Delhi District Court
(C.B.I. vs . Rakesh Kumar Bhatia & Ors.) on 31 January, 2014
Judgement in the matter of:
(C.B.I. Vs. Rakesh Kumar Bhatia & Ors.)
Dated : 31.01.2014
: IN THE COURT OF SH. KANWAL JEET ARORA :
SPECIAL JUDGE : C.B.I. (P.C.ACT)
DWARKA COURT COMPLEX, NEW DELHI.
Case No.: RC3(E)/99/EOWII/ DLI/
Branch CBI/New Delhi dated 17.12.99
Under sec: 120B r/w 419, 420, 467 & 471
I.P.C. r/w sec.13(2) & 13(1)(d) of P.C.Act.
In the matter of:
CENTRAL BUREAU OF
INVESTIGATIONS (C.B.I)
v e r s u s
(i) RAKESH KUMAR BHATIA,
S/o.: Sh.Sohan Lal Bhatia,
R/o.:F186A, MIG, Gate Enclave,
Delhi93.
(ii) JIYA LAL ARORA @RAM NARAYAN,
S/o.: Sh.Amolak Ram,
R/o.: 26/114, Gali No.10,Vishwas Nagar,
Shahadara, Delhi52.
(iii) VIJENDER KUMAR,
S/o.: Sh.Vishwa Nath,
R/o.:BA/108, WEA, Karol Bagh,
New Delhi.
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Judgement in the matter of:
(C.B.I. Vs. Rakesh Kumar Bhatia & Ors.)
Dated : 31.01.2014
(iv) H.SURENDRA SHETTY,
S/o.: Late Sh.A.Sanjiva Shetty,
R/o.:1061, Vijaya Bank, Lay Out,
Sunder Ram Shetty Nagar,
Bannerghatta, Bangalore.
(v) K.VASANTH KUMAR SHETTY,
S/o.: Late Sh.Krishna Shetty K.,
R/o.:Vaishnavi No.1304,
Gauri Apartment, New Bel Road,
Ramakrishna Garden, Bangalore.
(vi) H.BALAKRISHNA SHETTY,
S/o.: Sh.Govinda Shetty,
R/o:Flat No.003, Block 11, Mantri Residency,
Bannerghatta Road, Bangalore.
(vii) A.MAILLAPPA RAI,
S/o: Shri Alake Thinmmaappa Rai,
R/o: Alake House, Post Nari Mugru,
Puttur, Taluka Dakshin, Kannada, Karnataka.
... Accused Persons.
Date of Institution : 10.10.2001.
Date on which the case was : 13.10.2011.
received on transfer in this court
Date of reserving judgement : 10.01.2014.
Date of pronouncement : 31.01.2014.
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Judgement in the matter of:
(C.B.I. Vs. Rakesh Kumar Bhatia & Ors.)
Dated : 31.01.2014
: J U D G E M E N T :
1. Economic growth of any Civil Society, depends
on the displacement of its fiscal deposits from depositors to
investors, so as to sustain developmental projects, boosting the
socioeconomic development of the nation as a whole. In any
economy, banks play an important role. Banks are considered
as reliable financial institutions having core business of
mobilizing the savings of people for investment. Banks receives
money from one group and lends it to other group of people.
2. As banks being financial institutions, operate
like intermediaries between the depositors and investors and
thus deal with the public money, therefore the actions and
conduct of its officers, being public servants should be such, so
that the public money should not be mishandled, misused or
misappropriated for any undue pecuniary advantage either of
the public servants themselves or of anyone else in whom they
are interested.
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Judgement in the matter of:
(C.B.I. Vs. Rakesh Kumar Bhatia & Ors.)
Dated : 31.01.2014
3. Despite deterrent penal provisions under
Prevention of Corruption Act and Indian Penal Code and
directions vide circulars, rules, referendums and policies issued
from time to time by Reserve Bank of India and the banks
themselves, various instances of embezellment with public
money comes to light.
4. CBI on getting a complaint from
Sh.B.R.Chandra Shekhar, Chief Vigilance Officer of Vijaya
Bank of one such instance, had registered FIR
No.RC3(E)/99/EOWII/DLI dated 17.12.1999 against the public
servants, the valuer on the panel of bank and other private
individuals. After registration of the case, it was investigated
and on conclusion of investigations, the present charge sheet
was filed against (i) Rakesh Kumar Bhatia, the principal
borrower ; (ii) Jiya Lal Arora, the alleged guarantor, (iii)
Vijendra Kumar, the empanelled valuer with complainant
bank; (iv) H.Surendra Shetty, Assistant General Manager; (v)
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Judgement in the matter of:
(C.B.I. Vs. Rakesh Kumar Bhatia & Ors.)
Dated : 31.01.2014
K.Vasanth Kumar Shetty, Chief Manager; (vi) H.Balakrishna
Shetty, Senior Manager, Foreign Exchange Department ; and
(vii) A.Maillappa Rai, Manager, Foreign Exchange Department
; for their trial on the allegations that all of them, entered in a
criminal conspiracy between 1994 to 1998, the object of which
was to cheat Vijaya Bank, Barakhamba Road to the tune of Rs.
114 lakhs by availing various credit facilities in favor of M/s
U.S.R Exports, on the basis of fake collateral security,
pertaining to Plot No.25, Mohalla Dillai Abadi, Shiv Nagar,
Shahadara, Delhi, stated to be in the name of one Ram
Narayan, which was not in existence and thereby causing a
wrongful loss to the bank and wrongful gain to Rakesh
Kumar Bhatia, proprietor of M/s U.S.R Exports Delhi.
5. Before proceeding further, it is pertinent to
advert to the facts in brief which led to registration of FIR and
filing of charge sheet against the accused persons. The same
are as under:
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Judgement in the matter of:
(C.B.I. Vs. Rakesh Kumar Bhatia & Ors.)
Dated : 31.01.2014
FACTUAL MATRIX:
6. Rakesh Kumar Bhatia, proprietor of M/s U.S.R
Exports had opened an account in the name of his firm with
Vijaya Bank, Barakhamba Road Branch. He applied with the
bank seeking Credit Limit facilities to the tune of Rs.80 lacs
vide his application dated 24.11.1996, for the purposes of
export of readymade garments. It is alleged that in support of
his application, Rakesh Kumar Bhatia had filed balance sheets
dated 30.03.1996 and for the period ending 06.12.1996 along
with the projected balance sheets for the year ending
31.03.1997 and 31.03.1998. It is alleged that accused Rakesh
Kumar Bhatia had shown inflated figures in the balance sheets
as well as the projected balance sheets, so as to get the
maximum credit facilities.
7. It is alleged that accused A.Maillappa Rai, the
Manager, Foreign Exchange Department, processed this
application vide process note dated 22.01.1997 without asking
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Judgement in the matter of:
(C.B.I. Vs. Rakesh Kumar Bhatia & Ors.)
Dated : 31.01.2014
for any explanation or proof, with respect to the figures
mentioned in the balance sheets.
8. It is alleged that accused H.Balakrishna
Shetty, Senior Manager, simply endorsed the process note by
A.Maillappa Rai and forwarded it to accused K.Vasanth Kumar
Shetty, Chief Manager, who approved the same.
9. It is alleged that accused Rakesh Kumar
Bhatia in support of his loan application had produced one Jiya
Lal Arora, who impersonated himself as Ram Narayan owner
of Plot No.25, Mohalla Dillai, Abadi Shiv Nagar, Shahadara. It
is alleged that this property was offered as "collateral security"
for the credit facilities which were sought.
10. It is alleged that Head office of Vijaya Bank
had issued a circular bearing number 191 of 1996 dated
06.11.1996 whereby the bank officers were called upon to
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Judgement in the matter of:
(C.B.I. Vs. Rakesh Kumar Bhatia & Ors.)
Dated : 31.01.2014
conduct physical verification of the property offered as
"collateral security". It is however alleged that none of the
bank officers, the public servants, in compliance of the
directions given in this circular had conducted physical
verification of this property which was subsequently found to
be a nonexistent property.
11. It is alleged that public servants even failed to
take any identity proof of the guarantor on record for the
purposes of establishing his identity as Ram Narayan and
without doing so, sanctioned the credit facilities vide sanction
order dated 26.03.1997 to the extent of :
1. Fund Based : (i) PCL (Hypothecation): Rs.15 lacs.
(against confirmed irrevocable LCs of prime bank.)
(ii) FDBP / FUDBP : Rs.20 lacs (under LC)
(sub limit of Rs.15 lacs on DP basis and Rs.5 lacs
on DA Basis for 90 days.)
2.NonFund Based : (iii) FLC / ILC : Rs.10 Lacs on DP basis.
(sublimit Rs.5 lacs if under DA tenure for 90 days).
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Judgement in the matter of:
(C.B.I. Vs. Rakesh Kumar Bhatia & Ors.)
Dated : 31.01.2014
12. It is alleged that valuation of this property
offered as "collateral security" by the principal borrower and
the alleged guarantor Jiya Lal Arora, who impersonated
himself as Ram Narayan, was got conducted by the bank from
approved valuer ie. accused no.3 Vijender Kumar. It is
alleged that accused Vijender Kumar in furtherance of the
conspiracy had dishonestly valued a different property bearing
no.E7/A10, Krishna Nagar, Delhi, which actually belonged to
one Harbans Lal Sethi and furnished his valuation report with
the bank, showing the said valuation to be of property bearing
plot no.25, Khasra no.634, Mohalla Dillai, Abadi Shiv Nagar,
Shahadara, Delhi.
13. It is further alleged that immediately after
sanction of the initial credit facilities on 26.03.1997, accused
no.1 vide his letter dated 21.05.1997 approached the bank for
additional credit facilities misrepresenting that he had an
export order to the tune of Rs.18 crores. In support of his
C.C.No: 44 / 2011 Page No.9 of 205
Judgement in the matter of:
(C.B.I. Vs. Rakesh Kumar Bhatia & Ors.)
Dated : 31.01.2014
application, he had shown his export turn over during 199697
till the date of submission of his request letter to be Rs.77.35
lacs and had shown sale turn over of Rs.96 lacs, upto
31.03.1997. In his letter, accused no.1 further alleged to have
sent shipment of Rs.36 lacs during AprilMay 1997 and
proposed his export turn over to be of Rs.4 crores.
14. It is alleged that actually the shipment had
taken place after 26.05.1997. It is alleged that accused
A.M.Rai, Manager, FED, accused H.Balakrishna Shetty, Senior
Manager and accused K.Vasanth Kumar Shetty, Manager, did
not ask for clarifications / assessment and recommended the
enhancement of the credit facilities without asking for any
additional collateral security and forwarded the application to
accused no.4 H.Surendra Shetty, AGM who also failed to ask
for any additional collateral security and had also failed to
physically inspect the property offered as collateral security or
to direct his subordinate to do physical verification of the
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Judgement in the matter of:
(C.B.I. Vs. Rakesh Kumar Bhatia & Ors.)
Dated : 31.01.2014
property and sanctioned the additional limits vide sanction
dated 30.05.1997 to the extent of :
(i) PCL (ie. Packing Credit Limit) Rs. 15 lacs to 30 lacs.
(ii) FUDBP / FDBP (ie. Foreign Usance Documentary Bill Purchase /
Foreign Documentary Bill Purchase) limit Rs.20 lacs to Rs.50 lacs.
(iii) FLC / ILC from Rs.15 lacs to Rs.25 lacs.
(ie. Foreign Letter of Credit / Inland Letter of Credit).
15. It is alleged that accused K.Vasanth Kumar
Shetty recommended vide his process note dated 23.03.1997 for
release of "packing credit limit" of Rs.4,60,000/ and of Rs.
6,12,000/ against the L.C of United Bank, Dubai opened by
M/s Cordinal Trading Centre, Dubai in favor of M/s USR
Exports.
16. It is alleged that this L.C. was valid till
07.06.1997 which was got amended by M/s U.S.R Exports till
07.07.1997, but no consignment was sent against this amended
LC and the entire amount was withdrawn by the party.
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Judgement in the matter of:
(C.B.I. Vs. Rakesh Kumar Bhatia & Ors.)
Dated : 31.01.2014
17. It is alleged that on 08.09.1997, third packing
credit limit amounting to Rs.19.25 lacs was released and
credited in current account of M/s U.S.R Exports against an
order from M/s Ismail General Trading Centre, Dubai for
supplies to be made between 06.08.1997 to 06.10.1997. It is
alleged that Rakesh Kumar Bhatia had withdrawn this amount
but did not send any consignment to the buyer through bank.
18. It is alleged that vide another process note
dated 29.09.1997, accused K.Vasanth Kumar Shetty had
recommended for release of Rs.10 lacs against the same buyer
ie. M/s Cordinal Trading Centre, with the delivery period upto
28.02.1998. It is alleged that Rakesh Kumar Bhatia withdrew
this amount as well and failed to submit any bill for export /
shipment for realization from the buyer against the amount
released under Packing Credit Limit by Vijaya Bank.
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Judgement in the matter of:
(C.B.I. Vs. Rakesh Kumar Bhatia & Ors.)
Dated : 31.01.2014
19. It is further alleged that at the time of release
of 4th Packing Credit Limit of Rs.10 lacs on 29.09.1997, seven
FUDBP Bills were due for payments, despite which accused
K.Vasanth Kumar Shetty, recommended the process note for
release of this packing credit limit without raising any query.
20. It is alleged that the accused public servants
were also instrumental in purchase of 8 FUDBPs against the
sanctioned limits of Rs.50 lacs between 10.03.1997 to
10.06.1997 which remained unpaid. The same are as under :
Sl. Bill No. Date Amount in Amount Due Date Paid on
No. US $ in Rupees
1. 401,058 10.03.97. 16,681.5 605,872 27.06.97 Unpaid
2. 401,129 29.05.97 21,560.5 780,059 15.09.97 Unpaid
3. 401,130 29.05.97 15,145.5 547,946 15.09.97 Unpaid
4. 401,131 29.05.97 9,845.5 343,167 15.09.97 Unpaid
5. 401,149 11.06.97 15,440 555,840 28.09.97 Unpaid
6. 401,150 11.06.97 18,108.83 651,919 28.09.97 Unpaid
7. 401,151 11.06.97 21,800 784,800 28.09.97 Unpaid
8. 401,152 11.06.97 14,150 509,434 28.09.97 Unpaid
Total 47,79,039/
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Judgement in the matter of:
(C.B.I. Vs. Rakesh Kumar Bhatia & Ors.)
Dated : 31.01.2014
21. It is alleged that these FUDBPs were
discounted on the basis of "memorandum of sanction" which
were processed by accused H.Balakrishna Shetty and
recommended by accused K.Vasanth Kumar Shetty and
approved by H.Surendra Shetty. It is further alleged that
while recommending the release of fourth banking credit limit
in favor of accused no.1, these accused public servants, failed to
mention that 7 FUDBPs were pending for payment, despite
which they recommended and released the fourth packing
credit limit. It is alleged that all the 8 FUDBPs were returned
back by the concerned bank as the buyer did not make any
payment. It is alleged that the amount against the FUDBPs of
Rs.47.79 lacs was credited in the current account of accused no.
1, which was withdrawn by him. These bills were discounted
on the understanding of furnished documents by accused no.1,
which as per him were exported to the buyer M/s Ismail
General Trading, Dubai, but the buyer did not make any
payment and bills were returned unpaid.
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Judgement in the matter of:
(C.B.I. Vs. Rakesh Kumar Bhatia & Ors.)
Dated : 31.01.2014
22. It is further alleged that against the
sanctioned limit of inland letter of credits following ILCs, were
opened by the bank on request of accused no.1.
(i) H.L.Rakesh Hosiery, Ludhiana on 29.09.97 Rs.2,00,000/
(ii) L.K.Fabrics, Ludhiana on 03.10.97 Rs.7,67,500/
(iii) L.K.Fabrics, Ludhiana on 03.10.97 Rs.6,36,000/
___________________________________________________________________________
Total Rs.16,03,500.00
___________________________________________________________________________
23. It is alleged that opening of these ILCs were
processed by one Ram Nath Bhandari and was recommended
by accused H.Balakrishna Shetty and K.Vasanth Kumar
Shetty. It is alleged that accused Rakesh Bhatia accepted
documents against payment after 90 days against these ILCs
and despite receiving goods against the documents and release
of payment by Vijaya Bank against all the 3 ILCs, accused
Rakesh Kumar Bhatia failed to make payment on the due date
of maturity.
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Judgement in the matter of:
(C.B.I. Vs. Rakesh Kumar Bhatia & Ors.)
Dated : 31.01.2014
24. It is alleged that accused R.K.Bhatia had made
heavy cash withdrawals from his current account bearing no.
5198 which were not properly monitored by accused K.Vasanth
Kumar Shetty. It is alleged that the accused public servants in
order to achieve the object of criminal conspiracy which they
had with accused no.1, facilitated him to misuse the credit
facilities extended to him against a nonexistent collateral
property and that too from a person who impersonated himself
as owner of the property and without asking for the documents
of his identity, permitted to have wrongful gain to accused no.
1, to the extent of approximately Rs.114 lacs, and thereby
causing wrongful loss to the bank.
25. It is alleged that as on date of investigations,
the liability of accused no.1 was as under:
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Judgement in the matter of:
(C.B.I. Vs. Rakesh Kumar Bhatia & Ors.)
Dated : 31.01.2014
Sl.No. Nature of facility Balance Outstanding Accrued Interest
(Rs.) (Rs.)
1. PCL 29,97,000.00 817.820
2. FUDBP 50,16,416.00 1,256,374
3. IAB (LCs) 9,62,005.00 277,615
4. TOD in current a/c 93,883.40 18,605
TOTAL 1,14,39,718.40 2,370.414
26. It is alleged that the bank officers ie. accused
no.4 to 7 being public servants, misconducted themselves,
which resulted in wrongful loss to the bank and caused
pecuniary advantage to coaccused Rakesh Kumar Bhatia to
the extent of Rs.114 lacs. It is alleged that requisite sanction
for prosecution against these public servants were granted by
the competent authority.
27. Whereafter, the present charge sheet was filed
in court against all the accused persons for proceeding against
them, as per law.
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Judgement in the matter of:
(C.B.I. Vs. Rakesh Kumar Bhatia & Ors.)
Dated : 31.01.2014
COGNIZANCE OF OFFENCE:
28. Pursuant to filing of charge sheet and after
perusal of the same in the light of supporting documents,
Ld.Predecessor of this court took cognizance of offence and
accused persons were accordingly summoned.
29. In compliance to the provisions of Section 207
Cr.P.C, the accused persons were supplied with the copies of
charge sheet and documents relied upon by the prosecution.
CHARGE:
30. Ld.Predecessor of this court, after hearing
arguments on charge on behalf of CBI as well as the accused,
vide orders dated 13.02.2003 had opined that primafacie case
for offence punishable under section 120B IPC r/w section 419,
420, 467, 471 IPC and section 13(1) (d) & section 13 (2) of
Prevention of Corruption Act, 1988 is made out against all the
accused persons as well as for substantive offence u/s 13(1) (d)
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Judgement in the matter of:
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Dated : 31.01.2014
r/w section 13(2) of P.C.Act is made out against the public
servants ie. accused H.Surendra Shetty, K.Vasanth Kumar
Shetty, H.Balakrishna Shetty and A.M.Rai.
31. Requisite charge for offence under section
120B IPC r/w section 419, 420, 467, 471 IPC and section
13(1) (d) & section 13 (2) of Prevention of Corruption Act, 1988
against all the accused persons was framed and separate
charge for substantive offence u/s 13(1) (d) r/w section 13(2) of
P.C.Act was framed against accused H.Surendra Shetty,
K.Vasanth Kumar Shetty, H.Balakrishna Shetty and A.M.Rai,
the public servants, which was read over to the accused
persons, to which they pleaded not guilty and claimed trial.
PROSECUTION EVIDENCE:
32. Prosecution was thereafter called upon to
substantiate its case by examining their witnesses, listed in the
list of witnesses, filed along with the charge sheet. Availing the
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Judgement in the matter of:
(C.B.I. Vs. Rakesh Kumar Bhatia & Ors.)
Dated : 31.01.2014
given opportunities, CBI had examined 40 witnesses.
33. The witnesses so examined by the prosecution
can be broadly categorized in 6 categories:
34. First Category is of material witnesses which
consists of the witnesses from Vijaya Bank who have deposed
regarding the procedure with respect to processing of loan
application, documents and reports etc. This category
comprises of :
(i) PW14 Sh.B.R.Chandrashekar, the complainant ;
(ii) PW3 Sh.Vipin Kumar ;
(iii) PW12 Sh.Rajesh Ratan;
(iv) PW15 Sh.M.Sudhakar Shetty ;
(v) PW16 Sh.Ravi Joshi;
(vi) PW20 Sh.K.K.Khurana,
(vii) PW27 Sh.Sudhakar Hegde ;
(viii) PW28 Sh.K.Amarnath Shetty;
(ix) PW33 Sh.Rajive Shetty;
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Judgement in the matter of:
(C.B.I. Vs. Rakesh Kumar Bhatia & Ors.)
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35. Second Category consists of witnesses
examined by the prosecution with respect to the collateral
security offered to the bank in support of loan application. This
category comprises of:
(i) PW1 Sh.O.P.Mahajan, Dy.Assessor & Collector, MCD.
(ii) PW7 Sh.Hakim Rai Arora, Superintendent, MCD.
(iii) PW4 Sh.Anil Kumar, Patwari, SDM Office, Vivek Vihar.
(iv) PW11 Sh.R.P.Gupta;
(v) PW2 Harbans Lal Sethi ;
(vi) PW25 Sh.Des Raj ;
(vii) PW36 Sh.Amit Talwar ;
(viii) PW23 Sh.Ashwani Sharma ;
(ix) PW24 Sh.Jag Mohan Aggarwal ;
(x) PW13 Sh.Shatrughan Poddar,
(xi) PW26 Sh.Mulakh Raj;
(xii) PW5 Sh.Satnam Singh;
(xiii) PW6 Sh.Tilak Kheda ;
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Judgement in the matter of:
(C.B.I. Vs. Rakesh Kumar Bhatia & Ors.)
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36. Third Category consists of those witnesses
who have proved the documents pertaining to M/s USR Exports
and those who were associated with transactions of this firm.
They are as follows:
(i) PW19 Sh.Dharmanand Bhatt;
(ii) PW21 Sh.Shashi Bhushan ;
(iii) PW22 Sh.Leonard D'Souza ;
(iv) PW37 Sh.Ripu Daman Sehgal ;
(v) PW40 Sh.L.S.Rawat ;
37. Fourth Category of witnesses are
miscellaneous witnesses, who were joined during the
investigations by the investigating officer and from whom
documents necessary for investigations were taken into
possession. This category includes :
(i) PW8 Sh.Ravinder Bhatia and PW9 Sh.Kalyan Singh ;
(ii) PW18 Sh.H.K.Srivastava and PW34 Sh.K.K.Khanna,
(iii) PW17 Sh.S.A.Bhambri,
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Judgement in the matter of:
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(iv) PW10 Sh.Nand Kishore Gupta ; PW30 Sh.Mohanan and
PW35 Sh.Suresh Kumar;
38. Fifth Category of the witnesses examined by
the prosecution were those who had given sanction for
prosecution of the accused public servants. This category
includes :
(i) PW28 Sh.Amarnath Shetty ; General Manager
(Personnel),Head Office, Vijaya Bank, Bangalore: who had
given sanction for prosecution with respect to accused
K.Vasanth Kumar Shetty ;
(ii) PW29 Sh.K.Jayakar Shetty; Deputy General Manager
Personnel Department, IRD, Head Office, Vijaya Bank,
Bangalore who had given sanction for prosecution with respect
to accused H.Balakrishna Shetty and accused A.Maillappa Rai;
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Judgement in the matter of:
(C.B.I. Vs. Rakesh Kumar Bhatia & Ors.)
Dated : 31.01.2014
(iii) PW31 Sh.Miachel Bastian ; Executive Director, Vijaya
Bank, Head Office, Bangalore, who had given sanction to
prosecute accused H.Surendra Shetty.
39. Sixth Category of witnesses includes those
who remained associated with the investigations of the
present case in one form or the other, including the
investigating officer and the scientific expert. This category
consists of :
(i) PW32 Sh.V.K.Khanna, Principal Scientific Officer, CFSL.
(ii) PW39 Sh.S.S.Atwal, the investigating officer.
40. Before proceeding further, it is pertinent to
make a brief mention of the role and deposition of the
prosecution witnesses category wise, as referred hereinabove.
The detail deposition of the witnesses is not being adverted to,
as the same shall be referred hereinafter while dealing with the
necessary ingredients of the offence, with which accused have
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Judgement in the matter of:
(C.B.I. Vs. Rakesh Kumar Bhatia & Ors.)
Dated : 31.01.2014
been charged, visavis the rival contentions advanced by
Ld.Special PP for CBI, as well as by Ld.Defence Counsels for
the accused persons.
41. Most of the prosecution witnesses were cross
examined in detail by Ld.Defence Counsels, who were ably
assisted by battery of their respective associates. The cross
examination of these witnesses is not being mentioned for the
sake of brevity, but the same and material portion thereof,
more particularly, the one referred to during the course of
arguments, shall be adverted to hereinafter, while appreciating
the legal and factual issues raised on behalf of the accused,
alongside appreciation of evidence in entirety.
FIRST SET OF WITNESSES:
42. PW3 Vipin Kumar, Assets Recovery
Manager posted with Vijaya Bank deposed that in July' 1998,
he was deputed to inspect property i.e. plot no. 25, Khasra no.
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Judgement in the matter of:
(C.B.I. Vs. Rakesh Kumar Bhatia & Ors.)
Dated : 31.01.2014
634, Village Dillai, Abadi Shiv Nagar, Shahdara, standing in
the name of Ram Narayan, guarantor as per record of the bank
by Sh. Rajiv Shetty, AGM. He deposed that he went to the
locality but could not locate the property nor he could locate
Ram Narayan, guarantor as no such person was residing there.
He deposed that he contacted the approved valuer of the bank
Vijender Kumar, who also expressed his inability to locate the
property and he accordingly submitted his report Ex. PW3/1 to
the AGM.
43. PW12 Sh.Rajesh Rattan, Advocate, Panel
Lawyer of Vijaya Bank appeared in the witness box and
deposed that on verbal instructions of the bank in February'99,
he had submitted his legal report Ex. PW12/B with respect to
plot no. 25, Khasra no. 634, Village Dillai, Abadi Shiv Nagar,
Shahdara. He deposed that he was given photocopies with
respect to this property i.e. the report submitted by registered
valuer Vijender Kumar and the Panel Lawyer K.K.Khurana.
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He deposed that he inspected the area but could not locate such
plot. He deposed that on local inquiry, he found that no such
plot existed there in the name of any Ram Narayan. He
further deposed of having visited the office of Patwari, who
disclosed that this Khasra has been divided into 35 parts and
no portion of this Khasra existed in the name of Ram Narayan.
He deposed that he had visited the SubRegistrar office and
inspected the records vide receipt Ex. PW12/A and found the
sale deed registered in the office of SubRegistrar with respect
to this plot.
44. PW20 Sh.K.K.Khurana, Panel Lawyer of
Vijaya Bank appeared and deposed that he was entrusted to
give legal scrutiny report with respect to property i.e. plot no.
25, Khasra no. 634, Village Dillai, Abadi Shiv Nagar,
Shahdara, purportedly standing in the name of Ram Narayan.
He deposed that he gave the legal report dated 17.12.1996 Ex.
PW15/A70 and Ex. PW15/DA1, pertaining to this property.
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He deposed that he also gave "Nil Encumbrances Certificate"
Ex. PW20/A. He deposed that the sale deed was duly
registered with respect to this plot with the office of Sub
Registrar. He deposed that he himself had not physically
verified this property as the same was not required.
45. PW16 Ravi Joshi, Manager, Vijaya Bank
appeared and deposed that "XOS" is the statement of "overdue
export bills" for which payment has not been received from the
parties. He deposed that "XOS" statement is reported to
Reserve Bank of India. He deposed that in the case of M/s
USR Exports, the matter was reported to RBI vide letters Ex.
PW16/1 and Ex. PW16/2.
46. PW27 Sh.Sudhakar Hegde, Chief Manager
with Vijaya Bank, appeared in the witness box and narrated
the procedural aspects with respect to submission of
application for grant of credit facility, the mode and method
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vide which it is processed, recommended and approved by the
sanctioning authorities.
47. PW38 G.K.Bhatt, Senior Manager working
with Foreign Exchange Department of Vijaya Bank deposed
that during the course of his tenure CBI had conducted
investigations with respect to present case and had taken into
possession documents, which the bank was maintaining during
the regular course of its business vide seizure memo Ex.
PW38/A, Ex. PW38/B and Ex. PW38/C. He deposed that the
file pertaining to loan application of M/s USR Exports is Ex.
PW33/A and the loan application is Ex. PW33/B which was
processed vide Process Note Ex. PW33/C and was sanctioned
by the then Chief Manager. He deposed that against the credit
limit, party had offered collateral security in the form of
property situated at plot no. 25, Khasra no. 634, Village Dillai,
Abadi Shiv Nagar, Shahdara, which was mortgaged on
04.01.1997. He deposed that valuer of the bank gave his report
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Ex. PW32/G29. This witness deposed that M/s USR Exports
vide letter Ex. PW33/D had sought additional credit facility
and bank vide letter dated 30.05.1997 inform the party that
they had been granted additional credit facility of Rs.55 lacs.
He deposed that legal report submitted by the Panel Lawyer
Sh. Rajesh Rattan is Ex. PW12/B alongwith receipt Ex.
PW12/A which is part of the file. He deposed that certified
copy of packing credit loan register and other documents
maintained by the bank were handed over to CBI. Certified
copy of Packing Credit Loan Register Ex. PW38/D, copy of
Letter Credit Register Mark Y, certified copy of Bill Liability
Register Ex. PW38/E, Liability Register of Letter of Credit Ex.
PW38/F, certified copy of Bill Liability Register Ex. PW38/G
and Packing Credit Liability Register Ex. PW38/H were also
handed over to CBI. He went on to depose that on query of
CBI, Sh. Rajiv Shetty, the then AGM informed CBI about
duties of various functionaries vide letter Ex. PW38/I.
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48. PW14 Complainant Sh.
B.R.Chandrashekhar, appeared and deposed that on
08.03.1999, he while being posted as Chief Vigilance Officer
with Vijaya Bank had made a complaint Ex.PW.14/A to CBI, on
the grounds that M/s USR Exports had taken credit facilities
from Vijaya Bank, on the basis of forged and bogus collateral
security.
49. PW15 Sudhakar Shetty, Chief Manager
Vijaya Bank appeared and deposed that in the year 1999 he
was posted as Senior Manager, Foreign Exchange Cell,
Barakhamba Road Branch. He deposed that on instructions
from higher authorities he had conducted inspection of account
of M/s USR Exports. He deposed that on inspection he found
that M/s USR Exports had applied for export credit facilities
with Vijaya Bank in November 1996. He further deposed that
accused company ie. M/s USR Export vide application Ex.PW.
15/A had submitted balance sheets and assets and liabilities
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statement with the bank. PW15 further deposed that during
inspection he had examined various documents of the accused
company comprising of various balance sheets and statement of
assets and liabilities ie. Ex.PW.15/A1 to Ex.PW.15/A6. PW15
deposed that on conclusion of investigations, he had submitted
his report to the higher authorities Ex.PW.15/A8 vide
forwarding letter Ex.PW.15/A7 on 14.08.1999.
50. PW15 deposed that accused no.7 A.M.Rai
processed first application of accused no.1 Rakesh Kr.Bhatia
seeking credit facilities and had prepared a process note dated
22.01.1997 Ex.PW.15/A9 which was put up before accused
H.Balakrishna Shetty, Senior Manager who forwarded it to
accused K.Vasanth Kumar Shetty which was finally sent for
approval to accused H.Surendra Shetty, AGM. PW15 further
deposed that the said process note was again reverted back to
accused K.Vasanth Kumar Shetty for approval as the amount
sought to be sanctioned was within his financial powers as per
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circular dated 01.02.2007. PW15 during the course of his
deposition further stated that on receipt of said process note
K.Vasanth Kumar Shetty, had approved the same on
26.03.1997 and requisite packing credit limit was granted to
accused company ie. M/s USR Exports.
51. PW15 during the course of his deposition
further deposed that before sanctioning the loan amount, legal
opinion and valuation report was sought from the Panel
Lawyer and Valuer of the bank viz. K.K.Khurana and Vijender
Kumar. He deposed that after sanction of the loan, documents
Ex.PW.15/A10 to Ex.PW.15/A13 were executed by accused no.
1 Rakesh Kumar Bhatia on 26.03.1997 which bears his
signatures. PW15 further deposed that documents Ex.PW.
15/A14 to Ex.PW.15/A21 for grant of packing credit limit were
also executed by accused no.1 on 26.03.1997 which bears
signatures of accused no.1 and accused no.2 being borrower and
guarantor respectively.
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52. PW15 further deposed that the property
which was offered as collateral security finds mention on the
process note Ex.PW.15/A9, which was mortgaged with the
bank on 04.01.1997 by depositing the title deeds. He further
deposed that after furnishing of title deeds, bills were furnished
with the bank for discounting, which were purchased on behalf
of the bank on the basis of deposit of title deeds. PW15 further
deposed that vide request letter dated 21.05.1997 Ex.PW.
15/A22 which was processed by A.M.Rai and was submitted to
accused H.Balakrishna Shetty, who forwarded it to accused
K.Vasanth Kumar Shetty for approval was finally approved b y
accused H.Surendra Shetty on 29.05.1997 which bears
signatures of these accused persons at point A to D
respectively. This witness went on to depose that vide
memorandum of sanction Ex.PW.15/A23 fresh bills were
purchased under enhanced limit on 29.05.1997 and 10.06.1997.
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53. PW15 Sudhakar Shetty deposed that vide
another memorandum of sanction dated 10.06.1997 Ex.PW.
15/A24, fresh bills amounting to Rs.25.02 lacs were purchased
by the bank which were approved by H.Balakrishna Shetty,
K.Vasathan Kumar Shetty and H.Surendra Shetty.
54. PW15 went on to depose that first packing
credit limit of Rs.4,60,000/ was released to accused R.K.Bhatia
on the basis of letter of credit of United Bank Limited, Dubai in
the name of M/s Cordinal Trading Dubai and a promissory note
dated 26.03.1997 to that effect Ex.PW.15/A25 was issued. He
further deposed that on fresh application for release of further
credit limit of Rs.6,12,000/ filed by the accused, another
process note Ex.PW.15/A26 was prepared which was signed by
the H.Balakrishna Shetty, K.Vasanth Kumar Shetty and
H.Surendra Shetty at Points B, C and D respectively, request
letter of which is Ex.PW.15/A27.
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55. PW15 further deposed that accused
R.K.Bhatia submitted a request dated 08.09.1997 Ex.PW.
15/A28 for release of packing credit limit of Rs.20 lacs which
was approved and corresponding promissory note Ex.PW.
15/A29 was executed by him.
56. PW15 further deposed that vide request letter
dated 26.09.1997 Ex.PW.15/A30, a request for release of
packing credit limit amount to Rs.10 lacs was made by accused
company, which was processed on 29.09.1997 vide process note
Ex.PW.15/A31 and a promissory note dated 29.09.1997 Ex.PW.
15/A32 was executed by accused R.K.Bhatia at point A. This
witness further deposed that on receipt of another request
letter Ex.PW.15A/33 of accused R.K.Bhatia ; a process note
Ex.PW.15/A34 was prepared which was signed by accused
H.Balakrishna Shetty ; K.Vasanth Kumar Shetty and
H.Surendra Shetty.
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57. This witness went on to depose that vide
request letter Ex.PW.15/A35 dated 20.09.1997, accused
company had requested for opening of fresh LC amounting to
Rs.2 lacs in favor of M/s H.L.Rakesh Hosiery which was
processed vide process note dated 29.09.1997 Ex.PW.15/A36 by
Ram Nath Assistant Manager and was routed through
H.Balakrishna Shetty and K.Vasanth Kumar Shetty and was
finally approved by Ravi Raj Shetty.
58. PW15 further deposed that vide application
Ex.PW.15/A37 and Ex.PW.15/A38, accused Rakesh Kumar
had requested for opening of two fresh LCs which was
processed vide note Ex.PW.15/A39 dated 03.10.1997. PW15
further deposed that vide two separate application forms
Ex.PW.15/A40 and Ex.PW.15/A41, a request for opening of
two LCs amounting to Rs.7,67,000/ and Rs.6,36,000/ was
made with the bank by accused no.1 Rakesh Kumar Bhatia.
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59. PW15 Sudhakar Shetty went on to depose
that on inspection of the present case, he found that at the time
of enhancement of credit facilities, no additional securities were
insisted by the accused bank officials. He further deposed that
out of the 4 Packing credit Limits released to the accused, only
one was adjusted and remaining 3 became overdue showing a
balance of rs.29,97,000/ vide statement of account Ex.PW.
15/A42 which was certified by Sudhakar Hegde vide Ex.PW.
15/A43. He further deposed that along with statement of
account Ex.PW.15/A43, Sudhakar Hegde, had also submitted
certified statement of account with respect to cristalized export
bills as Ex.PW.15/A4.
60. This witness went on to depose that as per
circular dated 06.11.1996 bearing no.191/96, it was made
mandatory for the Branch Manager to inspect the property
offered as collateral security. PW15 further proved a letter of
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Chief Vigilance Officer dated 06.12.2000 furnishing banking
pattern and hierarchy of officers in category of branches. PW1
deposed that vide seizure memo Ex.PW.15/A47, extracts of
Manual on Credit Management Guidelines issued by Vijaya
Bank as Ex.PW.15/A48 were taken into possession by the IO.
This witness while explaining the banking pattern went on to
depose that as per guidelines Ex.PW.15/A48, it was incumbent
upon the bank officers not to enhance the credit facilities
without proper justification.
61. PW15 deposed that as per statement
furnishing details of unpaid bills Ex.PW.15/A49, 7 bills
Ex.PW.15/A51 to Ex.PW.15/A57 were submitted by accused
Rakesh Kumar Bhatia on various dates.
62. PW15 Sudhakar Shetty during the course of
his deposition had stated that vide 7 Bills of Exchange Ex.PW.
15/A58 ; Ex.PW.15/A60 ; Ex.PW.15/A62 ; Ex.PW.15/A63 ;
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Ex.PW.15/A65 ; Ex.PW.15/A67 ; Ex.PW.15/A69, the same
were accepted by the foreign bank vide Ex.PW.15/A59 ;
Ex.PW.15/A61 ; Ex.PW.15/A62 ; Ex.PW.15/A64 ; Ex.PW.
15/A66 and Ex.PW.15/A68. This witness deposed that all the
abovementioned bills were returned unpaid by the foreign
buyer and the intimation thereof, was given to the bank vide
letter Ex.PW.15/A50.
63. PW15 went on to depose that cash
withdrawals were allowed to the accused against packing credit
loan. This witness further deposed that a legal opinion was
sought by the bank from their panel lawyer Sh.K.K.Khurana
which was furnished vide Ex.PW.15/A70. PW15 further
deposed that thereafter a subsequent opinion was obtained
from another lawyer Sh.Rajesh Rattan who furnished his
report Ex.PW.12/3. PW15 deposed that an officer Vipin Kumar
Manager was deputed to inspect the collateral property offered
by the accused, who could not locate the same and submitted
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his report to that effect as Ex.PW.3/1.
64. PW33 Rajiv Shetty appeared and deposed
that in the year 1999, he was working as AGM with Vijaya
Bank. He deposed that complaint was filed by Chief Vigilance
Officer of their bank with respect to the fraud committed with
the bank by proprietor of M/s USR Exports. He deposed that
accused A.M.Rai was posted as Manager, accused
H.Balakrishna Shetty as Senior Manager, accused K.Vasanth
Kumar Shetty as Chief Manager with Vijaya Bank. He
deposed that as per delegated powers, Chief Manager has the
power to sanction secured loan to the extent of Rs.80 lacs and
unsecured loans to the extent of Rs.15 lacs and AGM can
sanction secured loan to the extent of Rs.200 lacs and
unsecured loan to the extent of Rs.40 lacs. He deposed that M/s
USR Exports vide their application dated 24.11.1996 had
applied for credit facilities and the credit file is Ex.PW.33/A.
He deposed that for the credit facility this firm had offered
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security of property of one Ram Narayan and guarantee of said
person. He deposed that the loan application is Ex.PW.33/B
along with which the supporting documents Ex.PW.32/E11 to
Ex.PW.32/E15 and Ex.PW.32/G13 and Ex.PW.15/A were filed.
65. He corroborating the facts deposed by PW15,
went on to depose that the application of M/s USR Export was
processed by accused A.Maillappa Rai, H.Balakrishna Shetty
and K.Vasanth Kumar Shetty, whose signatures are there in
the file. He deposed that process note is Ex.PW.33/C which was
earlier exhibited as Ex.PW.15/A9. He deposed that accused
K.Vasanth Kumar Shetty vide sanction order dated 20.03.1997
had sanctioned the loan facilities.
66. He deposed that on 21.05.1997, M/s USR
Exports had applied for additional credit facilities vide request
letter Ex.PW.33/D. He deposed that this application was
process vide process note Ex.PW.15/A22 by accused A.M.Rai,
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H.Balakrishna Shetty and K.Vasanth Kumar Shetty and the
same was sanctioned by H.Surendra Shetty. He deposed that
the additional facilities sanctioned by the bank were
guaranteed by same guarantor Ram Narayan. He deposed that
the documents Ex.PW.15/A10 to Ex.PW.15/A21 were executed
in favor of the bank, besides which letter of guarantee Ex.PW.
32/C1 to Ex.PW.32/C6 were executed by Rakesh Bhatia and
the alleged guarantor Ram Narayan.
67. He deposed that the certificate of loan papers
and compliance of the terms and conditions was issued by
H.Balakrishna Shetty which is Ex.PW.33/D.
68. PW33 deposed that the credit facility
sanctioned to M/s USR Exports became irregular. He deposed
that the collateral security was found to be not existing. He
deposed that the bank deputed an officer to verify the collateral
security, but the same was found to be not available and the
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concerned officer submitted his report Ex.PW.3/1.
69. PW33 deposed that thereafter another panel
lawyer Sh.Rajeev Ratan was asked to furnish report, who
submitted his report Ex.PW.12/2 and Ex.PW.12/3 as per which
no person by the name of Ram Narayan was in existence, nor
the property was found to be in existence.
70. PW33 further deposed that the property was
valued by the empanelled valuer Vijender Kumar, who
submitted his report dated 02.01.1997 Ex.PW.32/G29 with
respect to a nonexistent property. He deposed that Vijender
Kumar was then given a notice by the bank Ex.PW.33/G.
PW33 deposed that the export bill submitted to the foreign
bank by Vijaya Bank, were returned unpaid.
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SECOND SET OF WITNESSES:
71. PW1 Sh.O.P.Mahajan, Dy. Assessor and
Collector, MCD, Shahdara South Zone, appeared and deposed
that the House Tax Receipt no. 1458943 dated 14.05.1993 for
Rs.4610/ purportedly issued in the name of Ram Narayan for
property situated in Khasra no. 644, Shiv Nagar, Shahdara i.e.
Ex. PW1/1 is a forged receipt as no such receipt was issued
from their department. He deposed that the receipt number,
on the genuine receipts issued by MCD are always printed and
are not handwritten. He deposed that he had informed about
this forged receipt to CBI vide his letter Ex. PW1/2.
72. PW1 was cross examined on behalf of accused
no. 3, wherein he stated that there can be more than one
property in one khasra number. He also stated that he had not
received any inquiry regarding this receipt from any bank.
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73. PW7 Hakim Rai Arora, Superintendent,
House Tax Department of MCD Shahdara North also
corroborated the facts deposed by PW1 and stated that Ex.
PW1/1 is not a genuine receipt and was not issued by MCD.
He deposed that receipt numbers are always printed on the
genuine receipts and the same are issued giving specific
property number and not by just mentioning the khasra
numbers. He deposed that this fact was brought to the notice
of CBI during investigations vide letter Ex. PW7/2, written by
Dy. Assessor and Collector Mr. Guru Dutt. This witness was
not at all cross examined by accused persons.
74. PW4 Anil Kumar, Patwari from the office
of SDM, Vivek Vihar, appeared and deposed that he maintains
the record of Khasra no. 634 of Village Chandrawali. He
deposed that pursuant to receipt of inquiry from the
Investigating Officer, the SDM had given the requisite
information vide letter Ex. PW4/1 alongwith the report Ex.
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PW4/2 prepared by him on the basis of records maintained.
He deposed that this report was sent to CBI pursuant to the
requisition received from CBI vide letter Ex. PW4/3. He
deposed that khasra no. 634 of Village Chandrawali was
divided in the year 1960 under mutation. Copy of which is Ex.
PW4/4. He deposed that the same does not find mention of
any Charan Dass or Ram Narayan in it.
75. PW11 Sh. R.P.Gupta, a notary deposed that
the Affidavit mark PA was never attested by him and the
initials appearing on this affidavit are not his. He deposed that
he had given specimen of his initials to the Investigating
Officer during investigations which are Ex. PW11/A1 to Ex.
PW11/A9. This witness was not at all cross examined on
behalf of accused persons.
76. PW2 Harbans Lal Sethi appeared and
deposed that property no. E7/A10, Krishna Nagar was owned
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by his mother. He deposed that it is a three storied building
which is occupied by him and his brothers. He deposed that he
never got this property valued from anyone at any point of
time.
77. PW25 Desh Raj, one of the occupants of shop
in the property bearing no. E7/A10, Sethi Building, Krishna
Nagar, appeared and deposed that he is running a tent house
by the name of M/s Khurana Tent House since 1983. He
deposed that no person by the name of Ram Narayan lives in
this building nor said person has any property in that area.
He deposed that this property belongs to one Vidya Prakash
Sethi.
78. PW36 Amit Talwar, occupant of property
bearing no. E7/A10, Sethi Building, Krishna Nagar, appeared
and deposed that he is residing in this property since 1990
which was earlier owned by his maternal grandfather. He
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deposed that his family and family of his Massi's are residing in
this property. He deposed that no valuer had visited this
property for carrying out any valuation. He also deposed that
there were four tenants residing in this building.
79. PW23 Ashwani Sharma, deposed that
property bearing no. 45/2, Azad Nagar, Krishna Nagar, was
earlier owned by his father in law and at present this property
is owned by his wife. He deposed that this property was
purchased by his father in law through Power of Attorney in
1998 from one Sunny Kalra and he proved the document as Ex.
PW23/A to Ex. PW23/F.
80. PW24 Jagmohan Aggarwal appeared and
deposed that property bearing no. A45/2, East Azad Nagar,
Shahadara is owned by his mother and three brothers vide
documents Ex. PW24/A, Ex. PW24/B & Ex. PW24/C which
were purchased by them from one Abid Ali through his
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attorney Desh Raj. This witness on being cross examined
stated that he had brought the documents pertaining to
property situated in Khasra no. 634/7 which is a built up
property and he cannot state the present market value of the
same.
81. PW5 Sh. Satnam Singh, deposed that he is
residing in the area of old Tejab Mill, Shahdara since his
childhood and is aware of all the residents. He deposed that no
person by the name of Ram Narayan S/o Raj Narayan lives in
this locality. He deposed that there is only one Ram Narayan
in this area whose father's name is Laxman Dass. He deposed
that as per the electoral roll Ex. PW5/1 no person by the name
of Ram Narayan S/o Raj Narayan is residing in the said area.
82. PW6 Tilak Kheda corroborated the facts
stated by PW5 and both these witnesses were not at all cross
examined on behalf of the accused persons.
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Judgement in the matter of:
(C.B.I. Vs. Rakesh Kumar Bhatia & Ors.)
Dated : 31.01.2014
83. PW13 Shatrughan Poddar appeared and
deposed that in the year 2000 he was working as Record
Keeper in the office of SubRegistrar, Kashmeri Gate. He
deposed that a sale deed at Sl. No. 3028 in Additional Book No.
1, Volume 1510 dated 31.01.1966 Ex. PW13/B is registered
pertaining to plot no. 25, situated in Khasra no. 634, Village
Dillai, Abadi Shiv Nagar, Shahdara, and the same was
executed by one Charan Dass in favour of Ram Narayan R/o
Old Tejab Mill, Bhola Nath Nagar, Shahdara. This witness
was not at all cross examined.
84. PW26 Mulakh Raj appeared and deposed
that sale deed Ex. PW26/A with respect to plot no. 25, Khasra
634 was witnessed by him which was got signed at his shop and
he had not gone to the office of Sub Registrar for the same. On
being cross examined, this witness stated that he had signed
this document without going through its contentions and at
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Judgement in the matter of:
(C.B.I. Vs. Rakesh Kumar Bhatia & Ors.)
Dated : 31.01.2014
instance of one Charan Dass. He deposed that he cannot tell if
the said property belonged to Charan Dass or not.
THIRD SET OF WITNESSES:
85. PW19 Sh. Dharama Nath Bhatt deposed
that he was working as Clearing Agent with M/s Rawat Air
Linkers and Sh.P.D.Eshwaran was his Clearing House Agent.
He deposed that the GR Forms Ex. PW1/1 to Ex. PW1/11
pertaining to different dates from 21.05.1997 to 30.05.1997
pertains to M/s USR Exports which were signed by him.
86. PW40 L.S.Rawat deposed that he was
working as Cargo Clearing Agent under the name of M/s Rawat
Air Linkers after having license from P.D. Eshwaran from
"Licensed Custom Clearing Agent". He deposed that D.N.Bhatt
was his employee and on his request P.D.Eshwaran had
authorized D.N.Bhatt to get Custom Clearance. This witness
corroborated the facts deposed by PW19 and stated that vide
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Judgement in the matter of:
(C.B.I. Vs. Rakesh Kumar Bhatia & Ors.)
Dated : 31.01.2014
GR Form Ex. PW19/1 to Ex. PW19/9 & Ex. PW19/11, the
goods were sent by M/s USR Exports and as per this GR Form,
the consignee was M/s V.K.International and destination was
Moscow. He deposed that vide GR Form Ex. PW19/10, the
goods were sent by M/s USR Exports to consignee M/s
Turgeneva Kristina, & destination was Tashkent. This
witness was not at all cross examined.
87. PW22 Leonard D'Souza deposed that he
was working as Accountant with GSA of Uzbekistan Airways.
He deposed that M/s USR Exports had exported the
consignment vide Airway bill no. 25000066113 dated
26.05.1997 to Tashkent, Uzbekistan which is Ex. PW22/1, copy
of G.R. Form is Ex. PW22/2 and copy of shipping bill is Ex.
PW22/3.
88. PW21 Sh.S.B.Shori, Chartered Accountant
of M/s USR Exports appeared and deposed that he had
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Judgement in the matter of:
(C.B.I. Vs. Rakesh Kumar Bhatia & Ors.)
Dated : 31.01.2014
prepared the balance sheet for the period ending 06.12.1996
Ex. PW15/A1, Trading profit and loss account for the period
ending 31.03.1996 Ex. PW15/A2, Trading profit and loss
account for the period ending 31.03.1995 Ex. PW15/A3,
monthly loss and purchase statement of M/s USR Exports
furnished on 09.12.1996 Ex. PW21/2, projected balance sheet
for the period 31.03.1997 and 31.03.1998 Ex. PW15/A4. He
deposed that he had issued a certificate dated 16.01.1997 Ex.
PW21/1 and had received the payment from Rakesh Kumar
Bhatia against his bills Ex. PW21/3, Ex. PW21/4, Ex.
PW21/5 and Ex. PW21/6 for the purposes of preparing these
balance sheets. He deposed that he had prepared these balance
sheets on the basis of record furnished to him by Rakesh
Kumar Bhatia. This witness was not at all cross examined on
behalf of accused persons.
89. PW37 Ripu Daman Sehgal appeared and
deposed that he was working as part time accountant with M/s
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Judgement in the matter of:
(C.B.I. Vs. Rakesh Kumar Bhatia & Ors.)
Dated : 31.01.2014
USR Export, the firm of accused R.K.Bhatia in the year 1995
and used to keep the accounts of this firm. He deposed that
during the course of investigations CBI had taken into
possession certain documents of M/s USR Exports vide seizure
memo Ex. PW37/A, which includes the document Ex. PW30/A,
receipt of M/s Blue Dart vide which some documents were sent
by M/s USR Export Ex. PW37/B, file Ex. PW37/C and another
file Ex. PW37/E. PW37 further deposed that he identifies
signatures of accused Rakesh Kumar Bhatia having worked
with him on Ex. PW32/G13, Ex. PW15/A, Ex. PW21/2, Ex.
PW15/A4 as well as on Ex. PW37/D1 to Ex. PW37/D9. He
further identified signatures of accused R.K.Bhatia on Ex.
PW15/A30, Ex. PW32/G20, Ex. PW15/A27, Ex. PW32/G24,
Ex. PW32/G25, Ex. PW15/A10, Ex. PW15/A11, Ex.
PW15/A12 to Ex. PW15/A21. He further identified his
signatures on Ex. PW32/G1, Ex. PW32/G21, Ex. PW37/D10,
Ex. PW37/D11, Ex. PW37/D12, Ex. PW37/D13, Ex.
PW32/F95, Ex. PW32/G28 to Ex. PW15/A40 and Ex.
PW15/A41. PW37 also identified signatures of R.K.Bhatia on
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Judgement in the matter of:
(C.B.I. Vs. Rakesh Kumar Bhatia & Ors.)
Dated : 31.01.2014
cheques Ex. PW32/F36, Ex. PW32/F52, Ex. PW32/F64, Ex.
PW32/F79, Ex. PW32/F84, Ex. PW32/F85, Ex. PW32/F86,
Ex. PW32/F48, Ex. PW32/F53, Ex. PW32/F54, Ex.
PW32/F60 and Ex. PW32/A94.
FOURTH SET OF WITNESSES:
90. PW8 Sh. Ravinder Bhatia, A.G.M., Canara
Bank, deposed that he had joined investigations with the
Investigating Officer on 30.05.2002 during which IO had taken
specimen signatures and handwriting of accused Jiya Lal Arora
Ex. PW8/1 to Ex. PW8/30 and of accused R.K.Bhatia on Ex.
PW8/31 to Ex. PW8/79. He deposed that he signed all these
sheets as a witness at point A. This witness was not at all
cross examined on behalf of accused persons.
91. PW9 Kalyan Singh, Manager, SBI,
corroborated the deposition made by PW8 and stated that he
also joined investigations and signed sheets on which specimen
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(C.B.I. Vs. Rakesh Kumar Bhatia & Ors.)
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signatures and handwriting were taken at point B. This
witness was also not at all cross examined on behalf of accused
persons.
92. PW17 S.A.Bambari from Bank of Baroda,
appeared and deposed that he joined investigations with
Investigating Officer during the course of which Investigating
Officer had taken specimen signatures of accused Vijender
Kumar Ex. PW17/1 to Ex. PW17/7 which he signed as a
witness at point A. This witness was not at all cross examined
on behalf of the accused persons.
93. PW18 Sh. H.K.Srivastava, Sr. Manager
from Bank of Baroda, deposed that he joined investigations
with Investigating Officer during which IO had taken specimen
signatures of D.N.Goel on Ex. PW18/1 to Ex. PW18/11 and
specimen signatures of accused Jiya Lal as 'Ram Narayan' on
Ex. PW18/12 to Ex. PW18/27 which he signed as a witness at
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Judgement in the matter of:
(C.B.I. Vs. Rakesh Kumar Bhatia & Ors.)
Dated : 31.01.2014
point A.
94. PW34 Sh. K.K.Khanna, Dy. Manager, SBI,
corroborated the version given on record by PW18 and stated
that on 03.05.2000 Investigating Officer had taken specimen
signatures of accused Jiya Lal on Ex. PW18/12 to Ex.
PW18/27 on which he signed as a witness at point B.
95. PW10 Nand Kishore Gupta, Partner of M/s
Union Roadways Corporation, appeared and deposed that he is
Partner of M/s Union Roadways Corporation and is in the
business of transporting goods to various places. He deposed
that the consignment notes Ex. PW10/1 & Ex. PW10/2 were
issued by their firm alongwith corresponding receipts for Rs.
16,225/ and Rs.28,425/ Ex. PW10/3 & Ex. PW10/4, on
request of A.M.Rai as he required the same for getting
reimbursement from his bank. He deposed that he got these
receipts issued from his employee Mohnan and Suresh Kumar.
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Judgement in the matter of:
(C.B.I. Vs. Rakesh Kumar Bhatia & Ors.)
Dated : 31.01.2014
He deposed that the consignment note Ex. PW10/5 and Ex.
PW10/6 dated 06.06.1997 and of July'1997 alongwith its
corresponding receipts Ex. PW10/7 and Ex. PW10/8 were also
issued by their firm. He deposed that he had not received any
payment from A.M.Rai against these cash receipts and no
goods were transported by their firm. He deposed that their
firm is approved carrier of Indian Banks Association and the
employees of the bank can get reimbursement, if the
consignment note and receipts are issued by their company. He
deposed that he had issued these consignment notes and
receipts on telephonic request of A.M.Rai which were collected
from his house by accused Rakesh Kumar Bhatia. He deposed
that these documents were taken into possession vide seizure
memo Ex. PW10/9.
96. PW30 Mohanan and PW35 Suresh Kumar
corroborated the version given on record by PW10. Both of
them deposed that they were working with M/s Union
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Roadways Corporation. Both of them deposed that the
consignment note Ex. PW10/1 and Ex. PW10/2 were issued by
them alongwith corresponding cash receipts Ex. PW10/3 and
Ex. PW10/4 which were again exhibited as Ex. PW30/A to Ex.
PW30/D. They deposed that these documents were issued by
them on instructions of the partner of the firm PW10 Nand
Kishore Gupta.
FIFTH SET OF WITNESSES:
97. PW28 Sh. K.Amarnath Shetty, deposed
that on 07.09.2001, he was posted as G.M. (Personnel) with
Vijaya Bank Head office. He deposed that CBI on conclusion of
investigations had submitted its report including statement of
witnesses recorded by them alongwith the documentary
evidence. He deposed that he being the competent authority to
remove accused K.Vasanth Kumar Shetty, who was then
posted as Chief Manager, had gone through the entire record
placed before him and after satisfying himself that the same is
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Judgement in the matter of:
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sufficient for prosecution against accused, passed sanction
order for prosecution against accused K.Vasanth Kumar Shetty
Ex. PW28/A.
98. PW29 Sh.K.Jayakar Shetty, deposed that
on 01.09.2001 he was posted as Deputy G.M (Personnel), Vijaya
Bank, Head office, Bangalore. He deposed that at that time a
report submitted by CBI after conclusion of investigations
including the documents collected by them during the course of
investigations as well as statement of witnesses was placed
before him. He deposed that he being the authority competent
to remove H.Bala Krishna Shetty and A.M.Rai posted as Sr.
Manager and Manager respectively with Vijaya Bank, and
after satisfying himself that material placed on record is
sufficient to proceed against them, had passed sanction for
prosecution against accused H.Bala Krishna Shetty which is
Ex. PW29/A and against A.M.Rai which is Ex. PW29/B.
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Judgement in the matter of:
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99. PW31 Sh.Miachel Bastian deposed that in
the year 2001 he was posted as Executive Director of Vijaya
Bank. He deposed that at that time CBI on conclusion of
investigations had submitted a report alongwith oral and
documentary evidence collected by them during the course of
investigations seeking sanction for prosecution. He deposed
that he being the competent authority, competent to remove H.
Surendra Shetty, who was posted as Dy.General Manager with
Vijaya Bank and was earlier posted as AGM, and after
satisfying himself that material placed on record is sufficient to
proceed against him, had passed sanction for prosecution
against accused H. Surendra Shetty, which is Ex. PW31/A.
SIXTH SET OF WITNESSES:
100. PW32 V.K.Khanna, Principal Scientific
Officer from CFSL appeared and deposed that CBI had
submitted certain questioned documents for comparison with
the admitted and specimen handwriting. He deposed that
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Judgement in the matter of:
(C.B.I. Vs. Rakesh Kumar Bhatia & Ors.)
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pursuant to receipt of the documents from CBI, he had
examined the documents with scientific aids and framed his
report Ex.PW.32/A and Ex.PW.32/B. He deposed that his report
Ex.PW.32/A was forwarded to CBI vide forwarding letter
Ex.PW.32/C and his report Ex.PW.32/B was forwarded along
with the forwarding letter Ex.PW.32/D. He deposed that his
reports are correct.
101. Sh.S.S.Atwal, the investigating officer,
appeared in the witness box as PW39. He deposed that on
receipt of complaint from Sh.B.R.Chandrashekhar, General
Manager and Chief Vigilance Officer, Vijaya Bank Ex.PW.14/A,
and on instructions of the then S.P. Sh.J.N.Prasad FIR No.
RC3(E)/09/EOWII/DLI dated 17.12.1999 Ex.PW.39/A was
registered and the same was entrusted to him for
investigations.
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Judgement in the matter of:
(C.B.I. Vs. Rakesh Kumar Bhatia & Ors.)
Dated : 31.01.2014
102. The investigating officer further deposed that
he had recorded statement of witnesses and sought certain
documents from Vijaya Bank, which were seized by him vide
seizure memo Ex.PW.38/A ; Ex.PW.38/B and Ex.PW.38/C. He
deposed that apart from that, he had taken into possession
documents vide seizure memo dated 17.08.2000 Ex.PW.39/B,
seizure memo dated 25.01.2000 Ex.PW.39/C ; seizure memo
dated 08.02.2000 Ex.PW.39/D ; seizure memo dated 14.02.2000
Ex.PW.37/A. He deposed that he had taken certain documents
in possession from Union Roadways Corporation vide seizure
memo Ex.PW.10/9 and certain documents vide seizure memo
dated 30.10.2000 Ex.PW.39/E. He deposed that he had taken
into possession some documents from one Ajit Kumar Sharma
of Om Goods Carrier vide seizure memo Ex.PW.39/F dated
30.06.2000.
103. PW39 deposed that he had examined one
Rakesh Kumar Yadav, Airport Manager and had taken into
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possession certain documents from him vide seizure memo
dated 31.01.2000 Ex.PW.39/G. He deposed that he
interrogated one D.N.Bhatt and had taken into possession
certain documents vide seizure memo Ex.PW.39/H. He further
deposed that he had also taken into possession documents from
one Prakash Chand of Vijaya Bank vide seizure memo Ex.PW.
39/I. He deposed that from one Surender Manuja, he had
taken into possession documents vide seizure memo Ex.PW.
39/J and from Sudhakar Shetty documents were also taken into
possession vide seizure memo Ex.PW.15/A47.
104. PW39 further deposed that he had examined
one Sh.B.M. Apanna of Vijaya Bank and had taken into
possession documents from him vide seizure memo Ex.PW.
39/K. He deposed that he had interrogated Assistant Manager
of Vijaya Bank and had received letter from him Ex.PW.38/I
whereby he was informed about the tenure and nature of work
of the accused persons with Vijaya Bank.
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Judgement in the matter of:
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105. PW39, the investigating officer deposed that
he made investigations with respect to House Tax Receipt
Ex.PW.1/1 and found that this receipt was never issued by
MCD which fact he was informed vide letter Ex.PW.39/L. He
deposed that he had also received letter in this regard from
MCD Shahadara, South Zone Ex.PW.1/2 and MCD Shahadara,
North Zone Ex.PW.7/2.
106. The investigating officer deposed that he had
received information regarding property bearing plot no.25,
Khasra No.34, Abadi Shiv Nagar, Mohalla Dillai, Shahadara
from the office of SDM vide letter Ex.PW.4/1. He deposed that
vide letter Ex.PW.39/M, he was informed about the details of
bills purchased by the bank and vide letter Ex.PW.15/A46 he
was informed about the details of officers posted with Vijaya
Bank. He deposed that vide letter Ex.PW.39/N, he was
forwarded circulars issued by Vijaya Bank. He deposed that
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during the course of investigations, he had obtained specimen
signatures of accused Jiya Lal Ex.PW.18/12 to Ex.PW.18/27
and Ex.PW.8/1 to Ex.PW.8/30 in presence of witnesses. He
deposed that he had also obtained specimen signatures of
Rakesh Kumar Bhatia Ex.PW.8/31 to Ex.PW.8/79 in presence
independent witnesses and that of accused Vijender Kumar
Ex.PW.17/1 to Ex.PW.17/7 and of D.N.Goel Ex.PW.8/1 to
Ex.PW.8/11 and R.P.Gupta Ex.PW.11/A1 to Ex.PW.11/A9,
which these persons had given voluntarily.
107. PW39 the investigating officer deposed that
he had sent the specimen signatures along with the questioned
documents to GEQD and received the expert reports Ex.PW.
32/A and Ex.PW.32/B vide letters Ex.PW.32/C and Ex.PW.
32/D.
108. The IO further deposed that after recording of
statement of witnesses and on conclusion of investigations, he
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had sought sanction for prosecution of bank officers and
received sanction with respect to accused H.Surendra Shetty
Ex.PW.39/A ; accused K.Vasanth Kumar Shetty Ex.PW.28/A ;
H.Balakrishna Shetty Ex.PW.29/A and accused A.Maillappa
Rai Ex.PW.29/B.
109. The investigating officer deposed that after
conclusion of investigations and after getting the sanction for
prosecution against the accused public servants, he filed
charge sheet along with the list of documents and list of
witnesses for trial of accused persons.
STATEMENT OF ACCUSED:
110. Separate statement of all the seven accused
persons were thereafter recorded under section 313 Cr.P.C.,
wherein the prosecution evidence against them was put, which
they denied.
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Judgement in the matter of:
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111. On being asked, accused no.1, accused no.2 and
accused no.7 wished to examine witnesses in their defence.
They were permitted to do so.
DEFENCE EVIDENCE:
112. Availing the given opportunities accused no. 1
Rakesh Kumar Bhatia, accused no.2 Jiya Lal Arora and
accused no.7 A.M.Rai had examined witnesses in their defence.
The other accused persons did not examine any witness and
closed their defence evidence.
113. DW1 Rajesh Jain appeared on behalf of
accused no. 1 and deposed that he was having business dealing
with the accused in furtherance of which they had met one
Manish Gupta. He deposed that Manish Gupta proposed
Rakesh Kumar Bhatia that he can get him loan from the bank
by arranging sureties in case he wants to expand his business.
He, however, stated that he was not present in the bank when
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the loan application was submitted by Rakesh Kumar Bhatia
and when the documents of the property were submitted with
the bank. He deposed that he is not aware about the
proceedings conducted by the valuer.
114. On being cross examined by Ld. Public
Prosecutor for CBI, this witness denied the suggestion that
accused ever met Manish Gupta in his presence.
115. DW2 Murli Dhar Nair, Chief Manager,
Asset Recovery Branch, Vijaya Bank appeared and deposed
that the loan file pertaining to M/s USR Exports through its
sole proprietor Rakesh Kumar Bhatia is closed in the books of
accounts, as accused has settled all his dues with the bank and
nothing is outstanding against him. He proved copy of letter
Ex. DW2/A issued by the bank to that effect.
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116. DW3 Shashi Bhushan Shori also appeared
on behalf of accused no. 1 and deposed that he being Charted
Accountant was looking after the accounts of M/s USR Exports.
He deposed that he had met one Manish Gupta in the office of
Rakesh Kumar Bhatia. He deposed that Rakesh Kumar Bhatia
told him that Manish Gupta can get him loan by arranging
surety as well as documents.
117. On being cross examined by Ld. Public
Prosecutor for CBI, he deposed that he is not aware of the
occupation of Manish Gupta. He denied the suggestion of
having met Manish Gupta in the office of Rakesh Kumar
Bhatia.
118. DW5 Rakesh Kumar, appeared and deposed
that he knows Rakesh Kumar Bhatia being in the same
business. He deposed that he had met Manish Gupta in the
office of Rakesh Kumar Bhatia and in his presence Manish
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Gupta had asked Rakesh Kumar Bhatia for some balance
sheets.
119. On being cross examined this witness states
that he is not aware of the nature of business of Manish Gupta.
120. DW8 Ripu Daman Sehgal appeared and
deposed that he was working as part time accountant with
accused Rakesh Kumar Bhatia. He deposed that he knows one
Manish Gupta, who used to visit Rakesh Kumar Bhatia. He
deposed that some balance sheets prepared by S.B.Shori,
Charted Accountant were handed over by Rakesh Kumar
Bhatia in his presence to Manish Gupta stating that Manish
Gupta is arranging loan for him.
121. On being cross examined this witness denied
the suggestion that there was no occasion with Rakesh Kumar
Bhatia to tell him as to what Manish Gupta is doing for him.
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122. On behalf of accused no. 2, DW7 Sh. Manish,
Ahlmad in the Court of undersigned appeared and deposed that
a case titled CBI Vs. S.C.Mittal bearing C.C. No. 04/11 is
pending adjudication in this Court wherein charge sheet was
filed against S.C.Mittal and V.K.Khanna, Principal Scientific
Officers, CFSL, CBI.
123. On behalf of accused no. 7 A.M.Rai, DW4 Sh.
Sharad Kumar Naik appeared in the witness box. This
witness deposed that he knows A.M.Rai being his colleague. He
deposed that in May'1997, he and A.M.Rai were transferred
from Delhi to Bangalore. He deposed that one Om Goods
Carrier approached him for transportation of his household
goods and stated that even A.M.Rai had booked them for
transportation of his household goods.
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124. On being cross examined this witness denied
the suggestion that the representative of Om Goods Carrier
had not shown him any invoice vide which the household goods
of A.M.Rai were transported. This witness denied the
suggestion that Rakesh Kumar Bhatia had paid the
transportation charges of household goods of A.M.Rai.
125. DW6 Rohan Kumar from Vijaya Bank
appeared and proved certified copy of statement of account of
A.M.Rai with Vijaya Bank as DW6/A and the certificate
regarding correctness of statement of account as Ex. DW6/B.
He deposed that as per entry X on Ex. DW6/A a cheque
amounting to Rs.13,100/ was cleared in favour of Om Goods
Carrier and as per entry Y a cheque amounting to Rs.2200/
was cleared in favour of Akash International.
126. DW9 Ajit Kumar Sharma appeared and
deposed that his father was running a transport company by
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the name of M/s Om Goods Carrier. He deposed that vide GR
Ex. DW9/A issued by Manager of their firm, goods of A.M.Rai
were transported from Gurgaon to Bangalore. He further
proved another GR Ex. DW9/B regarding transportation of
goods of A.M.Rai. He proved the carbon copies of these two
GR's as Ex. DW9/C & Ex. DW9/D. He proved the brief
description of the car belonging to A.M.Rai prepared by him
before transporting it as Ex. DW9/E and a certificate given by
accused to their company for transportation of his car as Ex.
DW9/F. He proved the receipts vide which they had got the
transportation charges from accused as Ex. DW9/G & Ex.
DW9/H.
127. On being cross examined this witness stated
that they had never handed over any copy of their GR to M/s
Union Roadways Corporation. He denied the suggestion that
no money was paid by accused to their company or that he is
deposing falsely at instance of the accused.
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ARGUMENTS ON BEHALF OF CBI:
128. It is contended by Ld.Special PP for CBI
relying upon the deposition of the witnesses examined by them
during the course of trial that prosecution has been able to
establish its case against the accused persons who were
working as Assistant General Manager, Chief Manager, Senior
Manager and Manager with Foriegn Exchange Department
Vijaya Bank, Barakhamba Road and thus were public servants.
It is contended by Ld.PP for CBI that their being public
servants, has not been disputed by the accused persons. He
further contended that they in furtherance of the conspiracy
with other accused persons had violated the guidelines of the
bank and facilitated accused Rakesh Kumar Bhatia to avail
various credit facilities against a nonexistent collateral
security and by letting accused no.2 Jiya Lal Arora to
impersonate himself as guarantor Ram Narayan and accused
no.3 knowingly had furnished a false valuation report, which
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they accepted without verification thereby causing wrongful
loss to the bank and corresponding wrongful gain to Rakesh
Kumar Bhatia.
129. He contended relying upon the deposition of
prosecution witnesses examined during the course of trial that
the public servants working with Vijaya Bank were under legal
and professional obligation to follow the rules, regulations and
guidelines of the bank issued from time to time, more
particularly the ones given in circular bearing no.191 of 96
dated 06.11.1996 issued by Vijaya Bank. He contended that
none of the public servants had followed these guidelines. He
contended that they did so, with malafide intention to get
pecuniary advantage to their coaccused persons, to the
detriment of the bank and thus misconducted themselves.
130. He contended that accused Rakesh Kumar
Bhatia that for availing the credit facility from the bank had
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submitted a loan application along with the supporting
documents wherein he had given inflated figures regarding his
firm, so as to get the maximum credit facility. He further
contended relying upon the deposition of prosecution witnesses
that accused Rakesh Bhatia had produced accused no.2 Jiya
Lal Arora in the bank representing him as Ram Narayan, to
stand as guarantor for the loan. He contended that accused
Jiya Lal Arora impersonated himself as Ram Narayan and
offered property bearing no.25, Khasra No.634, Mohalla Dillai,
Shahadara, Delhi as collateral security knowing fully well that
this property did not belong to him.
131. Ld.PP further contended that accused no.1 and
accused no.2 in furtherance of their conspiracy with the
approved valuer of the bank had got a false valuation of a
nonexistent property done. He contended that public
servants in violation of the circular issued by the bank, did not
personally inspect the property and had even failed to ask for
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the proof of identity of the guarantor and approved the credit
facilities in favor of accused no.1.
132. It is further contended by Ld.PP for CBI that
the prosecution witnesses on the basis of documentary evidence
on record have established that accused no.1 after availing the
credit facilities, misused the same which was facilitated by the
public servants who went on to discount the bills produced by
accused no.1 without taking into consideration that the
previous bills discounted by them were still outstanding and
accused no.1 had also made huge cash withdrawals from his
current account in violation of the credit facilities. He
contended that all the accused persons be accordingly convicted
under the relevant provisions of Law.
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DEFENCE ARGUMENTS :
(a) On behalf of accused no.1 Rakesh Kumar Bhatia:
133. Sh.M.C.Kochhar, Advocate, Ld.Defence
Counsel for accused R.K.Bhatia, leading the Defence
Arguments, opened the same with a multipronged attack on
the case of prosecution. The first and foremost contention of
Sh.M.C.Kochhar , Advocate, Ld.Defence Counsel, to the case of
prosecution was that prosecution has miserably failed to prove
the necessary ingredients of the offence, with which the
accused were charged. He further contended that there is no
iota of evidence brought on record by the prosecution to show
that any amount or pecuniary advantage was extended by his
client ie. Rakesh Kumar Bhatia to the public servants in lieu of
the grant of credit facilities to him. Ld.Defence Counsels
appearing for accused no.1 contended that no case is made out
either against him or against public servants of any criminal
misconduct. It is contended that the transaction between
Rakesh Kumar Bhatia and the bank was a business
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transaction wherein credit facility was extended, which has
already been repaid to the bank by the accused along with
interest.
134. He contended relying upon the cross
examination of prosecution witnesses as well as the documents,
that as the credit facilities sought for, by the accused was for
export purposes, therefore as per RBI Guidelines, the same was
to be extended on the basis of need and collateral security
should not have been asked for. He contended that even the
complainant during his cross examination admitted that there
was a RBI Circular Ex.PW.14/DB which says that the export
oriented loan should be needbased and not security based and
thus collateral security is not of great importance.
135. He contended that even PW15 M.Sudhakar
Shetty during his cross examination had admitted the circular
Ex.PW.14/DB and endorsed this fact. He contended that
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enhancement of credit facilities in favor of accused no.1 was
made by the bank on the basis of past performance. He
contended that no witness of the prosecution deposed that any
additional security was asked for, from the accused at the time
of enhancement of credit limit. Therefore, there was no occasion
with him to offer any additional security, as has been alleged
by the prosecution.
136. Ld.Defence Counsel vociferously contended
that accused no.1 and the guarantor are the two different
persons and separate entities. He contended that as there was
no requirement of furnishing any collateral security as per
the RBI guidelines, therefore there was no occasion with
accused to produce false collateral security. He further relying
upon his defence evidence contended that he was not knowing
accused no.2, who was introduced to him by one Manish
Gupta as "Ram Narayan" on which he believed and went
ahead to produce him as guarantor. He contended that there is
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no conspiracy between him and the other accused persons.
137. Ld.Defence Counsel submitted that the
investigating officer had examined one O.P.Gupta during
investigations through whom Manish Gupta met the accused,
but neither Manish Gupta nor O.P.Gupta were examined by
the prosecution during the course of trial and they being
material witnesses were withheld, therefore an adverse
inference be drawn against the prosecution.
138. Ld.Defence Counsel contended that supporting
documents filed alongwith loan application were genuine
documents. He further submitted relying upon the deposition
of PW22 and PW40 that shipment were infact sent by the
accused. Ld.Defence Counsel contended that the ingredients of
cheating qua accused no.1 have not been proved by the
prosecution. He submitted that for cheating, there has to be a
dishonest intention to cheat at the very inception of the
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credit facility.
139. His last contention was that no loss to the
bank had accrued as dues of the bank were cleared by the
accused as per Ex.DW.2/A, the letter / certificate of the bank to
that effect. He contended that his client be acquitted of the
charges.
(b) On behalf of accused no.2 Jiya Lal Arora :
140. Sh.S.P.Kaushal, Advocate, Ld.Defence Counsel
had advanced arguments on behalf of accused no.2 Jiya Lal
Arora, in addition to filing written submissions. He contended
that no case is made out against his client by the prosecution.
He also relying upon the circular bearing no.71/2000 issued
by Vijaya Bank dated 28.03.2000 on the basis of guidelines
issued by Reserve Bank of India Letter dated 14.02.2000
Ex.PW.27/DA, contended that export oriented loan should be
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need based and should not depend on the availability of the
collateral security. He further contended that in view of this
circular, collateral security was not essential for the present
loan, therefore no case is made out against accused no.2, who
has been allegedly roped in, only for this aspect.
141. He further contended that no witness of the
prosecution had deposed that it was accused no.2 Jiya Lal
Arora who had submitted the collateral security documents or
had signed the guarantee deed in favor of the bank. He
contended that merely on the basis of report given by the
handwriting expert Ex.PW.32/A and Ex.PW.32/B, accused no.2
cannot be fastened with any criminal liability. He contended
that the IO during the course of his cross examination had
admitted that he had not taken any permission from the
Court before taking specimen signatures of accused Jiya Lal
Arora, therefore the same cannot be used for any purpose
whatsoever, including for getting the same compared with
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questioned signatures. He in order to substantiate this
contention of his, had relied upon the law laid down by Hon'ble
Apex Court in case titled "Sukvinder Singh vs. State of
Punjab" reported as (1994) 55 SCC 152 and in another case
titled "Sapan Haldar & Anr. vs. State" decided by Hon'ble
High Court of Delhi in Crl.Appeal No.804/01 decided on
25.05.2002.
142. His next contention was that as the amount
released to the borrower, even prior to the valuation of
alleged collateral security, therefore it cannot be said that the
bank was induced by the security documents alleged to have
been submitted by accused no.2 to grant credit facility.
Ld.Defence Counsel went on to contend that prosecution has
failed to establish on record, as to what wrongful gain accused
no.2 got by standing as guarantor. It is contended that as the
credit facility to accused no.1 was extended by the bank from
time to time without knowledge of accused no.2, therefore, by
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no stretch of imagination it can be held that his client ie.
accused no.2 Jiya Lal Arora, was part of any criminal
conspiracy, or was in any way liable.
(c) On behalf of accused no.3 Vijender Kumar:
143. Sh.Satish Tamta, Advocate, appearing on
behalf of accused Virender Kumar, approved valuer of the
bank, contended that the FIR Ex.PW.39/A does not depict the
name of Vijender Kumar as an accused. He contended that it
was the duty of the panel lawyer while furnishing legal
scrutiny report, to have physically verified the property. He
contended that it was not obligatory on the part of approved
valuer of the bank to have physical verified the property, as
the same is not required in view of the circular bearing no.
101/96 dated 06.11.96 Ex.PW.15/A45.
144. Ld.Defence Counsel Sh.Satish Tamta,
Advocate relying upon cross examination of the investigating
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officer submitted that his client had replied to the notice
Ex.PW.33/G issued to him by the bank and copy of same was
taken into possession by IO, but he failed to consider the same
and has falsely implicated him.
145. It is contended by Ld.Defence Counsel that
there was no conspiracy between this accused and other
accused persons as he was not related to them but was acting
on behalf of and at behest of the bank for giving his report.
He contended that the report given by accused no.3 is a
genuine report which he has given after valuation of the
property where he was taken by the borrower.
146. Ld.Defence Counsel in order to substantiate
his contentions had relied upon the law laid down by Hon'ble
Supreme Court in case titled "CBI Vs. K.Narayana Rao"
reported as (2012) 9 SCC 512 and in the case titled
"L.N.Rajgopalan Vs. State" bearing Crl.R.C.No.1063 of
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th
2008 decided by Hon'ble High Court of Madras on 10 August
2009.
(d) On behalf of accused no.4 H.Surendra Shetty ; Accused
no.5 K.Vasanth Kumar Shetty; Accused no.6 H.Balakrishna
Shetty and Accused no. 7 A.Maillappa Rao, the public
servants:
147. Sh.Mukul Sharma, Advocate, appearing on
behalf of public servants namely H.Surendra Shetty ;
K.Vasanth Kumar Shetty; H.Balakrishna Shetty and
A.Maillappa Rao, had led a multifaceted attack on the case of
prosecution.
148. At the outset, Ld.Defence Counsel contended
that extension of credit facilities by the bank in favor of the
principal borrower was plain and simple business
transaction. He contended that principal borrower had not
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given any bribe or any pecuniary advantage to their clients, ie.
the public servants, so as to bring them within the scope and
purview of criminal misconduct, with which they have been
charged. To further this contention, he toeing the arguments
advanced by Ld.Defence Counsel for accused no.1 contended
that there is no evidence on record of any quidproquo or any
ill gotten money having changed hands between the principal
borrower and the public servants, therefore the provisions of
section 13(1) (d) of Prevention of Corruption Act, are not at all
attracted.
149. He contended that in any business
transaction, an element of risk is always involved and merely
because the loan extended to principal borrower was not paid in
time, that ipso facto is not sufficient to fasten the public
servants for any criminal liability. He contended that the
public servants did their best in interest of the bank and
by no stretch of imagination, their conduct can be termed as
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"criminal misconduct" as has been alleged by the
prosecution.
150. He contended that as the loan has already
been repaid by the principal borrower as per Ex.DW.2/A the
certificate to that effect issued by the bank, the present
proceedings should be stopped and all the accused persons be
acquitted on this ground itself. He went on to substantiate this
contention of his, on the basis of orders passed by Hon'ble High
Court of Delhi in a similar case. He placed on record orders
dated 30.01.2008 passed by Hon'ble High Court of Delhi in
Crl.M.C.No.4450/06 and contended that in the said case also,
CBI had registered a case for various offence under section
Indian Penal Code and provisions of Prevention of Corruption
Act against bank officers as well as principal borrower. He
contended that once the loan was repaid by the principal
borrower, Hon'ble High Court had quashed the proceedings
not only against the principal borrower but also against the
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public servants.
151. Next contention of Ld.Defence Counsel was
that the circular bearing no.191 of 96 dated 06.11.1996 ie.
Ex.PW.15/A45 was not being followed in principal which had
led to issuance of another circular bearing no.101/98 wherein it
was made compulsory for the bank officials to physically
verify the property offered as collateral security and the second
circular was issued subsequent to the present transaction and
thus was not applicable.
152. He contended relying upon the cross
examination of PW3 Sh.Vipin Kumar, Asset Recovery
Manager ; PW33 Sh.Rajiv Shetty, cross examination of PW14
B.R.Chandrashekhar, the complainant as well as PW15
Sudhakar Shetty that the earlier circular was not being
followed by the bank officers. He contended that as the
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witnesses of the prosecution themselves had admitted that
circular on which prosecution is relying upon to prove their
case was not being followed and it was not mandatory for the
officers to follow, therefore at best, the lapse on the part of
public servants can be termed as professional misconduct and
not the criminal misconduct.
153. He further contended relying upon the cross
examination of PW15 and PW33 that in the initial circular of
1996, no precise duty was assigned to any specific officer to
physically inspect the property, therefore in absence of same,
criminal liability cannot be fastened on all the four accused
persons, without there being any specific duty assigned to any
one.
154. Another facet to the arguments advanced by
Ld.Defence Counsel was that as per the RBI guidelines, for the
purposes of extending any export oriented loan, availability of
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collateral security was not important. He contended that in
view thereof, non verification of the collateral security by the
public servant in absence of any specific mandate cannot be
held against them. He contended that even otherwise all the
public servants acted prudently as they had sought legal
scrutiny report from the approved panel lawyer of the bank and
also got the property valued from the approved valuer, before
processing the loan application of the accused.
155. It is submitted that as the documents which
were offered by the principal borrower and the guarantor were
bearing the particulars of subregistrar's office and as the legal
scrutiny report and the report of approved valuer was with the
public servants ie. the bank officers, therefore, there was no
reason with them to doubt about the genuineness of the
guarantor and the collateral security and thus they acted in a
bonafide manner.
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156. Next contention of Ld.Defence Counsel was
that when principal borrower had a person with him who was
ready to stand as guarantor along with the registered sale deed
which was duly scrutinized by the panel lawyer of the bank
and the property being valued by the approved valuer then
there was no occasion with accused no.1, 2 and 3 who were
acting inconcert with each other to have involved the bank
officers in their net of conspiracy, so as to widen the same,
thereby increasing the chances and loopholes of their being
caught.
157. Ld.Defence Counsel contended that in fact, the
public servants were themselves cheated due to the
concerted acts of accused no.1, 2 and 4, who had conspired with
each other and submitted forged and fabricated documents
claiming them to be genuine on the basis of which, the bank
officers were induced to grant credit facility in favor of M/s USR
Export. He contended that there was no meeting of mind
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amongst the public servants, ie. the bank officers and the
principal borrower, alleged guarantor and approved valuer.
158. Lastly it was contended by Ld.Defence Counsel
that the sanctioning authority has failed to apply its mind and
had granted sanction in a mechanical manner.
159. He contended that as the public servants acted
in a bonafide manner and to the best of their capabilities and
as in the year 1997 it was not mandatory to physically inspect
the property, therefore, it cannot be said that they have
criminally misconducted themselves in furtherance of criminal
conspiracy, therefore they be acquitted.
APPRECIATION OF EVIDENCE AND RIVAL
CONTENTIONS:
160. Before adverting to appreciate the prosecution
as well as defence evidence which has come up on record visa
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vis the charges against the accused persons, as well as the
arguments advanced on the mixed questions of facts and law, I
deem it appropriate to deal with those contentions first which
have been raised by Ld.Defence Counsels, on purely legal
aspects, in their quest to demolish the prosecution case at the
threshold.
161. One such contention is urged by Sh. Mukul
Sharma, Advocate, on behalf of accused no. 4 to 7.
162. Sh. Mukul Sharma, Advocate, had contended
that the credit facility / loan extended by the complainant bank
to the firm of accused no. 1 Rakesh Kumar Bhatia has already
been repaid. He contended relying upon the deposition of DW2
Sh.Murli Dhar Nayyar, Chief Manager (Assets), Recovery
Branch, Vijaya Bank, as well as the letter of the complainant
bank Ex. DW2/A, that accused no. 1 has settled all his dues
with Vijaya Bank and nothing is now outstanding against
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him. It is submitted that in view thereof, the present
proceedings should be stopped and all the accused persons
should be exonerated / acquitted. This contention of Sh. Mukul
Sharma, Advocate, has been seconded by Ld. Defence Counsels
appearing on behalf of other accused persons.
163. Ld. Defence Counsel in support of his
contention had submitted that in an identical matter registered
by CBI on complaint of Vijaya Bank, against the bank officers
and the borrower, Hon'ble High Court in Criminal MC no.
4450/2006 decided on 30.01.2008 had quashed the
proceedings against the accused persons.
164. I have considered this submission advanced by
Ld. Defence Counsel and have perused the orders passed by
Hon'ble High Court in the said petition which have been placed
on record by Ld. Defence Counsel. It is apparent on perusal of
the said order that prior thereto other accused persons facing
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criminal case against them had filed Criminal M (M) 945/02
which was disposed off by Hon'ble High Court of Delhi vide
orders dated 18.09.2003 and the said order was relied upon by
Hon'ble High Court while passing orders dated 30.01.2008 in
Criminal MC No. 4450/06.
165. There is no denying the fact that the payment
of outstanding amount in the present case has now been made
by the borrower i.e. Accused no.1 to the bank and in terms of
Ex. DW2/A nothing now is outstanding against him.
166. However, the important question which arises
is that, his having paid the outstanding amount now to the
bank, is sufficient to exonerate him of the alleged acts of
cheating and fraud committed by him in conspiracy with public
servants and others as alleged in the present case. The answer
to my mind is NO, as that would amount to putting a premium
on the criminal conduct of his and the other coaccused persons.
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167. Even the case ie. Criminal M.C.No.4450/06,
orders of which passed by Hon'ble High Court of Delhi, have been
relied upon by Ld. Defence Counsel does not come to his rescue.
168. It is pertinent to mention the relevant
observation of Hon'ble High Court which are reproduced as
under :
"4. .....However contention of the Counsel for the
respondent CBI that the complainant bank should
not be allowed to withdraw the complainant merely because it has received bank the loan amount advanced to the petitioners as they had lodged a Criminal Complaint against the petitioners and other officers of the bank and there is an attempt on the part of complainant bank to save their senior officers does not cut ice particularly in view of the nature of offence as well as absence of any direct allegation of overt or covert nature against the officers of the bank of having committed a fraud upon the bank in advancing loan to the petitioners. Once such commercial transactions are decided by way of compromise by the loaning bank, the matter should be put at rest unless allegations of forgery, cheating are found writ large on the face of facts contained in the complaint or which surface during investigation.
(Emphasis supplied).
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169. In view of this observation, made by Hon'ble High Court it is apparent that Hon'ble High Court in that order itself made it clear, that in the cases where there are allegations of forgery and cheating writ large, then the proceedings should not be quashed on compromise or making of payment of outstanding dues. In the present case, there are clear allegations against the accused persons of cheating the bank by furnishing a collateral security for the purposes of availing credit facility, which in fact does not exist and of producing a guarantor, who impersonated himself as the owner of a non existent property.
170. Further in the present case, not only the investigations have been completed but also the charge sheet has been filed and after culmination of the evidence, we have reached at the fag end of the trial, therefore, to my mind the contention urged by Sh.Mukul Sharma, Advocate, on behalf of accused no. 4 to 7 and seconded by Ld. Defence Counsels C.C.No: 44 / 2011 Page No.101 of 205 Judgement in the matter of: (C.B.I. Vs. Rakesh Kumar Bhatia & Ors.) Dated : 31.01.2014 appearing for other accused persons that as the outstanding amount towards complainant bank had already been repaid by the borrower, therefore, the present proceedings should be stopped and they be exonerated / acquitted, does not hold ground. Same is accordingly rejected.
171. This has brought me down to another legal contention urged on behalf of the accused persons. It is contended by Ld.Defence Counsels for all the public servants ie. the bank officers as well as the principal borrower, that as it is not the case of the prosecution that accused being public servants had adopted any corrupt or illegal means or had demanded and accepted any illegal gratification from co accused Rakesh Kumar Bhatia, for extending any favor to him or to cause any advantage to him therefore, the provisions of Section 13 (1) (d) of Prevention of Corruption Act, cannot be invoked against the accused persons.
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172. In order to deal with this contention of Ld.Defence Counsels, it is pertinent to make a mention of the relevant provisions of Section 13 (1) (d) of Prevention of Corruption Act. The same is as follows : Section 13: Criminal misconduct by a public servant : (1) A public servant is said to commit the offence of criminal misconduct,
(a) . . .
(b) . . .
(c) . . .
(d) if he,
(i) by corrupt or illegal means, obtains for himself or for any other person any valuable thing or pecuniary advantage ; or
(ii)by abusing his positioning as a public servant, obtains for himself or for any other person any valuable thing or pecuniary advantage ; or
(iii)while holding office as a public servant, obtains for any person any valuable thing or pecuniary advantage without any public interest ; or
(e) . . .
173. The phrases namely "corrupt , illegal means"
and "by abusing his position as public servants" are different C.C.No: 44 / 2011 Page No.103 of 205 Judgement in the matter of: (C.B.I. Vs. Rakesh Kumar Bhatia & Ors.) Dated : 31.01.2014 categories of corrupt practices, which are conjuncted by the words "or" and not by the conjunction "and". This in itself indicates that these three different categories are alternate misconduct on the part of public servant and either of these three practices, if done by public servant then the same can constitute an offence under this Section.
174. The phraseology "By abusing his official position as Public Servant" covers the acts done by the public servant otherwise than by corrupt or illegal means. The gist of the offence under this clause is that a public officer abusing his position as "public servant" obtains for himself or for other person, any valuable thing. The word "abuse" used by the Legislature means "misuse", ie. using his position for something which is not intended. That abuse of the position may be by corrupt or illegal means or otherwise than those means". In view thereof, the Legislature never intended that there has to be an evidence of illegal gratification before C.C.No: 44 / 2011 Page No.104 of 205 Judgement in the matter of: (C.B.I. Vs. Rakesh Kumar Bhatia & Ors.) Dated : 31.01.2014 invocation of this section. In case, there are instances and allegations that a person has abused his position as a public servant, in order to cause advantage to anyone, that in itself is sufficient for invocation of this Section.
175. Meaning thereby that in absence of any allegations by the prosecution on the part of public servant of demand and acceptance of illegal gratification for showing any favor to a private individual, the provisions of Prevention of Corruption Act cannot be invoked, as urged by Ld.Defence Counsel, to my mind is farfetched and devoid of merits. As there are allegation of abuse of official position by the public servants in order to cause pecuniary advantage to their co accused.
176. In view thereof, the contention advanced by Ld.Defence Counsels that in the present case there are no allegations on record that either of the four public servants, C.C.No: 44 / 2011 Page No.105 of 205 Judgement in the matter of: (C.B.I. Vs. Rakesh Kumar Bhatia & Ors.) Dated : 31.01.2014 who are accused herein had adopted any corrupt or illegal means or have obtained any pecuniary advantage for themselves, is rejected. However, the prosecution has to establish the necessary ingredients of the offences, with which the accused persons have been charged, on the basis of the evidence which has come up on record, with which I shall be dealing hereinafter.
177. Another argument advanced by Ld. Defence Counsels to dent the prosecution case on this aspect, was that the prosecution has withheld material witnesses. Sh.M.C.Kochhar, Advocate, Ld.Counsel for the accused Rakesh Kumar Bhatia had contended that PW Om Prakash Gupta, whom CBI had interrogated during the course of investigations was not named in the list of witnesses filed along with the charge sheet. He contended that Om Prakash Gupta was a material witness as it was he, through whom his client ie. Rakesh Kumar Bhatia came in contact with Manish Gupta, C.C.No: 44 / 2011 Page No.106 of 205 Judgement in the matter of: (C.B.I. Vs. Rakesh Kumar Bhatia & Ors.) Dated : 31.01.2014 who in turn had introduced him to accused no.2 Jiya Lal Arora as Ram Narayan. He further contended that non - examination of these material witnesses has caused prejudice to the case of accused persons, therefore an adverse inference should be cast on the prosecution case.
178. Ld.Defence Counsel in support of his contentions had relied upon the law laid down by Hon'ble Supreme Court in case titled "Narain & Others vs. State of Punjab" reported as AIR 1959 SC 484.
179. I have considered this contention of Ld.Defence Counsels and have also perused the precedents relied upon by them.
180. It is and always has been a sound and well established rule of law and practice, that a court while adjudicating upon a particular issue, should always be C.C.No: 44 / 2011 Page No.107 of 205 Judgement in the matter of: (C.B.I. Vs. Rakesh Kumar Bhatia & Ors.) Dated : 31.01.2014 concerned with the quality of evidence before it and not quantity for proving or disproving a fact. The material witnesses listed in the "list of witnesses" by the prosecution, should be and ought to be examined. However, the discretion always rests with the Public Prosecutor, who is Incharge of the prosecution case, not to examine irrelevant or superfluous witnesses, more particularly, when a particular fact which is sought to be proved, has already come up on record through deposition of other witnesses already examined.
181. The relevant test has been laid down by Hon'ble Supreme Court in the precedent relied upon by Ld.Defence Counsels which is, "The test is, whether he is a witness essential to the unfolding of narrative, on which the prosecution is based".
182. Going by this particular test laid down by Hon'ble Apex Court, I am of the opinion that all the material C.C.No: 44 / 2011 Page No.108 of 205 Judgement in the matter of: (C.B.I. Vs. Rakesh Kumar Bhatia & Ors.) Dated : 31.01.2014 witnesses, who were essential to the unfolding of prosecution case, were examined. Those witnesses who were not summoned despite having figured in the list of witnesses, are superfluous witnesses. Further, there was no prohibition imposed on the accused persons to summon any or all those witnesses, who they think were necessary for their defence. Accused Rakesh Bhatia could himself had summoned Om Prakash Gupta, which he failed to do and Manish Gupta has already expired.
183. In view thereof, I am of the considered opinion that this argument has been raised only as an afterthought and in an attempt to dent the prosecution case in an indirect manner. The same is therefore rejected.
184. This has brought me down to the contentions urged on behalf of the accused persons which involves mix questions of facts and law, for which the evidence on record and more particularly the cross examination referred to by C.C.No: 44 / 2011 Page No.109 of 205 Judgement in the matter of: (C.B.I. Vs. Rakesh Kumar Bhatia & Ors.) Dated : 31.01.2014 Ld.Defence Counsels, during the course of their arguments, is required to be advertedto.
185. Sh.M.C.Kochhar, Advocate, Ld.Defence Counsel of accused no.1 contended relying upon the circular bearing no.71 of 2000 of Vijaya Bank Ex.PW.14/DB passed on the letter of RBI Ex.PW.27/DA that in case of export oriented loan, the same had to be need based and is extended by the bank on the basis of performance of the exporter, irrespective of the availability of the collateral security. He contended that as collateral security was not required therefore there was no occasion with him to furnish any collateral security with the bank.
186. Prosecution in order to substantiate its contention had examined PW27 Sh.Sudhakar Hegde, Chief Manager with Vijaya Bank, who narrated the procedure which is generally followed for processing any loan application, C.C.No: 44 / 2011 Page No.110 of 205 Judgement in the matter of: (C.B.I. Vs. Rakesh Kumar Bhatia & Ors.) Dated : 31.01.2014 leading to the sanction of loan. This witness so far as procedural aspects are concerned, was not at all cross examined on behalf of the accused persons. However, in his cross examination relied upon by Ld.Defence Counsel, this witness did state that he is aware of the circular no.71 of 2000 issued by Vijaya Bank Ex.PW.14/DB, which was issued on the basis of Reserve Bank of India Letter dated 14.02.2000 Ex.PW.27/DA.
187. PW33 Sh.Rajeev Shetty, AGM, Vijaya Bank and PW15 Sh.Sudhakar Shetty also deposed about the procedure which was adopted in the present case by the bank for processing the loan application submitted with it by accused no.1
188. On being cross examined, PW15 as well as PW33 both admitted about issuance of the circular no. 71/2000 Ex.PW.14/DB issued by Vijaya Bank. C.C.No: 44 / 2011 Page No.111 of 205
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189. It is contended by Ld.Counsel for accused no.1 that all the banks are governed by RBI Guidelines and as per the letter dated 14.02.2000 of RBI Ex.PW.27/DA, Vijaya Bank had issued a circular no.71 of 2000 Ex.PW.14/DB, stating that assessment of export credit limit should be need based and not directly linked to availability of collateral security. He contended that RBI had issued a mandate for all banks to follow that the requirement of credit limit is to be justified with exporter's past performance and track record, credit limit should not be denied merely on the ground of nonavailability of collateral security. It is submitted by him that in view of this circular, which has been admitted by the prosecution witnesses ie. PW14, the complainant, PW15 Sudhakar Shetty, PW27 Sudhakar Hegde and PW33 Rajeev Shetty, there was no requirement on the part of accused no.1, who had sought the loan for export purposes, to furnish any collateral security. C.C.No: 44 / 2011 Page No.112 of 205
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190. These arguments of Ld.Defence Counsel appearing for accused no.1 has been supported by Ld.Defence Counsels for other accused persons as well, stating that there was absolutely no requirement for furnishing collateral security, therefore the allegation and evidence, if any, that fake collateral security was furnished in support of loan application, should be taken off the record and should not be considered.
191. No doubt, the factum of issuance of circular bearing no.71 of 2000 Ex.PW.14/DB on the basis of RBI guidelines mentioned in letter dated 14.02.2000 Ex.PW.27/DA is established on record. However, the said circular of Vijaya Bank Ex.PW.14/DB was issued on 28.03.2000 on the basis of RBI Guidelines dated 14.02.2000 ie. much later than the date on which the application for loan Ex.PW.33/B of accused no.1 dated 24.11.1996 was filed with Vijaya Bank and was processed. Meaning thereby that this circular sought to be relied upon by Ld.Defence Counsels that furnishing collateral C.C.No: 44 / 2011 Page No.113 of 205 Judgement in the matter of: (C.B.I. Vs. Rakesh Kumar Bhatia & Ors.) Dated : 31.01.2014 security was not at all required, does not hold ground as this circular was not in force at the relevant point of time.
192. Even otherwise, had the said circular ie. 71/2000 being in force, despite which, if the bank had insisted for collateral security, the same does not give any authority or right to a person approaching a bank for credit facility to furnish fake or nonexistent collateral security, as has been done in the present case.
193. Moreover, the charges against the accused persons are not that they allowed the credit facilities in favor of accused no.1 without taking collateral security. However, the charge against them is that the collateral security, so furnished by accused no.1 as collateral security, was nonexistent, which the public servants failed to physically verify before sanctioning the credit facilities.
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194. In view thereof, this submission of all the accused persons that in view of the circular no.71/2000 Ex.PW. 14/DB, the evidence on record regarding submission of collateral security, in support of the application for credit facilities be not considered, is turned down.
195. Sh.M.C.Kochhar, Advocate, Ld.Defence Counsel for accused R.K.Bhatia while admitting the filing of application Ex.PW.33/B seeking credit facility from Vijaya Bank in favor of his firm had tried to disown the guarantee deed, guarantor and submission of documents with respect to property ie. Plot no.25, Khasra no.634, Mohalla Dillai, Abadi Shiv Nagar, Shahadara, as collateral security.
196. He contended relying upon deposition of defence witnesses ie. DW1 Rajesh Jain, DW2 Murli Dhar Nair, DW3 S.B.Shori, DW5 Rakesh Kumar and DW8 Ripu Daman Sehgal, that it was Manish Gupta who was arranging C.C.No: 44 / 2011 Page No.115 of 205 Judgement in the matter of: (C.B.I. Vs. Rakesh Kumar Bhatia & Ors.) Dated : 31.01.2014 loan for him from the bank, & had also arranged the guarantor. He contended that it was said Manish Gupta who has since expired, who introduced Jiya Lal Arora to him as Ram Narayan being owner of the property, which he shall offer as collateral security with the bank.
197. Ld.Defence Counsel contended that he never knew that accused Jiya Lal is impersonating as Ram Narayan and that the property is not owned by him which was to be offered as collateral security. He contended that guarantor is a different entity with whom he is not related and therefore for any wrong on the part of guarantor he cannot be made liable.
198. This contention of Ld.Defence Counsel to my mind is preposterous and its totally unacceptable. What is a guarantor to the bank without the principal borrower ? Nobody. A guarantor binds himself only for the benefit to be extended by the bank to principal borrower. Otherwise what C.C.No: 44 / 2011 Page No.116 of 205 Judgement in the matter of: (C.B.I. Vs. Rakesh Kumar Bhatia & Ors.) Dated : 31.01.2014 interest he had to stand as guarantor and that too by impersonating someone else and claiming to be the owner of a property which as per evidence on record was a nonexistent one.
199. None of the defence witnesses sought to be relied upon by Ld.Defence Counsel to urge that it was Manish Gupta who had arranged the guarantor, stated that they were present at the time of execution of the loan documents and guarantee deeds Ex.PW.15/A10 to Ex.PW.15/A21 and Ex.PW. 32/C1 to Ex.PW.32/C6. In such an eventuality their deposition is of hardly any assistance to the accused. Even if the guarantor was arranged by Manish Gupta as urged by Ld.Defence Counsel, it was legal obligation of accused R.K.Bhatia, to have ascertained the genuineness and identity of guarantor and of collateral security which was offered vide memorandum dated 04.01.1997 Ex.PW.32/E1 in support of his application for credit facilities.
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200. Therefore, this contention of Ld.Defence Counsel that guarantor is a different entity and because of impersonation by accused no.2 Jiya Lal as Ram Narayan and by his offering a collateral security which was nonexistent, liability cannot be fastened on him, is farfetched, as it was accused Rakesh Kumar Bhatia who was the ultimate beneficiary. This contention is accordingly rejected.
201. Next contention urged by Ld.Defence Counsel for accused no.1, which was seconded by Ld.Counsel for accused no.2 is that the Sale Deed Ex.PW.26/A (which is also exhibited as Ex.PW.13/B) is a genuine document which was duly registered with SubRegistrar's Office.
202. No doubt, from the deposition of PW13 Sh.Shatrughan Poddar, it is evident that sale deed Ex.PW.26/A was duly registered with the office of SubRegistrar. However, mere registration of this Sale Deed in SubRegistrar's Office C.C.No: 44 / 2011 Page No.118 of 205 Judgement in the matter of: (C.B.I. Vs. Rakesh Kumar Bhatia & Ors.) Dated : 31.01.2014 does not confer any benefit, either to case of accused no.1 or accused no.2. Had this sale deed been genuine, then there should have been a property in existence, and also the person in whose favor it was executed. Prosecution through the deposition of PW4 ; PW12 and PW3 has clearly established on record that no such property was there in existence. Further, from the deposition of PW5 ; PW6 and PW12, prosecution has established on record that no person by the name of Ram Narayan s/o Raj Narayan was in existence.
203. As per the provisions of Indian Evidence Act, to prove any particular fact, the initial onus lies on the prosecution and once these facts are established & initial onus is discharged, then in view of section 106 of Indian Evidence Act, the burden shifts on the accused to disprove those facts or prove what is within his specific knowledge. C.C.No: 44 / 2011 Page No.119 of 205
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204. In the present case, had there been any genuineness in the existence of the property, then it was for accused no.1, the principal borrower and accused no.2 the alleged guarantor as it was he who claimed himself to be the owner of that property to have revealed its identity initially to the bank and then to the IO, during the course of investigations. But that was not to be.
205. Ld.Defence Counsel contended that alongwith the loan application, accused no.1 had filed genuine supporting documents regarding his business and balance sheets. He contended relying upon the deposition of PW21 S.B.Shori that nowhere this witness had stated that the figures in the balance sheets prepared by him, which were submitted along with the loan application were inflated. He further contended that even the investigating officer during the course of his cross examination conducted by him had stated that the documents submitted along with the loan application were genuine. C.C.No: 44 / 2011 Page No.120 of 205
Judgement in the matter of: (C.B.I. Vs. Rakesh Kumar Bhatia & Ors.) Dated : 31.01.2014 Ld.Defence Counsel stated that when the supporting documents filed along with the loan application as per the investigating officer were genuine, then no case is made out against the accused.
206. I do not find any merits in this contention of Ld.Defence Counsel. For the purposes of appreciation and interpretation of the deposition of any witness, the tone and tenor in which the deposition is given by the witness as a whole, is required to be considered. It neither a rule of prudence nor of practice that from the deposition of any witness, a solitary sentence should be picked up for giving a particular interpretation or meaning. In the present case, the investigating officer during the course of his cross examination, did state that the documents filed by accused no.1 along with the loan application, were genuine, by which he (PW39) only meant that the same were filed by him (accused Rakesh Kumar Bhatia) in support of his loan application, if his (PW39's) C.C.No: 44 / 2011 Page No.121 of 205 Judgement in the matter of: (C.B.I. Vs. Rakesh Kumar Bhatia & Ors.) Dated : 31.01.2014 deposition is read as a whole. Further PW21 the Chartered Accountant of accused no.1 during the course of his deposition has categorically stated that the projected balance sheets were prepared by him on the basis of figures supplied to him by the accused. Nowhere this witness had stated that he had gone through the books of accounts of accused before preparing these documents, although he was examined by accused in his defence as well. It is apparent that he had prepared these balance sheets for and at instance of the figures supplied by accused no.1, as is evident from his deposition.
207. Further, Ld.Defence Counsel relying upon the deposition of PW19 D.N.Bhatt ; PW22 Leonard D'Souza and PW40 L.S.Rawat, contended that accused did send the shipment, for which he got the bills discounted from the bank but the buyer did not make the payment, as a result of which, he could not make payment to the bank in time. C.C.No: 44 / 2011 Page No.122 of 205
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208. This contention of Ld.Defence Counsel is also devoid of any merits as the same runs contrary to the evidence which has come up on record.
209. It is apparent on perusal of the deposition of PW15 Sudhakar Shetty, who had proved the bills submitted by the accused with the bank for discounting ie. Ex.PW.15/A51 to Ex.PW.15/A57 and also the corresponding bills of exchanges as per which he was required to send the shipment to Dubai and those bills were returned unpaid by M/s Abu Dhabi Commercial Bank vide letter dated 11.02.1998 Ex.PW.15/A50 whereas, as per the deposition of PW19, PW22 and PW40, accused had sent his shipment to Moscow and Tashkant, keeping the bank in dark.
210. It has brought me down to the last contention urged on behalf of accused no.1 by Sh.M.C.Kochhar, Advocate. It is submitted by Ld.Defence Counsel that for the purposes of C.C.No: 44 / 2011 Page No.123 of 205 Judgement in the matter of: (C.B.I. Vs. Rakesh Kumar Bhatia & Ors.) Dated : 31.01.2014 proving the necessary ingredients of cheating, there has to be a dishonest intention at the outset. He contended that prosecution has not been able to establish any such dishonest intention against accused no.1.
211. This contention of Ld.Defence Counsel to my mind is meritless. Accused no.1 at the outset had produced a person to stand as his guarantor whom he knew or reasons to believe to be not Ram Narayan s/o Raj Narayan. Then, he along with guarantor had furnished documents with the bank with respect to the property which was not in existence. Thereafter, he acting in concert with accused no.3, the approved valuer of the bank got another property valued and falsely depicted the said valuation report, to be with respect to the property offered by them as collateral security. Further, after availing the facility, he had submitted the bills for discounting with the bank showing that shipment is being sent to Dubai whereas he kept the bank in dark and sent the C.C.No: 44 / 2011 Page No.124 of 205 Judgement in the matter of: (C.B.I. Vs. Rakesh Kumar Bhatia & Ors.) Dated : 31.01.2014 shipment to Moscow and Tashkant to the detriment of the bank.
212. In view thereof, this argument raised by Ld.Defence Counsel for accused no.1, is also turned down.
213. Sh. S.P.Kaushal, Advocate, appearing on behalf of accused Jiya Lal Arora in his quest to demolish the case of the prosecution contended that there is no evidence on record that it was accused Jiya Lal, who visited the bank for standing as guarantor for the credit facility and for furnishing the documents of alleged collateral security.
214. To further his contention, he had relied upon the deposition of PW14, the complainant, PW15 Sudhakar Shetty, PW33 Rajeev Shetty and PW27 Sudhakar Hegde and stated that none of these witnesses during their deposition had stated that it was Jiya Lal Arora, who had signed the C.C.No: 44 / 2011 Page No.125 of 205 Judgement in the matter of: (C.B.I. Vs. Rakesh Kumar Bhatia & Ors.) Dated : 31.01.2014 guarantee deed and who had submitted the documents pertaining to the property offered as collateral security.
215. Arguments of Ld.Defence Counsel solely revolves around the question as to whether there is any direct evidence to prove that it was accused Jiya Lal who impersonated as Ram Narayan to stand as guarantor and offered property bearing plot no.25, Khasra No.634, Mohalla Dillai, Shahadara, as collateral security.
216. To appreciate this contention of Ld.Defence Counsel, I have perused the deposition of the prosecution witnesses i.e. PW15 Sudhakar Shetty, PW27 Sudhakar Hegde, PW33 Rajiv Shetty as well as PW14, the complainant. It is apparent that these witnesses had deposed about the procedure and had given their deposition on the basis of the documents which were being maintained by the bank during official course of its business. Admittedly, these C.C.No: 44 / 2011 Page No.126 of 205 Judgement in the matter of: (C.B.I. Vs. Rakesh Kumar Bhatia & Ors.) Dated : 31.01.2014 witnesses were not present at the time when loan documents with respect to present case Ex.PW.15/A10 to Ex.PW.15/A21 and Ex.PW.32/C1 to Ex.PW.32/C6 were executed, therefore there is no question of their giving any direct testimony to the effect that it was Jiya Lal who signed the documents as Ram Narayan.
217. In fact, the concerned officers of the bank, who were associated in the present case for execution of the loan document and to whom the documents relating to collateral security were submitted vide memorandum dated 04.01.1997 Ex.PW.32/E1 are themselves accused in the present case ie. accused no.4 to accused no.7.
218. In such a situation, there cannot be any direct evidence of any other bank officer, who had personally seen accused Jiya Lal Arora appearing in the bank and executing the documents. This fact is required to be ascertained C.C.No: 44 / 2011 Page No.127 of 205 Judgement in the matter of: (C.B.I. Vs. Rakesh Kumar Bhatia & Ors.) Dated : 31.01.2014 on the basis of other evidence proved on record in the form of examination of the specimen signatures of this accused taken during the course of investigations and its comparison with the questioned documents and expert report thereon Ex.PW.32/A and Ex.PW.32/B. In view of my observation given in para 233 (infra), prosecution has been able to establish that it was Jiya Lal only who had signed the guarantee deed and other loan documents as Ram Narayan and it was Jiya Lal only who had signed memorandum dated 04.01.1997 Ex. PW32/E1 as Ram Narayan, vide which he had furnished the sale deed, site plan, house tax receipt, affidavit and indemnity bond for securing the debts / loan to be extended by the bank in favor of Rakesh Kumar Bhatia.
219. In view thereof, I do not find any merits in this contention of Ld. Defence Counsel. The same stands rejected accordingly.
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220. This has brought me down to the next contention raised by Sh.S.P.Kaushal, Advocate on behalf of accused Jiya Lal Arora. Ld. Defence Counsel relying upon the law laid down by Hon'ble Apex Court in case titled "Sukhbir Singh & Others Vs. State of Punjab", reported as 1995 (5) SSC 152 and in the case titled "Sapan Haldar & Ors. Vs. State", decided by Hon'ble High Court of Delhi bearing Criminal Appeal no. 804/01 on 25.05.2012, contended that the specimen signatures of accused Jiya Lal Arora could not have been taken by the Investigating officer of CBI during the course of investigations. He further contended that the specimen signatures of accused Jiya Lal Arora which as per the prosecution were sent to CFSL for the purposes of comparing with the questioned signatures, were not taken with permission of the Court which fact has been admitted by IO during his cross examination. He contended relying upon these judgments that even the Court cannot order for giving specimen signatures to accused during the course of C.C.No: 44 / 2011 Page No.129 of 205 Judgement in the matter of: (C.B.I. Vs. Rakesh Kumar Bhatia & Ors.) Dated : 31.01.2014 investigations. Therefore, the report of the expert i.e. PW32 V.K.Khanna, Ex. PW32/A & Ex. PW32/B are not admissible and cannot be relied upon against accused Jiya Lal Arora.
221. No doubt, PW39 S.S.Atwal, IO during his cross examination conducted by Ld.Defence Counsel had admitted that he had not sought permission of the Court before taking specimen signatures and handwriting sample of Jiya Lal Arora. Further, this fact was also endorsed by PW18 and PW34, the independent witnesses that IO had not shown them any order or permission from the Court to take specimen signatures of Jiya Lal Arora. However, that in itself, is not sufficient to accept the contention urged by Ld.Defence Counsel and to throw the expert opinion Ex.PW.32/A and Ex.PW.32/B.
222. I do not find any merits in this contention of Ld. Defence Counsel as merely by taking the specimen signatures of an accused person during the course of C.C.No: 44 / 2011 Page No.130 of 205 Judgement in the matter of: (C.B.I. Vs. Rakesh Kumar Bhatia & Ors.) Dated : 31.01.2014 investigations, the Investigating officer can by no stretch of imagination be held as asking him to stand as a witness against himself. Scientifically it is established that the impression of finger prints and handwriting of any individual does have such intrinsic qualities which no one can willfully change. The use of specimen signatures / handwriting of a person becomes important for any investigating agency to have it compared with the questioned signatures / handwriting just to corroborate the line of investigation which the investigating agency otherwise is carrying forward to unearth the truth in the case in hand.
223. The precedents relied upon by Ld. Defence Counsel in support of his contentions does not come to his rescue in view of the law laid down by Hon'ble Apex Court in Rabindra Kumar Pal @ Dara Singh Vs. Republic of India, reported as 2011 (2) SCC 490. This judgment delivered by Hon'ble Apex Court is the latest judgment on this C.C.No: 44 / 2011 Page No.131 of 205 Judgement in the matter of: (C.B.I. Vs. Rakesh Kumar Bhatia & Ors.) Dated : 31.01.2014 aspect whereas the precedent relied upon by Ld. Defence Counsel in Sukhbir's Case (Supra) is of the year 1995.
224. In the other judgment relied upon by Ld. Defence Counsel of Hon'ble High Court of Delhi, the law laid down by Hon'ble Apex Court in Dara Singh's Case (Supra) was not considered as the said judgment was not quoted before Hon'ble High Court, Sapan Haldar's Case (supra).
225. In Dara Singh's Case Hon'ble Supreme Court of India had taken into consideration the 11Judge Bench decision in case titled "The State of Bombay Vs. Kathi Kalu Oghad & Ors." reported as AIR 1961 SC 1808. It is pertinent to reproduce the observation made by Hon'ble Apex Court in Dara Singh's case (Supra) which are as under: "Another question which we have to consider is whether the Police (CBI) had the power under the Cr.P.C. to take specimen signatures and writing of A3 for examination by the expert. It was pointed out that during investigation, even the Magistrate cannot C.C.No: 44 / 2011 Page No.132 of 205 Judgement in the matter of: (C.B.I. Vs. Rakesh Kumar Bhatia & Ors.) Dated : 31.01.2014 direct the accused to give his specimen signatures on the asking of the police and only in the amendment of the Cr.P.C. In 2005, power has been given to the Magistrate to direct any person including the accused to give his specimen signatures for the purpose of investigation. Hence, it was pointed out that taking of his signatures / writings being per se illegal, the report of the expert cannot be used as evidence against him. To meet the above claim, learned Addl. Solicitor General heavily relied on a 11Judge Bench decision of this Court in The State of Bombay Vs. Kathi Kalu Oghad & Ors., (1962) 3 SCR 10 = AIR 1961 SC 1808. This larger Bench was constituted in order to re examine some of the propositions of law laid down by this Court in the case of M.P. Sharma and Ors., Vs. Satish Chandra, District Magistrate, Delhi and Ors., (1954) SCR 1077. After adverting to various factual aspects, the larger Bench formulated the following questions for consideration : "2. ........... On these facts, the only questions of constitutional importance that this Bench has to determine are; (1) whether by the production of the specimen handwritings - Exs. 27, 28 and 29 - the accused could be said to have been 'a witness against himself' within the meaning of Article 20 (3) of the Constitution; and (2) whether the mere fact that when those specimen handwritings had been given, the accused person was in police custody could, by itself, amount to compulsion, apart from any other circumstances which could be urged as vitiating the consent of the accused in giving those specimen handwritings. .................
4. ................. The main question which arises for determination in this appeal is whether a direction C.C.No: 44 / 2011 Page No.133 of 205 Judgement in the matter of: (C.B.I. Vs. Rakesh Kumar Bhatia & Ors.) Dated : 31.01.2014 given by a Court to an accused person present in Court to give his specimen writing and signature for the purpose of comparison under the provisions of section 73 of the Indian Evidence Act infringes the fundamental right enshrined in Article 20 (3) of the Constitution.
10. ............... Furnishing evidence" in the latter sense could not have been within the contemplation of the Constitutionmakers for the simple reason that - though they may have intended to protect an accused person from the hazards of selfincrimination, in the light of the English Law on the subject - they could not have intended to put obstacles in the way of efficient and effective investigation into crime and of bringing criminals to justice. The taking of impressions or parts of the body of an accused person very often becomes necessary to help the investigation of a crime. It is as much necessary to protect an accused person against being compelled to incriminate himself, as to arm the agents of law and the law courts with legitimate powers to bring offenders to justice. ...............
11. .............. When an accused person is called upon by the Court or any other authority holding an investigation to give his finger impression or signature or a specimen of his handwriting, he is not giving any testimony of the nature of a 'personal testimony'. The giving of a 'personal testimony' must depend upon his volition. He can make any kind of statement or may refuse to make any statement. But his finger impressions or his handwriting, in spite of efforts at concealing the true nature of it by dissimulation cannot change their intrinsic character. Thus, the giving of C.C.No: 44 / 2011 Page No.134 of 205 Judgement in the matter of: (C.B.I. Vs. Rakesh Kumar Bhatia & Ors.) Dated : 31.01.2014 finger impressions or of specimen writing or of signatures by an accused person, though it may amount to furnishing evidence in the larger sense, is not included within the expression 'to be a witness'.
12. .................. A specimen handwriting or signature or finger impressions by themselves are no testimony at all, being wholly innocuous because they are unchangeable except in rare cases where the ridges of the fingers or the style of writing have been tampered with. They are only materials for comparison in order to lend assurance to the Court that its inference based on other pieces of evidence is reliable. They are neither oral nor documentary evidence but belong to the third category of material evidence which is outside the limit of 'testimony'.
16. In view of these considerations, we have come to the following conclusions :
1. An accused person cannot be said to have been compelled to be a witness against himself simply because he made a statement while in police custody, without anything more. In other words, the mere fact of being in police custody at the time when the statement in question was made would not, by itself, as a proposition of law, lend itself to the inference that the accused was compelled to make the statement, though that fact, in conjunction with other circumstances disclosed in evidence in a particular case, would be a relevant consideration in an enquiry whether or not the accused person had been compelled to make the C.C.No: 44 / 2011 Page No.135 of 205 Judgement in the matter of: (C.B.I. Vs. Rakesh Kumar Bhatia & Ors.) Dated : 31.01.2014 impugned statement.
2. The mere questioning of an accused person by a policy officer, resulting in a voluntary statement, which may ultimately turn out to be incriminatory, is not 'compulsion'.
3. 'To be a witness' is not equivalent to 'furnishing evidence' in its widest significance; that is to say, as including not merely making of oral or written statements but also production of documents or giving materials which may be relevant at a trial to determine the guilt innocence of the accused.
4. Giving thumb impressions or impressions of foot or palm or fingers or specimen writings or showing parts of the body by way of identification are not included in the expression 'to be a witness'.
5. 'To be a witness' means imparting knowledge in respect of relevant facts by an oral statement or a statement in writing, made or given in Court or otherwise.
6. 'To be a witness' in its ordinary grammatical sense means giving oral testimony in Court. Case law has gone beyond this strict literal interpretation of the expression which may now bear a wider meaning, namely, bearing testimony in Court or out of Court by a person accused of an offence, orally or in writing.
7. To bring the statement in question within the prohibition of Article 20 (3), the person accused C.C.No: 44 / 2011 Page No.136 of 205 Judgement in the matter of: (C.B.I. Vs. Rakesh Kumar Bhatia & Ors.) Dated : 31.01.2014 must have stood in the character of an accused person at the time he made the statement. It is not enough that he should become an accused, any time after the statement has been made." In view of the above principles, the procedure adopted by the investigating agency, analyzed and approved by the trial Court and confirmed by the High Court, cannot be faulted with."
226. Having regards to the above observations made by Hon'ble Apex Court, more particularly the one mentioned in subpara (4) of the proceeding para, it is apparent that the Investigating officer during the course of investigations can obtain specimen signatures of an accused for the purposes of comparing it with the questioned signatures. By doing that, a person cannot be said to stand as a witness against himself.
227. In the present case, it is apparent from the prosecution evidence led on record more particularly in view of the deposition of PW8 Sh. Ravinder Bhatia, A.G.M., Canara Bank, PW9 Kalyan Singh, Manager, SBI, PW18 Sh. C.C.No: 44 / 2011 Page No.137 of 205
Judgement in the matter of: (C.B.I. Vs. Rakesh Kumar Bhatia & Ors.) Dated : 31.01.2014 H.K.Srivastava, Sr. Manager from Bank of Baroda and PW34 Sh. K.K.Khanna, Dy. Manager, SBI, that specimen signatures and handwriting of Jiya Lal Arora were obtained by the Investigating officer which accused had voluntarily given. There was no suggestion from the accused to any of these witnesses of his having been forced by the IO to give specimen writing and signatures.
228. The Investigating officer PW39 S.S.Attwal also during the course of his deposition had stated that accused Jiya Lal Arora has voluntarily given his specimen signatures and handwriting. This leaves me with no ground to doubt that specimen signatures of the accused were obtained from him under any pressure, threat or duress.
229. It is contended by Ld.Defence Counsel that IO had not shown any identity proof of Jiya Lal to PW18 or PW34, the independent witnesses before taking his specimen C.C.No: 44 / 2011 Page No.138 of 205 Judgement in the matter of: (C.B.I. Vs. Rakesh Kumar Bhatia & Ors.) Dated : 31.01.2014 signatures. This contention of Ld.Defence Counsel though has some force, but does not come to rescue the case of accused Jiya Lal Arora, as both the witnesses during their cross examination contended that Jiya Lal Arora introduced to them by IO.
230. Further, PW18 H.K.Srivastava and PW34 K.K.Khurana, the independent witnesses, correctly identified accused Jiya Lal Arora, during the course of their cross examination in court stating that he was the one, who gave his specimen writing and signatures in their presence as Ex.PW. 18/1 to Ex.PW.18/23.
231. PW8 and PW9, the other two independent witnesses proved the specimen signatures of Jiya Lal, taken in their presence by IO as Ex.PW.8/1 to Ex.PW.8/30 and both these witnesses were not at all cross examined on behalf of the accused.
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232. Apart from above, in view of the deposition of PW39 the Investigating officer as well as PW32 V.K.Khanna, Pr. Scientific officer from CFSL, it is apparent that these specimen signatures and handwriting alongwith the questioned documents were forwarded to CFSL where they were compared by PW32 using scientific aids and instruments.
233. Nothing material has emanated out of cross examination of PW32 to doubt the reasons given by him to arrive at his reports Ex. PW32/A & Ex. PW32/B. Mere denial of these reports on the part of accused that too during the course of arguments is not sufficient to discard the same. More particularly when on bare perusal of the specimen signatures of accused Jiya Lal on Ex. PW8/1 to Ex. PW8/30 and Ex. PW18/12 to Ex. PW18/27 and comparing it with the signatures appearing as "Ram Narayan" on the loan documents and guarantee deeds Ex.PW.15/A10 to Ex.PW.15/A21, Ex.PW. 32/C1 to Ex.PW.32/C6 and Ex.PW.32/E1, the similarities C.C.No: 44 / 2011 Page No.140 of 205 Judgement in the matter of: (C.B.I. Vs. Rakesh Kumar Bhatia & Ors.) Dated : 31.01.2014 between the two are so apparent which leads to the only inference that it was him, who appeared in the bank with co accused Rakesh Kumar Bhatia and stood as guarantor, impersonating himself as Ram Narayan.
234. Ld. Defence Counsel in another attempt to demolish the reports of the expert Ex. PW32/A & Ex. PW32/B contended that the expert who gave these reports was himself facing a criminal prosecution in this very Court, relying upon the deposition of DW7 Ahlmad of this Court. This contention of Ld. Defence Counsel is also devoid of any merits. Merely because the experts who had examined the questioned documents in the present case is facing a criminal prosecution does not ipsofacto puts a question mark on all his reports.
235. The next contention of Ld. Defence Counsel was that the evidence on record falls short of proving as to whether property was in existence or not. C.C.No: 44 / 2011 Page No.141 of 205
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236. During the course of arguments, Ld. Defence Counsel relied upon the deposition of PW13 Shatrughan Poddar and stated that, this witness had deposed that the sale deed dated 28.01.1966 was registered with the office of Sub Registrar, therefore, the property should also have been in existence. No doubt PW13 did state the factum of registration of the sale deed Ex. PW26/A with the office of Sub Registrar. But that in itself is not sufficient proof regarding existence of this property.
237. Prosecution has examined PW4 Anil Kumar, Patwari of the concerned area, who deposed that Khasra no. 634 was divided under the mutation order in the year 1960 and in no part the name of owner is mentioned either as Charan Dass or Ram Narayan.
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238. Further the house tax receipt Ex. PW1/1 submitted with the bank by this accused vide Ex.PW.32/E1 was proved to be a forged one, in view of the clear deposition of PW1 & PW7 from the House Tax Department. Both these witnesses had categorically stated that this receipt was not issued by MCD. Both these witnesses PW1 & PW7 were not at all cross examined and there is no reason for me to doubt their deposition as they had given specific reasons that the original house tax receipts issued from MCD bears printed serial number and the same are always issued by specific property number and not by Khasra number.
239. Further from the deposition of PW3 Vipin Kumar, Assets Recovery Manager of the bank as well as PW12 Sh.Rajesh Rattan, Advocate, Panel Lawyer of the bank it is established on record that no such property was in existence. C.C.No: 44 / 2011 Page No.143 of 205
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240. Had there been so, it was for the Principal borrower or the guarantor, who were interested in having the bank assumed about existence of this property to have identified the same atleast during the course of investigations. But that was not to be.
241. In view thereof, this contention of Ld. Defence Counsel that the evidence on record is not sufficient to establish that property was not in existence is also rejected.
242. This has led me to the last contention urged on behalf of this accused that the alleged collateral security has no nexus with credit limit. Ld. Defence Counsel relying upon the deposition of PW15 & PW31 contended that the sanctioning officer has to ensure that adequate security is obtained for any advance, but in the present case additional credit facilities were extended which were beyond the valuation of this collateral security. He contended that in view thereof, bank cannot be C.C.No: 44 / 2011 Page No.144 of 205 Judgement in the matter of: (C.B.I. Vs. Rakesh Kumar Bhatia & Ors.) Dated : 31.01.2014 said to be induced by this collateral security.
243. This contention of Ld. Defence Counsel is also not tenable and is devoid of any merits in view of the overall evidence which has come up on record establishing a nexus between the bank officers, who were acting in concert with the Principal borrower and had extended the additional credit facilities on the same collateral security without asking for any further security. Merely because at the time of extending additional credit facility, no further collateral security was sought, that in no way diminishes the importance of the security, which was sought for while considering the initial credit facility.
244. In view thereof, it cannot be said that this collateral security which infact was a non existent one, has no nexus with the credit facility extended. C.C.No: 44 / 2011 Page No.145 of 205
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245. Before adverting to delve upon the contentions raised by Sh. Satish Tamta, Advocate, on behalf of accused no.3 Vijender Kumar, the approved valuer, it is pertinent to mention that the factum of his being approved valuer with Vijaya Bank and the mandate given by the bank to him for the purposes of submitting valuation report with respect to property bearing plot no. 25, Khasra no. 634, Mohalla Dillai, Abadi Shiv Nagar, Shahdara, and is having submitted the valuation report dated 02.01.1997 Ex. PW32/G29 are admitted facts on record.
246. Prosecution, however, in order to discharge its onus and to prove these facts had examined PW15 Sh.Sudhakar Shetty and PW33 Rajiv Shetty who deposed that pursuant to filing of loan application by accused Rakesh Kumar Bhatia and offering property bearing plot no. 25, Khasra no. 634, Mohalla Dillai, Abadi Shiv Nagar, Shahdara, purportedly owned by one Ram Narayan, bank had deputed accused no. 3 C.C.No: 44 / 2011 Page No.146 of 205 Judgement in the matter of: (C.B.I. Vs. Rakesh Kumar Bhatia & Ors.) Dated : 31.01.2014 Vijender Kumar, who was approved valuer on panel of the bank for valuation of the property and submission of report. These witnesses deposed that accused had submitted report Ex. PW32/G29 dated 02.01.1997 with the bank.
247. In order to connect the accused with report dated 02.01.1997 prosecution examined PW17 S.A.Bambari, who deposed that Investigating Officer had taken specimen signatures of accused Vijender Kumar Ex. PW17/1 to Ex. PW17/7 in his presence. Investigating Officer PW39 S.S.Atwal corroborated this fact which even otherwise was not contradicted by accused no. 3 as no cross examination was conducted on this aspect. PW39 Investigating Officer S.S.Atwal further established the link by deposing that specimen signatures of Vijender Kumar were sent to CFSL to be compared with questioned signatures, on the Valuation report dated 02.01.1997 Ex. PW32/G29. C.C.No: 44 / 2011 Page No.147 of 205
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248. PW32 V.K.Khanna, Pr. Scientific officer proved his report Ex. PW32/A whereby he opined that the signatures on the valuation report Ex. PW32/G29 dated 02.01.1997 are of Vijender Kumar.
249. Accused Vijender Kumar, during the course of his statement u/s 313 Cr.PC as well as his Counsel during the course of arguments had even otherwise admitted the fact that this valuation report Ex. PW32/G29 bears signatures of accused Vijender Kumar and infact he had submitted this report with the bank.
250. Ld. Defence Counsel vociferously contended that the report furnished by accused no. 3 Vijender Kumar Ex. PW32/G29 is as per the banking norms and practice which was submitted on the requisite format. He contended that the valuation report is in consonance to the Circular no. 191/96 Ex. PW15/A45 issued by Vijaya Bank, as per which approved C.C.No: 44 / 2011 Page No.148 of 205 Judgement in the matter of: (C.B.I. Vs. Rakesh Kumar Bhatia & Ors.) Dated : 31.01.2014 valuer was not required to do anything else except for giving valuation of the property to which he was taken by the borrower.
251. Second limb of the contention raised by Ld. Defence Counsel was that there was no meeting of mind between him and the coaccused persons. He contended that bank had issued him a notice Ex. PW32/G which was replied by him and those replies of his were also taken into possession by the Investigating Officer which fact has been admitted by Investigating Officer during his cross examination, but his replies were not considered. He contended that as per the reply submitted by him, he was taken to the property by the borrower who identified the property. Ld. Defence Counsel submitted that his client had inspected the structure and gave his detailed report which is correct. Ld. Defence Counsel contended that valuer was not required to ascertain the Municipal number of the property, valued by him as well as the C.C.No: 44 / 2011 Page No.149 of 205 Judgement in the matter of: (C.B.I. Vs. Rakesh Kumar Bhatia & Ors.) Dated : 31.01.2014 aspect of ownership and occupancy, as it was the duty of the Panel Advocate, who was supposed to submit legal scrutiny report with respect to the property.
252. In support of his contentions, he had relied upon the law laid down in CBI Vs. K.Narayan Rao (Supra) and in L.N.Raja Gopalan Vs. State (Supra).
253. In order to appreciate the contentions raised by Ld. Defence Counsel it is necessary to peruse the directions given for approved valuers by the bank vide its Circular no. 191/96 dated 06.11.1996 Ex. PW15/A45. The relevant portion of this Circular is as under : "3. Valuation reports : Another shortcoming observed is with regard to the valuation reports of properties which are not subjected to independent verification by Branch Manager. Branch Managers should visit the site and they should independently comment about the accessibility to the property, tenancy occupation, if any, fair market value, etc. The valuer should also be advised to mention in the C.C.No: 44 / 2011 Page No.150 of 205 Judgement in the matter of: (C.B.I. Vs. Rakesh Kumar Bhatia & Ors.) Dated : 31.01.2014 valuation report whether the property is self occupied residential property or whether it is partly occupied with tenants, etc., and the valuation method should be correctly justified by approved valuers.
In the appraisal memoranda, location (Urban or not), full description of the property including survey No., area, valuation of land, valuation of building, name of the valuer, whether self - occupied / tenanted, date of valuation, method of valuation etc., should be clearly indicated."
254. It is apparent on bare perusal of this Circular that an approved valuer in his valuation report is required to furnish full description of the property, area, valuation of the land, building depicting whether it is self occupied or tenanted. Meaning thereby, that the approved valuer is required to make inquiries from the occupants of the property which he has to evaluate. It is incumbent in the mandate given to him that he has to ensure that valuation is being done by him of that very property, property number of which he was given by the bank for the purposes of valuation.
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255. The approved valuer of the bank is under a solemn duty to submit a true and actual valuation report of the property knowing fully well that it is on the basis of his report that the bank shall act for disbursing any credit facility to the borrower and thus his valuation report can be considered as a valuable security.
256. In view of above, the arguments raised by Ld. Defence Counsel that accused Vijender Kumar as approved valuer was only supposed to value the property to which he was taken and which was identified by the borrower, to my mind is devoid of any logic and merits and thus it cannot be accepted.
257. If such a proposition is accepted then the same shall lend to hazardous results. Any borrower desirous of having credit facility from the bank shall take the approved valuer to any well situated and sought after property and C.C.No: 44 / 2011 Page No.152 of 205 Judgement in the matter of: (C.B.I. Vs. Rakesh Kumar Bhatia & Ors.) Dated : 31.01.2014 would identify that to be his property. The approved valuer is not supposed to evaluate that property without ascertaining that to be the one which is mentioned in the documents handed over to him by the bank for the purposes of submission of valuation report.
258. The approved valuer who is so appointed by the bank at first instance should not visit the property with borrower or guarantor, as by visiting the same with them he is exposing himself to be misled by them.
259. The approved valuer, who is appointed to conduct the valuation of a particular property is supposed to act in a bonafide manner in interest of the bank and is required to submit actual valuation report after identifying the property mentioned in the documents submitted to him for the purposes of carrying out valuation. For the same he is not supposed to visit the property in question with the borrower C.C.No: 44 / 2011 Page No.153 of 205 Judgement in the matter of: (C.B.I. Vs. Rakesh Kumar Bhatia & Ors.) Dated : 31.01.2014 who is interested in getting the credit facility from the bank. A valuer is supposed to identify the property independently and is required to ascertain as to whether the same is self occupied or is a tenanted property as per the instructions given to him vide Circular Ex. PW15/A45.
260. In the present case, it is apparent from the reply submitted by the valuer to the Show Cause Notice Ex. PW33/G issued to him by the bank that he visited the property with the borrower, who identified the same and he on the basis of said identification of the property by the borrower had valued the same.
261. The precedents relied upon by Ld. Defence Counsel also does not come to his rescue as in both the cases relied upon by him, the matter before Hon'ble Superior Courts were either at the stage of cognizance or of charge whereas in the present case we are at the final stages where all C.C.No: 44 / 2011 Page No.154 of 205 Judgement in the matter of: (C.B.I. Vs. Rakesh Kumar Bhatia & Ors.) Dated : 31.01.2014 evidence of the parties has come up on record, which is required to be looked into to ascertain the role of the accused.
262. It is pertinent to mention the observations made by Hon'ble High Court of Madras in L.N.Raja Gopalan Case (Supra) which are reproduced as under: "A Valuer is supposed to estimate the marketability of the property referred for valuation by the bank based on the documents provided by it. Of course, the Valuer is bound to inspect the property referred by the bank for valuation purposes. The Valuer cannot simply go to a location of a property on his own. For the purpose of identification, he takes the Branch Manager or some authorized agent to the location at the time of inspection for the purpose of identifying the property. The Valuers take this precaution just to avoid any mistake in the identification of the property. Even if the Branch Manager locates the property for the purpose of inspection by the approved Valuer, the Valuer is supposed to identify the property with the schedule found in the copy of the document furnished to him for valuing the property.
An approved Valuer fixes the value of the property taking into account various factors contributing to the marketability of the property viz., the location of the property, the availability of transport facility, the width of the road which leads to the property, C.C.No: 44 / 2011 Page No.155 of 205 Judgement in the matter of: (C.B.I. Vs. Rakesh Kumar Bhatia & Ors.) Dated : 31.01.2014 the availability of access to hospital, schools, bus terminus, etc. and determine the value of the property and thereafter generates the valuation report in the prescribed format laid down by the bank."
263. In view of the above observations also made by Hon'ble High Court of Madras, it is apparent that accused no. 3, the approved valuer of the bank should have taken necessary precaution for identification of the property which he was supposed to value as per the mandate given by the bank and should have ascertained by making independent enquiry, to find out whether it is a self occupied property or not, from the owner / occupants of the property. Had he done so, then the situation might have been different, but that was not to be for obvious reasons.
264. Perusal of the valuation report Ex. PW32/G29 reveals that accused no. 3 had mentioned therein the name of owner as Ram Narayan S/o Raj Narayan and he C.C.No: 44 / 2011 Page No.156 of 205 Judgement in the matter of: (C.B.I. Vs. Rakesh Kumar Bhatia & Ors.) Dated : 31.01.2014 had submitted in his report that value of the property given by him, is on the basis of statement of the owner, meaning thereby that accused no. 3 had recorded statement of owner or atleast made enquiries from him. Whereas the evidence which has come up on record, reveals that there is no person by the name of Ram Narayan S/o Raj Narayan. Meaning thereby that accused no. 3 had given a palpably false declaration in his report dated 02.01.1997 stating it to be based on his personal visit and inspection of the property on 31.12.1996.
265. To substantiate the allegations that accused no. 3 Vijender Kumar had submitted his valuation report with respect to a different property and claimed it to be valuation of plot no. 25, situated in Khasra no. 634, Village Dillai, Abadi Shiv Nagar, Shahdara, prosecution had examined PW3 Vipin Kumar, Assets Recovery Manager with Vijaya Bank. This witness deposed that he was deputed by the bank to locate this property which he could not locate and he had also sought C.C.No: 44 / 2011 Page No.157 of 205 Judgement in the matter of: (C.B.I. Vs. Rakesh Kumar Bhatia & Ors.) Dated : 31.01.2014 assistance of accused Vijender Kumar, who was also not in a position to locate the property valued by him. He proved his report submitted to the bank as Ex. PW3/1 to this effect.
266. The Investigating Officer S.S.Attwal appeared in the witness box as PW39. He deposed that during the course of investigations he had asked accused no. 3 to identify the property valued by him at instance of borrower on which he had identified a property in Krishna Nagar. This property purportedly identified by accused no. 3 Vijender Kumar during investigations to be the one where he was taken to by the borrower for the purposes of valuation, as per prosecution evidence on record was property bearing no. E7/A10, Sethi Building, Krishna Nagar.
267. PW2 Harbans Lal Sethi, the occupant of this property stated that his mother was owner of this property and they never got the same valued. Another occupant of this C.C.No: 44 / 2011 Page No.158 of 205 Judgement in the matter of: (C.B.I. Vs. Rakesh Kumar Bhatia & Ors.) Dated : 31.01.2014 property namely Desh Raj, appeared in the witness box as PW25, who also deposed that this property belonged to Vidya Prakash Sethi and no person by the name of Ram Narayan is residing in this property.
268. PW36 Amit Talwar, another occupant of this property too deposed that he is residing in this property since 1990 and they never got this property valued. Nothing material emanated out of cross examination of these witnesses. The same goes on to establish on record that it was the property owned and occupied by PW2, PW25, PW36 and others and no person by the name Ram Narayan was either the owner or occupant of this property which was valued by accused no. 3 and had wrongly shown the same to be the valuation report of plot no. 25, Khasra no. 634, Village Dillai, Abadi Shiv Nagar, Shahdara, as has been mentioned by him in his report Ex. PW32/G29.
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269. Had he made any efforts to ask for Ram Narayan S/o Raj Narayan from the occupants of this property where he as per him was taken by the borrower, then he would not have submitted this valuation report with the bank. But that was not to be. He merely acted for and at behest of borrower and submitted this valuation report which goes on to establish a nexus between him and the Principal borrower.
270. Prosecution in order to further substantiate that accused no. 3 had furnished a false valuation report wherein he had mentioned the name of the owner of the property so valued by him as Ram Narayan S/o Raj Narayan, had examined PW5 Sh. Satnam Singh and PW6 Tilak Kheda. Both these witnesses during the course of their deposition stated that they had been residing in the area of old Tejab Mill, Shahdara and there is no person by the name of Ram Narayan S/o Raj Narayan, living in that area. The electoral roll of the area was also proved as Ex. PW5/1 wherein there is C.C.No: 44 / 2011 Page No.160 of 205 Judgement in the matter of: (C.B.I. Vs. Rakesh Kumar Bhatia & Ors.) Dated : 31.01.2014 no mention of any Ram Narayan S/o Raj Narayan.
271. Apart from that PW4 Anil Kumar, Patwari, appeared in the witness box and deposed that pursuant to the query raised by the Investigating Officer during investigations, he had prepared a report Ex. PW4/2 with respect to Khasra no.
634. He deposed that this Khasra was divided in the year 1960 under mutation, Ex. PW4/4 as per which there is no mention of any Charan Dass or Ram Narayan in it. This fact was also corroborated by PW12 Sh.Rajesh Rattan, the Panel Lawyer of Vijaya Bank, who was subsequently deputed by the bank to again verify the property i.e. plot no. 25, Khasra no. 634, Village Dillai, Abadi Shiv Nagar, Shahdara. PW12 Sh.Rajesh Rattan also in his report Ex. PW12/B had stated that no such property is in existence nor any person by the name Ram Narayan S/o Raj Narayan could be located. C.C.No: 44 / 2011 Page No.161 of 205
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272. Ld. Defence Counsel relied upon the cross examination of PW4 conducted by him and stated that the records in the office of SDM were being maintained khasra wise and not plot wise, therefore, his deposition should not be considered. I do not find any substance in the same.
273. Had the approved valuer i.e. accused no. 3 Vijender Kumar made any efforts to find out the name of the owner of the property from the occupants of the building, then he could have very well found that this building which he was evaluating on identification of the borrower is neither plot no. 25, Khasra no. 634, Village Dillai, Abadi Shiv Nagar, Shahdara, nor was owned by Ram Narayan S/o Raj Narayan.
274. The approved valuer, who was assigned professional duty by the bank for which he had levied professional fees, which was paid to him, had a corresponding professional duty to perform, which made it C.C.No: 44 / 2011 Page No.162 of 205 Judgement in the matter of: (C.B.I. Vs. Rakesh Kumar Bhatia & Ors.) Dated : 31.01.2014 obligatory on the part of accused no. 3 to give a bonafide and correct report. But he has failed to do the same and has merely given the report for and at instance of the Principal borrower which pertains to a different property than the one claimed by accused no. 3 in his report.
275. From this conduct of accused no. 3, it is clearly evident that he acted in concert with the Principal borrower and had given the report Ex. PW32/G29 in furtherance of the conspiracy, so as to facilitate accused no. 1 to achieve his object of getting the necessary credit facility from the bank.
276. In view of this conduct on the part of accused no. 3 contention raised by Ld. Defence Counsel that there was no meeting of mind between accused no. 3 and the Principal borrower and that accused no. 3 had merely performed his duties assigned to him by the bank pales into insignificance, being devoid of any merits.
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277. Sh. Satish Tamta, Advocate, Ld. Counsel for accused no. 3 Vijender Kumar, contended that the valuation report Ex. PW32/G29 was even otherwise superfluous as the same was not relied upon by the bank officials, as the loan application of accused was processed before taking valuation report from the approved valuer.
278. This contention of Ld. Defence Counsel is also devoid of merits, in view of the factual aspects proved on record by the prosecution. It is apparent on perusal of the record that the loan application filed by the Principal borrower Ex. PW33/B, was processed by accused no. 7 only on 22.01.1997 whereas the present valuation report was submitted by accused no. 3 with the bank on 02.01.1997.
279. Further, the process note does find mention about the valuation report, therefore, this contention of Ld. Defence Counsel that the valuation report was not at all C.C.No: 44 / 2011 Page No.164 of 205 Judgement in the matter of: (C.B.I. Vs. Rakesh Kumar Bhatia & Ors.) Dated : 31.01.2014 considered and the bank was not induced by this report for the purposes of extending the credit facility to the Principal borrower is rejected.
280. Having dealt with the contentions raised on behalf of principal borrower R.K.Bhatia, Jiya Lal Arora and Vijender Kumar, has brought me down to the arguments advanced by Sh.Mukul Sharma, Advocate, Ld.Defence Counsel for all the public servants.
281. First contention of Ld.Defence Counsel that in terms of circular no.71/2000 of Vijaya Bank Ex.PW.14/DB, availability of collateral security is not required, has already been dealtwith by me hereinbefore in para 185 to 194 (supra).
282. Another facet to the arguments advanced by Sh. Mukul Sharma, Advocate appearing on behalf of the public C.C.No: 44 / 2011 Page No.165 of 205 Judgement in the matter of: (C.B.I. Vs. Rakesh Kumar Bhatia & Ors.) Dated : 31.01.2014 servants was that, in the year 199697, it was not mandatory on the part of bank officers to personally inspect the property offered as collateral security. He contended relying upon the cross examination of PW3, Sh.Vipin Kumar, Asset Recovery Manager, PW14 Sh.B.R.Chandrashekhar, the complainant, PW15 Sudhakar Shetty and PW33 Rajeev Shetty, that the bank officials themselves were not required to physically inspect the property. He contended that it was made mandatory by the bank only after issuance of the circular no. 101/98 issued on 18.04.1998. He contended that prior thereto, the bank officers used to get legal scrutiny report from the panel lawyer and the valuation report from the approved valuer of the bank for the purposes of processing any loan application. He contended that the directions given in the circular no.191/96 dated 06.11.1996 Ex.PW.15/A45, were not mandatory.
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283. In the present case, the allegations against the public servants, who are bank officers, are that they have criminally misconducted themselves by abusing their official position as public servants and have extended the credit facilities in favor of coaccused R.K.Bhatia on the basis of a collateral security which was not in existence and by letting the coaccused Jiya Lal Arora impersonating as Ram Narayan, the alleged owner of the property offered as collateral security. It is alleged that the public servants failed to adhere to the banking guidelines as mentioned in circular no.191 of 96 dated 06.11.1996 Ex.PW.15/A45.
284. Section 8 of Indian Evidence Act makes the conduct of the accused person to a proceeding relevant if that conduct influences the act or action of theirs, being relevant to the adjudication thereof. It is required to be looked into as to whether the accused persons viz. H.Surendra Shetty, K.Vasanth Kumar Shetty, H.Balakrishna Shetty and C.C.No: 44 / 2011 Page No.167 of 205 Judgement in the matter of: (C.B.I. Vs. Rakesh Kumar Bhatia & Ors.) Dated : 31.01.2014 A.Maillappa Rai, being senior and responsible officers of Vijaya Bank did follow the regular and prescribed procedure while dealing with the loan application Ex.PW.33/B (also exhibited as Ex.PW.15/A) or their conduct to violate the the guidelines mentioned in circular number 191 of 96 of Vijaya Bank, influenced their actions and if so, whether the deviations are proved on record and if proved, are sufficient to constitute the offence, with which they have been charged.
285. In order to appreciate this contention of Ld.Defence Counsel, I have perused the deposition of PW3, PW14, PW15, PW27 and PW33, more particularly, their cross examination which was pointed out by Ld.Defence Counsel to substantiate his contentions. All these prosecution witnesses have categorically stated about the issuance of circular no.191 of 1996 dated 06.11.1996 Ex.PW.15/A45. Issuance of the subsequent circular ie. 101 of 1998 dated 18.04.1998 is also accepted by these prosecution witnesses. C.C.No: 44 / 2011 Page No.168 of 205
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286. No doubt, PW3, PW15 and PW33 during their cross examination had stated in one form or the other that collateral security offered by the borrower was not used to be inspected. However, they deposed that as per the requirement of circular Ex.PW.15/A45, it was necessary for them to physically inspect the collateral security. PW27 during the course of his cross examination went on to depose that before sanctioning of loan, bank officers are supposed to physically inspect the property offered as collateral security.
287. As per the provisions of Indian Evidence Act, whenever there is a documentary evidence, then the same is required to be considered over and above the oral testimony. In view thereof, irrespective of the deposition made by the prosecution witnesses, who more or less, had stated that physical inspection of collateral security is required to be done by the bank officers, it is pertinent to peruse the relevant C.C.No: 44 / 2011 Page No.169 of 205 Judgement in the matter of: (C.B.I. Vs. Rakesh Kumar Bhatia & Ors.) Dated : 31.01.2014 portion of the circular Ex.PW.15/A45 which are reproduced as under: ".... Another shortcoming observed is with regard to the valuation reports of properties which are not subjected to independent verification by Branch Manager. Branch Managers should visit the site and they should independently comment about the accessibility to the property, tenancy occupation, if any, fair market value, etc. The valuer should also be advised to mention in the valuation report whether the property is self occupied residential property or whether it is partly occupied with tenants, etc., and the valuation method should be correctly justified by approved valuers. The operative portion of this circular reads as under: All concerned at branches, controlling offices and at HO as well, particularly processing officers should follow the above instructions and ensure that there is qualitative improvement in credit appraisal / lending techniques. C.C.No: 44 / 2011 Page No.170 of 205
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288. In the subsequent circular no.101/98 dated 18.04.1998, which is relied upon by Ld.Defence Counsel, the relevant portion reads as under: "Since the shortcomings as above have exposed the Bank to risks as well as financial loss, it is felt that the sanctioning authorities at the Branch/ Regional / Zonal / Head Office should pay more attention to this vital aspect. To explain, while the procedure relating to obtention of legal opinion as well as valuation report in the prescribed format from the Bank's approved counsel / valuer would continue as before, henceforth, it is compulsory for the Branch Manager concerned to personally inspect the security and record his observations as per the enclosed format."
289. Bare perusal of the relevant portion of circular Ex.PW.15/A45 makes it abundantly clear that it was made mandatory by the bank for its officers, more particularly, the Branch Manager to personally verify the property offered by the borrower or guarantor as collateral security over and above the valuation report and the legal scrutiny report C.C.No: 44 / 2011 Page No.171 of 205 Judgement in the matter of: (C.B.I. Vs. Rakesh Kumar Bhatia & Ors.) Dated : 31.01.2014 furnished by the approved valuer and panel lawyer of the bank. The words used in the earlier circular which was in force at the time when the present loan application of accused no.1 was processed by the public servants, makes it explicit that the same are mandatory and not directory. In the said circular, it is directed that Branch Manager should visit the site and should independently comment about the assessibility of the property.
290. Further, the operative part of the circular makes it mandatory for all the officers to follow the instructions given in the circular to ensure qualitative improvement in Credit Appraisal.
291. In view of these clear wordings of the initial circular the arguments raised by Ld.Defence Counsel Sh.Mukul Sharma, Advocate that physical verification of the property was made compulsory only by the subsequent circular bearing no. C.C.No: 44 / 2011 Page No.172 of 205
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292. Merely because PW3 ; PW14 and PW15 during the course of their cross examination had stated that the physical verification of the property was not being done, by no stretch of imagination can absolve the present public servants of the liability, which they had on their shoulders to physically verify the property themselves for credit appraisal of the present application in view of the clear mandate in circular Ex.PW.15/A45.
293. Ld.Defence Counsel extended this argument further and stated relying upon the cross examination of PW3 Vipin Kumar ; PW15 Sudhakar Shetty and PW33 Rajeev Shetty, that in absence of a clear / specific duty by this circular C.C.No: 44 / 2011 Page No.173 of 205 Judgement in the matter of: (C.B.I. Vs. Rakesh Kumar Bhatia & Ors.) Dated : 31.01.2014 on any particular officer to physically verify the collateral security, all public servants cannot be fastened with any criminal liability.
294. This contention of Ld.Defence Counsel to my mind, does not hold much waters. It is apparent that the process of credit appraisal is carried out in different stages involving different officers, as per their hierarchy. The processing officer, the forwarding officer, the recommending officer and the officer who ultimately approves the sanction are different in their posts and hierarchy. The circular Ex.PW. 15/A45 clearly requires that the Branch Manager has to physically verify, the property himself apart from taking the legal scrutiny report and valuation report from the approved valuer and should independently assess the said property, before processing the loan application. In the present case, as per the appraisal note Ex.PW.15/A9 dated 22.01.1997, the application was processed by accused A.M.Rai, who was C.C.No: 44 / 2011 Page No.174 of 205 Judgement in the matter of: (C.B.I. Vs. Rakesh Kumar Bhatia & Ors.) Dated : 31.01.2014 supposed to physically verify this property in term of the circular, before initiating his process note. He however has failed to do so and had prepared his note which was forwarded by accused H.Balakrishna Shetty, Senior Manager, who then placed it before accused K.Vasanth Kumar Shetty, Chief Manager and he thereafter submitted it to accused H.Surendra Shetty, Assistant General manager, who sent back the same to Chief Manager, stating that to sanction the initial credit facility was within his financial powers, which was ultimately done by accused K.Vasanth Kumar Shetty, vide orders dated 20.03.1997.
295. Had the initial processing officer ie. A.M.Rai mentioned in his process note, even wrongly that he had physically inspected the property offered as collateral security, then there would have been some merits in the contention raised by ld.Defence Counsel that the senior officers bonafidely acted on this report of Manager. But that was not to be. There C.C.No: 44 / 2011 Page No.175 of 205 Judgement in the matter of: (C.B.I. Vs. Rakesh Kumar Bhatia & Ors.) Dated : 31.01.2014 is no mention of the fact that A.M.Rai had personally visited / inspected the property offered as collateral security in his process note Ex.PW.15/A9. In such an eventuality, the senior officers to whom this note was put up for the purposes of recommendations and approval, should have either carried out the physical inspection of the property themselves or they should have directed the processing officer to physically inspect the property, in compliance of the directions given in circular Ex.PW.15/A45. But this process was not followed rather deviated from, for obvious reasons. The operating part of the circular Ex.PW.15/A45 is reproduced hereunder again even at the cost of repetition: All concerned at branches, controlling offices and at HO as well, particularly processing officers should follow the above instructions and ensure that there is qualitative improvement in credit appraisal / lending techniques. C.C.No: 44 / 2011 Page No.176 of 205
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296. This operating part makes is mandatory for all the officers at Branches, Controlling Offices as well as Head Office to follow the instructions given in circular. In view thereof, a specific duty vide this circular was cast on not only the officers of the branches, but also of the controlling officers as well as Head Office, to comply with the directions given in this circular and thus the contention raised by Ld.Defence Counsel that in absence of any specific duty, criminal liability cannot be fastened on all the public servants, is rejected.
297. This has brought me down to the next contention raised by Sh.Mukul Sharma, Advocate on behalf of the public servants. He contended that when the principal borrower was having a person with him who was ready to impersonate as guarantor and was ready to furnish a Sale Deed with respect to a property for which they through accused no.3 had managed to get a false valuation report, then there was no occasion with the principal borrower to have roped in the C.C.No: 44 / 2011 Page No.177 of 205 Judgement in the matter of: (C.B.I. Vs. Rakesh Kumar Bhatia & Ors.) Dated : 31.01.2014 public servants unnecessarily to widen the conspiracy, to achieve the object of getting the credit facility.
298. This contention of Ld.Defence Counsel to my mind is also devoid of any merits, in view of the fact that the public servants not only obviated to comply with the directions given in circular Ex.PW.15/A45, but there involvement was necessary, for the ultimate object of the conspiracy, as has emanated out of the evidence, which has come up on record.
299. It is apparent from record that while accepting the guarantee deed and other documents Ex.PW.15/A10 to Ex.PW.15/A21, the accused public servants failed to ask for the identity proof of the person who appeared before them as guarantor to the credit facility sought for by accused no.1.
300. Had there been no involvement of the public servants, then rule of prudence demands that they should C.C.No: 44 / 2011 Page No.178 of 205 Judgement in the matter of: (C.B.I. Vs. Rakesh Kumar Bhatia & Ors.) Dated : 31.01.2014 have asked for an identify proof from the person appearing before them to stand as guarantor for the credit facility sought by accused no.1, the principal borrower. But the same was not done. Had the public servants been not involved in the conspiracy then they should have asked for an identity proof from the guarantor before letting him stand as guarantor for the credit facility. If the same was done, then it could have been clear at that point of time itself, that the person who is standing as guarantor is not Ram Narayan s/o Raj Narayan, who claimed himself to be the owner of the property offered as collateral security.
301. Apart from that, it is apparent from the evidence which has come up on record in the form of deposition of of PW15 Sudhakar Shetty, who had submitted his report Ex.PW.15/A8 to the bank, with respect to the account of M/s USR Exports, which is part of the record, that the initial loan which was sanctioned on 26.03.1997 was entered into the C.C.No: 44 / 2011 Page No.179 of 205 Judgement in the matter of: (C.B.I. Vs. Rakesh Kumar Bhatia & Ors.) Dated : 31.01.2014 sanction register only on 09.04.1997. however the terms of sanction were made known to the party on 26.03.1997 itself, on which date not only the loan documents and guarantee documents Ex.PW.15/A10 to Ex.PW.15/A21 were executed, but also the first Packing Credit Limit was released.
302. This in itself shows the involvement of the public servants and the haste in which they were in, in extending the credit facility to the principal borrower.
303. The report Ex.PW.15/A8 of PW15 Sudhakar Shetty, makes it further clear that the public servants while processing, recommending and approving the request of accused R.K.Bhatia for release of the packing credit limits, had failed to mention the balance outstanding bills against him.
304. The involvement of the public servants is further apparent from the fact that they within 2 months of C.C.No: 44 / 2011 Page No.180 of 205 Judgement in the matter of: (C.B.I. Vs. Rakesh Kumar Bhatia & Ors.) Dated : 31.01.2014 grant of initial sanction had entertained an application Ex.PW. 15/A22 of the principal borrower dated 21.05.1997 to enhance the limit which was processed by accused no.7 A.M.Rai, who forwarded it to accused H.Balakrishna Shetty who recommended it to accused K.Vasanth Kumar Shetty and it was ultimately sanctioned by accused H.Surendra Shetty on 29.05.1997. The evidence on record reveals that immediately after the approval of the enhanced limit, further bills were purchased by the bank on 29.05.1997 and 10.06.1997.
305. It is apparent from statement of account of the principal borrower Ex.PW.15/A42 that out of 4 packing credit limits released, only one was adjusted whereas remaining were outstanding. Further, even at the time of enhancing the credit limit, the mandate given in circular Ex.PW.15/A45 was not followed and the public servants had not asked for any additional collateral security from the principal borrower which clear depicts their involvement. The Manual on Credit C.C.No: 44 / 2011 Page No.181 of 205 Judgement in the matter of: (C.B.I. Vs. Rakesh Kumar Bhatia & Ors.) Dated : 31.01.2014 Management Guidelines of the Vijaya Bank Ex.PW.15/A48 states that there should be no frequent enhancement without proper justification. However, in the present case, it is apparent from the record that despite outstanding bills, the accused persons went on to process the release of the credit facility in favor of the principal borrower which leads to the only inference that they were acting in concert with the principal borrower.
306. In view of the evidence discussed hereiabove, it is clear that the public servants were to be involved in the conspiracy to achieve its object and they joined the conspiracy and performed their role. This counters the alternative argument raised by Ld.Defence Counsel that in fact public servants were themselves cheated. This contention of Ld.Defence Counsel is unacceptable as public servants being senior officers were expected to be vigilant and prudent, while processing, recommending and approving any application for C.C.No: 44 / 2011 Page No.182 of 205 Judgement in the matter of: (C.B.I. Vs. Rakesh Kumar Bhatia & Ors.) Dated : 31.01.2014 credit facility and in assessing at least the identity of the person standing as guarantor. This was not done and the record reveals that it was not an unintentional omission on their post to ask for identity proof but a deliberate omission. Therefore, this contention of defence that public servants were themselves cheated is turned down.
307. Prosecution in order to establish a link between accused no.7 A.M.Rai and the principal borrower Rakesh Kumar Bhatia had examined PW10 Nand Kishore Gupta, partner of M/s Union Roadways ; PW30 Mohanan and PW35 Suresh Kumar ; employees of M/s Union Roadways Corporation. PW10 Nand Kishore Gupta deposed that at instance of A.M.Rai, he through his employees had prepared builties / consignment notes Ex.PW.10/1 and Ex.PW.10/2 and corresponding cash receipts Ex.PW.10/3 and Ex.PW.10/4 and also the consignment note Ex.PW.10/5 and Ex.PW.10/6 and corresponding cash receipt Ex.PW.10/7 who asked for the same C.C.No: 44 / 2011 Page No.183 of 205 Judgement in the matter of: (C.B.I. Vs. Rakesh Kumar Bhatia & Ors.) Dated : 31.01.2014 to get reimbursement from the bank regarding transportation of his household goods after his transfer from Delhi to Bangalore. This witness deposed that against these consignment notes, they had not transported any goods,nor received any amount against these cash receipts from A.M.Rai. PW10 further deposed that he had handed over these documents to Rakesh Bhatia at instance of A.M.Rai, who in turn gave it to A.M.Rai.
308. Ld.Defence Counsel relying upon the defence evidence led by him ie. DW4 Sharad Kumar Naik ; DW6 Rohan Kumar and DW9 Ajit Kumar Sharma of M/s Om Goods Carrier, contended that accused A.M.Rai after his transfer from Delhi to Bangalore got his household goods transported from M/s Om Goods Carrier. He further contended relying upon the statement of account of accused A.M.Rai Ex.PW.6/A that the payments of transportation charges were also made by accused to M/s Om Goods Carrier which fact has been admitted by C.C.No: 44 / 2011 Page No.184 of 205 Judgement in the matter of: (C.B.I. Vs. Rakesh Kumar Bhatia & Ors.) Dated : 31.01.2014 DW9. Ld.Defence Counsel submitted that as accused had transported his goods through M/s Om Goods Carrier, therefore, there is no question of his asking M/s Union Roadways Corporation to prepare any builty and cash receipt and prosecution evidence to that effect should be discarded, which they have produced to show a nexus between A.M.Rai and Rakesh Kumar Bhatia.
309. I have perused the evidence led on record by the prosecution as well as by accused A.M.Rai. There is no denying the fact which has also been proved on record through deposition of DW4 ; DW6 and DW9 that accused A.M.Rai had transported his household goods from Delhi to Bangalore, pursuant to his transfer through M/s Om Goods Carrier and he had also made payment to M/s Om Goods Carrier through his bank account.
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310. However, as deposed by PW10 Nand Kishore Gupta, partner of M/s Union Roadways Corporation, his firm is approved by Indian Bank's Association and if the household goods of bank employees are transported through their roadways, then the said employee can get reimbursement from his department of those charges. PW10 has further deposed that A.M.Rai asked him for consignment note and cash receipts only for the purposes of getting reimbursement, which fact has not been challenged, during the course of his cross examination on behalf of accused A.M.Rai.
311. The factum of handing over these documents by Nand Kishore Gupta to accused Rakesh Kumar Bhatia and of sending these documents by Rakesh Kumar Bhatia to A.M.Rai has been proved on record in view of the documentary evidence in the form of a courier receipt Ex.PW.37/B which along with the forwarding letter was recovered from the office of M/s USR Exports, by the investigating officer during the C.C.No: 44 / 2011 Page No.186 of 205 Judgement in the matter of: (C.B.I. Vs. Rakesh Kumar Bhatia & Ors.) Dated : 31.01.2014 course of investigations and this fact has been proved by the employee of accused no.1 R.K.Bhatia namely Ripu Daman Sehgal himself, who appeared in the witness box as PW37.
312. In order to counter the case of the prosecution that there was no occasion with accused A.M.Rai to ask PW10 for preparation of any consignment note or cash receipts, accused could have produced the evidence from his department for reimbursement of the transportation charges which he must have claimed, but that was not done by the accused, for the reasons best known to him.
313. Prosecution through deposition of PW10 ; PW30 and PW35 coupled with the courier receipt Ex.PW.37/B has been able to establish a nexus between accused R.K.Bhatia and A.M.Rai, the public servant. Accused A.M.Rai being one of the important officers dealing with the application of loan of R.K.Bhatia had no business to have any favor howsoever trivial C.C.No: 44 / 2011 Page No.187 of 205 Judgement in the matter of: (C.B.I. Vs. Rakesh Kumar Bhatia & Ors.) Dated : 31.01.2014 it may be from him.
314. Next contention raised by Ld.Defence Counsel was that the investigations were carried out in an unfair manner as the IO during the course of his cross examination had admitted that no case of accumulation of disproportionate assets or inquiry was conducted against any of the public servants. He further contended that IO even failed to take into consideration the internal and external audit reports of the bank before filing the charge sheet.
315. This contention of Ld.Defence Counsel in view of the evidence which has already come up on record against the accused public servants, is devoid of any merits. It is not necessary that whenever any public servant is charge sheeted for offence under section 13(1) (d) of Prevention of Corruption Act, then there necessarily has to be any inquiry or charge sheet against him for offence under section 13 (1) (e) of C.C.No: 44 / 2011 Page No.188 of 205 Judgement in the matter of: (C.B.I. Vs. Rakesh Kumar Bhatia & Ors.) Dated : 31.01.2014 Prevention of Corruption Act. Further, the actions and inactions of the public servants in the present case were with respect to processing, forwarding recommending, and approving the application of principal borrower as well as facilitating accused no.2 to impersonate himself as Ram Narayan without asking for any identity proof of this person and deliberately avoiding to follow the directions given in the circular Ex.PW.15/A45 and making other leeways while processing the release of credit facilities, for which examination of internal or external audit reports of the bank by the IO, were not required being beyond the scope of the investigations of the present case. This contention of Ld.Defence Counsel is also turned down being raised just as an afterthought.
316. This has brought me down to the last contention raised on behalf of public servants by Sh.Mukul Sharma, Advocate. It is submitted by Ld.Defence Counsel that the sanction to prosecute the accused persons has not been C.C.No: 44 / 2011 Page No.189 of 205 Judgement in the matter of: (C.B.I. Vs. Rakesh Kumar Bhatia & Ors.) Dated : 31.01.2014 properly granted by the sanctioning authority PW28 ; PW29 and PW31. He contended that the sanction order Ex.PW. 28/A ; Ex.PW.29/A and Ex.PW.29/B and Ex.PW.31/A were accorded in a mechanical manner and on the asking of CBI therefore, the public servants should be acquitted.
317. I do not find any merits in this contention advanced by Ld.Defence Counsel, which to my mind has been raised by him just to make a last ditch effort in an attempt to escape the criminal liability on technical grounds.
318. Honble Apex Court in case titled "State of Maharashtra vs. Mahesh G.Jain" bearing Criminal Appeal No.2345 of 2009 decided on 28.05.2013 had laid down principles and guidelines which are required to be followed to decide the sanction as to whether the same has been properly granted or not. It is apparent on bare perusal of the sanction order in this case coupled with the deposition of the sanctioning authorities C.C.No: 44 / 2011 Page No.190 of 205 Judgement in the matter of: (C.B.I. Vs. Rakesh Kumar Bhatia & Ors.) Dated : 31.01.2014 who appeared in the witness box that the sanction was properly accorded.
319. In view of the observations as has been summed up by Hon'ble Apex Court in Para13 of the said judgement coupled with the deposition of sanctioning authorities examined in this case ie. PW28 ; PW29 and PW31, I am of the considered opinion, that sanction in this case was properly granted by the concerned sanctioning authorities after having satisfying themselves. This contention of Ld.Defence Counsel is accordingly turned down.
320. Next contention urged on behalf of the accused persons was that their actions and inactions does not constitute the offence under Prevention of Corruption Act as the same at best, can amount to misconduct. It is contended that this misconduct, by no stretch of imagination, can be termed as "criminal".
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321. The word "misconduct" has been defined in Black's Law Dictionary, which reads as under: "The transgression of some established rule of action, dereliction from duty, unlawful behaviour, improper or wrong behaviour".
322. The term "misconduct" implies wrong intention and not a mere error of judgement. 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. In usual parlance, misconduct means a transgression of some established and definite rule of action.
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323. Section 13(1) (d) of the Prevention of Corruption Act, does not make any negligence or a plain and simple misconduct on the part of any public servant, a punishable offence. Hon'ble Apex Court in a catena of judgement while interpreting the provisions of this Act has laid down that a blatant carelessness or gross negligence on the part of any public servant, does not ipsofacto, comes within the domain of this Section. The alleged misconduct on the part of public servant has to be actuated with criminal intent. The abuse of his position as a public servant in order to come within the mischief of the section must necessarily be dishonest intention on the part of said officer qua the alleged act.
324. The burden to prove affirmatively that accused by abusing his official position had obtained any pecuniary advantage either for himself or for any other person, lies on the prosecution. The prosecution on the basis of evidence led by it on record, has to satisfy the principal that all inculpatory C.C.No: 44 / 2011 Page No.193 of 205 Judgement in the matter of: (C.B.I. Vs. Rakesh Kumar Bhatia & Ors.) Dated : 31.01.2014 facts, established on record must be inconsistent with the innocence of the accused and incapable of explanation of any other hypothesis than that of his guilt.
325. In the backdrop of above, the analysis of evidence adduced by the prosecution during the course of trial, and observed by me hereinabove, in my considered opinion has led to an unerring certainty that accused no.4 H.Surendra Shetty ; Accused no.5 K.Vasanth Kumar Shetty ; accused no.6 H.Balakrishna Shetty and accused no.7 A.Maillappa Rai, acting inconcert, with each other being public servants, had abused their official position as such and facilitated co accused R.K.Bhatia to get credit facility from the bank on the basis of fake collateral security and by letting coaccused Jiya Lal impersonate as Ram Narayan, the alleged owner of the property offered as collateral security, by relying upon fake valuation report of the said property by accused no.3 Vijender Kumar without themselves physically inspecting the property C.C.No: 44 / 2011 Page No.194 of 205 Judgement in the matter of: (C.B.I. Vs. Rakesh Kumar Bhatia & Ors.) Dated : 31.01.2014 have thereby caused wrongful loss to the bank.
326. These actions and omissions of theirs, is nothing short of "criminal misconduct" as the same is laden with a dishonest intention, with which they had acted while dealing with the loan application Ex.PW.33/B of accused no.1 and extending credit facilities to him, in the name of his firm.
327. This has brought me down to the last leg of the arguments advanced by Ld.Defence Counsels with respect to the conspiracy. It is contended that the prosecution case is silent with respect to the alleged offence of conspiracy. It is submitted that there is no material on record, from which it can be inferred that there is any meeting of mind, amongst the accused persons to do any illegal act or a legal act by illegal means.
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328. Ld.Defence Counsels for the accused persons in order to support their contentions that there are no circumstances on record which leads to the hypothesis of conspiracy amongst accused persons, had relied upon the law laid down by Hon'ble Apex Court in case titled "K.R.Purushottam vs. State of Kerala" reported as (2005) 12 SCC 631 and "State vs. V.C.Shukla" reported as AIR 1980 SC 1382.
329. I have considered the submissions advanced and have perused the law laid down by Hon'ble Apex Court in the precedents relied upon by Ld.Defence Counsel. There is no denying the fact that Hon'ble Apex Court while holding that the offence of conspiracy is committed in secrecy and can be proved only by circumstantial evidence has held that these circumstances should be proved, beyond reasonable doubt, leading to the guilt of the accused.
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330. Section 120A IPC defines "criminal conspiracy". Accordingly to this section when two or more persons agree to do, or cause to be done (i) an illegal act, or (ii) an act which is not illegal, by illegal means such an agreement is designated as "criminal conspiracy".
331. In view of this definition, the gist of the offence is "an agreement to break the law". Parties to such an agreement are guilty of criminal conspiracy, though the illegal act agreed upon by them to be done, has not or could not be done. It is not necessary that all the parties to such an agreement should agree to do a single illegal act. It may comprise of commission of a number of acts. It is not necessary that all the conspirators must know each and every detail of the conspiracy.
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332. Conspiracy is seldom an open affair. Its existence and objects can only be deduced from circumstances of the case and conduct of the accused, who are party to such conspiracy.
333. As Conspiracy has to be and can only be inferred from the physical manifestation of conduct of the conspirators / accused. Thus, to deduce actual meeting of minds amongst the accused person to find out transmission of thoughts, the actual words used by them during communication, are to be considered.
334. The conduct of the conspirators / accused are to be deciphered not only from the actual words spoken by them but also from their body language, mannerism and behaviour by which they intervene in the conversation taking place between the complainant and coaccused, as their state of mind has to be inferred on the basis of their conduct. C.C.No: 44 / 2011 Page No.198 of 205
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335. Being aware of the fact that for the purposes of appreciating the evidence on record with respect to the allegations of conspiracy, the circumstances in which the accused acted, their actions and mannerism were required to be considered therefore, I am deliberately dealing with this argument at the end, after having held hereinabove the conduct of the accused persons in the present case, their actions and inactions.
336. It has already been held hereinabove by me that accused persons, H.Surendra Shetty; K.Vasanth Kumar Shetty ; H.Balakrishna Shetty and A.M.Rai, being public servants, had deviated from the regular practice and procedure and the directions of the bank given in circular no. 191 of 96 Ex.PW.15/A45 and failed to physically inspect the property offered as collateral security. Besides that, they facilitated accused no.2 Jiya Lal to impersonate himself as Ram Narayan, to stand as guarantor for the credit facility in C.C.No: 44 / 2011 Page No.199 of 205 Judgement in the matter of: (C.B.I. Vs. Rakesh Kumar Bhatia & Ors.) Dated : 31.01.2014 favor of R.K.Bhatia, by failing to ask for proof of his identity, at the time of having the deed of Guarantee signed from him and taking on record the documents pertaining to a property, which was found to be a nonexistent one.
337. Further, it has also been held by me on the basis of evidence on record that accused no.2 Jiya Lal Arora, knowingly impersonated himself as Ram Narayan to stand as guarantor for the credit facilities, in favor of M/s U.S.R.Exports, firm of accused no.1 R.K.Bhatia and wrongly claimed himself to be owner of property bearing plot no.25, Khasra No.634, Mohalla Dillai, Abadi Shiv Nagar, Shahadara, which was found to be a nonexistent one. Accused no.2 Jiya Lal Arora had also placed on record Sale Deed Ex.PW.26/A, House Tax Receipt Ex.PW.1/1 and Affidavit Ex.PW.11/A vide memorandum dated 04.01.1997 Ex.PW.32/E1, knowing them to be false documents. It has been already held by me hereinbefore that these documents were placed on record by C.C.No: 44 / 2011 Page No.200 of 205 Judgement in the matter of: (C.B.I. Vs. Rakesh Kumar Bhatia & Ors.) Dated : 31.01.2014 accused no.2, for and at instance of accused no.1 Rakesh Kumar Bhatia for facilitating the extension of credit facility to his firm.
338. It has also been held by me hereinabove that accused no.3 Vijender Kumar, an approved valuer of the bank, acting inconcert with accused no.1, had furnished a false valuation report with the bank, knowing the same to be of a property different from the one, for which it was claimed to have been filed and having reasons to believe that the same shall be considered as a valuable security by the bank for the purposes of extending the credit facility to firm of accused no.1.
339. Consequently, from the material placed and proved on record by the prosecution, it is established that there was prior meeting of minds amongst all the accused persons, who acting inconcert had hatched a conspiracy, the object of which was to obtain pecuniary advantage to accused Rakesh C.C.No: 44 / 2011 Page No.201 of 205 Judgement in the matter of: (C.B.I. Vs. Rakesh Kumar Bhatia & Ors.) Dated : 31.01.2014 Kumar Bhatia by granting various credit facilities on the basis of a nonexistent collateral security. Prosecution has been able to establish on record that all the accused had performed their assigned roles of commissions and omissions, in the process of achieving the object of conspiracy. Had there been no prior meeting of minds, then the accused persons would not have conducted themselves, the way they have, as held by me hereinabove.
340. In view thereof, I do not find any merits in the contentions advanced by Ld.Counsels for the accused persons that the material on record is not sufficient to infer that there was no meeting of mind amongst the accused persons to carry out any illegal design.
341. The cumulative effect of the facts established on record by the prosecution which are inconsistent with the innocence of the accused persons and incapable of any C.C.No: 44 / 2011 Page No.202 of 205 Judgement in the matter of: (C.B.I. Vs. Rakesh Kumar Bhatia & Ors.) Dated : 31.01.2014 explanation or any loopholes, other than guilt of the accused persons, I am of the considered opinion that apart from the offence of commission of criminal conspiracy to commit offences, the same are sufficient for proving substantive offences of cheating, impersonation and committing forgery by preparing a false valuation report against accused no.1 R.K.Bhatia, accused no.2 Jiya Lal Arora and accused no. 3 Vijender Kumar.
342. However, as charges against these 3 accused persons for substantive offences were not framed by Ld.Predecessor of this Court, therefore at this stage, when almost 15 years have elapsed from the date of registration of the present FIR, I do not deem it appropriate to modify the charge as in that eventuality, fresh opportunity would be required to be given to these accused persons to cross examine the prosecution witnesses and that would further procrastinate the disposal of the present case, which has C.C.No: 44 / 2011 Page No.203 of 205 Judgement in the matter of: (C.B.I. Vs. Rakesh Kumar Bhatia & Ors.) Dated : 31.01.2014 occupied the dockets of the Court for last 15 years. Adopting that process at this stage, to my mind, instead of augmenting the interest of justice, would thwart the same.
343. In view thereof , I proceed to dispose off the present case on the basis of charges already framed against the accused persons.
FINAL VERDICT:
344. Having regards to the facts and circumstances and the discussions as delineated hereinabove, I am of the opinion that CBI has been able to establish the necessary ingredients of offences with which all the accused persons were charged on 13.02.2003 and 15.02.2003.
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345. All the accused persons are convicted for offences punishable under section 120B r/w 419, 420, 467 and 471 I.P.C, read with sec.13(2) & 13(1)(d) of Prevention of Corruption Act.
346. Accused no.4 H.Surendra Shetty ; Accused no.5 K.Vasanth Kumar Shetty ; Accused no.6 H.Balakrishna Shetty and Accused no.7 A.M.Rai are also convicted for substantive offences under section 13(1)(d) read with section 13(2) of Prevention of Corruption Act.
347. Let all the convicts be heard on the point of sentence.
Announced in the Open Court On the 31 Day of January, 2014.
st (KANWALJEET ARORA) SPECIAL JUDGE : C.B.I. (P.C.ACT) DWARKA COURTS, NEW DELHI.
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