 1997 - 98 and its forwarding letter dated 23.03.1999;
6) copy of letter dated 31.01.2000 addressed to the AR (West) regarding transfer of the society file to the west zone and election intimation is also given by this letter;
7) copy of society letter dated 21.07.2000 whereby the society has forwarded comments on the representation of Sh. Ganesh Jha;
8) Copy of letter dated 27.07.2000 regarding transfer of society file in the west zone/copy of CBI Case No. 65/2019 CBI vs. Lila Krishna Seth & Ors Page 41 of 124 UPC proof dated 27.07.2000;
9) copy of letter dated 08.11.2000 addressed to AR West regarding compliant to Mr. Ganesh Jha;
10) copy of letter dated 14.11.2000 addressed to AR, West regarding deputing staff for production of the society's record;
11) Copy of agenda notice and copy of GMB meeting held on 27.01.2001. The election of the society was also held in the said meeting;
12) copy of audit compliance report for the year 1999-2000 and its forwarding dated 05.02.2001.
As the society has not produced the original record in respect of the aforesaid photocopies and also not produced the record pertained to the shifting of the address of the society from Laxmi Nagar to Janak Puri, we may depute any area inspector to verify the complete records pertaining to the elections since 1991 and the record of shifting of address of the society.
Submitted please"
59. It is pertinent to mention here that the aforesaid note-sheet was approved by the accused L.K Seth as the Assistant Registrar, West.
60. Consequently, Inspector accused Zafar Iqbal visited the society office and the following note sheet was added in the file on 04.06.2001:-
"As per direction of AR (West) dated 30.05.2001, the undersigned visited the present registered address of Maharani Avanti Bai CGHS at 303, 3 rd Floor, Vasant Tower, Janak Community Center, Janak Puri, New Delhi on 02.06.2001. Sh. O.P. CBI Case No. 65/2019 CBI vs. Lila Krishna Seth & Ors Page 42 of 124 Aggarwal, the secretary and Ms. Sujata, Treasurer of the society were present in the society office. The secretary produced all the available relevant records of the society. Photocopies of same were already produced by him in this office on 30.05.2001 and copies of other relevant required records were taken.
Shifting of Address:-
Regarding shifting, following records were verified and photocopies were retained:-
i) Property tax receipt issued by MCD in the name of Sh. S.R. Narula (Ownership Proof);
ii) Rent Receipt issued by the owner dated 31.12.1998 worth Rs. 1500/- per month in the name of the society;
Elections:-
As per records available with the society, a GBM was held on 01.10.1989 wherein the election for the post of secretary was also conducted. The society had also lodged an FIR to the police station Janak Puri regarding missing of folders containing the society documents (P-310/C).
The society called the GBM at the Janak Puri address on 15.11.1998 and passed the resolution regarding change of its address and also the elections of the society were held in the said GBM. After that, two GBMs on 23.01.2000 and 27.01.2001 were also held and the elections were conducted. Photocopies of proceedings of GBM dated 01.10.1989, 15.11.98, 23.01.2000 and 27.01.2001 have been obtained and placed on record. The photocopies of elections held on 27.01.2001, such copy of agenda notice and service proof thereof and also the copies nomination forms were obtained during the inspection and the same have been placed on record.( P-318/c to 334/c) In view of above verification report, if approved, a certified list of Managing Committee as requested by the society may be issued. Draft/fair letter is added for approval/signature pl."CBI Case No. 65/2019 CBI vs. Lila Krishna Seth & Ors Page 43 of 124
61. The aforesaid noting was approved by the accused Mr. L.K. Seth as the AR, West. Consequently, the certified list of the Managing Committee was issued on 07.06.01 (Ex.
PW33/A37 page no. 335/c) under the signatures of the accused L.K Seth and Zafar Iqbal.
62. As seen from the notings on the page No. 21/N to 24/N, the request to issue certified list was received from the secretary of the society as the same was required for approval of lay out and building plan sanction. As noted above, the concerned official from the registrar office wrote that the latest election report has not been furnished by the society and therefore, Inspector Zafar Iqbal may be deputed to verify the election report and present functioning of the society to submit his report. Further, the photocopies of the documents as mentioned above in the note-sheet dated 30.05.2001 were also annexed with the application dated 29.05.2001 by the secretary i.e. the accused O.P. Aggarwal.
63. It would thus be seen that the roles of the accused L.K. Seth (Assistant Registrar-West) and Zafar Iqbal (Inspector) need to be examined collectively, given that their roles are closely linked with respect to the issuance of the certified copy of the Managing Committee list.
For the purposes of this analysis, the court will proceed under the assumption that both accused, acting in their respective capacities as Inspector and Assistant Registrar, were CBI Case No. 65/2019 CBI vs. Lila Krishna Seth & Ors Page 44 of 124 unaware that other private individuals had committed forgery and had relied on forged documents to influence them for issuing the certified list of Managing Committee members. Consequently, the court needs to determine whether the accused committed significant irregularities and blatantly ignored the deficiencies in the society's proceedings based on the records available, thereby reflecting any dishonest intent on their part. The crucial question is whether the documents on record, by themselves, reveal that these public servants possessed the necessary mens rea to deliberately favour the private accused persons in the issuance of the certified copy. Additionally, it must be considered whether the accused circumvented the provisions of the Delhi Cooperative Act and Rules to such a degree that their dishonest intentions are evident from the documents themselves.
64. According to the earlier note-sheets, there was com- plete absence of communication between the society and the reg- istrar's office from 1991 to 1997. The final note-sheet from 1991, dated 06.11.1991, specifically recorded that the society had not complied with previous correspondence regarding the resignation and enrollment of its members. Even prior to 1991, the society had received explicit directions to conduct elections in accor- dance with Schedule-II of Rule 58 of the Society Registration Rules, 1973.
65. However, in the year 1997, communications with the RCS office resumed when the DDA issued an offer letter for land CBI Case No. 65/2019 CBI vs. Lila Krishna Seth & Ors Page 45 of 124 allotment to an incorrect address. The registrar's office subse- quently provided the correct address to the DDA. Following this, a complaint from Mr. Ganesh Jha was received by the registrar's office, alleging that the society had changed its address without proper notification. During the hearing of this complaint, the As- sistant Registrar (East) observed from the office records that there had been no correspondence from the society since 1990 and that the society had shifted its address from Laxmi Nagar to Janak Puri without any official intimation. As a result, it was rec- ommended that a notice under Section 32 of the DCS Act be is- sued to the society. Subsequently, on 24.07.2000, President O.P. Aggarwal (accused) appeared and requested additional time to submit the required report. Thereafter, the file was transferred to the West Zone, where it was handled by Zafar Iqbal and L.K. Seth.
66. Therefore, it is evident that both the accused persons had the opportunity to review the previous note-sheets in the file, which clearly indicated that the society had not conducted elec- tions in accordance with Schedule-II and that there had been no communication since 1990. The photocopies of the relevant doc- uments were first presented on 30.05.2001, as previously noted. After this, a physical inspection was conducted, and the accused L.K. Seth concurred with the findings of the inspection carried out by the accused Zafar Iqbal, ultimately certifying the names of the Managing Committee members.
CBI Case No. 65/2019 CBI vs. Lila Krishna Seth & Ors Page 46 of 12467. As noted above, the testimony of PW-8 shows the authenticity of the file D-2. Similarly, the testimony of PW-22 reveals that the file D-2 was seized by the Investigating Officer. Therefore, it is evident that the previous note-sheets formed an integral part of the official record at the time when the accused, Zafar Iqbal and L.K. Seth, were rendering their findings in this file. Both had the opportunity and advantage to review these note-sheets thoroughly before arriving at and recording their conclusions.
68. At this stage, it is pertinent to highlight the legal provisions that talks about the power of the inspector when conducting an inspection of a society. Section 54 of the Delhi Cooperative Societies (DCS) Act, 1972 lays down the framework for the inspection of societies. The relevant portion is reproduced below:
"54. Inspection of societies - The Registrar, or any person authorised by general or special order in this behalf by him, may inspect a co-operative society. For the purpose of inspection, the Registrar or the person so authorised by him shall at all times have access to all books, accounts, papers, vouchers, securities, stock and other property of the society and may in the event of serious irregularities discovered during inspection take them into custody and shall have power to verify the cash balance of the society and subject to the general or special order of the Registrar to call a committee meeting and a general meeting. Every officer or member of the society shall furnish such information with regard to the working of the society as the Registrar or the person making such inspection may require."CBI Case No. 65/2019 CBI vs. Lila Krishna Seth & Ors Page 47 of 124
69. The Section 54 of D.C.S Act, 1973 essentially establishes that, for the purposes of inspection, the Registrar or any person authorized by him is granted unrestricted access to all books, accounts, papers, vouchers, securities, and stock belonging to the society. In instances where serious irregularities are discovered during such inspections, the Registrar or his nominee is empowered to take these materials into custody. Furthermore, they possess the authority to convene committee meetings and general meetings in order to assess and verify the proper functioning of the society. In addition, the Section 55 of The Delhi Cooperative Societies Rules, 1972 stipulates that the Registrar may, either on his own initiative or by directing an authorized delegate, conduct an inquiry into the constitution, operations, and financial status of a cooperative society. To provide greater clarity, the Section 55 of the DCS Act, 1972 is reproduced below:
"55. Inquiry by Registrar.--(1) The Registrar may of his own motion or on the application of a majority of the committee or of not less than one- third of the members, hold an inquiry or direct some person authorised by him by order in writing in this behalf to hold an inquiry into the constitution, working and financial condition of a co-operative society.
(2) The Registrar or the person authorised by him under sub-section (1) shall have the following powers, namely:--
(a) he shall at all times have, for purpose of examination, free access to the books, accounts, cash and other properties belonging to or in the custody of the society and may summon any person CBI Case No. 65/2019 CBI vs. Lila Krishna Seth & Ors Page 48 of 124 in possession or responsible for the custody of any such books, accounts, documents, securities, cash or other properties to produce the same, at any place specified by him;
(b) he may, notwithstanding any rule or bye-
law specifying the period of notice for a general meeting of the society, require the officers of the society to call a general meeting at such time and place at the headquarters of the society to consider such matters, as may be directed by him; and where the officers of the society refuse or fail to call such a meeting he shall have power to call it himself;
(c) he may summon any person who is reasonably believed by him to have any knowledge of the affairs of the society to appear before him at any place at the headquarters of the society or any branch thereof and may examine such person on oath.
(3) Any meeting called under clause (b) of sub- section (2) shall have all the powers of a general meeting called under the bye-laws of the society and its proceedings shall be regulated by such bye- laws.
(4) The Registrar shall communicate a brief summary of the report of the inquiry to the society, the financing institutions, if any, to which the society is affiliated, and to the person or authority, if any, at whose instance the inquiry is made"
70. Furthermore, the Section 63 grants the Registrar the authority to dissolve a cooperative society if, in his judgment, the society is not operating in accordance with cooperative principles and should therefore be wound up. Additionally, Section 31 of The Co-operative Societies Act, 1972, addresses the election and nomination procedures for members of the committee. In relation to the present case, it is pertinent to set out Section 31 below for greater clarity and understanding:-
CBI Case No. 65/2019 CBI vs. Lila Krishna Seth & Ors Page 49 of 124"31. Election and nomination of members of committees.--(1) The superintendence, direction and control of the preparation of the electoral rolls for, and the conduct of, elections of the members of the committees of such co-operative societies or class of co-operative societies as may be prescribed shall be vested in such returning officers not below the rank of gazetted officers as may be appointed by the Lieutenant-Governor in this behalf.
(2) The vote at such elections shall be by secret ballot.
(3) The term of office of the elected members of the committee shall be such, not exceeding three co-
operative years including the co-operative year of their election, as may be specified in the bye-laws of the society: Provided that the elected members shall continue to hold office till their successors are elected or nominated under the provisions of the Act or the rules or bye-laws.
(4) No person shall be eligible to be elected as a member of the committee of a co-operative society unless he is shareholder of that co-operative society.
(5) Notwithstanding anything contained in this Act, a person shall be disqualified for election as, or for being, the president, vice-president, chairman, vice- chairman, managing director, secretary, joint secretary or treasurer of a committee,--
(a) if he has held any such office on that committee during two consecutive terms, whether full or part;
(b) if he holds any such office on a committee of another co-operative society of the same type;
(c) if he holds any such office on the committees of three or more co-operative societies of a different type or different types: Provided that nothing contained in this sub-section shall be deemed to disqualify any such person for election as, or for being, a delegate of a society or a member of another committee.
CBI Case No. 65/2019 CBI vs. Lila Krishna Seth & Ors Page 50 of 124Explanation 1.--Where any person holding any office as aforesaid at the commencement of this Act is again elected to any such office after such commencement, he shall for the purpose of this sub- section be deemed to have held that office for one term before such election.
Explanation 2.--A person who has ceased to hold any such office as aforesaid continuously for one full term shall again be qualified for election to any of those offices.
(6) On the committee of such co-operative societies or class of co-operative societies as may be prescribed, two seats shall be reserved, one for the members who belong to the Scheduled Castes and one for economically weaker sections of the members who as land-owners or tenants or as both do not hold more than the prescribed area of agricultural land or fulfill the prescribed conditions, and if no such persons are elected, the committee shall co-opt the required number of members from amongst the persons entitled to such representation:
Provided that in the case of a primary agricultural credit society such number of seats, being not less than one-half of the total number of members of the Committee, shall be reserved for members belonging to the Scheduled Castes and the aforesaid economically weaker sections of the members as may be prescribed, and if no such persons are elected, the Committee shall co-opt the required number of members from amongst the persons entitled to such representation.
Explanation.--For the purpose of this sub- section,--
(i) "Scheduled Castes" means any of the Scheduled Castes specified in Part I of the Schedule to the Constitution (Scheduled Castes) (Union Territories) Order, 1951;
(ii) "primary agricultural credit society" has the meaning assigned to it in clause (cii) of section 2 of the Reserve Bank of India Act, 1934 (2 of 1934).CBI Case No. 65/2019 CBI vs. Lila Krishna Seth & Ors Page 51 of 124
(7) Notwithstanding anything contained in this Act, any dispute relating to election of members of any committee of a co-operative society mentioned in sub-section (1) shall be referred to the Lieutenant- Governor whose decision thereon shall be final.
(8) The Lieutenant-Governor may make rules generally to provide for or to regulate matters in respect of elections of members of the committees.
(9) Notwithstanding anything contained in sub- sections (1) to (8),--
(a) where the Central Government has subscribed to the share capital of a co-operative society, the Central Government or any person authorised by it in this behalf shall have the right to nominate on the committee such number of persons not exceeding three or one-third of the total number of members thereof, whichever is less, as the Central Government may determine;
(b) where the Industrial Finance Corporation, the State Finance Corporation or any other financing institution notified in this behalf by the Central Government has provided finance to a co-operative society, the Industrial Finance Corporation, State Finance Corporation or other financing institution, as the case may be, shall have the right to nominate one person on the committee.
(10) A person nominated under sub-section (9) shall hold office during the pleasure of the Central Government or the Corporation or other financing institution, as the case may be.
71. Additionally, Section 40 of the Act imposes a mandatory obligation on every co-operative society to maintain an up-to-date register of its members. The importance of this re- quirement cannot be overstated, as the register serves as the offi- cial and primary record of the society's membership at any given CBI Case No. 65/2019 CBI vs. Lila Krishna Seth & Ors Page 52 of 124 time. For clarity and reference, the full text of Section 40 is pro- vided below: -
"40. Register of members.--Any register or list of members or shares kept by any co-operative society shall be prima facie evidence of any of the following particulars entered therein:--
(a) the date on which any person entered in such register or list became a member;
(b) the date on which any such person ceased to be a member."
72. In addition to the statutory provisions outlined above, the Registrar, Co-operative Societies has consistently issued directives to facilitate the efficient operation of co- operative societies. Notably, in 1988, the Registrar circulated a comprehensive notice to all co-operative societies, mandating that every society promptly report all instances of member resignations and new enrollments to the Registrar's office. Furthermore, the Registrar actively monitors and ensures that societies conduct their elections in a timely manner, thereby enabling the regular formation of new Managing Committees in accordance with the requirements set forth in The Delhi Co- operative Societies Act. For greater clarity and understanding, it is pertinent to reproduce Rule 58 of the DCS Rules, 1973 below, as it is particularly relevant to the proper conduct of society elections: -
CBI Case No. 65/2019 CBI vs. Lila Krishna Seth & Ors Page 53 of 124"58.Election of Committee.
1. Notwithstanding anything contained in these rules or the bye-taws and without prejudice to the generality of the powers of the Lt. Governor, in sub- section (1) of section 31, election of members of the committee of a class of society specified below shall be conducted in the manner given in Schedule II, namely:-
(a) Federal Society.
(b) Financing Bank.
(c) Consumers' Society.
(d) T & C Urban Co-operative Banks.
(e) Housing Societies.
(f) Any other society whose membership exceeds two hundred.
2. Notwithstanding anything contained in the bye- laws, the election of the members of the committee of a society of any class not falling under classes specified in sub-rule (1 ) shall be by show df hand in the manner given in Schedule III unless a poll is demanded in which case it shall be held by secret ballot.
3. Every cooperative society shall hold elections of its committee in the manner as prescribed in Sub- Rule (1) or (2) above, as he case may be, within 30 days from the expiry of one year from the date of last election of its committee.
Provided that in case a cooperative society fails to conduct election of its committee within the period specified above, the Registrar may after issuing the requisition under section SO (1) of the Act, appoint an election officer to call a Special General body Meeting of the cooperative society and hold election of its committee provisionally within 60 days from his appointment.
CBI Case No. 65/2019 CBI vs. Lila Krishna Seth & Ors Page 54 of 124Provided for the reason beyond the control of the election officer he may conduct the election of the committee, after the expiry of 60 (sixty) days by taking extension of time from the Registrar. The Registrar may grant extension of time for conducting election specifying the reasons for such extension. (Added on 9.9.88)
4. Notwithstanding anything contained in Rule 62 herein after provided where the Registrar appoints election officer under Sub-Rule (3) he shall order the election of all the members of the committee irrespective of their terms of retirement there under.
Provided that all such elections shall be conducted by secret ballot by the Election Officer appointed by the Registrar irrespective of any provisions made there under in Sub-Rule (1) and (2) and schedule II & III under Rule 58. (Added on 9.9.88)
5. In all cooperative societies, including the class of cooperative societies prescribed for the purpose of sub-section (1) of section 31, two posts shall be reserved for women in the committee;
Provided that in case no woman comes forward to contest the election, the committee shall be competent to co-opt women member(s) subsequently within a period of one month of the election.
(Added on 8.8.97)
58.A. For the purpose of sub-section (1) or section 31, the classes of co-op. societies are prescribed as under:-
(1) Societies constituted under the multi-unit Co-
operative Societies Act 1942.
(2) Federal Co-operative Societies.
(3) Financing Bank.
(4) Urban Thrift and Credit Banks.
(Added on 24.5.82) CBI Case No. 65/2019 CBI vs. Lila Krishna Seth & Ors Page 55 of 124 Provided that in the case of a federal cooperative society, the primary society shall be asked to intimate the name of the its delegate who is not a defaulter to the society or any other society on or before the prescribed date for the purpose fixed by the returning officer appointed by the Lt. Governor. In respect of the delegate so nominated by a primary society, his details alongwith photograph, a copy of the resolution of the primary society shall be forwarded to the returning officer so as to reach his office on or before the prescribed date. if any society has not responded to the notice of the returning officer upto the prescribed date and tune, the said primary society shall not be eligible to participate in the elections to be conducted thereafter"
73. Returning to the specific facts of this case, it is pertinent to note that in 1989, the Registrar's office raised an objection regarding the society's failure to hold elections in accordance with Rule 58 (as amended by notification dated 09.09.1988). Subsequently, on 24.12.1990, 01.02.1991 and 06.11.1991, the Registrar's office recorded that a reminder should be sent to the society for verification of records relating to member resignations and enrollments. Despite this directive, the society failed to comply, resulting in a prolonged period of no communication between the co-operative society and the Registrar's office from 06.11.1991 to 21.11.1997. This lack of correspondence clearly indicates that no information regarding elections was provided to the Registrar, Co-operative Societies by the society during this time-frame.
74. It is important to emphasize that the public servants CBI Case No. 65/2019 CBI vs. Lila Krishna Seth & Ors Page 56 of 124 in question, namely Lila Krishna Seth and Zafar Iqbal had never been members of the society nor involved in its daily operations. Their responsibilities only commenced upon receiving communication from the society, at which point they were required to consider applications and interact with its representatives in accordance with the rules and procedures established by the prevailing Act. As public servants, they inherently possess a degree of discretionary power, and before any challenge to their discretion can be made, there must be clear evidence of dishonest intent. Courts, when evaluating the actions of public servants, are not expected to focus on minor errors in note-sheets in order to hold them criminally liable; rather, they must assess whether the notings and facts recorded are in violation of the rules and regulations applicable to their roles.
75. As established, there was a complete absence of communication from the society. Elections were required to be conducted in accordance with Rule 58 of the DCS Rules, 1972. These rules mandate that elections must take place within 30 days after the expiration of one year from the last committee election. If this is not adhered to, the Registrar is empowered to issue a requisition under the Section 32 of the D.C.S Act, 1973 to appoint an election officer, who will then call a Special General Body Meeting of the co-operative society and facilitate the election of its committee under Section 30 of the Act.
76. After a lapse of seven years, the Registrar's office CBI Case No. 65/2019 CBI vs. Lila Krishna Seth & Ors Page 57 of 124 reactivated the file concerning the present co-operative society, initially in response to a request for address clarification from the DDA, as land had been allotted to the society. During this process, it was discovered that the Registrar Office had provided an incorrect address to the DDA, preventing the proper communication of the land allotment to the society. Additionally, the Registrar Office received a complaint from one of its promoter member namely Ganesh Jha. When addressing the complaint of the promoter member namely Ganesh Jha, the Registrar's office wrote in the note-sheet that there had been no correspondence from the society since 1990, and that the society had shifted its address from Laxmi Nagar to Janak Puri without notifying the Registrar's office. Consequently, it was proposed that the society should be issued a notice under Section 32 of the DCS Act, 1972.
77. At this juncture, it is appropriate to reproduce Section 32 of the DCS Act, 1972 for further clarity and understanding:
"32. Supersession of committee.--(1) If, in the opinion of the Registrar, the committee of any co- operative society persistently makes default or is negligent in the performance of the duties imposed on it by this Act or the rules or the by-laws, or commits any act which is prejudicial to the interest of the society, or its members, the Registrar may, after giving the committee an opportunity to state its objections, if any, by order in writing, remove the committee; and
(a) order fresh election of the committee, or CBI Case No. 65/2019 CBI vs. Lila Krishna Seth & Ors Page 58 of 124
(b) appoint one or more administrators who need not be members of the society, to manage the affairs of the society for a period not exceeding one year specified in the order, which period may, at the discretion of the Registrar be extended from time to time, so, however, that the aggregate period does not exceed three years.
(2) The Registrar may fix any remuneration for the administrator, as he may think fit. Such remuneration shall be paid out of the funds of the society.
(3) The administrator shall, subject to the control of the Registrar and to such instructions as he may from time to time give, have power to exercise all or any of the functions of the committee or of any officer of the society and take all such actions as may be required in the interest of the society.
(4) The administrator shall, at the expiry of his term of office, arrange for the constitution of a new committee in accordance with the bye-laws of the society.
(5) Before taking any action under sub-section (1) in respect of a co-operative society, the Registrar shall consult the financing institution to which it is indebted.
(6) Notwithstanding anything contained in this Act, the Registrar shall in the case of a co-operative bank, if so required in writing by the Reserve Bank in the public interest or for preventing the affairs of the co-operative bank being conducted in a manner detrimental to the interests of the depositors or for securing the proper management of a co-operative bank pass an order for the supersession of the committee of that co-operative bank and appointment of an administrator therefor for such period or periods not exceeding five years in the aggregate, as may from time to time be specified by the Reserve Bank."
78. Reverting back to the facts of this case, it is evident CBI Case No. 65/2019 CBI vs. Lila Krishna Seth & Ors Page 59 of 124 from the records that the President of the society, O.P. Aggarwal, appeared before the Registrar Office and requested additional time to submit all relevant documents on 24/07/2000. The note- sheet reflects that there had been no correspondence from the society since November 1991. It was also officially recorded that the last elections were held on 23/01/2000; however, the society failed to submit the election records to the Registrar's office. Subsequently, the file was transferred to the West Zone following the society's change of address from Laxmi Nagar to Janak Puri. A comprehensive note-sheet dated 01.11.2000 was prepared, granting the society a final opportunity to submit its records. The note-sheet shows that, in the event of non-compliance, action would be taken under Section 32 of the DCS Act, 1972. The pattern and content of these note-sheets make it abundantly clear that the society had not maintained any communication with the Registrar's office throughout this period.
79. Apparently, there was no record of any election submitted to the Registrar's office from 1991 to 2000. The only evidence was a statement by O.P. Aggarwal, President, given to the East Zone office on 24/07/2000, claiming that the last elections were held on 23/01/2000, but no supporting documents were provided. The Registrar's office was considering the issuance of a notice under Section 32 of the DCS Act, which provides for the supersession of the committee for default or negligence in the performance of society duties. Against this backdrop, the process for issuing a certified list of the Managing CBI Case No. 65/2019 CBI vs. Lila Krishna Seth & Ors Page 60 of 124 Committee commenced. This is where the roles of the two accused persons become relevant.
80. Setting aside the technicalities of the Rules and Act for a moment and considering the situation from the perspective of a rational public servant: such a public servant would first request the election reports dating back to 1991, or at least from the last known election in 1991 or prior to the most recent elections. If no elections had occurred during the intervening period, several provisions under the DCS Act could be invoked, with one prominent measure being the appointment of an administrator to conduct elections. Secondly, the public servant would review the list of promoter members, as well as the lists of newly enrolled and resigned members. If it was determined that nearly all promoter members had resigned and the society was now controlled by new members, the public servant would seek evidence of these resignations and documentation of the proceedings that confirmed the enrollment of new members occupying positions in subsequent executive meetings. These are standard procedures that a public servant would generally follow in addition to the strict requirements outlined in the DCS Rules.
At their discretion, the public servant may excuse delays in holding elections or in submitting lists of enrollments and resignations; however, they would certainly examine how the composition of the society had changed, especially during the period when there was no communication between the society CBI Case No. 65/2019 CBI vs. Lila Krishna Seth & Ors Page 61 of 124 and the Registrar's office. With the approval of the accused L.K. Sethi, Inspector/accused Zafar Iqbal was assigned to verify the election report and review the society's current operations. Prior to Zafar Iqbal's verification, O.P. Aggarwal (Secretary of the society) appeared and provided photocopies of documents as previously noted. Specifically, O.P. Aggarwal submitted election records from 15/11/1998 onward. No records were presented for the period between 1991 and 1998; documentation was only available from 15/11/1998 to 2001. Subsequently, Zafar Iqbal visited the office to inspect the elections and recorded his findings which have already been noted above.
81. He supported the issuance of a certified list for the Managing Committee, as requested by the society. Subsequently, the accused L.K. Seth reviewed the matter, granted approval, and formally issued the certified list bearing his signature.
82. At this stage, the court must determine whether any illegality or irregularity occurred in the issuance of the certified list. To address this, the court must examine the surrounding circumstances, since there is no direct evidence available. The purpose is to evaluate whether there was an abuse of power with dishonest intent, resulting in wrongful gain for private individuals.
Circumstance No.1:-
83. The society convened the General Body Meeting CBI Case No. 65/2019 CBI vs. Lila Krishna Seth & Ors Page 62 of 124 (GBM) at the Janak Puri address on 15/11/1998. Notably, the original minutes of this meeting are unavailable; however, photocopies have been submitted by the accused persons namely O.P. Aggarwal as the Secretary of the society. The primary issue that should have been addressed by the accused public servants was whether the elections conducted on 15/11/1998 complied with Section 31 of the D.C.S Act, 1972 and Rule 58 of the D.C.S Rules, 1973. Firstly, the elections held on 15/11/1998 were not conducted within the required 30-day period following the expiration of one year from the previous committee election. The Rule 58(3) explicitly mandates that every cooperative society must hold its committee elections within 30 days after one year has elapsed since the last committee election. In this case, there was an almost eight-year gap, as the previous elections were held on 29.07.1990.
84. The Rule 58 of the DCS Rules, 1973 also provides a remedy if elections are not held within the stipulated period. Specifically, it states that the registrar may, after issuing a requisition under Section 30 of the Act, direct the election officer to call a special GBM for the purpose of conducting elections. Despite this, neither of the public servants made any effort to investigate what transpired during the intervening years from 1990 to 1998. Instead, they relied on a police report indicating that the folder containing society documents was missing, using this as justification. This report claimed that the proceedings register for the period 1997-98, as well as the agenda and election CBI Case No. 65/2019 CBI vs. Lila Krishna Seth & Ors Page 63 of 124 forms for the 1998, had been lost at Janak Puri Bus Stop. Such a claim should have prompted serious concern and scrutiny by the accused public servant.
85. Rather than simply accepting this explanation, the correct procedure would have been to convene a special GBM of society members and conduct elections under the supervision of an officer appointed by the Registrar, Cooperative Societies, before issuing the certified list. The court is not searching for an ideal scenario but is instead focused on the standard procedures that should be followed, as there is no provision in the DCS Act or DCS Rules to waive the requirement for timely elections. The only legitimate course of action is to call a special GBM and hold elections under the guidance of an officer designated by the Registrar.
86. This provision is designed to ensure that the society is governed by individuals who have been democratically elected, rather than by a select few who have maintained control. In this instance, the circumstances reflect poorly on the accused persons. The oversight is evident from the records, and such a significant lapse leads to the inference that the accused public servant acted with dishonest intent.
Circumstance No. 2:-
87. The minutes of the meeting held on 15/11/1998 indicate the resignation of 46 promoter members. At this CBI Case No. 65/2019 CBI vs. Lila Krishna Seth & Ors Page 64 of 124 juncture, the court does not consider the statements of those promoter members may have made before the court, as the only documents available to the accused public servants were the minutes themselves. Significantly, these minutes reveal that 46 promoter members resigned during a period when the society had no communication with the Registrar's office. Their resignations had not been approved by the Registrar. In fact, the file itself shows that the Registrar's office had requested the society to submit records of enrollments and resignations for approval. Despite these requests, no communication was made, and after a gap of eight years, the minutes from 15.11.1998 presented to the Registrar's office only in the year 2001 and it suddenly reflected the resignation of 46 promoter members.
88. This situation should have raised serious concerns for the accused public servant and warranted a thorough review to determine how such a large number of promoter members could resign simultaneously. Instead, no such scrutiny was exercised. The society was not even asked to substantiate the resignations of these members. The only justification placed on record was the police report of lost articles dated 16/04/1999, which stated that the file containing the members' resignations had been lost. If that were the case, Section 54 of the DCS Act, 1973 which grants the Inspector or a nominee of the Registrar broad powers to inspect the society and summon individuals for inquiry should have been invoked. The Inspector should have called upon the individuals listed as having resigned to verify the CBI Case No. 65/2019 CBI vs. Lila Krishna Seth & Ors Page 65 of 124 authenticity of the resignations.
89. Such steps are standard procedure in these circumstances, as the DCS Act, 1972 requires the Registrar's active involvement at every stage of a cooperative society's operations. Cooperative Societies are governed much more strictly by their specific statutes and rules than General Societies registered under the Societies Registration Act, which are generally left to manage their own affairs. Therefore, the failure to verify or approve the resignation of these 46 promoter members is a significant factor weighing against the accused public servants, leading to the inference that their actions were dishonest.
Circumstance No. 3:-
90. During the Annual General Body Meeting held on 29/07/1990, the following individuals were elected to the com- mittee:
i) Mishri Lal (President);
ii) Achal Kumar (Vice President);
iii) Bhupender Kumar (Secretary);
iv) Padam Singh (Treasurer);
v) V.K. Tondon (Committee Member);
vi) Kanta Devi (Committee Member);CBI Case No. 65/2019 CBI vs. Lila Krishna Seth & Ors Page 66 of 124
vii) Bhopal Singh (Committee Member);
viii) Babu Ram (Committee Member); and
ix) Kishan (Committee Member)
91. According to the minutes dated 15/11/1998, several key committee members were shown as having resigned prior to that meeting President Mishri Lal was recorded as having re- signed on 20/06/1998; Treasurer Padam Singh Verma and Execu- tive Member Subhash Chand both were listed as having resigned during 1996-97; and Babu Ram was indicated as having resigned on 25/07/1998. This sequence of resignations raises critical ques- tions. If the president had resigned in June 1998 and the treasurer in 1996-97, it remains unclear who was responsible for enrolling the individuals who convened the General Body Meeting on 15/11/1998. The available records do not clarify under whose au- thority the meeting dated 15.11.1998 at Janak Puri was actually held, especially since the society's registered office at that time was located at Laxmi Nagar. Additionally, the fact that not a sin- gle promoter member attended the meeting further complicates the matter, leaving unanswered the question of who presided over the proceedings.
92. The accused public servants failed to investigate why none of the promoter members were present, despite only 46 having resigned, nor did they inquire whether the remaining pro-
CBI Case No. 65/2019 CBI vs. Lila Krishna Seth & Ors Page 67 of 124moter members had received a copy of the agenda. Such glaring irregularities strongly suggest that the public servants acted in concert with private accused persons to confer undue benefits, rather than upholding proper governance standards.
Circumstance No.4: -
93. The newly elected Managing Committee, chosen unani- mously and without contest on 15/11/1998, appointed the follow- ing individuals:
i) Anil Kumar Sharma (President);
ii) Mahavir Prasad (Vice-President);
iii) R.N. Aggarwal (Committee Member);
iv) O.P. Aggarwal (Committee Member);
v) Ms. Sujata (Committee Member);
vi) Sudhir Aggarwal (Committee Member);
vii) Subhash Chand Gupta (Committee member)
94. Once again, the accused public servants neglected to enforce Rule 58(5) of the DCS Rules, 1973 which stipulates that every cooperative society committee must reserve two positions for women. If no female candidates come forward for election, the committee must co-opt women members within one month after the elections. Despite these requirements, only one execu-
CBI Case No. 65/2019 CBI vs. Lila Krishna Seth & Ors Page 68 of 124tive member, Smt. Sujata, was present, and the public servants failed to address this violation. Both public servants referred to subsequent elections. The next round of elections took place on 23/01/2000 at the Janak Puri Office, where also no promoter member attended. The minutes of the said meeting recorded the resignation of an additional ten (10) promoter members and the induction of twenty-three (23) new members. Another referenced General Body Meeting occurred on 27/01/2001, during which a new Managing Committee was elected by the election officer A.K. Jain. Only seven nomination forms were filed, resulting in an uncontested election. The following individuals were elected:-
i) R.N. Aggarwal (President);
ii) Anil Kumar Sharma (Vice President);
iii) O.P. Aggarwal (Hony. Secretary);
iv) Ms. Sujata (Treasurer);
v) Smt. Janak (Committee Member);
vi) Sudhir Aggarwal (Committee Member);
vii) Tara Chand (Committee Member)
95. However, the original proceedings register contains no record of an annual General Body Meeting. It only contains the record of the Managing Committee Meeting held on CBI Case No. 65/2019 CBI vs. Lila Krishna Seth & Ors Page 69 of 124 27/01/2001. This meeting referred to the election of a new Man- aging Committee, with the aforesaid members being elected.
96. It is evident from these records that, between the year 1998 and 27.01.2001, the same set of persons were repeat- edly appointed as President and executive committee members, all in the absence of any promoter members. This situation should have prompted the accused public servants to convene a special General Body Meeting under their direct supervision. However, they failed to do so, instead issuing a certified list of Managing Committee members. These deficiencies are glaring and are clearly demonstrated by the documents itself. The records unmistakably highlight these procedural defects. Even if one as- sumes the accused public servants were unaware of whether the resignations of promoter members were legitimate or not, they nonetheless possessed the documents that revealed considerable irregularities in the election proceedings. The records provide substantial evidence and indicate that serious violations occurred during the society's operations.
97. According to the minutes dated 15/11/1998, the pre- vious President, Mishri Lal, was shown as having resigned on 20/06/1998. Secretary Bhupender Kumar was not listed as re- signed in those minutes, even though the President had stepped down. There are no meeting records indicating the appointment CBI Case No. 65/2019 CBI vs. Lila Krishna Seth & Ors Page 70 of 124 of a new President or any resolution authorizing Bhupender Ku- mar to accept the allotment letter dated 21.09.1998 (Page 34 of D-43) from the DDA. The matter of Bhupender Kumar's signa- ture on the allotment letter will be discussed separately, as it was not before the accused Public servant at the time. However, the public servant did have access to the relevant minutes, which showed the President's resignation effective from 20/06/1998. Bhupender Kumar's resignation was subsequently accepted on 22/11/1998.
Good Faith and Dishonesty:-
98. It is submitted that Section 93 of Societies Registration Act, 1972 bars the jurisdiction of court. It is further argued that Section 95 of Societies Registration Act, 1972 says that no suit, prosecution or other legal proceedings shall lie against the Registrar or any other person subordinate to him or acting on his authority in respect of anything in good faith done or purported to have been done under this act. For a convenience, all three provisions are reproduced here as under:-
"Section 93 - Bar of jurisdiction of courts - (1) Save as provided in this act, no civil or revenue court shall have any jurisdiction in respect of -
a) the registration of cooperative society or its bye- laws or of an amendment of a bye-law;
b) removal of a committee;
c) any dispute required under Section 60 to be referred to the Registrar; and
d) any matter concerning the winding up and the dissolution of a cooperative society.CBI Case No. 65/2019 CBI vs. Lila Krishna Seth & Ors Page 71 of 124
(2). While a cooperative society is being wound up, no suit or other legal proceedings relating to the business of such society shall be proceeded with or instituted against, the liquidator as such or against the society or any member thereof, except by leave of the registrar and subject to such terms as he may impose.
(3) Save as provided in this act, no order, decision or award made under this act shall be questioned in any court on any ground whatsoever.
Section 95 - Indemnity:-- No suit, prosecution or other legal proceedings shall lie against the Registrar or any person subordinate to him or acting on his authority in respect of anything in good faith done or purporting to have been done under this act."
99. Perusal of all these two provisions shows that there is a bar of jurisdiction of civil court or revenue court in respect of registration of society, removal of a committee and winding up of a cooperative society. Further, no prosecution shall lie against the Registrar or any person subordinate to him or acting on his authority in respect of anything done in the good faith. The good faith has been defined under Section 52 of the Indian Penal Code.
"Section 52 IPC - "Good Faith":-
Nothing is said to be done or believed in "good faith" which is done or believed without due care and attention."
100. As noted above in the four circumstances noted previously, the accused persons have brazenly ignored the glaring serious irregularities, clearly visible from the minutes of CBI Case No. 65/2019 CBI vs. Lila Krishna Seth & Ors Page 72 of 124 meetings. It cannot be asserted that their actions were carried out in good faith, as they performed those acts without exercising the necessary care and attention required by law. The indemnity of Section 95 of the Delhi Cooperative Society Act protects the act done in good faith. Where there is no Good Faith, no protection is available. At this stage, it is relevant here to refer to the definition of 'dishonestly'. The definition of "dishonestly" is provided under Section 24 of IPC which provides that :-
"Section 24 - "Dishonestly" - Whoever does anything with the intention of causing wrongful gain to one person or wrongful loss to another person is said to do things "dishonestly".
101. In light of the aforementioned circumstances, it is evident that the public servants in question wholly disregarded the documents pertaining to elections, member enrollments, and resignations within the society. They accepted the election held on 15.11.1998 at face value, despite the fact that these elections were not conducted in accordance with the DCS Act, 1972 and DCS Rules, 1973. There was no proper circulation of the agenda notice, and none of the promoter members participated in the proceedings.
102. Furthermore, they failed to address a crucial issue: if the president of the society had been elected in 1990 and subsequently resigned in 1998, it remains unclear who presided over the meeting during which the new Governing Body composed of newly enrolled members was elected. As previously CBI Case No. 65/2019 CBI vs. Lila Krishna Seth & Ors Page 73 of 124 highlighted, the responsibilities of these public servants were substantial, granting them wide-ranging authority to oversee the functioning of the cooperative society and to ensure its operations were consistent with cooperative principles and the intended spirit of the law. Section 55 of the DCS Act, 1972 specifically empowers these officials to conduct an inquiry into the constitution, functioning, and financial condition of the society. They are authorized to convene a General Body Meeting (GBM) of the society and may summon any individual reasonably believed to possess knowledge of the society's affairs, examining such individuals under oath if necessary. The DCS Act, 1972 thus vests them with broad powers to ensure that the society is managed in accordance with democratic and cooperative values. Even in cases where the original promoter members have disappeared, the society should be removed from the registrar's records. If the promoters have lost interest, the proper course of action would have been to strike the society off the register, rather than allow it to be controlled by unidentified persons who joined only after a parcel of land was allotted to the society.
The public servants were obligated to recognize that these new members were enrolled precisely when the society received its land, while the original promoters had become absent from any involvement. Nonetheless, these officials permitted the society to fall under the control of new enrolled persons. The falsification and manipulation of records were clearly apparent CBI Case No. 65/2019 CBI vs. Lila Krishna Seth & Ors Page 74 of 124 from the documents presented before them. Therefore, these failings cannot be dismissed as mere departmental oversights, breaches of procedural formalities, or simple negligence. Rather, they constitute deliberate actions aimed at concealing the true facts and intentionally disregarding the mandates set forth by the DCS Act and DCS Rules.
103. Consequently, the conduct of these public servants amounts to misconduct under Section 13(1)(d) of the Prevention of Corruption Act, 1988 to give advantage to the private accused persons to possess the land of DDA. Their actions fall squarely within the scope of this provision, and they are thus found guilty of the offence under Section 13(1)(d) read with Section 13(2) of the Prevention of Corruption Act, 1988.
Conspiracy of Public Servants with the private accused persons:-
104. It is the case of the prosecution that the public servants conspired with the private persons to give benefit to the private persons. It is to be noted here that in the matter of State (NCT of Delhi) v. Navjot Sandhu [(2005) 11 SCC 600, the Hon'ble Supreme Court held as under :-
"101. One more principle which deserves notice is that the cumulative effect of the proved circumstances should be taken into account in determining the guilt of the accused rather than adopting an isolated approach to each of the circumstances. Of course, each one of the circumstances should be proved beyond reasonable doubt. Lastly, in regard to the appreciation of evidence relating to the conspiracy, the Court must CBI Case No. 65/2019 CBI vs. Lila Krishna Seth & Ors Page 75 of 124 take 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."
105. Further, in the matter of Yogesh v. State of Maharashtra [(2008) 10 SCC 394, the Hon'ble Supreme Court held as under:-
"25. Thus, it is manifest that the 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 possible to prove the agreement between them by direct proof. Nevertheless, existence of the conspiracy and its objective can be inferred from the surrounding circumstances and the conduct of the accused. But the incriminating circumstances must form a chain of events from which a conclusion about the guilt of the accused could be drawn. It is well settled that an offence of conspiracy is a substantive offence and renders the mere agreement to commit an offence punishable, even if an offence does not take place pursuant to the illegal agreement."
106. In the present case, apparently, there is no direct evidence qua the public servants that they had taken bribe to favour the private accused persons. The case of the prosecution depends upon circumstantial evidence. The five golden rules as set out in the judgment of Sharad Birdhichand Sarda vs State of Maharashtra (Supra) shall also apply while proving the offence of conspiracy.
107. With respect to the conduct of the public servants, this court has already outlined the circumstances highlighting the CBI Case No. 65/2019 CBI vs. Lila Krishna Seth & Ors Page 76 of 124 evident agreement between the accused persons, namely L.K. Seth and Zafar Iqbal, to carry out the illegal act of issuing the certified list of Managing Committee Members. As previously noted, the following facts are reiterated here as circumstantial ev- idence regarding the involvement of both public servants and pri- vate individuals:
I. They neglected the significant lapse of eight years since the last election, during which nearly 50% (fifty percent) of promoter members were shown as resigned, despite no resignation letters being submitted to the RCS Office.
II. They disregarded the fact that the police report of lost arti-
cles submitted to PS-Janak Puri pertained to documents al- legedly executed between 1990 and 1998 a period when the society had no communication whatsoever with the registrar office.
III. They ignored the resignation of treasurer Padam Singh Verma during 1996-97; of President Mishri Lal Lodhi on 26.06.1998 and Babu Ram on 25.07.1998, raising the question of who was responsible for enrolling the newly approved members who ultimately took control of the ex-
ecutive committee. There are no recorded minutes of the Managing Committee that document the enrollment of R.N. Aggarwal, O.P. Aggarwal, or any other newly ap- pointed members.
CBI Case No. 65/2019 CBI vs. Lila Krishna Seth & Ors Page 77 of 124IV. They overlooked the fact that from 1998 to 27.01.2001, al-
most all promoter members were shown as having re- signed from the society's membership.
108. All of these circumstances have already been exam- ined in detail when determining the role of the accused, L.K. Seth and Zafar Iqbal. The act of disregarding these significant irregu- larities during document verification and in the issuance of the certified list of committee members undeniably demonstrates a criminal conspiracy between L.K. Seth and Zafar Iqbal. It is clear that neither could have acted alone without the involvement of other private co-accused persons, whose roles will be considered at a later part in this judgment. Nevertheless, the circumstances unequivocally establish that L.K. Seth and Zafar Iqbal conspired with other accused persons to facilitate the revival of Maharani Avanti Bai CGHS. The accused persons are not permitted to take the plea that previous Inspector P.L. Khera had also given the same finding for the reasons that firstly he has not been made the accused and secondly noting was done on his inspection report as the file was transferred from East Zone to the West Zone.
Sanction under Section 197 Cr.P.C:-
109. Now, this court shall come to issue of requirement of sanction under Section 197 Cr.P.C to prosecute the public servants. It is relevant here to reproduce the relevant part of Section 197 Cr.P.C for a better understanding of the provision:-
CBI Case No. 65/2019 CBI vs. Lila Krishna Seth & Ors Page 78 of 124"S. 197 Prosecution of Judges and public servants When any person who is or was a Judge or Magistrate or a public servant not removable from his office save by or with the sanction of the Government is accused of any offence alleged to have been committed by him while acting or purporting to act in the discharge of his official duty, no Court shall take cognizance of such offence except with the previous sanction-
1. in the case of a person who is employed or, as the case may be, was at the time of commission of the alleged offence employed, in connection with the affairs of the Union, of the Central Government;
2.in the case of a person who is employed or, as the case may be, was at the lime of commission of the alleged offence employed, in connection with the affairs of a State, of the State Government:
Provided........."
110. The principle governing the sanction under Section 197 Cr.P.C has been laid down by the Hon'ble Supreme Court in number of judgments. In the matter of B. Saha v. M.S. Kochar [(1979) 4 SCC 177, the Hon'ble Supreme Court held as under:-
"17. The words 'any offence alleged to have been committed by him while acting or purporting to act in the discharge of his official duty' employed in Section 197(1) of the Code, are capable of a narrow as well as a wide interpretation. If these words are construed too narrowly, the section will be rendered altogether sterile, for, 'it is no part of an official duty to commit an offence, and never can be'. In the wider sense, these words will take under their umbrella every act constituting an CBI Case No. 65/2019 CBI vs. Lila Krishna Seth & Ors Page 79 of 124 offence, committed in the course of the same transaction in which the official duty is performed or purports to be performed. The right approach to the import of these words lies between these two extremes. While on the one hand, it is not every offence committed by a public servant while engaged in the performance of his official duty, which is entitled to the protection of Section 197(1), an act constituting an offence, directly and reasonably connected with his official duty will require sanction for prosecution under the said provision. As pointed out by Ramaswami, J. in Baijnath v. State of M.P. [AIR 1966 SC 220] :
(AIR p. 227, para 16) '16. ... It is the quality of the act that is important, and if it falls within the scope and range of his official duties the protection contemplated by Section 197 of the Criminal Procedure Code will be attracted'.
18. In sum, the sine qua non for the applicability of this section is that the offence charged, be it one of commission or omission, must be one which has been committed by the public servant either in his official capacity or under colour of the office held by him."
111. Further, in the matter of Rakesh Kumar Mishra v. State of Bihar [(2006) 1 SCC 557, the Hon'ble Supreme Court held as under:-
"12. It has been widened further by extending protection to even those acts or omissions which are done in purported exercise of official duty; that is, under the colour of office. Official duty, therefore, implies that the act or omission must have been done by the public servant in the course of his service and such act or omission must have been performed as part of duty which further must have been official in nature. The section has, thus, to be construed strictly, while determining its applicability to any act or omission in the course of CBI Case No. 65/2019 CBI vs. Lila Krishna Seth & Ors Page 80 of 124 service. Its operation has to be limited to those duties which are discharged in the course of duty. But once any act or omission has been found to have been committed by a public servant in the discharge of his duty then it must be given liberal and wide construction so far its official nature is concerned. For instance a public servant is not entitled to indulge in criminal activities. To that extent the section has to be construed narrowly and in a restricted manner. But once it is established that an act or omission was done by the public servant while discharging his duty then the scope of its being official should be construed so as to advance the objective of the section in favour of the public servant. Otherwise the entire purpose of affording protection to a public servant without sanction shall stand frustrated. For instance a police officer in the discharge of duty may have to use force which may be an offence for the prosecution of which the sanction may be necessary. But if the same officer commits an act in the course of service but not in the discharge of his duty and without any justification therefore then the bar under Section 197 of the Code is not attracted.
112. Here, reliance is also placed on Parkash Singh Badal v. State of Punjab [(2007) 1 SCC 1, wherein the Hon'ble Supreme Court held as under:
"38. The question relating to the need of sanction under Section 197 of the Code is not necessarily to be considered as soon as the complaint is lodged and on the allegations contained therein. This question may arise at any stage of the proceeding. The question whether sanction is necessary or not may have to be determined from stage to stage."
113. The issue of Sanction under Section 197 Cr.P.C can be taken up at any stage as observed in the matter of Davender CBI Case No. 65/2019 CBI vs. Lila Krishna Seth & Ors Page 81 of 124 Singh vs State of Punjab, Crl. Appeal No. 190/2003, wherein it was observed that the question of sanction can be raised at any time in the light of evidence adduced after conclusion of trial or at other appropriate stage.
114. Further, in the matter of A. Srinivasulu vs State (Rep. by Inspector of Police) 2023 Livelaw (SC) 485, wherein the Hon'ble Supreme Court held that the observations contained in paragraph 50 in the decision in Prakash Singh Badal are too general in nature and can not be regarded as the ratio flowing out of the said case. If by their very nature, the offences under Section 420, 468, 471 and 120-B IPC can not be regarded as having been committed by the public servant while acting or purporting to act in the discharge of official duties, the same logic would apply in much more vigour under the cases under PC Act. The paragraph 48 to 51 of this judgment is reproduced here as under:-
"48. Sh. Padmesh Mishra, Ld. counsel for respondent placed strong reliance upon the observation contained in paragraph 50 of the decision of this court in Prakash Singh Badal vs State of Punjab. It reads as follows:-
"50. The offence of cheating under Section 420 or for that offences relatable to Section 467, 468, 471 and 120-B IPC can by no stretch of imagination by their very nature be regarded as having been committed by any public servant while acting or purporting to act in discharge of official duties. In such cases, official status only provides an opportunity for commission of offence.CBI Case No. 65/2019 CBI vs. Lila Krishna Seth & Ors Page 82 of 124
49. On the basis of the above observation, it was contended by Ld. counsel for the respondent that any act done by public servant, which constitutes an offence of cheating, can not be taken to have been committed while acting or purporting to act in the discharge of official duty.
50. But the above contention in our opinion is far-fetched. The observations contained in paragraph 50 of the decision in Prakash Singh Badal (Supra) are too general in nature and can not be regarded as the ratio flowing out of the said case. If by there very nature, the offence under Section 420, 468, 471 and 120-B IPC can not be regarded as having been committed by a public servant while acting or purporting to act in discharge of official duties, the same logic would apply with much more vigour in the case of offences under the PC Act. Section 197 of the Code does not carve out any group of offences that will fall outside its purview. Therefore, the observations contained in para 50 in decision of Prakash Singh Badal can not be taken as carving out an exception judicially, to a statutory prescription. In-fact, Prakash Singh Badal cites with approval the other decision (authored by the very same Ld. Judge) where this court made distinction between an act, though in excess of the duty, was reasonably connected with the discharge of official duty and an act which was merely a cloak for doing the objectionable act. Interestingly, the preposition laid down in Rakesh Kumar Mishra (supra) was distinguished in paragraph 49 of the decision in Prakash Singh Badal before the court made the observations in para 50 extracted above.
51. No public servant is appointed with a mandate of public to commit an offence.
Therefore, the observations contained in paragraph 50 of the decision in Prakash Singh Badal are applied, any act which constitutes an offence under any statue will go out of the purview of an act in the discharge of official duty. The requirement of previous sanction will thus be redundant by such an interpretation. "
CBI Case No. 65/2019 CBI vs. Lila Krishna Seth & Ors Page 83 of 124115. Therefore, the twin test is to be passed by the accused for availing the benefit under Section 197 Cr.P.C.
Firstly, is that he is a public servant not removable from his office saved by or with the sanction of the Government;
Secondly, he did the alleged offence while acting or purporting to discharge his official duty.
116. Reverting back to the facts of the present case, the accused Zafar Iqbal was working as the Inspector. The phrase in the Section 197 Cr.P.C "removable from his office save by or with the sanction of the Government" restricts its application to only for those public servants, who are removable with the sanction of the government only. Not all the public servants are removable by or with the sanction of the government. In the executive sphere of the government, the Central Government performs its official act under the seal of the President of India, whereas the State Governments works through the seal of the Governor of State. Only those Government Servants, who are removable by the order of the President of India or the Governor of the State are protected under Section 197 Cr.P.C. Apparently, the accused Zafar Iqbal was removable from their competent authority of their department i.e. the Chief Secretary/Director/Registrar/Controller of Accounts of GNCT, Delhi. Therefore, he was not removable by the Government, hence, the protection under Section 197 Cr.P.C is not available to CBI Case No. 65/2019 CBI vs. Lila Krishna Seth & Ors Page 84 of 124 him. Since, this protection under Section 197 Cr.P.C is not available, therefore, further discussion on facts to find out whether his alleged acts come under discharge of the official duties needs not to be done.
117. Now, coming to the sanction under Section 197 Cr.P.C in respect of the accused L.K. Seth. He was the Gazetted Officer in the office of RCS. Undisputedly, he was removable by or with the sanction of the Government. Therefore, the first limb of the Section 197 Cr.P.C is fulfilled qua him. The second limb of the Section 197 Cr.P.C says that the act must be done while acting or purporting to act in discharge of his official duties. He certified the list of Managing Committee. Apparently, there is no direct evidence of bribe against him. Had it been the direct evidence of bribe, then this court would easily say that taking bribe is not a part of his official duties. But here we have drawn inferences from the facts that he had overlooked some material and serious irregularities while certifying the list of the Managing Committee. His official duty to certify the list of Managing Committee and overlooking the material irregularities in the record of the society are intrinsically inter-connected. The alleged act is so mingled with his official duty that both these acts can not be separated with each other. As noted above, this court has pointed out the incriminating circumstances, which are only consistent with the guilt of the accused persons from the documents available on the record.CBI Case No. 65/2019 CBI vs. Lila Krishna Seth & Ors Page 85 of 124
118. Further, there is no evidence that the accused L.K. Seth had himself forged any document. However, inferences have been drawn from the minutes of meeting and inspection report that he had overlooked the serious irregularities in connivance with the other accused persons. Thus, by applying "reasonable nexus" test which means there must be a reasonable connection between the act alleged as an offence and the official duty of the public servant, it would thus been seen that the accused certified the list of Managing Committee in discharge of his official duties and therefore, the sanction under Section 197 Cr.P.C was required. Though this court has held him guilty under Section 13(1)(d) read with S. 13(2) of PC Act, 1988 and has also observed that he had conspired with other accused persons, but the observations of this court should not be a substitute for the Sanction under Section 197 Cr.P.C. If the final judgment of the court is substituted in place of sanction, then the Section 197 Cr.P.C shall become redundant. The requirement of the sanction is to be seen from the alleged offence, not from the view taken by the court on merits of the case. Accordingly, in absence of the sanction under Section 197 Cr.P.C, the accused L.K. Seth can not be held guilty for the Indian Penal Code offences (IPC).
Sanction under Prevention of Corruption Act, 1988:-
119. The prosecution got sanction in respect of the accused Zafar Iqbal. The accused L.K. Seth retired from the service w.e.f 30.06.2002 i.e. before initiation of the investigation.
Therefore, there was no need to obtain sanction under Section 19 CBI Case No. 65/2019 CBI vs. Lila Krishna Seth & Ors Page 86 of 124 of the P.C Act, 1988 for the accused L.K Seth. The sanction order of the accused Zafar Iqbal is Ex. PW-37/A given by Controller of Accounts i.e. PW-37. He appeared before the court and deposed that he examined all the documents which were put to him before giving sanction for prosecution of the accused Zafar Iqbal. He deposed that he was working as the HOD and was competent to issue sanction order as he was competent to remove the accused Zafar Iqbal from his service. He stated that he read the sanction order before signing it. In his cross-examination, he denied the suggestion that he did not receive any document from CBI. He denied the suggestion that he received the draft sanction order from the CBI. Therefore, from the testimony of PW-37, this court finds that the sanctioning authority perused the record of the case. This court has perused the sanction order i.e. Ex. PW-37/A. It can not be said that it is copy and paste sanction. He has given his reasoning to arrive at his decision to grant sanction. Thus, the record shows that the sanctioning officer applied his mind before granting sanction in respect of the accused Zafar Iqbal. As a result, the accused Zafar Iqbal is found guilty of offences under Section 13(1)(d) r/w 13(2) of PC Act, 1988 and for the offence under Section 120-B IPC read with Section 420, 468 and 471 of Indian Penal Code, 1860.
Liability of the private persons namely Bhim Singh Mahur and Sujata Chauhan:-
120. Both of these accused persons passed away during the course of the proceedings. Consequently, there is no CBI Case No. 65/2019 CBI vs. Lila Krishna Seth & Ors Page 87 of 124 requirement to explore their involvement in conspiring with the other accused persons to illegally transfer control of the society, as the proceedings against them have already been abated.
Role of Subhash Gupta, Madan Sharma and Ramesh Chand Bansal:-
121. It is alleged that the late Bhim Singh Mahur handed over all the original documents of the society, including the resignation letters of its members, to Subhash Gupta. It is further alleged that Subhash Gupta subsequently transferred these documents illegally to the accused Ram Narayan Aggarwal through the involvement of Madan Sharma and R.C. Bansal, purportedly at the rate of Rs. 5,000 per resignation letter of each promoter member.
122. During the investigation, the statement of witness Satya Prakash Garg was recorded under Section 164 Cr.P.C. In his statement, he asserted that Bhim Singh Mahur was in urgent need of funds to pay the resigning members and, as a result, handed over the society's documents to Mr. Subhash Gupta for a sum of Rs. 50,000 in cash, which was exchanged in his presence at the said meeting.
123. Witness Satya Prakash Garg was examined as PW-
29. During his examination-in-chief, he declared that he did not know Bhim Singh Mahur or Subhash Gupta. He stated that he had gone to the Patiala House Courts, where his statement was CBI Case No. 65/2019 CBI vs. Lila Krishna Seth & Ors Page 88 of 124 recorded under Section 164 Cr.P.C., and he acknowledged his statement as Ex. PW-29/PX-1. However, in his cross-
examination by the learned Public Prosecutor for CBI, he denied every sentence of his earlier statement under Section 164 Cr.P.C. When cross-examined by the accused Ram Nath Aggarwal, he stated that the facts in his Section 164 Cr.P.C statement were provided to him by the CBI officer.
124. Apart from this testimony, there is no other evidence demonstrating that Subhash Gupta paid money to the late Bhim Singh Mahur to acquire the society's documents or that these documents were subsequently handed over to the accused R.N. Aggarwal through Madan Sharma and R.C. Bansal. The prosecution has not produced any additional witnesses regarding this matter. Consequently, the prosecution has failed to establish its case against the accused Subhash Chand Gupta, Madan Sharma, and R.C. Bansal. As a result, all three accused are acquitted of the charges framed against them.
Role of Accused R.N. Aggarwal and O.P. Aggarwal:-
125. The society was originally established in 1983, with the late Bhim Singh Mahur playing a key role in its formation. Despite not being a member, Bhim Singh Mahur assumed the po- sition of secretary, a fact that appeared to go unchecked by the office of the Registrar of Cooperative Societies (RCS), enabling him to serve as the Secretary for an extended period. Subse-
CBI Case No. 65/2019 CBI vs. Lila Krishna Seth & Ors Page 89 of 124quently, the composition of the Governing Body underwent changes.
126. Notably, between 1983 and 20.07.1990 accused R.N. Aggarwal and O.P. Aggarwal had no involvement with the society. They were not even members during this time. Their names first surfaced in the society's records during the General Body Meeting held on 15.11.1998, where they were elected as the Executive Members of the Governing Body. It is stated that they joined the society in 1996-97; however, there is no docu- mentary evidence, such as Governing Body records, to confirm their membership prior to this meeting. As discussed in previous sections, the manner in which they became members was never properly disclosed to the RCS office. The significance of both ac- cused arises from the fact that they managed the society's affairs at the time when the plot was allotted. The lease deed for the plot was executed in the name of R.N. Aggarwal. Before delving deeper, it is pertinent to consider the statements of prosecution witnesses regarding the involvement of these two accused indi- viduals.
Evidence in respect of the private persons:-
127. The following witnesses have deposed the facts pertaining to the private persons:-
CBI Case No. 65/2019 CBI vs. Lila Krishna Seth & Ors Page 90 of 124PW Name Brief Deposition Number PW-1 Meer Singh He neither became the member nor resigned.
PW-2 Anand Kumar He became the promoter member.
He denied his signatures on the resignation letter.
PW-3 Pravesh Kumar Mehta He did not become the member. He denied his signatures on the membership affidavit. He denied his signatures on the resignation letter.
PW-4 Subhash Chand He was declared hostile.
PW-5 Babu Lal He became the promoter member of society and was elected as Vice-
President. He resigned from the society. He left the society after 1985.
PW-6 Anchal Kumar Mehrotra He became the promoter member.
He denied attending any meeting after 1986. He denied his signatures on proceedings dated 15.08.1986, 15.03.1987 and 08.01.1989. He left the society as no meeting of the society was held and he also went to Gujarat.
PW-7 Mishri Lal Lodhi He became the promoter member.
He was elected for the post of President on 22.01.1989. He resigned from the membership of society on 13.05.1998. He identified the membership register containing names of 100 members of society till 08.07.1990. The society was not working after 1990 PW-9 Deepak Sharma Declared hostile.
PW-10 Surender Kumar Gupta He became the promoter member.
He resigned from the society.
PW-11 Daya Nand He became the promoter member.
He resigned from the society.
PW-12 Vijay Singh He became the promoter member CBI Case No. 65/2019 CBI vs. Lila Krishna Seth & Ors Page 91 of 124 and resigned.
PW-13 Laxmi Narayan He became the promoter member and resigned. He submitted his resignation to Mishri Lal Lodhi.
PW-14 Padam Singh Verma He became the member in 1985. He denied attending any meeting from 02.10.1987 till 29.07.1990. He denied his signatures on the meetings between 1987 to 1990. He resigned from the society.
PW-18 Shiv Kumar Bassi He became the member in 2000.
However, his enrollment form carried the rubber stamp showing his date of application (Ex. PW-18/B) as 07.10.1996. His money receipt (Ex.
PW-18/D) of Rs. 110/- was shown of the year 14.01.1997.
PW-19 Vikram Dhingra He deposed that he became the member through Mr. Gupta deputed by the accused R.N. Aggarwal. He further deposed that R.N. Aggarwal was having his bank account in the branch of his father. His father was working as the Senior Manager in the Punjab National Bank. He took the membership in the year 1998 and resigned in the year 1999.
PW-25 Bhupender Kumar He became the promoter member.
He deposed that the accused Bhim Singh Mahur obtained his signatures on many papers including blank papers. He resigned from the society.
He denied his signatures on the proceedings dated 19.02.1989, 16.04.1989, 10.06.1989, 06.09.1989, 19.11.1989, 08.07.1990.
He denied his signatures on the letter dated 01.10.1989 and admitted his signatures on letter dated 15.11.1998. He also admitted signatures on the letter dated NIL regarding handing over of documents. He denied his signatures CBI Case No. 65/2019 CBI vs. Lila Krishna Seth & Ors Page 92 of 124 on letter (Ex. PW-25/F) addressed to Lt. Governor, Delhi. He denied his signatures on Ex. PW-20/P, Ex. PW-
20/Q, Ex. PW-20/R, Ex. PW-20/S and Ex. PW-20/T. He deposed that the accused Bhim Singh Mahur used to obtain his signatures on the blank papers at his home.
PW-27 A.K.Jain He became member in the year 1998. He was declared hostile. In his cross-examination by Ld. Senior PP for the CBI, he stated that the accused R.N. Aggarwal was his relative.
PW-28 A.K. Sharma He was declared hostile.
PW-29 Satya Prakash Garg He gave his statement under Section 164 Cr.P.C. However, he did not support his statement and was declared hostile.
PW-30 Sanjeev Kumar Chaswal He was the promoter member and he resigned from the membership.
PW-33 Mohinder Singh Handwriting expert. He exhibited his (GEQD) forensic reports.
PW-34 DSP Ghanshyam Roy He received documents from the accused R.N. Aggarwal and Bhim Singh Mahur.
PW-35 Sudhir Aggarwal He was declared hostile.
PW-38 DSP Surender Singh, He conducted the investigation and Investigating Officer filed the charge-sheet.
128. After listing the witnesses and summarizing the nature of their testimonies, it is appropriate to provide a concise overview of their statements along with a detailed analysis at the relevant points, as follows:-
129. PW-1 deposed that the accused/deceased Bhim CBI Case No. 65/2019 CBI vs. Lila Krishna Seth & Ors Page 93 of 124 Singh was relative and he had never become the member of the society. Therefore, his testimony is not relevant in context of both these accused persons. However, his testimony was relevant in the context of the accused Bhim Singh Mahur as the witness denied his signatures on his affidavit. Since the accused Bhim Singh Mahur has expired, therefore, this court is not delving upon the testimony of the PW-1.
130. The PW-2 namely Anand Kumar became the promoter member of the society through the deceased accused Bhim Singh Mahur. He identified his affidavit and by-laws of the society. He attended meetings of the society. During his deposition, a photocopy of his resignation letter was shown to him, he deposed that he did not resign from the membership of the society and stated that signature on the resignation letter does not belong to him. He did not submit any such resignation.
He stated that the deceased accused Bhim Singh Mahur was looking after the affairs of the society. He further deposed that after his accident in the year 1992, he was not aware about the affairs of the society.
Now, at this stage, this Court would like to see the minutes of the meeting to find out when Anand Kumar was shown to have resigned. Looking at the minutes of the meeting dated 15.11.98, Anand Kumar was shown resigned between 1996-1997. These minutes were filed by the society to get the CBI Case No. 65/2019 CBI vs. Lila Krishna Seth & Ors Page 94 of 124 certified copy of the Managing Committee from the accused Public Servant L. K. Seth. In the General Body Meeting dated 15.11.1998, new Governing Body was elected unopposed. In the said Governing Body meeting, R. N. Aggarwal and O. P. Aggarwal were the executive members. They were shown newly enrolled between 1996-1997. In the said minutes of the meeting no promoter member was present. So, the General Body Meeting of society dt. 15.11.98 was benefiting the member of the New Governing Body as they were elected unopposed in the said meeting.
131. PW-3 namely Pravesh Kumar Mehta deposed that he did not become the member of the society. This deposition does not pertain to the accused persons namely R.N. Aggarwaland O.P. Aggarwal. So, it needs not to be discussed further.
132. The PW-4 namely Subhash Chand became the promoter member of the society. He identified his membership affidavit, his signatures on the membership register. He also identified his resignation. He was declared hostile by the Ld. PP for the CBI. In his cross-examination by the Ld. PP for the CBI, he stated that he gave the statement to the CBI and stated that he received back his Rs.500/- as he was unable to pay further amount of Rs. 5000/-, however, he stated that he cannot say whether signatures on the resignation letter were his signatures or not? Therefore, his testimony needs not to be discussed as he did not support the prosecution.
CBI Case No. 65/2019 CBI vs. Lila Krishna Seth & Ors Page 95 of 124133. PW-5 namely Babulal was the promoter member. He identified his signatures in the membership register. He became the Vice President in the society. He deposed that he lastly attended the meeting on 21.04.85. Thereafter, he did not attend any meeting. He left the society as he was not having any money to proceed further with his membership. He deposed that thereafter, the society remained 'CHUP-CHAP'. He explained that "CHUP-CHAP" means that he did not have any interest in the society and he did not know what had happened to the society thereafter. He identified his signatures on the resignation. Since, he has deposed that he had voluntarily resigned from the society, therefore, his testimony needs not to be discussed further.
134. The PW-6 namely Aanchal Kumar Mehrotra was the promoter member. He deposed that he attended one or two society meetings initially, and thereafter, he was not in touch with the society. He left the society as no meeting of the society was held and he also went to Gujarat. He denied the signatures on the minutes of the meeting dt. 15.8.86 (Ex.PW6/D), 15.3.87 (Ex.PW6/E) and 08.01.89 (Ex.PW6/F).
He did not depose anything about his resignation, however, he was shown resigned on 22.11.98 in the meeting of the New Managing Committee, wherein the accused R. N. Aggarwal and O.P. Aggarwal were elected as Secretary and Treasurer respectively. The accused R.N. Aggarwal submitted the resignation of the members received by him from ex-secretary CBI Case No. 65/2019 CBI vs. Lila Krishna Seth & Ors Page 96 of 124 for approval including the resignation of Aanchal Kumar Mehrotra.
135. The PW-7 namely Mishri Lal Lodhi was the promoter member. He identified his signatures on the membership register. He deposed that he attended several meetings. He identified his signatures on the minutes of meeting from 1983 to 1989. He was elected the President of the Society in the meeting dated 22.01.1989. He identified his signatures on other meetings held between 1989 to 1990. During his deposition, he saw his resignation letter dtd. 13.05.1998. He identified his signatures on the resignation letter and deposed that he resigned from the society on 13.05.1998.
He further stated that the accused Bhim Singh Mahur asked him to sign the documents and he signed, the accused Bhim Singh Mahur told him that somebody else would run the society, however, he did not tell him the name of that person. He deposed that he did not sign any document after he resigned from the society and after signing the bank documents on asking of the accused Bhim Singh Mahur. He stated that the persons whose names are mentioned from serial no. 1 to 100 in the member-ship register were the only members in the society. He deposed that the name of the last member namely Yogesh Gupta was written at the Serial No. 100.
136. Here, his testimony needs analysis qua the accused CBI Case No. 65/2019 CBI vs. Lila Krishna Seth & Ors Page 97 of 124 R. N. Aggarwal and O.P. Aggarwal. The witness categorically deposed that he resigned from the society on 13.05.1998 and he signed some bank documents on asking of the deceased accused Bhim Singh Mahur before his resignation as he was told that someone else would run the society. During his testimony, he categorically deposed that at the time of his resignation, there were only 100 members. He resigned on 13.05.1998. The testimony of Mishri Lal Lodhi makes it categorically clear that in the capacity of the President of the society, he did not admit Ram Narayan Aggarwal and O.P. Aggarwal as the members in the society in the year 1996-1997. Thus, it categorically proves that the minutes of meeting dtd. 15.11.98 were forged to show Ram Narayan Aggarwal and O.P. Aggarwal as members inasmuch as the accused R. N. Aggarwal and O.P. Aggarwal were enrolled during 1996-1997 as shown in the General Body Meeting dated 15.11.1998. Though others were also shown as the members but in the said meeting, it was R. N. Aggarwal and O.P. Aggarwal who became the Managing Committee members in the said meeting. He was cross-examined by accused R. N Aggarwal. In his cross -examination he admitted the suggestion that since inception till his resignation, he was the member of the Managing Committee in one capacity or the other. He stated that he did not remember as to whether no election of society was held from 1990 till 1998.
137. The PW-13 namely Laxmi Narayan deposed that he was the promoter member of the society. He identified his CBI Case No. 65/2019 CBI vs. Lila Krishna Seth & Ors Page 98 of 124 signatures in the membership register. He deposed that in the year 1998, Mishri Lal Lodhi stated that some members were not contributing to the society and he was resigning from the society. Then, he also decided to resign from the society and he accordingly resigned. He submitted his resignation to Mishri Lal Lodhi and he returned his amount of Rs. 2000/- in the year 1998. However, the minutes of meeting from 1998 to 2001 show that his resignation had never been accepted either in the Managing Committee Meetings or in the General Body Meetings.
138. The PW-14 namely Padam Singh Verma was the promoter member. He admitted his signatures on his affidavit. However, he denied attending meetings of the society from 1987 to 1990 and denied his signatures on the minutes of these meetings. He stated that he resigned from the society and he received back his amount of Rs. 1000/-. His testimony also pertains to the deceased accused Bhim Singh Mahur and therefore, it needs not to be discussed.
139. The PW-18 namely Shiv Kumar Bassi deposed that he became the joint member with his wife in the society in the year 2001. He admitted his signatures on the joint application form i.e. Ex.PW18/B (D-13, Page 86). He deposed that his joint application wrongly carries the rubber stamp of 07.10.1996. The said application was submitted after the year 2000.
This Court paused here for a moment to observe that CBI Case No. 65/2019 CBI vs. Lila Krishna Seth & Ors Page 99 of 124 the application form of the PW-18 i.e. Shiv Kumar Bassi, which was submitted for enrollment after the year 2000, carries the rubber stamp of the year 1996 -- which shows date of application as 07.10.1996; the date of Managing Committee meeting as 14.01.1997 and share certificate dtd. 14.01.1997. It only shows that this mistake occured while preparing the pre-dated documents to show enrollment of members during the period of 1996/1997 i.e. before allotment of the plot. This testimony clearly points out manipulation on the part of the accused persons namely R.N. Aggarwal and O.P. Aggarwal who were managing the affairs of the society.
140. The PW-19 namely Vikram Dhingra deposed that he became the member of the society in the year 1998. He stated that one manager posted in the Punjab National Bank introduced to him to one Mr. Gupta who was looking after the affairs of the Maharani Avanti Bai Society being deputed by R. N. Aggarwal. He exhibited the membership form as Ex.PW19/A. He stated that Mr. R. N. Aggarwal was having his bank account in the said branch.
141. The PW-21 namely Madan Lal Sharma, Asstt. Registrar Policy was posted in the office of Registrar of Cooperative Society from April 2006 to Sept., 2007. After seeing the photocopy of resolution dated 15.11.1998 at page no.277 to 283 of File D-2, he deposed that O P Aggarwal, R. N Aggarwal and Anil Kumar Sharma were not eligible for becoming the CBI Case No. 65/2019 CBI vs. Lila Krishna Seth & Ors Page 100 of 124 members of the Executive Committee as they had not completed one year as member. He further deposed that as per directives of the Registrar Cooperative Society dt. 26.03.1990 (Ex.PW21/B), the society was required to forward the resignations/enrollment of the members within 15 days from the date of passing the resolution to the office of Registrar Cooperative Society. The resolution was not forwarded to the office of Registrar Cooperative Society within the stipulated period.
142. The PW-25 namely Bhupender Kumar deposed that the accused Bhim Singh Mahur was his distant maternal uncle. He deposed that accused Bhim Singh Mahur made him the member in the society. He identified his application form. He also identified his resignation letter at the Page No. 6 of D-10. After seeing the proceedings register, he deposed that he did not sign the proceedings dt. 19.02.1989. Similarly, he denied his signatures on the proceedings dt. 16.04.1989, 10.06.1989, 06.09.1989 and 19.11.1989. However, he admitted his signatures on the proceedings dated 08.07.1990. During his examination in chief, the letters carrying his signatures from the DDA file i.e. D- 43 were shown to him. His testimony in respect of each document is reproduced as under:-
After seeing the letter dt. 01.10.1989 (Page 3 of D-17) Ex.PW25/C, he denied his signatures on the said letter. After seeing the letter dt. 15.11.1998 (Page 4 of D-17) Ex.PW25/D, he stated that it appears to be his signatures.CBI Case No. 65/2019 CBI vs. Lila Krishna Seth & Ors Page 101 of 124
After seeing the undated letter regarding handing over of documents (Page 88 of D-11) Ex.PW25/E, he stated that the said letter does not bear his signatures. After seeing the letter dated NIL (Ex. PW-20/G, Page 15 of D-43), he stated that this letter bears his signatures. After seeing the letter (Page 28 of D-43) Ex.PW20/P, addressed to Sh. A. Ramaswamy, IAS, he stated that the said letter does not bear his signatures at point A. After seeing the letter (Page 18 of D-43) (Ex. PW-25/F) addressed to Lt. Governor, Raj Niwas, Delhi he stated that this letter does not bear his signatures. After seeing the letter (Page 31 to 34 of D-43) Ex.PW20/Q, he stated that the said letter does not bear his signatures at point B. After seeing the letter (Page 35 of D-43) i.e. Ex.PW20/R, he stated that this letter does not bear his signatures. After seeing the letter (Page 37 of D-43) Ex.PW20/S, he stated that this does not bear his signatures. After seeing the letter (Page 38 of D-43) i.e. Ex.PW20/T, he stated that it does not bear his signatures.
143. He deposed that he gave specimen signatures to the IO. Specimen signatures were collectively exhibited as Ex.PW25/G (colly). He deposed that he had never been the secretary to Maharani Avanti Bai (CGHS). He deposed that he knew the accused Bhim Singh Mahur as he was his distant maternal uncle. He deposed that Bhim Singh Mahur used to CBI Case No. 65/2019 CBI vs. Lila Krishna Seth & Ors Page 102 of 124 obtain his signatures on blank papers at his home.
In his cross-examination, he stated that he informed the IO that he was neither the member of the society nor an office bearer of the society. In his cross-examination on behalf of accused R. N. Aggarwal, he reiterated the fact that accused Bhim Singh Mahur got his signatures on two to three blank papers twice or thrice.
144. PW-26 namely Ganesh Jha was the promoter member of the society. In the year 2003, he made the complaint in the Registrar Office to know the status of the society. However, his complaint was resolved and he had even become the Vice President of the Society from the year 2011 to 2014. He stated that earlier he lost contact with Mr. B. S. Mahur, who had made him the member in the society.
145. PW-27 namely A.K. Jain became the member of the society in 1998 through one P. C. Gupta. He identified his signatures on the minutes of meeting dated 23.03.2003 (Page 12 D-17) Mark PW27/C; on the minutes of meeting dated 27.01.2001 (Page 286 to 304 of D-2) Mark PW27/D; minutes of meeting dtd. 28.01.2002 (Page 17 & 19 of D-9) Ex. PW27/E; on minutes of meeting dtd. 16.02.2002 (Page 19 & 20 of D-9) Ex.PW27/F; on minutes of meeting dtd. 24.03.2002 (Page 21 & 22 of D-9) Ex.PW27/G and other minutes of meeting.
CBI Case No. 65/2019 CBI vs. Lila Krishna Seth & Ors Page 103 of 124He was declared hostile by the Ld. Public Prosecutor for the CBI. In his cross-examination by Ld. Sr. Public Prosecutor for the CBI, he admitted that he knew the accused R. N. Aggarwal as he was his brother-in-law (husband of wife's sister). He denied the suggestion that he was made secretary of the society by the accused R. N. Aggarwal.
146. PW-28 namely Anil Kumar Sharma was also declared hostile by Ld. Public Prosecutor for the CBI. He became the President of the Society on 15.11.1998. He admitted his signatures on the letter dated 15.11.1998 (Page 4 of D-17) Ex.PW25/D). Since he resiled from his earlier statement, he was declared hostile by the Ld. Senior P.P. for the CBI. He denied the suggestion that he did not attend any meeting of the society. He later on resigned from the society.
147. The prosecution examined the handwriting expert as PW-33. He exhibited his opinion (D-24) as Ex.PW33/C-1. His reasons for opinion are Ex.PW33/C-2. He also exhibited his supplementary opinion as Ex.PW33/D-1 and his reasons for supplementary opinion are Ex.PW33/D-2 (D-39).
148. The PW-34 is the Investigating Officers. He deposed that during inquiry, he collected various documents through receipt memo from the accused Ram Narayan Aggarwal and Bhim Singh Mahur. He exhibited the receipt memo dated 07.08.2006 (D-29) (Ex. PW-34/A) through which he received the CBI Case No. 65/2019 CBI vs. Lila Krishna Seth & Ors Page 104 of 124 file from Ram Narayan Aggarwal. He also exhibited the receipt memo dated 18.08.2006 (D-30) (Ex. PW-34/B) through which he received the file from accused Bhim Singh Mahur. He also exhibited the receipt memo dated 23.08.2006 (D-31) (Ex. PW- 34/C) through which he received the documents mentioned in the memo from the accused Ram Narayan Aggarwal.
He was cross-examined by the accused Ram Narayan Aggarwal. The accused did not challenge his deposition to an extent that the accused gave him the document memos Ex. PW-34/A and Ex. PW-34/C. Meaning thereby, the accused is not challenging the fact that the investigating officer i.e. PW-34 received the two membership registers, four proceeding registers from the inception of the society till 2004 and the file containing membership form of the society, audit reports, resignation letters from the accused Ram Narayan Aggarwal. His testimony further shows that he further received another documents such as cash book, ledger register, resignation letters and miscellaneous documents from the accused Ram Narayan Aggarwal. Not challenging this fact means the accused has admitted that he handed over these documents to the PW-34.
149. The PW-35 namely Sudhir Aggarwal became the member of the society. He identified his signatures on the proceedings dated 15.11.1998 (D-8), 21.02.1999 (D-8), 28.04.2001(D-9), 12.05.2001(D-9), 30.05.2001 (D-9) and 16.06.2001(D-9). He was also declared hostile by the Ld. Public CBI Case No. 65/2019 CBI vs. Lila Krishna Seth & Ors Page 105 of 124 Prosecutor as he resiled from his statement under Sec. 161 Cr.P.C.
During his cross-examination he denied the suggestion that R. N. Aggarwal and Ramesh Chand Bansal were controlling the affairs of the society. He denied the suggestion that he knew R. N. Aggarwal as he had worked with him as the Sub-contractor. He admitted his signatures on the proceedings dated 15.11.1998.
150. The PW-36 was then Ld. Metropolitan Magistrate, Patiala House Courts, who recorded the statement of witness Satya Prakash Aggarwal under Section 164 Cr.P.C.
151. The PW-38 was the investigation officer. He exhibited the FIR as Ex. PW-38/A. He seized the bank record vide seizure memo dated 24.04.2007 (D-32) (Ex. PW-15/D); vide memo dated 20.03.2007 (D-33) and vide seizure memo dated 27.04.2007 (D-34).
He also collected the documents from Ram Narayan Aggarwal vide seizure memo dated 07.05.2007 (D-35) (Ex. PW- 38/B). He sent various documents to GEQD through the letter signed by Sh. N.K. Bhatt, SP, CBI. He exhibited the letter as Ex. PW-33/A and identified the signature of M.K. Bhatt at Point-A. He also obtained specimen signatures of the witnesses and the accused persons. He also sent documents for supplementary CBI Case No. 65/2019 CBI vs. Lila Krishna Seth & Ors Page 106 of 124 report of GEQD. He received documents from Group Housing, DDA. He received the file of the society (D-2) from the Assistant Registrar, Cooperative Society. After completion of investigation, he filed the charge-sheet.
152. The initial issue that needs thorough consideration is why only R.N. Aggarwal and O.P. Aggarwal have been named as accused, while other members of the Governing Committee namely Anil Kumar Sharma, Mahavir Prasad, Sudhir Aggarwal, and Subhash Chand Gupta, were not similarly charged. It is significant to note that Anil Kumar Sharma was appointed President during the meeting held on 15.11.1998, Mahavir Prasad became vice-president, and both Sudhir Aggarwal and Subhash Chand Gupta assumed roles as Managing Committee members. Importantly, the prosecution called Anil Kumar Sharma, Sudhir Aggarwal, and Subhash Chand Gupta as the prosecution witnesses, but all three of them turned hostile during the proceedings.
153. Returning to the core question of why culpability has specifically been assigned to R.N. Aggarwal and O.P. Aggarwal, it is pertinent to highlight that both individuals were recorded as Executive Members in the minutes of the meeting dated 15.11.1998. However, in the Managing Committee Meeting held on 22.11.1998, the accused R.N. Aggarwal was elected as the Secretary and the accused O.P. Aggarwal was elected as the Treasurer. Subsequently, at the next General Body CBI Case No. 65/2019 CBI vs. Lila Krishna Seth & Ors Page 107 of 124 Meeting (GBM) on 23.01.2000 (as noted on pages 284 to 289 of file D-2), O.P. Aggarwal was elevated to the position of President, while R.N. Aggarwal continued as a Managing Committee member, and Anil Kumar Sharma was relegated to the post of Vice-President. Later, in the Annual GBM held on 27.01.2001, R.N. Aggarwal was appointed as the President and O.P. Aggarwal became the honorary secretary.
154. The court has already observed that the authenticity of file D-2 is not in dispute, since witnesses from the Registrar Cooperative Societies (RCS) office have unequivocally testified regarding the official notings in this file. Furthermore, all documents within this file regardless of whether they are photocopies or originals were submitted by the accused themselves and were duly received by the RCS officials in the normal course of their duties. Following their appointments as the President and the Secretary, the accused R.N. Aggarwal and O.P. Aggarwal engaged directly with both the Delhi Development Authority (DDA) and the RCS office. They corresponded regarding the deposit of funds for the allotment of a plot to the DDA and requested the issuance of a certified list of the Managing Committee. Their active and central involvement in these critical affairs demonstrates that the prosecution has correctly identified them as the primary persons responsible for unlawfully taking control of the society by disregarding the rules and regulations outlined in the Delhi Cooperative Society Act.
CBI Case No. 65/2019 CBI vs. Lila Krishna Seth & Ors Page 108 of 124155. Specifically, the accused O.P. Aggarwal authored the letter dated 05.02.2001 (page 306 of D-2, Ex. PW-33/A-32) addressed to the Assistant Registrar, Audit, submitting a compliance report in Form-16A for the financial year 1999-2000. He also sent another letter dated 29.05.2001 (Ex. PW-33/A-33, page 307 of D-2) to the Assistant Registrar (West), requesting a certified list of the Managing Committee. These actions further underscore his prominent and instrumental role in the management and operations of the society. His questioned signatures were encircled on both these documents as Q-76 and Q-75 respectively.
156. In a similar manner, the accused R.N. Aggarwal, acting in the capacity of secretary, addressed the letter dated 23.03.1999 (Ex. PW-33/A29, Page No. 291, D-2) to the Assistant Registrar, Audit, submitting the compliance report in Form 16-A. Furthermore, the accused R.N. Aggarwal authored another letter dated 31.01.2000 (Ex. PW-33/A30, Page No. 293, D-2) to the Assistant Registrar, West, requesting the transfer of the society's file to the west zone. His questioned signatures on both these documents are encircled as Q-72 and Q-73. On 24.05.2001 (Page No. 337/C of D-2), O.P. Aggarwal corresponded with the Assistant Registrar, West, seeking a certified list of the Managing Committee as required by the DDA for the approval of the layout and building plan. On this letter, his questioned signatures encircled as Q-82. Additionally, some letters were also issued by the accused Sujata; however, as she has since passed away, CBI Case No. 65/2019 CBI vs. Lila Krishna Seth & Ors Page 109 of 124 proceedings against her have been abated. Likewise, the file maintained by the DDA (D-43) contains letters from R.N. Aggarwal addressed to the DDA, wherein he requested approval of the layout plan to facilitate the deposit of funds. Similarly, O.P. Aggarwal maintained correspondence with the DDA through letters marked as Ex. PW-20/Z-7 (D-43) (Page No. 108) and PW- 20/Z-5 (D-43) (Page No. 102). It is evident from these records that both R.N. Aggarwal and O.P. Aggarwal were actively communicating with the RCS (Registrar Cooperative Society) and the DDA (Delhi Development Authority) during a period when the promoter members had already resigned.
157. It is undisputed that a majority of the promoter members were resigning. The reasons that can be discerned from the file indicate that these members became disillusioned due to the lack of allotment progress and the repeated demands by the deceased accused, Bhim Singh Mahur, for additional funds to be contributed to the society. Some members lost interest altogether when asked for the substantial amounts required for land allotment.
158. Notably, if members were resigning or losing interest, there was no criminality in such actions. Likewise, if the members of a registered cooperative society lose interest in its affairs, the Delhi Cooperative Societies Act prescribes the procedure for cancellation of the society's registration. It is also a fact that new members are permitted to join the society. They CBI Case No. 65/2019 CBI vs. Lila Krishna Seth & Ors Page 110 of 124 may submit application forms and, upon approval by the Governing Committee, they are admitted as members. There is no restriction preventing all promoter members from resigning, nor is there a prohibition against all new members joining, provided the procedure is followed. It is entirely possible for all promoter members to resign and for new members to replace them, but this transition must occur strictly according to the prescribed procedure under D.C.S Act, 1972 and D.C.S. Rules, 1973.
159. However, no new member can be admitted to a society whose Governing Body has ceased to function, as only the governing body holds the authority to admit new members. If the governing body is defunct, there is simply no legitimate means to enter the society. New members cannot be allowed to forge or manipulate records to falsely reflect their entry into the society. When the Governing Body ceases to exist and the members lose interest, the only lawful outcome is the cancellation of the society. Given that cooperative societies receive land from the Government, their functioning is closely monitored by the authorities. The Registrar of Cooperative Societies (RCS) ensures that the individuals who formed the society in the spirit of cooperative the benefits of their collective efforts. This oversight is the reason for annual elections and the requirements related to resignations and new enrollments.
160. Now, coming to the testimony of PW-7 namely CBI Case No. 65/2019 CBI vs. Lila Krishna Seth & Ors Page 111 of 124 Mishri Lal, he deposed that Bhim Singh Mahur told him that somebody else would run the society and he resigned on 13.05.1998. After the resignation of the President, what was left in the Governing Body? He further stated that at the time of resignation, there were only 100 members till he resigned on 13.05.1998.
161. As per the membership register (D-5), the 100th member was Yogesh Gupta. The accused R.N. Aggarwal is 101 st member and the accused O.P. Aggarwal is 112 th member. As per enrollment form of R.N. Aggarwal, he became member in 1996-
97. This fact has been mentioned in minutes of meeting dated 15.11.1998. How he can become the member in 1996-97 when the President of the society deposed that till his resignation in the year 1998, there were only 100 members. It clearly shows that their enrollment were shown back dated before the resignation of President Mishri Lal Lodhi.
162. Similarly, in the last annual General Meeting dated 29.07.1990 under the chairmanship of Mishri Lal, he identified signatures in the said meeting. He was appointed as the President in the said meeting. He resigned on 13.05.1998. Before his resignation, R.N. Aggarwal and O.P. Aggarwal were not enrolled as members. So, how they came? They can not come by their own. That was not permitted under DCS Act, 1972. The only way to enter the society was through the Governing Body. Similarly, PW-14 Padam Singh Verma was appointed Treasurer CBI Case No. 65/2019 CBI vs. Lila Krishna Seth & Ors Page 112 of 124 in the General Body Meeting dated 29.07.1990. He was also resigned. He did not enroll R.N. Aggarwal and O.P. Aggarwal as members. The secretary Bhupender Kumar had even denied his signatures on the minutes of meeting held previous to GBM dated 29.07.1990. He started denying his signature on the minutes of meeting dated 19.02.1989; dated 16.04.1989, dated 10.06.1989, dated 06.09.1989 and dated 19.11.1989. However, he admitted his signatures on the minutes of GBM dated 08.07.1990. It gives an impression that some of the meeting even prior to 1990 were being manipulated by forging signatures. However, these circumstances may be read only against the deceased accused Bhim Singh Mahur. However, he has expired. But the fact is that Bhupender Kumar also resigned from the society and he did not enroll R.N. Aggarwal.
163. We now arrive at the most important question regarding the role of the accused, R.N. Aggarwal and O.P. Aggarwal. The learned counsel for R.N. Aggarwal and O.P. Aggarwal contended that Bhupender Kumar, in his testimony, admitted to his signatures on the letter dated 15.11.1998 (Ex. PW-25/D) (D-17), which was addressed to the Manager of Delhi State Cooperative Bank. By this letter, the bank was informed that a new Managing Committee had been elected, naming Anil Kumar Sharma as the President, R.N. Aggarwal as the Secretary, and O.P. Aggarwal as treasurer. Notably, Bhupender Kumar acknowledged his signature on this letter. The Ld. counsel for the accused persons have argued that once the charge was transferred CBI Case No. 65/2019 CBI vs. Lila Krishna Seth & Ors Page 113 of 124 to a new executive committee, it cannot be questioned that R.N. Aggarwal and O.P. Aggarwal entered the society without following the rules and regulations. They argue that Bhupender Kumar's admission of his signature on the letter dated 15.11.1998 to the Bank Manager serves as the conclusive evidence that the new Managing Committee was duly elected.
164. Upon considering this argument, it is important to observe that although Bhupender Kumar handed over the charge to the new Managing Committee, he did not testify that any new Managing Committee was actually elected. He merely confirmed that the signature on the said letter appeared to be his. In fact, in his deposition, Bhupender Kumar stated that he never served as the Secretary of Maharani Avantibai CGHS. He deposed that the accused, Bhim Singh Mahur, his distant maternal uncle, would often obtain his signatures on blank papers at his home. Similarly, it is argued that Bhupender Kumar admitted his signature on the handing over memo (Ex. PW-25/E, D-11). Bhupender Kumar acknowledged that this letter bore his signature at Point A, but again, he did not testify that he handed over the charge to the newly elected secretary, R.N. Aggarwal. The Ld. defence counsel has argued that Bhupender Kumar's acknowledgment of his signature on both the handing over memo and the letter dated 15.11.1998 to the bank manager precludes any denial of the minutes of the meeting dated 15.11.1998, in which the accused became executive members.
CBI Case No. 65/2019 CBI vs. Lila Krishna Seth & Ors Page 114 of 124At this juncture, it is crucial to highlight a significant and revealing inconsistency:-
165. R.N. Aggarwal and O.P. Aggarwal were appointed as executive members on 15.11.1998 in the General Body Meeting. Consequently, the next meeting of the new Managing Committee was held on 22.11.1998, during which the election of Secretary and Treasurer took place. In this meeting, O.P. Aggarwal proposed R.N. Aggarwal for the post of Secretary, seconded by Sudhir Aggarwal, and R.N. Aggarwal was elected Secretary unopposed. Similarly, S.C. Gupta proposed O.P. Aggarwal for Treasurer, seconded by R.N. Aggarwal, and O.P. Aggarwal was elected Treasurer unopposed. These proceedings were written in the register (D-8) and are exhibited as Ex. PW-28/F.
166. If the accused persons became Secretary and Treasurer only on 22.11.1998, it raises the question of how they could have represented themselves as Secretary and Treasurer in the letter dated 15.11.1998. Did they know on 15.11.1998 that they would be elected as Secretary and Treasurer on the future date i.e. 22.11.1998. Further, how Bhupender Kumar had assumed them as the Secretary and the Treasurer. This contradiction demonstrates that Bhupender Kumar could not have voluntarily handed over charge, nor could he have written to the Bank Manager on 15.11.1998, stating that R.N. Aggarwal and O.P. Aggarwal held these offices, when in fact they did not officially assume these positions until a week later. This suggests CBI Case No. 65/2019 CBI vs. Lila Krishna Seth & Ors Page 115 of 124 that Bhupender Kumar's signatures were used to fabricate a false document. In their eagerness to create the forged record, the accused failed to recognize that the actual assumption of office as Secretary and Treasurer occurred on 22.11.1998, not on 15.11.1998. This is not a mere technical irregularity; it is a glaring flaw in the society's documentation that points directly to the culpability of the accused as conspirators who sought to take control of a society whose original promoter members were no longer interested, particularly after the society had received the allotment.
167. Furthermore, as previously noted in the summary of prosecution witness testimony, PW-18 Shiv Kumar Bassi became a member in 2000, yet his enrollment form is dated 07.10.1996. This discrepancy indicates an attempt to show his membership before the General Body Meeting of 15.11.1998, further suggesting manipulation by the accused.
168. Additionally, the questioned signatures of R.N. Aggarwal on numerous documents are marked as Q-9, Q-10, Q- 11, Q-12, Q-13, Q-14, Q-16, Q-22, Q-23, Q-24, Q-25, Q-31, Q- 32, Q-33, Q-34, Q-35, Q-36, Q-37, Q-38, Q-40, Q-44, Q-71, Q- 72, Q-73, Q-77, Q-89, Q-91, Q-93, Q-95, Q-97, Q-98, Q-99, Q- 100, Q-101A, Q-106, Q-109, Q-113, Q-117, Q-121, Q-132, Q- 136, Q-139, Q-143, Q-147, Q-148, Q-151, Q-161, Q-164, Q-167, Q-170, and Q-173. His specimen signatures were recorded as S- 50 to S-54. The Government Examiner of Questioned Documents CBI Case No. 65/2019 CBI vs. Lila Krishna Seth & Ors Page 116 of 124 (GEQD), Shimla, in report Ex. PW-33/C1, confirmed that the specimen signatures and the questioned signatures were made by the same individual.
169. Similarly, the questioned signatures of O.P. Aggarwal from various documents are marked as Q-7, Q-8, Q- 15, Q-17, Q-18, Q-19, Q-20, Q-21, Q-26, Q-28, Q-67, Q-70, Q- 74, Q-75, Q-76, Q-76A, Q-78, Q-82, Q-102, Q-105, Q-110, Q- 115, Q-118, Q-123, Q-134, Q-149, Q-152, Q-162, Q-165, and Q- 174, with specimen signatures taken as S-90 to S-95. The GEQD report (Ex. PW-33/C1) also concluded that O.P. Aggarwal's specimen and questioned signatures matched, confirming his involvement.
170. The identity of R.N. Aggarwal is further corroborated by the testimony of PW-19 Vikram Dhingra, who specifically testified that R.N. Aggarwal maintained a bank account at his father's branch. He deposed that one Mr. Gupta was looking after the affairs of Maharani Avanti Bahi Co- operative Society being deputed by R.N. Aggarwal. Additionally, R.N. Aggarwal's identity is established by the perpetual lease deed (Ex. PW-33/A20) executed by DDA, which bears both his signature and photograph. Thus, it is clear that R.N. Aggarwal is the same individual who was shown as entering the society on 15.11.1998 and who executed the perpetual lease on behalf of the society on 24/03/2002. His signatures on the lease, marked Q-33, Q-34, Q-35, Q-36, Q-37, Q-38, and Q-40, match his specimen CBI Case No. 65/2019 CBI vs. Lila Krishna Seth & Ors Page 117 of 124 handwriting. Therefore, there is no room left to argue that his signatures are not present on the application requesting certified copies from public servants, nor has he denied signing the perpetual lease deed executed by DDA in favor of the society. He has not denied that the photograph of the person on the perpetual lease deed is not his photograph.
171. Regarding O.P. Aggarwal's identity, in his statement under Section 313 Cr.P.C., he admitted that he was a member of the society and later resigned. When confronted with the handwriting expert's testimony (PW-33), under Section 313 Cr.P.C, he claimed that the specimen writing did not belong to him, yet he did not deny writing letters as Secretary. When questioned about the minutes dated 15.11.1998, which listed him as an executive committee member, he stated that it was a matter of record, effectively admitting his presence in the society first as an executive member and subsequently as the secretary.
172. Upon a comprehensive review of the testimony provided by the prosecution witnesses, along with the documentary evidence on record including the proceedings registers, various communications issued by R.N. Aggarwal to the Registrar of Cooperative Societies (RCS) and the Delhi Development Authority (DDA), as well as the reports of the handwriting experts, it is evident that the prosecution has successfully established its case against the accused, R.N. Aggarwal and O.P. Aggarwal. The evidence demonstrates beyond CBI Case No. 65/2019 CBI vs. Lila Krishna Seth & Ors Page 118 of 124 reasonable doubt that both accused conspired with public servants to unlawfully assume control of the society by relying on forged and fabricated documents. Consequently, R.N. Aggarwal and O.P. Aggarwal stand convicted for the offense under Section 120-B of the Indian Penal Code for entering into a criminal conspiracy with public officials for this unlawful takeover of the co-operative society.
173. PW-25 Bhupender Kumar has denied his signatures on the most of the proceedings and letters from 1989 to 1998. However, the letters pertaining to the period after 1990 are relevant as the allotment of land was made in the year 1995. The relevant letters are highlighted here as under:-
a). A letter written to Lt. Governor, Raj Niwas, Delhi which was received at Lt. Governor office on 08.10.1997. Bhupender Kumar denied his signature on the said letter. His questioned signature was encircled as Q-1. In his testimony he admitted that he gave his specimen signatures consisting of 10 pages (S-1 to S-
10, D-23). This questioned letter has been exhibited as Ex. PW- 25/F. The handwriting expert i.e. PW-33 in his report Ex. PW- 33/C1 has corroborated the testimony of Bhupender Kumar by his opinion that Q-1 does not match with the specimen signatures of Bhupender Kumar. Thus, it is clear that signatures of Bhupender Kumar were forged on Ex. PW-25/F (Page No. 18, D-
43).
CBI Case No. 65/2019 CBI vs. Lila Krishna Seth & Ors Page 119 of 124b) Further, Bhupender Kumar denied his signatures on the letter addressed to A. Ramaswamy, IAS, Principal Commissioner, DDA received at the Principal Commissioner Office on 15.07.1998 regarding allotment of plot to the society. The letter has been exhibited as Ex. PW-20/P. A witness from DDA namely Virender Singh Verma, who retired from the post of Assistant Director, saw the entire file of DDA marked as D-43 and exhibited different documents. After seeing the letter dated 15.07.1998, he exhibited the same as Ex. PW-20/P. Though the PW-20 did not directly deal with the file, but he identified the documents lying in the DDA file as IO had shown him the documents pertaining to correspondence of Maharani Avanti Bai file of D.D.A. The questioned signature on the letter dated 15.07.1998 (Ex. PW-20/P) were marked as Q-2. The hand- writing expert by his report i.e. Ex. PW-33/C-1 has corroborated the testimony of Bhupender Kumar by giving his opinion that Q- 2 does not match with the specimen signatures of Bhupender Kumar (S-1 to S-10).
c). Bhupender Kumar has denied his signatures on allotment letter exhibited as Ex. PW-20/Q from Page No. 31 to 34 of D-43. His questioned signatures were encircled as Q-3. The hand- writing expert by his report i.e. Ex. PW-33/C-1 has corroborated the testimony of Bhupender Kumar by giving his opinion that Q- 3 does not match with the specimen signatures of Bhupender Kumar (S-1 to S-10). The PW-20 has deposed that this allotment letter is the part of DDA file (D-43) and he identified this CBI Case No. 65/2019 CBI vs. Lila Krishna Seth & Ors Page 120 of 124 allotment letter as Ex. PW-20/Q.
d). Bhupender Kumar denied his signatures on the letter dated 13.11.1998, Page No. 37 of D-43. His disputed signatures marked as Q-5. The hand-writing expert by his report i.e. Ex. PW-33/C-1 has corroborated the testimony of Bhupender Kumar by giving his opinion that Q-5 does not match with the specimen signatures of Bhupender Kumar (S-1 to S-10). This letter has been identified by the witness from the DDA i.e. PW-20.
e) Bhupender Kumar denied his signatures on the undated letter lying on the DDA file as Ex. PW-20/R (Page No. 35/C of D-43). His disputed signature was encircled as Q-4. The hand- writing expert by his report i.e. Ex. PW-33/C-1 has corroborated the testimony of Bhupender Kumar by giving his opinion that Q- 4 does not match with the specimen signatures of Bhupender Kumar (S-1 to S-10).
f) Bhupender Kumar denied his signatures on the letter dated 02.11.1998 lying on the DDA file as Ex. PW-20/P (Page No. 38 of D-43). His disputed signature was encircled as Q-6. The hand- writing expert by his report i.e. Ex. PW-33/C-1 has corroborated the testimony of Bhupender Kumar by giving his opinion that Q- 6 does not match with the specimen signatures of Bhupender Kumar (S-1 to S-10).
174. Thus, Bhupender Kumar has denied his signatures at CBI Case No. 65/2019 CBI vs. Lila Krishna Seth & Ors Page 121 of 124 six (06) places on the letters lying on the DDA file. These letters pertain to the year 1997-98. His testimony has been corroborated by the hand-writing expert. It makes it clear that his signatures were forged to write letters to the DDA pertaining to allotment of the plot. Though it is not clear as to who had forged these letters, but it is proved beyond doubt that these forged letters were used to get the allotment of land from the DDA.
175. The DDA demanded the certified list of Managing Committee Members to ensure the genuinety of the Cooperative Society. However, the DDA was deceived by showing a document which was issued illegally pursuant to the criminal conspiracy amongst the accused persons. Accordingly, ingredients of Section 468 IPC which talks about forgery for the purpose of cheating and ingredients of Section 471 IPC which talks about using as genuine a forged document are fulfilled. Thus, the accused R.N. Aggarwal and O.P. Aggarwal conspired with public servants to use forged documents in order to cheat the DDA.
176. Accordingly, both the accused persons are convicted for the offence under Section 120-B read with 420/468/471 of Indian Penal Code. However, no ingredient of Criminal Breach of Trust is made out against these two accused persons as no entrustment was made to them. They illegally took over the society on the basis of forged and fabricated documents. So, the charge of 406 IPC has not been proved against them.
CBI Case No. 65/2019 CBI vs. Lila Krishna Seth & Ors Page 122 of 124Conclusion:-
177. In view of the aforesaid, the accused persons are found guilty as follows: -
i) Accused L. K. Seth is found guilty of the offence under Section 13(1)(d) punishable under Section 13(2) of the Prevention of Corruption Act, 1988 and is accordingly convicted for the offence under Section 13(1)(d) punishable under Section 13(2) of the Prevention of Corruption Act, 1988.
He is acquitted of the offence under Section 120-B IPC read with Section 420, 468, 471 IPC for want of sanction under Section 197 Cr.P.C.
ii) Accused Zafar Iqbal is found guilty of the offence under Section 13(1)(d) read with Section 13(2) of the Prevention of Corruption Act, 1988 and under Section 120-B IPC read with Section 420,468,471 IPC and is accordingly convicted for the offence under Section 13(1)(d) punishable under Section 13(2) of the Prevention of Corruption Act, 1988 and under Section 120-B IPC read with Section 420,468,471 IPC.
iii) Accused Ram Narayan Aggarwal is found guilty of the offence under Section 120-B IPC read with Section 420,468,471 IPC and is accordingly convicted for the offence under Section 120-B IPC read with Section 420,468,471 IPC.
iv) Accused Om Prakash Aggarwal is found guilty of the CBI Case No. 65/2019 CBI vs. Lila Krishna Seth & Ors Page 123 of 124 offence under Section 120-B IPC read with Section 420,468,471 IPC and is accordingly convicted for the offence under Section 120-B IPC read with Section 420,468,471 IPC.
178. The other accused persons namely Subhash Gupta, Madan Sharma and Ramesh Chand Bansal are acquitted for want of evidence against them.
179. Let the dasti copy of this judgment be supplied to all convicted accused persons and the prosecution. Let the judgment be uploaded on the website i.e. delhidistrictcourts.nic.in forthwith.
180. Be heard separately on the point of sentence.
Pronounced and Dictated in Open Court today i.e. 27th March, 2026 Digitally signed by RAJESH RAJESH MALIK Date: MALIK 2026.03.27 11:56:02 +0530 (Rajesh Malik) Special Judge (PC Act) CBI-14 Rouse Avenue District Court New Delhi CBI Case No. 65/2019 CBI vs. Lila Krishna Seth & Ors Page 124 of 124