Delhi District Court
Court Of India In Iridium India Telecom ... vs . Motorola on 17 October, 2012
IN THE COURT OF SHRI L.K. GAUR, SPECIAL JUDGE
P.C. ACT (CBI09), CENTRAL DISTRICT,
TIS HAZARI: DELHI
CC No. 11/11
R.C. No. 30(A)/97/CBI/ACB/ND
Central Bureau of Investigation
Versus
1. Shri Satnam Singh
S/o Shri Sardul Singh,
Chief Manager, Andhra Bank
20, Visakhapatnam,
Andhra Pradesh. (Expired)
2. M/s Bharti Exports,
3384, Roop nagar,
Mahindra Park, Delhi.
3. Shri Rajesh Gupta
H. No. B57, Sector55,
Noida, U.P.
4. Shri Vinay Gupta,
Flat No. D96, Sochana Apartments
Vasundhra Enclave,
Ghaziabad.
CC No. 11/2011
5. Shri Naresh Kumar Sikri,
A2/62, Hastasal Road,
Uttam Nagar,
New Delhi.
Date of Institution : 03.07.2000
Date of reserving Judgment : 06.08.2012
Date of Pronouncement : 08.10.2012
JUDGEMENT
Preliminary The accused were sent up for trial for having committed offences punishable under Section 120B IPC read with Section 420 IPC and 13(2) read with Section 13(1)(d) of the Prevention of Corruption Act, 1988 and substantive offences committed by Shri Satnam Singh ( Accused No. 1 ) former Chief Manager of Andhra Bank, Janakpuri Branch, punishable under Section 13(2) read with Section 13(1)(d) of the Prevention of Corruption Act, 1988 and the substantive offence committed punishable under Section 420 IPC by the remaining accused i.e M/s Bharti Exports (Accused No. 2) and its Partner Shri Rajesh Gupta (Accused No. 3) and Shri Vinay Gupta (Accused No. 4) and one Shri Naresh Sikri (Accused No. 5). CC No. 11/2011
2. During the course of trial after framing of charge, Accused No. 1 Shri Satnam Singh had expired and the proceedings against him stood abated on 14.12.2010. The present Judgment is, therefore, directed only against the remaining accused. Facts
3. As per the allegations in the charge sheet, M/s Bharti Exports, Accused No. 2 had opened a Current Account No. 1494 with Andhra Bank, Janakpuri Branch on 02.09.1993. The same was allowed to be opened by the deceased Accused No. 1 Shri Satnam Singh. On 28.09.1993 M/s Bharti Exports had applied for Packing Credit Limit (PCL) of Rs. 9 lacs for the purpose of exporting garments against a Letter of Credit dated 21.09.1993 issued by Malayan Bank Berhad, Singapore for US Dollars 38,850 valid up to 30.12.1993. The PCL proposal was processed by Shri K.S. Murthy, the then SubManager wherein it had been noted that the firm was engaged in the electrical trade and had no experience of export of garments. He had further noted that there were deficiencies in the partnership deed and also that the shipment time given in the Letter of Credit as too short for CC No. 11/2011 executing the exports. This note was routed through the then Manager Shri J.V. Ratnam to the deceased Accused No. 1 Shri Satnam Singh who despite the adverse remark of the said subordinate officers chose to sanction Packing Credit Limit of Rs. 9 lacs to M/s Bharti Exports. It is further alleged that he had obtained no collateral security from the party in violation of the existing rules.
4. The Packing Credit Limit was disbursed in the form of four pay orders, the details of which are as follows: S. NO. P.O. NO. DATE AMOUNT IN FAVOUR OF ENCASHED THROUGH 1 437277 11.10.1993 5,00,000 M/s Fashion Flame Union Bank, Punjabi Bagh.
2 437309 22.10.1993 1,10,000 M/s Sultan Embroidery PNB, Sector18, Noida.
3 437310 22.10.1993 1,40,000 M/s Classic Enterprise PNB, Madhuban. 4 437310 20.11.1993 1,50,000 M/s Fashion Flame. Union Bank, Punjabi Bagh.
5. The amount of Rs. 6.5 lacs released in favour of M/s Fashion Flame was taken back in the form of three cheques by the partners CC No. 11/2011 (Accused Nos. 3 & 4) of the Firm (Accused No. 2) with the connivance of Shri Naresh Sikri (Accused No. 5). The remaining amount released was also misutilized by M/s Bharti Exports. There was no export made as against the above Letter of Credit. Though the Firm (Accused No. 2) had repaid Rs. 1,72,000/ but the remaining amount had remained unpaid. To recovery the outstanding amount bank had filed a civil suit against M/s Bharti Exports of Rs. 11, 25,041.
Framing of charge
6. On the basis of the allegations a charge under Section 120B read with Section 420 IPC and section 13(1)(d) read with section 13(2) of the Prevention of Corruption Act, 1988 was framed against all the accused. Apart from it charges were also separately framed against the deceased Accused No. 1 Shri Satnam Singh for committing substantive offence under Section 13(1)(d) read with Section 13(2) of the P.C. Act and under Section 420 IPC ; as against the Accused No. 2 M/s Bharti Exports through its Partners Shri Rajesh Gupta and Shri Vinay Gupta under Section 420 IPC; as CC No. 11/2011 against No. 3 Shri Rajesh Gupta under Section 420 IPC; as against accused No. 4 Shri Vinay Gupta under Section 420 IPC and as against accused No.5 Shri Naresh Kumar Sikri under Section 420 IPC.
7. The accused had pleaded not guilty and claimed trial. Examination of witnesses
8. During the course of trial the prosecution had examined in all 13 witnesses.
9. Witness PW1 Shri K.S. Murthy had identified the account opening form of Current Account No. 1494 in the name of M/s Bharti Exports, Ex. PW1/1 and he had also identified the signatures of Shri Vinay Gupta and Shri Rajesh Gupta at points A & B appearing on the said opening form. As per his testimony this account was allowed to be opened by deceased Accused No. 1 Shri. Satnam Singh on 02.09.1993. He had identified signature of deceased Accused No. 1 Sri Satnam Singh on the account opening form appearing at point D. CC No. 11/2011 He had deposed that M/s Bharti Exports had submitted the application for advance Ex. PW1/2 along with it they had also attached copy of Partnership Deed, letter of Central Bank of India dated 24/09/1993 relating to the Letter of Credit addressed to Accused No. 2 Bharti Exports Ex. PW1/3, letter of credit Ex. PW1/4, and the particulars of the properties of Shri Rajesh Gupta and Vinay Gupta Ex. PW1/5 and Ex. PW1/6. On these documents, except for the Letter of Credit and the letter from the Central Bank of India, witness had identified the signatures of Shri Rajesh Gupta as well as of Shri Vinay Gupta.
10. This witness had identified the note dated 08.10.1993, Ex. PW1/7 in his handwriting, which he had submitted to Shri J.V. Ratnam, the then Manager of Janakpuri Branch, Andhra Bank. In this noting he had mentioned that the partners of M/s Bharti Exports were in the business of electrical items earlier and they had less experience in the new business / activity. It was further noted that shipment time of the exports left was very short as per the terms and conditions of letter of credit. There were deficiencies in the partnership deed also noted. This noting was also initialed by CC No. 11/2011 deceased Accused No. 1 Sh. Satnam Singh at points B, B1 and B2 in token of having seen the said noting.
11. This witness had further identified the noting dated 10.10.1993 Ex PW 1/8 of Shri J.V. Ratnam, the then Manager. Witness had identified his handwriting as well as signatures. He had also identified the signatures of deceased Accused No. 1 Shri Satnam Singh appearing on this noting at points B, B1 and B2. At the end of the noting of Shri J.V. Ratnam the deceased accused No. 1 Shri Satnam Singh had sanctioned Packing Credit Limit of Rs. 9 lacs against the letter of credit in favour of M/s Bharti Exports on 10.10.1993. Witness had identified his handwriting as well as signatures appearing at point B on this note, sanctioning the Packing Credit Limit.
12. This witness had also identified the loan document RF 298 dated 10.10.1993 Ex. PW1/9 signed by Accused Shri Vinay Gupta at point A and Accused Shri Rajesh Gupta at point B, the security for advances and loans executed by Accused Shri Vinay Gupta and Accused Shri Rajesh Gupta Ex. PW1/10 bearing their signatures at CC No. 11/2011 points A and B; Packing Credit Agreement Ex. PW1/11 signed by Accused Shri Vijay Gupta at point A and by Accused Shri Rajesh Gupta at point B.
13. As per the testimony of this witness on 11.10.1993 first installment of loan was disbursed to the current account of Accused M/s Bharti Exports vide voucher Ex. PW1/12 signed by the deceased Accused No. 1 Shri Satnam Singh at point A. On 22.10.1993 another installment of Rs. 2.5 lacs was released in the current account of M/s Bharti Exports vide voucher Ex. PW1/13 bearing signatures of deceased Accused No. 1 Shri Satnam Singh at point A and lastly released Rs. 1.5 lacs in favour of Accused M/s Bharti Exports as against the advance on 20.11.1993. The details of all these installments had been mentioned on the back of second page of Letter of Credit Ex. PW1/4 encircled at point B, which the witness had identified to be in his handwriting.
14. In his testimony this witness had identified the certified copy of the ledger pertaining to PCL Account No. 693 Ex. PW1/14 by identifying the signatures of Shri P.K. Dass, Chief Manager, who had CC No. 11/2011 attested the same. Similarly, he had also identified the ledger sheet Ex. PW1/15 relating to the current Account No. 1494 of M/s Bharti Exports certified by Shri P.K. Dass.
15. In relation to the issuance of the pay order of Rs. 5 lacs this witness had deposed that on 11.10.1993 Accused Shri Vinay Gupta on behalf of Accused M/s Bharti Exports had requested for the issuance of a pay order of Rs. 5 lacs in favour of M/s Fashion Flames. He had identified the signatures of Accused Shri Vinay Gupta appearing on the letter Ex. PW1/16 at point A submitted for issuance of the pay order and it being permitted by deceased Accused No. 1 Shri Satnam Singh by putting his initials at point B. Accused Shri Vinay Gupta thereafter according to this witness had deposited a cheque Ex. PW1/17 of Rs. 5,00,025 for issuance of a pay order along with the draft voucher Ex. PW1/18 both bearing the signatures of Accused Shri Vinay Gupta. Finally, the issuance of pay order Ex. PW1/19 in favour of M/s Fashion Flame. He had identified the signature of Shri K. Kapoor, an officer of the bank appearing on the pay order.
CC No. 11/2011
16. Similarly, there was an application dated 22.10.1993 Ex. P.W1/20 submitted on behalf of Accused M/s Bharti Exports signed by Accused Rajesh Gupta and Accused Vinay Gupta for issuance of two pay orders, one for Rs. 1,10,000/ in favour of Sultan Embroidery House and another for Rs. 1, 40,000/ in favour of M/s Classic Enterprise. According to this witness, this application was allowed by the deceased accused No. 1 Shri Satnam Singh. After the same had been allowed, Accused No. 4 Vinay Gupta had deposited a cheque of Rs. 2, 50,050/ Ex. PW21 for issuance of pay orders. This cheque was passed by deceased accused No. 1 Sh. Satnam Singh . This witness had also identified the signatures of Accused Shri Vinay Gupta on the voucher Ex. PW1/22 for the issuance of draft of Rs. 1,40,000/ and another voucher Ex. PW1/23 signed by him for the issuance of pay order of Rs. 1,10,000/. Followed by the issuance of the pay order of Rs. 1, 40,000/ Ex. PW1/35 signed by another officer of the bank Sh. J.V. Ratnam in favour of M/s Classic Enterprise and another pay order of Rs. 1,40,000/ Ex. PW1/25 signed by Shri J.V. Ratnam issued in the name of M/s Classic Enterprise.
CC No. 11/2011
17. This witness has further referred to another pay order of Rs. 1,50,000/ Ex. PW1/26 issued in favour of M/s Fashion Flame.
18. According to the testimony of this witness on behalf of Accused M/s Bharti Exports there was an application dated 08.03.1994 submitted Ex. PW1/27 signed by accused Rajesh Gupta and accused Vinay Gupta addressed to Chief Manager wherein it was stated that they could not export the goods because of unforeseen circumstances and also promised to return the money to the bank.
19. As per this witness accused No. 3 Rajesh Gupta and Accused No. 4 Vinay Gupta whenever they used to visit the bank they used to directly deal with the accused No. 1 Satnam Singh and they used to be accompanied by the other Accused No. 5 Naresh Sikri. He had identified all the accused in the Court along with the deceased accused No. 1 Shri Satnam Singh.
20. Testimony of witness PW2 Shri J. V. Ratnam who had worked as Manager at the Janakpuri Branch of Andhra Bank during the CC No. 11/2011 period 1992 to 1994 is on the similar lines as that of the testimony of the witness PW1. This witness had also identified the account opening form, Ex. PW1/1 of account No. 1494 in the name of Accused M/s Bharti Exports, application for advance Ex. PW1/2 submitted for PCL to the extent of Rs. 9 lacs on behalf of Accused M/s Bharti Exports, the processing note dated 08.10.1993 Ex. PW1/7 by which the said application was processed by Shri K.S. Murthy and note prepared by him, Ex. PW1/8 on the same application dated 10.10.1993 and having placed the same before the deceased accused No. 1 Satnam Singh.
21. This witness had deposed that the partners of M/s Bharti Exports i.e. accused Vinay Gupta and Rajesh Gupta did not have past experience in the line of ready made garments for export and they did not have also the infrastructure to carry out the work. They had represented that they had invested capital of Rs. 3 lacs but it was not reflected in the current account opened by them. Further, according to him, they were giving job work to other and those peoples were changed from time to time and they were not clear as to who would do their job work. He had placed this matter before CC No. 11/2011 accused No. 1 to consider his note as well as the note of Shri K.S. Murthy but accused No. 1 still sanctioned PCL to the extent of Rs. 9 lacs. He had identified the sanction note of deceased accused No. 1 Shri Satnam Singh appearing on the last page of his note Ex. PW1/8.
22. As per the advice of deceased accused No. 1 Sh. Satnam Singh, this witness had prepared the loan documents Ex. PW1/9, Ex. PW1/10, Ex. PW1/11 and Ex. PW2/A, which were signed by the accused Vinay Gupta and accused Rajesh Gupta and also the guarantors before deceased accused No. 1. Shri Satnam Singh.
23. Like the witness PW1 he had further identified the letter dated 11.10.1993 Ex. PW1/16 submitted by accused M/s Bharti Exports for issuance of pay order of Rs. 5 lacs in favour of M/s Fashion Flame which was permitted by deceased accused No. 1 Shri Satnam Singh by making an endorsement on it. Similarly, he had also identified the letter Ex. PW1/20 dated 22.10.1993 for issuing two pay orders, one for Rs. 1,10,000/ in favour of M/s Sultan Embroidery and another for Rs. 1,40,000/ in favour of M/s Classic Enterprise, CC No. 11/2011 which was allowed by deceased accused No. 1 Sh. Satnam Singh. He had identified signatures of deceased accused Shri Satnam Singh on debit vouchers Ex. PW1/12 and Ex. PW1/13 passed by him.
24. He had further identified the cheques dated 11.10.1993 Ex. PW1/17 and another cheque dated 22.10.1993 Ex. PW1/21 for Rs. 2,50,050 for the issuance of the pay orders, which were allowed by deceased accused No. 1 Shri Satnam Singh and accordingly on its basis pay orders Ex. PW1/19 dated 11.10.1993 for Rs. 5 lacs was issued in favour of M/s Fashion Flame and two pay orders Ex. PW1/24 for Rs. 1,10,000/ in favour of M/s Sultan Embroidery House and Pay order PW1/25 for Rs. 1,20,000/ was issued in favour of M/s Classic Enterprise. He had also identified the related vouchers Ex. PW1/22 and Ex. PW1/23.
25. This witness had referred to letter Ex. PW1/27 addressed to the Chief Manager by partners of M/s Bharti Exports informing that they were not in a position to export garments because of unforeseen circumstances. They had promised to pay the outstanding amount shortly and further not to disposed the stock CC No. 11/2011 procured under PCL. This letter was received by him. He had thereafter placed it before the accused No. 1 after putting the note Ex. PW2/B for necessary action. As per his testimony, he had brought it to the notice of the deceased Accused No. 1 Shri Satnam Singh that M/s Fashion Flame was not existing and he was informed by representative of M/s J.N. Exports (who was also owner of M/s Fashion Flame as per Ex. PW2/B) that the amount taken by him from Bharti Exports had been returned to M/s Bharti Exports. He had suggested the inspection in the month of October, 1993 but the Accused No. 1 Shri Satnam Singh had suggested that the borrowers will themselves take them for inspection but partners of Accused M/s Bharti Exports did not turn up to take them for inspection. He had recommended for an action to be taken against accused M/s Bharti Exports as the borrower's had bad intention and warned if the action is not taken in time, it would be difficult to recover the money. The deceased accused No. 1 Sh. Satnam Singh , however, returned the note on 2.05.1994 advising to issue a registered notice to the borrower and guarantors, which he had received vide the endorsement dated 02.05.1994. He had identified the said notes Ex. PW2/B1 and B2, in his testimony.
CC No. 11/2011
26. This witness had deposed that deceased accused No. 1 Satnam Singh did not take any action against M/s Bharti Exports even after he had submitted the note Ex. PW2/B dated 02.05.1994 had another note dated 10.05.1994 Ex. PW2/C to the deceased accused No. 1 Shri Satnam Singh.
27. Witness PW3 Shri G.D. Bhalla who was working as Chief Inspector, Regional Inspectorate, Andhra Bank, Zonal Office, New Delhi in the year 1994 had deposed about the staff accountability report dated 26.12.1994 prepared by him Ex. PW3/1, interalia, referring to the irregularities committed relating to the sanctioning of PCL to Accused M/s Bharti Exports. This inquiry he had conducted at the instructions of the Head Office in which he was assisted by Shri Madan Mohan Tyagi, the then Vigilance Officer, Andhra Bank.
th th They had visited the bank on 24 and 25 December, 1994 and had gone through the various records of the Branch including the reports of Shri K.S. Murthy, the then SubManager and Shri J.V. Ratnam. All the irregularities which were found to have been committed were mentioned in the report Ex. PW3/1.
CC No. 11/2011
28. Witness PW4 Shri M.M. Shah, who was posted as a Single Window Operator in Punjab National Bank in Sector62 Noida during the period 1997 to 2003 had deposed that the account No. 1749 was opened by M/s Sultan Embroidery House, E25, Sector29, Noida at Sector18 Noida Branch, Punjab National Bank. He had identified the account opening form Ex. PW4/A signed by Shri Sultan Ahmed as Proprietor of M/s Sultan Embroidery House. He had further identified statement of account Ex. PW4/B of M/s Sultan Embroidery House. He referred to the cheque No. 446851 dated 25.10.1993 Ex. PW4/C for Rs. 50,000/ drawn on self by Shri Sultan Ahmed and another cheque bearing No. 446852 Ex. PW4/D dated 28.10.1993 for Rs. 59,000/ again drawn on self by Shri Sultan Ahmed.
29. As per his testimony this account was opened on 16.10.1993. On 25.10.1993 vide credit voucher Ex. PW4/E, a cheque of Rs. 1,10,000/ was deposited in this account asking the bank to immediately allow a credit of Rs. 50,000/, which was allowed by the bank accordingly after deducting a commission of Rs. 90, the bank had deposited an amount of Rs. 49910/ in his account on 25.10.1993 itself and the balance amount of Rs. 60,000/ was CC No. 11/2011 credited in his account arising from the said pay order on 28.10.1993. He had identified the relevant entries in the statement of account Ex. PW4/B with regard to the credit of Rs. 49,910 at point X1, credit entry of Rs. 60,000/ at point X2, withdrawal of Rs. 50,000/ vide cheque Ex. PW4/C on 25.10.1993 at X3 and withdrawal of Rs. 59,000/ by cheque Ex. PW4/D on 28.10.1993 at point X4.
30. This account was closed on 26.02.1994.
31. Significantly, according to this witness the account of M/s Sultan Embroidery House was introduced by one Vinay Gupta, Proprietor of Vikhyat International having the current Account No. 1350.
32. Witness PW5 Shri Madan Mohan Tyagi who was posted as Vigilance Officer at Regional Inspectorate, New Delhi during the period 1994 1995 had deposed that on the lines of the testimony of the witness PW3 Shri G.D. Bhalla. He had deposed that he had assisted Shri G.D. Bhalla, Chief Inspector at Regional Inspectorate CC No. 11/2011 New Delhi in investigation and conducting accountability study of certain accounts at Janakpuri Branch. According to him they had found lapses / deficiencies in sanctioning and conduct of the accounts for which a report was submitted to the Competent Authority of the Bank. He had identified the report Ex. PW3/1 prepared by Shri G.D. Bhalla with his assistance. According to him, it was evident from the report that the accused No. 1 had exposed the bank to financial risks.
33. Witness PW6 Shri P. Balachandaran is one of the two Investigating Officers in this case. According to his testimony he had taken over the investigation of this case from Shri Surender Dhillon, the then Inspector, CBI, ACB, New Delhi. During the investigation he had seized documents Ex. PW6/A1 to Ex. PW6/A6 from Shri D.K. Dogra, Assistant Head Cashier, Union Bank of India, Punjabi Bagh, New Delhi, received vide letter Ex. PW6/C through receipt memo dated 12.05.1999. He had further deposed that by letter Ex. PW6/B dated 12.07.1996 written by Shri R.P.S. Bajwa, Chief Manager, Andhra Bank he had received the documents Ex. PW1/19, Ex. PW1/24 to Ex. PW1/26. He had further deposed that he had CC No. 11/2011 received the documents Ex. PW4/A to Ex. PW4/E from Shri M.M. Shah, Clerk, PNB, Sector18, Noida which he had seized through the receipt memo Ex. PW4/F. He also referred to the documents Ex. PW6/D1 to Ex. PW6/D5 seized by him from Shri R.K. Srivastava, Clerk, PNB, Madhuban Branch, Delhi110092 through the receipt memo dated 12.05.1999 Ex. PW6/D.
34. Witness PW7 Shri K.K. Khanna who was working as Branch Manager at Punjabi Bagh Branch of the Bank from April, 1964 to October, 2005 had identified the current account opening form Ex. PW6/A1 opened in the name of M/s Fashion Flame by Shri R.K. Kapoor, its proprietor. He had identified his signature appearing on the account opening form at points A1 to A2. This account was introduced by Shri Kapoor himself on behalf of M/s J.N. Trading Co. which also had a current account in the bank. This account was opened on 03.04.1993.
35. As per the testimony of this witness there were two bearer cheques Ex. PW6/A4 and Ex. PW6/A5 issued by Shri Kapoor on behalf of M/s Fashion Flame in favour of Accused M/s Bharti Exports CC No. 11/2011 for Rs. 2 lacs and Rs. 3 lacs on 12.10.l1993 and 14.10.1993. He had identified the signatures of Shri Kapoor on these cheques. He was, however, unable to identify the signatures of the person appearing on the back side of these cheques. He had explained that as per the signatures appearing at point C on both the cheques some one had collected the money for Accused M/s Bharti Exports as its Partner. There were certain cuttings appearing on the back side of the cheques at points B1 to B3. He however, could not give any explanation to that except that logically the said cuttings should not have been there on the back side of the cheques as normally once payment had been made against a bearer cheque the person signing the same is not allowed to have an access to the said cheque unless there are some special convincing reasons disclosed.
36. Witness PW8 Shri R.D. Groh who was working as Accountant in Union Bank of India, Punjabi Bagh Branch during the period 1993 to 1994 had identified the account opening form Ex. PW6/A1 of M/s Fashion Flame. He had further identified the credit slip Ex. PW6/A2 with regard to deposit of cheuqe No. 437277 dated 11.10.1993 of Andhra Bank of Rs. 5 lacs in the account of M/s Fashion Flame. He CC No. 11/2011 had identified another credit slip dated 10.11.1993 Ex. PW6/A3 by which cheque No. 437413 of Andhra Bank dated 20.11.1993 was deposited in the account of M/s Fashion Flame. After seeing the statement of account Ex. PW6/A6 of M/s Fashion Flame he had deposed that the entries at points A and B show that the said pay orders / demand drafts were credited in this account by clearing.
37. He had also identified the bearer cheques Ex. PW6/A4 and Ex. PW6/A5 for the sum of Rs. 2 lacs and 3 lacs issued in favour of Accused M/s Bharti Exports and the signatures appearing on the cheques at point B. He had also identified the signatures of Shri S.K. Gupta, Cashier, appearing at point E with regard to the cash payments made against the said cheques.
38. Witness PW9 Shri Rajesh Kumar Srivastava, who has working as clerk in the Madhuban Branch of the Punjab National Bank during the period 19941995 had identified the receipt memo Ex. PW6/D and his signatures appearing on it at point B by which he had handed over the documents Ex. PW6/D1 to D5, to the Investigating Officer.
CC No. 11/2011
39. As per his testimony the account opening form Ex. PW6/D1 relating to current Account No. 681 opened by M/s Classic Enterprise and signed on its behalf by its Proprietor Shri Inder Singh. After seeing the statement of account Ex. PW6/D5 he had stated that a credit of Rs. 1,40,000/ was made in the said account on 30.10.1993 through clearing as per entry at point A after a cheque bearing No. 437310 drawn on Andhra Bank had been deposited vide the pay in slip Ex. PW6/D4.
40. He had further referred to the entry dated 03.11.1993 appearing at point B in the statement of account Ex. PW6/D5 of Rs. 80,000/ showing that the said amount of money was drawn by the cheque Ex. PW6/D3 drawn on self by Shri Inder Singh, Proprietor of M/s Classic Enterprise. Similarly, he had also identified the entry dated 05.11.1993 at point C in the statement of account Ex. PW6/D5 showing a withdrawal of Rs. 60,000/ by a bearer cheque Ex.PW6/D2 drawn in favour of one Raj Kumar.
41. As per testimony of this witness the account was closed on 03.03.1994.
CC No. 11/2011
42. Witness PW10 Shri Surender Dhillon is the first investigating officer to whom the investigation of this case was handed over by Shri R.K. Prasad, the then Superintendent of Police after registration of the FIR Ex. PW10/A. During the investigation he had conducted the search of the residence of the accused Satnam Singh on 29.04.1997. He had seized the articles vide the seizure memo Ex. PW10/B. Thereafter the investigation of the case was handed over to Shri P. Balachandaran.
43. Witness PW11 Shri Ravinder Pal Kapoor had deposed that he in the year 1993 had a business of export of ready made garments and he was running this business in two names, viz M/s Fashion Flame and M/s J.N. Exports International both at the same address. He had identified the accounting opening form Ex. PW6/A1 opened by him in the name of M/s Fashion Flame bearing his signatures at points B1 to B2, which he himself introduced as partner of M/s J.N. Trading Co. which had an account in the same Branch. After seeing the credit slips Ex. PW6/A2 and A3 he had deposed that by the said credit slips, bearing his initials, he had deposited two cheques of Rs. 5 lacs and Rs. 1.50 lacs Ex. PW1/19 and Ex. PW1/26 in the CC No. 11/2011 account of M/s Fashion Flame. He had identified the accused Naresh Sikri in the court. He had, however, added that Shri Naresh Sikri was introduced to him once by his Manager Shri B.N. Chopra in connection with an export order of Shri Naresh Sikri.
44. He had further identified the cheques Ex. PW6/A4 and Ex. PW6/A5 issued by him on behalf of M/s Fashion Flame in favour of Accused M/s Bharti Exports for Rs. 2 lacs and Rs. 3 lacs respectively. According to him, these cheques must have been handed over by his Manager to the concerned party. He had added that at that point of time he did not know that Naresh Kumar was the Proprietor of Accused M/s Bharti Exports. He had further added that the said cheques had been cleared.
45. This witness was crossexamined by the Ld. PP for CBI. In the crossexamination by Ld. PP for CBI he had although admitted that the pay orders Ex. PW1/19 and Ex. PW1/26 were deposited through the credit slips Ex. PW6/A2 and A3 but had not committed that the said pay order had been delivered to him by Shri Naresh Sikri on behalf of Accused M/s Bharti Exports personally. He had CC No. 11/2011 also denied that Accused Shri Naresh Sikri had introduced the partners of M/s Bharti Exports to him.
46. He had further stated that in this particular case the order of export of Shri Naresh Sikri was brought to him by his Manager but later on it was cancelled, therefore, the money was returned.
47. Witness PW12 Shri Yogeshwar Kumar who was working as General Manager of Andhra Bank in the year 1999 had deposed that he had accorded sanction for the prosecution of the accused No. 1 Shri Satnam Singh by order Ex. PW12/A.
48. Witness PW13 Shri Kuldeep Singh Walia had deposed that in the year 1993 he had a business of manufacturing of artificial flowers. He had a current account and banking limits with Andhra Bank, Janakpuri. He had introduced the account of M/s Bharti Exports on being asked by deceased accused No. 1 Shri Satnam Singh thought he did not know accused Shri Rajesh Gupta and Shri Vinay Gupta personally. He had been crossexamined by Ld. PP for CBI. In the crossexamination he had although admitted that he CC No. 11/2011 knew Shri Naresh Sikri who also had account in the same Branch but had denied having introduced the account of M/s Bharti Exports on being persuaded by Shri Naresh Sikri.
Statement of Accused U/S 313 CR.P.C.
49. All the incriminating evidence which have come on record was put to the accused and their statement under Section 313 Cr.P.C were recorded.
Hearing of submissions
50. I have heard the counsel for the parties including the written submissions submitted and also the record of the case. DISCUSSION AND FINDINGS Staff accountability report cannot be the basis of Conviction
51. There is a detailed report of inspection on record. It has been th referred as "Staff Accountability Report" dated 26 December 1994, CC No. 11/2011 and exhibited in the course of the trial as Ex. PW3/1. This report was prepared by PW3 Sh. G D Bhalla, the then Chief Inspector Regional Inspectorate Andhra Bank Zonal Office New Delhi with the assistance of PW5 Sh. M.M. Tyagi vigilance officer posted in the Regional Inspectorate. The said report cannot be considered as substitute for the prosecution to have proved its case before the Court by leading evidence independently. It is a kind of internal fact finding report on the basis of which it may not have been even been possible to impose departmental penalty unless the allegations therein were proved before the inquiring authority by leading evidence. Therefore it may be noted that whatever may have been stated in the said report, this case would assessed not on the basis of what has been stated in that report but on the basis of the evidence which has been lead in this case by the prosecution to prove it case independence of the said report.. Conspiracy to commit offence punishable under section 13(2) of the Prevention of Corruption Act, 1988
52. Deceased Accused No. 1 Sh. Satnanm Singh was the only public servant in this case. He has expired. Once he has expired CC No. 11/2011 there would no conviction under section 13(2) read with section 13(1)(d) of the Prevention of Corruption Act, 1988. The question,however, would be, will it be possible to convict the remaining accused for conspiracy to commit the offence punishable under section 13(2) read with section 13(1)(d) of the Prevention of Corruption Act, 1988.
53. I am of the view the offence under section 120B of the Prevention of Corruption Act, 1988 is an independent offence and is not dependent upon the coexistence of any other offence. Therefore, even if there is no conviction possible under section 13(2) read with section 13(2) read with section 13(1)(d) of the Prevention of Corruption Act,1988 it would be still possible to convict the other accused for criminal conspiracy under section 120B of the Penal Code.
Whether M/s Bharti Export can be convicted for cheating and conspiracy
54. It is not in dispute that Accused M/s Bharti Export is a partnership firm and the Accused Rajesh Gupta and Vinay Gupta are its partners.
CC No. 11/2011
55. Since partnership is an association of persons it would a 1 "Person" within the meaning of section 11 of the Indian Penal Code. It may be noted that the term "person" is a term of art and its applicability is to be read only in the context of the provisions of Indian Penal Code. It really does not matter how the other branches of law or enactment consider it to be. For section 11 "an association of persons" is as much an artificial person as a Company registered under the Companies Act. The considerations which would go into convicting a company incorporated under Companies Act would be equally applicable in case of a partnership firm.
56. One may here refer to the judgment of the Hon'ble Supreme Court of India in IRIDIUM INDIA TELECOM LTD. Vs. MOTOROLA INCORPORATED & ORS. [CRIMINAL APPEAL NO.688 OF 2005] In this case Ld. Judicial Magistrate had issued process against respondent no.1 to 7 (respondent no.1 was a company registered under the Companies Act) under Section 420 read with Section 120B IPC. Hon'ble High Court on being approached under Article 227 of Constitution of India and under Section 482 of the Criminal Code of 1 Section 11 "The word "person" includes any company or Association or body of persons, whether incorporated or not."
CC No. 11/2011 Procedure had set aside the order of the Ld. Judicial Magistrate. "It is held that a company being a juridical person cannot have the intention to deceive, which is the necessary mens rea for the offence of cheating. According to the High Court, although a company can be a victim of deception, it can not be the perpetrator of deception. It can only be a natural person who is capable of having mens rea to commit the offence. According to the High Court, the same reasoning would also apply in respect of the offence of conspiracy which involves a guilty mind to do an illegal thing." (Para 33, page 34 of the judgment). The High Court was further of the opinion "Since the offence of cheating under Section 415 and the offence of conspiracy Section 120B can only be committed by a natural person, the word "whoever" cannot include in its sweep, a juridical person like a company" (Para 34, page 34 and 35 of the judgment). Hon'ble Supreme Court had held ... "that a corporation is virtually in the same position as any individual and may be convicted of common law as well as statutory offences including those requiring mens rea. The criminal liability of a corporation would arise when an offence is committed in relation to the business CC No. 11/2011 of the corporation by a person or body of persons in control of its affairs". (Para 38, page 40 of the judgment). After referring to the observations made by the Hon'ble Supreme Court in Standard 1 Chartered Bank case , it was noted "a company/ corporation cannot escape liability for a criminal offence, merely because the punishment prescribed is that of imprisonment and fine. We are of the considered opinion that in view of the aforesaid judgment of this Court, the conclusion reached by the High Court that the respondent could not have the necessary mens rea is clearly erroneous."(Para 40, page 43 of the judgment).
57. In Reji Michael Vs. Vertex Securities Ltd. [1999 CrI.L.J 3787] a complaint was filed by a Public Limited Company against a partnership firm as the first accused and its partners accused no. 2 and 3. On an order passed by Ld Chief Judicial Magistrate under section 156(3) of Cr.P.C a case was registered against the partnership firm and its partner under section 420 read with section 34IPC. Hon'ble High Court was approached for the quashing of the entire proceedings. It was pleaded before the Hon'ble High Court "the offence punishable under Section 420 of IPC cannot lie in this 1 (2005) 4 SCC 405 CC No. 11/2011 case since the complainant is a public limited company which is not a natural but juristic person and the offence is alleged against the 1st accused partnership firm which is also not a natural but juristic person. According to him, in order to attract the provisions of cheating under Section 415, IPC there must be a fraudulent inducement by a natural person whereby a natural person should have been deceived to deliver a property. Therefore, according to him, since no natural person is either fraudulently induced or deceived in this case, the provisions of Section 415 so as to attract Section 420 of IPC are not applicable in this case." It was held:
"11. 'Person'. The word 'persons' includes any Company or Association or body of persons, whether incorporated or not."
Therefore, from the very definition of 'persons' it is clear that any Company or Association or body of persons, whether incorporated or not, is a person within the ambit of the IPC.
6. Section 415 of IPC refers to deceiving any person, fraudulently or dishonestly inducing the person so decided to deliver any property to any persons. Therefore, a plain reading of Section 415 establishes that a Company, firm and other juristic person come within the definition of 'person' for the purpose of Section 415 of the IPC. Therefore, this contention of the petitioner has to be rejected."
CC No. 11/2011
58. As already noted a partnership in the context of penal code is to be seen strictly in terms of the section 11 of the code and not the way it may have defined in the partnership act or any other legislation. That being the case a Partnership firm is a "person" which is independent of the existence of its partners. It is not just an aggregate of its partners but represents the collective will of the partners which is not the same as the individual will of the partners constituting the same. One may ask in the context of offence of criminal conspiracy if they were to be different what kind of an agreement which can exist between a partner and the partnership firm. The agreement between a partner and a partnership firm can be to use the formation of partnership firm to commit the crime or to do something unlawful or do something in lawful way which is unlawful.
59. It may further be noted that there can be cases where some of the partners may be completely unaware of what the other partners are up to. Like in the cases where some of them are dormant partners and others active partners. One partner is an agent of the 1 other is not something recognized in the criminal law in India . The 1Sham Sundar & Ors vs State Of Haryana 1989 AIR 1982 CC No. 11/2011 effect of it would be that in case of crime being committed using the instrumentality of a Partnership firm only the person directly involved in the commission of crime would get punished and not the other though all the other partners would be able to reap the benefits of the crime being the partners of the firm. The answer to this lies in section 11 of Penal Code itself which provides the scope of convicting a partnership itself apart form its partners thus allowing none to reap the benefits of crime.
60. I have not been able find any case law to support the view that a partnership can be in conspiracy with its partners when it comes to commission of offences under the Penal Code. But it is no as far fetched as it may seem. In Nagase Singapore Pte Ltd V David K H rd 1 Ching judgment dated 3 October 2007 , a Judgment of Honble High Court of Singapore, plaintiff (NS) had employed another private limited company (DL) to provide logistics services for the business of the plaintiff. The allegation was that (DL) over charged the plaintiff (NS) and that it together with its major shareholder and Director, the first defendant (DC) an third and fourth defendants who were 1 http://www.ipsofactoj.com/highcourt/2007/Part04/hct2007%2804%29-010.htm CC No. 11/2011 employees of the plaintiff had conspired to injure the plaintiff. One of the questions which arose for consideration was as to whether the first defendant (DC) who was the Director of the second defendant company (DL) could have conspired with the second defendant (DL) for (DL) was nothing but an alter ego of its Director (DC). The Court after referring to the judgments in English case Bellmont Finance No. 1 Vs Williams Furniture (1979) CH 250 and Irish Judgment Taylor V/s Smyth (1991) 1 IR 142 had concluded that "there can be a conspiracy between a company and its controlling Director to damage a third party by unlawful means...."
61. At the risk of repetition one may say as far as the section 11 of the Penal Code is concerned a partnership firm is as much an artificial/legal person as much a Company registered under the Companies Act. What is true of a Company registered under the Companies Act in terms of the offences committed under the Penal Code same would also be true in respect of a partnership firm.
62. Thus it would not be an impediment to prosecute or convict Accused M/s Bharti Export either for the offence under section 420 IPC or under section 120B IPC.
CC No. 11/2011 Not carrying out the Exports
63. This is clear here that actually there had been no export of goods in this case. This is a fact not even disputed by the Accused Shri Rajesh Kumar and Vinay Kumar the partners of M/s Bharti Export.
Siphoning of the money
64. Let us follow what happened to the money which the Accused had received from the Bank under the packing credit limit. Pay Order in favour of M/s Sultan Embroidery House
65. On 22/10/1993 there was a pay order (Ex PW1/24) issued in favour of one M/s Sultan Embroidery House for Rs. 1,10,000/ ( One Lac and then thousand). This pay order is issued on the request dated 22/10/1993 (Ex PW 1/20) of partners of Accused No. 2 M/s Bharti Exports namely Accused No. 3 Rajesh Gupta and Accused No. 4 Vinay Gupta. The body of letter reads as under: CC No. 11/2011
"We wish to inform you that our work is in progress and we hope to dispatch the goods in time. We further request you to release us a PCL of Rs.2, 50,000/ Rs. Two lacs fifty thousand only. We have to make a payment of Rs.1.10 lax to M/s Sultan Embroidery House and Rs.1.40 lac to M/s Classic Enterprise."
66. The packing credit was sanctioned on 10/10/1993. The account in the name of M/s Sultan Embroidery House was opened 16/10/1993. The reading of the account opening form Ex PW4/A would show that this account had been introduced by the proprietor of one M/s Vikhyat International. The pay order was deposited in the account of M/s Sultan Embroidery House vide credit voucher on 25/10/1993. It is clearly visible on the credit voucher that there is a request made for discounting of the check on the same day to the tune of Rs.50, 000/ . There is a check drawn on self ( Ex PW4/C) in the name of M/s Sultan Embroidery House of the same day for Rs. 50,000/. There is another check drawn on self on record of Rs. 59,000/ dated 28/10/1993 Ex PW4/D. CC No. 11/2011
67. I have seen the signatures appearing on Ex PW4/A the accounting form of the Proprietor of M/s Vikhyat International and also the signatures appearing on the back side of the above cheques for withdrawal of money of Rs.50,000/ and Rs.59,000/ by above self drawn cheques Ex PW4/ C and Ex PW4/D and have compared the signatures of the Accused Vinay Gupta appearing on the charge, his statement recorded under section 313 Code of Criminal Procedure1973, vakalatnama executed by him in favour one Alok K. th Aggarwal and Application filed on his behalf dated 26 of March, 2001 for supply of documents. I am convinced that the signature appearing on the account opening form of M/s Sultan Embroidery House as proprietor M/s Vikhyat International as introducer of the account of M/s Sultan Embroidery House and the signatures appearing on the back side of the self drawn cheques Ex PW4/C and Ex PW4/ D are of none other than that of Accused Vinay Gupta.
68. I would like state here since all these signatures look the same, there could be only two possibilities one that signature appearing on Ex PW 4/ A the account opening form of M/s Sultan Embroidery House of the Accused Vinay Gupta or his signatures CC No. 11/2011 appearing on self drawn checks issued for M/s Sultan Embroidery House had been forged or genuine. There is absolutely exists no reason why would anyone forge the signatures of Sh. Vinay Gupta on these documents. The only possibility could that signatures appearing on these documents are genuinely of accused Vinay Gupta.
69. I would like to further add that I am conscious of the fact 1 though Section 73 of the Indian Evidence Act though creates no bar for the Court to compare two signatures to determine the authorship of the disputed one but the Court should be slow to take up this exercise on itself. I have still undertaken this exercise for some reasons. First of all it is far more easier to compare the signatures of an individual then the long handwritten notes for the reason a signature of an individual is personalized form of writing with features 1 Section 73 Comparision of signature, writing or seal with others admitted or proved : In order to ascertain whether a signature, writing or seal is that of the person, by whom it purports to have been written or made, any signature, writing, or seal admitted or proved to the satisfaction of the court to have been written or made by that person may be compared with the one which is to be proved, although that signature, writing, or seal has not been produced or proved for any other purposes.
The Court may direct any person present in Court to write any words or figures for the purpose of enabling the Court to compare the words or figures so written with any words of figures alleged to have been written by such person.
This section applies also, with any necessary modification, to finger impressions. CC No. 11/2011 which are more pronounced than the normal handwriting. Secondly, sometimes even in the case of signatures of an individual it may become impossible to compare with naked eye because over a period of time signature may get changed to an extent retaining still sometime rudimentary features. In this case, however, the signatures have remained almost the same over a period time; therefore it did not pose much of difficulty in comparing the signatures. Lastly, if this comparison had not been made it would have amounted to turning blind eye to the obvious. Similar course was followed by the Hon'ble Supreme Court in the case. Ajit Sawant Majagavi V State of 1 Karnataka where the Hon'ble Supreme Court had compared the disputed signatures with the admitted ones. The relevant part of the Judgment reads as under:
"36. The original records were also placed before us and we have perused those records. Since learned counsel for the appellant contended that the appellant had not stayed in the "Ashoka Lodge", we looked into the "Register of Lodgers". It contains the relevant entry against which signature of the appellant also appears. His signature also appears on the "Vakalatnama" filed by him in this appeal. In the presence of the learned counsel for the parties, we compared the signature of 1 1997( 3 )Suppl.SCR 444 CC No. 11/2011 the appellant on the "Vakalatnama" with the signature in the "Register of Lodgers". A mere look at the signatures was enough to indicate the similarity which was so apparent that it required no expert evidence. This comparison was done by us having regard to the provisions of Section 73 of the Evidence Act......"
70. It was laid down in the Judgment:
"38. As a matter of extreme caution and judicial sobriety, the Court should not normally take upon itself the responsibility of comparing the disputed signature with that of the admitted signature of handwriting and in the event of slightest doubt, leave the matter to the wisdom of experts. But this does not mean that the Court has not power to compare the disputed signature with admitted signature as this power is clearly available under Section 73 of the Act. (See: State (Delhi Administration) vs. Pali Ram, AIR 1979 SC 14 = (1979) 2 SCC 158)"
71. The only conclusion which can be drawn from above is that pay order of Rs.1,10,000/ 22/10/1993 was got issued by the Accused Rajesh Gupta and Accused Vinay Gupta of M/s Bharti Exports as packing credit for making payment to one M/s Sultan Embroidery House. This pay order was deposited in the Bank which CC No. 11/2011 was opened just a few days back and on the same day of the deposit th Rs. 50,000/ had been withdrawn and Rs. 59,000/ on 28 of October in cash by none other the Accused No. 4. Sh. Vinay Gupta. Pay Orders in favour of Classic Enterprises
72. The pay order of Rs. 1, 40,000/ Ex PW1/25 was also issued on the same day i.e 22/10/1993 following the above request from the Accused Rajesh Gupta and Vinay Gupta on behalf of M/s Bharti Exports Ex PW1/20.
73. Although the investigating officer did not trace the trail of this money that how the Accused Rajesh Gupta and Vinay Gupta got this money back but it is almost certain that M/s Classic Enterprises was a fly by Night Company which was created only to encash the said pay order and not for doing any business. Since it was not meant do any business it can be said without any doubt that the said pay order could not have been given to M/s Classic Enterprises for any business. This account was opened only to corner the pay order got issued by the Accused Rajesh Gupta and Vinay Gupta in favour of M/s Classic Enterprises. To reach this conclusion one may note the CC No. 11/2011 following facts:
This account was opened on 29/10/1993 by depositing cash of Rs. 600/ with PNB Maduban and on the same day above pay order was deposited with the Bank and this money was credited in this account evident form the Account opening form Ex PW6/D1 statement of account certified under the Banker's Book Evidence Act Ex PW6/D5 and deposit slip Ex PW6/D4.
There are no other transactions in this account except for withdrawal of Rs. 80,000/ on 3/11/1993 by a self cheque (Ex. PW6/D3) and bearer cheque dated 05/11/1993 PW6/D2 in favour of Raj Kumar for Rs 60,000/ authorizing said Raj Kumar to withdraw the money. Next entry in the account is of 25/02/1994 of deduction of some bank charges of Rs. 50/ followed by withdrawal of Rs. 500/ in cash and again deduction Rs 50/ as some bank charge and the account is closed evident from self check Ex. PW6/D3, and bearer check in favour of Raj Kumar Ex PW6/ D3 and statement of Account Ex PW6/D5.
M/s Classic Enterprises has claimed itself to be a cloth CC No. 11/2011 merchant. It is nearly impossible to believe if it had been cloth merchant in normal course things it would have had not just one transaction over period of five months.
Pay Orders in favour of M/s Fashion Flame
74. There are two pay orders issued in favour of Fashion Flame by the Bank on the request of M/s Bharti Export by its partners. One such request is dated 11/10/93 made on the day just next to day the packing limit was sanctioned. This request is Ex. PW1/16 and signed by the Accused Vinay Gupta for Accused M/s Bharti Export. On the basis of this request pay order dated 11/10/1993 Ex PW1/19 was issued in favour of the M/s Fashion Flame. There are two cheques issued in favour M/s Bharti Export to return the money. One is dated 12/10/1993 Ex PW6/A4 for Rs.2, 00,000/ and other is dated 14/10/1993 Ex Pw6/A5 for Rs. 3, 00,000/ . Both the cheques were bearer checks . The stamps appearing on the said checks and the signatures of both the Accused Rajesh Gupta and Vinay Gupta show they had received the said amount in cash from the Bank of Fashion Flame itself. The other pay order issued to the Accused was dated CC No. 11/2011 20/11/1993 Ex PW1/26 for Rs. 1, 50,000/. It was deposited in the account of Rs. Fashion Flame on 20/11/1993 on the same day vide pay in slip Ex PW/6/ A3. The entry at point B in statement of Account Ex PW6/A6 shows that on the same day M/s Bharti Exports gets this money back.
75. There is a reason to say that this whole sequence was already fixed and it was predetermined that the pay orders would be issued in the name M/s Fashion Flame and the said money would be returned in cash to the Accused M/s Bharti Export, despite the fact that testimony of witness Sh. Ravinder Pal Kapoor Proprietor of M/s Fashion Flame does not say so. It is generally believed and accepted that the witnesses may lie but the circumstances would not. Let us examine the circumstances on which such a conclusion can be reached:
(i) The pay order of Rs. 5 lacs is though dated 11/10/1993 but it was deposited in the Bank Account of Fashion Flame on 12/10/11993 and on the same day a bearer cheques was issued in the name of Bharti Export for Rs. 2 Lacs and on the same day as per CC No. 11/2011 entry a point A on the statement of Account Ex PW6/A6 M/s Bharti Export received Rs. 2 Lacs in cash from the Bank of Fashion Flame.
The other bearer check too in all likelihood was issued on the same day though dated 14/10/1993 as the two checks bear consecutive numbers. In any case as per entry at point A of the statement of Account the payment as against the said check was received in cash by M/s Bharti Exports on 14/10/1993. As far the pay order of 20/11/1993 is concerned as already noted on the same day M/s Bharti Export got this money back from M/s Fashion Flame in cash. Sh. Ravinder Pal Kapoor who appeared as witness PW11 tried to explain by it by saying that "Perhaps this deal was cancelled and therefore I had returned the said money to the party." If the Deal was cancelled on the same day where was the necessity to have first deposited the cheques in the account and then return the said money almost like cash? The pay order could have been returned as such.
(ii). Most importantly if the things had not worked out between M/s Bharti Export and M/s Fashion Flame parties on 12/10/1993 on the day pay order of Rs. Five Lacs was handed over to the M/s Fashion CC No. 11/2011 Flame why did M/s Bharti Export got issued another pay order in its favour on 20/11/1993 and why did M/s Fashion Flame accepted the same.
(iii) Another factor one must also take note of is, after M/s Bharti Export had received Rs. Five lacs in cash from M/s Fashion Flame and this money was in its possession which was unutilized then why did M/s Bharti Export again approached the Bank to get another pay order of Rs. 1, 50,000/ in favour of M/s Bharti Export. Bank dishonestly induced to sanction packing facility and then issue pay orders
76. This is clear from the facts that applying for packing credit limit was nothing but a ruse to let the Bank lend the money to Accused M/s Bharti Export which it did intend to pay back. It is evident from the following facts put together:
M/s Bharati Export or its partners had no previous experience in exporting garments.
(i) The witness PW1 Sh. K S Murthy Scale II Officer had deposed CC No. 11/2011 on the application of loan of the Accused M/s Bharti Export he had given the note dated 08/10/1993. it is noted in the report "Earlier the parties were doing supply of electrical items and now have changed their activity in which they are less experienced." in the cross examination too this witness deposed "Borrowers themselves informed me that they were already dealing in electrical business and wanted to change their activity to export of garments and that is why I reported my opinion accordingly. I have received this information on interaction with the accused Vinay Gupta and Rajesh Gupta. Parties came to me as the loan proposal was placed before me for making opinion." There is no crossexamination on this question that this information was not supplied to him by the Accused themselves. The conclusion reached by the witness PW2 Sh. J. V. Ratnam, Manger to whom the said note was submitted by Sh. K S Murthy is the same. He in his report has stated referring to the partners of the firm "From the discussions I conclude that both are new to business." There is no crossexamination of this witness on this line.
(ii) It, therefore, can be said that the accused were new to the business of export. It may be note this by itself was not an illegality CC No. 11/2011 as was admitted by the witness PW2 J Venktaratnam "There was no ban sanctioning packing credit limit to a new firm or new exporters".
It may, however, can be considered as one of the factors to establish that M/s Bharti Export did not have the intention to make export. To put differently if the M/s Bharti Export or its partners had been in the business of making export of garments, it would have strongly shown since they were in the business of exporting garments this time around also they intended to do so.
No infrastructure as to the capability of making the export
(iii) It is noted in the note of PW1 Sh. K S Murthy Ex PW1/7 "Basically they are not manufacturing these items and depending on other suppliers" The note Ex PW1/8 of PW2 Sh. J.V. Ratnam is far more detailed. He has noted:
"As explained above the partners are inexperienced, they are getting the work done from outsiders.
During the discussion it is informed that the job would be done by :
M/s Simran Exports - 1000 pcs and R.K. (....) (not CC No. 11/2011 readable) - Noida - 500 pcs.
But finally when they are asked to submit the orders placed they have submitted following: a.Classic Enterprises b.Sulatan Embroidiery House. .
When enquired, it is informed that M/s Simran Exports have coated (sic.) higher price and hence the order was not given to them.
Partner further inform that they will purchase some machinery and install with the fabricator. So it is also evident, that the fabricators needs certain machinery"
(iv) In his examination in chief as well this witness has stated "I have analyzed the matter and I observed that the applicant Mr. Vinay Gupta and Rajesh Gupta partners of M/s Bharti Exports did not have any past experience in the line of ready made garments for exports and they do not have any infrastructure with them ... ... ..." In the cross -examination there is no question put to this witness as it having any infrastructure. In answer to a question this witness had deposed "The exporter can get the job work done from other party or he can himself manufacture the goods to be exported." CC No. 11/2011
(v) It is thus clear as far as Accused M/s Bharti Export is concerned it had no infrastructure of its own to carry out the export in terms of the Letter of credit. Again since the Accused M/s Bharti Export had no infrastructure of its own to manufacture garments. It had no machinery no man power. It would be another factor , in light of other evidence on record, to show that M/s Bharti Export and its partners had no intention to export they only wanted the PCL to be sanctioned so that they could get the money from the Bank Shortage of time for making export
(vi) It may be noted that in this case as per the Letter of Credit the th shipment was to be made by 29 of November, 1993. The Letter of st Credit is of 21 of September 1993. It must have reached the hands of the Accused just close to 28/09/1993, the date of applying for PCL, as there is a letter dated 24/09/1993 of Central Bank on record Ex PW1/3 addressed to M/s Bharti Export forwarding the Letter of Credit to it. It is obvious it must have taken some time to process the request of the Accused. The order of sanction was passed by the Accused No. 1 on 10/10/1993. it does not appear that Accused M/s CC No. 11/2011 Bharti Export was capable of executing the order within a period of about 40 days I.e the day on which the Limit was sanctioned to the date when shipment was to be made specially in view of the fact M/s Bharti Export had no infrastructure of its own to manufacture the goods and it was new to the business and it had actually to start the process of procuring the material after the packing credit had been release.
(vii) It was noted also in the note Ex PW1/7 of Sh. K R Murthy dated 08/10/1993 that "As the time is very short we should ensure from the party that the shipment will be made before the date or we may have to ask for amendment in LC for extending the shipment date to be on the safer side."
(viii) I am of the view on the face of it the time on the day of filing the application for PCL was too short for executing the export order. Meaning of it would be though accused M/s Bharti Exports wanted packing credit limit to be sanctioned but it was impossible for it to carry out the export order. To put it differently, it had only interest in packing credit and not exporting the goods under the Letter of Credit. CC No. 11/2011 Offence under section 420 IPC and under section 120 B read with section 420 IPC by Accused M/s Bharti Export and Its Partner Accused Rajesh Gupta and Vinay Gupta
77. The main allegation which survive against the Accused M/s Bharti Export and it partners Accused Rajesh Gupta and Accused Vinay Gupta are that they have conspired to cheat the Andhra Bank and pursuant to the said conspiracy cheated the Bank. Offence under section 120 B read with section 420 IPC. 1
78. As per section 120 A in short to constitute conspiracy there should be:
An agreement between two or more persons to do; •An illegal act, or •An act which is not illegal by illegal means. 1 120A . Definition of criminal conspiracy;- When two or more persons agree to do, or cause to be done;-
(1) an illegal act, or (2) an act which is not illegal by illegal means, such an agreement is designated a criminal conspiracy;
Provided that no agreement except an agreement to commit offence shall amount to a criminal conspiracy unless some act besides the agreement is done by one or more parties to such agreement in pursuance thereof Explanation.- It is immaterial whether the illegal act is the ultimate object of such agreement, or is merely incidental to that object..
CC No. 11/2011
79. Here we have before us three persons Accused No 2, a partnership firm, its partner Accused No. 3 Sh. Rajesh Gupta and its other partner Accused No. 4 Sh. Vinay Gupta. Accused No. 2 M/s Bharti Exports is involved every where. The Letter of Credit is in its name, account had been opened in its name, packing credit limit had been sanctioned in its name, pay orders had been issued from its account and the money from M/s Fashion Flame had been received on its behalf. The accused No.3 Rajesh Gupta and Accused No. 4 Vinay Gupta are the two hands of the Accused No. 2 M/s Bharti Export. It has already been seen above how actively they have been involved in the siphoning the money of the Bank. It is also is certain from the facts narrated above that the Accused Rajesh Gupta and Accused Vinay Gupta and been acting in unison with the Accused M/s Bharti Exports and for its benefit. The relationship among them and the entire process shows without any doubt that there had been an agreement among them to cheat the Bank. Meaning thereby that they had been a part of criminal conspiracy to cheat the Bank and thus all of them have committed the offence punishable under section 120 B read with section 420 IPC.
CC No. 11/2011 Offence under section 120B IPC read with section 13(2) r/w Section 13(1)(d) of the Prevention of Corruption Act, 1988.
80. There is no direct evidence available of the Accused herein having entered into conspiracy with the deceased accused No. 1 Sh. Satnam Singh. It would be clear from above that the total evidence can be divided broadly into two parts one related the irregularities committed in the according to the sanction for packing credit limit and the other is related to the facts as to how the money had been separated from the Bank after the sanction of the packing credit limit. I am of the view that the allegation of irregularities committed are primarily directed against the deceased accused No. 1 Satnam Singh without the same being proved no charge of abuse of position under section 13(1)(d) of the Prevention of Corruption Act , 1998 would stick. It may further be noted as far as the allegation relating to abuse of official position are concerned he was the best person to have answered the same and no one else. It would be unfair to call upon the remaining Accused to defend the allegation of "abuse of position"
as against the Accused No. 1 Sh. Satnam Singh as also that he was not part of any conspiracy. I am,therefore, not inclined to read the CC No. 11/2011 evidence which has come in respect of irregularities committed which has come on record as against the other Accused herein. That being the position just on the bases of the evidence which come on record relating to siphoning off the money of the Bank and other evidence against these Accused it would not be possible to conclude that the Accused herein have committed the offence under section 120B IPC read with section 13(2) r/w section 13(1)(d) of the Prevention of Corruption Act, 1988.
Offence under section 420 IPC
81. Section 415 IPC defines what is cheating. In the context of this case, leaving aside the minute details. It would read as under:
Whoever, by deceiving any person, fraudulently or dishonestly induces the person so deceived to deliver any property to any person, ... ... ... is said to" cheat".
82. Section is followed by many examples one of the examples, reads as under:
A Intentionally deceives Z into a belief that A means to repay any money that Z may lend to him and thereby dishonestly CC No. 11/2011 induces Z to lend him money, A not intending to repay it. A cheats.
83. Section 24 IPC defines what is meant by "dishonestly" and Section 25 defines what is meant by "fraudulently". The said two provisions read as under:
Section 24 Whoever does anything with the intention of causing wrongful gain to one person or wrongful loss to another person, is said to do that thing "dishonestly". Section 25 A person is said to do a thing fraudulently if he does that thing with intent to defraud but not otherwise.
84. From the facts established above one may say that since M/s Bharti Export had no previous experience in export of garments, it had no capability or infrastructure to manufacture the goods, it did not have time to make the export of garments and its subsequent conduct of not using the money for manufacture of goods for export but for siphoning off that money by taking the same money in cash from M/s Fashion Flame, Classic Enterprises and M/s Sultan Embroidery House as against the pay orders issued in their favor would show in no uncertain terms that Accused M/s Bharti Exports CC No. 11/2011 and its partners Accused Vinay Gupta and Accused Rajesh Gupta from the very beginning had dishonest intention to cheat the Bank. They had deceived the Bank and pursuant to the said deception made the Bank part with Rs. 9 Lacs. The entire description of events fits well in the definition of cheating as per 415 of the Penal Code. Thus it can be said without any doubt that they have committed substantive offence punishable under 420 IPC. Role of Naresh Sikri
85. Accused Naresh Sikri has been charged under section 120 B IPC and also under section 420IPC to induce the Bank to deliver Rs. 9 lacs to the other accused.
Is Naresh Sikri part of any conspiracy
86. it is settled in law that direct evidence is hard to come by. It is an inference drawn from the circumstantial facts established by the prosecution form a complete chain which would be inconsistent with innocence of the accused and would unequivocally point only in the CC No. 11/2011 direction of the guilty of the Accused.
87. There is no direct evidence against the Accused Naresh Sikri in this case for having either committed the offence of cheating for being part of any criminal conspiracy.
88. Witness PW1 Sh. K S Murthy deposed in his testimony referring to accused Rajesh Gupta and Vinay Gupta "whenever accused Rajesh Gupta and Vinay Gupta came to Janak Puri Branch of Andhra Bank, they used deal with accused Satnam Singh directly. Both of them used to be accompanied by accused Naresh Sikri." In the crossexamination this witness had admitted "Accused No. 5 Naresh Sikri was also having his account in the branch of the bank. This accused person Naresh Sikri was already having his account in the branch prior to 1993. It was in the name of the firm and he was customer and after the offence in question he closed that open (sic) and opened another account in the same branch." He had further stated in the crossexamination "I had suspected something wrong when Naresh Sikri visited along with Vinay Gupta and CC No. 11/2011 Rajesh Gupta directly in the chamber of Chief Manager Satnam Singh as normal banking activity should have been done at the concerned counter of the concerned official of the bank." The testimony of the other witness of the bank Sh. J.V Ratnam is absolutely silent about it.
89. On the back side of the two bearer cheques Ex.PW6/A4 and Ex.PW6/A5 issued in the name of M/s Bharti Exports bearing date of 12.10.93 and 14.10.93 there were many cuttings. In the cross examination of the witness PW7 Sh. K.K Khanna (Branch Manager, United Bank of India, Punjabi Bagh Branch at the relevant time) by the Ld. PP for CBI this witness had deposed "I do not know any person by the name of Naresh Sikri". He had further deposed in the crossexamination "I will not be able to say anything as to why the aforesaid cuttings at point B1 to B3 have bee made on the back side of each of the cheques." In the crossexamination on behalf of accused Naresh Sikri to a question put to him he had replied "there are too many cuttings on the back side of the cheques, it is difficult to say who had presented the cheques, but I firmly believe that cheques in the shape with lot many CC No. 11/2011 cuttings will neither be passed by the authorised officer nor will be paid by the cashier. It appears to me that these cuttings may have been subsequently made after the cheques had been paid".
90. Similarly there is nothing been said as against the accused Naresh Kumar Sikri in the testimony of the witness PW8 working as Accountant with United Bank of India, Punjabi Bagh at the relevant time.
91. The witness PW11 Sh. Ravinder Pal Kapoor had deposed "I know Sh. Naresh Sikri today present in the Court (correctly identified). I know Sh. Naresh Sikri as he had been introduced to me once by my Manager Sh. B.N Chopra in connection with an export order of Sh. Naresh Sikri. I do not know by what name he was running his business." With reference to the two cheques in question Ex.PW6/A4 and Ex.PW6/A5 he had deposed "I had handed over these cheques to my Manager, who must have given them to the concerned party. (Vol.) At that point of time I did not know that Sh. Narehs Sikri was the proprietor of M/s CC No. 11/2011 Bharti Exports. (Vol. Further) I came to know on the last date of hearing when I came to the Court that Mr. Naresh Sikri was the proprietor of M/s Bharti Exports." This witness was cross examined by Ld. PP for CBI. In the crossexamination he had stated "I cannot say if the said pay order had been delivered to me personally by Sh. Naresh Sikri for M/s Bharti Exports." On a suggestion given to him by Ld. PP for CBI that Sh. Naresh Sikri had introduced the partners of M/s Bharti Exports to him, he had replied "although I had met Sh. Naresh Sikri through my Manager Sh. B.M Chopra but Sh. Sikri had not introduced to me any partner of M/s Bharti Exports." He had denied the suggestion that Sh. Naresh Sikri used to meet him frequently in connection with his business. He had however, stated "in this particular case the order of export of Sh. Naresh Sikri was brought to me by my Manager. It was lateron canceled, therefore the money was refunded." In the crossexamination on behalf of Naresh Sikri, on a question put to him, he had deposed "Last time I had visited this Court I had seen the accused in the Court and had talk to him by saying that I have seen you some time before. Then somebody sitting in Court who was going through the prosecution file had informed me that he was CC No. 11/2011 Naresh Sikri. (Vol.) This was, however, in my mind that for the first time I was introduced to Sh. Naresh Sikri by my staff I was informed that he was the proprietor of M/s Bharti Exports". He had, however, denied the suggestion that he had never met Sh. Naresh Sikri before and had met him for the first time when he had met the accused Naresh Sikri in the Court. He had also denied the suggestion that he had never met Naresh Sikri at any time in his office or he had been introduced by his staff to him that Sh. Naresh Sikri was the proprietor of M/s Bharti Exports.
92. At best what emerges from the above testimonies is, even if they are believed as such, that the Accused Naresh Sikri used to accompany the Accused Rajesh Gupta and Vinay Gupta directly in the chamber of Accused Satnam Singh Chief Manger of the Bank. Witness PW1 Sh. K S Murthy had suspected that there was something wrong being done. Further, witness PW11 Sh. Kapoor considered Accused Naresh Sikri to be the Proprietor of M/s Bharti Export and Naresh Sikri had been introduced to him by his staff. I am of the view this evidence is grossly insufficient to establish the Accused Naresh Sikri as coconspirator or that he had induced the Bank to deliver any money of Accused M/s Bharti Export or any of partners of this firm Accused Rajesh Gupta and Vinay Gupta. CC No. 11/2011 Conclusions
93. in view of the forging discussion, I am convicting Accused No. 2,3 and 4 for having committed offences under section 420 IPC and I am also convicting them for having committed the offence under section 120B read with section 420IPC. They be heard on the point of sentence.
94. I am acquitting the Accused No. 5 Naresh Sikri of all charges. His bail bond is cancelled and surety discharged.
Announced in the Open Court ( L. K. GAUR )
on 08th of October, 2012 Special Judge (CBI)9
Central District, Delhi.
CC No. 11/2011
IN THE COURT OF SHRI L.K. GAUR, SPECIAL JUDGE
P.C. ACT (CBI09), CENTRAL DISTRICT,
TIS HAZARI: DELHI
CC No. 11/11
R.C. No. 30(A)/97/CBI/ACB/ND
Central Bureau of Investigation
Versus
1. M/s Bharti Exports,
3384, Roop nagar,
Mahindra Park, Delhi.
2. Shri Rajesh Gupta
H. No. B57, Sector55,
Noida, U.P.
3. Shri Vinay Gupta,
Flat No. D96, Sochana Apartments
Vasundhra Enclave,
Ghaziabad.
Date of Institution : 03.07.2000
Date of reserving Order : 11.10.2012
Date of Pronouncement : 17.10.2012
CC No. 11/2011
ORDER ON SENTENCE
CONVICTION
Preliminary
1 M/s Bharti Exports, a partnership firm, and its partners
namely Sh. Rajesh Gupta and Sh. Vinay Gupta have been convicted in this case for having committed offences punishable under Section 420 Indian Penal Code and also under Section 120B read with Section 420 of the Indian Penal Code. 2 The prosecution has been successful in proving against them that they had conspired to cheat Janakpuri Branch of Andhra Bank and pursuant to the said conspiracy had cheated it of Rs.9 lakhs.
3 The convicts had applied for Packing Credit Limit for export of garments on the basis of a Letter of Credit. It was sanctioned and on its release on their request four pay orders were issued in the names of parties supposedly who were to CC No. 11/2011 work for them. It was established during the trial that in case of three pay orders they were first handed over to the concerned parties and credited in their account and then the money so credited in the account of the said parties were taken back by the convicts in cash by way of bearer cheques being issued by such parties. In the case of the fourth pay order although there was no clear evidence to establish that how the money in lieu of the said pay order had came in the hands of convicts, but it was evident that the establishment in whose favour the said pay order was got issued was a fly by night establishment which was only created to get the said pay order encashed and not for doing any business. The account by this establishment was opened only to corner the pay order got issued in its favour by the convicts. Thus, the pay order issued in favour of this establishment was also not for procuring any material etc. for which Packing Credit Limit was sanctioned.
4 It may further be noted that the convicts had availed this loan on concessional rates under a scheme meant for promotion of exports.
CC No. 11/2011 Submissions 5 I have heard the Ld. Public Prosecutor for CBI and also the Ld. Defence Counsel on the point of sentence. Mitigating circumstances No previous record of conviction 6 It was submitted on behalf of accused that none of the convicts herein have any previous record of conviction against them. It was further submitted that they have also not been involved in any other case of criminal nature.
M/s Bharti Exports no longer in business 7 It was pleaded that M/s Bharti Exports is no longer in business for last fifteen years.
CC No. 11/2011 Family Background of the convict Sh. Vinay Gupta 8 It was submitted that the convict Sh. Vinay Gupta does not have a house of his own and he is staying in a rented accommodation with his family. His wife is suffering from some Neurological problem(Altered Sensorium) besides other ailments like Hypothyroidism, Slipdisc, Depression etc. for which she is under constant medication. He has placed on record some documents related thereto of the Fortis Hospital of the year 2009.
9 It was further submitted that the convict has one daughter and a son of twelve years and eight years respectively and both of them are school going. The parents of the convict who are aged (father eighty one years - mother seventy two years) are also stated to be dependent on the convict. He informed that he was the sole bread earner of his family.
CC No. 11/2011 Family background of the accused Sh. Rajesh Gupta
10. It was submitted on his behalf that the convict is the only bread earner of his family. He has old parents who are dependent on him. He has one son and a daughter who are studying in the class Eleventh and First respectively. Long trial and conduct of the convicts during trial
11. It was submitted that this case is pending against the convicts since the year 2000 and they have been facing this trial from almost twelve years. In the entire course of the trial of twelve years they have been appearing in the Court regularly and never tried to delay the trial of this case from their side. Return of money to the bank
12. It was submitted on behalf of the convicts that on 31.3.1995 the convicts had returned Rs.1,08,549/ and thereafter Rs.64,000/ on 20.5.1995. The bank had filed a suit CC No. 11/2011 for recovery against the convicts and during the trial of the said civil case, in full and final settlement of all the claims which the bank had against the convicts, they paid to the bank a sum of Rs.9,86,267/. To counter this point Ld. Public Prosecutor had pointed out that the settlement arrived at by the bank with the convicts was more out of compulsion than voluntary. According to him it was for practical considerations the bank had compromised with the convict by accepting a lesser amount considering the factors like possibility of recovering the money from the convicts and saving the interest of the bank and not really to absolve the convicts of their criminal conduct. He had pointed out that even as a result of this compromise the convicts have been benefited at the expense of the interest of the bank. Aggravating circumstances Quantum of money
13. It may be noted that in this case the money involved is Rs. 9 lakhs. In the year 1993 when this cheating was committed Rs. 9 lakhs was not a small amount.
CC No. 11/2011 Modus operandi
14. The modus operandi used by the convicts to deceive the bank and to separate the bank with its money was to say the least devious and definitely making a case for higher sentence. Request for releasing the accused on probation :
15. It has been submitted by the Ld. Defence Counsels that since in this case the punishment involved is not more than seven years and considering the antecedents of the convicts this Court may consider to admonish them or may release them 1 on probation under Section 360 of the Code of Criminal 1 Section 360 Order to release on probation of good conduct or after admonition (1) When any person not under twentyone years of age is convicted of an offence punishable with fine only or with imprisonment for a term of seven years or less, or when any person under twentyone years of age or any woman is convicted of an offence not punishable with death or imprisonment for like, and no previous conviction is proved against the offender, it it appears to the Court before which he is convicted, regard being had to the age, character or antecedents of the offender, and to the circumstances in which the offence was committed, that it is expedient that the offender should be released on probation of good conduct, the Court may, instead of sentencing him at once to any punishment, direct that he be released on his entering into a bond, with or without sureties, to appear and receive sentence when called upon during such period (not exceeding three years) as the Court may direct and in the meantime to keep the peace and be of good behaviour. Provided .... ... ...
CC No. 11/2011 1 Procedure or under Section 3 of Probation of Offenders Act, 1958.
16. It may be noted that both in the case of Section 360 of the Code of Criminal Procedure and Section 3 of the Probation of Offenders Act, 1958 the circumstances of the case in which the offence has been committed plays an important role. A convict cannot be released on probation or admonished just because there is no criminal case pending against the convict. It has already been noted above that the modus operandi used by the convicts for committing the offence in this case. I am, therefore, not inclined to admonish the convicts or to release them under the Probation of Offenders Act, 1958.
1 Section 3 : Power of Court to release certain offenders after admonition. When any person is found guilty of having committed an offence punishable under Section 379 or Section 380 or Section 381 or Section 404 or Section 420 of the Indian Penal Code (45 of 1860) or any offence punishable with imprisonment for not more than two years, or with find, or with both, under the Indian Penal Code or any other law, and no previous conviction is proved against him and the court by which the person is found guilty is of opinion that, having regard to the circumstances of the case including the nature of the offence and the character of the offender, it is expedient so to do, then. notwithstanding anything contained in any other law for the time being in force, the court may, instad of sentencing him to any punishment or releasing him on probation of good conduct under section 4, release him after due admonition. CC No. 11/2011 Conclusions :
17. It may be noted that since M/s Bharti Exports is an artificial person in terms of Section 11 of the Indian Penal Code, it certainly cannot be imprisoned and, therefore, in accordance with the judgment of Hon'ble Supreme Court in the case Standard Chartered Bank vs. Directorate of Enforcement (2005) 4 SCC 405, M/s Bharti Exports can only be punished with fine.
18. As far as the offence under Section 120B is concerned, as to what punishment should be awarded for the commission of this offence would relate to the punishment provided for the 1 abetment of such an offence. It would take one to Section 109 of the Penal Code which again lays down that the punishment for abetment, where it has resulted into the commission of the offence, is the same which is provided for the offence committed in consequence of such abetement. Meaning thereby the 1 Section 109. Punishment of abetment if the act abetted is committed in consequence and where no express provision is made for its punishment - Whoever abets any offence shall, if the act abeted is committed in consequence of the abetment, and no express provision is made by this Code for the punishment of such abetment, be punished with the punishment provided for the offence.
CC No. 11/2011
punishment for Section 120B IPC in this case would be the same as provided for under Section 420 IPC.
19. The maximum punishment provided under Section 420 IPC is seven years. There is, however, no limit to the fine which can be imposed under this Section.
20. I am of the view that when it comes to imposition of fine and if it relates to the offence of cheating, it would surely have a correlation with the amount involved in the cheating. So as to not just neutralize the benefit drawn as a result of cheating but to also show that it was in the end a bad bargain. One can also 1 take cue from Section 16 of the Prevention of Corruption Act, 1988 which establishes a link between the fine to be fixed and the amount of the value of the property an accused has obtained by committing an offence under sub Section 2 of 1 Section 16. Matters to be taken into consideration for fixing fine - Where a sentence of fine is imposed under subsection (2) of section 13 or section 14, the Court in fixing the amount of the fine shall taken into consideration the amount or the value of the property, if any, which the accused person has obtained by committing the offence or where the conviction is for an offence referred to in clause (e) of subsection (1) of section 13, the pecuniary resources or property referred to in that clause for which the accused person is unable to account satisfactorily.
CC No. 11/2011 Section 13 or Section 14 of the same Act and to also take into account the pecuniary resources or the property which the Accused is unable to account for satisfactorily for an offence referred to in clause (e) of sub Section (1) of Section 13 of the Prevention of Corruption Act, 1988. I would also like to make a reference here to the judgment of the Hon'ble High Court of Bombay in the case Mohan Lal Gokul Dass vs. Emperor AIR (35) 1948 Bombay 358. It was a case related to offence of profiteering under Essential Supplies (Temporary Powers) Act (1946). It was observed :
"Usually a fine is imposed when the offence is the result of cupidity. When a person wants to make more money and to get rich and to amass a fortune at the cost of society and of its poor and needy members, the only way to deter others from following in his footsteps is to make it clear that crime is not easy and that he should not be permitted to enjoy his illgotten wealth. If the only sentence were the sentence of imprisonment and if the accused was permitted to come back after serving his sentence to enjoy the wealth which he has amassed by antisocial acts or by committing offences, then it certainly would not deter others CC No. 11/2011 from following in his footsteps. Therefore, not only must a fine be imposed, but the fine must be of such a character and of such an amount has to be really deterrent in its character." [Para 5]
21. I also see a point in what has been submitted by the Ld. Public Prosecutor, when he says that the settlement between the bank and the convict was more on account of practical considerations rather than for absolving the convicts of the crime committed. Specially for the reason that the statement of account on record shows that on 20.5.1995 when the last payment was made by the convicts to be adjusted against the interest due, the outstanding balance against them was Rs.9 lakhs and after ten years the matter was settled for just Rs. 9,86,267/. I, therefore, feel that this would not be a reason to not to impose fine on the convicts at the same time take into account that some benefit (money) had been returned by the convicts to the bank which it had gained as a result of cheating and that the fine imposed is not so high that it may turn out to be ruinous for the family of the convicts.
CC No. 11/2011
22. The maximum imprisonment provided for an offence under Section 420 IPC is seven years. It is a matter of fact that the convicts have been facing trial in this case for long time. It also can be taken into account that the convict Sh. Rajesh Gupta and Sh. Vinay Gupta have family responsibilities and school going children to support. Surely it would mean that the punishment in terms of imprisonment would not be on the higher side and the fine imposed would be reasonable in the overall circumstances.
23. As far as the role of convicts are concerned, there is not much of difference in the role played by them. I would, however, like to note here that according to the submissions made on behalf of the convicts M/s Bharti Exports is not in business for last fifteen years. In any case, if any fine is to be imposed on M/s Bharti Exports, it would have still gone from the pocket of the other convicts i.e Sh. Rajesh Gupta and Sh. Vinay Gupta. I, therefore, intend to impose only a nominal fine on M/s Bharti Exports.
CC No. 11/2011 Not awarding of imprisonment in default of payment of fine
24. I do not intend to pass an order to impose imprisonment in default of payment of fine as I would like the convicts to actually pay the amount of fine imposed and not just get away by suffering the imprisonment in default. I am of the view that in case of failure to pay the fine, the steps can always be taken by the Court to recover the fine in accordance with Section 421 of the Code of Criminal Procedure, 1973.
Sentence
25. In view of the forgoing discussion and facts and circumstances of the case, I am sentencing :
(a) The convict M/s Bharti Exports to pay a fine of Rs. 500/ ( five hundred only) for the offence punishable under Section 420 IPC and to also pay same amount of fine of Rs.500/ ( five hundred only) for the offence punishable under Section 120B IPC read with Section 420 IPC ;
CC No. 11/2011
(b) The convict Sh. Rajesh Gupta to undergo Rigorous Imprisonment ( RI) for a period of two years and to pay a fine of Rs. 75,000/ ( Rs. Seventy Thousand Only) for the offence punishable under Section 420 IPC and to also undergo RI for a period for the same period i.e. two years and to also pay same amount of fine of Rs. 75,000/ ( Rs. Seventy Thousand only) for the offence punishable under Section 120B IPC read with Section 420 IPC; and
(c) The convict Sh. Vinay Gupta to undergo RI for a period of two years and to pay a fine of Rs. 75,000/ ( Rs. Seventy Thousand Only) for the offence punishable under Section 420 IPC and to also undergo RI for a period for the same period i.e. two years and to also pay same amount of fine of Rs. 75,000/ ( Rs. Seventy Thousand only) for the offence punishable under Section 120B IPC read with Section 420 IPC
26. The offences under Section 420 IPC and under Section 120B read with Section 420 IPC committed in this case are so CC No. 11/2011 intimately connected that it will be appropriate that the sentences of imprisonment imposed under the said Sections should run concurrently. I am accordingly directing that the sentences of imprisonment imposed on the convicts Sh. Rajesh Gupta and Sh. Vinay Gupta for the offences punishable under Section 420 IPC and under Section 120B IPC read with Section 420 IPC shall run concurrently.
27. The convicts had not been arrested in this case and have spent no time in jail during the entire course of the trial, therefore, there is no benefit under Section 428 Cr.P.C needs to be given to the convicts in this case.
Ordered Accordingly.
Announced in the Open Court ( L. K. GAUR )
on 17th of October, 2012 Special Judge, P.C. Act
(CBI09), Central District,
Delhi.
CC No. 11/2011
CC No. 11/2011
CC No. 11/2011