Delhi District Court
Cbi vs N. Ramakrishnan Others on 27 November, 2024
IN THE COURT OF MANOJ KUMAR : DISTRICT JUDGE
(COMMERCIAL COURT)-5, CENTRAL DISTRICT, TIS HAZARI,
DELHI
CNR No. DLCT11-000289-2019
Cri. Case No. 01/2023
ID No. 58/2019
FIR No. RC 7(A)/97-CBI, BS&FC/N. DL1
In the matter of:
The State*
through Central Bureau of Investigation
VERSUS
1. N. Ramakrishnan,
son of Sh. Nagarajan,
Formerly Chief Manager,
Central Bank of India,
Janpath Branch, New Delhi
Resident of 33/4, 1st Main Road,
Gandhi Nagar, Adiyar,
Chennai-20 (Since deceased)
2. M/s Indodan Industries Ltd.
72, Janpath, New Delhi.
Through Sh. Rakesh Vashist
3. H.S. Jalan, Chairman,
M/s Indodan Industries Ltd.,
72, Janpath, New Delhi,
Resident of 3-4/124,
Safdarjung Enclave,
New Delhi. (Since deceased)
Criminal Case No. 01/2023 Page No. 1 of 262
4. Rakesh Vashist,
son of Sh. I.K. Vashist,
Director, M/s Indodan Industries Ltd.,
Resident of M-295, G.K. Part-II.
New Delhi.
5. Mahesh Gupta,
son of Sh. S.C. Gupta,
Commercial Manager,
M/s Foremost Industries Ltd.,
72, Janpath, New Delhi,
Resident of Bldg. No. 121,
3rd Floor, Ghee Mundi,
Pahar Gunj, New Delhi.
(Since deceased)
6. C. Subramanian,
son of Sh. P.S. Chandershekar,
Formerly Director, M/s Mani
Management Consultants Pvt. Ltd.,
Mumbai, resident of 101,
Shanta Sadan, Prarthana
Samaj Road, Vill. Parle (East),
Mumbai-57.
7. N. Muralidharan,
son of late R. Narasimhan,
Formerly Director, M/s Mani
Management Consultants Pvt. Ltd.,
Chennai, resident of 14,
Karpagamble Nagar,
Mylapore, Chennai-4.
(Since deceased)
Criminal Case No. 01/2023 Page No. 2 of 262
8. S. Anand,
son of Sh. V. Subrahmanyam,
Director, M/s Mani Management
Consultants Pvt. Ltd.,
Resident of 113, 1st Floor,
Chamiers Nandanam,
Chennai. .... Accused Persons
Date of Institution : 22.02.2001
Date of Reserving judgment : 21.10.2024
Date of pronouncement : 27.11.2024
For State (CBI) : Mr. Neel Mani, Public Prosecutor.
For Defence : Dr. Sushil Gupta, Advocate for the accused
Nos. 2 and 4.
Mr. G.A. Khan, Advocate for the accused
No. 6.
Ms. Rebecca M. John, Senior Advocate
along with Mr. Vishal Gosain, Advocate for
the accused No. 8.
JUDGMENT :
Judgment in the present case was reserved while I was working as the Special Judge (PC Act) (CBI)-17 at Rouse Avenue Courts Complex, New Delhi. By order No. 37/D3/Gaz.-IA/DHC/2024, dated the 25th October, 2024 I was transferred to the present court. This judgment would be pronounced in compliance of the said order passed by the Hon'ble High Court, which, inter alia, reads as follows:
The judicial officers under transfer shall notify the cases in which they had reserved judgments/orders before relinquishing the charge of their Criminal Case No. 01/2023 Page No. 3 of 262 court in terms of the posting/transfer order. The judicial officers shall pronounce judgments/orders in all such matters on the date fixed or maximum within a period of 2-3 weeks thereof, notwithstanding the posting/transfer. Date of pronouncement shall be notified in the cause list of the court to which the matter pertains as also of the court to which the judicial officer has been transferred and on the website also.
2. On 22.02.2001, the police report (charge sheet) giving rise to the present case was put up by the State through Mr. Bhupinder Kumar (PW33), Deputy Superintendent of Police (Dy. S.P.), Central Bureau of Investigation (CBI), BS&FC, New Delhi before the learned predecessor with a view to take cognizance of offences punishable under section 120B of the Indian Penal Code read with sections 409, 420, 467, 468 and 471 of the Indian Penal Code and section 13(2) read with section 13(1)(d) of the Prevention of Corruption Act, 1988 (Act 49 of 1988), and to proceed against accused N. Ramakrishnan (since deceased), H.S. Jalan (since deceased), Rakesh Vashist, Mahesh Gupta (since deceased), C. Subramanian (according to the accused No. 6 his name is C. Subramaniam), N. Muralidharan (since deceased) and S. Anand for having committed the said offence(s). By way of the said police report it was also sought that cognizance be also taken, and the process be issued, against accused N. Ramakrishnan (since deceased), a public servant dismissed from his service, for his having committed offences punishable under section 409 of the Indian Penal Code and section 13(2) read with section 13(1)(d) of Act 49 of 1988; that cognizance be also taken, and the process be issued, against accused M/s Indodan Industries Ltd. for its having committed offence Criminal Case No. 01/2023 Page No. 4 of 262 punishable under section 420 of the Indian Penal Code; and that cognizance be also taken, and the process be issued, against accused H.S. Jalan (since deceased) and Rakesh Vashist for their having committed offences punishable under sections 420 and 471 of the Indian Penal Code; and all of them be put on trial for the commission of the said offences.
3. As per the police report, the first information report (FIR), giving rise to the case was registered on the basis of a complaint (Ex.PW28/1) dated 13.5.1997 made by Radhey Raman Sharma (PW28), the Chief Vigilance Officer and General Manager, Central Bank of India, Mumbai on the allegations that during the period 1989- 93 N. Ramakrishnan (A-1), formerly Chief Manager, Central Bank of India, Janpath Branch, Delhi, other different officers of the said bank, M/s Indodan Industries Ltd. (IIL) (A-2), its Chairman and Managing Director H.S. Jalan (A-3) and its different other executives entered into a criminal conspiracy the object of which was to defraud the bank (Central Bank of India) in the matter of availing of different facilities extended by the bank to M/s IIL, and in pursuance thereof the following transactions were made in the account of M/s IIL, namely,
(i) in the account of M/s IIL a 36 times revolving Letter of Credit (LC) with automatic reinstatement, without recourse and with unrestricted negotiations for Rs.3,63,195/- was opened in favour of M/s Mani Management Consultants Private Ltd., Bombay for procurement of equipment under hire purchase agreement; the beneficiaries, however, Criminal Case No. 01/2023 Page No. 5 of 262 discounted the clean Hundis, accepted by IIL, with their bankers the Standard Chartered Bank, Mumbai, which presented the said Hundis to the Central Bank of India, Janpath Branch, Delhi from time to time and realised an amount of 1.35 crore rupees approximately from the Central Bank of India; (ii) in the account of M/s IIL, a 15 times revolving LC with reinstatement, without recourse and with unrestricted negotiations for Rs.7,00,000/- was opened in favour of M/s N.R. Films, Chennai for sponsorship of T.V. Serial "Vishwamitra", and against this LC the bank had to pay an amount of 68.51 lakh rupees to M/s N.R. Films without any collateral security by way of goods against the LC being available to the bank; (iii) in the account of M/s IIL, an 11 times irrecoverable revolving LC with automatic reinstatement, without recourse and unrestricted negotiations for twelve lakh rupees was opened in favour of M/s Deepak Diary (as stated in the police report), Delhi for supply of milk, and in the process the bank had to pay 150.19 lakh rupees without receipt of the invoices; (iv) three LCs, that is LC No. 43/98 dated 11.01.1990 for 22.23 lakh rupees, LC No. 44/50 dated 02.5.1990 for 20.63 lakh rupees, and LC No. 44/48 dated 25.8.1990 for 41.19 lakh rupees were opened in favour of M/s Manu Steel, 118 Shakti Vihar, New Delhi for procurement of stainless steel/ sheets, which were not related to the line of business of the company; and accordingly, the bank was defrauded for the corresponding amount, as the beneficiary M/s Manu Steel by its letter dated 25.8.1990 informed the bank that Criminal Case No. 01/2023 Page No. 6 of 262 the LC did not pertain to them in any manner, and was a fraud: (v) in the account of M/s IIL, eleven different bills amounting to 72.18 lakh rupees approximately were submitted and discounted which were accompanied with Motor Transport Receipts of non-existent transport companies, and the same were returned unpaid when presented for payment, and thus, the bank was defrauded in the matter of discounting of those bills for the corresponding amount of 72.18 lakh rupees; (vi) in the account of M/s IIL, twenty seven different cheques, amounting to 1.16 crore rupees were discounted during the year 1990- 92 without looking into the aspect or purpose of issuance thereof, consequently, the cheques were returned unpaid resulting in corresponding wrongful loss to the Bank; (vii) in the account of M/s IIL, on 21.12.1992 and 15.01.1993, bills aggregating 61.74 lakh rupees, drawn by M/s IIL on Milk Commissioner, Calcutta were discounted, and uptil then bills worth about 60 lakh rupees had already been returned unpaid in the account; that enquiries made by the bank with the Milk Commissioner had revealed that payments in respect of the supplies, made by IIL had already been made, thereby the company fraudulently submitted one set of bills to the Milk Commissioner while another set of documents was submitted to the bank and discounted, resulting in the aforesaid corresponding wrongful loss to the bank.
4. As per the police report, during the investigation it was revealed that M/s IIL, a closely held public limited company of H.S. Criminal Case No. 01/2023 Page No. 7 of 262 Jalan (A-3) was banking with the Central Bank of India, Janpath Branch, New Delhi since the year 1971, and was engaged in manufacturing and marketing of dairy products and gold coffee; that the working capital requirements of the company were assessed during October 1988, when fund based working capital facilities requirements of the company were approved by the Board of Directors of the Bank to be of 395 lakh rupees; that the sanctioned limits were subsequently reviewed by the Board of Directors of the Bank on 27.9.1989, and had enhanced the same.
5. In relation to the allegation pertaining to 36 times revolving LC without reinstatement clause, without recourse and unrestricted negotiations for Rs.3,61,395/- opened in the account of M/s III with the bank in favour of M/s Mani Management Consultants Pvt. Ltd., Bombay, it is stated in the police report that pursuance of the resolution dated 20.7.1989 of the Board of Directors of M/s IIL, which was authenticated by accused H.S. Jalan (since deceased), under which the company had to raise one crore rupees through M/s Mani Management Consultants Pvt. Ltd. by lease/hire purchase of machinery and equipment, K.C. Jain (PW8), the then General Manager (Finance) of Indodan Industries Ltd. group of companies, had submitted to the Bank an application dated 25.7.1989 for opening of that LC; that the related meetings qua that resolution dated 20.7.1989 were chaired by accused Rakesh Vashist (A-4); that as per the application, the company, that is M/s IIL had expressed its Criminal Case No. 01/2023 Page No. 8 of 262 willingness to provide 100% margin for establishment of the said LC. As per the police report, initially, when the application was presented to accused N. Ramakrishnan, the then Chief Manager of Central Bank of India, Janpath Branch, Delhi, he had expressed his reservations about opening a revolving LC, and had accordingly returned the same, and, subsequent persuasions in this regard by the said K.C. Jain with accused N. Ramakrishanan did not yield any result; that later on, meetings took place between accused Rakesh Vashist (A-4) and accused N. Ramakrishanan (A-1), consequent upon which LC No. 43/98 (as stated in the police report) dated 22.8.1989 was opened, and in that regard K.C. Jain had also submitted letter of the date to the Bank. As per the police report, during investigation it was also revealed that even though the LC spoke of the hire purchase agreement between M/s IIL and M/s Mani Management Consultants Pvt. Ltd. to be the basis for opening of the LC, yet the LC was opened when the agreement was not available to accused N. Ramakrishanan for perusal and scrutiny, and despite it being pointed out to him (accused N. Ramakrishanan) by the dealing officer, he ignored the same and ordered / approved for opening of the LC; that the related hundis drawn by M/s Mani Management Consultants Pvt. Ltd against this LC on M/s IIL were accepted by K.C. Jain in one go just on the day following the day of opening of the LC, and the same were discounted by M/s Mani Management Consultants Pvt. Ltd. with their bankers, namely, Standard Chartered Bank, Mumbai. As per the police report, Criminal Case No. 01/2023 Page No. 9 of 262 during the investigation it was also transpired that revolving LCs could not have been opened without reinstatement clause as dispensing with the same would have resulted in exposure of the bank equivalent to the multiple of the LC value and the number of times it was expected to revolve; that the LC in question was opened by accused N. Ramakrishnan (A-1) at a stage when against a sanctioned LC limit of 30 lakh rupees in the account of M/s IIL there was an exposure of 89.38 lakh rupees; that as per the terms and conditions of the LC, no recourse was available to the bank in the event of M/s IIL violating the terms of agreement or in the event of its failing to make the payment, which instantly happened in this case; that M/s IIL provided only one time 100% margin, which was treated as margin for the subsequent revolutions of the LC; that the payments were made to the beneficiary / its agent Standard Chartered Bank, Mumbai by debiting the overdrawn account of M/s IIL; that the bills drawn against the LC were accepted in one go by K.C. Jain for M/s IIL and the same were discounted on 29.8.1989 with the Standard Chartered Bank, Bombay by M/s Manai (sic) Management Consultants Pvt. Ltd. in its account; that the bank after retaining its commission / service charges credited an amount of Rs.1,02,34,929.00 to the account of M/s Mani Management Consultants Pvt. Ltd., and out of the said credit M/s Mani Management Consultants Pvt. Ltd. issued three cheques for 25 lakh rupees each, and another (fourth) cheque for Rs. 25,46,222/- in favour of M/s IIL, and thus, a total amount of Rs.1,00,46,222/- was Criminal Case No. 01/2023 Page No. 10 of 262 received by M/s IIL from M/s Mani Management Consultants Pvt Ltd. against the LC. As per the police report, during investigation it was further revealed that in pursuance of the aforesaid criminal conspiracy with the object to defraud the bank, and to cause corresponding wrongful gain to M/s IIL, accused C. Subramaniam (A-6), Director of M/s Mani Management Consultants Pvt. Ltd. had executed the said hire purchase agreement as well as the 36 hundis drawn by M/s Mani Management Consultants Pvt. Ltd. on M/s IIL (A-2); that accused C. Subramaniam had also signed / issued the said four cheques through which proceeds of discounting of the bills drawn against the LCs were remitted to M/s IIL. As per the police report, during the investigation it was transpired that the negotiations with M/s IIL on behalf of M/s Mani Management Consultants Pvt. Ltd. for issuance of the LC and raising of the funds against the hundis were carried out by accused S. Anand (A-8), another Director of M/s Mani Management Consultants Pvt. Ltd. in pursuance of the aforesaid criminal conspiracy with accused executives of M/s IIL.
6. It is stated in the police report that as per the refer book / Sanction Register of the Central Bank of India, Janpath Branch, Delhi, as on 28.8.1989, against a sanction limit of 305 + 25 lakh rupees in the account of M/s IIL, the account was being operated with a debit balance of 595.11 lakh rupees, when the then Chief Officer of the Branch had allowed passing of cheque worth Rs.9,500/- only in the account, while the remaining cheques, put up for passing were Criminal Case No. 01/2023 Page No. 11 of 262 disallowed; that when the matter was put up to accused N. Ramakrishanan, however, he allowed passing of the entire lot of cheques with the endorsement "Party expecting DD for Rs. 1 crore from Bombay; that subsequently, also on 29.8.1989, cheques worth 34.63 lakh rupees were allowed to be passed in the account in the refer book by accused N. Ramakrishnan. As per the police report, those endorsements clearly indicated that accused N. Ramakrishanan knew that the funds of one crore rupees were being organised in the account of M/s IIL by discounting of the bills drawn against the LC; that, as such, obviously, in pursuance of the criminal conspiracy accused N. Ramakrishnan, by gross abuse of his official position allowed the funds fraudulently to be credited to the account of M/s IIL and also allowed the same to be misappropriated by accused H.S. Jalan (A-3) and accused Rakesh Vashist (A-4) who had financial interest in the company and were controlling its finance. As per the police report, apparently, accused N. Ramakrishnan, who initially expressed his inability to open the LC, subsequently opened the same by abuse of his official position in criminal conspiracy with other accused persons, knowing that there were no limits available for opening of LC, much less for opening of revolving LC; that accused N. Ramakrishnan did so at the instance of accused Rakesh Vashist (A-4) with whom he held meetings in that regard, without even perusing the elementary document, that is the hire purchase agreement in question; that accused N. Ramakrishnan (A-1) was also aware that the object of Criminal Case No. 01/2023 Page No. 12 of 262 opening of the LC was to raise funds by M/s IIL in an illegal manner by way of discounting of the hundis drawn against the LC; that in pursuance of the said criminal conspiracy, different Directors of M/s Mani Management Consultants Pvt. Ltd. abetted and facilitated the illegal move of M/s IIL in the matter of opening of revolving LC and remittance of the proceeds thereof to the account of M/s IIL; that also in pursuance of the said conspiracy the LC was opened by accused N. Ramakrishnan by gross abuse of his official position as only one time margin was accepted, even though M/s IIL in its application for the purpose had offered to provide 100% margin having implications of about 1.3 crore rupees; that the illegal object of the LC, as per the aforesaid agreement, was to take machinery on hire, already purchased and possessed by M/s III; that the rental for the same was to be paid by M/s IIL through the media of the said LC; that all this lead the bank to make payments against the LC, 36 times by debiting overdrawn account of M/s IIL, without any additional security / limit being available with the result that. the bank suffered a corresponding wrongful loss of about 1.3 crore rupees in the process.
7. In respect of the allegation pertaining to 15 times revolving LC. No. 43/51 dated 13.01.1989 for seven lakh rupees, opened in the account of M/s IIL by accused N. Ramakrishnan in favour of M/s N.R. Films, it is stated in the police report that the investigation did not disclose specific wrongful gain to M/s IlL or its directors, and accordingly, the allegations with regard to opening of Criminal Case No. 01/2023 Page No. 13 of 262 LC. No. 43/51 were not substantiated.
8. With reference to the allegation pertaining to irrevocable twelve times revolving LC No. 44/21 dated 17.5.1990 opened in the account of M/s IIL in favour of M/s Deepak Diary (as named in the police report), it is stated in the police report that the investigation revealed that K.C. Jain (PW8) had applied for opening of the said LC by application dated 15.5.1990, in terms of the item No. 7 of the minutes of meeting of the Board of Directors of M/s IIL dated 30.3.1990; that the said application was accompanied by a letter from K.C. Jain, addressed to the bank, as per which M/s IIL had entered into an agreement with M/s Deepak Diary (as stated in the police report) of Delhi for supply of milk at Muzaffarnagar; that the LC was to be automatically reinstated on 25th of each month, starting from 25.6.1990; that endorsements in the hand of dealing officer of the bank on the back side of the application indicated that at that point of time as against the sanctioned limit of 125 lakh rupees the outstanding were to the tune of 162.91 lakh approximately; that with this position in hand, the instructions of the Chief Manager were sought for, and accused N. Ramakrishnan made further endorsements on the application on 17.5.1990 and worked out the outstanding of 141.02 lakh rupees; that accused N. Ramakrishnan endorsed that the LC be opened subject to the party providing margin as per stipulation; that the application of the party, however, did not speak of the same; that the Board of Directors of the bank on 27.9.89 had sanctioned Criminal Case No. 01/2023 Page No. 14 of 262 enhanced limits to M/s IIL which included LC limit of 125 lakh rupees; that the security for the same was the title to goods, and this limit had a sub-limit of 30 lakh rupees on DA (documents against acceptance) basis for 90 days, and the remaining LC limit of 95 lakh rupees was on DP (documents against payment) basis for opening of LC to meet publicity expenses, and thus, the Board of Directors of the bank had not sanctioned any additional limit for procurement of the raw material, still accused N. Ramakrishanan allowed this LC to be opened, when effectively the sanctioned limit for the purpose was 35 lakh only and against it outstanding LCs were of about 162.91 lakh rupees. As per the police report, during the investigation M/s Deepak Diary (as stated in the police report) was found to be non-existent at the given address, that is Gali Bajrang Wali (as stated in the police report), Chawri Bazaar, Delhi; that during searches at the factory premises of M/s IIL at Muzaffar Nagar records were recovered indicating payments having been made to M/s Deepak Diary (as stated in the police report), and the investigation carried out in the light of the recovered documents led to one Manoj Kumar Goel, of Secunderabad, district Bulandshahar, who had stated that he had started M/s Deepak Diary (as stated in the police report) for supply of milk to M/s IIL, and the supply of milk was initially made on cash basis, but in the year 1990 his substantial funds were struck-up with M/s III, that M/s IIL had provided him funds by getting bills drawn by M/s Deepak Diary on IIL discounted with M/s Capital Trust, and he had signed those Criminal Case No. 01/2023 Page No. 15 of 262 bills as "Raj Kumar" for M/s Deepak Diary. As per the police report, Manoj Kumar Goel, however, denied having any connection with the agreement between M/s IIL and M/s Deepak Diary (as stated in the police report), which led to opening of LC No. 44/21 or the bills drawn against the LC and negotiated with ANZ Grindlays Bank, Chennai. As per the police report, the bills drawn by M/s Deepak Diary on M/s IIL were forged, and the same were accepted by K.C. Jain on behalf of M/s IIL in pursuance of the aforesaid criminal conspiracy and resolution of the Board of Directors of M/s IIL; that K.C. Jain (PW8) in his statement under section 164 of the Code of Criminal Procedure, 1973 (Cr.P.C.) had stated that the bills, purported to had been drawn by M/s Deepak Diary on M/s IIL, were made available to him by accused Rakesh Vashist (A-4); that the forged bills were caused to be prepared in pursuance of the said criminal conspiracy to be used as genuine by accused Rakesh Vashist; that all the twelve bills were accepted by K.C. Jain in one go just after opening of the LC; that the said twelve bills, bearing blank endorsements of M/s Deepak Diary were passed on to M/s Mani Management Consultants Pvt. Ltd. for to be discounted in its account. As per the police report, investigation also disclosed that the said twelve Bills/ Hundis, prepared in pursuance of the said criminal conspiracy to defraud the Central Bank of India, and to cause corresponding wrongful gain to M/s IIL, were endorsed by accused N. Muralidharan (A-6), Director, M/s Mani Management Consultants Pvt. Ltd. in favour of the ANZ Grindlays Bank; that Criminal Case No. 01/2023 Page No. 16 of 262 investigation made with ANZ Grindlays Bank, Chennai revealed that the said bills were discounted by the Bank on 21.5.1990 by way of bill No. BE 1301/70/1230 to 1241 in the account of M/s Mani Management Consultants Pvt. Ltd. and proceeds thereof amounting to Rs.1,32,20,899.79 was credited to the account of the company (Mani Management); that on 21.5.1990, M/s Mani Management Consultants Pvt. Ltd. from its said account had issued cheque for Rs.1,30,21,192/- in favour of M/s IIL, which was paid to the Central Bank of India, Addison Building Branch, Chennai in the account of M/s Indodan Milk Products, from which DDs worth 1.25 crore rupees were issued in favour of M/s IIL payable at Delhi, and the said DDs were paid into the account of M/s IIL with the Punjab National Bank, Janpath Branch, Delhi; that thus, LC No. 44/21 was allowed to be opened by accused N. Ramakrishanan (A-1) for purchase of milk, when the LC limit had already been substantially overdrawn, and the LC ultimately ended up in the generation of cash by fraud rather than procurement of milk for which the LC was opened; that accused Rakesh Vashist (A-4), who made available the said Bills to K.C.Jain, caused the forged bills purported to had been raised by M/s Deepak Diary to be used as genuine knowing or having reasons to believe the same to be forged, and in the process the bank suffered a wrongful loss of 1.44 crore rupees approximately.
9.1 In relation to the allegation pertaining to (a) LC No. 43/98 dated 13.01.1990 for Rs.22,12,750/-, (b) LC No.44/15 dated Criminal Case No. 01/2023 Page No. 17 of 262 02.5.1990 for Rs.20,59,426.20/-, and (c) LC No. 44/48 dated 25.8.1996 (sic) for Rs.41,18,852.40/- it is stated in the police report that the three LCs were opened in favour of M/s Manu Steel, 118, Shakti Vihar, Delhi; that the application dated 11.01.1990 for opening of the L.C for Rs.22,12,750/- (LC No. 43/98) in the account of M/s IIL was signed by K.C. Jain (PW8) and N.C. Bahati (PW22), another executive of the Company, and they both had also signed on behalf of M/s IIL on the forwarding letter dated 12.01.1990 addressed to the bank; that as per the application, the LC was opened for purchase of stainless steel plates, tubes and spares etc, as per purchase order dated 14.10.1989 with conditions of unrestricted negotiations; that the said LC was to be advised through Addison Building Branch of the Central Bank of India at Chennai; that as per the application, invoices prior to the date of LC were acceptable; that Bharat Bhushan (PW10), who worked as an officer in the Janpath Branch of the Bank during the relevant period, and looked after the work of opening of LCs endorsed on it to the effect that against a limit of 125 lakh rupees the outstanding in the account were to the extent of 92.3 lakh rupees, and upon this accused N. Ramakrishnan had desired to know whether there was no sub-limit for DALC (Documents against acceptance LC); that the application bore endorsement in the hand of Bharat Bhushan to the effect that there was a sub-limit of Rs.95 lakh on D.A. basis for 180 days for publicity, and upon this accused N. Ramakrishnan allowed opening of this LC (No. 43/98) with endorsement, "We may Criminal Case No. 01/2023 Page No. 18 of 262 open DALC; however, we will not open further DALC when Advt. LC was due"; that, apparently, accused N. Ramakrishnan allowed opening of this LC on DA basis when no limit for opening of the same for purchase of materials was available; that the related Hundi, drawn by M/s Manu Steel on M/s IIL bore signatures of Satyasen Gogia as proprietor of M/s Manu Steel, who worked with M/s IIL during the relevant period; that Satyasen Gogia stated that he had signed the Hundi at the instance of accused Mahesh Gupta (A-5) when it was already bearing the seal of M/s Manu Steel; that the aforesaid bill drawn against LC 43/98 was negotiated in the account of M/s Mani Management Consultants Private Ltd with the Standard Chartered Bank, Chennai on 18.01.1990 along with three other bills amounting to Rs.52,66,995.31; that the bank having discounted the three bills on 18.01.1990 had credited an amount of Rs.50,80,833/- to the account of M/s Mani Management Consultants Private Ltd. with Mylapore Exchange Branch of the Bank; that against this credit M/s Mani Management Consultants Private Ltd had issued a cheque for Rs.44,49,403/- from its account with the instructions to issue a D.D. for Rs.44,48,403/- in favour of M/s Foremost Industries payable at Delhi; that the demand draft (DD) issued by the Standard Chartered Bank at Chennai for the said amount was credited to the account of Foremost Industries on 19.01.1990; that on 19.01.1990 M/s Foremost Industries had issued a cheque for 43 lakh rupees from its account in favour of M/s IIL, and the amount was credited to the account of M/s Criminal Case No. 01/2023 Page No. 19 of 262 IIL; that the Central Bank of India, Addison Building Branch, had raised Manifold No. 4863 dated 16.4.1990 on the Janpath Branch for Rs.46,23,470/- in respect of LC 43/98 and another LC for Rs.24,10,500.00/-, which was debited to the account of M/s IIL; that the related debit voucher dated 30.4.1990 regarding debit of IIL was authorised by Smt. Snehalata Tandon, who had worked as an Officer in the Foreign Exchange Department of Central Bank of India, Janpath Branch, Delhi, during the relevant period.
9.2 As per the police report, the application dated 27.4.1990 for opening the LC No.44/15 dated 02.5.1990 for Rs.20,59,426.20 was signed by K.C. Jain (PW8), while forwarding letter thereof was signed by N.C. Bahati (PW22), another executive of the company; that the terms and conditions of LC No.44/15 were similar to those of LC No. 43/98 dated 31.01.1990 (sic), with the exception that shipment was to take place from New Delhi to Muzaffarnagar; that LC No.44/15 was opened under the signature of accused N. Ramakrishnan (A-1) and late S.K. Goel; that LC No.44/15 was allowed to be opened by accused N. Ramakrishnan by gross abuse of his official position, in pursuance of the said criminal conspiracy as the outstanding against the LC limit was much more than the sanctioned limit of 125 lakh rupees, which included sub-limit of 90 lakh rupees for opening of LC on DA (documents against acceptance) basis for advertisement purposes; that the related Hundi/ Bill, drawn by M/s Manu Steel on M/s IIL was seized in pursuance of the custodial interrogation of accused Rakesh Criminal Case No. 01/2023 Page No. 20 of 262 Vashist (A-4); that in this case also the bill/invoices numbers, that is 357, 360 and 390 are the same as indicated in the Hundi for the LC discussed above (LC 43/98). As per the police report, during investigation it was established that Vijay Kumar, who worked for M/s Foremost Industries as a stenographer during the relevant period and was attached to K.C. Jain/ Director Office had signed as "V.K. Goel"
for M/s Manu Steel; that during the year 1989 Vijay Kumar was attached to Directors office in M/s IIL, and he stated to CBI that even though S.C. Bhatia was the whole time Director of the company, yet he was mechanically signing the documents without any involvement; that according to him (Vijay Kumar) the Director's office was being looked after/controlled by accused Rekesh Vashist (A-4) and H.S. Jalan (A-3), and that he (Vijay Kumar) had signed different Hundis in assumed names at the instance of K.C. Jain (PW8), who told him to sign the same as desired by accused Rakesh Vashist and / or H.S.Jalan; that despite his initial reluctance, he (Vijay Kumar) signed the same as in private sector refusal to obey orders of the Directors / chairman had severe consequences. As per the police report, the aforesaid Hundi indicated that the same was presented for payments by ANZ Grindlays Bank, Chennai to the Addison Building Branch of Central Bank of India at Chennai which had made the payment and raised Manifold No. 25656 dated 29.10.1990 on Janpath Branch, for Rs.50,88.176.56, which covered the amount of LC No. 44/15 as well; that documents relating to discounting of LC No. 44/15 by ANZ Grindlays Bank, Criminal Case No. 01/2023 Page No. 21 of 262 Chennai, however, were not seized during investigation as the same were not available / traceable with the bank.
9.3. As per the police report, regarding LC No. 44/48 dated 25.8.90 for Rs. 41,18,852.40, the Central Bank of India, Janpath Branch, New Delhi could not make available the related application of M/s IIL or forwarding letter thereof; that during the course of searches at the premises of M/s IIL, a letter dated 25.8.1990 of M/s IIL addressed to M/s Mani Management Consultants Private Ltd. was recovered, through which the original LC (No.44/48), the correspondent bank copy of the LC and the related duly discharged Hundi along with photo copies of the bills and the letter of Manu Steel were forwarded in pursuance of the discussions K.C. Jain had had for further action in the matter; that the letter bore initials of K.C. Jain; that even though the investigation established that the related Hundi was signed by accused K.C. Jain in token of acceptance thereof for M/s IIL, yet it had not been possible to establish as to who signed for M/s Manu Steel; that the Standard Chartered Bank, Chennai made available their CBN No.171/3609, with regard to discounting of the bill against the said LC (44/48); that M/s Mani Management Consultants Private Ltd. made available the related LC and the memo copy dated 28.8.1990 of the STANDARED (sic) CHARTERED BANK which refers to CBN NO. 3609 of STANDARED (sic) CHARTERED BANK; that T.R. Mehta (PW34), the Manager (Operations) of Standard Chartered Bank by referring to those Criminal Case No. 01/2023 Page No. 22 of 262 documents stated that consequent upon discounting of the related bill for Rs. 41,18,852.40 an amount of Rs.38,34,208.40 was credited to the account of Mani Management Consultants Private Ltd, and the voucher bore his initials and those of Satyanarayan, who worked with him; that on 31.3.1990, there was a credit of Rs.37,02,014.00 in the account of M/s IIL which was the likely proceeds of this LC (No. 44/48); that letter dated 27.8.1990, made available by M/s Mani Management Consultants Private Ltd bore the initials of Shri Anand (A-8), its Director and was with regard to discounting of this LC (No. 44/48); that even though the LC was opened by the Central Bank of India, Janapth Branch, Delhi, yet it did not make payment for the same, because subsequent to discounting of the Bill against this LC, the Standard Chartered Bank, Chennai had addressed a letter to M/s Manu Steel in the matter, regarding discounting of the LC, and after receiving the same, being surprised, Vivek Sheel Nayar, partner of the company (sic) had addressed a letter dated 22.9.1990 to the Central Bank of India, Janpath Branch, Delhi, besides others, which responded by accused N. Ramakrishnan vide his letter dated 5.10.1990, whereby Vivek Sheel Nayar was informed that the LC concerned was opened at the request of M/s IIL and the documents produced by them in that regard, and that the bank had nothing more to comment in the matter; that on record there was a telex No. 1469 of the Central Bank of India, Addison Building Branch in respect of LC No. 44/48, addressed to the Janpath Branch, which was issued by the Addison Building Branch, Criminal Case No. 01/2023 Page No. 23 of 262 consequent to receipt of the aforesaid letter dated 22.9.1990 of M/s Manu Steel, and by this telex, Addison Building Branch had sought instructions regarding reimbursement of claim under LC No. 44/48 by other banks; that the telex No. 1469 bore endorsement dated 04.10.1990 in the hand of N. Ramakrishnan to the fact, "Please send telex to honour commitment under this LC". As per the police report, during investigation Vivek Sheel Nayar, partner in M/s Manu Steel had stated about having sent the said letter (dated 22.9.1990) with copy thereof to the Standared (sic) Chartered Bank, Chennai and the said Addison Building Branch, and he also produced the letter dated 05.10.1990 received from the Janpath Branch of the Bank, original LC received by him from STANDARED (sic) CHARTERED BANK, Chennai and the ledger folios of the ledger of M/s Manu Steel for the year 1989-90 relating to M/s IIL and M/s Foremost Industries; that Vivek Sheel Nayar stated that during the year 1989-90 they had made supplies to M/s IIL vide bill No.357 for Rs.5,96,700/- and vide bill No.360 for the Rs.541704.80; that supplies were also made to M/s Foremost Industries vide bill No.498 for Rs.458247.40; that Vivek Sheel Nayar further stated that supplies were effected at the factory premises of the respective companies and as such there was no point in raising bill on the H.O of the company at Janpath, as recorded and seen from the photocopies of the bills purported to had been raised by M/s Manu Steels on M/s IIL. seized from IIL; that Vivek Sheel Nayar further stated that M/s Manu Steel had effected supplies worth about Criminal Case No. 01/2023 Page No. 24 of 262 eight to ten lakh rupees to M/s IIL and payment for the same was received, and thereafter, they neither entered into any agreement with M/s IIL for supply of the materials nor they had received any supply order from M/s IIL in the matter.
10. With reference to the allegations relating to discounting of 11 different bills, namely, (1) Bill No. 99 dated 27.4.92 for Rs.643500 drawn on M/s Gagu Bhai Ukeda and Company, Mumbai; (2) Bill No. 83 dated 22.4.1992 for Rs. 495000/-, (3) Bill No. 84 dated 22.04.92 for Rs. 643500/-, (4) Bill No. 87 dated 23.04.92 for Rs. 495000/-, and (5) Bill No. 93 dated 24.04.92 for Rs. 643500/-, drawn on M/s Avon Agencies Silvasa; (6) Bill No. 90 dated 23.4.94 for Rs.655715 drawn on M/s Sanjay Brothers, Indore; (7) Bill No.B-125 dated 15.10.92 for Rs. 419028, (8) Bill No. B-141 dated 21.10.92 for Rs. 847764, drawn on M/s Rahul Traders, Lucknow; (9) Bill No.B-119 dated 12.10.92 for Rs. 873030 drawn on M/s Ambica Sales Corporation, Ajmer; and (10) Bill No.B-117 dated 12.10.92 for Rs. 642500 and (11) Bill No.B-142 dated 21.10.92 for Rs. 859238, drawn on M/s Link Sales Corporation, Ludhiana, it is stated in the police report that the investigations was made with M/s Gagubhai Ukeda and Company, Mumbai, M/s Avon Agencies, M/s Rahul Traders, M/s Ambica Sales Corporation and M/s Link Sales Corporation, which revealed that those companies were customers of M/s IIL; they had, however, neither placed the order for supply of the related goods nor had received the goods covered by the related bills, with the result that the bills were returned unpaid. As per Criminal Case No. 01/2023 Page No. 25 of 262 the police report, the said bills were accompanied with motor transport receipts/consignment note of the transport companies, like M/s Jindal Goods Transport Company, Ghaziabad, M/s. Kanpur Guwahati Road Lines Ghaziabad, M/s. Bombay Delhi Transport Corporation of India, Ghaziabad etc; that those transport companies, except M/s Jindal Goods Transport had been found to be non-existent as alleged in the FIR of the case; that during the investigation it was transpired that the motor transport receipts in most of the cases were written in the hand of one Charan Singh, an employee of M/s IIL group of companies at the instance of accused Mahesh Gupta (A-5), who used to submit the bills to the bank for discounting; that investigation also revealed that accused Mahesh Gupta, in pursuance of criminal conspiracy with the accused Chairman and Director of M/s IIL, namely, H.S. Jalan and R.K. Vashist respectively had caused other executives of Indodan Industries to forge the aforesaid documents with intent to defraud the bank on the basis of fake and forged invoices, bills, and Motor transport receipts etc. As per the police report, the beneficiary of the funds so fraudulently obtained from the bank on the basis of fake/ forged bills, invoices and motor transport receipts of non existing transport companies was M/s IIL, whose affairs were controlled by H.S. Jalan (A-3) and Rakesh Vashist (A-4) in the capacity of the Chairman and the Director of the group companies, who looked after the day to day business of the Group Companies and had financial interest in the company which basically belonged to the family of H.S. Criminal Case No. 01/2023 Page No. 26 of 262 Jalan of whom accused Rakesh Vashist was the son-in-law; and that on account of the fraud committed the bank was subjected to the corresponding wrongful losses.
11. In relation to the allegations relating to discounting of following twenty seven cheques, namely, (1) Cheque No. 348047 dated 27.4.1992 for Rs.3 lakh issued by M/s Avon Agencies from its account with J&K Bank, Chandni Chowk, Delhi, (2) Cheque No. 471551 dated 6.5.1992 for Rs.10,02,500/- drawn by M/s Jagdish Stores from its account with Tamilnad Mercantile Bank Ltd, Calcutta, (3) Cheque No. 372163 dated 25.5.1992 for Rs.5 lakh issued by M/s Gopalan Foods Products from its accounts with Hong Kong Bank, Chandni Chowk, Delhi, (4) Cheque No. 871905 dated 15.5.1992 for Rs.10 lakh issued by M/s Dinesh General Stores form its account with Punjab National Bank, Sarkaghat, (5) Cheque No. 612090 dated 16.5.1992 for Rs.2 lakh issued by M/s Pawan Chandra Agencies form its account with Punjab National Bank, Parwanoo, (6) Cheque No. 412405 dated 26.5.1992 for Rs.5 lakh issued by M/s Rasoi Food Products from its account with OBC Okhlarsi, (7) Cheque No. 225414 dated 8.5.1992 for Rs.5 lakh issued by M/s Bharat Marketing Co. from its account with SBI Moradabad, (8) Cheque No. 057027 dated 22.5.1992 for Rs.50,000/- issued by M/s M.M. Agencies from its account with Bareilly Corpn. Bank, Pilibhit, (9) Cheque No. 685252 dated 20.5.1992 for Rs.2 lakh issued by M/s Prakash Enterprises from its account with SBBJ, M.I.Rd. Jaipur, (10) Cheque No. 1333226 dated Criminal Case No. 01/2023 Page No. 27 of 262 20.5.1990 for Rs.1 lakh issued by M/s Link Sales Corporation form its account with Union Bank of India, Kesargunj, Ludhiana, (11) Cheque No. 7408746 dated 22.5.1992 for Rs.5 lakh issued by M/s Malchand Radhey Shyam from its account with Canara Bank, Jorhat, (12) Cheque No. 7408747 dated 26.5.1992 for Rs.5 lakh issued by M/s Malchand Radhey Shyam from its account with Canara Bank, Jorhat, (13) Cheque No. 077181 dated 26.5.1992 for Rs.3 lakh issued by M/s Anand Enterprises from its account with Bank of Raj, Sirsa, (14) Cheque No. 993132 dated 27.5.1992 for Rs.10 lakh issued by M/s B.B Enterprises from its account with Syndicate Bank, Pan Bzr. Guwahati, (15) Cheque No. 025002 dated 6.6.1992 for Rs.1,50,000/- issued by M/s Chaman Lal, Jagdish Kumar from its account with SBI, Rudrapur, (16) Cheque No. 645083 dated 31.10.1991 for Rs.5,25,000/- issued by M/s TRADECO, Uayog from its account with UCO Bank, Calcutta, (17) Cheque No. 171733 dated 6.12.1991 for Rs.4 lakh issued by M/s Associated Trd. Concern from its account with Vijaya Bank, Agartala, (18) Cheque No. 716258 dated 16.10.1991 for Rs.2 lakh issued by M/s Rahul Traders from its account with SBP Lucknow, (19) Cheque No. 866179 dated 21.12.1991 for Rs.2 lakh issued by M/s United Marketing Agencies from its account with United Bank of India, Pilkhana Br., Howrah, (20) Cheque No. 740184 dated 27.11.1991 for Rs.4.5 lakh issued by M/s Bengal Milk Traders for its account with Tamilnadu Co-operative Bank, Calcutta, (21) Cheque No. 377573 dated 24.12.1991 for Rs.5,45,750/- issued by M/s Shree Manohar Criminal Case No. 01/2023 Page No. 28 of 262 Bhandar from its account Tamilnadu Co-op. Bank, Calcutta, (22) Cheque No. 377574 dated 26.12.1991 for Rs.5,45,750/- issued by M/s Shree Manohar Bhandar from its account with Tamilnadu Co-op. Bank, Calcutta (23) Cheque No. 377575 dated 27.12.1991 for Rs.5,45,750/- issued by M/s Shree Manohar Bhandar from its account withTamilnadu Co-op. Bank, Calcutta, (24) Cheque No. 316165 dated 06.01.1992 for Rs.2 lakh issued by M/s Orient Enterprises from its account with SBI, Ahemdabad, (25) Cheque No. 0009919 dated 26.10.1991 for Rs.25,000/- issued by M/s Khandelwal Bros. from its account with Union Bank Bargarh, Orissa, (26) Cheque No. 645087 dated 24.11.1991 for Rs.6 lakh issued by M/s Tradeco Udyog from its account with UCO Bank, Calcutta, and (27) Cheque No. 645084 dated 31.10.1991 for Rs.6,15,500/- issued by M/s Tradeco Udyog from its account with UCO Bank, Calcutta it is stated in the police report that during the investigation conducted with the different parties, like M/s Avon Agencies, Gopalan Food Products, Dinesh General Stores, Pawanchandra Agency, Prakash Enterprises, Link Sales etc., who issued the aforesaid cheques, it was revealed that they were all clients of M/s IIL group of companies and were dealing in its milk products; that they had issued the related blank cheques to be filled up for the amounts equivalent to the value of the consignments as and when despatched by M/s IIL in pursuance of sales effected to them; that the blank cheques were obtained by IIL group of companies with the understanding that upon despatch of the stocks sold to a party with Criminal Case No. 01/2023 Page No. 29 of 262 whom the related sale had been finalised, M/s IIL would fill up the cheque for the transaction value and lodge the same with its bankers for realisation thereof, from the party which issued the same. As per the police report, during investigation it was further revealed that the said twenty seven cheques were discounted with the Central Bank of India, Janpath Branch by M/s IIL with which the company had had the limit / facility for cheque / Bill discounting, and the underlying idea was that by the time consignments had reached destination and the party concerned had provided funds for the same in its account, the funds of M/s IIL were not struck up; that all the parties concerned, except M/s Gopalan Food Products, however, stated before CBI that they never received the related consignments and accordingly, there was no point in providing funds for the payment of those cheques; that M/s Gopalan Food Products instructed its bankers for stopping of payment against its cheque, as instead of the products of M/s IIL, products of M/s Foremost Industries Ltd. were supplied which were having less potential in the market as compared to the products of M/s IIL; and that funds for the related consignments were, however, later paid by M/s Gopalan Food Products. As per the police report, investigation conducted with the Central Bank of India, Janpath Branch revealed that all the said twenty seven cheques when presented for payment had returned unpaid, and proceeds of those cheques on the date of discounting were credited to the account of M/s IIL and the same were withdrawn by the company. As per the police report, during Criminal Case No. 01/2023 Page No. 30 of 262 the investigation it was also transpired that some of the cheques were filled in the hands of the employees of M/s IIL group of companies, and they had filled up the same as the related deal had been finalised with the company concerned; that payment was not received against those cheques as the management did not execute the related deal by despatch of the related consignment; that as stated above, the funds organised fraudulently by M/s IIL on account of discounting of aforesaid cheques were utilised at the instance and behest of accused Rakesh Vashist and H.S. Jalan and as such they were the beneficiary of the funds fraudulently so obtained.
12. In connection with the allegations relating to discounting of the bills drawn on the Milk Commissioner, Calcutta, it is stated in the police report that the investigation revealed that in the month of September 1992, the bank had recalled the advances sanctioned to the different group companies of M/s IIL and contemplated legal action against the group companies, in the event of their reluctance to sign the debt confirmation or renewal of documents; that in this background the executives of the company, namely, H.S. Jalan, Chairman and accused Rakesh Vashist, Director, on 03.9.1992 attended a meeting with the executives of the bank, wherein the said accused persons had agreed to authorise and assist the bank to collect and recover a sum of 45 lakh rupees approximately from the Milk Commissioner, Calcutta, which was due to M/s IIL for the last ten months; that the funds so collected were to be credited with the bank towards the overdue amounts in the Criminal Case No. 01/2023 Page No. 31 of 262 account of M/s IIL; that subsequently, a letter was addressed by accused Rakesh Vashist to the Branch Manager, Central Bank of India, Janpath Branch, Delhi on letter head of M/s Foremost Industries (India) Ltd., which was a sister concern of M/s IIL and was having banking facilities with the Central Bank of India, Janpath Branch, New Delhi with a copy to General Manager of the Bank wherein aforesaid commitments made in the meeting dated 03.9.9292 were reiterated; that it was also pointed out in the said letter that upon M/s IIL taking up the matter with the Milk Commissioner, the latter was prepared to release the balance amount of 43.36 lakh rupees on piece meal basis, that is payment for three trucks load of skimmed milk powder on receipt of two truck loads by the Milk Commissioner; that it was also assured to the bank that 10% of the receipts on account of fresh supply to be made to the Milk Commissioner would also be credited to the bank towards the existing liabilities, provided the bank allowed facility of discounting of bills drawn on Milk Commissioner for which the Central Office of the bank had already sanctioned a separate limit; that as a matter of fact the bank had sanctioned a limit of two crore rupees for the purpose which was not allowed to be availed as the liabilities were piling up in the account; that the matter was taken up with the Board of Directors of the Bank in its meeting dated 14.5.1992, wherein operation of the account was allowed with the following stipulations, namely, (a) the party would bring in credit of two crore rupees per month, (b) 10% of credit effected in the account would be Criminal Case No. 01/2023 Page No. 32 of 262 appropriated towards the overdrawn positions of account, and (c) the company would assign debt recoverable from Milk Commissioner, Calcutta, amounting to Rs. 45 lakh in favour of bank etc.; that consequent upon the approval of said note by the Board of Directors of the bank, the General Manager of the Bank had written letter dated 12/16.9.1992 to the Zonal Manager, whereby, subject to certain conditions it was, inter alia, provided: (a) The Company would be allowed to operate the accounts, that is they will be allowed to utilise the Cash Credit, Bills and Cheques facility account; (b) and that the Bank, after obtaining authority from the Company would make efforts to recover amount from Milk Commissioner, Calcutta to reduce its liability of the Company. It is further stated in the police report that the Zonal Manager had also written on the aforesaid lines to the Branch Manager, who in turn had addressed his letter dated 19.9.1992 to H.S. Jalan, Chairman of the Group of Companies setting out the aforesaid terms and conditions of operation of the account, copy of which was marked to accused Rakesh Vashist. As per the police report, in pursuance of the terms of allowing of operation of the account, accused Rakesh Vashist had executed power of attorney dated 13.11.1992 in favour of the bank, whereby the bank was authorised to collect the funds amounting 31.3 lakh rupees from the Milk Commissioner, Calcutta; that in addition 10% of the proceeds of the balance supply of milk powder 462.5 MT, in terms of supply order dated 9.10.1991 of the Milk Commissioner was also to be Criminal Case No. 01/2023 Page No. 33 of 262 appropriated towards reducing liabilities in the account; that in this connection letter by way of undertaking was also executed by S. Menon, the then Executive Director of the company in favour of the bank. As per the police report, the Bank did not receive payment from the Milk Commissioner, Calcutta in respect of the following Bills discounted in the account of IIL:
Banks Date of Bill No MTR BP No. Despatch of IIL No. Amount (in Rs.) 033 21.12.92 9 18501 4,41,000.00 034 21.12.92 10 18502 4,41,000.00 035 21.12.92 11 18503 4,41,000.00 036 21.12.92 12 18504 4,41,000.00 037 21.12.92 13 18505 4,41,000.00 038 21.12.92 14 18506 4,41,000.00 039 19.01.93 15 19271 4,41,000.00 040 19.01.93 16 19272 4,41,000.00 041 19.01.93 17 19273 4,41,000.00 042 19.01.93 18 19274 4,41,000.00 043 19.01.93 19 19275 4,41,000.00 044 19.01.93 20 19276 4,41,000.00 045 19.01.93 21 19277 4,41,000.00 046 19.01.93 22 19278 4,41,000.00
As per the police report, the Bank could not make available any of the Criminal Case No. 01/2023 Page No. 34 of 262 bills aforesaid during the investigation; that upon the matter being taken up with the Office of Milk Commissioner Calcutta, a bunch of documents, which included two letters, both dated 15.01.1993, of the Branch Manager, the Central Bank of India, Janpath Branch, New Delhi through which the documents as detailed below were forwarded for collection were made available:-
Banks Bill/Invoice MTR BP No. No. & date of IIL No. Amount (in Rs.) 039 15 dt. 13.01.93 19271 4,41,000.00 040 16 dt. 13.01.93 19272 4,41,000.00 041 17 dt. 13.01.93 19273 4,41,000.00 042 18 dt. 13.01.93 19274 4,41,000.00 043 19 dt. 13.01.93 19275 4,41,000.00 044 20 dt. 13.01.93 19276 4,41,000.00 045 21 dt. 13.01.93 19277 4,41,000.00 046 22 dt. 13.01.93 19278 4,41,000.00
that rest of the Bills were not traceable in the office of Milk Commissioner Calcutta; that all the above said motor transport receipts were of M/s Allied Cargo Movers, Rani Jhansi Road, New Delhi; that records relating to the payments made by the Office of Milk Commissioner to M/s Indodan Industries and the related bills / invoices were collected, which indicated that the following consignments had been despatched / delivered to the Milk Criminal Case No. 01/2023 Page No. 35 of 262 Commissioner subsequent to 21.12.1992, that is the period to which the bills outstanding pertain to:-
Name of supplying Sl. No. Invoice No. Date Company 1 MC/WB/30 24.12.92 IIL 2 MC/WB/31 31.12.92 IIL 3 MC/WB/31A 29.12.92 IIL 4 MC/WB/32A 31.12.92 IIL 5 MC/WB/31 21.12.92 Foremost Industries As per the police report, the records collected indicated M/s IIL had received three cheques, each for Rs. 17,64,000/- on 14.01.1993 from the Milk Commissioner, Calcutta; that the statement of account of IIL, maintained with the bank indicates receipt of credit of two cheques only in the account on 15.01.1993 when the account showed a debit balance of 19.15 crore rupees approximately; that the closing balance in the account on the day was 19.12 crore rupees, meaning thereby that the funds so credited were withdrawn from the account. As per the police report, the aforesaid bills, which were accompanied with invoices Nos. 15 to 22 all dated 13.1.93 were purported to had been issued from the godown of IIL at B-28 Ansal, Palam Udyog, Maruti Industrial Area, Gurgaon; that enquiries made at the premises revealed that the godown of the company was never operational at the said address in the year 1992-93; that it was also revealed that the aforesaid invoices/Bill Nos. 9 to 22 were prepared in the office of IIL, while as a Criminal Case No. 01/2023 Page No. 36 of 262 matter of fact the same should have been prepared at the godown of the company from where the goods was purported to had been despatched; that the invoices were prepared by watchmen Hem Singh and Samudar Singh of the company, who worked at Delhi, U.P Boarder godown of the company and visited the Head Office of the company for delivery of dak etc. As per the police report, the accompanying Motor Transport Receipts of M/s Allied Cargo Masters, office copy of which was collected from the company, indicated acknowledgment of the stocks by IIL on its backside which goes to establish that the stocks were never despatched; that thus accused Rakesh Vashist and H.S.Jalan having made a commitment to the bank to the effect that the bills of doubtful nature would not be limited, and instead sent for collection, and having executed power of attorney in favour of the bank, for realisation of proceeds of the Bills of future sales and the funds struck up with the Milk Commissioner, Calcutta, allowed the fake bills to be discounted with the bank, without ensuring despatch of the related consignments. As per the police report, during the investigation it was also transpired that accused Mahesh Gupta, who worked as Manager Commercial, M/s Foremost Industries, a sister concern of IIL, looked after the day to day bank work of the group companies, which included checking of availability of limits in the account with the Central Bank of India, Janpath Branch; that he (Mahesh Gupta) informed about the same to the accused Directors of M/s IIL, who controlled the utilization of the available limits; that the Criminal Case No. 01/2023 Page No. 37 of 262 aforesaid transactions of bill discounting / cheque discounting / opening of LCs took place at his instance and accused Mahesh Gupta was instrumental in execution thereof in the bank in pursuance of the said criminal conspiracy; that at times, he had also put up the bills relating to the transactions of bill discounting to the different executives of IIL group of companies, authorised signatories for signatures and they had signed the same with the belief that the same pertained to the routine business of the group companies.
13. As per the police report, the sanction order for prosecution of accused N. Ramakrishnan was not required as he had already been dismissed from services by the bank; that accused K.C.Jain had been granted pardon by court, and he turned an approver in the case. As per the police report, during the investigation no sufficient evidence had come on record regarding involvement of accused Chandrasekhar (K. Chander Shekar), K.S.S. Prasad, N.D. Wadhwa, N.K. Khator, S.K. Gupta, S. Menon, and accused N.K. Malpani and accordingly they were not being recommended for prosecution.
14. It is further stated in the police report that by their acts accused N. Ramakrishnan (since deceased), H.S. Jalan (since deceased), Rakesh Vashist, Mahesh Gupta (since deceased), C. Subrahmanyam, N. Muralidharan (since deceased) and S. Anand had committed offence punishable 120B of IPC (Indian Penal Code) read with sections 409, 420, 467, 468 & 471 of IPC (Indian Penal Code) Criminal Case No. 01/2023 Page No. 38 of 262 and under section 13(2) read with section 13(1)(d) of PC Act, 1988 (the Prevention of Corruption Act, 1988). It is further stated in the police report that the accused persons also committed substantive offences in following manner: that accused N. Ramakrishnan committed offence punishable under section 409 IPC (the Indian Penal Code) and section 13(2) read with section 13(1)(d) of PC Act, 1988 (the Prevention of Corruption Act, 1988); that accused M/s Indodan Industries Ltd. committed offence punishable under section 420 IPC (the Indian Penal Code); and accused H.S. Jalan (since deceased) and Rakesh Vashist committed offences punishable under sections 420 and 471 IPC (the Indian Penal Code).
15. Having taken cognizance of the offences upon the police report, my learned predecessor procured the presence of the accused persons before the court and supplied copies of the police report and the documents etc. filed along with the same to them as per law.
16. On 22.8.2006, before framing of the charges, accused H.S. Jalan died, and the proceedings against him were declared as abated on 22.11.2006.
17. On 18.5.2012, after hearing the Public Prosecutor as well as the accused persons, their representative and counsel, pursuant to order dated 07.5.2012 passed by the learned predecessor, charges were framed against the accused persons. The relevant part of the order dated 07.5.2012, whereby charges were ordered to be framed reads as follows:
Criminal Case No. 01/2023 Page No. 39 of 262Conclusion
64. In view of the foregoing discussions and facts and circumstances of the case, there is sufficient material to conclude that, prima facie, the accused have committed offences as follows:-
(1) All accused including deceased accused Sh. H.S Jalan and Sh.
K.C Jain approver have committed offence punishable under Section 120-B IPC read with (i) Section 13(1)(c) & (d) read with Section 13(2) of the Prevention of Corruption Act, 1988; (ii) Section 109 read with Section 467 IPC (iii) Section 471 read with Section 467 IPC; (iv) Section 411 IPC; and (v) Section 109 IPC read with Section 411 IPC.
(2) In relation to LC No. 43/48 :
(a) Accused no.1 Sh. N. Ramakrishnan, Accused no.2 M/s Indodan Industries Ltd, Accused no.4 Sh. Rakesh Vashistha, Accused no.6 Sh.
C. Subramanian, Accused no.7 Sh. N. Muralidharan and Accused no.8 Sh. S. Anand along with deceased accused Sh. H.S Jalan and Sh. K.C Jain approver have committed offences punishable under SeMerchantction (sic) 409 IPC, 13(2) read with Section 13(1)(c) and 13(1)(d) of the Prevention of Corruption Act, 1988 read with Section 120B IPC.
(b) Accused no.2 M/s Indodan Industries Ltd. committed offences under Section 411 IPC and Accused no.4 Sh. Rakesh Vashistha (along with deceased accused Sh. H.S Jalan and Sh. K.C Jain Approver), Accused no.6 Sh. C. Subramanian, Accused no. 7 Sh. N. Muralidharan and Accused no.8 Sh. S. Anand have committed offences punishable under Section 109/411 read with Section 120B IPC.
(3) In relation to L.C No.44/21 :
(a) Accused no.1 Sh. N. Ramakrishnan, Accused no.2 M/s Indodan
Industries Ltd. and Accused no.4 Sh. Rakesh Vashistha (along with deceased accused Sh. H.S Jalan and Sh. K.C Jain approver) have committed offences punishable under Section 409 IPC, 471 IPC read with Section 467 IPC and under Section 13(2) and read with Section 13(1)(c) and (13)(1)(d) of the Prevention of Corruption Act, 1988 read with Section 120B IPC.13(1)(c) and 13(1)(d) of the Prevention of Corruption Act, 1988 read with Section 120B IPC.
Criminal Case No. 01/2023 Page No. 40 of 262(b) Accused no.2 M/s Indodan Industries Ltd. committed offences under Section 411 IPC and Accused no.4 Sh. Rakesh Vashistha (along with deceased accused Sh. H.S Jalan and Sh. K.C Jain Approver), Accused no.6 Sh. C. Subramanian, Accused no. 7 Sh. N. Muralidharan and Accused no.8 Sh. S. Anand have committed offences punishable under Section 109/411 read with Section 120B IPC.
(4) In relation to L.C No.43/98 :
(a) Accused no.5 Sh. Mahesh Gupta committed offence punishable
under Section 109/467 IPC and Accused no.1 Sh. N.
Ramakrishnan, Accused no.2 M/s Indodan Industries Ltd. and Accused No.4 Sh. Rakesh Vashistha (along with deceased Accused Sh. H.S Jalan and Sh. K. C Jain approver) have committed offences punishable under Section 409 IPC, 471 read with 467 IPC, 471 read with 464 IPC and 13(2) read with Section 13(1) (c) and 13(1) (d) of the Prevention of Corruption Act, 1988 read with Section 120B IPC.
(b) Accused no.2 M/s Indodan Industries Ltd. committed offence punishable under Section 411 IPC, Accused no.4 Sh. Rakesh Vashistha (along with deceased Accused Sh. H.S Jalan and Sh. K.C. Jain approver), Accused no.6 Sh. C. Subramanian, Accused no.7 Sh. N. Muralidharan and Accused no.8 Sh. S. Anand have committed offences punishable under Section 109/411 IPC read with Section120B IPC.
(5) In relation to L.C No.44/15 :
(a) Accused no.1 Sh. N. Ramakrishnan, Accused no.2 M/s Indodan Industries Ltd., Accused no.4 Sh. Rakesh Vashistha ( along with deceased Accused Sh. H.S Jalan and Sh. K.C Jain approver) have committed offences punishable under Section 409 IPC, Section 471 read with Section 464 IPC, Section109/467 IPC, Section 471 read with Section 467 IPC, read with Section 120B IPC.
(b) Accused no.2 M/s Indodan Industries Ltd. committed offense punishable under Section 411 IPC, Accused no.4 Sh. Rakesh Vashistha (along with deceased Accused Sh. H.S Jalan and Sh. K.C. Jain approver), Accused no.6 Sh. Subramanian, Accused no.7 Sh. N. Muralidharan and Accused no.8 Sh. S. Anand have committed offences punishable under Section 109/411 IPC read with Section Criminal Case No. 01/2023 Page No. 41 of 262 120B IPC.
(6) In relation to L.C No.44/48 :
(a) Accused no.1 Sh. N. Ramakrishnan, Accused no.2 M/s Indodan
Industries Ltd., Accused no.4 Sh. Rakesh Vashistha ( along with deceased Accused Sh. H.S Jalan and Sh. K.C Jain approver) have committed offenses punishable under Section 409 IPC, Section 471 read with Section 467 IPC, Section 471 read with Section 464 and under Section 13(2) read with Section 13(c) and Section 13(d) of the Prevention of corruption Act, 1988, read with Section 120B IP C.
(b) Accused no.2 M/s Indodan Industries Ltd. committed offence under Section 411 IPC, Accused no.4 Sh. Rakesh Vashistha (along with deceased accused Sh. H.S Jalan and Sh. K.C Jain approver), Accused no.6 Sh. C. Subramanian, Accused no.7 Sh. N. Muralidharan and Accused no.8 Sh. S. Anand have committed offenses punishable under Section 109/411 IPC read with Section 120B IPC.
18. By order dated 07.5.2012, in respect of the rest of the allegations made against the accused persons in the police report, the learned predecessor observed as follows:
56. I have gone through the statement of the witnesses and also the letter dated 28.11.90 addressed by the Accused No. 1 to the Zonal Manger (sic). It is evident from this letter that the Accused No. 1 was relived of the Charge by letter dated 19/11/1990. Therefore, when Ld defence counsel states that after November 1990 Accused No. 1 was not in the Branch can be believed. The moment the Accused No. 1 was out of the Branch the conspiracy between him on the one hand the Officials of IIL had come to an end. He cannot be blamed for anything which transpired thereafter. I have closely examined the charge-sheet and also seen statements of witnesses I do not find any allegation being made against the Accused No. 1 after November 1990. There is no reference to his being responsible for discounting of Bills referred in para 25 of charge-sheet), discounting of cheques referred to in para 29 of the charge-sheet) or discounting of bills drawn on Milk Commissioner Calcutta. There is no allegation that any other officers of the Bank was involved in the commission of any offence(s) is in relation to the said transaction. Only thing which can be said that if Criminal Case No. 01/2023 Page No. 42 of 262 there were any offences committed in relation thereto they could be handiwork of any of the official of IlL or anyone else but not of the Accused No. 1 or any other officer of the Bank. No offence, therefore, in relation to the said offences can be said to have been made out under any of the provisions of the Prevention of corruption Act. In terms of sequence these are separate and distinct offences and cannot be clubbed with rest of the offence. CBI may collect the documents relating to the said offence if it decides to file a separate charge-sheet in relation to the said offences or to further investigate them.
19. The charges framed against the accused person were read over and explained to accused N. Ramakrishnan, Rakesh Vashist, Mahesh Gupta, C. Subramaniam, N. Muralidharan and S. Anand and the representative of accused M/s Indodan Industries Ltd., to which they did not plead guilty and claimed trial.
20. In support of its case the prosecution got examined PW1 Raj Kumar Jain, PW2 B.R. Kakkar, PW3 Akhilesh Gupta, PW4 Laxmi Narain, PW5 Satya Narain, PW6 Hitesh Chander Sharma, PW7 Baldev Raj Dhand, retired Bank Manager, Punjab National Bank, Parwanoo, Himachal Pradesh, PW8 K.C. Jain (approver), PW9 Sneh Lata Tandon, retired bank officer, who also worked with the Central Bank of India, Janpath branch, New Delhi, PW10 Bharat Bhushan, retired bank officer, who also worked with the Central Bank of India, Janpath branch, New Delhi, PW11 R.K. Sharma, ex bank employee, Union Bank of India, Kesar Ganj branch, Ludhiana, PW12 Kamal Lal Garg, retired bank officer, who also worked with the Central Bank of India, Janpath branch, New Delhi, PW13 Hemantha Kumar D, Head of Institutional Operations, ANZ Bank, Mumbai, PW14 R.K. Gautam, Criminal Case No. 01/2023 Page No. 43 of 262 retired bank officer, who also worked with the Central Bank of India, Janpath branch, New Delhi (July-August, 1997 till 30.9.1999), PW15 K.P. Punitha, retired bank officer, who also worked with the Central Bank of India, Addision Buildings branch, Madras (Chennai), PW16 K.A. Sarnaik, retired bank officer, who also worked with the Central Bank of India, Foreign Bills (Export) department, Bombay (Mumbai), PW17 V.K. Chopra, retired General Manager, Central Bank of India, PW18 Asha Verma, retired Assistant Regional Manager, Central Bank of india, Regional Office, Nagpur, PW19 D. Gopalakrishnan, retired bank officer, who also worked as the Chief Manager, Zonal Office, Central Bank of India, Delhi, PW20 W.F. Mosses, retired bank officer, who also worked with the Canara Bank, Mumbai, PW21 Sarala Kulasekaran, ex bank officer, who also worked with ANZ Grindlays Bank, Rajaji Salai branch, Chennai, PW22 N.C. Baheti, ex employee of M/s Foremost Industries (India) Ltd., PW23 Rajender Dhamija, ex employee of M/s Foremost Industries (India) Ltd., PW24 Viveksheel Nayyar, PW25 Satya Sen, ex employee of M/s Foremost Industries (India) Ltd., PW26 Vijay Kumar, ex employee of M/s Foremost Industries (India) Ltd., PW27 Behram Pestonji Jamadar, retired bank officer, who also worked as General Manager (Credit), Central Office, Central Bank of India, Bombay (Mumbai), PW28 Radhey Raman Sharma, ex Chief Vigilance Officer, Central Bank of India, PW29 S. Syamasundra, retired bank officer, who also worked as Senior Manager, Indian Bank, Mumbai, PW30 Pankaj Pahwa, ex employee of Criminal Case No. 01/2023 Page No. 44 of 262 M/s Foremost Industries (India) Ltd., PW31 R.P. Sharma, retired Superintendent of Police, CBI, PW32 Ram Singh, Deputy Superintendent of Police, CBI, PW33 Bhupinder, Deputy Superintendent of Police, CBI, and the investigating officer (IO) of the case, PW34 T.R. Mehta, ex bank officer, Standard Chartered Bank, Bills department, Head Office, Madras (Chennai), PW35 Chandra Shekhar Verma, Officer, Canara Bank, Circle Office, Nehru Place, New Delhi, PW36 ML Sharma, retired Government handwriting expert, PW37 Jai Kumar, Superintendent of Police, ACB, CBI, Mumbai, PW38 Ravinder Bhatia, retired AGM. Canara Bank and PW39 Deepak Garg, Special Judge, NDPS, New Delhi. During examination of the prosecution witnesses documents Ex.PW4/A (cheque), Ex.PW8/A (application for getting recorded the confession/statement under section 164 of Cr.P.C.), Ex.PW8/B (part statement under section 164 of Cr.P.C.), Ex.PW8/C (part statement under section 164 of Cr.P.C.), Ex.PW8/D (part statement under section 164 of Cr.P.C.), Ex.PW8/E (letter dated 22.8.1989 for opening of LC in favour of M/s Mani Management Consultants Pvt. Ltd.), Ex.PW8/F (application for opening of LC in favour of M/s Mani Management Consultants Pvt. Ltd.), Ex.PW8/G (application & agreement for letter of credit dated 25.7.1989), Mark-PW8/PX1 (document purporting to be copy of Hire Purchase agreement dated 17.7.1989), Ex.PW8/H (letter dated 23.8.1989 addressed on behalf of M/s Foremost Industries Ltd. to M/s Mani Management Consultants Pvt. Ltd.), Ex.PW8/J (bill Criminal Case No. 01/2023 Page No. 45 of 262 of exchange maturing for payment on 25.11.1991 under LC No. 43/48), Ex.PW8/J-1 to Ex.PW8/J-32 (bills of exchange maturing for payment on 25.12.1991, 25.01.1992, 25.02.1992, 25.3.1992, 25.4.1992, 25.5.1992, 25.6.1992, 25.7.1992, 25.8.1992, 25.7.1991, 25.8.1991, 25.9.1991, 25.10.1991, 25.4.1991, 25.5.1991, 25.6.1991, 25.3.1991, 25.02.1991, 25.12.1990, 25.01.1991, 25.11.1990, 25.10.1990, 25.9.1990, 25.7.1990, 25.8.1990, 25.4.1990, 25.5.1990, 25.6.1990, 25.02.1990, 25.3.1990, 25.12.1989 and 25.11.1989 respectively under LC No. 43/48), Ex.PW8/K1 (minutes of meeting dated 28.5.1995), Ex.PW8/K2 (minutes of meeting dated 20.7.1989), Ex.PW8/K3 (signature sheet in respect of the meeting dated 20.7.1989), Ex.PW8/K4 (minutes of meeting dated 30.3.1990), Ex.PW8/K5 (signature sheet in respect of the meeting dated 30.3.1990), Ex.PW8/K6 (copy of LC No. 44/21 in favour of M/s Deepak Dairy), Ex.PW8/K7(1) (request for opening of LC), Ex.PW8/K7(2) (bill of exchange maturing for payment on 23.01.1991 under LC No. 44/21), Ex.PW8/K8 (bill of exchange maturing for payment on 23.02.1991 under LC No. 44/21), Ex.PW8/K9 (bill of exchange maturing for payment on 23.3.1991 under LC No. 44/21), Ex.PW8/K10 (bill of exchange maturing for payment on 23.4.1991 under LC No. 44/21), Ex.PW8/K11 (bill of exchange maturing for payment on 23.5.1991 under LC No. 44/21), Ex.PW8/K12 (bill of exchange maturing for payment on 23.6.1991 under LC No. 44/21), Ex.PW8/K13 (bill of exchange maturing for payment on 23.7.1991 Criminal Case No. 01/2023 Page No. 46 of 262 under LC No. 44/21), Ex.PW8/K14 (bill of exchange maturing for payment on 23.8.1991 under LC No. 44/21), Ex.PW8/K15 (bill of exchange maturing for payment on 23.12.1991 under LC No. 44/21), Ex.PW8/K16 (debit voucher dated 27.9.1990 issued by the Central Bank of India, Janpath branch in respect of payment under LC No. 44/21), Ex.PW8/K17 (debit voucher dated 24.10.1990 issued by the Central Bank of India, Janpath branch in respect of payment under LC No. 44/21), Ex.PW8/K18 (debit voucher dated 30.11.1990 issued by the Central Bank of India, Janpath branch in respect of payment under LC No. 44/21), Ex.PW8/K19 (debit voucher dated 24.12.1990 issued by the Central Bank of India, Janpath branch in respect of payment under LC No. 44/21), Ex.PW8/K20 (debit voucher dated 30.6.1990 issued by the Central Bank of India, Janpath branch in respect of payment under LC No. 44/21), Ex.PW8/K21 (debit voucher dated 31.7.1990 issued by the Central Bank of India, Janpath branch in respect of payment under LC No. 44/21), Ex.PW8/K22 (debit voucher dated 31.8.1990 issued by the Central Bank of India, Janpath branch in respect of payment under LC No. 44/21), Ex.PW8/K23 (debit voucher dated 09.4.1991 issued by the Central Bank of India, Janpath branch in respect of payment under LC No. 44/21), Ex.PW8/K24 (letter dated dated 12.01.1990 for opening of LC), Ex.PW8/K25 (application for creation of LC), Ex.PW8/K26 (application & agreement for letter of credit), Ex.PW8/K27 (bill of exchange dated 13.01.1990 drawn under LC No. 43/98), Ex.PW8/K28 (copy of bill/cash memo), Ex.PW8/K29 Criminal Case No. 01/2023 Page No. 47 of 262 (copy of bill/cash memo), Ex.PW8/K30 (copy of bill/cash memo), Ex.PW8/K31 (copy of bill/cash memo), Ex.PW8/K32 (copy of LC No. 43/98), Ex.PW8/K33 (letter dated 26.6.1990 for opening of LC), Ex.PW8/K34 (application for creation of LC), Ex.PW8/K35 (application & agreement for letter of credit), Ex.PW8/K36 (copy of LC No. 44/15), Ex.PW8/K37 (bill of exchange dated 02.5.1990 drawn under LC No. 44/15), Ex.PW8/L (ledger copy of LC No. 44/48), Ex.PW8/M (letter dated 12.9.1990 addressed by PW8 K.C. Jain to account department of FIIL/IIL/ISFIL/IEL, 72, Janpath, New Delhi), Ex.PW8/N (document purporting to be part copy of the bill of exchange drawn under the LC No. 44/48), Ex.PW8/P (Journal Voucher No. 10/37 dated 15.10.90, Ex.PW8/Q {copy of LC No. 44/-(full number not visible)}, Ex.PW9/A (letter dated 19.6.1991 addressed by S. Gopalakrishnan, Deputy General Manager, Central Bank of India, Zonal Office, Delhi to K. Chandrasekaran, Chief Manager, Branch Office Janpath, New Delhi), Ex.PW9/B (letter dated 04.7.1991 addressed by S. Gopalakrishnan, Deputy General Manager, Central Bank of India, Zonal Office, Delhi to K. Chandrasekaran, Chief Manager, Branch Office Janpath, New Delhi), Ex.PW9/C (letter dated 19.7.1991 addressed by K. Chandrasekaran, Chief Manager, Branch Office Janpath, New Delhi to Deputy General Manager, Central Bank of India, Zonal Office, Delhi to), Ex.PW9/D (manifold dated 16.4.1990 sent by Central Bank of India, Addison Building branch, Madras to Central Bank of India, Janpath branch, New Delhi in respect Criminal Case No. 01/2023 Page No. 48 of 262 of LCs Nos. 43/98 and 99 of Indodan Industries Ltd. and Foremost Industries Ltd.), Ex.PW9/E (banker's cheque dated 16.4.1990 issued by Central Bank of India, Addison Buildings branch, Madras to pay Rs.46,23,250/- to Standard Chartered Bank in respect of LCs No.s 43/98 and 43/99), Ex.PW9/F (debit voucher dated 30.4.1990 for payment of Rs.22,27,864/- under LC No. 43/98), Ex.PW9/G (letter dated 28.11.1990 addressed by N. Ramakrishnan, Chief Manager, Branch Office Janpath, New Delhi to S. Gopalakrishnan, Deputy General Manager, Central Bank of India, Zonal Office, Delhi), Ex.PW9/H (letter dated 22.9.1990 addressed by Vivek Sheel Nayyar, Partner in Manu Steels to Central Bank of India, 70 Janpath, New Delhi and others in respect of LC No. 44/48 ), Ex.PW9/J (telex received by Central Bank of India, Janpath branch, New Delhi from Central Bank of India, Addison Buildings, Madras in respect of LC No. 44/48), Ex.PW9/K (letter dated 05.10.1990 addressed by Manager, Central Bank of India, Janpath branch, New Delhi to M/s Manu Steels), Ex.PW9/L (ledger copy of LC No. 43/48 dated 22.8.1989), Ex.PW9/M (manifold No. 19867 dated 24.3.1990), Ex.PW9/M (manifold No. 19867 dated 24.3.1990), Ex.PW9/N (manifold No. 044684 dated 24.11.1990), Ex.PW9/P (manifold No. 049199 dated 25.7.1991), Ex.PW9/Q (manifold No. 008312 dated 25.3.1992), Ex.PW9/R (manifold No. 008366 dated 25.2.1992), Ex.PW9/S (manifold No. 020920 dated 25.3.1992), Ex.PW9/T (manifold No. 020994 dated 25.5.1992), Ex.PW9/U (manifold No. 044961 dated Criminal Case No. 01/2023 Page No. 49 of 262 25.7.1992), Mark-PW9/PX-1, Mark-PW9/PX-2, Ex.PW10/1 (manifold No. 047599 dated 27.11.1989), Ex.PW10/2 (manifold No. 007523 dated 23.12.1989), Ex.PW10/3 (manifold No. 007561 dated 25.1.1990), Ex.PW10/4 (manifold No. 4969 dated 24.2.1990), Ex.PW10/5 (manifold No. 32210 dated 25.4.1990), Ex.PW10/6 (manifold No. 32242 dated 25.5.1990), Ex.PW10/7 (manifold No. 16597 dated 25.6.1990), Ex.PW10/8 (manifold No. 8238 dated 25.7.1990), Ex.PW10/9 (manifold No. 8283 dated 25.8.1990), Ex.PW10/10 (manifold No. 44624 dated 25.9.1990), Ex.PW10/11 (manifold No. 44653 dated 25.10.1990), Ex.PW10/12 (manifold No. 31221 dated 26.12.1990), Ex.PW10/13 (manifold No. 31269 dated 25.02.1991), Ex.PW10/14 (manifold No. 31244 dated 25.01.1991), Ex.PW10/15 (manifold No. 49226 dated 25.3.1991), Ex.PW10/16 (manifold No. 49289 dated 25.4.1991), Ex.PW10/17 (manifold No. 49333 dated 25.5.1991), Ex.PW10/18 (manifold No. 49393 dated 25.6.1991), Ex.PW10/19 (manifold No. 8737 dated 23.8.1991), Ex.PW10/20 (manifold No. 8797 dated 25.9.1991), Ex.PW10/21 (debit voucher dated 28.9.1989), Ex.PW10/22 (debit voucher dated 30.10.1989), Ex.PW10/23 (debit voucher dated 06.12.1989), Ex.PW10/24 (debit voucher dated 28.12.1989), Ex.PW10/25 (debit voucher dated 31.1.1990), Ex.PW10/26 (debit voucher dated 02.3.1990), Ex.PW10/27 (debit voucher dated 31.3.1990), Ex.PW10/28 (debit voucher dated 07.5.1990), Ex.PW10/29 (debit voucher dated 05.6.1990), Ex.PW10/30 (debit voucher dated Criminal Case No. 01/2023 Page No. 50 of 262 02.7.1990), Ex.PW10/31 (debit voucher dated 03.8.1990), Ex.PW10/32 (debit voucher dated 01.9.1990), Ex.PW10/33 (debit voucher dated 11.10.1990), Ex.PW10/34 (debit voucher dated 30.10.1990), Ex.PW10/35 (debit voucher dated 29.11.1990), Ex.PW10/36 (debit voucher dated 23.3.1991), Ex.PW10/37 (debit voucher dated 09.4.1991), Ex.PW10/38 (debit voucher dated 11.5.1991), Ex.PW10/39 (debit voucher dated 03.7.1991), Ex.PW10/40 (debit voucher dated 11.9.1991), Ex.PW10/41 (debit voucher dated 19.8.1991), Ex.PW10/42 (debit voucher dated 11.10.1991), Ex.PW10/43 (debit voucher dated 15.2.1991), Ex.PW10/44 (debit voucher dated 10.6.1991), Ex.PW10/45 (debit voucher dated 16.12.1991), Ex.PW10/46 (debit voucher dated 13.1.1992), Ex.PW10/47 (debit voucher dated 21.2.1992), Ex.PW10/48 (debit voucher dated 04.3.1992), Ex.PW10/49 (debit voucher dated 02.4.1992), Ex.PW10/50 (debit voucher dated 12.5.1992), Ex.PW10/51 (debit voucher dated 03.6.1992), Ex.PW10/52 (debit voucher dated 11.8.1992), Ex.PW10/53 (debit voucher dated 07.9.1992), Ex.PW10/54 (debit voucher dated 06.7.1992), Ex.PW10/55 (debit voucher dated 2.1.1991), Ex.PW10/55 (manifold No. 25656 dated 29.10.1990), Ex.PW10/57 (Sanction Register), Ex.PW11/1 (cheque), Ex.PW11/4 (cheque return memo), Ex.PW11/2 (bill return memo), Ex.PW11/3 (endorsement), Ex.PW12/1 (seizure memo), Ex.PW12/2 (statement), Ex.PW13/1 to Ex.PW13/5 (tickler copies of bills No. 1232, 1233, 1240, 1241 and Criminal Case No. 01/2023 Page No. 51 of 262 1236), Ex.PW13/6 (debit voucher), Ex.PW13/7 (credit voucher), Ex.PW14/1 (receipt memo dated 17.3.1998), Ex.PW14/2 (receipt memo dated 2.6.1997), Ex.PW14/3 (receipt memo dated 7.4.1997), Ex.PW14/4 (receipt memo dated 17.10.1997), Ex.PW14/5 (receipt memo dated 14.10.1997), Ex.PW14/6 (receipt memo dated 3.11.1997), Ex.PW14/7 (receipt memo dated 3.7.1998), Ex.PW15/1 (challan), Ex.PW15/2 (account opening form), Ex.PW16/1 to Ex.PW16/21 (credit vouchers dated 27.9.1989, 27.11.1989, 23.12.1989, 25.01.1990, 24.02.1990, 24.3.190, 25.4.1990, 25.5.1990, 25.7.1990, 25.8.1990, 25.9.1990, 25.10.1990, 24.11.1990, 26.12.1990, 25.4.1991, 25.5.1991, 25.6.1991, 25.7.1991, 23.8.1991, 25.9.1991 and 24.12.1991 respectively issued by Central Bank of India, Bombay branch favouring Standard Chartered Bank on account of Mani/Money Management Consultants Pvt. Ltd. in respect of LC No. 43/48, issued by Central Bank of India, Janpath branch, New Delhi each for Rs.3,63,195/-), Ex.PW16/22 to Ex.PW16/29 (vouchers dated 25.1.1992, 25.2.1992, 25.3.1992, 25.4.1992, 25.5.1992, 25.6.1992, 25.7.1992 and 25.8.1992 respectively issued by Central Bank of India, Bombay branch favouring Standard Chartered Bank and Mani Management Consultants Pvt. Ltd. on account of Indodan Industries Ltd. in respect of LC No. 43/48, issued by Central Bank of India, Janpath branch, New Delhi each for Rs.3,63,195/-), Ex.PW16/30 (Manifold dated 27.11.1991), Ex.PW16/31 (telegram message by Central Bank of India, Bombay branch to Central Bank of India, Criminal Case No. 01/2023 Page No. 52 of 262 Janpath branch, New Delhi to reinstate the LC value ), Ex.PW20/1 (specimen writing), Ex.PW21/1 (memo dated 11.12.1999), Ex.PW22/1 (letter for opening LC), Ex.PW22/2 (letter dated 15.5.1990), Ex.PW22/3 (letter dated 19.6.1990), Ex.PW22/4 to Ex.PW22/18 (cheques), Ex.PW22/19 (specimen signatures), Ex.PW23/1 (internal voucher dated 28.2.1990), Ex.PW23/2 (internal voucher dated 02.01.1991/10.01.1991), Ex.PW23/2A (advice), Ex.PW23/3 (internal voucher dated 26.12.1989), Ex.PW23/3A (advice), Ex.PW23/4 (internal voucher dated 28.2.1990), Ex.PW23/5 (internal voucher dated 28.12.1989), Ex.PW23/5A (advice), Ex.PW23/5B (advice), Ex.PW23/6 (internal voucher dated 6.12.1989), Ex.PW23/6A (advice), Ex.PW23/7 (internal voucher dated 02.3.1990/15.3.1990), Ex.PW23/7A (advice), Ex.PW23/8 (internal voucher dated 31.3.1990), Ex.PW23/8A (advice), Ex.PW23/9 (internal voucher dated 30.11.1990), Ex.PW23/9A (advice), Ex.PW23/10 (internal voucher dated 11.10.1990/26.10.1990), Ex.PW23/10A (advice). Ex.PW23/11 (internal voucher dated 27.9.1990/26.10.1990), Ex.PW23/12 (internal voucher dated 30.10.1990), Ex.PW23/12A (advice), Ex.PW23/13 (internal voucher dated 02.7.1990/07.7.1990), Ex.PW23/13A, Ex.PW23/13B, (advice), Ex.PW23/14 (internal voucher dated 03.8.1990), Ex.PW23/14A (advice), Ex.PW23/15 (internal voucher dated 05.6.1990/09.6.1990), Ex.PW23/15A (advice), Ex.PW23/16 (internal voucher dated 07.5.1990), Ex.PW23/16A (advice). Ex.PW23/17 (internal voucher dated Criminal Case No. 01/2023 Page No. 53 of 262 30.11.1990/17.12.1990), Ex.PW23/17A, Ex.PW23/18 (internal voucher dated 24.12.1990), Ex.PW23/18A (advice), Ex.PW23/19 (internal voucher dated 27.9.1990/26.10.1990), Ex.PW23/20 (internal voucher dated 27.9.1990/26.10.1990), Ex.PW23/20A (advice), Ex.PW23/21 (internal voucher dated 31.10.1990), Ex.PW23/21A (advice), Ex.PW23/22 (internal voucher dated 30.6.1990/07.7.1990), Ex.PW23/22A (advice). Ex.PW23/23 (internal voucher dated 31.7.1990), Ex.PW23/23A, Ex.PW23/24 (internal voucher dated 30.4.1990), Ex.PW23/24A (advice), Ex.PW23/24B (advice), Ex.PW23/25 (internal voucher dated 01.11.1990), Ex.PW23/26 (cheque), Ex.PW23/27 (specimen writing sheet of PW23), Ex.PW24/1 (receipt memo dated 8.3.1999), Ex.PW24/2 (letter dated 05.10.1990), Ex.PW24/3 (original LC dated 25.8.1990), Ex.PW24/4 (ledger page No. 251), Ex.PW24/5 (ledger page No. 237), Ex.PW25/1 (writing), Ex.PW26/1 (specimen writing and signatures), Ex.PW28/1 (complaint dated 13.5.1997), Ex.PW29/1 (specimen signatures), Ex.PW31/1 (copy of FIR), Ex.PW33/1 (seizure memo dated 19.12.1997), Ex.PW33/2 (receipt memo dated 19.02.1999), Ex.PW33/3 (receipt cum production memo dated 19.5.1999), Ex.PW33/4 (receipt cum production memo dated 17.5.1999), Ex.PW33/5 (receipt memo dated 06.10.1997), Ex.PW33/6 (receipt memo dated 09.01.1998), Ex.PW33/7 (receipt memo dated 12.1.1998), Ex.PW33/8 (receipt memo dated 23.3.1998), Ex.PW33/9 (receipt memo dated 21.6.1999), Ex.PW33/10 (receipt memo dated 03.7.1998), Ex.PW33/11 (receipt Criminal Case No. 01/2023 Page No. 54 of 262 memo dated 29.7.1998), Ex.PW33/12 (receipt memo dated 06.01.1998), Ex.PW33/13 (receipt memo dated 06.01.1998), Ex.PW33/14 (receipt memo dated 17.01.2000), Ex.PW33/15 (receipt memo dated 17.12.1999), Ex.PW33/16 (receipt memo dated 25.3.1999), Ex.PW33/17(1) (receipt memo dated 02.02.1999), Ex.PW33/17(2) (search list), Ex.PW33/18 (application dated 01.7.2000 under section 164 of Cr.P.C.), Ex.PW33/19 (order of pardon dated 7.02.2001), Ex.PW33/20 (specimen signatures and writing), Ex.PW33/21 (specimen signatures and writing), Ex.PW33/22 (specimen signatures and writing), Ex.PW33/23 (specimen signatures and writing), Ex.PW33/24 (specimen signatures and writing), Ex.PW33/25 (specimen signatures and writing), Ex.PW33/26 (specimen signatures and writing), Ex.PW33/27 (specimen signatures and writing), Ex.PW34/1 {Credit Bill Negotiation (CBN)}, Ex.PW34/2 (letter dated 26.9.1990), Ex.PW34/3 (CBN dated 28.8.1990), Ex.PW35/1 (specimen signatures and writing), Ex.PW35/2 (specimen signatures and writing), Ex.PW35/3 (specimen signatures and writing), Ex.PW35/4 (specimen signatures and writing), Ex.PW35/5 (specimen signatures and writing), Ex.PW35/6 (specimen signatures and writing), Ex.PW35/7 (specimen signatures and writing), Ex.PW35/8 (specimen signatures and writing), Ex.PW35/9 (specimen signatures and writing), Ex.PW36/1 (letter dated 03.8.1999), Ex.PW36/2 (letter dated 13.4.2000), Ex.PW36/3 (report), Ex.PW36/4 (reasons in support of report), Ex.PW36/5 (supplementary opinion) Criminal Case No. 01/2023 Page No. 55 of 262 and Ex.PW36/6 (reasons for opinion) have been tendered in evidence. During cross-examination of PW8 KC Jain, PW9 Sheh Lata Tandon, PW17 V.K. Chopra, PW26 Vijay Kumar, PW27 Behram Pestonji Jamadar and PW33 Bhupinder Kumar documents Ex.PW8/DA, Ex.PW8/DB, Ex.PW8/PX, Ex.PW8/PX1, Ex.PW9/D1, Ex.PW9/D2, Ex.PW17/DX, Ex.PW17/DX1, Ex.PW17/D1, Ex.PW26/PX, Ex.PW27/DX, Ex.PW27/D1, Ex.PW33/D1, Ex.PW33/D2 and Ex.PW33/D3 have also been brought on the record.
21. On 19.12.2016, accused N. Ramakrishnan (since deceased) was examined under section 313 of Cr.P.C. and his statement was recorded. During his examination under section 313 of Cr.P.C. accused N. Ramakrishnan denied the correctness of, or expressed ignorance about, the incriminating circumstances appearing against him during the prosecution evidence, and declared several circumstances as the matter of record. During his examination under section 313 of Cr.P.C. accused N. Ramakrishnan admitted that initially he had refused to open LC No. 43/48 dated 22.8.1989 since he knew very well that it required higher authority's sanction. During his examination under section 313 of Cr.P.C. accused N. Ramakrishnan further stated that after some time, however, he had had consultations with zonal office as well as central office, and after obtaining their approval he had established the LCs. During his examination under section 313 of Cr.P.C. accused N. Ramakrishnan further stated that executed hire purchase agreement was produced to them (the bank) Criminal Case No. 01/2023 Page No. 56 of 262 before the LC was signed. During his examination under section 313 of Cr.P.C. accused N. Ramakrishnan admitted that the LC in favour of M/s Mani Management Consultants Pvt. Ltd. was opened in his tenure. During his examination under section 313 of Cr.P.C. accused N. Ramakrishnan further admitted that LCs Nos. 43/98 and 44/15 for Rs.22,17,673/- and Rs.20,59,426/- respectively were opened for supply of stainless steel items by Manu Steels. During his examination under section 313 of Cr.P.C. accused N. Ramakrishnan further admitted that LC No. 44/48 dated 25.8.1990 for Rs.41,18,852/- was opened by him. During his examination under section 313 of Cr.P.C. accused N. Ramakrishnan, in respect of bill of exchange Ex.PW8/K-27 stated that the bill was to be dealt with by the negotiating bank and not by the issuing bank, that is the Central bank of India; and since he did not deal with the bill, so he did not know the same. During his examination under section 313 of Cr.P.C. accused N. Ramakrishnan further stated that the copies of hire purchase agreement duly executed was produced on the same evening, and only after receipt of the same as well as the LC agreement form the LC was signed; that the party's office was in the same building where the bank was situated; that when the discrepancies were pointed out, he had informed Sh. K.C. Jain, General Manager (Finance) and necessary documents were produced immediately. During his examination under section 313 of Cr.P.C. accused N. Ramakrishnan further stated that letter of credit and letter of guarantee limits were termed as non fund based limits; that both Criminal Case No. 01/2023 Page No. 57 of 262 those limits were always taken together for allowing facilities, therefore, opening of LC was in order; that the total available sanction limits in the non fund based limits were never exceeded. During his examination under section 313 of Cr.P.C. accused N. Ramakrishnan further stated that he was posted in the branch till 19.11.1990, whereas document Ex.PW12/2 pertained to the period 01.10.1991 to 01.4.1993 and did not pertain to his period. During his examination under section 313 of Cr.P.C. accused N. Ramakrishnan further stated that during the period he was posted in the branch the company (the accused No. 2) was regularly meeting the installments which were being debited to the party's Cash Credit account and the same was done on due dates; and that what had happened after he left the branch he did not know. During his examination under section 313 of Cr.P.C. accused N. Ramakrishnan admitted that in case of a revolving LC the amount of entire period could not be disposed in one go, but every month on production of documents by the negotiating bank as per terms of LC. During his examination under section 313 of Cr.P.C. accused N. Ramakrishnan stated that since they (Central Bank of India) were the issuing bank and not negotiating bank, hence disbursal of the entire period vested with negotiating bank, namely, Standard Chartered Bank; and that as far as Central Bank of India was concerned, during his tenure he had released the second installment only after receipt of first installment; that he had taken one installment as 100% security (margin) so as to protect the bank in case of default. During his Criminal Case No. 01/2023 Page No. 58 of 262 examination under section 313 of Cr.P.C. accused N. Ramakrishnan further stated that during his tenure there was no default by the party, and he had fully complied with the directions as given in UCPDC, where, as per article 45 if the drawings within given periods as stipulated within the credits and any installment was not drawn within the allowed period the credit ceased to be available for that and any subsequent installment unless otherwise stipulated. During his examination under section 313 of Cr.P.C. accused N. Ramakrishnan further stated that since there was nothing in LC terms and conditions, hence in case of default, the subsequent LC installments would have ceased to be available to the negotiating bank on presentation of documents. During his examination under section 313 of Cr.P.C. accused N. Ramakrishnan further stated that on receipt of letter Ex.PW9/H he wrote back to PW24 Viveksheel Nayar clearly stating that he must take up the matter with the LC opener, that is Indodan Industries Limited; that Central Bank of India, Janpath Branch did not have any account of Manu Steels nor connected with the proprietor or the partners in any way whatsoever, hence, he directed Manu Steels to approach the appropriate person. During his examination under section 313 of Cr.P.C. accused N. Ramakrishnan further stated that in D-399, that is letter dated 01.10.1999 by the branch to zonal office the proposal of M/s. Indodan Industries Limited PW27 Behram Prestonji Jamadar himself had sanctioned the approval of sub-limit of Rs. 95 lakh within the LC limit of Rs. 125 lakh for publicity expenses, thus Criminal Case No. 01/2023 Page No. 59 of 262 the statement of PW27 Behram Pestonji Jamadar was contrary to his own sanction. During his examination under section 313 of Cr.P.C. accused N. Ramakrishnan further stated that all the revolving LCs opened by him during his tenure contained the reinstatement clause, and it was wrong to state that LCs were opened by him without reinstatement clause, and since LCs were opened with reinstatement clause he was having a power to open revolving LCs wherein he had taken one installment as 100% margin and secondly he had taken permission from zonal / central office before opening the revolving LCs. During his examination under section 313 of Cr.P.C. accused N. Ramakrishnan stated that except PW27 (Behram Prestonji Jamadar), no prosecution witness had deposed against him. During his examination under section 313 of Cr.P.C. accused N. Ramakrishnan stated that PW27 had deposed against him as he was not fully well versed with procedure of bank with respect to opening of LCs, the articles of the Uniform Customs & Practice for Documentary Credit, and had not gone through the documents prior to making his statement before the court. During his examination under section 313 of Cr.P.C. accused N. Ramakrishnan further stated that the sanction granted by him (PW27 Behram Prestonji Jamadar) in respect of review proposal of M/s Indodan Industries Limitted with Janpath Branch showed his deposition in contradiction to the documents with which sanction had been granted. During his examination under section 313 of Cr.P.C. accused N. Ramakrishnan further stated that the present case was a Criminal Case No. 01/2023 Page No. 60 of 262 false and fabricated case against him. During his examination under section 313 of Cr.P.C. accused N. Ramakrishnan further stated that while opening the LCs in dispute in the present case he had acted as per the terms and conditions of the UCPDC looking into the interest of the bank and within the framework and guidelines of the banking. During his examination under section 313 of Cr.P.C. accused N. Ramakrishnan further stated that he had not violated any condition and the LCs opened by him were non transferable. During his examination under section 313 of Cr.P.C. accused N. Ramakrishnan expressed his desire to lead evidence in his defence.
22. On 19.12.2016, accused No. 2 M/s Indodan Industries Limited was examined under section 313 of Cr.P.C. through its authorized representative (AR) Rakesh Vashist and its statement was recorded through him. During its examination under section 313 of Cr.P.C., through its AR Rakesh Vashist accused No. 2 M/s Indodan Industries Limited denied the correctness of, or expressed ignorance about, the incriminating circumstances appearing against it during the prosecution evidence. During his examination under section 313 of Cr.P.C. Rakesh Vashist, the AR of the accused No. 2 stated that all the financial deals were done by K.C. Jain on the instructions of S.C. Bhatia and H.S. Jalan, who were looking after the day to day affairs of the company and Rakesh Vashist was only working as a non-functional director of the company. During his examination under section 313 of Cr.P.C. Rakesh Vashist, the AR of the accused No. 2 further stated that Criminal Case No. 01/2023 Page No. 61 of 262 whatever address was provided by Sh. Manoj Kumar, Poprietor of Deepak Dairy to the company was noted on the record of the company Indodan Industries Limited; and that Sh. Manoj Kumar was examined by CBI under section 161 Cr.P.C. wherein he had admitted that he had opened the bank account on the above address which was in the name of his relative. During his examination under section 313 of Cr.P.C. Rakesh Vashist, the AR of the accused No. 2 further stated that all the day to day affairs were being controlled by Sh. S.C. Bhatia, the whole time director of the company, and he was only non-functional director which was clear from the annual report of the company. During his examination under section 313 of Cr.P.C. Rakesh Vashist, the AR of the accused No. 2 further stated that some of the directors of M/s Foremost Industries Ltd. and M/s Indodan Industries Ltd. were common, but Indodan industries Ltd. was under the direct control of K. C. Jain and S.C. Bhatia under the Chairmanship of late H.S. Jalan. During his examination under section 313 of Cr.P.C. Rakesh Vashist, the AR of the accused No. 2 further stated that PW8 K.C. Jain has deposed at the behest of CBI to save himself and to implicate accused Rakesh Vashist. During his examination under section 313 of Cr.P.C. accused Rakesh Vashist further stated that accused Rakesh Vashist never instructed or asked anybody to look for alternate funds as he was non-functional director of the company, who rarely visited the office of accused Indodan Industries Ltd., and he had merely signed some of board meeting agenda at behest of his father-in-law H.S. Jalan. During Criminal Case No. 01/2023 Page No. 62 of 262 his examination under section 313 of Cr.P.C. Rakesh Vashist, the AR of the accused No. 2 further stated that all the LCs were opened after obtaining the sanction/approval from the competent authority and the same were within credit limits and opened with 100% margin. During his examination under section 313 of Cr.P.C. Rakesh Vashist, the AR of the accused No. 2 further stated that witnesses have not placed on record any document/notification/rules regarding opening of LC etc. During his examination under section 313 of Cr.P.C. accused Rakesh Vashist further stated that PW23 Rajinder Dhamija was directly reporting to K.C. Jain and was not reporting through accused Mahesh Gupta. During his examination under section 313 of Cr.P.C. Rakesh Vashist, the AR of the accused No. 2 further stated that there were number of transactions between Manu Steel and Indodan Industries Ltd. in the year 1989 and 1990 and CBI has failed to produce to show that PW24 Viveksheel Nayar was one of the partners of M/s Manu Steel. During his examination under section 313 of Cr.P.C. Rakesh Vashist, the AR of the accused No. 2 further stated that PW26 Vijay Kumar was directly reporting to K.C. Jain, and that the company never instructed anybody to do any illegal work. During his examination under section 313 of Cr.P.C. accused Rakesh Vashist, representing M/s Indodan Industries Limited, further stated that Indodan Industries Limited was formed in the year 1962 and was professionally run company under the chairmanship of H.S. Jalan, guided by the Board of Directors and under the whole time director S. C. Bhatia, who were Criminal Case No. 01/2023 Page No. 63 of 262 managing the day to day affairs of the company; that K. C. Jain had joined as Chartered Company (sic) in the year 1983 as Finance Manager and gradually rose as General Manager (Finance); that Indodan Industries Limited was a part of a group of companies popularly known as Indana Group making various milk products. During his examination under section 313 of Cr.P.C. Rakesh Vashist, the AR of the accused No. 2 further stated that Indodan Industries Limited was the one of the fastest growing company in the food processing industries and was banking solely exclusively with Central Bank of India from 1971. During his examination under section 313 of Cr.P.C. Rakesh Vashist, the AR of the accused No. 2 further stated that all the group company accounts were with Central Bank of India, and Indodan Industries Ltd had a health code one credit rating with Central Bank of India. During his examination under section 313 of Cr.P.C. Rakesh Vashist, the AR of the accused No. 2 further stated that the entire financial dealing was done by K. C. Jain, who was reporting to the whole time director S.C. Bhatia and chairman H.S Jalan, and he had no role to play in day to day functioning as he was a NRI and most of the time was out of India. During his examination under section 313 of Cr.P.C. Rakesh Vashist, the AR of the accused No. 2 further stated that from October, 2006, after the demise of H. S. Jalan he had become the Chairman of Indodan Industries Limited, and prior to 2006, he was not involved in the day to day working at all. During his examination under section 313 of Cr.P.C. Rakesh Vashist, the AR of Criminal Case No. 01/2023 Page No. 64 of 262 the accused No. 2 further stated that he had merely attended the board meetings, and he was not involved in the implementation and the work of the company. During his examination under section 313 of Cr.P.C. Rakesh Vashist, the AR of the accused No. 2 further stated after filing of the charge sheet, the company was represented through A. K. Sriwastava, who was the Vice-President of the company; and that after A. K. Sriwastava left the company in the year 2013, an application was made in the court and he was substituted in place of A. K. Sriwastava as the AR of accused no. 2 M/s Indodan Industries Limited on 13.11.2013. During his examination under section 313 of Cr.P.C. Rakesh Vashist, the AR of the accused No. 2 further stated that in the year 1989-1990 the company's Board of Directors was comprising of Chairman H. S. Jalan, whole time director S. C. Bhatia with other director Sh. B. C. Sarbadhikari, B. L. Saraf, K. P. Kejriwal, Rakesh Vashist, R. G. Nirmal and V. P. Arya. During his examination under section 313 of Cr.P.C. Rakesh Vashist, the AR of the accused No. 2 further stated that the company was having its Head Office at 72, Janpath, New Delhi and the factory at Mujjaffar Nagar, U.P. During his examination under section 313 of Cr.P.C. Rakesh Vashist, the AR of the accused No. 2 further stated that all the LCs were opened by the Bank after completing all the due formalities /documentation, and the company had fulfilled the criteria of the same and thereafter, the same were opened with the approval of the Board of Directors of the Bank. During his examination under section 313 of Cr.P.C. Rakesh Vashist, Criminal Case No. 01/2023 Page No. 65 of 262 the AR of the accused No. 2 further stated that the company had already settled the matter with the Bank and the entire payment had already been made by the company to the Bank and no dues certificate had already been issued by the Bank. During his examination under section 313 of Cr.P.C. accused Rakesh Vashist further stated that no wrongful loss has been caused to the Bank. During his examination under section 313 of Cr.P.C. Rakesh Vashist, the AR of the accused No. 2 further stated that it was merely a financial transaction which was stopped due to some financial crises which occurs some times in the functioning of the big business. During his examination under section 313 of Cr.P.C. Rakesh Vashist, the AR of the accused No. 2 further stated that it was a routine problem. During his examination under section 313 of Cr.P.C. accused Rakesh Vashist further stated that there was no such intention of the company to cause any loss or gain anything unlawfully. During his examination under section 313 of Cr.P.C. Rakesh Vashist, the AR of the accused No. 2 further stated that the company had never instructed any office employee to do any illegal work on behalf of the company; and that K.C. Jain had deposed falsely in this regard to save himself. During his examination under section 313 of Cr.P.C. Rakesh Vashist, the AR of the accused No. 2 further stated that the company was still functioning and doing business in the market and enjoyed a good reputation in the market. During his examination under section 313 of Cr.P.C. accused Indodan Industries Ltd. through Rakesh Vashist expressed its desire to lead evidence in its Criminal Case No. 01/2023 Page No. 66 of 262 defence.
23. On 19.12.2016, accused Rakesh Vashist was examined qua the accused No. 4 under section 313 of Cr.P.C. and his statement was recorded. During his examination under section 313 of Cr.P.C. accused Rakesh Vashist denied the correctness of, or expressed ignorance about, the incriminating circumstances appearing against him during the prosecution evidence. During his examination under section 313 of Cr.P.C. accused Rakesh Vashist stated that H.S. Jalan (deceased), his father-in-law had made him a director in M/s Indodan Industries Limited sometime in 1988-1989, but he was a non- functional director and was not looking after the day to day affairs of the company. During his examination under section 313 of Cr.P.C. accused Rakesh Vashist further stated that after M. B. Lal, who was looking after the day to day affairs of the company till 1985, S.N. Chandak had been looking after the day to day affairs of the company as he was the whole time director upto 1987. During his examination under section 313 of Cr.P.C. accused Rakesh Vashist further stated that after 1987 S.C. Bhatia took over from S.N. Chandak and looked after the day to day affairs of the company till 1993; however, the entire financial aspects were being looked after by K.C. Jain, who was the General Manager (Finance) of the company. During his examination under section 313 of Cr.P.C. accused Rakesh Vashist further stated that he was a non-functional director of the company and was visiting the company occasionally. During his examination under section 313 of Criminal Case No. 01/2023 Page No. 67 of 262 Cr.P.C. accused Rakesh Vashist further stated that it was true that H.S. Jalan (deceased) was controlling the day to day affairs of the company along with the whole time director S.C. Bhatia. During his examination under section 313 of Cr.P.C. accused Rakesh Vashist further stated that he had never asked K.C. Jain to look for alternate funds; that he had never discussed anything with K.C. Jain regarding any aspect of the company; and that he knew K.C. Jain because he had met him on a few occasions as he was the General Manager (Finance) of the company. During his examination under section 313 of Cr.P.C. accused Rakesh Vashist admitted that he had attended the meeting of Board dated 20.7.1988, but as a non-functional director. During his examination under section 313 of Cr.P.C. accused Rakesh Vashist further stated that he was not at all aware of the financial position of the company and had just attended the meeting on asking of his father- in-law with other directors so as to complete the coram. During his examination under section 313 of Cr.P.C. accused Rakesh Vashist further stated that though he had attended the meeting of 20.7.1988, he did not know as to what was resolved in the said meeting as he had attended the same only to complete the coram as he was asked by his father-in-law, the Chairman of the company. During his examination under section 313 of Cr.P.C. the accused Rakesh Vashist further stated that he had no knowledge of any LC on Indodan Industries Ltd. opened with any bank; and that he had never looked after the day to day affairs of the company and administrational personal or other work Criminal Case No. 01/2023 Page No. 68 of 262 of the company. During his examination under section 313 of Cr.P.C. the accused Rakesh Vashist further stated that he had not handed over any draft hire purchase agreement to K.C. Jain at any point of time; that he was not knowing any company by name of M/s Mani Management Ltd. nor he had met with any owner, director, employee of the company prior to registration of this case. During his examination under section 313 of Cr.P.C. the accused Rakesh Vashist further stated that he might have attended the meeting of the Board of Directors held on 30.3.1990, but he was not at all involved in any decision making on initiation of proposal or passing of any resolution; that he was not aware of the financial position of the company and the same was looked after by the General Manager (Finance) K.C. Jain, who directly reported to the whole time director S.C. Bhatia and the Chairman; and that he never had any interaction with K.C. Jain with respect to any matter of the company except for occasional greetings; and that he was not aware of any party from whom the supply of milk procurement were being made. During his examination under section 313 of Cr.P.C. the accused Rakesh Vashist further stated that none of the prosecution witness had deposed against him, except K.C. Jain, who had turned as an approver at the instance of CBI. During his examination under section 313 of Cr.P.C. accused Rakesh Vashist further stated that K.C. Jain had deposed against him in order to save himself; and that is why he put the entire blame on him to support CBI, who were hell-bent to prove the case against him as they had Criminal Case No. 01/2023 Page No. 69 of 262 arrested him during the case.During his examination under section 313 of Cr.P.C. accused Rakesh Vashist further stated that he has been falsely implicated in this case, and expressed his desire to lead evidence in his defence. During his examination under section 313 of Cr.P.C. accused Rakesh Vashist expressed his desire to lead evidence in his defence.
24. On 19.12.2016, accused Mahesh Gupta (since deceased) was examined under section 313 of Cr.P.C. and his statement was recorded. During his examination under section 313 of Cr.P.C. accused Mahesh Gupta denied the correctness of, or expressed ignorance about, the incriminating circumstances appearing against him during the prosecution evidence. During his examination under section 313 of Cr.P.C. accused Mahesh Gupta further stated that the main financial issues of the company were being looked after by K.C. Jain, and it was wrong that Rakesh Vashist was controlling the affairs of the company or issuing instructions; and that Rakesh was an occasional visitor and more of a non functional director. During his examination under section 313 of Cr.P.C. accused Mahesh Gupta further stated that PW25 Satyasen worked in M/s Foremost Industries (India) Ltd. as an accountant and administrative officer, and he was also working as an accountant in the said company; and as they both were at same position, so there was no question of any seniority between them. During his examination under section 313 of Cr.P.C. accused Mahesh Gupta further stated that PW25 Satyasen used to sign the documents Criminal Case No. 01/2023 Page No. 70 of 262 as per his own or may be on instructions of other, but he (Mahesh Gupta) never asked him to put any signature on any documents. During his examination under section 313 of Cr.P.C. accused Mahesh Gupta further stated that the working seat of PW25 Satyasen was opposite the cabin of K.C. Jain whereas he has his working seat on a different floor. During his examination under section 313 of Cr.P.C. accused Mahesh Gupta denied that PW25 Satyasen put his signatures at points B and C on Ex.PW8/K27 on his asking. During his examination under section 313 of Cr.P.C. accused Mahesh Gupta stated that he never asked PW25 Satyasen to sign on any document including Ex.PW8/K27. During his examination under section 313 of Cr.P.C. accused Mahesh Gupta further stated that PW25 Satyasen has deposed falsely to implicate him falsely. During his examination under section 313 of Cr.P.C. accused Mahesh Gupta further stated that no prosecution witness had deposed against him, except PW25 Satyasen. During his examination under section 313 of Cr.P.C. accused Mahesh Gupta further stated that PW25 Satyasen had falsely deposed against him at the instance of CBI as he was threatened by them that if he had not named him, he would be made an accused for having forged the signature. During his examination under section 313 of Cr.P.C. accused Mahesh Gupta further stated that he had been falsely implicated in this case; and that he had been made a scapegoat as he was not towing the line of CBI in falsely implicating Rakesh Vashist during investigation and was stating the truth. During his examination under section 313 of Cr.P.C. accused Criminal Case No. 01/2023 Page No. 71 of 262 Mahesh Gupta further stated that he never instructed anybody to sign any document illegally and nothing illegal was done in the said LCs. During his examination under section 313 of Cr.P.C. accused Mahesh Gupta further stated that he was doing his job honestly, and sincerely for the last so many years. During his examination under section 313 of Cr.P.C. accused Mahesh Gupta did not express his desire to lead evidence in his defence.
25. On 19.12.2016, accused C. Subramaniam was examined under section 313 of Cr.P.C. and his statement was recorded. During his examination under section 313 of Cr.P.C. the accused denied the correctness of, or expressed ignorance about, the incriminating circumstances appearing against him during the prosecution evidence. During his examination under section 313 of Cr.P.C. accused C. Subramaniam stated that the statement of PW17 V.K. Chopra is merely an opinion and not a legally admissible evidence. During his examination under section 313 of Cr.P.C. accused C. Subramaniam further stated that there was no incriminating statement against him, and whatever the witnesses had deposed was not legally admissible, and that they made statements under the influence of CBI. During his examination under section 313 of Cr.P.C. accused C. Subramaniam further stated that he had been falsely implicated and he was innocent. During his examination under section 313 of Cr.P.C. accused C. Subramaniam expressed his desire to lead evidence in his defence.
26. On 19.12.2016, accused N. Muralidharan (N. Criminal Case No. 01/2023 Page No. 72 of 262 Muralidharan) (since deceased) was examined under section 313 of Cr.P.C. and his statement was recorded. During his examination under section 313 of Cr.P.C. accused N. Muralidharan denied the correctness of, or expressed ignorance about, the incriminating circumstances appearing against him during the prosecution evidence. During his examination under section 313 of Cr.P.C. accused N. Muralidharan stated that the discounting of hundis pertaining to M/s Deepak Dairy had taken place in conformity with the established law. During his examination under section 313 of Cr.P.C. accused N. Muralidharan further stated that the hundis were presented to them by M/s Indodan Industries, and that the said hundis were carrying blank endorsement on the reverse of the document which in terms of standard financial practice made such hundi a valuable negotiable instrument by mere delivery and further made the same fit for discounting. During his examination under section 313 of Cr.P.C. accused N. Muralidharan further stated that at no point of time M/s Mani Management Consultants Ltd. or any of it's Directors were under an obligation or duty to verify the details about the drawer of the hundis, which in this case was M/s Deepak Dairy as M/s Mani Management Consultants Pvt. Ltd. was dealing in documents, and they never found anything suspicious about the hundis sent to them by M/s Indodan Industries. During his examination under section 313 of Cr.P.C. accused N. Muralidharan further stated that in fact, as per established financial practice those hundis were further forwarded to ANZ Grindlays Bank Criminal Case No. 01/2023 Page No. 73 of 262 for purposes of discounting and even they neither conducted any inspection or verification about M/s Deepak Dairy in compliance with established financial practice. During his examination under section 313 of Cr.P.C. accused N. Muralidharan further stated that the hundis were duly discounted by ANZ Grindlays Bank without any objection. During his examination under section 313 of Cr.P.C. accused N. Muralidharan further stated that the said practice was fully covered under the law in terms of the provisions of the Negotiable Instruments Act and the UCPDC. During his examination under section 313 of Cr.P.C. accused N. Muralidharan further stated that PW5 and PW6 were procured witnesses, who had made tailor made statements under pressure from the CBI to suit the story of the prosecution. During his examination under section 313 of Cr.P.C. accused N. Muralidharan further stated that he did not know about the application dated 23.8.1989 as the same had not been addressed to him; that there was no legally admissible incriminating evidence against him as regards the said letter; and in so far as the Hire Purshase Rental agreement was concerned the same was a matter of record. During his examination under section 313 of Cr.P.C. accused N. Muralidharan further stated that the dates mentioned on bills of exchange Ex.PW8/J1 to Ex.PW8/J32 referred to the due dates on which the bills became payable. During his examination under section 313 of Cr.P.C. accused N. Muralidharan further stated that the equipment in question was not sold to M/s Mani Management Consultants Pvt. Ltd., but was given as Criminal Case No. 01/2023 Page No. 74 of 262 security under the hire purchase agreement which was entered into for providing refinance facility. During his examination under section 313 of Cr.P.C. accused N. Muralidharan further stated that no draft Hire Purchase Agreement was forwarded by M/s Mani Management Consultants Pvt. Ltd. to either Rakesh Vashist or K.C. Jain. During his examination under section 313 of Cr.P.C. accused N. Muralidharan further stated that no bill of exchange was prepared by the office of M/s Mani Management Consultants Pvt. Ltd. During his examination under section 313 of Cr.P.C. accused N. Muralidharan further stated that there was no admissible evidence on record to support the opinionated statement, totally unconnected to the transactions pertaining to the present case, as mentioned by PW14 R.K. Gautam. During his examination under section 313 of Cr.P.C. accused N. Muralidharan further stated that the statement of PW17 V.K. Chopra was merely an opinion and not a legally admissible evidence; and his statement, based on assumptions and presumptions, is not supported by any document. During his examination under section 313 of Cr.P.C. accused N. Muralidharan further stated that no partnership deed to show that M/s Manu Steel was a partnership concern has been proved on record. During his examination under section 313 of Cr.P.C. accused N. Muralidharan further stated that PW24 Viveksheel Nayar was a procured witness, who had testified under pressure from CBI. During his examination under section 313 of Cr.P.C. accused N. Muralidharan further stated that the discounting of hundis had taken Criminal Case No. 01/2023 Page No. 75 of 262 place on the basis of the blank endorsement that the hundis bore, which made them to be a valuable negotiable instrument by mere delivery and the same were fit for discounting. During his examination under section 313 of Cr.P.C. accused N. Muralidharan further stated that the hundis pertaining to M/s Manu Steel were discounted by both Standard Chartered Bank and ANZ Grindlays Bank and at no stage did any of the banks raise any objection or suspicion regarding the authenticity of the hundis since they also believed the instrument to be a genuine bill of exchange as it was bearing legitimate endorsements. During his examination under section 313 of Cr.P.C. accused N. Muralidharan further stated that likewise, at the time when they received the hundis/bills of exchange, they also believed the instrument to be genuine and fit for discounting as they were bearing blank endorsement, and it was no part of their duty or obligation to verify the hundis as they were only dealing with documents and for purposes of discounting it was perfectly legal and legitimate for them to believe that the hundis sent to them by Indodan Industries Ltd. were genuine; and the practice was fully covered by the UCPDC and the Negotiable Instruments Act. During his examination under section 313 of Cr.P.C. accused N. Muralidharan further stated that the statement of PW27 Behram Prestonji Jamadar was merely an opinion and not legally admissible evidence. During his examination under section 313 of Cr.P.C. accused N. Muralidharan further stated that the present case was a false case against him and the charge sheet filed by the IO in the Criminal Case No. 01/2023 Page No. 76 of 262 present case was nothing but comprised of statements of procured witnesses and also opinionated statements which were totally legally inadmissible piece of evidence; that, however, the LCs bearing Nos. 43/48, 44/21, 43/98, 44/15 and 44/48 were opened as per the well established practice of the bank; that the hundis were an acceptable negotiable instrument as per the banking practices; that the automatic reinstatement clause enumerated in the LCs was also as per the established banking practices. During his examination under section 313 of Cr.P.C. accused N. Muralidharan further stated that neither the Zonal Office nor the Head Office of the Central Bank Of India ever raised any objection with regard to the enumeration of the automatic reinstatement clause in the LC. During his examination under section 313 of Cr.P.C. accused N. Muralidharan further stated that the hundis Ex. PW 8/J to Ex.PW 8/J-31 were drawn in respect of LC No. 43/48, and the same were equivalent to the amount mentioned therein. During his examination under section 313 of Cr.P.C. accused N. Muralidharan further stated that the Standard Chartered Bank had purchased the aforesaid hundis which were drawn in respect of LC No. 43/48 and had made corresponding payments to M/s Mani Management Consultants Pvt. Ltd. During his examination under section 313 of Cr.P.C. accused N. Muralidharan further stated that there was no restriction on the discounting of the hundis by one single transaction and therefore, Standard Chartered Bank and M/s Mani Management Consultants Pvt. Ltd. did not have to wait for 36 months period of LCs to lapse before Criminal Case No. 01/2023 Page No. 77 of 262 getting each of the hundis discounted. During his examination under section 313 of Cr.P.C. accused N. Muralidharan further stated that in view of no embargo on discounting of hundis in one go, Standard Chartered Bank and A.N.Z Grindlays Bank had discounted the bills / hundis in one go. During his examination under section 313 of Cr.P.C. accused N. Muralidharan further stated that as per the banking practices the bank was under no obligation to conduct an inspection of the addresses of the beneficiary of the LC as the bank was dealing only with the documents. During his examination under section 313 of Cr.P.C. accused N. Muralidharan further stated that even the prosecution witnesses had supported the aforesaid banking practices, vis-a-vis discounting of the hundis. During his examination under section 313 of Cr.P.C. accused N. Muralidharan further stated that with respect to the hundis drawn by M/s Deepak Dairy on M/s Indodan Industries Ltd. (Ex.PW-8/K7 to Ex. PW 8/K15), the aforesaid hundis bore blank endorsements on the reverse side of it when the same were received by M/s Mani Management Consultants Pvt. Ltd., due to which M/s Mani Management Consultants Pvt. Ltd. became the holder in due course for the said hundis. During his examination under section 313 of Cr.P.C. accused N. Muralidharan further stated that those hundis were then discounted by ANZ Grindlays Bank, who had sought confirmation from the Central Bank Of India before discounting those hundis. During his examination under section 313 of Cr.P.C. accused N. Muralidharan further stated that in so far as the Criminal Case No. 01/2023 Page No. 78 of 262 discounting of the above-mentioned hundis of M/s Deepak Dairy was concerned neither any complaint was filed against ANZ Grindlays Bank nor any objection was raised by the Central Bank Of India with regard to the discounting of bills undertaken by ANZ Grindlays Bank. During his examination under section 313 of Cr.P.C. accused N. Muralidharan further stated that the discounting of the aforesaid bills was also within the established banking practices. During his examination under section 313 of Cr.P.C. accused N. Muralidharan further stated that similarly, vis-a-vis the hundi of M/s Manu Steel (Ex.PW8/ K27), M/s Mani Management Consultants Pvt. Ltd. was the holder in due course as the said hundi bore blank endorsement of M/s Manu Steel on its reverse side. During his examination under section 313 of Cr.P.C. accused N. Muralidharan further stated that the said hundi along with it's invoices was discounted by Standard Chartered Bank, who were the bankers of M/s Mani Management Consultants Pvt. Ltd., and as such no complaint was made by Central Bank of India against Standard Chartered Bank for extending the bill discounting facility. During his examination under section 313 of Cr.P.C. accused N. Muralidharan further stated that there was no partnership deed of M/s Manu Steel on record which would show that it was a partnership firm, and moreover, the CBI had, at no point of time asked the concerned witnesses to produce any such partnership deed nor was any such partnership deed was shown to the said witnesses. During his examination under section 313 of Cr.P.C.
Criminal Case No. 01/2023 Page No. 79 of 262accused N. Muralidharan further stated that the specimen signatures of Mr. Manu Nayyar, the Proprietor of M/s Manu Steel were deliberately not taken by the investigating officer nor was he examined in the present case. During his examination under section 313 of Cr.P.C. accused N. Muralidharan further stated that to say that M/s Manu Steel was a partnership firm was nothing but a false allegation levelled by CBI. During his examination under section 313 of Cr.P.C. accused N. Muralidharan further stated that none of the Directors / officials of M/s Mani Management Consultants, including him had ever dealt personally, met or communicated with Central Bank of India or its officials, consequently, the bill discounting facility extended by M/s Mani Management Consultants Pvt. Ltd., after it had become a holder in due course of the hundis was an established and accepted banking norm. During his examination under section 313 of Cr.P.C. accused N. Muralidharan further stated that notwithstanding the above. with respect to LC No. 44/48, a payment of Rs. 41.18,852/- was made by M/s Indodan Industries Ltd. to Standard Chartered Bank, Chennai from their own funds. During his examination under section 313 of Cr.P.C. accused N. Muralidharan further stated that Bombay Main Branch of Central Bank of India was the advising branch, and being the advising branch it was the duty of the Bombay Branch to confirm the authenticity of the LC on the basis of Article 8 of the UCPDC. During his examination under section 313 of Cr.P.C. accused N. Muralidharan further stated that the negotiating bank was not Criminal Case No. 01/2023 Page No. 80 of 262 concerned with the supply of goods, subject matter of the LC. During his examination under section 313 of Cr.P.C. accused N. Muralidharan further stated that in terms of the banking practices and norms M/s Mani Management Consultants Pvt. Ltd. was under no obligation to verify the details of the drawer and the authenticity of blank endorsements at the time when they received the hundis for discounting as M/s Mani Management was dealing only in documents and not in goods or services to which the LC might pertain. During his examination under section 313 of Cr.P.C. accused N. Muralidharan further stated that the Dy. General Manager was heading the Bombay Main Branch of Central Bank of India during the relevant time whose designation was higher than the Chief Manager of Janpath Branch, Central Bank of India, New Delhi. During his examination under section 313 of Cr.P.C. accused N. Muralidharan further stated that the object of nominating the corresponding branch in respect of letter of credit was to facilitate the realization of proceeds of letter of credit by the beneficiary. During his examination under section 313 of Cr.P.C. accused N. Muralidharan further stated that the beneficiary of the letter of credit submits the documents as per the terms and conditions of the LC to their bankers who in turn forward the same after having found them to be in order as per the terms of the LC of the bank which had opened the LC. During his examination under section 313 of Cr.P.C. accused N. Muralidharan further stated that after making payment to the bank of beneficiary, the corresponding bank debit the Criminal Case No. 01/2023 Page No. 81 of 262 payment from the account of the branch which had issued the LC. During his examination under section 313 of Cr.P.C. accused N. Muralidharan further stated that Bombay Main Branch being the advising branch was always aware about the fact that the LC No. 43/48 was automatic revolving LC. During his examination under section 313 of Cr.P.C. accused N. Muralidharan further stated that the procedure that was adopted by Bombay Main Branch was unified adopted procedure well established in banking sector. During his examination under section 313 of Cr.P.C. accused N. Muralidharan further stated that no complaint was filed in Mumbai Main Branch regarding any irregularities of LC No. 43/48. During his examination under section 313 of Cr.P.C. accused N. Muralidharan further stated that even the prosecution witnesses had supported the aforesaid banking practices and had deposed to the effect that the procedures followed in the present case with respect to the LCs were totally in consonance with the well-established banking norms and financial practices. During his examination under section 313 of Cr.P.C. accused N. Muralidharan further stated that the LC (Ex.PW8/E) was opened by the Central Bank Of India without his help and subsequently, M/s Mani Management Consultants Pvt. Ltd. discounted the bills in respect of that revolving LC. During his examination under section 313 of Cr.P.C. accused N. Muralidharan further stated that M/s Indodan Group of Companies was raising funds from the market on Hire Purchase basis or through discounting of bills with different finance Criminal Case No. 01/2023 Page No. 82 of 262 companies. During his examination under section 313 of Cr.P.C. accused N. Muralidharan further stated that finance companies / banks could extend financing facilities against existing assets which was precisely Hire Purchase refinancing. During his examination under section 313 of Cr.P.C. accused N. Muralidharan further stated that all the hundis, including the hundis in favour of M/s Manu Steel were typed by the stenographer of K.C Jain. During his examination under section 313 of Cr.P.C. accused N. Muralidharan further stated that even the work of opening of the LC was looked after by K.C Jain and the entire correspondences in that regard used to be drafted by the stenographer of K.C Jain on his behalf. During his examination under section 313 of Cr.P.C. accused N. Muralidharan further stated that M/s Mani Management Consultants and its officials had no role to play in the opening of LC by M/s Indodan Industries Ltd. with Central Bank Of India. During his examination under section 313 of Cr.P.C. accused N. Muralidharan further stated that the entire transaction in this case had been done by the Zonal Office and that the bill discounting facility as extended by them to M/s Indodan Industries Ltd. was a part of banking practices and in consonance with the provisions as laid down under the Negotiable Instruments Act and the UCPDC. During his examination under section 313 of Cr.P.C. accused N. Muralidharan further stated that he passed B.Com (Pass) from Madras University; and that he passed examination of Chartered Accountancy and became a member of the Institute of Chartered Accountants of India. During Criminal Case No. 01/2023 Page No. 83 of 262 his examination under section 313 of Cr.P.C. accused N. Muralidharan further stated that he had also passed the final examination of the Institute of Cost and Work Accountants of India. During his examination under section 313 of Cr.P.C. accused N. Muralidharan further stated that M/s Mani Management Consultants Pvt. Ltd. was providing financial services to various corporate and other clients and had an impeccable career record over the years. During his examination under section 313 of Cr.P.C. accused N. Muralidharan further stated that in the present case M/s Mani Management had provided financial services only and was never the ultimate beneficiary. During his examination under section 313 of Cr.P.C. accused N. Muralidharan further stated that he had nothing to do with LC No. 43/48 and the same had been testified by the the investigating officer. During his examination under section 313 of Cr.P.C. accused N. Muralidharan further stated that CBI had procured witnesses to falsely implicate them in the present case. During his examination under section 313 of Cr.P.C. accused N. Muralidharan further stated that the investigating officer had procured opinionated statements of some individuals and had deliberately termed them as statements of prosecution witnesses. During his examination under section 313 of Cr.P.C. accused N. Muralidharan further stated that those witnesses had given tailor made inadmissible statements under pressure from the CBI to suit the prosecution story. During his examination under section 313 of Cr.P.C. accused N. Muralidharan further stated that no Criminal Case No. 01/2023 Page No. 84 of 262 witness from Central Bank of India had stated regarding representation being given on behalf of M/s Mani Management and also no objection was raised either by Central Bank Of India or Standard Chartered Bank or A.N.Z. Grindlays Bank regarding discounting of hundis. During his examination under section 313 of Cr.P.C. accused N. Muralidharan further stated that none of the witnesses had given any incriminating statement against him in relation to the transactions in question. During his examination under section 313 of Cr.P.C. accused N. Muralidharan further stated that after grant of pardon to K.C. Jain his statement was not recorded by the Court. During his examination under section 313 of Cr.P.C. accused N. Muralidharan further stated that admittedly the entire outstanding liability in the context of the LCs forming subject matter of the present case had been paid and the Central Bank of India and M/s Indodan Industries Ltd. entered into a compromise arrangement before the Debt Recovery Tribunal where the entire outstanding liability had been settled and a No Due Certificate was issued by Central Bank of India to M/s Indodan Industries Ltd. and thus, no loss was caused to Central Bank of India. During his examination under section 313 of Cr.P.C. accused N. Muralidharan further stated that in the debt recovery proceedings he was not made a party by the Central Bank of India. During his examination under section 313 of Cr.P.C. accused N. Muralidharan further stated that this clearly showed that even Central Bank of India had no grievance against them. During his examination under section 313 of Cr.P.C.
Criminal Case No. 01/2023 Page No. 85 of 262accused N. Muralidharan expressed his desire to lead evidence in his defence.
27. On 19.12.2016, accused S. Anand was examined under section 313 of Cr.P.C. and his statement was recorded. During his examination under section 313 of Cr.P.C. accused S. Anand denied the correctness of, or expressed ignorance about, the incriminating circumstances appearing against him during the prosecution evidence. During his examination under section 313 of Cr.P.C. accused S. Anand took his defence on the line almost identical to the line of defence taken by accused N. Muralidharan. During his examination under section 313 of Cr.P.C. accused S. Anand further stated that he was B.Com passed and post graduation diploma holder in business management (MBA) from the IIM, Ahmedabad. During his examination under section 313 of Cr.P.C. accused S. Anand further stated that he passed his final examination of the Cost Accountancy Institute and became a member of the Institute of Cost and Works Accountants of India. During his examination under section 313 of Cr.P.C. accused S. Anand further stated that he passed the final examination of the Company Secretary and became a member of the Institute of Company Secretaries of India. During his examination under section 313 of Cr.P.C. accused S. Anand further stated that M/s Mani Management Consultants Pvt. Ltd. was providing financial services to various corporate and other clients and had an impeccable career record over the years. During his examination under section Criminal Case No. 01/2023 Page No. 86 of 262 313 of Cr.P.C. accused S. Anand expressed desire to lead evidence in his defence.
28. In his defence accused No. 1 N. Ramakrishnan got examined himself as DW10 and during his examination tendered documents Ex.DW10/1 to Ex.DW10/10 in his evidence. Accused No. 1 N. Ramakrishnan also called some documents in his defence by the process of the court, but the same were not produced, and it was stated by DW5 Rakesh Kumar, officer from the Punjab National Bank, Janpath branch, New Delhi, DW6 B. Ashok, DW7 B.S. Shekhawat, DW8 Gurinder Singh Bedi and DW9 Madan Lal that the records and documents were destroyed or not traceable.
29. In his defence accused No. 4 Rakesh Vashist got examined himself as DW4 and during his examination tendered documents DW4/1 and Ex.DW4/2 in his evidence. Accused No. 4 Rakesh Vashist also got examined DW3 Satish Kumar Gupta in his defence.
30. In their defence accused Nos. 6, 7 and 8 got examined DW1 M. Jaya Ram and DW2 V. Narayan Swami, who gave their opinions regarding banking practices, especially about nature and types of hire purchase transactions, bills of exchange, hundis and letters of credit
31. During the trial, on 08.5.2021 accused No. 5 Mahesh Gupta died, and the proceedings against him were declared as abated on 21.8.2021.
32. During the trial, on 28.3.2022 accused No. 7 N. Criminal Case No. 01/2023 Page No. 87 of 262 Muralidharan died, and the proceedings against him were declared as abated on 06.6.2022.
33. During the trial, on 17.6.2022 accused No. 1 N. Ramakrishnan died, and the proceedings against him were declared as abated on 22.8.2022.
34. I have heard Mr. Neel Mani, Public Prosecutor for the State (CBI), Dr. Sushil Gupta, Advocate for accused M/s Indodan Industries Ltd. and Rakesh Vashist, Mr. G.A. Khan, Advocate for accused C. Subramaniam and Ms. Rebecca M. John, Senior Advocate and Mr. Vishal Gosain, Advocate for accused S. Anand and have gone through the material on record carefully. I have also gone through the written arguments filed by the prosecution and on behalf of the accused persons.
35. Having drawn the attention of the court on the testimonies of PW1 Raj Kumar Jain, PW2 B.R. Kakkar, PW3 Akhilesh Gupta,, PW5 Satya Narain, PW6 Hitesh Chander Sharma, PW7 Baldev Raj Dhand, PW8 K.C. Jain, PW9 Sneh Lata Tandon, PW10 Bharat Bhushan, PW12 Kamal Lal Garg, PW13 Hemantha Kumar D, PW14 R.K. Gautam, PW15 K.P. Punitha, PW16 K.A. Sarnaik, PW17 V.K. Chopra, PW19 D. Gopalakrishnan, PW20 W.F. Mosses, PW21 Sarala Kulasekaran, PW22 N.C. Baheti, PW23 Rajender Dhamija, PW24 Viveksheel Nayyar, PW25 Satya Sen, PW26 Vijay Kumar, PW27 Behram Pestonji Jamadar, PW28 Radhey Raman Sharma, PW29 S. Syamasundra, PW30 Pankaj Pahwa, PW31 R.P. Sharma, Ex.PW32 Criminal Case No. 01/2023 Page No. 88 of 262 Ram Singh, PW33 Bhupinder Kumar, PW34 T.R. Mehta, PW35 Chandra Shekhar Verma, PW36 M.L. Sharma, PW37 Jai Kumar, PW38 Ravinder Bhatia and PW39 Deepak Garg; documents Ex.PW8/A, Ex.PW8/B, Ex.PW8/C, Ex.PW8/D, Ex.PW8/E, Ex.PW8/F, Ex.PW8/G, Ex.PW9/H, Ex.PW8/J, Ex.PW8/J1 to Ex.PW8/J32, Ex.PW8/K1, Ex.PW8/K2 , Ex.PW8/K3, Ex.PW8/K4, Ex.PW8/K5, Ex.PW8/K6, Ex.PW8/K7(1), Ex.PW8/K7(2), Ex.PW8/K8, Ex.PW8/K9, Ex.PW8/K10, Ex.PW8/K11, Ex.PW8/K12, Ex.PW8/K13, Ex.PW8/K14, Ex.PW8/K15, Ex.PW8/K16, Ex.PW8/K17, Ex.PW8/K18, Ex.PW8/K19, Ex.PW8/K20, Ex.PW8/K21, Ex.PW8/K22, Ex.PW8/K23, Ex.PW8/K24, Ex.PW8/K25, Ex.PW8/K26, Ex.PW8/K27, Ex.PW8/K28, Ex.PW8/K29, Ex.PW8/K30, Ex.PW8/K31, Ex.PW8/K32, Ex.PW8/K33, Ex.PW8/K34, Ex.PW8/K35, Ex.PW8/K36, Ex.PW8/K37 Ex.PW8/L, Ex.PW8/M, Ex.PW8/N, Ex.PW8/P, Ex.PW8/Q, Ex,PW9/A, Ex.PW9/B, Ex.PW9/C, Ex.PW9/D, Ex.PW9/E, Ex.PW9/F, Ex.PW9/G, Ex.PW9/H, Ex.PW9/J, Ex.PW9/K, Ex.PW9/L, Ex.PW9/M, Ex.PW9/N, Ex.PW9/P, Ex.PW9/Q, Ex.PW9/R, Ex.PW9/S, Ex.PW9/T, Ex.PW9/U, Ex.PW9/PX-1, Ex.PW9/PX-2, Ex.PW10/1, Ex.PW10/2, Ex.PW10/3, Ex.PW10/4, Ex.PW10/5, Ex.PW10/6, Ex.PW10/7, Ex.PW10/8, Ex.PW10/9, Ex.PW10/10, Ex.PW10/11, Ex.PW10/12, Ex.PW10/13, Ex.PW10/14, Ex.PW10/15, Ex.PW10/16, Ex.PW10/17, Ex.PW10/18, Ex.PW10/19, Ex.PW10/20, Ex.PW10/21, Ex.PW10/22, Ex.PW10/23, Criminal Case No. 01/2023 Page No. 89 of 262 Ex.PW10/24, Ex.PW10/25, Ex.PW10/26, Ex.PW10/27, Ex.PW10/28, Ex.PW10/29, Ex.PW10/30, Ex.PW10/31, Ex.PW10/32, Ex.PW10/33, Ex.PW10/34, Ex.PW10/35, Ex.PW10/36, Ex.PW10/37, Ex.PW10/38, Ex.PW10/39, Ex.PW10/40, Ex.PW10/41, Ex.PW10/42 , Ex.PW10/43, Ex.PW10/44, Ex.PW10/45, Ex.PW10/46, Ex.PW10/47, Ex.PW10/48, Ex.PW10/49, Ex.PW10/50, Ex.PW10/51, Ex.PW10/52, Ex.PW10/53, Ex.PW10/54, Ex.PW10/55, Ex.PW10/56, Ex.PW12/1, Ex.PW12/2, Ex.PW13/1, Ex.PW13/2, Ex.PW13/3, Ex.PW13/4, Ex.PW13/5, Ex.PW13/6, Ex.PW13/7, Ex.PW14/1, Ex.PW14/2, Ex.PW14/3, Ex.PW14/4, Ex.PW14/5, Ex.PW14/6, Ex.PW14/7, Ex.PW15/1, Ex.PW15/2, Ex.PW16/1 to Ex.PW16/21, Ex.PW16/22 to Ex.PW16/29, Ex.PW16/30, Ex.PW16/31, Ex.PW20/1, Ex.PW21/1, Ex.PW22/1, Ex.PW22/2, Ex.PW22/3, Ex.PW22/4, Ex.PW22/5, Ex.PW22/6, Ex.PW22/7, Ex.PW22/8, Ex.PW22/9, Ex.PW22/10, Ex.PW22/11, Ex.PW22/12, Ex.PW22/13, Ex.PW22/14, Ex.PW22/15, Ex.PW22/16, Ex.PW22/17, Ex.PW22/18, Ex.PW22/19, Ex.PW23/1, Ex.PW23/2, Ex.PW23/2A, Ex.PW23/3, Ex.PW23/3A, Ex.PW23/4, Ex.PW23/5, Ex.PW23/5A, Ex.PW23/5B, Ex.PW23/6 , Ex.PW23/6A, Ex.PW23/7, Ex.PW23/7A, Ex.PW23/8, Ex.PW23/8A, Ex.PW23/9, Ex.PW23/9A, Ex.PW23/10, Ex.PW23/10A, Ex.PW23/11, Ex.PW23/12, Ex.PW23/12A, Ex.PW23/13, Ex.PW23/13A, Ex.PW23/13B, Ex.PW23/14, Ex.PW23/14A, Ex.PW23/15, Ex.PW23/15A, Ex.PW23/16, Ex.PW23/16A. Ex.PW23/17, Ex.PW23/17A, Ex.PW23/18, Ex.PW23/18A, Ex.PW23/19, Ex.PW23/20, Criminal Case No. 01/2023 Page No. 90 of 262 Ex.PW23/20A, Ex.PW23/21, Ex.PW23/21A, Ex.PW23/22, Ex.PW23/22A, Ex.PW23/23, Ex.PW23/23A, Ex.PW23/24, Ex.PW23/24A, Ex.PW23/24B, Ex.PW23/25, Ex.PW23/26, Ex.PW23/27, Ex.PW24/1, Ex.PW24/2, Ex.PW24/3, Ex.PW24/4, Ex.PW24/5, Ex.PW25/1, Ex.PW26/1, Ex.PW28/1, Ex.PW29/1, Ex.PW31/1, Ex.PW33/1, Ex.PW33/2, Ex.PW33/3, Ex.PW33/4, Ex.PW33/5, Ex.PW33/6, Ex.PW33/7, Ex.PW33/8, Ex.PW33/9, Ex.PW33/10, Ex.PW33/11, Ex.PW33/12, Ex.PW33/13, Ex.PW33/14, Ex.PW33/15, Ex.PW33/16, Ex.PW33/17(1), Ex.PW33/17(2), Ex.PW33/18, Ex.PW33/19, Ex.PW33/20, Ex.PW33/21, Ex.PW33/22, Ex.PW33/23, Ex.PW33/24, Ex.PW33/25, Ex.PW33/26, Ex.PW33/27, Ex.PW34/1, Ex.PW34/2, Ex.PW34/3, Ex.PW35/1, Ex.PW35/2, Ex.PW35/3, Ex.PW35/4, Ex.PW35/5, Ex.PW35/6, Ex.PW35/7, Ex.PW35/8, Ex.PW35/9, Ex.PW36/1, Ex.PW36/2, Ex.PW36/3, Ex.PW36/4, Ex.PW36/5, Ex.PW36/6; State of Rajasthan v. Tejmal Choudhary, 2022 LiveLaw (SC) 158, State of Maharashtra v. Sukhdev Singh, (1992) 3 SCC 700, Yash Pal Mittal v. State of Punjab, (1977) 4 SCC 540, Murari Lal v. State of M.P., (1980) 1 SCC 704, State of Tamil Nadu v. Nalini, Ashok Debbarma alias Achak Debbarma v. State of Tripura, (2014) 4 SCC 747, Bhimbdhar Pradhan v. State of Orissa, AIR 1956 SC 469, Noor Mohammad Mohd. Yusuf Momin v. State of Maharashtra, AIR 1971 SC 885, Baliram Tikaram Marathe v. Emperor, AIR 1945 Nagpur 1, State v. Navjot Sandhu, (2005) 11 SCC 600, Collector of Customs, Madras and others v. D. Bhoormall, (1974) Criminal Case No. 01/2023 Page No. 91 of 262 2 SCC 544, Kehar Singh v. State (Delhi Administration), (1988) 3 SCC 609, Ram Narayan Popli v. CBI, AIR 2003 SC 2748 and Neera Yadav v. CBI, (2017) 8 SCC 757 it is submitted by the learned Public Prosecutor that before filing of the police report in the present case accused No. 1 N. Ramakrishnan was dismissed from the services of the Central Bank of India, therefore, it was not necessary for CBI to obtain any sanction under section 19 of Act 49 of 1988 to prosecute him. It is further submitted by the learned Public Prosecutor that the provisions of Act 16 of 2018, whereby section 19 of Act 49 of 1988 has been amended are not retrospective in operation. It is further submitted by the learned Public Prosecutor that from the cross- examination carried out by the accused persons and arguments advanced by them it has established that they have admitted following facts, namely: (1) that accused No. 1 N. Ramakrishnan was working as Chief Manager, Central Bank of India, Janpath branch, New Delhi, (2) that accused No. 4 Rakesh Vashist was the Director of M/s Indodan Industries Ltd., (3) that accused No. 6 C. Subramaniam, accused No. 7 N. Murlidaharan and accused No. 8 S. Anand were directors of M/s Mani Management Consultant Pvt. Ltd., (4) that accused Mahesh Gupta was working with M/s Foremost Industries Ltd., which was a sister concern of accused No. 2 M/s Indodan Industries Ltd., (5) that accused M/s Indodan Industries Ltd. was having its accounts with the Central Bank of India, and they had got issued alleged LCs in favour of respective beneficiaries, (6) that M/s Mani Management Consultant Criminal Case No. 01/2023 Page No. 92 of 262 Pvt. Ltd. was having transactions with accused M/s Indodan Industries Ltd. in respect of the said LCs, and (7) that the transactions actually took place between the parties. It is further submitted by the learned Public Prosecutor that from the evidence led by the prosecution it has been proved that since the year 1986 the financial condition of M/s Indodan Industries Ltd. was not good and its banker was reluctant to accommodate it in the matter of extending loan and other facilities. It is further submitted by the learned Public Prosecutor that from the testimony of PW8 K.C. Jain and documents Ex.PW8/K2, Ex.PW8/K3, Ex.PW8/E, Ex.PW8/F, Ex.PW8/G and Ex.PW9/L it has been proved that at the strength of the resolution, the minutes of which are Ex.PW8/K2, passed by the Board of Directors of M/s Indodan Industries Ltd. in its meeting held on 20.7.1989, which was chaired by H.S. Jalan as Managing Director and attended by accused Rakesh Vashist as Director, PW8 K.C. Jain applied for opening of a revolving LC for Rs.3,63,195/- in favour of M/s Mani Management Consultants Pvt. Ltd. to be reinstated 36 times. It is further submitted by the learned Public Prosecutor that the said application for opening of the LC in favour of M/s Mani Management Consultants Pvt. Ltd. was made by PW8 K.C. Jain on behalf of M/s Indodan Industries Ltd. on the basis of a sham and collusive agreement for hire-purchase dated 17.7.1989 purportedly entered into between the said M/s Mani Management Consultants Pvt. Ltd. through its director C. Subramainum and accused No. 2 M/s Indodan Industries Ltd through Criminal Case No. 01/2023 Page No. 93 of 262 PW8 K.C. Jain. It is further submitted by the learned Public Prosecutor that from the testimony of PW8 K.C. Jain it has also been proved that initially accused N. Ramakrishnan refused to open the LC on revolving basis as the credit limit was not available with the accused No. 2, but subsequently, after meeting with accused Rakesh Vashist, ignoring the analysis report put up by PW12 Kamal Lal Garg on the reverse of Ex.PW8/E and without the agreement dated 17.7.1989 being produced before him, he allowed revolving LC No. 43/48 to be opened for value of Rs.3,63,195/- to be reinstated 36 times on the gap of one month, commencing from 25.9.1989 without seeking adequate security for reinstatement. It is further submitted by the learned Public Prosecutor that after opening of LC No. 43/48 on 22.8.1989, on 23.8.1989, M/s Mani Management Consultants Pvt. Ltd. and its directors, in prosecution of the conspiracy entered into among all the accused persons, had drawn 36 bills of exchange/hundis under the said LC upon M/s Indodan Industries Ltd. in one go with maturity date of each of the bill at the gap of one month, and PW8 K.C. Jain accepted the said bills of exchange in one go on behalf of M/s Indodan Industries Ltd. It is further submitted by the learned Public Prosecutor that after indorsing the said 36 bills in favour of Standard Chartered Bank under the signatures of accused C. Subramaniam, M/s Mani Management Consultants Pvt Ltd. got discounted the said 36 bills/hundis. It is further submitted by the learned Public Prosecutor that after discounting, the amount of 36 bills/hundis in respect of LC Criminal Case No. 01/2023 Page No. 94 of 262 No. 43/48, that is Rs.1,00,46,222/- was paid by M/s Mani Management Consultant Pvt. Ltd. to M/s Indodan Industries Ltd. by cheques and remaining amount of Rs.1,88,707/- was kept by it, and this fact is evident from the ledger sheet of account No.102 of M/s Indodan Industries Ltd., maintained with the Central Bank of India, Janpath branch, New Delhi. It is further submitted by the learned Public Prosecutor that from the testimony of PW8 K.C. Jain and documents Ex.PW8/K4, Ex.PW8/K5, Ex.PW8/K7 and Ex.PW22/2 it has also been proved that at the strength of the resolution, the minutes of which are Ex.PW8/K4, passed by the Board of Directors of M/s Indodan Industries Ltd. in its meeting held on 30.3.1990, which was chaired by H.S. Jalan as Managing Director and attended by accused Rakesh Vashist as Director, PW8 K.C. Jain applied for opening of a revolving LC for Rs.12,00,000/- in favour of M/s Deepak Dairy to be reinstated 11 times. It is further submitted by the learned Public Prosecutor that the said application for opening of the LC in favour of M/s Deepak Dairy was made by PW8 K.C. Jain on behalf of M/s Indodan Industries Ltd. at the strength of a forged agreement for milk supply purportedly entered into between M/s Indodan Industries Ltd. and M/s Deepak Dairy, and supplied to him by accused No. 4 Rakesh Vashist. It is further submitted by the learned Public Prosecutor that keeping in view the account condition of the accused No. 2, the said LC could not have been opened, but the accused No. 1 in conspiracy with the other accused persons, by committing misconduct and by abusing his Criminal Case No. 01/2023 Page No. 95 of 262 position as a public servant opened the said LC. It is further submitted by the learned Public Prosecutor that from the testimonies of PW1 Raj Kumar Jain, PW2 B.R. Kakkar, PW3 Akhilesh Gupta, PW4 Laxmi Narain, PW5 Satya Narayan, PW6 Hitesh Chander Sharma it has been proved that there was no firm in the name of M/s Deepak Dairy at 3486, Gali Bajrang Bali, Chowri Bazaar, Delhi, and further, from the records pertaining to account maintained in the Bank it is evident that there was no transaction of M/s Indodan Industries Ltd. with M/s Deepak Dairy. It is further submitted by the learned Public Prosecutor that during the investigation it was also revealed that the bills/hundis on behalf of fictitious M/s Deepak Dairy were drawn by a Manoj Kumar Goel, who, by writing name 'Raj Kumar' had drawn and indorsed the same without supplying any milk to accused No. 2 M/s Indodan Industries Ltd. It is further submitted by the learned Public Prosecutor that from the testimony of PW8 K.C. Jain it has also been proved that twelve bills of exchange/hundi in respect of LC No.44/21 in the name of M/s Deepak Dairy were prepared by the office of M/s Mani Management Consultant Pvt. Ltd. and the same were handed over to PW8 K.C. Jain by accused Rakesh Vashist for acceptance for payment on behalf of M/s Indodan Industries Ltd., and the same were already signed by authorized signatory of M/s Deepak Dairy. It is further submitted by the learned Public Prosecutor that after opening of LC No. 44/21 on 17.5.1990, on the same day the said Manoj Kumar Goel by putting his name as Raj Kumar and claiming to be the Criminal Case No. 01/2023 Page No. 96 of 262 authorised signatory of M/s Deepak Dairy had drawn 12 bills of exchange/hundis on M/s Indodan Industries Ltd. in one go with maturity date at the gap of one month, and PW8 K.C. Jain accepted the said bills of exchange in one go on behalf of M/s Indodan Industries Ltd. It is further submitted by the learned Public Prosecutor that after indorsing the said 12 bills in favour of ANZ Grindlays Bank, Madras under the signatures of accused N. Muralidharan, M/s Mani Management Consultants Pvt Ltd. got discounted the said 12 bills. It is further submitted by the learned Public Prosecutor that in respect of LC No. 44/21 pertaining to M/s Deepak Dairy, a cheque of Rs. 1,30,21,192/- was deposited by challan Ex.PW15/1 in the account of M/s Indodan Industries Ltd. It is further submitted by the learned Public Prosecutor that from the testimonies of PW8 K.C. Jain and PW22 N.C. Baheti and documents Ex.PW8/K24, Ex.PW8/K25, Ex.PW8/K26, Ex.PW8/K27, Ex.PW8/K28, Ex.PW8/K29, Ex.PW8/K30, Ex.PW8/K31, Ex.PW8/K32, Ex.PW8/K33, Ex.PW8/K34, Ex.PW8/K35, Ex.PW8/K36, Ex.PW8/K37, Ex.PW8/L, Ex.PW8/M, Ex.PW8/N, Ex.PW8/P, Ex.PW8/Q, Ex.PW9/H, Ex.PW9/J, Ex.PW9/K, Ex.PW34/1, Ex.PW34/2 and Ex.PW34/3 it has also been proved that applications were made by them on behalf of M/s Indodan Industries Ltd. for issuing LCs Nos. 43/98, 44/15 and 44/48 in favour of M/s Manu Steels by falsely claiming that the goods had already been supplied by it to the accused No. 2. It is further submitted by the learned Public Prosecutor that the said applications were made on the Criminal Case No. 01/2023 Page No. 97 of 262 basis of resolution passed by the Board of Director of M/s Indodan Industries Ltd. and while making the said applications, and also the application in respect of M/s Deepak Dairy, the accused No. 2 specially requested that the advising bank under the said LCs would be Central Bank of India, Addison Buildings branch, Madras. It is further submitted by the learned Public Prosecutor that the invoices, on the basis of which the applications for issuing the LCs in favour of M/s Manu Steels made were forged documents. It is further submitted by the learned Public Prosecutor that from the testimonies of PW8 K.C. Jain, PW24 Viveksheel Nayyar, PW25 Satya Sen and PW26 Vijay Kumar it has also been proved that bills of exchange/ hundis Ex.PW8/K27, Ex.PW8/K37 and PW8/N drawn under LCs No. 43/98, 44/15 and 44/48 respectively were forged documents which were prepared by the office of M/s Mani Management Consultant Pvt. Ltd. and the same were handed over to PW8 K.C. Jain by accused Rakesh Vashist for acceptance of payment from M/s Indodan Industries Ltd. It is further submitted by the learned Public Prosecutor that from the evidence led by the prosecution it has also been proved that the bills of exchange/hundis were never drawn or negotiated by M/s Deepak Dairy or M/s Manu Steels. It is further submitted by the learned Public Prosecutor that from the evidence led by the prosecution it has also been proved that bills Ex.PW8/K27 and Ex.PW8/K37, purportedly drawn under the LC No. 43/98 and LC No. 44/15 respectively were got discounted by M/s Mani Management Consultants Pvt. Ltd.
Criminal Case No. 01/2023 Page No. 98 of 262through its banker. It is further submitted by the learned Public Prosecutor that having got discounted bills Ex.PW8/K27 and Ex.PW8/K37, M/s Mani Management Consultants Pvt. Ltd., after retaining some part of the proceed, transferred the remaining amount to M/s Indodan Industries Ltd. It is further submitted by the learned Public Prosecutor that the proceeds of three LCs were never went to the beneficiaries, like M/s Deepak Dairy and M/s Manu Steels in whose favour those LC's were got opened, and actually the transactions were carried out by the M/s. Indodan Industries Ltd. for the purpose of generating funds only. It is further submitted by the learned Public Prosecutor that from the testimony of PW8 K.C. Jain, who categorically stated that the applications for opening the LCs were made by him at the instruction of accused H.S. Jalan (deceased) and accused Rakesh Kumar Vashist it has been proved that accused No. 4 Rakesh Vashist was active participant in the conspiracy and the commission of the offences as charged against him. It is further submitted by the learned Public Prosecutor that from the testimonies of PW24 Viveksheel Nayyar, PW25 Satya Sen and PW28 Vijay Kumar, corroborated by the reports of the expert Ex.PW36/3 and Ex.PW36/5 it has been proved that there was no transactions between M/s Manu Steels and M/s Indodan Industries Ltd on the basis of letter of credit/Hundis, and they had only one transaction with M/s Indodan Industries sometime in the year 1989 for which they had received the price from M/s Indodan Industries through cheque, and thus, it has Criminal Case No. 01/2023 Page No. 99 of 262 been proved that the accused persons forged documents Ex.PW8/K27, Ex.PW8/K37 and Ex.PW8/DB pertaining to M/s Manu Steel and M/s Manu Steels and used them as genuine. It is further submitted by the learned Public Prosecutor that from the evidence adduced by the prosecution it has also been proved that while applying for the LCs, applicant M/s. Indodan Industries Ltd. had asked to Central Bank of India for giving the correspondent bank at Madras, where the office of M/s. Mani Management was situated. It is further submitted by the learned Public Prosecutor that if the office of M/s. Deepak Dairy, as mentioned in the application, was situated in Delhi and the supply of milk was required to be effected at Muzaffarnagar then what was the need for M/s Indodan Industries Ltd. to mention the correspondent bank at Chennai unless there was pre-meeting of mind between the directors of M/s Mani Management and M/s. Indodan Industries Ltd. It is further submitted by the learned Public Prosecutor that from the testimony of PW9 Sheh Lata Tandon and letter Ex.PW9/G it has also proved that by way of letter Ex.PW9/G accused No. 1 N. Ramakrishnan admitted that the LCs were opened by him under the impression that the same were within his delegated powers, and that on 08.8.1990 he had realized that there was subtle difference between opening of LCs on revolving basis with reinstatement clause and without reinstatement clause. It is further submitted by the learned Public Prosecutor that from the testimony of PW9 Sneh Lata Tandon it has also been proved that accused N. Ramakrishnan did not open the Criminal Case No. 01/2023 Page No. 100 of 262 LCs either under the direction of his superior officer or under the impression that the bank was having sufficient security for opening the said LCs. It is further submitted by the learned Public Prosecutor that all the accused persons after entering into a conspiracy, in prosecution of such conspiracy have committed the offences as charged against them, therefore, accused M/s Indodan Industries Ltd., Rakesh Vashist, C. Subramaniam and S. Anand be convicted and be severely punished.
36. Per contra, having drawn the attention of the court on the testimonies of PW8 K.C. Jain, PW9 Sneh Lata Tandon, PW12 Kamal Lal Garg, PW17 V.K. Chopra, PW24 Viveksheel Nayar and DW2 V. Narayanswami, document Ex.DW4/2, sections 24 and 120B of the Indian Penal Code, section 13 of Act 49 of 1988, Karnataka Emta Coal Mines Ltd. and another v. Central Bureau of Investigation, 2024 SCC Online SC 2250, State NCT of Delhi v. Navjot Sandhu, (2005) 11 SCC 600, Esher Singh v. State of A.P., (2004) 11 SCC 585, State of Kerala v. P. Sugathan, (2000) 8 SCC 203, State and CBI v. Nalini and others, (1999) 5 SCC 253, Ajay Aggarwal v. Union of India, (1993) 3 SCC 609, Kehar Singh and others v. State (Delhi Administration), (1988) 3 SCC 609, V.C. Shukla v. State (Delhi Administration), (1980) 2 SCC 665, Natwarlal Sakarlal Mody v. The State of Bombay, 1961 SCC OnLine SC 1, L.K. Advani v. CBI, 1997 SCC OnLine Del 382, N.R. Saraiya and another v. Union of India and another, 2017 SCC OnLine Bom 5016, Atchut Mucund Alornekar and others v. Central Bureau of Investigation, 2012 SCC OnLine Bom 1256, copy of judgment dated Criminal Case No. 01/2023 Page No. 101 of 262 22.11.2013 passed by the Hon'ble Supreme Court in Criminal Appeal No. 1838/2013 entitled C.B.I. v. Ashok Kumar Aggarwal and copy of judgment dated 29.6.2015 passed by the Hon'ble Delhi High Court in Crl.M.C. No. 5798/2014 entitled Sanjay Bhandari and another v. Central Bureau of Investigation it is submitted by the learned counsel for the accused No. 2 that the accused No. 2 has committed no offence and never entered into conspiracy with other accused persons. It is further submitted by counsel for the accused No. 2 that a settlement has already been effected between the bank and the accused No. 2, therefore, the accused No. 2 is not liable for the commission of any offence. It is further submitted by counsel for the accused No. 2 that the accused No. 2 was a high priority customer of the bank and was given Health Code 1. It is further submitted by counsel for the accused No. 2 that the transactions between the accused No. 2 and M/s Mani Management Consultants Pvt. Ltd. were genuine transactions and the LCs issued by the bank were lawful and were not actuated by any offence on the part of the accused No. 2. It is further submitted by counsel for the accused No. 2 that the accused No. 1 did not abuse his office or power and did not commit any act of misconduct in opening LCs in favour of the accused No. 2. It is further submitted by counsel for the accused No. 2 that since no case is made out against the public servant, therefore, the accused No. 2 cannot be fastened with the liability of getting any pecuniary advantage through the other accused persons. It is further submitted by counsel for the accused No. 2 that as Criminal Case No. 01/2023 Page No. 102 of 262 regards the allegations of forging the documents, it has been proved that the LCs amount was paid to the holder in due course by the drawer of the LC on its due date to debit of their account, so when the contractual obligations of the contract is fulfilled there is no question of any forgery. It is further submitted by counsel for the accused No. 2 that from the contents of the police report it is evident that Deepak Dairy existed and it had dealings with the accused No. 2. It is further submitted by counsel for the accused No. 2 that the accused No. 2 is entitled to be acquitted.
37. Having drawn the attention of the court on the testimonies of PW8 K.C. Jain, PW9 Sheh lata Tandon, PW10 Bharat Bhushan, PW12 Kamal Lal Garg, PW22 N.C. Baheti, PW23 Rajinder Dhamija, PW25 Satya Sen, PW26 Vijay Kumar, PW30 Pankaj Pahwa, DW1 Jaya Ram and DW2 V. Narayanswamy, DW3 Satish Kumar Gupta, DW4 Rakesh Vashist and DW10 N. Ramakrishanan; documents Ex.DW4/1 and Ex.DW4/2; Mrinal Das v. State of Tripura, (2011) 9 SCC 479, Maksud Saiyad v. State of Gujarat, (2008) 5 SCC 668, S.K. Alagh v. State of UP, (2008) 5 SCC 662, Katta Sujatha v. Fertilizers & Chemicals Travancore Ltd., (2002) 7 SCC 655, Niranjan Singh v. State of Punjab, (1996) 9 SCC 98, State of Karnataka v. Pratap Chand, (1981) 2 SCC 335, Girdhari Lal Gupta v. D.H. Mehta, (1971) 3 SCC 189, Lachhi Ram v. State of Punjab, 1966 SCC OnLine SC 92 and Gopi Chand v. State, 2013 SCC OnLine Del 2969 it is submitted by the learned counsel for the accused No. 4 that from the testimonies of Criminal Case No. 01/2023 Page No. 103 of 262 PW8 K.C. Jain, PW22 N.C. Baheti, PW23 Rajinder Dhamija, PW25 Satya Sen, PW26 Vijay Kumar, PW30 Pankaj Pahwa, DW3 Satish Kumar Gupta and DW4 Rakesh Vashist and document Ex.DW4/1 it has been proved that the accused No. 4 was a non functional director in Indodan Industries Ltd. and he was not looking after the day to day affairs of the said company. It is further submitted counsel for the accused No. 4 that PW8 K.C. Jain is not a trustworthy witness and he has deposed falsely that the agreement and bills were given by the accused No. 4 to him. It is further submitted counsel for the accused No. 4 that the accused No. 4 is not vicariously liable for the alleged acts of the accused No. 2 and its employees. It is further submitted counsel for the accused No. 4 that since the accused No. 4 was not at all in control of the affairs of the accused No. 2 in the matter of opening of LCs, therefore, no criminal liability would stick to him, and in this connection reliance is placed on the testimonies of PW8 K.C. Jain, PW9 Sheh lata Tandon, PW10 Bharat Bhushan, PW12 Kamal Lal Garg, DW1 Jaya Ram and DW2 V. Narayanswamy. It is further submitted counsel for the accused No. 4 that by order dated 10.02.2009 passed in OA No. 131/97 entitled Central bank of India v. M/s Indodan Ind. Ltd. and others, a copy of which is Ex.DW4/2, all the dues of the bank have already been paid. It is further submitted counsel for the accused No. 4 that no conspiracy is proved against the accused No. 4 and reliance in this regard is placed on the testimonies of PW8 K.C. Jain and DW10 N. Ramakrishanan. It is further Criminal Case No. 01/2023 Page No. 104 of 262 submitted counsel for the accused No. 4 that the accused No. 4 is entitled to be acquitted.
38. Having drawn the attention of the court on the testimonies of PW8 K.C. Jain, PW9 Sneh Lata Tandon, PW16 K.A. Sarnaik, PW26 Vijay Kumar, PW27 Behram Pestonji Jamadar, PW30 Pankaj Pahwa, PW33 Bhupinder Kumar, DW1 M. Jayaram and DW2 V. Narayanswami, sections 8, 14, 15, 48, 35 and 37 of the Negotiable Instruments Act, 1881 (Act 26 of 1881) and section 62 of the Indian Contract Act, 1872 (Act 9 of 1872) it is submitted by the learned counsel for the accused No. 6 that since M/s Mani Management Consultants Pvt Ltd. has not been charged, therefore, the prosecution of the accused No. 6 is bad. It is further submitted by counsel for the accused No. 6 that the hire purchase agreement between the accused No. 2 and M/s Mani Management Consultants Pvt. Ltd. is lawful and the same was a legitimate means of refinancing. It is further submitted by counsel for the accused No. 6 that the accused No. 6 had no role in opening of LCs between the accused No. 2 and M/s Mani Management Consultants Pvt. Ltd. and the hire purchase agreement was available with the bank at the time of the opening of LC in favour of M/s Mani Management Consultants Pvt. Ltd. It is further submitted by counsel for the accused No. 6 that the accused No. 6 is entitled to be acquitted.
39. Having drawn the attention of the court on the testimonies of PW1 Raj Kumar Jain, PW2 B.R. Kakkar, PW3 Akhilesh Gupta, PW5 Satya Narain, PW6 Hitesh Chander Sharma, PW8 K.C. Jain, Criminal Case No. 01/2023 Page No. 105 of 262 PW9 Sneh Lata Tandon, PW14 R.K. Gautam, PW16 K.A. Sarnaik, PW17 V.K. Chopra, PW24 Viveksheel Nayar, PW26 Vijay Kumar, PW27 Behram Pestonji Jamadar, PW30 Pankaj Pahwa, PW33 Bhupinder Kumar, PW34 T.R. Mehta, DW1 M. Jayaram and DW2 V. Narayanswami; documents Mark-PW8/PX1, Ex.PW8/K7 to Ex.PW8/K15, Ex.PW8/K27, Ex.PW8/K32, Ex.PW8/K36, Ex.PW8/K37, Ex.PW8/L, Ex.PW8/N, Ex.PW8/PX1, Ex.PW9/L, Ex.PW13/7, Ex.PW15/1, Ex.PW22/2, Ex.PW33/D, Ex.PW33/D1 Ex.PW33/D2, Ex.PW33/D3, sections 109, 120B, 403, 409, 410 and 411 of the Indian Penal Code, section 13 of Act 49 of 1988, sections 3, 5, 9, 16, 46, 47 and 54 of Act 26 of 1881; Uniform Customs and Practice for Documentary Credits 400 (UCPDC), Ravindranatha Bajpe v. Mangalore Special Economic Zone Ltd. and others, (2022) 15 SCC 430, Sheila V. Sebastian v. R. Jawaharaj, (2018) 7 SCC 581, Sharad Kumar Sanghi v. Sangita Rane, (2015) 12 SCC 781, Sunil Bharti Mittal v. CBI, (2015) 4 SCC 609, R. Shaji v. State of Kerala, (2013) 14 SCC 266, CBI, Hyderabad v. K. Narayana Rao, (2012) 9 SCC 512, Utpal Das v. State of West Bengal, (2010) 6 SCC 493, State of Karnataka v. M Munniswamy, (2002) 10 SCC 546, M. Abbas v. State of Kerala, (2001) 10 SCC 103, State of Kerala v. P. Sugathan, (2000) 8 SCC 203, Aneeta Hada v. Godfather Travel and Tours Pvt. Ltd., (2012) 5 SCC 661, Dayle D'souza v. Govt. of India, 2012 SCC OnLine Sc 1012, Thermax Ltd. v. K.M. Johny, (2011) 13 SCC 412, Mohd. Ibrahim and others v. State of Bihar, (2009) 8 SCC 751, R. Kalyani v.
Criminal Case No. 01/2023 Page No. 106 of 262Janak C. Mehta, (2009) 1 SCC 516, S.K. Alagh v. State of Uttar Pradesh, (2008) 5 SCC 662, P.K. Narayanan v. State of Kerala, (1995) 1 SCC 142, Kehar Singh v. State, (1988) 3 SCC 609, Bhagirath v. State of MP, (1976) 1 SCC 20, Sundaram Finance Ltd. v. State of Kerala, AIR 1966 SC 1178, Sarwan Singh v. State of Punjab, [1957] SCR 953, Raj Bahadur v. State, 1991 SCC OnLine Del 450, State of Maharashtra v. Shantabai Kabir Joshi, 2018 SCC OnLine Bom 492, Banchit Guli Majhi v. State of West Bengal, 2006 SCC OnLine Cal 527, Official Liquidator, Manasuba and Co. (Private) Ltd. v. Commissioner of Police and others, (1969) ILR 2 Mad 559, Udhyanithi v. State, 2019 SCC OnLine Mad 9061, Ramdayal v. State of Madhya Pradesh, 1992 SCC OnLine MP 67, Mani Charan Panigrahi v. Radhamadhab Pande, 1990 SCC OnLine Ori 69 and copy of judgment dated 17.01.2024 passed by the Hon'ble Madhya Pradesh High Court in Criminal Appeal 2446-2005 entitled Hari Narayan v. State of Madhya Pradesh it is submitted by the learned senior counsel for the accused No. 8 that the accused No. 8 has been falsely implicated in the present case and neither he nor M/s Mani Management Consultants Pvt. Ltd. have committed any offence. It is further submitted on behalf of the accused No. 8 that M/s Mani Management Consultants Pvt. Ltd., of which the accused No. 8 had been a director had acted as per the provisions of Act 26 of 1881 and UCPDC and he neither entered into any conspiracy with any of the other accused persons, including M/s Indodan Industries Ltd. nor committed criminal breach of trust or received any Criminal Case No. 01/2023 Page No. 107 of 262 stolen property. It is further submitted on behalf of the accused No. 8 that M/s Mani Management Consultants Pvt. Ltd. on the security of the machinery etc. of the accused No. 2 only provided finance to the accused No. 2 against hire purchase and got discounted the bills accepted by the accused No.2. It is further submitted on behalf of the accused No. 8 that the prosecution has failed to prove that the accused No. 8 was part of any conspiracy to commit forgery, criminal breach of trust and receiving stolen property as alleged in the charge. It is further submitted on behalf of the accused No. 8 that the accused No. 8 is not vicariously liable for the commission of any offence as M/s Mani Management Consultants Pvt. Ltd. is not an accused in the present case. It is further submitted on behalf of the accused No. 8 that M/s Mani Management Consultants Pvt. Ltd. and its directors, including accused S. Anand had no means to know about the infirmities in the documents pertaining to M/s Deepak Dairy and M/s Manu Steel. It is further submitted on behalf of the accused No. 8 that M/s Mani Management Consultants Pvt. Ltd. was dealing only in documents, and they did not need to check the genuineness of the documents. It is further submitted on behalf of the accused No. 8 that everything M/s Mani Management Consultants Pvt. Ltd. did was legal and in strict compliance with the law as laid down under Act 26 of 1881 and the practice as laid down in the UCPDC when dealing with bills of exchange and documentary credits. It is further submitted on behalf of the accused No. 8 that the role of M/s Mani Management Consultants Criminal Case No. 01/2023 Page No. 108 of 262 Pvt. Ltd. was only limited to discounting of the hundis with its banker. It is further submitted on behalf of the accused No. 8 that M/s Mani Management Consultants Pvt. Ltd. simpliciter provided finance to accused M/s Indodan Industries Ltd by discounting the Bills of exchange drawn under LCs of Central Bank of India. It is further submitted on behalf of the accused No. 8 that it is false that the bills of exchange were prepared at the office of M/s Mani Management Consultants Pvt. Ltd.. It is further submitted on behalf of the accused No. 8 that since the prosecution has failed to prove its case, therefore, the accused No. 8 is entitled to be acquitted.
40. I have given my thoughtful consideration to the submissions made on behalf of the parties.
41. Out of thirty nine witnesses examined by the prosecution, PW4 Laxmi Narain and PW18 Asha Verma have been declared as irrelevant witnesses by the prosecution, and they were dropped after their part examination. PW7 Baldev Raj Dhand and PW11 R.K. Sharma, both bank employees, sought to prove the facts, which, in the light of the charges framed in the case, are neither facts in issue nor relevant facts, therefore, their testimonies are irrelevant.
42. PW28 Radhey Raman Sharma, who at the relevant time was working as the Chief Vigilance Officer with the Central Bank of India laid information in writing (complaint) Ex.PW28/1 dated 13.5.1997 before CBI, on the basis of which PW31 R.P. Sharma, Superintendent of Police, CBI, BS&FC, New Delhi ordered for Criminal Case No. 01/2023 Page No. 109 of 262 registration of FIR Ex.PW31/1 and entrusted the investigation to PW33 Bhupinder Kumar, Deputy Superintendent of Police, CBI, who assisted by PW32 Ram Singh and PW37 Jai Kumar, the then inspectors of police, completed investigation. PW32 Ram Singh recorded statements of two witnesses who are not examined during the trial and PW37 Jai Kumar collected documents which are not relevant in the light of the charges framed against the accused persons.
43. PW1 Raj Kumar Jain, PW2 B.R. Kakkar, PW3 Akhilesh Gupta, PW5 Satya Narain and PW6 Hitesh Chander Sharma sought to prove only one fact, that is: M/s Deepak Dairy was not existing at Gali Bajrang Bali, Chowri Bazar, Delhi.
44. Five prosecution witnesses, namely, PW22 N.C. Baheti, PW23 Rajender Dhamija, PW25 Satya Sen, PW26 Vijay Kumar and PW30 Pankaj Pahwa declared themselves as ex employees of M/s Foremost Industries (India) Ltd. from the witness box, whereas PW8 K.C. Jain, from the witness box declared himself as an ex employee of of accused No. 2 M/s Indodan Industries Ltd.; he during his further examination-in-chief and cross-examination as PW8, and in his statement recorded under section 164 of Cr.P.C. vide Ex.PW8/B, Ex.PW8/C and Ex.PW8/D, however, declared himself as an employee of M/s Foremost Industries (India) Ltd. who also rendered his services to accused No. 2 M/s Indodan Industries Ltd. Three witnesses, out of the said six witnesses, namely, PW8 K.C. Jain, PW25 Satya Sen and PW26 Vijay Kumar, themselves, as per the prosecution's version, were Criminal Case No. 01/2023 Page No. 110 of 262 participants in the commission of the offences charged against the accused persons; and one of them, namely, PW8 K.C. Jain turned approver during the investigation, and two others, namely, PW25 Satya Sen and PW26 Vijay Kumar have been examined as witnesses for the prosecution. The testimonies of PW25 Satya Sen and PW26 Vijay Kumar, however, would be appreciated on the same standards on which the testimony of an accomplice is to be assessed.
45. PW12 Kamal Lal Garg, PW9 Sneh Lata Tandon, PW10 Bharat Bhushan, at the relevant time, were the employees of Central Bank of India, and were working at its Janpath branch, New Delhi, whereas PW14 R.K. Gautam, as per his testimony, worked at Janpath branch of Central Bank of India from July-August, 1997 till 30.9.1999 as Chief Manager. PW14 R.K. Gautam during his examination stated about the rules regarding opening of LC and gave his opinion on banking practices. The rules have not been produced before the court, and the opinion of PW14 R.K. Gautam, as submitted by the learned counsel for the accused persons, not falling within the ambit of section 45 to section 51 of the Indian Evidence Act, 1872 (Act 1 of 1872) is not relevant and cannot be relied upon.
46. PW17 V.K. Chopra, at the relevant time, was working with the Central Bank of India, Zonal Office, Delhi (see his cross- examination conducted on behalf of the accused Nos. 7 and 8.). PW17 V.K. Chopra did not testify about the facts of the case which were within his knowledge. PW17 V.K. Chopra gave his opinion on banking Criminal Case No. 01/2023 Page No. 111 of 262 practices, but such opinion, as submitted by the learned counsel for the accused persons, is not within the ambit of section 45 to section 51 of Act 1 of 1872, hence opinion given by him is not relevant.
47. PW19 D. Gopalakrishnan during the period December 1991 to July 1993 was posted as Chief Manager, Zonal Office, Central Bank of India. PW19 D. Gopalakrishnan has not deposed about the state of the things that existed from 20.7.1989 to 28.11.1990 when the conspiracy in question was in prosecution.
48. PW15 K.P. Punitha, at the relevant time, was an employee of Central Bank of India, and was working with its Madras (Chennai) branch. PW15 K.P. Punitha by identifying signature of a V. Ramachandran, an officer of Central bank of India, Chennai branch on document Ex.PW15/1 sought to prove the contents of the same. PW15 K.P. Punitha by identifying signature of a Rajinder Kaul on Account Opening Form Ex.PW15/2 also sought to prove the contents of the same.
49. PW16 K.A. Sarnaik, at the relevant time, was an employee of Central Bank of India, and was working with the Foreign Bills (exports) department, main office, Bombay (Mumbai). PW16 K.A. Sarnaik by identifying his signatures on documents Ex.PW16/1 to Ex.PW16/21 sought to prove the said documents issued against LC No. 43/48. PW16 K.A. Sarnaik by identifying the signatures of a M.M. Maniyar, an Assistant Manager posted with the Central Bank of India also sought to prove documents Ex.PW16/22 to Ex.PW22/29 issued Criminal Case No. 01/2023 Page No. 112 of 262 against LC No. 43/48. PW16 K.A. Sarnaik also identified his signatures on manifolds Ex.PW9/M and Ex.PW9/N tendered during examination of PW9 Sneh Lata Tandon, and also on manifold Ex.PW16/30, and deposed that by manifolds Ex.PW9/M to Ex.PW9/P and Ex.PW16/30 main office of Central Bank of India, where he had been working at the relevant time received the payment mentioned in the said manifolds. PW16 K.A. Sarnaik also identified his signature on message Ex.PW16/31. PW16 K.A. Sarnail also sought to give opinion regarding the procedure to open an LC, but his opinion is not relevant being not covered under section 45 to section 51 of Act 1 of 1872.
50. PW27 Behram Pestonji Jamadar, at the relevant time, was working with the Central Bank of India, Head Office, Bombay (Mumbai). PW27 Behram Pestonji Jamadar has not testified about the facts of the present case which were within his knowledge, and gave his opinion on banking practices. His opinion, however, is not within the ambit of section 45 to section 51 of Act 1 of 1872. During cross- examination of PW27 Behram Pestonji Jamadar document Ex.PW27/D1 was brought on record.
51. PW34 T.R. Mehta, at the relevant time, was an employee of Standard Chartered Bank, and was working at its Madras (Chennai) branch. PW34 T.R. Mehta by identifying the signatures of a Satyanarayanan, Senior Manager on Credit Bill Negotiation (CBN) Ex.PW34/1, letter Ex.PW34/2 and CBN Ex.PW34/3 sought to prove the said documents.
Criminal Case No. 01/2023 Page No. 113 of 26252. PW13 Hemantha Kumar D and PW21 Ms. Sarala Kulasekaran, at the relevant time, were employees of ANZ Grindlays Bank and were working at its Madras (Chennai) branch. PW13 Hemantha Kumar R by identifying signatures of a P.M. Naraynan, officer of ANZ Grindlays Bank on tickler copies Ex.PW13/1 to Ex.PW13/5 sought to prove the same. PW13 Hemantha Kumar R by identifying signatures of a P.C. Satgopalan, employee of ANZ Grindlays Bank on debit voucher Ex.PW13/6 and credit voucher Ex.PW13/7 also sought to prove the said two last mentioned documents. During his examination PW13 Hemantha Kumar R also deposed that bills Ex.PW8/K7, Ex.PW8/K8, Ex.PW8/K9, Ex.PW8/K10 and Ex.PW8/K11 on the reverse side were bearing signatures on P.M. Narayanan at points X in token of discharge for having received the payment and further stated that the said bills/hundis were having bill reference as DB/G-1301/1237, 1238, 1239, 1240 and 1241.
53. PW21 Ms. Sarala Kulasekaran sought to prove that in the year 1988, while she was posted with the Rajaji Salai branch, Chennai of ANZ Gindlays Bank, M/s Mani Management Consultants Pvt. Ltd. at the strength of documents Mark-PW21X/, Mark-PW21/X1, Mark- PW21/X2, Mark-PW21/X3, Mark-PW21/X4, Mark-PW21/X5, Mark- PW21/X6, Mark-PW21/X7, Mark-PW21/X8, Mark-PW21/X9, Mark-
PW21/X10, Mark-PW21/X11, Mark-PW21/X12 and Mark-PW21/X13, got opened account No. 01CBM3322600 with the Criminal Case No. 01/2023 Page No. 114 of 262 said branch. Although through PW21 Ms. Sarala Kulasekaran the prosecution also sought to prove the signatures of accused N. Muralidharan, but she did not identify his signatures. PW21 Ms. Sarala Kulasekaran has not proved any material fact pertaining to the case
54. PW20 W.F. Mosses, PW29 S. Syamasundara Babu, PW35 Chandra Shekhar Verma and PW38 Ravinder Bhatia, as per their respective testimonies, witnessed giving of specimen writing and signatures to the investigating officer by several persons, including accused Rakesh Vashist, C. Subramaniam and N. Muralidharan, and witnesses PW8 K.C. Jain, PW22 N.C. Baheti, PW23 Rajender Dhamija, PW25 Satya Sen, PW26 Vijay Kumar and PW30 Pankaj Pahwa.
55. PW20 W.F. Mosses during his examination-in-chief deposed that in the year 2000 while he was posted as Officer in Scale- ll in Circle Office of Canara Bank in Mumbai, CBI officer had taken specimen writing of some person at Mumbai. PW20 W.F. Mosses further deposed that each sheet of Ex.PW20/1 bore his signature at point A. PW20 W.F. Mosses further deposed that as per sheets Ex.PW-20/1 (colly.) accused C. Subramaniam gave his specimen signatures to Inspector CBI in his presence. From the testimony of PW20 W.F. Mosses it can be discerned that initially, though he deposed that in the year 200 CBI officer had taken writing of some person at Mumbai, but he did not name the person whose writing was taken. Only after seeing document Ex.PW20/1, PW20 W.F. Mosses Criminal Case No. 01/2023 Page No. 115 of 262 deposed that as per Ex.PW20/1 (and not as per his knowledge) accused C. Subramaniam gave his specimen signatures to Inspector CBI in his presence. PW20 W.F. Mosses nowhere deposed that accused C. Subramaniam gave writing Ex.PW20/1 without any compulsion from CBI.
56. PW29 S. Syamasundara Babu, who, in the year 2000 was working as Senior Manager, Indian Bank, Vigilance Department, Central Office, Chennai, during his examination-in-chief, only after seeing specimen signature sheets S-229 to S-242 deposed that in his presence CBI officer had taken specimen signature of accused N. Muralidharan on those sheets Ex.PW29/1, therefore, he signed as a witness. During his cross-examination by counsel for the accused No. 7 and 8 PW29 S. Syamasundara Babu further deposed that the IO had not shown him any permission of the court for obtaining signature of accused N. Muralidharan. PW29 S. Syamasundara Babu nowhere deposed that accused accused N. Muralidharan gave signatures embodied in Ex.PW29/1 without any compulsion from CBI.
57. PW24 Viveksheel Nayyar appeared in the witness box to prove that Manu Steels was a partnership firm comprising of him, his father and his brother; that LCs Nos. 43/98, 44/15 and 44/48 were obtained by M/s Indodan Industries Ltd. at the strength of forged documents; and that the bills drawn and endorsed under the said three LCs purportedly on behalf of M/s Manu Steel and M/s Manu Steels were forged and fictitious.
Criminal Case No. 01/2023 Page No. 116 of 26258. PW36 M.L. Sharma appeared as Government expert, who sought to prove documents, opinions and grounds of such opinions Ex.PW36/1 to Ex.PW36/6.
59. PW39 Deepak Garg proved statement/confession Ex.PW8/B, Ex.PW8/C and Ex.PW8/D of PW8 K.C. Jain, the approver, recorded under section 164 of Cr.P.C.
60. Accused No. 4 Rakesh Vashist is stated to be one of the directors of M/s Foremost Industries (India) Ltd. and accused No. 2 M/s Indodan Industries Ltd., but no document has been produced from the records of the Registrar of Companies to prove his position, powers and the period during which he remained as such director. During his examination under section 313 of Cr.P.C., however, accused No. 4 Rakesh Vashist has admitted that he was one of the directors of accused No. 2 M/s Indodan Industries Ltd., but also claimed that he was a non-functional director and was not in charge of the day to day affairs of accused No. 2 M/s Indodan Industries Ltd. Similarly, no documents has been produced from the records of the Registrar of Companies to prove that at the relevant time accused C. Subramania, N. Muralidharan and S. Anand were the directors in M/s Mani Management Consultants Pvt. Ltd.
61. Although during the course of arguments reference has been made by the prosecution to a book claimed to be the ledger pertaining to the Cash Credit/Current Account No. 105 of accused No. 2 M/s Indodan Industries Ltd. maintained by Central Bank of India, Criminal Case No. 01/2023 Page No. 117 of 262 Janpath branch, New Delhi, but the said book has neither been tendered in evidence nor the same has been admitted in evidence. No book of account has been proved pertaining to the account maintained by accused No. 2 M/s Indodan Industries Ltd. with the Punjab National Bank, Janpath branch, New Delhi or any other bank.
62. During examination-in-chief of PW12 Kamal Lal Garg four loose sheets Ex.PW12/2, purporting to be four leaves pertaining to account No. 05, described as 'Non Operative Account of Returned Bills Against LC' of Indodan Industries Ltd. 01.10.1991 to 01.4.1993, seized by way of seizure memo Ex.PW12/1 were tendered in evidence. The said four loose sheets Ex.PW12/2 are not in the form of a book, therefore, in view of the provisions of section 34 of Act 1 of 1872 the same are not relevant to prove the liability of accused No. 2 M/s Indodan Industries Ltd. Further, Ex.PW12/2 do not pertain to the period when the conspiracy was under prosecution.
63. While testifying to the facts and proving the documents, PW8 K.C. Jain also sought to prove documents Ex.PW8/K16 to Ex.PW8/K23. The said documents Ex.PW8/K16 to Ex.PW8/K23, though have no connection with PW8 K.C. Jain, indicate that under the LC No. 44/21 the said eight vouchers were issued by the Central Bank of India. The said vouchers do not bear signatures of any official of accused No. 2 M/s Indodan Industries Ltd. and no account book or ledger etc. has been proved by prosecution to show that the liability sought to be imposed upon accused No. 2 M/s Indodan Industries Ltd.
Criminal Case No. 01/2023 Page No. 118 of 262through Ex.PW8/K16 to Ex.PW8/K23 remained undischarged.
64. Besides testifying to the facts and proving the documents, PW9 Sneh Lata Tandon, PW10 Bharat Bhushan and PW12 Kamal Lal Garg also gave opinions about banking practices, but in the light of the provisions of section 45 to section 51 of Act 1 of 1872 their opinions are irrelevant.
65. Documents Ex.PW9/M, Ex.PW9/N, Ex.PW9/P, Ex.PW9/Q Ex.PW9/R, Ex.PW9/S, Ex.PW9/T, Ex.PW9/U, Mark- PW9/PX1, Mark-PW9/PX2, Ex.PW10/1, Ex.PW10/2, Ex.PW10/3, Ex.PW10/4, Ex.PW10/5, Ex.PW10/6, Ex.PW10/7, Ex.PW10/8, Ex.PW10/9, Ex.PW10/10, Ex.PW10/11, Ex.PW10/12, Ex.PW10/13 Ex.PW10/14, Ex.PW10/15, Ex.PW10/16, Ex.PW10/17, Ex.PW10/18, Ex.PW10/19 and Ex.PW10/20 show that before making periodical payments of Rs.3,63,195/- to the Standard Chartered Bank on different occasions under LC No. 43/48, issued by Central Bank of India, Janpath branch, New Delhi, Central Bank of India, Bombay Office through its branch in charge intimated to Central Bank of India, Janpath branch, New Delhi through the said documents (manifolds) that they had to advise having instructed central office to debit the Janpath branch of Central bank of India with the aggregate amount of Rs.3,63,195/- in respect of transaction pertaining to LC No. 43/48 on account of Mani Management Consultants Pvt. Limited, and asked Janpath branch to respond the entry to the credit of its account (Bombay branch) with the central office. And as per the testimonies of Criminal Case No. 01/2023 Page No. 119 of 262 PW9 Sneh Lata Tandon and PW10 Bharat Bhushan, the said two witnesses and other officials of Janpath branch, by putting their respective signatures on the said manifolds, gave confirmation as sought by Central Bank of India, Bombay Office. As per Ex.PW10/21 to Ex.PW10/55 and Ex.PW9/F, after confirmation that Central Bank of India, Janpath branch, New Delhi owed its liability to Central Bank of India, Bombay Office under Ex.PW9/M, Ex.PW9/N, Ex.PW9/P, Ex.PW9/Q Ex.PW9/R, Ex.PW9/S, Ex.PW9/T, Ex.PW9/U, Ex.PW9/PX1, Ex.PW9/PX2, Ex.PW10/1, Ex.PW10/2, Ex.PW10/3, Ex.PW10/4, Ex.PW10/5, Ex.PW10/6, Ex.PW10/7, Ex.PW10/8, Ex.PW10/9, Ex.PW10/10, Ex.PW10/11, Ex.PW10/12, Ex.PW10/13 Ex.PW10/14, Ex.PW10/15, Ex.PW10/16, Ex.PW10/17, Ex.PW10/18, Ex.PW10/19 and Ex.PW10/20, Central Bank of India, Janpath branch, New Delhi through PW9 Sneh Lata Tandon and PW10 Bharat Bhushan issued debit vouchers Ex.PW10/21 to Ex.PW10/55 and Ex.PW9/F against M/s Indodan Industries Ltd. in respect of the payments made by Central Bank of India, Bombay branch under LC No. 43/48 and other LCs and other charges. The said documents, however, do not show that the liability under Ex.PW10/21 to Ex.PW10/55 and Ex.PW9/F remained undischarged on the part of accused No. 2 M/s Indodan Industries Ltd.
66. Document Ex.PW10/56 shows that for making payment of Rs.20,59,426.20/- under LC No. 44/15, issued by Central Bank of India, Janpath branch, New Delhi, Central Bank of India, Addition Criminal Case No. 01/2023 Page No. 120 of 262 Buildings branch, Madras through branch in charge intimated to Central Bank of India, Janpath branch, New Delhi through Ex.PW10/56 that they had to advise having instructed central office to debit the Janpath branch with the aggregate amount of Rs.50,88,17,656/- in respect of transaction pertaining to LCs, including LC No. 44/15, and asked Janpath branch to respond the entry to the credit of its account (Madras branch) with the central office. And as per the testimony of PW10 Bharat Bhushan, he, by putting his signature on the said manifold, gave confirmation as sought by Madras branch. Further, Ex.PW9/D1 is claimed to be the debit voucher issued in respect of Ex.PW10/56, but on a perusal of Ex.PW9/D1 it is revealed that the same was in respect of LC No. 44/5 and not 44/15. No evidence has been led by the prosecution to show that debit voucher Ex.PW9/D1 actually pertained to LC No. 44/15.
67. Documents Ex.PW17/D1, Ex.PW9/A, Ex.PW9/B and Ex.PW9/C are the letters dated 27.5.1991, 19.6.1991, 04.7.1991 and 19.7.1991 respectively, exchanged between S. Gopalakrishnan, the then Deputy General Manager, Central Bank of India, Zonal Office, Delhi and K. Chandrasekaran, the then Chief Manager, Janpath branch, New Delhi in respect of the original documents under LC No. 44/15 which were, apparently, handed over by the branch to accused No. 2 M/s Indodan Industries Ltd. Out of the said letters, which were issued after the conspiracy came to an end, letter Ex.PW9/C written by K. Chandrasekaran to S. Gopalakrishnan is significant. It is, inter alia, Criminal Case No. 01/2023 Page No. 121 of 262 stated in Ex.PW9/C as follows:
In this connection, we would like to mention that the said bill of exchange has nothing to do with the security as no other party, other than the drawee of the bill, is liable in such case because credit opened by the Branch and accepted by the credit opener only. The amount has already been debited to the Company's Account thereby their liability has been included in the Cash Credit Account which is covered by registration of charges against floating assets of the Company. The bill of exchange alluded in Ex.PW9/C is, apparently, the bill drawn under LC No. 44/15, and the Company alluded is accused No. 2 M/s Indodan Industries Ltd. Thus, the contents of the said letter indicate that the bank had sufficient security against accused No. 2 M/s Indodan Industries Ltd. in respect of its Cash Credit Account maintained with Central Bank of India, Janpath branch, New Delhi. This fact is also strengthened by the contents of Ex.PW27/D1(colly) which embodies the assets of accused No. 2 M/s Indodan Industries Ltd. at the security of which credit and other facilities were extended by Central Bank of India, Janpath branch, New Delhi to accused No. 2 M/s Indodan Industries Ltd.
68. Although in letter Ex.PW9/A reference has been made to "Central Office guidelines" and PW14 R.K. Gautam and PW33 Bhupinder Kumar have also deposed about existence of rules and written instructions by Central Bank of India regarding issuance of LCs etc., but no rules or regulations made by the Central Bank of India, the Reserve Bank of India or any other competent authority, except Uniform Customs and Practices for Documentary Credits (1983 Criminal Case No. 01/2023 Page No. 122 of 262 Revision) International Chamber of Commerce Publication No. 400, regulating the issuance of LCs, particularly revolving LCs, by the employees of the bank at the relevant time has been brought to the notice of the court.
69. A perusal of Ex.DW4/2 shows that on 10.02.2009 in OA No. 131/97 entitled Central Bank of India v. Indodan Industries (India) Ltd. and others Debt Recovery Tribunal-II, Delhi disposed of two IAs bearing Nos. 186/08 and 633/08 and dismissed the said OA No. 131/97 as withdrawn. As per order Ex.DW4/2 Indodan Industries (India) Ltd.
was a party in the said proceedings. Ex.DW4/2 nowhere indicates that accused No. 2 M/s Indodan Industries Ltd. or Indodan Industries Ltd. was also a party in the said proceedings. No material has been placed before the court to show that on or before 10.02.2009 the name of the accused No. 2 was changed to Indodan Industries (India) Ltd.
70. In the light of the charges and the order dated 07.5.2012 giving rise to the charges, the conspiracy, in prosecution of which the other offences were committed, commenced in the month of July, 1989 and continued till the month of November, 1990. Thus, the events prior to the month of July, 1989 and after the month of November. 1990, unless they are otherwise relevant are not required to be taken into account.
71. In the present case, during the trial reliance has been placed by the parties on the communications (statements) by the officers of one branch or office of Central Bank of India to the other Criminal Case No. 01/2023 Page No. 123 of 262 branch or office of Central Bank of India, communications between Standard Chartered Bank and Central bank of India and communication between ANZ Griandlays Bank and Central Bank of India. Such statements, not falling within the ambit of term 'admissions' or otherwise not relevant under any provision of Act 1 of 1872; and bank entries or statements not contained in a book of account or any other official book, register or record under sections 34 and 35 of Act 1 of 1872, or otherwise not relevant, cannot be taken into account. Further, the opinions not falling within section 45 to section 51 of Act 1 of 1872 would be treated as irrelevant. Oral evidence of the witnesses which are not direct, and oral evidence about the contents of the documents, and not saved by any provision of Act 1 of 1872 would not be considered while appreciating the evidence. The use of statements of the witnesses recorded under section 162 of Cr.P.C. by the prosecution or the accused for the purpose other than contradicting such witnesses, including for refreshing the memory of the witnesses while they were in the witness box or for their affirmation, and not contradiction, shall be discounted while analysing the evidence.
72. In the light of the charges framed against the accused persons and arguments advanced on behalf of the parties, first point for determination is: whether during the period 25.7.1989 and 28.11.1990 accused No. 1 N. Ramakrishnan (since deceased) was a public servant?
Criminal Case No. 01/2023 Page No. 124 of 26273. The police report, giving rise to the present case, at the relevant time, was put up before the Special Judge appointed under Act 49 of 1988, and not before any Metropolitan Magistrate or other court because one of the accused persons, namely, N. Ramakrishnan (the accused No. 1), at the time of the commission of the offences was stated to be a bank employee, and thus, a public servant. To prove the position of accused No. 1 N. Ramakrishnan as such public servant no document from his service record or otherwise has been called and proved by the prosecution. However, from the testimonies of PW9 Sneh Lata Tandon, PW12 Kamal Lal Garg and PW10 Bharat Bhushan, who in the years 1989 and 1990 were posted at the Janpath branch of Central Bank of India, and also from the testimonies of PW8 KC Jain, PW22 N.C. Baheti, PW30 Pankaj Pahwa and PW27 Behram Pestonji Jamadar, who, as per their respective testimonies, knew him as such bank officer and dealt with him in that capacity it has been proved that during the period 25.7.1989 and 28.11.1990 accused No. 1 N. Ramakrishnan was working as the Chief Manager, Central Bank of India, Janpath branch, New Delhi; and thus, he was a public servant.
74. The next point for determination is: whether in the absence of sanction under section 19 of Act 49 of 1988 the prosecution of accused No. 1 N. Ramakrishnan (since deceased) for the commission of offence punishable under section 13(2) of Act 49 of 1988 and for entering into criminal conspiracy to commit the said offence had been valid?
Criminal Case No. 01/2023 Page No. 125 of 26275. It is the case of the prosecution, and it has been so proved that at the time of the commission of the alleged offences accused No. 1 N. Ramakrishnan was a public servant. Accused No. 1 N. Ramakrishnan was sent for, and had been put on, trial for the commission of offences, inter alia, punishable under section 13 of Act 49 of 1988. As per section 19 of Act 49 of 1988 for such prosecution of accused No. 1 N. Ramakrishnan sanction from the authority concerned was required. It is stated in the police report, and it has been so argued by the learned Public Prosecutor that no sanction for prosecution of accused No. 1 N. Ramakrishnan was required in the present case as on the date of filing of the police report (charge sheet) and taking congnizance of offences by the learned predecessor he (the accused No. 1) was not in the services of the Bank as he was already dismissed. The fact that on the date of taking cognizance of offences the accused No. 1 was dismissed has not been proved by filing any document. Appointments to public offices and services are always made by orders in writing; and also the persons from public offices and services are dismissed by orders in writing, In a judicial proceeding, in view of the first exception to section 91 of Act 1 of 1872 when a public officer is required by law to be appointed in writing, and when it is shown that any particular person has acted as such officer, the writing by which he is appointed need not be proved, but the same does not apply in case of dismissal of a public officer who can be dismissed by an order in writing only. In the present case, Criminal Case No. 01/2023 Page No. 126 of 262 in view of section 91 of Act 1 of 1872 the dismissal of accused No. 1 N. Ramakrishnan from the services of Central Bank of India could be proved by his dismissal order only, which has neither been filed nor has been proved. Further reliance has been placed by the learned Public Prosecutor on a document purporting to be an application dated 04.7.2005 and a purported affidavit dated 05.7.2005 of accused No. 1 N. Ramakrishnan attached with the same. A perusal of the record shows that the said application with affidavit of accused No. 1 N. Ramakrishnan, wherein he allegedly admitted his dismissal from the services of the bank was never filed in the court as is evident from the order sheets dated 05.7.2005 and 06.7.2005, which read as follows:
57/05 Present: Sh. S. Islam, P.P. For CBI.
All accused except accused H.S. Jalan and
C. Subramanium are present on bail with
respective Counsels.
Both accused H.S. Jalan and C.Subramaium are
exempted for today only on applications moved.
Args on charge Partly heard.
Put up on 67/05 for further args on charge.
Sd/-
Special Judge
5.7.05
6.7.05
Present: Sh. S. Islam, P.P. For CBI.
All accused except accused H.S. Jalan and C.
Subramanium are present on bail.
Both accused are exempted from personal appearance on applications moved.
Args on charge Partly heard.
Put up on 16 th and 17th August, 2005 for further arg on charge.
Criminal Case No. 01/2023 Page No. 127 of 262Sd/-
Special Judge 6.7.05 Thus, the prosecution has failed to prove that on the date of taking cognizance of offences accused No. 1 N. Ramakrishnan had ceased to be a public servant. Therefore, in the light of the provisions of sections 13 and 19 of Act 49 of 1988 his prosecution for the commission of offence punishable under section 13(2) of Act 49 of 1988 and for entering into criminal conspiracy to commit the said offence had not been valid.
76. The next point for determination is: what was the financial state of affairs of accused No. 2 M/s Indodan Industries Ltd. in the books of the Central Bank of India, Janpath branch, New Delhi in the months of July-August, 1989?
77. On this point it is, inter alia, stated in the police report, and has been so argued by the learned Public Prosecutor that at the relevant time the financial condition of M/s Indodan Industries Ltd. was not good, and as per the refer book / Sanction Register of the Central Bank of India, Janpath branch, Delhi, as on 28.8.1989, against a sanction limit of 305 + 25 lakh rupees in the account of accused No. 2 M/s Indodan Industries Ltd. the account was being operated with a debit balance of 595.11 lakh rupees, when the then Chief Officer of the branch had allowed passing of cheque worth Rs.9,500/- only in the account, while the remaining cheques, put up for passing were disallowed; that when the matter was put up to accused N. Criminal Case No. 01/2023 Page No. 128 of 262 Ramakrishanan, however, he allowed passing of the entire lot of cheques with the endorsement "Party expecting DD for Rs. 1 crore from Bombay; that subsequently, on 29.8.1989 also cheques worth 34.63 lakh rupees were allowed to be passed in the account in the refer book by accused N. Ramakrishnan. In this connection reliance has also been placed on the testimonies of PW8 K.C. Jain, the approver, PW12 Kamal Lal Garg and PW19 D. Gopalakrishnan.
78. PW19 D. Gopalakrishnan during his examination deposed that he was posted as Chief Manager in Delhi Zonal Office of the Central Bank of India during the period 1991 to July 1993. PW19 D. Gopalakrishnan further deposed that there were three deputy general managers in the Zonal Office, namely, S. Gopalakrishnan, N. Venkateshwaran and V.K. Chopra. PW19 D. Gopalakrishnan further deposed that the incumbent of Janpath branch of Central bank of India was of the rank of Chief Manager in the scale IV, and the Chief Manager of Janpath branch used to directly report to the Zonal Manager (Deputy General Manager) with regard to transaction of the branch. PW19 D. Gopalakrishnan further deposed that he came to know that M/s Indodan Industries Group had account in Janpath branch of Central Bank of India and there was problem in their account. PW19 D. Gopalakrishnan further deposed that as per his knowledge, all the accounts of M/s Indodan Industries Group were not satisfactory. PW19 D. Gopalakrishnan further deposed that he had no knowledge regarding the LC facility granted by the Central Bank of Criminal Case No. 01/2023 Page No. 129 of 262 India, Janpath branch to accused M/s Indodan Industries Ltd. From the testimony of PW19 D. Gopalakrishnan it can be discerned that the statements made by him are of general nature and he did not specifically stated about the financial condition of accused No. 2 M/s Indodan Industries Ltd. in the books of the bank.
79. PW8 K.C. Jain (the approver) during his examination-in- chief deposed that he was a Chartered Accountant by profession, and somewhere in the year 1983 he had joined accused M/s Indodan Industries Ltd. as a Finance Manager. PW8 K.C. Jain further deposed that the Central Bank of India, Janpath branch was their main banker with whom the company enjoyed all financial facilities. PW8 K.C. Jain further deposed that in the year 1986 the group companies were looking for expansion programmes, but looking into the financial condition of the company the Central Bank of India, Janpath branch, New Delhi was reluctant to give additional facilities, like funds for the project and also for their working capital. PW8 K.C. Jain further deposed that the bank was asking for additional collateral securities which was not provided upto the satisfaction of the bank, and this had resulted in lack of trust of the bank with the company. PW8 K.C. Jain further deposed that resultantly he was asked by the Chairman H.S. Jalan, and also by accused Rakesh Vashist to look for alternate funds. PW8 K.C. Jain further deposed that since he was looking after finance, so he approached various banks and institutions for alternate source of funding, and in this process he also came in contact one company in Criminal Case No. 01/2023 Page No. 130 of 262 the south, that is Money Management, through whom they had some leasing transactions.
80. According to PW8 K.C. Jain the financial condition of the accused No. 2 M/s Indodan Industries Ltd. was not good since 1986. Before this court, however, no material has been proved to show as to what was the financial condition of accused No. 2 M/s Indodan Industries Ltd. from the year 1986 onwards, and especially in the year 1989. The refer book / Sanction Register of the Central Bank of India, Janpath branch, Delhi, referred to in the police report and the relevant writing and entries therein, have not been proved to show that on 28.8.1989, against a sanction limit of 305 + 25 lakh rupees in the account of M/s Indodan industries Ltd., the account was being operated with a debit balance of 595.11 lakh rupees. During the course of arguments strong reliance has been placed by the prosecution on a book stated to be the ledger maintained by Central Bank of India in respect of the Cash Credit/Current Account No. 105 of the accused No. 2, but, as already mentioned, the said ledger has neither been tendered in evidence nor its entries have been proved as per law.
81. It has also been stated in the police report that due to financial condition of accused No. 2 M/s Indodan Industries Ltd. the bank stopped passing its cheques, but this fact has not been proved by the prosecution by leading any evidence. On the contrary, it has emerged from the contents of two documents, that is report Ex.PW27/D1(colly) and complaint Ex.PW28/1 that pursuant to the Criminal Case No. 01/2023 Page No. 131 of 262 application of accused No. 2 M/s Indodan Industries Ltd. made on 10.7.1989 a report Ex.PW27/D1(Colly) was prepared by three senior officers of Central Bank of India, namely, K. Chandrashekharan (Chief Manager CCR), S. Gopalkrishnan (Deputy General Manager) and the accused No. 1 (Chief Manager Branch), who highly recommended to enhance the cash credit limit and other financial facilities to accused No. 2 M/s Indodan Industries Ltd. by the bank, and on such application and request, as per complaint Ex.28/1, on 27.8.1989, the Board of Directors of Central Bank of India had sanctioned the limits in the manner that, (a) the Cash Credit (Hyp) limit was enhanced from 495 lakh rupees to 650 lakh rupees, (b) bills purchase limit was enhanced from 40 lakh rupees to 50 lakh rupees, (c) End. Demand bills limit was enhanced from 35 lakh rupees to 50 lakh rupees, and
(d) letter of credit (Inland/Import) limit was enhanced from 30 lakh rupees to 125 lakh; and the said enhancement was approved by PW27 B.P. Jamadar, General Manager (Credit) and J.N. Chinoy, Deputy General Manager (Credit) at Bombay. In this regard it is submitted by the learned Public Prosecutor that the limits were actually enhanced in the month of September, 1989, and not on 27.8.1989, but this plea cannot be accepted as PW28 Radhey Raman Sharma, the complainant from the witness box nowhere stated that the date 27.8.1989 mentioned on first page of complaint Ex.PW28/1 was due to some mistake and the things were otherwise. Thus, it is proved that although as per the analysis report given by PW12 Kamal Lal Garg on the Criminal Case No. 01/2023 Page No. 132 of 262 reverse of Ex.PW8/E dated 22.8.1989 accused No. 2 M/s Indodan Industries Ltd. was, apparently, exceeding its limit and was overdrawing the funds, but the bank did not see it as an impediment in having normal banker-customer relation with accused No. 2 M/s Indodan Industries Ltd., and accorded Health Code 1 to its account, which, as per the testimonies of PW17 V.K. Chopra and PW27 Behram Pestonji Jamadar meant that the account was satisfactorily conducted by the customer. In these circumstances the prosecution has failed to prove that in general the bank was hesitant in giving credit to the accused No. 2 and the financial condition of accused No. 2 M/s Indodan Industries Ltd. was not good.
82. The next point for determination is: whether resolution dated 20.7.1989 was passed by the Board of Directors of accused No. 2 M/s Indodan Industries Ltd. in attendance of H.S. Jalan (since deceased) and accused No. 4 Rakesh Vashist after H.S. Jalan had had discussion with accused No. 8 S. Anand?
83. Regarding the alleged meeting between accused S. Anand and late H.S. Jalan, and other matters, PW8 K.C. Jain in his statement Ex.PW8/C and Ex.PW8/D, made before PW39 Deepak Garg during the investigation, inter alia. stated as follows:
With regard to the transactions stated herein above for letter of credit and revolving letter of credit through Sh. S. Anand, I wish to state as under. Mr. S. Anand with whom several leses/hire (sic) purchase transactions had taken place since 1985 came in direct contect (sic) with Sh. H.S. Jalan the Chairman of the Group. While I was attempting to raise funds from different sources for the expension Criminal Case No. 01/2023 Page No. 133 of 262 (sic) and diversification activities of the Group of course with specifice (sic) prior approval of Sh. H.S. Jalan, sometime In Mid 1989 Sh. H. S. Jalan called me to his chamber and informed that Mr. S. Anand has agreed to provide finance of around Rs. 1 crore to Indodan Industries under hire purchase agreement for existing plant machinary (sic) already purchased. This transaction was not known to me and was informed by Sh. H.S. Jalan who had discussed with Mr. S. Anand The above letter of credit was to be opened in favour of M/s Mani Management Consultants Pvt. Ltd of Rs. 3.65 Lakhs approximately to be revolved 36 times with a view to provide cover to the hire purchase transactions of Rs. 1 crore for the existing plant machinery. The Resolution of the Board was passed some time in June, 1989 where Sh. H.S. Jalan was the Chairman and Mr. Rakesh Vashisht also attended the meeting, authorising me to raise the funds by opening revolving letter of credit in favour of Mani Management Consultants Pvt. Ltd and execute the documents as may be required by the Bank as well as Mani Management Consultants Pvt. Ltd. In persuance of this Resolution and as per the directions of Sh. H.S. Jalan, an application was made to sent to Central Bank of India for opening the letter of credit which was declined by the Chief Manager of Central Bank, Janpath. The matter was reported back to the Chairman Mr. Rakesh Vashisht and I was asked to persue the matter at Zonal Office of the Bank with Sh. Rakesh Vashisht. On explaining the requirements, the Zonal Manager informed us that he would take up the matter with Central Office of the Bank and would inform us in due course. Thereafter I was not aware of what transpired between the Bank as well as zonal Office or the Central Office of the Bank.
However, about 40 to 45 days after the request was made to Central Bank, I was called by Sh. H.S. Jalan who Informed me that the Chief Manager of Central Bank has now agreed to opening the letter of credit. Accordingly, a draft agreement of hire purchase was received from Mani Management Consultants Pvt. Ltd was submitted. Alongwith the application, the 36 bills of exchange (Hundies) duly signed by Mani Management Consultants Pvt. Ltd. as well as accepted by me on behalf of the Company were submitted to the Bank. The L.C. was opened with the corresponding branch of Bank at Bombay. The L.C. and the relevant documents were sent by me to the Madras Office of Mani Management Consultants Pvt. Ltd. I know that there was some lacuna in the documentation which had to be corrected and Sh. H.S. Jalan had visited from Bombay to the Office of Mani Management Consultants Pvt. Ltd. at Bombay and thereafter cheques Criminal Case No. 01/2023 Page No. 134 of 262 were received from Mani Management Consultants after adjusting their due commission which were given by me to the Accounts Department for depositing in the Bank.
84. During his examination as PW8, however, K.C. Jain nowhere deposed that before 20.7.1989, or after the said date and prior to 22.8.1989, any meeting or discussion had taken place between H.S. Jalan and S. Anand; or that H.S. Jalan told him about any such meeting or discussion between him and accused No. 8 S. Anand.
85. During his examination PW8 K.C. Jain has deposed that he executed the documents, accepted the bills and did other acts on the basis of the resolutions passed in his favour by the Board of Directors of accused No. 2 M/s Indodan Industries Ltd., and first of these resolutions was Ex.PW8/K2 which was passed by the Board on 20.7.1989 under the chairmanship of accused No. 4 Rakesh Inder Kumar Vashist in presence of others, whereas the other resolution Ex.PW8/K4 was passed on 30.3.1990 under the chairmanship of H.S. Jalan and in presence of others, including accused Rakesh Inder Kumar Vashist. The resolutions Ex.PW8/K2 and Ex.PW8/K4 form part of a book, which, as per the search report Ex.PW33/16, prepared by PW33 Bhupinder Kumar, was seized during a general search conducted at the offices of the accused No. 2 at Janpath, New Delhi on 10.5.1999. The said book, stated to be Minute Book was not produced by any Company Secretary or director of the accused No. 2, who was authorised to keep the same (Minute book) in his custody. Resolution Ex.PW8/K2 and Ex.PW8/K4 along with signature sheets Ex.PW8/K3 Criminal Case No. 01/2023 Page No. 135 of 262 and Ex.PW8/K5 have been admitted in evidence on the basis of PW8 K.C. Jain only identifying the signatures of accused Rakesh Vashist and H.S. Jalan on the same under section 47 of Act 1 of 1872, although he neither attended the meetings nor prepared and submitted the Minutes for the approval of the Chairman. Further, Minute Book, containing resolutions Ex.PW8/K2 and Ex.PW8/K4 has not, apparently, been maintained as per the provisions of section 193 of the Companies Act, 1956 (since repealed), which required that the Minute book must be numbered consecutively. The book purporting to be the Minute book and sought to be proved by PW8 K.C. Jain is not numbered consecutively and contain loose signature sheets attached to it. Thus, in the light of sections 193, 194 and 195 of the Companies Act, 1956 it is doubtful that the said Minute book can be used in evidence and its contents can be presumed to be correct. Nevertheless, the purported resolution Ex.PW8/K2, passed on 20.7.1989 under the chairmanship of director Rakesh Inder Kumar Vashist and in presence of other directors S.C. Bhatia and V.P. Arya reads as follows:
Item No. 5 PLANT & MACHINERY ON LEASE The Chairman informed the Board that the Company required certain equipments on lease. For that matter negotiations are being held with various parties. The Board discussed the matter in detail and passed the following resolutions there-after :-
I. "RESOLVED THAT the Company do take on lease/hire- purchase Machinery & Equipments valuing up to Rs.1.00.00.000/- (Rupees one Crore only) from M/s Mani Management Consultants (P) Ltd. A-3, Gajel, 152, Greams Rd., MDS-6, AND THAT Mr. K.C. Jain General Manager (Finance) be and is hereby authorised to negotiate and settle the terms of the lease for and on behalf of the Company."Criminal Case No. 01/2023 Page No. 136 of 262
"RESOLVED FURTHER THAT Mr. K.C. Jain, General Manager (Finance) be and is hereby further authorised to execute the lease agreement and other necessary documents as may be required in connection with the said lease for and on behalf of the Company. "
II. "RESOLVED THAT the Company do purchase machinery & equipments valuing up to Rs.7.30 lacs on lease from Contemporary Leasing & Finance Limited AND THAT Mr S.C. Bhatia, Director, be and is hereby authorised to execute lease agreements and other documents for and on behalf of the Company, as may be required in connection therewith."
There being no other item in hand, the meeting concluded with vote of thanks to the chair.
Sd/- 31/8/89 CHAIRMAN
86. In resolution Ex.PW8/K2 accused S. Anand has not been named at any place, though M/s Mani Management Consultants (P) Ltd. has been mentioned therein. The contents and condition of Ex.PW8/K2 (resolution) and Ex.PW8/K3 (signature sheet) belies the claim of PW8 K.C. Jain made in his statement Ex.PW8/C given before PW39 Deepak Garg that, "The resolution of the Board was passed some time in June, 1989 where Sh. H.S. Jalan was the Chairman and Mr. Rakesh Vashist also attended the meeting, authorising me to raise the funds by opening revolving letter of credit in favour of Mani Management Consultants Pvt. Ltd.". Thus, it is not proved that the resolution 20.7.1989 was passed by the Board of Directors of accused No. 2 M/s Indodan Industries Ltd. in attendance of H.S. Jalan and accused No. 4 Rakesh Vashist after H.S. Jalan had had discussion with accused No. 8 S. Anand.
87. The next point for determination is: whether prior to Criminal Case No. 01/2023 Page No. 137 of 262 22.8.1989 the accused No. 2 applied for opening a revolving LC in favour of Mani Management Consultants Pvt. Ltd. and accused No. 1 N. Ramakrishnan declined the same?
88. It is stated in the police report, and has been so argued by the learned Public Prosecutor that having declined the request of the accused No. 2 to open revolving LC on earlier occasions, the accused No. 1, in conspiracy with the accused No. 2 and the other accused persons opened the LC on the basis of a hire purchase agreement without the said agreement being produced before him on 22.8.1989. On this point, PW30 Pankaj Pahwa during his examination-in-chief deposed that he had joined M/s Indodan Group of Companies in the year 1986 and worked there as Deputy Manager (Accounts) till 1992. PW30 Pankaj Pahwa further deposed that firstly he had worked in M/s. Suvidha Leasing and Finance, one of the companies of M/s Indodan Groups, and subsequently, he was shifted to M/s. Foremost Industries Company, another company of M/s. Indodan Groups after a period of one year from his joining. PW30 Pankaj Pahwa further deposed that since the day of his joining in M/s. Indodan Group he worked with K. C. Jain, who, when he joined, was working as Deputy General Manager (Finance), and subsequently elevated as General Manager (Finance). PW30 Pankaj Pahwa further deposed that K.C. Jain used to report to H.S. Jalan (deceased) and Sh. Chandak, Executive Director at Delhi. PW30 Pankaj Pahwa further deposed that accused Rakesh Vashist, who was the son in law of H.S. Jalan (deceased) joined M/s.
Criminal Case No. 01/2023 Page No. 138 of 262Indana Group sometime in the year 1990, and he (Rakesh Vashist) was having his office with the Executive Director in Delhi. PW30 Pankaj Pahwa further deposed that he, under the assistance of K.C. Jain, prepared application Ex.PW8/E for opening of LC with Central Bank of India, Janpath branch, and the said application Ex.PW8/E bore signature of K.C. Jain at point A. PW30 Pankaj Pahwa further deposed that he along with the application for opening of LC visited Central Bank of India and met accused N. Ramakrishnan, who flatly refused to open the LC with Central Bank of India on the ground that the facility was not meant for revolving LC. PW30 Pankaj Pahwa further deposed that thereafter he came back and explained to K.C. Jain that the bank was not willing to do any such transaction. PW30 Pankaj Pahwa further deposed that after day or so, he along with K.C. Jain again visited the office of accused N. Ramakrishnan, where, when he started talking, K.C. Jain told him that he should go outside, and that he would discuss with accused N. Ramakrishnan. PW30 Pankaj Pahwa further deposed that he came back in his office which was situated in the same building. PW30 Pankaj Pahwa further deposed that after coming in their office K.C. Jain told him that accused N. Ramakrishnan was not agreeable on that (opening of LC). PW30 Pankaj Pahwa further deposed that he (K.C. Jain) also conveyed him that accused N. Ramamkrishnan told him that he would take up the matter with Zonal office for their approval or decision, and thereafter K.C. Jain met accused Rakesh Vashist as told by K.C. Jain to him.
Criminal Case No. 01/2023 Page No. 139 of 262PW30 Pankaj Pahwa further deposed that after a day or two K.C. Jain again asked him to take the application for opening of LC to Central Bank of India where accused N. Ramakrishnan had sought the approval of Zonal office on one condition that 100% margin would be retained by the bank of the LC amount. PW30 Pankaj Pahwa further deposed that thereafter he met accused N. Ramakrishnan along with application Ex.PW8/E dated 22.8.1989 and LC Ex.PW9/L was opened. PW30 Pankaj Pahwa further deposed that application Ex.PW8/F bore signature of K.C. Jain at point A. PW30 Pankaj Pahwa further deposed that he met, first time, with accused N. Ramakrishnan along with the said application when he refused to open the LC. PW30 Pankaj Pahwa further deposed that he enquired from K.C. Jain as to how the bank had agreed to open revolving LC, on which he replied that they were giving 100% margin to the bank for one month so the bank was covered. PW30 Pankaj Pahwa further deposed that subsequently, he came to know from day to day working that said revolving LC was opened for fund raising for the expansion of business of M/s. Indana Groups with the help of accused S. Anand of M/s. Mani Management Consultants. PW30 Pankaj Pahwa further deposed that he did not know if accused S.Anand was the financial consultant of M/s. Indana Group, but he had seen him visiting the office on various occasions. PW30 Pankaj Pahwa further deposed that 36 hundis were prepared for revolving LC, and those hundis were typed and prepared by the stenographer of K.C. Jain and were stamped Criminal Case No. 01/2023 Page No. 140 of 262 at Tis Hazari Courts.
89. PW8 K.C. Jain during his examination-in-chief deposed that LC Ex.PW9/L was opened in favour of M/s Mani Management Consultants (P) Ltd. for taking equipment under hire purchase agreement with M/s Mani Management Consultants (P) Ltd. PW8 K.C. Jain further deposed that the equipment had already been purchased by M/s Indodan Industries Ltd., but it was sold to M/s Mani Management Consultants (P) Ltd. and taken on hire purchase from them. PW8 K.C. Jain further deposed that against this transaction, the LC was opened by the Central Bank of India, and the application was made for opening this Letter of Credit to Central Bank of India, Branch Janpath, New Delhi by him at the instructions of H.S. Jalan and accused Rakesh Inder Kumar Vashist. PW8 K.C. Jain further deposed that the application form was filled up and given to the Chief Manager, accused N. Ramakrishnan but it was refused since M/s Indodan Industries Limited did not have facility to open LC on revolving basis and also the limit was not available. PW8 K.C. Jain further deposed that this fact was brought to the notice of accused Rakesh Inder Kumar Vashist, who suggested that the matter be referred to Zonal Office of the Central Bank of India, New Delhi, but the same was also refused at Zonal. PW8 K.C. Jain further deposed that thereafter, accused Rakesh Inder Kumar Vashist, perhaps, took up the matter himself along with accused H.S Jalan for further follow up, and after considerable passage of time, he was informed by accused H.S. Criminal Case No. 01/2023 Page No. 141 of 262 Jalan and accused Rakesh Inder Kumar Vashist that accused N. Ramakrishnan had agreed to open such Letter of Credit after having discussions with their Zonal Office as well as the Central Office.
90. Accused No. 1 N. Ramakrishnan, as PW10, during his cross-examination admitted that initially he refused to open the letter of credit in favour of M/s Mani Management Consultants Pvt. Ltd., but subsequently after instructions of S. Gopalakrishnan, the Zonal Manager he opened the LC. During his cross-examination PW10 N. Ramakrishnan deposed that initially he got the instructions telephonically, and then he wrote him for confirmation, pursuant to which he received instructions in writing. During his cross- examination PW10 N. Ramakrishnan explained that to show such written instructions he had summoned the concerned file during his evidence, which was found missing as per the intimation.
91. From the testimonies of PW8 K.C. Jain and PW30 Pankaj Pahwa it has been proved that before 22.8.1989, on two occasions the accused No. 2 requested to open a revolving LC in favour of Mani Management Consultant Pvt. Ltd; and first of those requests, it is highly probable as reflected from documents Ex.PW8/F and Ex.PW8/G, which bear date 25.7.1989, was made on 25.7.1989. And accused No. 1 N. Ramakrishnan refused to open such LC on those two occasions.
92. The next point for determination is: whether hire purchase agreement dated 17.7.1989 was signed by accused No. 6 C. Criminal Case No. 01/2023 Page No. 142 of 262 Subramaniam, former director of M/s Mani Management Consultant Pvt. Ltd. on behalf of M/s Mani Management Consultant Pvt. Ltd. under which neither any thing was given on hire nor any loan was advanced to accused No. 2 M/s Indodan Industries Ltd.?
93. During his examination-in-chief besides testifying to other facts PW8 K.C. Jain deposed that photocopy of Hire Purchase agreement Mark-PW8/PX1 dated 17.7.1989, made at Madras between M/s Money (sic) Management Consultants (P.) Ltd. and M/s Indodan Industries Ltd., bore his signatures at point Q-137 to Q-149. Although PW8 K.C. Jain deposed that Mark-PW8/PX1 was made at Madras, but he did not depose as to on which date the same was executed and who had executed the same on behalf of M/s Mani Management Consultants Pvt. Ltd.
94. To prove the signatures of C. Subramaniam and others on several documents the prosecution has relied upon opinions Ex.PW36/3 and Ex.PW36/5 and their grounds Ex.PW36/4 and Ex.PW36/6 given by PW36 M.L. Sharma. PW36 M.L. Sharma during his examination-in-chief deposed that he was post graduate in Chemistry from University of Delhi. PW36 M.L. Sharma further deposed that he had received specialized training in the scientific examination of documents including identification of handwriting and signature in Government of India Laboratory at Shimla for a period of about three years. PW36 M.L. Sharma further deposed that after completion of the training, he had independently examined a large Criminal Case No. 01/2023 Page No. 143 of 262 number of documents in various cases and had expressed his opinion on them. PW36 M.L. Sharma further deposed that he had also appeared as an expert witness in various courts of law.
95. PW36 M.L. Sharma further deposed that the documents of this case were received from SP, CBI, BS&FC, New Delhi for examination and opinion vide letters Ex.PW36/1 and Ex.PW36/2 bearing Nos. 3668 and 1909 respectively dated 3.8.1999 and 13.4.2000 respectively. PW36 M.L. Sharma further deposed that along with the letters Ex.PW36/1 and Ex.PW36/2 the original documents were received for examination and opinion along with the list of questionnaire as well as the specimen handwritings of various persons. PW36 M.L. Sharma further deposed that questioned documents, questioned writings and signatures, inter alia, received were the questioned signatures mark Q194 and Q195 on Ex.PW8/K24, questioned signature mark Q196 and Q197 on document Ex.PW8/K25, Q198 and Q199 on document Ex.PW8/K26, questioned signature marked Q200, Q201, Q202 and Q202 A on document Ex.PW8/K27, questioned writings mark Q203 on document Ex.PW8/K28, questioned writings mark Q204 on document Ex.PW8/K29, questioned writings mark Q205 on document Ex.PW8/K30, questioned writings mark Q206 on document Ex.PW8/K31, questioned signature mark Q207 on document Ex.PW8/K33, questioned signature mark Q208 on document Ex.PW8/K34, questioned signature mark Q209 on document Criminal Case No. 01/2023 Page No. 144 of 262 Ex.PW8/K35, questioned signature mark Q210 to Q213 and 213A on document Ex.PW8/K37, questioned signature mark Q214 on document Ex.PW22/1, questioned signature mark Q132 on document Ex.PW8/E, questioned signatures Q133 on document Ex.PW8/F, questioned signatures Q134 & Q135 on document Ex.PW8/G, questioned signatures mark Q136 on document Ex.PW8/H, questioned signatures mark Q137 to Q149 on document Mark-PW8/PX1, questioned signatures mark Q150, 150A and Q150B on document Ex.PW8/J32, questioned signatures mark Q151, Q151A and Q151B on document Ex.PW8/J31, questioned signatures mark Q152, Q152A and Q152B on document Ex.PW8/J29, questioned signatures mark Q153, Q153A and Q153B on document Ex.PW8/J30, questioned signatures mark Q154, Q154A and Q154B on document Ex. PW8/J26, questioned signatures mark Q155, Q155A and Q155B on document already Ex. PW8/J27, questioned signatures mark Q156, Q156A and Q156B on document Ex. PW8/J28, questioned signatures mark Q157, Q157A and Q157B on document Ex.PW8/J24, questioned signatures mark Q158, Q158A and Q158B on document Ex.PW8/J25, questioned signatures mark Q159, Q159A and Q159B on document Ex.PW8/J23, questioned signatures mark Q160, Q160A and Q160B on document Ex.PW8/J22, questioned signatures mark Q161, Q161A and Q161B on document Ex.PW8/J21, questioned signatures mark Q162, Q162A and Q162B on document Ex. PW8/J19, questioned signatures mark Q163, 163A and Q163B on document Ex. PW8/J20, questioned signatures Criminal Case No. 01/2023 Page No. 145 of 262 mark Q164, Q164A and Q164B on document Ex. PW8/J18, questioned signatures mark Q165, Q165A and Q165B on document Ex.PW8/J17, questioned signatures mark Q166, Q166A and 166B on document Ex.PW8/J14, questioned signatures mark Q167, Q167A and Q167B on document Ex.PW8/J15, questioned signatures mark Q168, 168A and Q168B on document Ex.PW8/J16, questioned signatures mark Q169, Q169A and Q169B on document Ex.PW8/J10, questioned signatures mark Q170, Q170A and Q170B on document Ex. PW8/J11, questioned signatures mark Q171, Q171A and Q171B on document Ex. PW8/J12, questioned signatures mark Q172, Q172A and Q172B on document already Ex.PW8/J-13, questioned signatures mark Q173, Q173A and Q173B on document Ex.PW8/J, questioned signatures mark Q174, Q174A and Q174B on document Ex.PW8/J1, questioned signatures mark Q175, Q175A and Q175B on document Ex.PW8/J2, questioned signatures mark Q176, Q176A and 176B on document Ex.PW8/J3, questioned signatures mark Q177, Q177A and Q177B on document Ex.PW8/J4, questioned signatures mark Q178, Q178A and Q178B on document Ex. PW8/J5, questioned signatures mark Q179, 179A and Q179B on document Ex.PW8/J6, questioned signatures mark Q180, Q180A and Q180B on document Ex.PW8/J7, questioned signatures mark Q181, Q181A and Q181B on document Ex.PW8/J8, questioned signatures mark Q182, Q182A and Q182B on document Ex.PW8/J9, questioned writings mark Q257 on a cheque Ex. PW11/1. PW36 M.L. Sharma further deposed that specimen handwritings for Criminal Case No. 01/2023 Page No. 146 of 262 the purpose of comparison, inter alia, received were the specimen signatures mark S107 to S116 purported to be written by Sh. K.C Jain Ex.PW35/5(colly.), the specimen signatures mark S117 to S127 purported to be written by Sh. N.C. Baheti Ex.PW22/19 (colly.), the specimen signature/writings mark S128 to S147 purported to be written by Sh. Vijay Kumar Ex.PW26/1(colly.), the specimen writings mark S173 to S184 purported to be written by Sh. Vinay Kumar (D600/173 to D600/184), the specimen writing/signature mark S185 to S190 purported to be written by Sh. S.S. Gogia Ex.PW35/6(colly.), the specimen handwriting/signature mark S191 to S196 purported to be written by Sh. Rajender Dhamija Ex.PW23/27(colly.), the specimen signature mark S207 to S217 purported to be written by accused Rakesh Vashist Ex.PW35/8(colly.), the specimen signatures mark S229 to S242 purported to be written by accused N. Muralidharan Ex.PW29/1(colly.) and the specimen signatures marked S243 to S253 purported to be written by accused C. Subramaniam Ex.PW20/1(colly.).
96. Having deposed about his qualifications and credentials, and after narrating about the circumstances in which the questioned documents and specimen signatures and writing of accused Rakesh Vashist, N. Muralidharan and C. Subramaniam and witnesses PW8 K.C. Jain, PW22 N. C. Baheti, PW23 Rajender Dhamija, PW25 S.S. Gogia, and PW26 Vijay Kumar were received by his office for analysis, PW36 M.L. Sharma gave omnibus statement/deposition that after Criminal Case No. 01/2023 Page No. 147 of 262 careful and thorough examination of the questioned writings and signatures with the relevant specimen writings and signatures, he gave his opinion in his report Ex.PW36/3 which bore his signature on each page at point A. PW36 M.L. Sharma further deposed that the reasons in support of his above report (Ex.PW36/3) were Ex. PW36/4 (10 pages) and each sheet of those reasons bore his signature at point A. PW36 M.L. Sharma also deposed that all the documents were independently examined by Dr. B.A. Vaid, the then Assistant Government Examiner whose signatures were appearing at mark B on Ex.PW36/3 on each page. PW36 M.L. Sharma further deposed that his supplementary opinion was Ex. PW36/5 which bore his signature at point A, and the documents mentioned in supplementary opinion were also examined by Dr. B.A. Vaid, who independently reached at the same conclusion and put his signature at point B. PW36 M.L. Sharma further deposed that the reasons for his supplementary opinion were Ex.PW36/6 which bore his signature at point A on each page.
97. Dr. B.A. Vaid has not been examined as a witness in this case.
98. During his examination PW36 M.L. Sharma has nowhere deposed as to what scientific or other experiments were done by him in examining the questioned writings and signatures and in analysing the same with the aid of specimen handwritings and signatures. In the name of giving his opinion and ground of such opinion, PW36 M.L. Sharma has only referred to writings Ex.PW36/3 to Ex.PW36/6, Criminal Case No. 01/2023 Page No. 148 of 262 claimed to be embodying his opinions and that of Dr. B.A. Vaid and their reasons in support of those opinions. PW36 M.L. Sharma himself did not deposed as to what opinion he had held regarding the questioned writings and signatures. PW36 M.L. Sharma even did not tell from the witness box as to in what capacity he had received the questioned documents and the specimen handwritins and signatures, and as to in what capacity he analysed the documents. PW36 M.L. Sharma, it appears, left everything for the assumptions on the basis of Ex.PW36/1 to Ex.PW36/6.
99. Unlike a case under section 293 of Cr.P.C. where any document purporting to be a report under the hand of a Government scientific expert, mentioned under sub-section (4) of the said section may be per se used as evidence in any inquiry, trial or other proceeding, in case of an opinion by an expert under section 45 of Act 1 of 1872 the report is not per se admissible. In this connection, the provisions of sections 45, 51 and 60 of Act 1 of 1872 are noteworthy. As per section 45 of Act 1 of 1872 when the Court has to form an opinion upon a point of foreign law or of science, or art, or as to identity of handwriting or finger impressions, the opinions upon that point of persons (called experts) specially skilled in such foreign law, science or art, or in questions as to identity of handwriting or finger impressions are relevant facts. As per section 51 of Act 1 of 1872 whenever the opinion of any living person is relevant, the grounds on which such opinion is based are also relevant. Further section 60 of Criminal Case No. 01/2023 Page No. 149 of 262 Act 1 of 1872 which declares that out of two types of evidence, that is oral and documentary, oral evidence must, in all cases whatever, be direct, provides that if oral evidence refers to an opinion or to the grounds on which that opinion is held, it must be the evidence of the person who holds that opinion on those grounds. Thus, as per section 60 of Act 1 of 1872 it must be the evidence of the person who holds the opinion on its grounds. Therefore, only opinion and its grounds given by an expert by way of oral evidence from the witness box on the matter under enquiry are substantive evidence. A report prepared by an expert embodying his opinion and its grounds, subject to the provisions of Act 1 of 1872 and Cr.P.C. may be used as corroborative evidence under section 157 of Act 1 of 1872, or may be used by him under sections 159 and 160 of Act 1 of 1872 while under examination to refresh his memory, but the same cannot be treated as substantive evidence. Therefore, if there is no substantive evidence of such witness through his words from the witness box, the report as such cannot be relied upon in proof of the facts contained therein. Thus, PW36 M.L. Sharma has actually not expressed his opinion and the grounds of such opinion through oral evidence; his reports Ex.PW36/3 and Ex.PW36/5 and grounds Ex.PW36/4 and Ex.PW36/6 cannot be relied upon. Further, as mentioned above, the prosecution has failed to show that accused C. Subramaniam gave specimen writing Ex.PW20/1 without any compulsion from CBI. In these circumstances, it is not proved that Mark-PW8/PX1 bears the signatures of accused C. Subramaniam.
Criminal Case No. 01/2023 Page No. 150 of 262100. As per the testimony of PW33 Bhupinder Kumar, the investigating officer of the case and memo Ex.PW33/14 the original Hire-Purchase agreement dated 17.7.1989 was apparently taken into his possession by PW33 Bhupinder Kumar from the possession of A.N.S. Narayan, Senior Manager Trade Client Servicing, Standard Chartered Bank, Mumbai on 17.01.2000, but the said agreement has neither been tendered in evidence nor has been admitted in evidence. Therefore, in view of the provisions of section 91 of Act 1 of 1872 its terms and conditions neither can be taken into account nor can be proved by oral evidence. In these circumstances, although, in the light of the testimony of PW8 K.C. Jain it has been proved that some agreement was made between the accused No. 2 M/s Indodan Industries Ltd. and the M/s Mani Management Consultants Pvt. Ltd., but it is not proved as to when and on what terms and conditions the same was executed. In the light of the provisions of section 91 of Act 1 of 1872 no reliance can be placed on the agreement or its copy Mark- PW8/PX1, and without going through its terms and conditions it cannot be said that the agreement was a sham document. Thus, it is not proved that hire purchase agreement dated 17.7.1990 was signed by accused No. 6 C. Subramaniam, former director of M/s Mani Management Consultants Pvt. Ltd. on behalf of M/s Mani Management Consultant Pvt. Ltd. under which neither any thing was given on hire nor loan was advanced to accused No. 2 M/s Indodan Industries Ltd.
Criminal Case No. 01/2023 Page No. 151 of 262101. The next point for determination is: whether accused No. 1 N. Ramakrishnan opened revolving LC No. 43/48 dated 22.8.1989 to be reinstated by the bank for the value of Rs.3,63,195/- thirty six times on every 25th of the month commencing from September, 1989 and ending 25th of August 1992 permitting unrestricted negotiations on the application dated 22.8.1989 signed by K.C. Jain?
102. During his examination-in-chief PW8 K.C. Jain identified his signatures on application Ex.PW8/E dated 22.8.1989, application Ex.Ex.PW8/F on prescribed proforma, application and agreement Ex.PW8/G (dated 25.7.1989) and letter Ex.PW8/H dated 23.8.1989. From the testimonies of PW8 K.C. Jain, PW30 Pankaj Pahwa and DW10 N. Ramakrishnan and the answers given by accused No. 1 N. Ramakrishnan during his examination under section 313 of Cr.P.C. it has been proved that on 22.8.1989 by way of applications Ex.8/E and Ex.PW8/F, supported by Ex.PW8/G, all the said three documents signed by PW8 K.C. Jain, accused No. 2 M/s Indodan Industries Ltd. applied for opening a LC in favour of M/s Mani Management Consultants Pvt. Ltd. on the terms and conditions embodied in Ex.PW8/E and Ex.PW8/F, and subject to agreement Ex.PW8/G (the application on the reverse of Ex.PW8/G being blank). The request letter Ex.PW8/E for opening the LC reads as follows:
IIL: PP: 89:
Aug. 22nd, 1989 The Chief Manager, Criminal Case No. 01/2023 Page No. 152 of 262 Cemtral (sic) Bank of India, 70, Janpath, NEW DELHI - 110 001.
REVOLVING LETTER of credit FOR Rs. 3,63,195.00 Dear Sir.
This is to inform you that we are procuring certain balancing equipments under the hire purchase arrangement with M/s Mani Management Consultants, Bombay.
Accordingly we have to established a revolving letter of credit for Rs. 3,63,195/- in favour of M/s Mani Management Consultants, Bombay to be revolved 36 times on every 25th of each month. The first reinstatement will take place on 25th of Sept. ,1989. We are willing to provide 100% margin for establising (sic) above letter of credit. We are also authorising you to recoverable the value of L/c 7 days in advance to ensure timely availability of funds for reimbursing to your correspondent for the L/c claim. The necessary terms & conditions along with the L/c agreement form is enclosed for yous dotng the needful We hope you will accede to our request and issue the letter of credit on top priority. The margin money may be kept under Fixed Deposit for 36 months.
Thanking you, Sd/-
Yours faithfully, FOT INDODAN INDUSTRIES LD., (K.С. JAIN) GENERAL MANAGER (FINANCE)
103. The application Ex.PW8/F reads as follows:
Dear Sirs, We shall thank you to open a Revolving Documentary letter of credit as per instructions given below :-
1. Revocable/Irrevocable
2. Without recourse
3. Amount IND Rs.3, 63,195/=
4. Bý short cable with Air Mail Details/Full Text Cable/Airmail
5. Beneficiary's Full Name & Address:
M/s MANI MANAGEMENT CONSULTANTS PVT. LID.
306, CHURCH GATE CHAMBERS NEW MARINE LINES, BOMBAY
6. Merchandise Criminal Case No. 01/2023 Page No. 153 of 262 Accepted Bill of Exchange as per Hira Purchase Agreement 17th July 1989
7. Shipment by Steamer/Post Parcel Air freight N. A
8. Country of origin :
9. Usance of Draft 1 month
10. Freight: Prepaid/paid at Destination N. A
11. Insurance: By Beneficiary/Covered here. N. A
12. Part shipment/Despatch : Permitted/Prohibited. N.A
13. Transhipment : Permitted/Prohibited. N.A
14. Shipment from to N.A
15. Destination of shipment N.A
16. Latest date of shipment: N.A
17. Latest date of negotiation : 31.9.1992
18. Import Licence No.
19. OGL No..Serial No.. Part No.
20. All charges autside indiaxare for account of the beneficiary/Credit openers.
21. Importer Code No. ;
22. We undertake to deliver exchange control copy of Bill of Entry immediately after clearance of goods. -N. A.
23. Special Instructions:
1) The L/c will be reinstated by the value of the L/c i.e. Rs.3,63,195/- on every 25th of each month first on 25.9.39. (36 times)
2) Negotiation under this L/c is, unrestricted.
3) L/C to be advised & claim to be available at CBI, main Branch, Fort, BOMBAY Yours faithfully, For INDODAN INDUSTRIES LIMITED (AUTHORISED SIGNATORIES)
104. Further, the agreement Ex.PW8/G executed by PW8 K.C. Jain on behalf of Indodan Industries Ltd., inter alia, stipulated as follows:
I/We agree that except as otherwise expressly stated the above mentioned credit will be subject to the Uniform Customs and practice for uncumentary (sic) Credit (1974 Revision). International Chambers of Commerce Brochure No. 290.
105. From a perusal of Ex.PW8/E it can be discerned that by Criminal Case No. 01/2023 Page No. 154 of 262 way of Ex.PW8/E PW8 K.C. Jain requested Central Bank of India, Janpath branch, New Delhi to open a letter of credit for Rs.3,63,195/- in favour of M/s Mani Management Consultants, Bombay, to be revolved 36 times on every 25th of each month. And accused No. 2 M/s Indodan Industries Ltd. offered to the Bank 100% margin for establishing the said letter of credit; and authorised it to recover the value of LC seven days in advance to ensure timely availability of funds for reimbursing to the correspondent of Central Bank of India for the LC claim. As per application Ex.PW8/F the LC in favour of M/s Mani Management Consultants Pvt. Ltd. was sought to be opened at the strength of an agreement dated 17.7.1989, and the said LC with unrestricted negotiation was requested to be reinstated by the value of the LC, that is Rs.3,63,195/- on every 25th of each month, first on 25.9.1989 (36 times); and as per Ex.PW8/G the terms of the said LC were to subject to the Uniform Customs and practice for uncumentary (sic) Credit (1974 Revision). International Chambers of Commerce Brochure No. 290.
106. From the testimonies of PW8 K.C. Jain, PW9 Sneh Lata Tandon, who identified the signatures of the accused No. 1 on LC Ex.PW9/L, PW12 Kamal Lal Garg, who gave his analysis report on the reverse of application Ex.PW8/E and the testimony of DW10 N. Ramakrishnan and answers given by him during his examination under section 313 of Cr.P.C. it has been proved that on 22.8.1989 pursuant to applications Ex.8/E and Ex.PW8/F made by PW8 K.C. Jain, supported Criminal Case No. 01/2023 Page No. 155 of 262 by Ex.PW8/G, accused No. 1 N. Ramakrishnan opened LC No. 43/48, the ledger copy of which is Ex.PW9/L, in favour of M/s Mani Management Consultants Pvt. Ltd. and the salient features of the said LC were that: (i) Usance draft with temor (sic) with interval of 1 month covering instalments due under the hire purchase agreement dt. 17.7.89; (ii) Negotiation under the LC was unrestricted; (iii) Reinstatement under the said Credit on due dates would be available with the Advising Bank; and (iv) The LC would be reinstated by Central Bank of India for the value of Rs.3,63,195/- 36 times on every 25th of each month, commencing from Sept. 89 & ending 25.8.92. Further it was written on the margin of the said LC that, "Except as otherwise expressly stated, this credit is subject to Uniform Customs and Practices for Documentary Credits (1983 Revision) International Chamber of Commerce Publication No. 400 ".
107. The next point for determination is: whether accused No. 1 N. Ramakrishnan opened the LC in favour of M/s Mani Management Consultants Pvt. Ltd. on the basis of hire purchase agreement without the said agreement being produced before him on 22.8.1989?
108. As per the police report, apparently, accused N. Ramakrishnan, who initially expressed his inability to open the LC, subsequently opened the same by abuse of his official position in criminal conspiracy with other accused persons, without even perusing the elementary document, that is the hire purchase agreement in Criminal Case No. 01/2023 Page No. 156 of 262 question. Thus, in the police report it is asserted that on 22.8.1989, when PW8 K.C. Jain applied for opening the LC no copy of the hire purchase agreement was produced before accused No. 1 N. Ramakrishnan; and that he opened LC No. 43/48 without going through the agreement on the basis of which the application for opening the LC was made. On the point as to what happened after PW8 K.C. Jain gave letter Ex.PW8/E on 22.8.1989, PW12 Kamal Lal Garg during his examination-in-chief deposed that letter Ex.PW8/E dated 22.8.1989 at point X bore endorsements of accused N. Ramakrishnan, the then Chief Manager, directing him to put up the papers. PW12 Kamal Lal Garg further deposed that on the reverse of Ex.PW8/E he had pointed out discrepancies to the effect that the LC was valid for 36 months, LC Agreement Form duly stamped was required and copies of Hire Purchase agreement was not submitted by the party. PW12 Kamal Lal Garg further deposed that he had also pointed out the account position to the effect that limit of LC was 30 lakh and limit of LG was Rs. 80 lakh; and the total of both the limits came to Rs.110 lakh. PW12 Kamal Lal Garg further deposed that he had also pointed out that total outstanding in LC account was Rs. 89.38 lakh and outstanding in LG Account was Rs. 35.67 lakh; and that the total outstanding came to Rs. 124.05 lakh. PW12 Kamal Lal Garg further deposed that Ex.PW8/E bore his signature at point Y1. PW12 Kamal Lal Garg further deposed that LC No. 43/48 Ex.PW9/L dated 22.08.1989 bore signature of accused N. Ramakrishnan at point Criminal Case No. 01/2023 Page No. 157 of 262 X, and signature of S.K. Goel, the then Chief Officer at point Y. PW12 Kamal Lal Garg further deposed that Ex.PW9/L also bore his initials at point Z. Thus, as per the testimony of PW12 Kamal Lal Garg request letter Ex.PW8/E was not accompanied by copy of hire- purchase agreement; and that LC agreement form Ex.PW8/G was not duly stamped. On this point the version of accused No. 1 N. Ramakrishnan from the witness box as DW10, and during his examination under section 313 of Cr.P.C. is that at the time of opening of the LC hire purchase agreement was not there, but the same was produced before dispatch of LC. According to accused No. 1 N. Ramakrishnan the office of accused No. 2 M/s Indodan Industries Ltd. was in the same building where the bank was having its branch, and after he called the company official, K.C. Jain produced a copy of the agreement. This plea of accused No. 1 N. Ramakrishnan is plausible, for while putting his analysis report on the reverse of Ex.PW8/E, apart from other objections, including objection regarding overdraw by accused No. 2 M/s Indodan Industries Ltd. from its account, two objections were taken by PW12 Kamal Lal Garg, namely, LC agreement Ex.PW8/G (25.7.1989) was not having stamp and hire- purchase agreement was not produced. In so far as question of stamping of LC agreement is concerned, it has been mentioned in receipt memo Ex.PW33/5, at page No. 7, against entry (b) that "Application and agreement for L/C No. /48 dated 25.7.89 with stamp paper attached", implying that PW33 Bhupinder Kumar seized the LC Criminal Case No. 01/2023 Page No. 158 of 262 agreement with stamp. The said stamp has not been produced, but the mentioning of fact in memo Ex.PW33/5 that the agreement was stamped gives rise to probability that the stamp was seized but not produced. Thus, one objection was removed by accused No. 2 M/s Indodan Industries Ltd. Further, despite repeated queries by the court the prosecution could not explain as to from where and under what circumstances copy of agreement Mark-PW8/PX1 was seized. In the absence of such explanation, it is probable that Mark-PW8/PX1 is the same copy of the agreement that was provided to the accused No. 2 before issuance of LC Ex.PW9/L. In these circumstances, on the preponderance of probability it is proved, as deposed by DW10 N. Ramakrishnan that before dispatch of the LC, a copy of which is Ex.PW9/L, agreement of hire-purchase was supplied to him. Now it is different matter, as mentioned above, the contents of the said agreement cannot be read in evidence in view of section 91 of Act 1 of 1872 to say that it was a sham document. Hence it is not proved that accused No. 1 N. Ramakrishnan opened LC No. 43/48 in favour of M/s Mani Management Consultants Pvt. Ltd. on the basis of hire purchase agreement without the said agreement being produced before him on 22.8.1989.
109. The next point for determination is: whether at the time of opening of LC No. 43/48 accused No. 2 M/s Indodan Industries Ltd. against the sanctioned limit of 30 lakh had exposure of Rs.89.38 lakh?
110. On this point, in connection with the writing on the Criminal Case No. 01/2023 Page No. 159 of 262 reverse of Ex.PW8/E, as already mentioned, PW12 Kamal Lal Garg deposed that he had pointed out discrepancies to the effect that the LC was valid for 36 months, LC Agreement Form duly stamped was required and copy of hire purchase agreement was not submitted by the party. PW12 Kamal Lal Garg further deposed that he had also pointed out the account position to the effect that limit of LC was 30 lakh and limit of LG was Rs. 80 lakh; and the total of both the limits came to Rs.110 lakh. PW12 Kamal Lal Garg further deposed that he had also pointed out that total outstanding in LC account was Rs. 89.38 lakh and outstanding in LG Account was Rs. 35.67 lakh; and that the total outstanding came to Rs. 124.05 lakh. To substantiate the facts mentioned on the reverse of Ex.PW8/E no other material has been produced by the prosecution; and accused No. 1 N. Ramakrishnan had explanation on the point. According to accused N. Ramakrishnan, as stated by him during his examination under section 313 of Cr.P.C., letter of credit and letter of guarantee limits were termed as non fund based limits; that both those limits were always taken together for allowing facilities, therefore, opening of LC was in order; and that the total available sanction limits in the non fund based limits were never exceeded. Notwithstanding the explanation given by accused No. 1 N. Ramakrishnan which shall be discussed further at appropriate place in this judgment, since PW12 Kamal Lal Garg had nothing against the accused persons, therefore, in the light of his testimony, supported by his writing on the reverse of Ex.PW8/E it has Criminal Case No. 01/2023 Page No. 160 of 262 been proved that on 22.8.1989 against the sanctioned limit of 30 lakh the accused No. 2 had exposure of Rs.89.38 lakh. Here it may not be overlooked, however, that on 22.8.1989, as per Ex.PW27/D1, the application for enhancement of limits made by accused No. 2 M/s Indodan Industries Ltd. was under consideration of Central Bank of India, which was allowed on 27.8.1989.
111. The next point for determination is: whether 36 bills of exchange under LC No. 43/48, accepted by K.C. Jain were drawn by accused No. 6 C. Subramaniam on behalf of M/s Mani Management Consultant Pvt Ltd., who subsequently got discounted the same through Standard Chartered Bank and received Rs. 1,02,34,929, out of which Rs.100,46,222/- were transferred to accused No. 2 M/s Indodan Industries Ltd. by way of four cheques signed by accused No. 6 C. Subramaniam on behalf of M/s Mani Management Consultant Pvt Ltd.?
112. Only thirty three bills of exchange/hundis, namely, Ex.PW8/J and Ex.PW8/J1 to Ex.PW8/J3 have been filed and sought to be proved by the prosecution. Although, in that connection also, during his examination-in-chief PW8 K.C. Jain did not state specifically that he on behalf of accused No. 2 M/s Indodan Industries Ltd. accepted bills of exchange Ex. PW8/J and Ex.PW8/J1 to Ex.PW8/J32, but he categorically identified his signatures at the places designated for the signatures of the acceptor on bills Ex.PW8/J and Ex.PW8/J1 to Ex.PW8/J32. Thus, it has been proved that the thirty three bills of Criminal Case No. 01/2023 Page No. 161 of 262 exchange, namely, Ex.PW8/J, Ex.PW8/J-1 to Ex.PW8/J32 drawn by M/s Mani Management Consultants Pvt. Ltd. were accepted by PW8 K.C. Jain on behalf of accused No. 2 Indodan Industries Ltd. However, on the point as to who had signed the said bills/hundis, it is not proved that the said bills on behalf of M/s Mani Management Consultants Pvt Ltd. were signed and indorsed by accused No. 6 C. Subramaniam.
113. In so far as the question of discounting of bills/hundis under LC No. 43/48 and transfer of proceeds to the accounts of M/s Mani Management Consultants Pvt. Ltd. and accused No. 2 M/s Indodan Industries Ltd. is concerned, on 9.8.2016 during cross- examination of PW33 Bhupinder Kumar by counsel for the accused Nos. 7 and 8 document Ex.PW33/D3 dated 25.8.1989, written by Mani Management Consultants Pvt. Ltd. to Standard Chartered Bank, Bombay was brought on record. As per Ex.PW33/D3, by way of the said letter Mani Management Consultants Pvt. Ltd. requested Standard Chartered Bank, Bombay to discount 36 bills of exchange, each of Rs.3,63,195/- aggregating to Rs.1,30,75,020/- drawn under an irrevocable revolving letter of credit No. 43/48 dated 22.8.1989 issued by the Central Bank of India, 70, Janpath, New Delhi, and presented following documents to the said bank for discounting, namely, (1) original revolving LC long with the notified letter from Central Bank of India, Foreign Bills Department, Standard Building, D N Road, Fort, Bombay, (2) 36 bills of exchange, each of Rs.3,63,195/-, (3) H P agreement entered by Mani Management Consultants Pvt. Ltd. with Criminal Case No. 01/2023 Page No. 162 of 262 M/s Indodan Industries Ltd. dated 17.7.1989, (4) signature verification of Mr. K C Jain duly attested by Central Bank of India, (5) board resolution empowering Mr. K C Jain to execute necessary documents, (6) copies of invoices supporting the hire purchase transaction, and (8) copy of the work sheet. From a perusal of the said letter Ex.PW33/D3 though it has emerged that Mani Management Consultants Pvt. Ltd. requested to discount thirty six bills of exchange accepted by M/s Indodan Industries Ltd., but no evidence has been led by the prosecution to show that the said bills were actually discounted by Standard Chartered Bank, Mumbai. In this connection no witness has been called from Standard Chartered Bank, Bombay branch with record or account book to show that at the instance of M/s Mani Management Consultants Pvt. Ltd. the bills/hundis under LC No. 43/48 were discounted by the said bank. The prosecution has also not led any evidence to show that after discounting of the bills/hundis M/s Mani Management Consultants Pvt. Ltd. had received Rs.1,02,34,929/-, out of which Rs.1,00,46,222/- were transferred to accused No. 2 M/s Indodan Industries Ltd. by way of four cheques signed by accused No. 6 C. Subramaniam on behalf of M/s Mani Management Consultants Pvt. Ltd. From the testimony of PW23 Rajender Dhamija and contents of payment vouchers Ex.PW23/1, Ex.PW23/2, Ex.PW23/3, Ex.PW23/5, Ex.PW23/6, Ex.PW23/7, Ex.PW23/8, Ex.PW23/9, Ex.PW23/10, Ex.PW23/11, Ex.PW23/12, Ex.PW23/13, Ex.PW23/14 and Ex.PW23/16, however, it has been Criminal Case No. 01/2023 Page No. 163 of 262 proved that after 25.9.1989, fourteen bills under the LC No. 43/48 for the amount mentioned in Ex.PW23/1, Ex.PW23/2, Ex.PW23/3, Ex.PW23/5, Ex.PW23/6, Ex.PW23/7, Ex.PW23/8, Ex.PW23/9, Ex.PW23/10, Ex.PW23/11, Ex.PW23/12, Ex.PW23/13, Ex.PW23/14 and Ex.PW23/16, prepared by PW23 Rajender Dhamija, were acknowledged on behalf of M/s Indodan Industries Ltd. having been paid by Central Bank of India on its behalf. In respect of other bills of exchange under LC No. 43/48 no material, except vouchers and manifolds Ex.PW9/F, Ex.PW9/M, Ex.PW9/N, Ex.PW9/P, Ex.PW9/Q Ex.PW9/R, Ex.PW9/S, Ex.PW9/T, Ex.PW9/U, Mark-PW9/PX1, Mark- PW9/PX2, Ex.PW10/1, Ex.PW10/2, Ex.PW10/3, Ex.PW10/4, Ex.PW10/5, Ex.PW10/6, Ex.PW10/7, Ex.PW10/8, Ex.PW10/9, Ex.PW10/10, Ex.PW10/11, Ex.PW10/12, Ex.PW10/13 Ex.PW10/14, Ex.PW10/15, Ex.PW10/16, Ex.PW10/17, Ex.PW10/18, Ex.PW10/19, Ex.PW10/20 and Ex.PW10/21 to Ex.PW10/55, issued by the banks inter se have been produced. The said vouchers and manifolds per se do not prove discounting of usance bills/hundis by Standard Chartered Bank, Bombay for M/s Mani Management Consultants Pvt. Ltd. and transfer of such discounted amount to M/s Mani Management Consultants Pvt. Ltd. and M/s Indodan Industries Ltd. The said vouchers and manifolds are the statements of the employees of the banks and do not fall within the definition of book of account under section 34 of Act 1 of 1872. In these circumstances it is not proved that 36 bills of exchange under LC No. 43/48, accepted by K.C. Jain were Criminal Case No. 01/2023 Page No. 164 of 262 drawn by accused No. 6 C. Subramaniam on behalf of M/s Mani Management Consultant Pvt Ltd., who subsequently got discounted the same through Standard Chartered Bank and received Rs. 1,02,34,929, out of which Rs.100,46,222/- were transferred to accused No. 2 M/s Indodan Industries Ltd. by way of four cheques signed by accused No. 6 C. Subramaniam on behalf of M/s Mani Management Consultant Pvt Ltd.
114. The next point for determination is: whether resolution dated 30.3.1990 was passed by the Board of Directors of accused No. 2 M/s Indodan Industries Ltd.?
115. As per the testimony of PW8 K.C. Jain Ex.PW8/K4 is the resolution passed by the Board of Directors of accused No. 2 M/s Indodan Industries Ltd. whereby he was authorised to approach Central Bank of India, Janpath branch, New Delhi with request to open a revolving LC in favour of M/s Deepak Dairy. As already observed, the book purporting to be the Minute book and sought to be proved by PW8 K.C. Jain is not numbered consecutively and contain loose signature sheets attached to it, therefore, in the light of sections 193, 194 and 195 of the Companies Act, 1956 it is doubtful that the said Minute book, containing resolution Ex.PW8/K4 can be used in evidence and its contents can be presumed to be correct. Nevertheless, the resolution Ex.PW8/K4, purportedly passed on 30.3.1990 under the chairmanship of H.S. Jalan and in presence of directors K.P. Kejriwal, Rakesh Inder Kumar Vashist, V.P. Arya, S.C. Bhatia reads as follows:
Criminal Case No. 01/2023 Page No. 165 of 262Item No. 7 Borrowings from Banks The Chairman informed the Board that the Company can raise Finance under Revolving Letter of Credit. The matter has been discussed with Central Bank Of India, Janpath Branch, New Delhi and it was decided that the Company should raise finance under the said Scheme. The Board considered the matter and passed the following resolution thereafter:
"RESOLVED THAT the Company do raise finance under revolving Letter of Credit to be revolved 11 times maximum each of Rs.12 lacs being established by Central Bank of India for procurement of Milk supplies on regular basis AND THAT Mr. K.C. Jain, General Manager (Finance), be and is hereby authorised to settle and negotiate the terms for the same for and on behalf of the Company."
"RESOLVED FURTHER THAT Mr. K.C. Jain, General Manager (Finance) be and is hereby further authorised to execute the relevant documents including accepting bill of exchange as may be required for and on behalf of the Company."
Sd/- 11/5/90 CHAIRMAN
116. From a reading of Ex.PW8/K4 it can be discerned that by way of the said resolution dated 30.3.1989 accused No. 2 M/s Indodan Industries Ltd. was authorised to raise finance under revolving LC to be revolved 11 times maximum each of Rs.12 lakh being established by Central Bank of India for procurement of Milk supplies on regular basis. In the said resolution, however, the name of the milk seller has not been mentioned.
117. The next point for determination is: whether on 17.5.1990 at the strength of a forged agreement purportedly executed between accused No. 2 M/s Indodan Industries Ltd. and M/s Deepak Dairy, that did not exist, accused No. 1 N. Ramakrishnan issued revolving irrevocable LC No. 44/21 to be automatically reinstated by the bank Criminal Case No. 01/2023 Page No. 166 of 262 for value of Rs.12,000,00/- commencing from 23.6.1990 to be reinstated 12 times for negotiating 12 drafts of Rs.12,000,00/-?
118. On this point PW8 K.C. Jain during his examination-in- chief deposed that on his request Ex.PW8/K7(1) dated 14.5.1990 as General Manager (Finance), LC Ex.PW8/K6 bearing No. 44/21 dated 17.5.1990 was opened by M/s Indodan Industries Ltd. in favour of M/s Deepak Dairy, Delhi, and the said LC bore signatures of accused N. Ramakrishnan at point A. PW8 K.C. Jain further deposed that bills of exchange/hundis Ex.PW8/K7(2), Ex.PW8/K8, Ex.PW8/K9, Ex.PW8/K10, Ex.PW8/K11, Ex.PW8/K12, Ex.PW8/K13, Ex.PW8/K14 and Ex.PW8/K15, each dated 17.5.1990, bore his signatures. PW8 K.C. Jain further deposed that Ex.PW8/K7(2), Ex.PW8/K8, Ex.PW8/K9, Ex.PW8/K10, Ex.PW8/K11, Ex.PW8/K12, Ex.PW8/K13, Ex.PW8/K14 and Ex.PW8/K15 were drawn under the Central Bank of India, Janpath branch, Delhi in connection with LC No. 44/21 dated 17.5.1990 for Rs.12,00,000/- each only. PW8 K.C. Jain further deposed that Ex.PW8/K7(2), Ex.PW8/K8, Ex.PW8/K9, Ex.PW8/K10, Ex.PW8/K11, Ex.PW8/K12, Ex.PW8/K13, Ex.PW8/K14 and Ex.PW8/K15 were drawn for supply of milk under the LC by M/s Deepak Dairy, and the said bills of exchange were accepted for payment on behalf of M/s Indodan Industries Ltd. as per the resolution (Ex.PW8/K4) passed by the Board of Directors. PW8 K.C. Jain further deposed that the said bills of exchange were prepared by the office of M/s Money Management Consultants Pvt. Ltd. and the Criminal Case No. 01/2023 Page No. 167 of 262 same were handed over to him by accused Rakesh Vashist for acceptance for payment on behalf of M/s Indodan Industries Ltd. PW8 K.C. Jain further deposed that the said bills of exchange Ex.PW8/K7(2), Ex.PW8/K8, Ex.PW8/K9, Ex.PW8/K10, Ex.PW8/K11, Ex.PW8/K12, Ex.PW8/K13, Ex.PW8/K14 and Ex.PW8/K15 were ultimately presented by M/s Money Management Consultants Pvt. Ltd to the Central Bank of India, Janpath branch for negotiations as was mentioned at point X on the back page of the said hundis Ex.PW8/K7(2), Ex.PW8/K8, Ex.PW8/K9, Ex.PW8/K10, Ex.PW8/K11, Ex.PW8/K12, Ex.PW8/K13, Ex.PW8/K14 and Ex.PW8/K15. PW8 K.C. Jain further deposed that Ex.PW8/K7(2), Ex.PW8/K8, Ex.PW8/K9, Ex.PW8/K10, Ex.PW8/K11, Ex.PW8/K12, Ex.PW8/K13, Ex.PW8/K14 and Ex.PW8/K15 were drawn under the revolving LC created on behalf of M/s Indodan Industries Ltd. by Central Bank of India, Janpath branch. PW8 K.C. Jain further deposed that the debit vouchers concerned of the Central Bank of India under LC 44/21 were Ex.PW8/K16, Ex.PW8/K17, Ex.PW8/K18, Ex.PW8/K19, Ex.PW8/K20, Ex.PW8/K21, Ex.PW8/K22 and Ex.PW8/K23.
119. Accused No. 1 N. Ramakrishnan during his examination under section 313 of Cr.P.C. accepted that he opened LC No. 44/21.
120. As per Ex.PW8/K7(1) PW8 KC Jain made the said written request dated 14.5.1990 on behalf of Indodan Industries Ltd. for revolving LC for twelve lakh rupees on thirty days sight basis to be Criminal Case No. 01/2023 Page No. 168 of 262 revolved eleven times. Ex.PW8/K7(1) reads as follows:
The Chief Manager, Central Bank of India, Janpath, NEW DELHI SUB : REQUEST FOR REVOLVING LC FOR Rs. 12 LAKHS on 30 DAYS SIGHT BASIS TO BE REVOLVED 11 TIMES.
Dear Sir, This is to inform you that we have entered into a Milk Procurement Agreement on annual basis with a Milk Contractor for supply of Milk on regular, uninterrupted and continuous basis to our plan at Muzaffarnagar. In order to ensure the same, we have agreed to offer him LC of Rs. 12 Lakhs to be revolved on monthly basis for maximum 11 times. We are enclosing herewith the following for your doing the needful :
1. Copy of the Agreement.
2. LC terms and conditions on your prescribed form.
3. LC Agreement on the prescribed format.
You are requested to establish the LC on top priority to enable us to ensure uninterrupted and continuous supply.
Thanking you, Yours faithfully, For INDODAN INDUSTRIES LIMITED K.C. JAIN GENERAL MANAGER (FINANCE)
121. From a reading of Ex.PW8/K7(1) it can be discerned that along with written request Ex.PW8/K7(1) a copy of the agreement was submitted by PW8 K.C. Jain; and there is nothing in the writing on the reverse of Ex.PW8/K7(1) to suggest that no such copy of the agreement was produced.
122. As per the testimony of PW22 N.C. Baheti Ex.PW22/2 dated 15.5.1990, whereby Central Bank of India, Janpath branch, New Delhi was requested to open a revolving LC in favour of M/s Deepak Criminal Case No. 01/2023 Page No. 169 of 262 Dairy bore signature of K.C. Jain at point A. It is surprising that when PW8 K.C. Jain was in the witness box, document Ex.PW22/2 was not put to him to seek better evidence through his mouth; and instead his signature was sought to be proved through the opinion of PW22 N.C. Baheti under section 47 of Act 1 of 1872. This conduct of the prosecution cannot be countenanced. As per Ex.PW22/2, while making the said application it was, inter alia, requested on behalf of accused M/s Indodan Industries Ltd. that 'On due date, proceeds of draft shall be available with CBI, Addison Building branch, Madras'.
123. From the testimony of PW8 K.C. Jain and contents of Ex.PW8/K7(1), Ex.PW22/2 and Ex.PW8/K6 it has been proved that on 17.5.1990 at the request of accused No. 2 M/s Indodan Industries Ltd., with the approval of accused No. 1 N. Ramakrishnan, LC No. 44/21, a copy of which is Ex.PW8/K6, was opened by Central Bank of India, Janpath branch, New Delhi in favour of M/s Deepak Dairy; and the salient features of the said LC were: (i) bill of exchange on one month to twelve months basis duly accepted by applicant; (ii) LC unrestricted for negotiation; (iii) the credit would be automatically reinstated on the 23rd of each month for full value of Rs.12 lakh commencing from 23rd June 1990 and would be reinstated 11 times for negotiation of 12 drafts of Rs.12 lakh each; and (iv) the credit was available for negotiation of Usance drafts, with tenor of 1 month to 12 months in intervals of one month covering supplies of milk. Further it was written on the margin of the said LC that, "Except as otherwise Criminal Case No. 01/2023 Page No. 170 of 262 expressly stated, this credit is subject to Uniform Customs and Practices for Documentary Credits (1983 Revision) International Chamber of Commerce Publication No. 400 ".
124. The next point for determination is: whether accused No. 1 N. Ramakrishnan opened LC No. 44/21 in favour of M/s Deepak Dairy on the basis of a forged agreement?
125. From a perusal of Ex.PW8/K7(1) and Ex.PW22/2 it is revealed that the LC in favour of M/s Deepak Dairy was sought to be issued at the strength of a written agreement entered into between M/s Indodan Industries Ltd. and M/s Deepak Dairy to supply milk to the accused No.2. The agreement in question has not been produced in evidence by the prosecution during the trial. To prove that the agreement dated 15.5.1990, at the strength of which LC No. 44/21 was opened, was forged the prosecution has cited two witnesses in the list of witnesses annexed with the police report, namely, Manoj Kumar Goel and S. Menon, According to the prosecution, the forged and fabricated agreement, an unsigned copy of which is D-134/43 in the court file, was purportedly signed on behalf of Indodan Industries Ltd. by S. Menon, Chief General Manager, and the same was signed on behalf of M/s Deepak Dairy by a Manoj Kumar Goel, who put the name of executor as Raj Kumar. Despite being cited as prosecution witnesses in the list of witnesses, neither Manoj Kumar Goel nor S. Menon have been examined as witnesses by the prosecution, and thus, it is not proved that the agreement for milk supply was signed by Criminal Case No. 01/2023 Page No. 171 of 262 Manoj Kumar Goel and S. Menon.
126. To prove that the agreement dated 15.5.1990 was forged, strong reliance has been placed by the prosecution on the testimonies of PW1 Raj Kumar Jain, PW2 B.R. Kakkar, PW3 Akhilesh Gupta, PW5 Satya Narain and PW6 Hitesh Chander Sharma (Postman). The said five witnesses sought to prove that M/s Deepak Dairy was not existing at Gali Bajrang Bali, Chowri Bazar, Delhi; and during their respective examination they have testified to that effect. Before coming to their testimonies, it is necessary to notice as to what has been stated in the police report in respect of the transaction pertaining to LC No. 44/21. The police report on the point in question reads as under:
12. Irrevocable 12 times Revolving LC no. 44/21 dtd. 17.5.90 opened in the a/c of M/s IIL in fovour of M/s Deepak Diary.
13. Investigation has revealed that Shri K.C. Jain had applied for opening of this LC vide application dtd. 15.5.90, in terms of the item no. 7 of the minutes of meeting of the Board of Directors of M/s IIL dtd. 30.3.90. The said minutes indicate that the Chairman i.e accused H.S. Jalan had informed the board that the company shall raise finance under revolving Letter of Credit for which the matter has been discussed with the Central Bank India, Janpath Branch, Delhi.
The resolution further provided for raising of the funds under revolving Letter of credit to be resolved 11 times maximum for Rs.12 lacs each. The letter of credit was established for procurement of milk supply to M/s IIL on regular basis. Shri K.C. Jain was authorised to negotiate and settle the terms of the same on behalf of M/s IIL. The said application was accompanied by a letter from Shri K.C. Jain, addressed to the bank, as per which M/s IIL had entered into an agreement with M/s Deepak Diary of Delhi for supply of milk at Muzaffarnagar. The LC was to be automatically reinstated on 25th of each month, starting from 25.6.90. Endorsements in the hand of dealing officer of the bank on back side of the application indicate that Criminal Case No. 01/2023 Page No. 172 of 262 at that point of time as against the sanctioned limit of Rs. 125 lacs the outstanding were to the tune of Rs.162.91 lacs approx. With this position in hand the instructions of the Chief Manager were sought for. Accused N. Ramakrishnan made further endorsements on the application on 17.5.90 and worked out the outstanding of Rs. 141.02 lakhs. He endorsed that the LC be opened subject to the party providing margin as per stipulation. However, the application of the party does not speak of the same. The Board of Directors of the bank on 27.9.89 had sanctioned enhanced limits to M/s IIL which included LC limit of Rs.125 lacs. The security for the same was the title of goods. The limit had a sub limit of Rs. 95 lacs was on DP basis for opening of LC to meet publicity expenses. Thus the board of Directors of the bank had not sanctioned any additional limit for procurement of the raw material. Accused N. Ramakrishanan, allowed this LC to be opened , when effectively the sanctioned limit for the purpose was Rs. 35 lacs only and against it outstanding LCs were about Rs.162.91 lacs.
14. During investigation, M/s Deepak Diary has been found to be non-existant at the given address, i.e Gali Bajrang Wali, Chawri Bazaar, Delhi. During searches at the factory premises of M/s IIL at Muzaffar Nagar records were recovered indicating payments having been made to M/s Deepak Diary. Investigation carried out in the light of the documents recovered lead to one Shri Manoj Kumar Goel, of Secunderabad, Distt. Bulandshahar. He has stated that he started M/s Deepak Diary for supply of milk to M/s IIL. The supply of milk was initially made on cash basis. However, in the year 1990 his substantial funds were struck-up with M/s IIL. M/s IIL had provided him funds by getting bills drawn by M/s Deepak Diary on M/s IIL discounted with M/s Capital Trust. He had signed these bills as "Raj Kumar" for M/s Deepak Diary. However, he denied having any connection with the agreement between M/s IIL and M/s Deepak Diary, which lead to opening of the instant LC or the bills drawn against the LC and negotiated with ANZ Grindlays Bank, Chennai.
15. The bills drawn by M/s Deepak Diary on M/s IIL are forged and the same were accepted by Shri K.C. Jain on behalf of M/s IIL, in pursuance of the aforesaid criminal conspiracy and resolution of the Board of Directors of M/s In Shri K.C. Jain in his statement u/s 164 Cr.PC has stated that the bills purported to have been drawn by M/s Deepak Diary on M/s IIL were made available to him by accused Rakesh Vashisht. The forged bills were caused to be prepared in pursuance of the said criminal conspiracy to be used as genuine by accused Rakesh Vashist . All the 12 Bills were accepted by the Criminal Case No. 01/2023 Page No. 173 of 262 K.C.Jain in one go just after opening of the LC. The said 12 bills bearing blank endorsements of M/s Deepak Diary were passed on to M/s Mani Management Consultants Pvt. Ltd. for to be discounted in its account.
16. Investigation has also disclosed that the said 12 Bills/ Hundis prepared in pursuance of the said criminal conspiracy to defraud the Central Bank of India and to cause corresponding wrongful gain to M/s IIL were endorsed by accused N. Muralidharan, Director, M/s Mani Management Consultants Pvt. Ltd. in favour of the ANZ Grindlays Bank. Investigation made with ANZ Grindlays Bank, Chennai, revealed that the said bills were discounted by the Bank on 21.5.90 by way of bill no. BE 1301/70/1230 to 1241 in the a/c of M/s Mani Management Consultants Pvt. Ltd. and proceeds there-of amounting to Rs.1,32,20,899.79 was credited to the a/c of the company. On 21.5.90, M/s Mani Management Consultants PVt. Ltd. had issued from its said account cheque for Rs. 1,30,21,192.00 in favour of M/s IIL, which was paid to the Central Bank of India, Addison Building Branch, Chennai in the account of M/s Indodan Milk Products from which DDs worth Rs. 1.25 crores were issued in favour of M/s IIL payable at Delhi. These DDs were paid into the a/c of M/s IIL with Punjab National Bank, Janpath Branch, Delhi.
17. Thus this LC was allowed to be opened by accused N. Ramakrishanan for purchase of milk, when the LC limit had already been substantially over-drawn. The LC ultimately ended-up in the generation of cash by is rather than procurement of milk for which the LC was opened. Accused Rakesh Vashist who made available the said Bills to Shri K.C.Jain caused the forged bills purported to have been raised by M/s Deepak Diary to be used as genuine knowing or having reasons to believe the same to be forged. In the process the bank suffered a wrongful loss of Rs. 1.44 crores approx. From the above it can be discerned that during the investigation the investigating officer was not investigating the matter pertaining to M/s Deepak Dairy; instead he was investigating the matter pertaining to M/s Deepak Diary, and was looking for it at Gali Bajrang Wali, Chawri Bazaar, Delhi. There is difference between 'dairy' and 'diary'. The former is a business and activity to rear milch animals and selling Criminal Case No. 01/2023 Page No. 174 of 262 milk products, whereas the later is a stationary item. There is also difference between 'Gali Bajrang Bali' and 'Gali Bajrang Wali'. During his examination PW33 Bhupinder Kumar, the investigating officer has not given any explanation in that regard, and has nowhere stated that there was any clerical or other mistake in using the expressions 'M/s Deepak Diary' and 'Gali Bajrang Wali' by him throughout the police report. Now if during the investigation the investigating officer would look out for M/s Deepak Diary at Gali Bajrang Wali, how would he find M/s Deepak Dairy. The contents of the police report, and no explanation forthcoming from the mouth of the investigating officer while he was in the witness box cast doubt on the testimonies of PW1 Raj Kumar Jain, PW2 B.R. Kakkar, PW3 Akhilesh Gupta, PW5 Satya Narain and PW6 Hitesh Chander Sharma, for it is probable that the investigating officer made enquiry from them about M/s Deepak Diary of Gali Bajrang Wali, instead of M/s Deepak Dairy of Gali Bajrang Bali and found the answer in negative. In these circumstances the prosecution has failed to prove that the agreement dated 15.5.1990, at the strength of which LC Ex.PW8/K6 was opened was a forged document.
127. The next point for determination is: whether at the time of opening of LC No. 44/21 accused No. 2 M/s Indodan Industries Ltd. against the sanctioned limit of Rs. 35 lakh for raw material had had outstanding to the tune of 162.91 lakh rupees?
128. On this point, reliance has been placed by the prosecution Criminal Case No. 01/2023 Page No. 175 of 262 on the writing on the reverse of request Ex.PW8/K7(7), but out of the two writings on the reverse of Ex.PW8/K7(1) only one writing, that is writing of accused No. 1 N. Ramakrishnan in green ink has been proved by PW9 Sneh Lata Tandon. The other writing on the reverse of Ex.PW8/K7(1) in blue colour, and the facts contained therein remains not proved, therefore, it is not proved that at the time of opening of LC No. 44/21 accused No. 2 M/s Indodan Industries Ltd. against the sanctioned limit of Rs. 35 lakh for raw material had had outstanding to the tune of 162.91 lakh rupees.
129. The next point for determination is: whether twelve bills of exchange/hundis, including Ex.PW8/K7(2) to Ex.PW8/K15, drawn under LC No. 44/21 were forged?
130. It is the prosecution's case that all the bills of exchange, including Ex.PW8/K7(2) to Ex.PW8/K15, purportedly drawn under LC No. 44/21 were signed as drawer and indorser by Manoj Kumar Goel in the name of Raj Kumar, claiming to be the authorised representative of M/s Deepak Dairy. As already observed, despite being cited as a prosecution's witness in the list of witnesses filed along with the police report the said Manoj Kumar Goel has not been examined as such witness. Further, as already mentioned, on the basis of the testimonies of PW1 Raj Kumar Jain, PW2 B.R. Kakkar, PW3 Akhilesh Gupta, PW5 Satya Narain and PW6 Hitesh Chander Sharma it cannot be concluded that M/s Deepak Dairy is a fictitious entity. In these circumstances, in the absence of any reliable evidence, it is not Criminal Case No. 01/2023 Page No. 176 of 262 proved that the bills of exchange/hundis Ex.PW8/K7(2) to Ex.PW8/K15, and four other bills/hundis (not produced and proved), drawn under LC No. 44/21 were forged, which were made and indorsed by Manoj Kumar Goel in the name of Raj Kumar.
131. The next point for determination is: whether twelve bills of exchange/hundis under LC No. 44/21, accepted by K.C. Jain, were delivered to him by accused No. 4 Rakesh Vashist?
132. As already observed, in connection with LC No. 44/21 instead of twelve bills of exchange, the prosecution has produced, and during examination of PW8 K.C. Jain sought to prove, only eight bills of exchange/hundis, namely, Ex.PW8/K7(2) to Ex.PW8/K15. During his examination-in-chief PW8 K.C. Jain in respect of bills Ex.PW8/K7(2) to Ex.PW8/K15 gave similar version by stating that each of the said bill of exchange/hundi dated 17.5.1990, each bearing his signature, was drawn for supply of milk under the LC by M/s Deepak Dairy; that each of the said bills was accepted for payment on behalf of M/s Indodan Industries Ltd. as per resolution passed by the Board of Directors; that the said hundis/bills of exchange were prepared by the office of M/s Money Management Consultants Pvt. Ltd.; and that the same were handed over to him by accused Rakesh Vashist for acceptance for payment on behalf of M/s Indodan Industries Ltd. PW8 K.C. Jain further deposed that each of the said hundis were ultimately presented by M/s Money Management Consultants Pvt. Ltd. to Central Bank of India, Janpath branch for Criminal Case No. 01/2023 Page No. 177 of 262 negotiations as was mentioned at point X on the back of each hundi. From the testimony of PW8 K.C. Jain it is proved that eight bills of exchange Ex.PW8/K7(2) to Ex.PW8/K15 were accepted by him on behalf of M/s Indodan Industries Ltd. His statement that hundis Ex.PW8/K7(2) to Ex.PW8/K15 were ultimately presented by M/s Money Management Consultants Pvt. Ltd. to Central Bank of India, Janpath branch for negotiations is false, for it is the case of the prosecution, and it appears from the contents of Ex.PW8/7(2) to Ex.PW8/K15 that the said bills were not presented by M/s Mani Management Consultants Pvt. Ltd. to Central Bank of India, Janpath branch for negotiations. As per the prosecution's case and the contents of Ex.PW8/7(2) to Ex.PW8/K15, after acceptance, the said bills were indorsed by the drawer, and subsequently indorsee M/s Mani Management Consultants Pvt. Ltd. further indorsed the said bills in favour of Grindlays Bank, and ultimately ANZ Grindlays Bank, 19, Rajaji Salai, Madras, and not M/s Mani Management Consultants Pvt. Ltd., presented the same to Central Bank of India for payment. Further, PW8 K.C. Jain has deposed that bills/hundis Ex.PW8/K7(2) to Ex.PW8/K15 were prepared by the office of M/s Money Management Consultants Pvt. Ltd. and the same were handed over to him by accused Rakesh Vashist. Here it is noteworthy that M/s Mani Management Consultants Pvt. Ltd. is not an accused in the present case, and PW8 K.C. Jain has not explained as to what did he mean by "office of M/s Money Management Consultants Pvt. Ltd." as this Criminal Case No. 01/2023 Page No. 178 of 262 expression is vague and does not throw light on the point as to which among the directors of M/s Mani Management Consultants Pvt Ltd. was instrumental in making/drawing of the said bills/hundis.
133. During the investigation, in connection with LC No. 44/21 PW8 K.C. Jain, in his statement Ex.PW8/B, Ex.PW8/C and Ex.PW8/D stated as follows:
Yet another L.C. was opened in March/April 1990 in favour of Deepak Dairy for supply of milk spread over the period of 11 months. A Resolution was passed in the Board meeting where Sh. H.S. Jalan as well as Mr. Rakesh Vashisht were present apart from another (sic) Directors. The Board was also informed by the Chairmen that funds be raised against revolving letter of credit and authorised me to execute the documents in favour of Mani Management Consultants Pet. Ltd. as well as the documents required by Central Bank of India. In persuance of the above Resolution and also at the instructions of Sh. H.S. Jalan, an application was made alongwith an agreement with M/S Deepak Dalry which was signed by Sh. S, Menon on behalf of the Company given to me by Mr. Rakesh Vashisht. In this case also 11 bills were drawn on stamped Hundies which were accepted by me on behalf of the Company. The documentation was done in consultation with S. Anand of Mani Management Consultants Pvt. Ltd. I am not aware of the address of Deepak Dairy. I even do not know the person representing Deepak Dairy. Such documents duly executed by Deepak Dairy were delivered to me by Mr. Rakesh Vashisht.
134. From a reading of the statement statement Ex.PW8/B, Ex.PW8/C and Ex.PW8/D made by PW8 K.C. Jain during investigation it can be discerned that during the investigation he stated before PW39 Deepak Garg that documentation, implying preparation of bills/hundis, was done in consultation with accused S. Anand; and thus, asserting that he had knowledge about the exact person who was involved in the preparation of documents, whereas during his Criminal Case No. 01/2023 Page No. 179 of 262 examination as PW8 he changed his version by stating that bills/hundis were prepared by the office of M/s Money Management Consultants Pvt. Ltd. In his statement Ex.PW8/B, Ex.PW8/C and Ex.PW8/D made before PW39 Deepak Garg PW8 K.C. Jain also stated that the agreement with M/s Deepak Dalry, which was signed by Sh. S. Menon on behalf of the Company was given to him by Mr. Rakesh Vashist, whereas during his examination as PW8 he kept silent on this point. Further, PW8 K.C. Jain, being an approver was supposed to give the details of the circumstances under which Ex.PW8/K7(2) to Ex.PW8/K15 were presented to him for acceptance, but he did not explain as to on which date, at what place and under what circumstances Ex.PW8/K7(2) to Ex.PW8/K15 were handed over to him by accused Rakesh Vashist. As already observed, important witnesses Manoj Kumar Goel and S. Menon have not been examined by the prosecution in the case. In these circumstances, only on the basis of shaky and uncorroborated testimony of K.C. Jain, who being an accompalice, to save himself from legal punishment, had all reasons to depose against accused Rakesh Vashist, it cannot be taken as proved that it was accused Rakesh Vashist who handed over Ex.PW8/K7(2) to Ex.PW8/K15 to PW8 K.C. Jain for acceptance.
135. The next point for determination is: whether twelve bills/hundis under LC No. 44/21 were indorsed by accused No. 7 N. Muralidharan in favour of ANZ Grindlays Bank, Madras for discounting?
Criminal Case No. 01/2023 Page No. 180 of 262136. As already observed, only eight bills/hundis, namely, Ex.PW8/K7(2) to Ex.PW8/K15 have been produced and tendered in evidence by the prosecution. PW21 Ms. Sarala Kulasekaran, whose opinion was sought by the Public Prosecutor during her examination under section 47 of Act 1 of 1872, did not identify the signatures of accused No. 7 N. Muralidharan on the bills of exchange. Even during her cross-examination by the Public Prosecutor she did not give answers favourable to the prosecution, and did not give her opinion on the signatures stated to be of accused No. 7 N. Muralidharan, therefore, the prosecution falls back on the opinion and grounds for such opinion Ex.PW36/3 to Ex.PW36/6 of PW36 M.L. Sharma. As already observed, the prosecution has failed to prove that specimen signatures Ex.PW29/1 of accused N. Muralidharan were taken without any compulsion. Further, PW36 M.L. Sharma has not given any opinion from the witness box as per law. In these circumstances the prosecution has failed to prove that the twelve bills of exchange, including bills Ex.PW8/K7(2) to Ex.PW8/K15 were indorsed by accused N. Muralidharan in favour of ANZ Grindlays Bank, Madras.
137. The next point for determination is: whether on 21.5.1990, after discounting of twelve bills of exchange under LC No. 44/21 an amount of Rs.1,32,20,899.79 was credited to the account of M/s Mani Management Consultants Pvt. Ltd., out of which, by cheque Rs.1,30,21,192/- was transferred to M/s Indodan Milk Products from which Rs.1,25,000,00/- was transferred by draft to accused No. 2 M/s Criminal Case No. 01/2023 Page No. 181 of 262 Indodan Industries Ltd.?
138. PW21 Ms. Sarala Kulasekaran sought to prove that in the year 1988, while she was posted with the Rajaji Salai branch, Chennai of ANZ Grindlays Bank, M/s Mani Management Consultants Pvt. Ltd. at the strength of documents Mark-PW21X/, Mark-PW21/X1, Mark- PW21/X2, Mark-PW21/X3, Mark-PW21/X4, Mark-PW21/X5, Mark- PW21/X6, Mark-PW21/X7, Mark-PW21/X8, Mark-PW21/X9, Mark-
PW21/X10, Mark-PW21/X11, Mark-PW21/X12 and Mark-PW21/X13, got opened account No. 01CBM3322600 with the said branch.
139. PW13 Hemantha Kumar D, at the relevant time, was an employee of ANZ Grindlays Bank and was working at its Madras (Chennai) branch. PW13 Hemantha Kumar R by identifying signatures of a P.M. Naraynan, officer of ANZ Grindlays Bank on tickler copies Ex.PW13/1 to Ex.PW13/5 sought to prove the same. As per Ex.PW13/1 to Ex.PW13/5, each dated 21.5.1990, and pertaining to bills Nos. 1232, 1233, 1240, 1241 and 1235 respectively, ANZ Gindlays Bank, Madars branch informed Central Bank of India, Janpath branch, New Delhi that they were claiming reimbursement from Addison Buildings, Madras office under the said bills under LC No. 44/21 dated 17.5.1990 the drawer/last indorser of which was Mani Management Consultants Pvt Ltd., 152, Greams Road, Madras and the drawee of which was Indodan Industries Ltd., 72, Janpath, New Delhi. A perusal of Ex.PW13/1 to Ex.PW13/5 also shows that the said Criminal Case No. 01/2023 Page No. 182 of 262 ticklers were marked as PAID on 23.8.1990, 22.9.1990, 23.4.1991, 23.5.1991 and 22.12.1990 respectively. PW13 Hemantha Kumar R by identifying signatures of a P.C. Satgopalan, employee of ANZ Grindlays Bank on debit voucher Ex.PW13/6 and credit voucher Ex.PW13/7 also sought to prove the said two last mentioned documents. As per Ex.PW13/6 and Ex.PW13/7 on 21.5.1990, after deducting a sum of Rs.11,79,100.21 out of Rs.1,44,00,000/-, a sum of Rs.1,32,20,899.79 was credited to the account No. 01CBM3322600 of Mani Management under the bills drawn by M/s Deepak Dairy under LC No. 44/21 on Indodan Industries Ltd. on account of Central Bank of India after bill discounting. During his examination PW13 Hemantha Kumar R also deposed that bills Ex.PW8/K7, Ex.PW8/K8, Ex.PW8/K9, Ex.PW8/K10 and Ex.PW8/K11 on the reverse side were bearing signatures on P.M. Narayanan at points X in token of discharge for having received the payment, and further stated that the said bills/hundis were having bill reference as DB/G-1301/1237, 1238, 1239, 1240 and 1241. It is not explained by the prosecution as to why P.M. Naraynan and P.C. Satgopalan, who prepared Ex.PW13/1 to Ex.PW13/5 and Ex.PW13/6 and Ex.PW13/7, and whose signatures the said documents bore, have not been called and examined as prosecution witnesses, for mere identification of the signatures of the maker of a document by a witness under section 47 of Act 1872 does not duly prove a document. For such proof it is also necessary to show as to under what circumstances the documents were prepared.
Criminal Case No. 01/2023 Page No. 183 of 262140. PW15 K.P. Punitha, at the relevant time, was an employee of Central Bank of India, and was working at its Madras (Chennai) branch. PW15 K.P. Punitha by identifying signature of a Rajinder Kaul on Account Opening Form Ex.PW15/2 sought to prove the contents of the same. As per Ex.PW15/2 on 26.11.1981 Indodan Milk Products Ltd. made an application for opening current account to Central Bank of India, Madras branch, and pursuant of the said application account No. 1591 in the name of Indodan Milk Products Ltd. was opened. PW15 K.P. Punitha by identifying signature of a V. Ramachandran, an officer of Central Bank of India, Madras branch on document Ex.PW15/1 also sought to prove the contents of the same. As per Ex.15/1, on 21.5.1990 at Central Bank of India, Addison Buildings branch, Madras, at the strength of a cheque bearing No. 589724 drawn on Grindlays Bank a sum of Rs.1,30,21,192/- was credited to the account No. 1591 of Indodan Industries Ltd. Here it is noteworthy that according to the prosecution the sum of Rs.1,30,21,192/- was transferred by Mani Management Consultants Pvt. Ltd. to the account of M/s Indodan Milk Products by cheque, and subsequently out of the said money a sum of Rs.1,25,000,00/- was transferred to the account of M/s Indodan Industries Ltd. by draft. A perusal of Ex.PW15/1, however, reveals that the sum of Rs.1,30,21,192/- was purportedly credited to the account No. 1591 maintained with Central Bank of India, Addison Buildings branch, Madras which was in the name Indodan Industries Ltd., and not M/s Indodan Milk Products. There is Criminal Case No. 01/2023 Page No. 184 of 262 no material before the court to show that at any occasion the account No. 1591 maintained with Central Bank of India, Addison Buildings branch, Madras was converted in the name of Indodan Industries Ltd. Further, there is no evidence before the court that Rs.1,25,000,00/- out of Rs.1,30,21,192/- was transferred from account No. 1591 maintained with Central Bank of India, Addison Buildings branch, Madras by bank draft which was encashed in the account of M/s Indodan Industries Ltd. maintained with the Punjab National Bank. In these circumstances it is not proved that on 21.5.1990, after discounting of twelve bills of exchange under LC No. 44/21 an amount of Rs.1,32,20,899.79 was credited to the account of M/s Mani Management Consultants Pvt. Ltd., out of which, by cheque, Rs.1,30,21,192/- was transferred to M/s Indodan Milk Products from which Rs.1,25,000,00/- was transferred by draft to the accused No. 2.
141. The next point for determination is: whether at the instance of M/s Indodan Industries Ltd. accused No. 1 N. Ramakrishnan opened LC No. 43/98 in favour of M/s Manu Steel?
142. In connection with LCs No. 43/98 dated 11.01.1990 for Rs.22.23 lakh, LC No. 44/15 dated 02.5.1990 for Rs.20.63 lakh and LC No. 44/48 dated 25.8.1990 for Rs.41.19 lakh it is stated in complaint Ex.PW28/1, at page 9, as follows:
The Company also opened the following letters of credit in favour of M/s. Manu Steels, 118, Shakti Vihar, New Delhi-34 with Janpath branch for purchasing of items stainless steel, plates and sheets which were not at all related to the line of business in which the company was Criminal Case No. 01/2023 Page No. 185 of 262 engaged.
1. LCs No. 43/98 dated 11.01.90 for Rs.22.23 lakhs and No. 44/15, dated 02.05.90 for Rs.20.63 lakhs. Bills paid by Central Bank of India, Addison Building, Madras branch. All bills negotiated at Madras, while the beneficiaries are at New Delhi.
2. LCs No. 44/48 dated 25.08.90 for Rs.41.19 lakhs. Bills paid by Central Bank of India, Addison Building, Madras branch. All bills negotiated at Madras. Beneficiaries vide letter dtd. 22.09.90 informed that the above L/C is fraud and does not pertain to them in any manner.
These statements contained in Ex.PW28/1 are not entirely correct, for LC No. 43/98 dated 13.01.1990 was opened in the name of M/s Manu Steel (not M/s Manu Steels), 118, Shakti Vihar, Delhi. In the police report also it has been stated that the said three LCs were opened in the name of M/s Manu Steel, implying that all three LCs were opened in the name of M/s Manu Steel, whereas two LCs bearing LCs Nos. 44/15 and 44/48 were in the name of M/s Manu Steels.
143. As per the testimonies of PW8 K.C. Jain and PW22 N.C. Baheti, LC No. 43/98, the ledger copy of which is Ex.PW8/K32, was opened by Central Bank of India, Janpath Branch, Delhi in favour of M/s Manu Steels (as stated by them) on the basis of letter Ex.PW8/K24, application Ex.PW8/K25 and Ex.PW8/K26, supported by copies of bills Ex.PW8/K28, Ex.PW8/K29, Ex.PW8/K30 and Ex.PW8/K31, purportedly issued by Manu Steels, 118, Shakti Vihar, New Delhi. From the writing on the reverse of Ex.PW8/K24 and the testimony of PW10 Bharat Bhushan it has emerged that before considering the request Ex.PW8/K24 made by PW8 K.C. Jain and PW22 N.C. Baheti on behalf of accused No. 2 M/s Indodan Industries Criminal Case No. 01/2023 Page No. 186 of 262 Ltd. an analysis report was taken by accused No. 1 N. Ramakrishnan from PW10 Bharat Bhushan, who, inter alia, reported that against the sanctioned limit of one hundred and twenty five thousand rupees, there was outstanding in the sum of Rs.92.3 lakh to which fresh liability in the sum of Rs.22,12,750/- was to be added under the LC applied for. Surprisingly, although the LC was sought to be opened in the name of M/s Manu Steel and the bills produced in support of the same were in the name of Manu Steels still no objection was taken by PW10 Bharat Bhushan on this point, and ultimately the LC was opened after approval by accused No. 1 N. Ramakrishnan and under his signature. This circumstance in itself shows that the entity named in letter Ex.PW8/K24 and application Ex.PW8/K25, in whose name the LC was sought to be opened, that is M/s Manu Steel was a fictitious entity, for had it been a real entity PW8 K.C. Jain and PW22 N.C. Baheti would have supported the same by the bills in the name of M/s Manu Steel and not Manu Steels.
144. The next point for determination is: whether bill of exchange/hundi Ex.PW8/K27, under LC No. 43/98, was drawn and indorsed in the name of M/s Manu Steels by Satya Sen by committing forgery at the instance of accused Mahesh Gupta?
145. In connection with Ex.PW8/K27, drawn under LC No. LC No. 43/98 PW25 Satya Sen during his examination-in-chief deposed that he had worked in M/s. Foremost Industries for fifteen years as an accountant as well as Administrative Officer. PW25 Satya Sen further Criminal Case No. 01/2023 Page No. 187 of 262 deposed that he left the job 7-8 years back. PW25 Satya Sen further deposed that M/s. Foremost Industries was having its office at Janpath, Delhi. PW25 Satya Sen further deposed that M/s Indodan Industries Ltd was the sister concern of M/s. Foremost Industries, and the said office was also having its office at Janpath. PW25 Satya Sen further deposed that he knew accused Mahesh Gupta, who was working as an accountant. PW25 Satya Sen further deposed that he had put signatures on various documents on his (Mahesh Gupta's) asking. PW25 Satya Sen further deposed that hundi Ex.PW8/K27 bore his initials at points B and C in his handwriting, and the said initials were made by him on the asking of accused Mahesh Gupta. PW25 Satya Sen further deposed that he did not know about the rubber stamp who affixed the same. PW25 Satya Sen further deposed that he did not remember if his specimen handwriting was taken by CBI. PW25 Satya Sen further deposed that the writing Ex.PW25/1 appearing over the page appeared at S-187 to S-190 to be in his handwriting. PW25 Satya Sen further deposed that he could not tell about the writing appearing at S-185 and S-186. PW25 Satya Sen further deposed that he did not remember the names of the directors of M/s Indodan Industries Ltd for whom he was working. PW25 Satya Sen further deposed that accused Rakesh Vashist was the son in law of H.S. Jalan (since deceased) and due to this reason he knew him. PW25 Satya Sen further deposed that accused Rakesh Vashist used to perform work of the company as well. PW25 Satya Sen further deposed that he had no concern whatsoever Criminal Case No. 01/2023 Page No. 188 of 262 with M/s Manu Steels proprietorship concern. PW25 Satya Sen further deposed that he was asked to put his signatures at points B and C on Ex. PW8/K27 by accused Mahesh Gupta, who directed him to put his signature otherwise the said fact would be brought to the knowledge of the director of the company.
146. As per the testimony of PW8 K.C. Jain bill of exchange Ex.PW8/K27 drawn under LC No. 43/98 was accepted by N.C. Baheti on behalf of M/s Indodan Industries Ltd. as per the resolution passed by the Board of Directors. His testimony on this point is false, because no material has been produced before the court to show, and it is otherwise not the prosecution's case that in connection with LC No. 43/98 any resolution was passed by the Board of Directors of M/s Indodan Industries Ltd. From a perusal of Ex.PW8/K2 and Ex.PW8/K4 it can be discerned that Ex.PW8/K2 authorised PW8 K.C. Jain to deal with M/s Mani Management Consultants Pvt. Ltd. and Ex.PW8/K4 authorised the Company to raise finance under revolving LC to be revolved 11 times maximum each of Rs.12 lakh being established by Central Bank of India for procurement of milk supplies on regular basis. PW8 K.C. Jain has also made false statement that bill of exchange Ex.PW8/K27 was accepted by N.C. Baheti on behalf of M/s Indodan Industries Ltd., for, as would be seen later, bill/ hundi Ex.PW8/K27 was accepted by PW22 N.C. Baheti not on behalf of M/s Indodan Industries Ltd.
147. Further, in connection with LC No. 43/98, a copy of Criminal Case No. 01/2023 Page No. 189 of 262 which is Ex.PW8/K32, and other two LCs in the name of M/s Manu Steels PW24 Viveksheel Nayyar during his examination-in-chief deposed that M/s Manu Steels was a partnership concern, which was existing at 118, Shakti Vihar, Rani Bagh, Delhi, and he was one of the partners in the said firm. PW24 Viveksheel Nayyar further deposed that the said partnership firm was started in the year 1987 and closed in the year 1993. PW24 Viveksheel Nayyar further deposed that the said firm comprised of three partners, that is he himself, his father and his brother Manu Nayyar, and used to deal in steels. PW24 Viveksheel Nayyar further deposed that he used to sign the bills / cash memo etc. on behalf of the said firm. PW24 Viveksheel Nayyar further deposed that M/s Manu Steels had had only one transaction with M/s Indodan Industries Ltd. sometime in the year 1989, and they had received complete payment from M/s Indodan Industries Ltd. through cheque. PW24 Viveksheel Nayyar further deposed that there was no transaction between M/s. Manu Steels and M/s Indodan Industries Ltd on the basis of letter of credit/hundis. PW24 Viveksheel Nayyar further deposed that letter Ex.PW9/H dated 22.9.1990 bore his signature at point A. PW24 Viveksheel Nayyar further deposed that they had received copy of LC No. 44/48 from Central Bank of India, Janpath and Standard Chartered Bank, and as they had no concern with the said LC, therefore, they wrote letter Ex.PW9/H in that regard to the Central Bank of India and copy of the same was also sent to Central Bank of India, Standard Chartered Bank and others. PW24 Criminal Case No. 01/2023 Page No. 190 of 262 Viveksheel Nayyar further deposed that copy of hundi Ex.PW8/DB did not bear the signatures of him, his father or his brother, who were the three partners in M/s. Manu Steels. PW24 Viveksheel Nayyar further deposed that copies of bills Nos. 108 dated 04.4.1990, 110 dated 06.4.1990, 115 dated 16.4.1990, 126 dated 10.5.1990, 134 dated 18.5.1990, 140 dated 26.5.1990, 145 dated 01.6.1990 and 149 dated 07.6.1990 neither pertain to his firm nor bore the signatures of him, his father or brother, who were the three partners in M/s. Manu Steels at point A on each bill nor bear the stamp of his partnership firm. PW24 Viveksheel Nayyar further deposed that those bills were related to bill of exchange / hundi Ex.PW8/DB. PW24 Viveksheel Nayyar further deposed that hundi / bill of exchange Ex.PW8/K27 pertaining to LC No. 43/98 dated 13.01.1990 did not bear the signatures of him, his father or his brother, who were the three partners in M/s. Manu Steels either at point B or at the reverse of the hundi at point C. PW24 Viveksheel Nayyar further deposed that the stamp affixed with the signatures at points B and C over the hundi were not of his firm. PW24 Viveksheel Nayyar further deposed that he did not know any company by the name of M/s. Mani Management Consultants. PW24 Viveksheel Nayyar further deposed that his firm had also not directed to pay to or to the order of M/s. Mani Management Consultants Pvt. Ltd. PW24 Viveksheel Nayyar further deposed that the bills referred to in Ex.PW8/K27 were Ex.PW8/K28 to Ex.PW8/K31. PW24 Viveksheel Nayyar further deposed that copies of the bills Ex.PW8/K28 to Criminal Case No. 01/2023 Page No. 191 of 262 Ex.PW8/K31 did not pertain to his firm nor bore the signatures of either of his father or his brother or him, who were the three partners in M/s. Manu Steels at point A on each bill nor bore the stamp of his partnership firm and the same were not issued by his firm. PW24 Viveksheel Nayyar further deposed that copy of the hundi Ex.PW8/K37 did not bore the signatures of either of his father or his brother or him, who were the three partners in M/s. Manu Steels at points A and B nor it bore stamp of his firm at point C and at the reverse at point D nor his firm had directed the bank to pay the amount mentioned in bill of exchange to M/s. Mani Management Consultants nor they had issued bills mentioned in hundi Ex.PW8/K37. PW24 Viveksheel Nayyar further deposed that Bill No. 357, 360, 390 and 408 were the same bills which were also mentioned in bill of exchange Ex.PW8/K27. PW24 Viveksheel Nayyar further deposed that no transaction took place between his firm and M/s. Indodan Industries Ltd. as shown in those bills nor his firm had received any payment against those bills. PW24 Viveksheel Nayyar further deposed that receipt memo Ex.PW24/1 dated 08.3.1999 bore his signatures at point A, and by the said receipt memo he had handed over letter dated 05.10.1990 of Central bank of India (D-590), original LC No. 43/44 dated 25.08.90 and page No. 251 and 237 of Ledger of his firm pertaining to year 1989 - 90 with regard to transaction with M/s. Foremost Industries and M/s. Indodan Industries Ltd. PW24 Viveksheel Nayyar further deposed that Ex.PW24/2 to Ex.PW24/5 Criminal Case No. 01/2023 Page No. 192 of 262 bore his signature at point A.
148. As found earlier, at the strength of the bills purportedly issued by Manu Steels, PW8 K.C. Jain and PW22 N.C. Baheti applied for issuance of LC in the name of M/s Manu Steel, and ignoring the documents filed in support of the application PW10 Bharat Bhushan gave his report on the reverse of PW8/K24, and thereafter, accused No. 1 N. Ramakrishnan opened LC No. 43/98, the ledger copy of which is Ex.PW8/K32. Subsequently, under the said LC, bill of exchange Ex.PW8/K27 was purportedly drawn in the name of M/s Manu Steels, which was signed by PW25 Satya Sen as proprietor of M/s Manu Steels. From the testimonies of PW25 Satya Sen and PW24 Viveksheel Nayyar it has been proved that bill Ex.PW8/K27 which was purportedly drawn and indorsed under the LC No. 43/98 is a forged document prepared by PW25 Satya Sen. Unfortunately, PW25 Satya Sen, who was an employee of M/s Foremost Industries is not an accused in this case, and his testimony cannot treated on better footing than the testimony of an accomplice. PW25 Satya Sen has deposed that accused Mahesh Gupta had induced him to put his signatures as proprietor of M/s Manu Steels on Ex.PW8/K27, but the prosecution has not produced any material to corroborate the testimony of PW25 Satya Sen on the point that it was accused Mahesh Gupta who abetted him to forge Ex.PW8/K27 as its maker/drawer and indorser. There is no material before the court which proves as to when and under what circumstances Mahesh Gupta asked PW25 Satya Sen to put his Criminal Case No. 01/2023 Page No. 193 of 262 signatures on Ex.PW8/K27. During his cross-examination PW25 Satya Sen has admitted that Mahesh Gupta was not in a position to take any disciplinary action against him. Since despite being actively involved in the act of committing forgery of a valuable security CBI did not make PW25 Satya Sen as an accused or approver, therefore, it cannot be ruled out that he named Mahesh Gupta only to save himself from prosecution and legal punishment. In these circumstances, although it has been proved that bill of exchange Ex.PW8/K27, under LC No. 43/98, was drawn and indorsed in the name of M/s Manu Steels by PW25 Satya Sen by committing forgery, but in the absence of corroborative evidence to support the testimony of PW25 Satya Sen it is not proved that he committed forgery of bill of exchange Ex.PW8/K27 at the instance of accused Mahesh Gupta.
149. The next point for determination is: whether on the basis of bill of exchange Ex.PW8/K27 Central Bank of India suffered loss at the hands of the accused persons?
150. No account book or ledger pertaining to the account of accused No. 2 M/s Indodan Industries Ltd. maintained with Central Bank of India, Janpath branch, New Delhi has been proved by the prosecution to show that under LC No. 43/98 any payment was made by Central Bank of India on behalf of accused No. 2 M/s Indodan Industries Ltd.. From the testimony of PW23 Rajender Dhamija and contents of payment voucher Ex.PW23/24 dated 30.4.1990 tendered during his examination, however, it has been proved that payment of Criminal Case No. 01/2023 Page No. 194 of 262 Rs.22,12,750/- under LC No. 43/98 Ex.PW8/K32 was acknowledged on behalf of accused No. 2 M/s Indodan Industries Ltd., but that was the money which was apparently paid by Central Bank of India in respect of bill Ex.PW8/K37 and not the money which was received after discounting. During his examination PW22 N.C. Baheti deposed that under the instructions of K.C. Jain he accepted bill of exchange Ex.PW8/K27 for and on behalf of M/s. Indodan Industries Ltd. PW22 N.C. Baheti further deposed that he had no personal knowledge regarding the transaction. Statement of PW22 N.C. Baheti that he accepted bill of exchange Ex.PW8/K27 for and on behalf of M/s. Indodan Industries Ltd. is false, for from a perusal of Ex.PW8/K27 it is evident that although the same was purportedly drawn on Indodan Industries Limited, but the same was not accepted on its behalf. From a perusal of Ex.PW8/K27 it can be discerned that the same was accepted for payment on due date for FOREMOST INDUSTRIES (INDIA) LTD. by N.C. Baheti, but subsequently words "FOREMOST" and "INDIA" were struck off, and thus, the bill Ex.PW8/K27 was accepted for INDUSTRIES LTD. only; which do not make any sense. It is really surprising that even in these circumstances bill Ex.PW8/K27 was indorsed by the fictitious payee and accepted for discounting by the Standard Chartered Bank and subsequently paid by Central Bank of India vide Ex.PW9/D and Ex.PW9/F, although under Act 26 of 1881 and the Uniform Customs & Practice for Documentary Credit it was not bound to pay. The conduct of Central Bank of India Criminal Case No. 01/2023 Page No. 195 of 262 shows that its Addison Building branch, Madras was negligent, and due to its own negligence the bank suffered loss, if any. Since the bill was actually not accepted by Indodan Industries Limited, therefore, it cannot be said that it conspired with its employees and other accused persons to commit forgery and other offences. PW22 N.C. Baheti, who accepted bill Ex.PW8/K27, has not deposed on the point as to whom Ex.PW8/K27 was handed over by him after acceptance, and the prosecution has not led any further evidence to show as to how Ex.PW8/K27 fell into the hands of M/s Mani Management Consultants Pvt. Ltd. In the absence of any evidence being led by the prosecution on this point, merely at the strength of the circumstance that while making application Ex.PW8/K25 on behalf of accused No. 2 M/s Indodan Industries Ltd. PW8 K.C. Jain applied that "LC to be advised through Addison Building branch, Madras and reimbursement on due date shall be available with them" it cannot be concluded that M/s Mani Management Consultants Pvt. Ltd. was part of the conspiracy. Loss, if any, to Central Bank of India, Janpath branch, New Delhi on the basis of Ex.PW8/K27 drawn under LC No. 43/98, in the opinion of the court, was its own making.
151. The next point for determination is: whether at the instance of M/s Indodan Industries Ltd. accused No. 1 N. Ramakrishnan opened LC No. 44/15 in favour of M/s Manu Steels?
152. As per the testimonies of PW8 K.C. Jain and PW22 N.C. Baheti, LC No. 44/15 Ex.PW8/K36 was opened by Central Bank of Criminal Case No. 01/2023 Page No. 196 of 262 India, Janpath Branch, Delhi in favour of M/s Manu Steels on the basis of letter Ex.PW8/K33 (dated 26.4.1990) and application Ex.PW8/K34 (dated 27.4.1990) signed by PW22 N.C. Baheti on behalf of PW8 K.C. Jain. As per the testimony of PW22 N.C. Baheti agreement Ex.PW8/K35 was also signed by him. Accused No. 1 N. Ramakrishnan during his examination under section 313 of Cr.P.C. admitted that LC No. 44/15 in favour of M/s Manu Steels was issued by him as the Chief Manager. Thus, it has been proved that at the instance of accused No. 2 M/s Indodan Industries Ltd. accused No. 1 N. Ramakrishnan opened LC No. 44/15 in favour of M/s Manu Steels. From the testimony of PW9 Sheh Lata Tandon and her analysis report on Ex.PW8/K33 it has also been proved that at the time of issuing the said LC No. 44/15 against the limit of 125 lakh rupees, accused No. 2 M/s Indodan Industries Ltd., as per bank register, had outstanding of 164.45 lakh rupees.
153. The next point for determination is: whether bill of exchange Ex.PW8/K37, under LC No. 44/15, was drawn and indorsed in the name of M/s Manu Steels by PW26 Vijay Kumar by committing forgery?
154. As per the testimony of PW8 K.C. Jain bill of exchange Ex.PW8/K37 under LC No. 44/15 Ex.PW8/K36 was accepted by him for payment on behalf of Indodan Industries Ltd. as per the resolution passed by the Board of Directors. PW8 K.C. Jain further deposed that the said hundi/bill of exchange Ex.PW8/K37 was prepared by the Criminal Case No. 01/2023 Page No. 197 of 262 office of M/s Money Management Consultants Pvt. Ltd. and the same was handed over to him by accused Rakesh Vashist for acceptance for payment on behalf of M/s Indodan Industries Ltd.
155. The testimony of PW8 K.C. Jain that bill of exchange Ex.PW8/K37 under LC No. 44/15 Ex.PW8/K36 was accepted by him for payment on behalf of Indodan Industries Ltd. as per the resolution passed by the Board of Directors is not true, for no resolution has been proved by the prosecution to show that the Board of Directors of M/s Indodan Industries Ltd. ever passed any resolution in respect of M/s Manu Steels.
156. In connection with LC No. 44/15 Ex.PW8/K36 the prosecution's case is that the bill of exchange Ex.PW8/K37 drawn under the same is a forged document which was purportedly made and endorsed on behalf of M/s Manu Steels by a Vijay Kumar, an employee of M/s Foremost Industries. The said Vijay Kumar has neither been made an accused nor an approver in this case, and instead he has been examined as PW26. During his cross-examination PW26 Vijay Kumar accepted that he had put his signatures on Ex.PW8/K37 as authorised representative of M/s Manu Steels; and that while putting signatures on Ex.PW8/K27 he knew that it was wrong to put his signatures on the said document. PW26 Vijay Kumar himself has not named any person at whose instance he forged Ex.PW8/K37, but in respect of Ex.PW8/K37 the prosecution's case is that it was K.C. Jain, the approver, who abetted PW26 Vijay Kumar to draw and Criminal Case No. 01/2023 Page No. 198 of 262 indorse the bill Ex.PW8/K37. If so is the case, then the testimony of PW8 K.C. Jain that Ex.PW8/K37 was prepared by the office of M/s Money Management Consultants Pvt. Ltd. and the same was handed over to him by accused Rakesh Vashist for acceptance for payment on behalf of M/s Indodan Industries Ltd. is false, for, if, as mentioned in the police report and the charge framed in the case, the forgery of Ex.PW8/K37 was committed at the behest of K.C. Jain then the said document could not have been prepared by the office of M/s Mani Management Consultants Pvt. Ltd. and could not have been delivered by accused Rakesh Vashist to PW8 K.C. Jain. From the testimony of the PW26 Vijay Kumar, especially the answers given by him during his cross-examination it is proved that he forged Ex.PW8/37, but, as I already mentioned, he is not an accused in this case. In these circumstances, although it is proved that bill Ex.PW8/K37 was forged by PW26 Vijay Kumar, but it is not proved that the said bill after forgery was handed over by accused Rakesh Vashist to PW8 K.C. Jain for acceptance.
157. The next point for determination is: whether accused N. Muralidharan indorsed Ex.PW8/K37 in favour of Grindlays Bank, Madras and got discounted the said bill Ex.PW8/K37 for M/s Mani Management Consultants Pvt. Ltd.?
158. In connection with Ex.PW8/K37 drawn under LC No. 44/15 no evidence has been led by the prosecution to show that the said bill was negotiated by accused N. Muralidharan under his Criminal Case No. 01/2023 Page No. 199 of 262 signature with Grindlays Bank, Chennai for discounting, and after such discounting the money was transferred to the account of accused No. 2 M/s Indodan Industries Ltd. In paragraph No. 22 of the police report it has been categorically stated that documents relating to discounting of LC No. 44/15 by ANZ Grindlays Bank, Chennai were not seized during investigation as the same were not available/traceable with the bank. From the testimony of PW23 Rajender Dhamija and contents of payment voucher Ex.PW23/25 dated 01/16.11.1990 tendered during his examination, however, it has been proved that payment of Rs.20,59,426/- under LC No. 44/15 was acknowledged on behalf of accused No. 2 M/s Indodan Industries Ltd., but that was the money which was apparently paid by Central Bank of India in respect of bill Ex.PW8/K37 and not the money which was received after discounting. As already mentioned, no statement of account has been proved by the prosecution that any money under any of the bills of exchange accepted by M/s Indodan Industries Ltd. under any of the LCs was received by Central Bank of India, Janpath branch, New Delhi in the book of account of the accused No. 2. Therefore, it is not proved that accused N. Muralidharan indorsed Ex.PW8/K37 in favour of Grindlays Bank, Chennai and got discounted the said bill Ex.PW8/K37 for M/s Mani Management Consultants Pvt. Ltd. It is also not proved that after discounting of bill Ex.PW8/K37 M/s Mani Management Consultants Pvt. Ltd. and accused No. 2 M/s Indodan Industries Ltd. received any money under the same which was transferred to accused No. 2 M/s Criminal Case No. 01/2023 Page No. 200 of 262 Indodan Industries Ltd. by M/s Mani Management Consultants Pvt. Ltd.
159. The next point for determination is: whether at the instance of M/s Indodan Industries Ltd. accused No. 1 N. Ramakrishnan opened LC No. 44/48 in favour of M/s Manu Steels?
160. In respect of LC No. 44/48 PW 8 K.C. Jain has deposed as follows:
I have seen LC No. 44/48 dated 25.08.1990 for Rs. 41,18,852.40 opened by M/s indodan Industries Ltd. 72, Janpath, New Delhi in favour of Manu Steels, Shakti Vihar, Delhi in Central Bank of India, Janpath Branch, Delhi (D-335), the same is now Ex. PW-8/L. The Directors of M/s Indodan Industries Ltd. at the relevant time were accused H.S., accused Rakesh Vashishtha and others.
I have also seen letter dated 12.09.90, signed by me at point A which I identify and the same is now letter Ex. PW-8/M (D-662/2). The said letter Ex.PW8/M is addressed to the Accounts Department informing them that the bills worth Rs. 41,18,852.40 as per hundi which is now Ex. PW-8/N, were got discounted through Money Management Consultants Pvt. Ltd. , Madras. The payment totaling to Rs. 37,02,014.00 was received vide DD no. 019601 to 019605 all dated 29.08.90. The voucher no.10/37 dated 15.10.90 of M/s Indodan Industries Ltd. for Rs.41,18,852.00 (D-662/1) duly signed by Sh. N.C. Baheti at point A on the said voucher which I identify as I had seen him signing and writing being an officer of M/s Indodan Industries Ltd.
and the same is now Ex. PW-8/P. The Hundi Ex. PW-8/N (D-662/4) is drawn against LC No. 44/48 dated 25.8.90, copy of which is now Ex. PW-8/Q (D-662/3). The bill of exchange was drawn for supply of SS Sheets / Plates / Rods as per the specifications and quantities mentioned in purchase order dated 28.03.90 as mentioned at point X on Ex. PW-8/Q. The said bill of exchange was accepted for payment on behalf of M/s Indodan Industries Ltd. as per the resolution passed by the Board of Directors. The said hundi Ex. PW-8/N was prepared by the office of M/s Money Management Consultants Pvt. Ltd. and was handed over to me by accused Rakesh Vashishtha for acceptance of payment by M/s Indodan Industries Ltd. The said Hundi Ex. PW-8/N alongwith other documents was presented by Money Management Criminal Case No. 01/2023 Page No. 201 of 262 Consultants Pvt. Ltd. to Central Bank of India for negotiations for discounting.
From the testimony of PW8 K.C. Jain it can be discerned that in respect of LC No. 44/48 he has not deposed about the circumstances under which the application for issuance of the said LC was made, and the documents on the basis of which such application was made. PW8 K.C. Jain has not deposed, and no other evidence has been led by the prosecution to show as to under what authority the application for issuance of the said LC was made. From the contents of Ex.PW8/L and the statement of accused No. 1 N. Ramakrishnan made under section 313 of Cr.P.C., however, it has been proved that on 25.8.1990 at the request of M/s Indodan Industries Ltd. LC No. 44/48, the ledger copy of which is Ex.PW8/L, was issued in favour of M/s Manu Steels.
161. The next point for determination is: whether any forged bill of exchange was drawn by the accused persons under LC No. 44/48?
162. As already observed, no prosecution witness, including PW8 K.C. Jain has deposed as to under what circumstances the application for issuing LC No. 44/48 was made on behalf of M/s Indodan Industries Ltd. There is no material before the court to show as to who had signed the application and agreement for issuing the said LC. Further, there is no evidence to show as to under what circumstances the bill of exchange, a copy of which is stated to be Ex.PW8/N, was drawn and who had signed the said bill of exchange as Criminal Case No. 01/2023 Page No. 202 of 262 its maker, even if the same was created by employing forgery. In fact, on this point it has been categorically stated in paragraph No. 23 of the police report that it was not possible to establish as to who had signed the same for M/s Manu Steel (sic). As per the contents of Ex.PW8/N, when the bill/hundi drawn under LC No. 44/48 was purportedly accepted, the same was undated, and it was to mature after 180 days, after accused No. 1 N. Ramakrishnan relinquished his charge as the Chief Manager, Central Bank of India, Janpath branch, New Delhi. PW8 K.C. Jain during his examination has deposed that bill of exchange/hundi Ex.PW8/N was accepted for payment on behalf of M/s Indodan Industries Ltd. as per the resolution passed by the Board of Directors, but he has nowhere deposed as to who had accepted the said bill; and his statement that bill Ex.PW8/N was accepted as per the resolution passed by the Board of Directors of M/s Indodan Industries Ltd. cannot be accepted as true as no such resolution has been produced. PW8 K.C. Jain has further deposed that bill of exchange/hundi Ex.PW8/N was prepared by the office of M/s Money Management Consultants Pvt. Ltd. and was handed over to him by accused Rakesh Vashist for acceptance of payment by M/s Indodan Industries Ltd., but this statement of him is vague and cannot be believed, for he has not deposed as to who in the office of M/s Mani Management Consultants Pvt Ltd. had prepared the same and under what circumstances the same was handed over to him by accused Rakesh Vashist. Here it is noteworthy that M/s Money/Mani Criminal Case No. 01/2023 Page No. 203 of 262 Management Consultants Pvt. Ltd. is not an accused in the present case. PW2 K.C. Jain has also deposed that Ex. PW8/N along with other documents was presented by Money Management Consultants Pvt. Ltd. to Central Bank of India for negotiations for discounting, but there is nothing in Ex.PW8/N to suggest that the same was presented by M/s Mani Management Consultants Pvt. Ltd. to Central Bank of India. In fact the claim of PW8 K.C. Jain that Ex. PW8/N along with other documents was presented by Mani Management Consultants Pvt. Ltd. to Central Bank of India for negotiations cannot be true, because the prosecution's case is that the said bill was discounted by Standard Chartered Bank, Madras, the bankers of M/s Mani Management Consultants Pvt. Ltd. If so was the case, after such discounting there was no occasion that Mani Management Consultants Pvt. Ltd. would present the original of Ex.PW8/N along with other documents to Central Bank of India. In these circumstances it is not proved that the bill/hundi drawn under LC No. 44/48 was forged by any of the accused persons.
163. The next point for determination is: whether M/s Indodan Industries Ltd. submitted the original of Ex.PW8/N to Mani Management Consultants Pvt. Ltd., who after discounting of the same retained Rs.1,32,284/- with it and transferred Rs.37,02,014/- to accused No. 2 M/s Indodan Industries Ltd.?
164. Before deciding the question of discounting of the bill/hundi under LC No. 44/48 it is necessary to determine as to under Criminal Case No. 01/2023 Page No. 204 of 262 what circumstances the said bill fell in the hands of Mani Management Consultants Pvt. Ltd.. As already observed, the original documents pertaining to LC No. 44/48 have not been proved by the prosecution. Only ledger copy of LC No. 44/48 Ex.PW8/L has been proved. The original bill of exchange (hundi) drawn under the said LC No. 44/48 has not been proved, and only a copy of its front portion has been proved as Ex.PW8/N on the basis of the testimony of PW8 K.C. Jain, who did not prepare the same; even during his examination he was not categorical that he accepted the bill, the copy of which Ex.PW8/N. Thus, it remains not proved as to what was written on the reverse side of Ex.PW8/N, and this throws questions: whether the bill was indorsed, if so, who indorsed the bill first in time; and how many times the bill was indorsed and who was the last indorser of the bill. The prosecution has not answered these questions by leading evidence, but it wants this court to believe that the maker of the bill, which was created by forgery, indorsed the bill in favour of M/s Mani Management Consultants Pvt. Ltd. which further indorsed the same in favour of Standard Chartered Bank, Madras and got it discounted.
165. Although indorsement of bill in favour of Mani Management has not been proved, but during cross-examination of PW8 K.C. Jain a document Ex.PW8/DA has been brought on record, which indicates as to how the bill came in possession of M/s Mani Management Consultants Pvt. Ltd.. The said documents reads as follows:
Criminal Case No. 01/2023 Page No. 205 of 262M/s Mani Management Consultants A-3, Gajel, 152, Greams Road, MADRAS-600 006 Kind attn : Mr. S. Anand Dear Sir, As per discussion you held with the undersigned, enclosed herewith please find the following documents :
1. Original LC No. 44/48 dated 25.08.90 for Rs. 41,18,852.40
2. LC Correspondent Bank copy in envelope.
3. Hundi for Rs. 41,18,852.40 duly discharged, signed and accepted for payment on due date alongwith photocopies of bill.
4. Letter from the party authorising you to collect the proceeds.
Please find the above in order and do the needful at your end immediately.
Thanking you, Yours faithfully, For INDODAN INDUSTRIES LTD.
(K.C. JAIN) GENERAL MANAGER (FINANCE) Enc : a/a
166. From a reading of letter Ex.PW8/DA it can be discerned that by way of the said letter it was communicated that the hundi was being sent, but it is not mentioned as to who had drawn the said hundi and who accepted the same for M/s Indodan Industries Ltd. A noteworthy feature of Ex.PW8/DA is that it says that out of the four documents being sent along with the same, one document, mentioned at serial No. 4 was : Letter from the party authorising you to collect the proceeds. The said letter has not been produced during evidence, but a copy of the same has been filed along with the police report as document No. D-134/27. The said document bearing No. D-134/27, Criminal Case No. 01/2023 Page No. 206 of 262 written on plain paper and not the letterhead of Manu Steels, reads as follows:
MANU STEELS
118, Shakti Vihar,
NEW DELHI-110 034
--------------------------------------------------------------------------- MS/BD/90-91 Date : 27.08.90 M/s Mani Management Consultants Private Limited, A-3, Gajel, 152, Greams Road, MADRAS-600 006 Dear Sirs, This has reference to the Bill of Exchange against LC No. 44/48 sent to you for discounting, duly accepted for payment by M/s Indodan Industries Limited, New Delhi for Rs. 41,18,852.40.
You are requested to kindly send the proceeds of the Bill of Exchange favouring M/s Indodan Industries Limited, New Delhi.
Thanking you, Yours faithfully, For MANU STEELS AUTHORISED SIGNATORY
167. In the light of the evidence led by the prosecution it is evident that original of D-134/27 was a forged document, but by way of the said document it was sought to convey to M/s Mani Management Consultants Pvt. Ltd. that M/s Manu Steels had authorised M/s Indodan Industries Ltd. to forward the hundi and to collect the proceeds for it. In the absence of proof of the fact that M/s Mani Management Consultants Pvt. Ltd. knew that the letter was forged, it cannot be ruled out that M/s Mani Management Consultants Criminal Case No. 01/2023 Page No. 207 of 262 Pvt. Ltd. received the hundi in good faith under impression that Manu Steels was acting through the accused No. 2 to avail of its services as a consultant.
168. On the point of discounting of the bill/hundi under LC No. 44/48, and distribution of its proceeds the prosecution relies on the testimonies of PW34 T.R. Mehta and PW8 K.C. Jain.
169. PW34 T.R. Mehta by identifying the signatures of a Satyanarayanan, Senior Manager on Credit Bill Negotiation (CBN) Ex.PW34/1, letter Ex.PW34/2 and CBN Ex.PW34/3 sought to prove the said documents. As per the contents of Ex.PW34/1, by way of the said communication dated 28.8.1990 addressed by Standard Chartered Bank, Madras branch to Central Bank of India, Janpath branch, New Delhi, under copy to Central Bank of India, Addison Buildings branch, Madras in respect of LC No. 44/48, having reference to CBN/171/3609 it was communicated that they (Standard Chartered Bank) had claimed reimbursement from Anna Salai branch of Central Bank of India as per terms of elcee. It is noteworthy that in Ex.PW34/1 Manu Steels and Indodan Industries Ltd have been named, but M/s Mani Management Consultants Pvt. Ltd. has not been mentioned at any place. Further, as per Ex.PW34/2, by way of the said letter dated 26.9.1990 addressed by Bills Manager of Standard Chartered Bank, Madras branch to the Manager, Central Bank of India, Janpath branch, New Delhi, the Standard Chartered bank sought confirmation to return their duplicate copy of schedule already forwarded to Central Bank of Criminal Case No. 01/2023 Page No. 208 of 262 India along with the documents that the bill bearing CBN No. 171/3609 with due date 21.02.1991 against LC No. 44/48 for Rs.41,18,852.40 would be paid on due date. In Ex.PW34/2 also Manu Steels and Indodan Industries Ltd have been named, but M/s Mani Management Consultants Pvt. Ltd. has not been mentioned at any place. As per the contents of Ex.PW34/3, by way of the said reminder dated 26.9.1990 addressed by Standard Chartered Bank, Madras branch to the Manager, Central Bank of India, Janpath branch, New Delhi, under copy to the Manager, Central Bank of India, Addison Buildings branch, Madras in respect of LC No. 44/48, having reference to CBN/171/3609 it was communicated that they (Standard Chartered Bank) had claimed reimbursement from Anna Salai branch of Central Bank of India as per terms of elcee. In Ex.PW34/3 also Manu Steels and Indodan Industries Ltd have been named, but M/s Mani Management Consultants Pvt. Ltd. has not been mentioned at any place.
170. As per paragraph No. 23 of the police report, the vouchers bore initials of T.R. Mehta and those of Satyanarayanan, but from the testimony of PW34 T.R. Mehta it is evident that he did not identify his initials on any of the documents tendered during his examination. During examination of PW34 T.R. Mehta while documents Ex.PW34/1, Ex.PW34/2 and Ex.PW34/3 were being tendered in evidence, objection was taken on behalf of the accused persons regarding the mode of proof. Although during his cross-examination Criminal Case No. 01/2023 Page No. 209 of 262 by counsel for the accused Nos. 2, 4 and 5 PW34 T.R. Mehta stated that when his statement was recorded by CBI, C. Satyanarayanan was not working with Standard Chartered Bank, but from his testimony and the other evidence led by the prosecution it does not appear that Mr. Satyanarayanan, Senior Manager, who apparently prepared documents Ex.PW34/1, Ex.PW34/2 and Ex.PW34/3 had died or otherwise not available to prove the contents of those documents and the circumstances under which they were prepared. In these circumstances merely on the basis of the opinion of PW34 T.R. Mehta in respect of the signatures of Satyanarayanan, Senior Manager under section 47 of Act 1 of 1872 it cannot be held that the contents of Ex.PW34/1, Ex.PW34/2 and Ex.PW34/3 and the facts contained therein have been duly proved. Further, his testimony that the Standard Chartered bank had realised the payment of bill No. 44/98 dated 25.8.1990 for Rs.41,18,852/- from Central Bank of India, Janpath branch is false, for it is the case of the prosecution, and there are evidence to support it, that the payment under the LC No. 44/48 was made by Indodan Industries Ltd. and not by Central Bank of India.
171. At the strength of letter Ex.PW8/M it is asserted by PW8 K.C. Jain that bills worth Rs. 41,18,852.40 as per hundi Ex.PW8/N were got discounted through Money Management Consultants Pvt. Ltd., Madras and the payment totaling to Rs.37,02,014.00 by DD Nos. 019601 to 019605, all dated 29.8.1990 was received.
172. PW8 K.C. Jain has also deposed that the voucher Criminal Case No. 01/2023 Page No. 210 of 262 No.10/37 Ex.PW8/P dated 15.10.90 of M/s Indodan Industries Ltd. for Rs.41,18,852.00 (D-662/1) was duly signed by Sh. N.C. Baheti at point A. N.C. Baheti has been examined as PW22 in this case, but surprisingly during his examination Ex.PW8/P was not brought to his notice and he did not say a word about the said voucher.
173. Although no account book of M/s Indodan Industries Ltd. maintained by it with Central Bank of India, Janpath branch, New Delhi or any other account book has been proved to support the claim of PW8 K.C. Jain in respect of Ex.PW8/M and Ex.PW8/P, but from the contents of those two documents it is proved that on 29.8.1990 the bill of exchange drawn under LC No. 44/48 was got discounted through M/s Mani Management Consultants Pvt. Ltd. and a sum of Rs.37,02,014.00 was received by M/s Indodan Industries Ltd. through five DDs. However, there is no evidence to prove that out of the proceeds received by M/s Mani Management Consultants Pvt. Ltd. it retained Rs.1,32,284/- with it.
174. The next point for determination is: whether the Central bank of India, Janpath branch, New Delhi suffered any wrongful loss, or M/s Indodan Industries Ltd. received any wrongful gain under the bill drawn in respect of LC No. 44/48?
175. From the testimonies of PW9 Sneh Lata Tandon and PW24 Vivek Sheel Nayyar and documents Ex.PW9/H, Ex.PW9/J and Ex.PW9/K it has been proved that in the wake of opening of LC No. 44/48, and before any payment by Central Bank of India upon the bill Criminal Case No. 01/2023 Page No. 211 of 262 of exchange drawn under the said LC PW24 Vivek Sheel Nayyar, by writing letter Ex.PW9/H registered his protest with Central Bank of India and others. From the contents of the police report it is evident that as a result of PW24 Vivek Sheel Nayyar writing letter Ex.PW9/H , Central Bank of India did not make any payment in respect of LC No. 44/48, for it has been categorically stated in paragraph No. 23 of the police report that "Eventhough the LC was opened by the Central bank of India, Janpath Branch, Delhi, yet it did not make payment for the same". In these circumstances it is found that no wrongful loss was caused to Central Bank of India, Janpath branch, New Delhi and no wrongful gain was effected to accused M/s Indodan Industries Ltd. or M/s Mani Management Consultants Pvt. Ltd. under LC No. 44/48 qua Central Bank of India.
176. The next point for determination is: whether after the month of July, 1989 accused N. Ramaksishnan (A-1), former Chief Manager of Central Bank of India, M/s Indodan Industries Ltd. (A-2), Rakesh Vashist (A-4) as Director of M/s Indodan Industries Ltd., Mahesh Gupta (A-5) as Commercial Manager of Foremost Industries Ltd. (an associate company of M/s Indodan Industries Ltd.), C. Subramaniam (A-6), former Director of Mani Management Consultants Pvt. Ltd., N. Muralidharan (A-7), former Director of Mani Management Consultants Pvt. Ltd. and S. Anand (A-8), Director of Mani Management Consultants Pvt. Ltd. entered into the conspiracy as charged against them?
Criminal Case No. 01/2023 Page No. 212 of 262177. As per the charge against the accused persons, in and after July 1989 they were party to a criminal conspiracy amongst themselves and deceased accused H.S. Jalan and K.C. Jain, the approver and PW8, the common object of which was to commit offences, namely, accused No. 1 N. Ramakrishnan while working as Chief Manager, Central Bank of India would abuse his position as such public servant and dishonestly and fraudulently misappropriate and/or allow M/s Mani Management Consultants Pvt. Ltd. to misappropriate money of the Central Bank of India Janpath under his control and dominion and obtain LCs (a valuable thing) for accused No. 2 M/s Indodan Industries Ltd. and to this end abet forgery of bills of exchange (hundis) and use such bills as genuine and at the end receive money so misappropriated (stolen) part in the account of Indodan Industries Ltd. (major share) and part in the account of Mani Management Consultants Pvt. Ltd. (as commission) with aid of its directors, knowing it be stolen property.
178. Section 120B of the Indian Penal Code, which prescribes punishment for criminal conspiracy, reads as follows:
120B. Punishment of criminal conspiracy.--(1) Whoever is a party to a criminal conspiracy to commit an offence punishable with death, imprisonment for life or rigorous imprisonment for a term of two years or upwards, shall, where no express provision is made in this Code for the punishment of such a conspiracy, be punished in the same manner as if he had abetted such offence.
(2) Whoever is a party to a criminal conspiracy other than a criminal conspiracy to commit an offence punishable as aforesaid shall be punished with imprisonment of either description for a term not Criminal Case No. 01/2023 Page No. 213 of 262 exceeding six months, or with fine or with both.
179. As per section 120A of the Indian Penal Code, which defines criminal conspiracy, when two or more persons agree to do, or cause to be done,-- (1) an illegal act, or (2) an act which is not illegal by illegal means, such an agreement is designated a criminal conspiracy. Thus, the essence of a criminal conspiracy is an agreement between or among the offenders.
180. As already observed, the prosecution has not proved the constitution of M/s Indodan Industries Ltd. and M/s Mani Management Consultants Pvt. Ltd. by calling any record from the office of Registrar of Companies. No documentary evidence has been adduced by the prosecution to show that H.S. Jalan and Rakesh Vashist were the directors in M/s Indodan Industries Ltd. and C. Subramaniam, N. Muralidharan and S. Anand were the directors in M/s Mani Management Consultants Pvt. Ltd. No record has been called by the prosecution to show as to who were the directors in Foremost Industries (India) Ltd, and to prove that it was an associate company of accused M/s Indodan Industries Ltd. with common directors.
181. The prosecution has sought to prove the conspiracy by leading circumstantial evidence, or by merely leveling allegations against the accused persons. No credible evidence has been adduced by the prosecution to prove that at the relevant time the financial condition of M/s Indodan Industries Ltd. was not good and due to Criminal Case No. 01/2023 Page No. 214 of 262 overdrawing from its Cash Credit and other accounts, the bank was reluctant to give credit to the accused No. 2 and stopped passing its cheques. On the contrary, as found above, in the light of the testimony of PW27 Behram Pestonji Jamadar and PW28 Radhey Raman Sharma and documents Ex.PW27/D1 and Ex.PW28/1 it has been proved that the bank had highly recommended to enhance the limits of various credit and other facilities to the accused No. 2, and on 27.8.1989 such limits were enhanced and health code of the account of the accused No. 2 was also retained as 1.
182. According to the prosecution, the conspiracy between the accused persons had commenced with the discussions between H.S. Jalan and S. Anand before passing of resolution dated 20.7.1989, and the foundation of this allegation is the statement Ex.PW8/B, Ex.PW8/C and Ex.PW8/D of PW8 K.C. Jain, made before PW39 Deepak Garg under section 164 of Cr.P.C. However, as found earlier, and can be discerned from the testimony of PW8 K.C. Jain and his statement Ex.PW8/B, Ex.PW8/C and Ex.PW8/D made under section 164 of Cr.P.C., although during investigation K.C. Jain stated that H.S. Jalan called him to his chamber and informed that Mr. S. Anand had agreed to provide finance of around one crore rupees to Indodan Industries under hire-purchase agreement for existing plant machinery already purchased, but there is nothing in his testimony, and otherwise no evidence has been led by the prosecution to show, that any meeting or discussions took place between H.S. Jalan and S. Anand in person Criminal Case No. 01/2023 Page No. 215 of 262 or otherwise.
183. Further, to prove the conspiracy PW8 K.C. Jain has deposed that the draft agreement dated 17.7.1989 was supplied to him by accused No. 4 Rakesh Vashist. However, on this aspect in his statements Ex.PW8/B, Ex.PW8/C and Ex.PW8/D he kept silent and merely said that draft agreement of hire purchase as received from Mani Management Consultants Pvt. Ltd. was submitted, without indicating that such draft was given to him by Rakesh Vashist. Therefore, in the light of statements Ex.PW8/B, Ex.PW8/C and Ex.PW8/D, testimony of PW8 K.C. Jain on the point that the draft agreement was supplied to him by accused No. 4 Rakesh Vashist cannot be relied upon.
184. According to the prosecution, passing of resolution dated 20.7.1989 by the Board of Directors of the accused No. 2 was a step towards achieving the object of the conspiracy. In this connection, it can be observed that a company is a legal person which acts through humans on the basis of decisions taken by its Board of Directors, therefore, passing of a resolution by the Board of Directors of the accused No. 2 cannot be treated as illegal or unlawful act per se. Resolution Ex.PW8/K2 authorised accused No. 2 M/s Indodan Industries Ltd. to enter into an agreement of hire-purchase with Mani Management Consultants Pvt. Ltd. and further authorised K.C. Jain to do necessary acts in respect of the same. In this connection, although the prosecution has succeeded to prove that some agreement was Criminal Case No. 01/2023 Page No. 216 of 262 executed on behalf of Mani Management Consultants Pvt. Ltd. but it has failed to prove as to who executed the same on behalf of Mani Management Consultants Pvt. Ltd. and what were its terms and conditions, for the agreement dated 17.7.1989 has not been proved as per law.
185. The prosecution has proved that before 22.8.1989, on two occasions, PW8 K.C. Jain and PW30 Pankaj Pahwa approached the accused No. 1 with application to issue a revolving LC in favour of Mani Management Consultants Pvt. Ltd. and he refused to do so. In the words of PW8 K.C. Jain, subsequently on the intervention of Zonal and Head office of Central Bank of India the application was entertained and allowed. Accused No. 1 N. Ramakrishnan, as PW10, during his cross-examination admitted that initially he refused to open the letter of credit in favour of M/s Mani Management Consultants Pvt. Ltd. but subsequently after instructions of S. Gopalakrishnan, the Zonal Manager he opened the LC. During his cross-examination PW10 N. Ramakrishnan deposed that initially he got the instructions telephonically, and then he wrote him (S. Gopalakrishnan) for confirmation, pursuant to which he received instructions in writing. During his cross-examination PW10 N. Ramakrishnan explained that to show such written instructions he had summoned the concerned file during his evidence, which was found missing as per the intimation. It is a matter of record that in his defence accused No. 1 N. Ramakrishnan called several documents through the process of the Criminal Case No. 01/2023 Page No. 217 of 262 court, and neither of the document so called was produced by DW5 Rakesh Kumar, DW6 B. Ashok, DW7 B.S. Shekhawat, DW8 Gurinder Singh Bedi and DW9 Madan Lal on the grounds that either those documents were weeded out or were not traceable, and thus adversely affecting his right to defence. To show that the version of the accused No. 1 that he opened the LC without obtaining the sanction of the higher authorities of the bank strong reliance has been placed by the prosecution on Ex.PW9/G which was brought on the record during the testimony of PW9 Sneh Lata Tandon. According to the prosecution by way of letter Ex.PW9/G the accused No. 1 admitted that he opened the LCs without taking any sanction from higher authorities. This court do not see any force in this contention. The contents of Ex.PW9/G instead of supporting the prosecution's case supports the version of the accused No. 1, who by letter Ex.PW9/G wrote back to S. Gopalakrishnan, Deputy General Manager, Central Bank of India, Zonal Office, Delhi that he was always under impression that the letters of credits opened were within his delegated powers, and he was opening those letters presuming that it was within sanctioned limits. Further, the version of the accused No. 1 that he opened the revolving LC No. 43/48 only after taking necessary sanction from higher authorities appears plausible, for had he had any intention to abuse his position as public servant he would not have refused to open the LC on two occasions. In the light of the testimonies of PW8 K.C. Jain, PW30 Pankaj Pahwa and DW10 N. Ramakrishnan it is highly probable that Criminal Case No. 01/2023 Page No. 218 of 262 after refusal to open the LC, and before 22.8.1989 he got permission or instructions from his higher office which persuaded him to change his mind and to open the LC. On the point whether after the accused No. 1 refused to open the revolving LC any meeting in that connection took place between him and accused H.S. Jalan or Rakesh Vashist, no clear evidence has come on the record. Even PW8 K.C. Jain, who was granted pardon and had knowledge about the affairs of the accused No. 2 did not state categorically that any such meeting took place, and stated that, "thereafter, accused Rakesh Inder Kumar Vashist perhaps took up the matter himself alongwith accused H.S Jalan for further follow up". Further, on this point the accused No. 1 as DW10 denied that he had had meeting with accused Rakesh Vashist with regard to opening of LC, and added that he had had meeting with accused Rakesh Vashist in connection with improvement of business with the bank.
186. There is also no evidence on record that before 22.8.1989 any meeting or any communication took place between the accused No. 1 and any of the directors of Mani Management Consultants Pvt. Ltd., including accused C. Subramaniam, N. Muralidharan and S. Anand.
187. It is submitted on behalf of prosecution that on 22.8.1989 the accused No. 1 issued the LC at the instance of the accused No. 2 in favour of Mani Management Consultants Pvt. Ltd. without having the agreement dated 17.7.1989 produced before him, and ignoring the Criminal Case No. 01/2023 Page No. 219 of 262 report after analysis of PW12 Kamal Lal Garg on the reverse side of Ex.PW8/E to the effect that that against the LC limit of Rs.30 lakh there was exposure of Rs.89.38 lakh. As already found by this court, there are circumstantial evidence that before issuance of LC the accused No. 1 had a copy of the agreement dated 17.7.1989 produced before him. Further, from a perusal of Ex.PW27/D1 and Ex.PW28/1 it has emerged that on 10.7.1989 the accused No. 2 applied for enhancement of credit and other facilities, and the three higher official of the bank, ignoring several allegations of misconduct against the accused No. 1 highly recommended to enhance the limits of the accused No. 1 in the manner as mentioned in the initial paragraphs of Ex.PW28/1. In these circumstances when the proposal for enhancement of the limits of the accused No. 2 was pending before the head office of the bank, which was ultimately allowed, it is not unusual that the accused No. 1 ignored the objection of his subordinate PW12 Kamal Lal Garg regarding the alleged overdrawing by the accused No.
2. Further, on this point this was the claim of the accused No. 1 that in the matter of LC, the limit of LC and the limit of LG (Letter of Guarantee) both are taken into account. If that was the case, the decision of the accused No. 1 cannot be seen as induced by any abuse of power.
188. It is argued by the learned Public Prosecutor that the accused No. 1 abused his position in opening LC No. 43/48 because he opened revolving LC without seeking any security from the accused Criminal Case No. 01/2023 Page No. 220 of 262 No. 2. Here it is noteworthy that ex facie the LC was for Rs.3,63,195/-, and not for Rs.1,30,75,020/-. It was an revolving LC which was to be revolved on 25th of September, 1989 and subsequently on 25th of each month for 35 times. It was to be reinstated for Rs.3,63,195/- each month. While requesting for opening the LC, the accused No. 2 through PW8 K.C. Jain had promised to give 100% margin money in the sum of Rs.3,63,195/- and further authorised the bank to recover the value of LC, that is Rs.3,63,195/- seven days in advance to ensure timely availability of funds for reimbursing to correspondent for the LC claim. The correspondent in respect of LC No. 43/48 was Central Bank of India, Fort, Bombay. At the time of opening the LC, Central Bank of India could not have insisted on the accused No. 2 for paying Rs.1,30,75,020/- as margin money. Further, as reflected from Ex.PW27/D1 and Ex.PW9/C the bank had adequate security at its disposal, recourse to which could be taken by it in case of any default by the accused No. 2. In these circumstances, it cannot be said that the accused No. 1 was having some criminal design or he was part of such design when he opened LC No. 43/48 in the form in which it was opened.
189. To fasten the liability on the accused persons another circumstance relied upon by the prosecution is that immediately after issuance of LC NO. 43/48 Mani Management Consultants Pvt Ltd. drew 36 bills/hundis under the said LC which were accepted on behalf of the accused No. 2 on the same day in one go. It is noteworthy that in Criminal Case No. 01/2023 Page No. 221 of 262 drawing and accepting the alleged bills/hundis the accused No. 1 had no role to play; and after opening of LC No. 43/48, as per the terms of the said LC it was axiomatic. During the trial 36 bills have not been produced and proved. Only 33 bills, namely, Ex.PW8/J and Ex.PW8/J1 to Ex.PW32 have been proved in the manner that during his examination PW8 K.C. Jain identified his signatures as acceptor on Ex.PW8/J and Ex.PW8/J1 to Ex.PW32., but he has nowhere deposed that 36 bills were accepted by him. Further, the prosecution has failed to prove that in respect of LC No. 43/48 Mani Management Consultants Pvt. Ltd., after discounting of bills received Rs.1,02,34,929/- from Standard Chartered Bank and out of the said money transferred Rs.1,00,46,222/- to the accused No. 2 by way of four cheques. To prove the fact that under LC No. 43/48 after discounting of bills Rs.1,00,46,222/- was transferred to account of the accused No. 1. no book of account pertaining to the account of the accused No. 2 maintained with Central Bank of India, Janpath branch, New Delhi has been proved by the prosecution. The prosecution has also not produced any other account book to show that under the LC No. 43/48, on the basis of discounting of 36 bills Rs.1,02,34,929/- was transferred to Mani Management Consultants Pvt. Ltd. Although the prosecution has proved only 33 bills and has failed to prove that after discounting of bills Rs.1,00,46,222/- was transferred to the account of accused No. 2 M/s Indodan Industries Ltd., but the question may arise:
even if such money was received, can it be termed as money in respect Criminal Case No. 01/2023 Page No. 222 of 262 of which criminal breach of trust had been committed, or the same was criminally misappropriated, and thus, was stolen property? In this connection, sections 409, 410 and 411 of the Indian Penal Code, and relevant parts of sections 403 and 405 of the said Code read as follows:
403. Dishonest misappropriation of property.--Whoever dishonestly misappropriates or converts to his own use any movable property, shall be punished with imprisonment of either description for a term which may extend to two years, or with fine, or with both.
Explanation 1.--A dishonest misappropriation for a time only is a misappropriation with the meaning of this section. Explanation 2.--A person who finds property not in the possession of any other person, and takes such property for the purpose of protecting it for, or of restoring it to, the owner, does not take or misappropriate it dishonestly, and is not guilty of an offence; but he is guilty of the offence above defined, if he appropriates it to his own use, when he knows or has the means of discovering the owner, or before he has used reasonable means to discover and give notice to the owner and has kept the property a reasonable time to enable the owner to claim it.
What are reasonable means or what is a reasonable time in such a case, is a question of fact.
It is not necessary that the finder should know who is the owner of the property, or that any particular person is the owner of it; it is sufficient if, at the time of appropriating it, he does not believe it to be his own property, or in good faith believe that the real owner cannot be found.
* * *
405. Criminal breach of trust.--Whoever, being in any manner entrusted with property, or with any dominion over property, dishonestly misappropriates or converts to his own use that property, or dishonestly uses or disposes of that property in violation of any direction of law prescribing the mode in which such trust is to be discharged, or of any legal contract, express or implied, which he has made touching the discharge of such trust, or wilfully suffers any other person so to do, commits "criminal breach of trust".
* * *
409. Criminal breach of trust by public servant, or by banker, merchant or agent.--Whoever, being in any manner entrusted with Criminal Case No. 01/2023 Page No. 223 of 262 property, or with any dominion over property in his capacity of a public servant or in the way of his business as a banker, merchant, factor, broker, attorney or agent, commits criminal breach of trust in respect of that property, shall be punished with imprisonment for life, or with imprisonment of either description for a term which may extend to ten years, and shall also be liable to fine.
410. Stolen property.--Property, the possession whereof has been transferred by theft, or by extortion, or by robbery, and property which has been criminally misappropriated or in respect of which criminal breach of trust has been committed, is designated as "stolen property", whether the transfer has been made, or the misappropriation or breach of trust has been committed, within or without India. But, if such property subsequently comes into the possession of a person legally entitled to the possession thereof, it then ceases to be stolen property.
411. Dishonestly receiving stolen property.--Whoever dishonestly receives or retains any stolen property, knowing or having reason to believe the same to be stolen property, shall be punished with imprisonment of either description for a term which may extend to three years, or with fine, or with both.
As per the prosecution's case, and the charge framed against the accused persons, by opening LC No. 43/48 the accused No. 1 allowed the misappropriation of Rs.1,30,75,020/- (36 x 3,63,195/-) by M/s Mani Management Consultants Pvt. Ltd. under his control/dominion as public servant; and that after discounting of 36 usance drafts/bills/hundis by Standard Chartered Bank, Bombay on 29.8.1989 M/s Mani Management Consultants Pvt. Ltd. received an amount of Rs.1,02,34,929/- out of which it had transferred Rs.1,00,46,222/- to M/s Indodan Industries Ltd., and thus, M/s Indodan Industries Ltd. had received stolen property, that is Rs.1,00,46,222/- and accused C. Subramaniam, N. Muralidharan and S. Anand had aided M/s Mani Management Consultants Pvt. Ltd. in fraudulently and dishonestly Criminal Case No. 01/2023 Page No. 224 of 262 retaining Rs.1,88,707/- (Rs.1,02,34,929 - Rs.1,00,46,222) knowing it to be stolen property.
190. It may be observed at the cost of repetition that as per the police report, the events pertaining to LC No. 43/48 took place in the following manner: that on 22.8.1989 at the request of the accused No. 2, accused No. 1 N. Ramakrishnan, the Chief Manager, Central Bank of India, Janpath branch, New Delhi opened irrevocable LC with unrestricted negotiations in favour of M/s Mani Management Consultants Pvt. Ltd.; that on 23.8.1989 M/s Mani Management Consultants Pvt. Ltd. had drawn 36 bills of exchange/hundis, each with maturity date at the gap of one month on M/s Indodan Industries Ltd. payable to itself (M/s Mani Management Consultants Pvt. Ltd.); that on 23.8.1989 PW8 K.C. Jain accepted the said 36 bills/hundis and delivered to M/s Mani Management Consultants Pvt. Ltd.; that on 25.8.1989 M/s Mani Management Consultants Pvt. Ltd. approached Standard Chartered Bank, Bombay for discounting of the said 36 bills/hundis; that on 29.8.1989, after discounting of 36 bills/hundis M/s Mani Management Consultants Pvt. Ltd. received Rs.1,02,34,929/- in its account from Standard Chartered Bank, Bombay, out of which, by way of four cheques issued by M/s Mani Management Consultants Pvt. Ltd. in favour of M/s Indodan Industries Ltd. Rs.1,00,46,222/ were transferred to M/s Indodan Industries Ltd. which was retained by it as stolen property; and that subsequently, accused No. 1 allowed the misappropriation of Rs.1,30,75,020/- (36 x Criminal Case No. 01/2023 Page No. 225 of 262 3,63,195/-) by M/s Mani Management Consultants Pvt. Ltd.
191. There is no evidence that as soon as LC No. 43/48 was opened on 22.8.1989 any sum of money, much less the sum of Rs.1,30,75,020/-, was appropriated towards it. From a perusal of Ex.PW9/L it is evident that the payment against the usance drafts/bills/hundis, drawn under LC No. 43/48 always subjected to submission of proper documents by the beneficiary, which included indorsee, under the said LC,.
192. It is a matter of record that on 28.11.1990 the accused No. 1 N. Ramakrishnan, after his transfer, relinquished charge as the Chief Manager, and thus, it cannot be said that even after 28.11.1990 he had any control/dominion on the funds of Central Bank of India, Janpath branch, Delhi.
193. Once LC No. 43/48 was opened on 22.8.1989, in the absence of any legal impediment it was lawful for M/s Mani Management Consultants Pvt. Ltd., the beneficiary under the LC, to draw the usance drafts (hundis) as per the terms of LC. And once the bills/hundis were drawn and produced before the accused No. 2 for acceptance, subject to the terms of LC No. 43/48 there was nothing in violation of Act 26 of 1881 or any other law if such bills were accepted by the accused No. 2. And since the negotiation under LC No. 43/48 was unrestricted, therefore, there was no illegality on the part of payee/indorser if the bills/hundis were discounted as per law because discounting of bills by banks in India is not illegal and it is part of Criminal Case No. 01/2023 Page No. 226 of 262 their ordinary business. Once the bills were discounted and the money was received by the payee/indorser (Mani Management Consultants Pvt. Ltd.) from bank (Standard Chartered Bank) in whose favour the usance drafts were negotiated, then it cannot be said that the money received was stolen property, for the money lawfully belonged to the indorser who got discounted the bill through the bank to which the bills were last negotiated.
194. Under LC No. 43/48, as per the prosecution's case, the first usance draft/bill/hundi was to mature on 25.9.1989, and thus, before the said date payee M/s Mani Management Consultants Pvt. Ltd. or its indorsee could not have claimed, and the Central Bank of India itself or its agent was not under any obligation to make, any payment on any of the bills/hundis, including Ex.PW8/J and Ex.PW8/J1 to Ex.PW8/J32. If the money was to be paid as an obligation under Act 26 of 1881 and under the provisions of the Uniform Customs & Practice for Documentary Credit on or after 25.9.1989 on the bills as per their tenor, then, in the opinion of the court, it can not be said that the money was misappropriated with the aid of the accused No. 1 by the accused No. 2 and M/s Mani Management Consultants Pvt. Ltd. on or before 29.8.1989 as the prosecution claims. Further, after discounting of the bills on 29.8.1989, although such discounting has not been proved, Standard Chartered Bank, Bombay had become the holder in due course of the bills/hundis for consideration, and therefore, as an obligation under the Criminal Case No. 01/2023 Page No. 227 of 262 Indian Contract Act, 1872 (Act 9 of 1872) and Act 26 of 1881, and under the provisions of the Uniform Customs & Practice for Documentary Credit, on and after 25.9.1989 till payment on the last draft/bill/hundi, accepted by PW8 K.C. Jain for the accused No. 2 was made, Central bank of India was liable to pay to Standard Chartered bank, Bombay on the usance drafts. The Standard Chartered Bank, Bombay was entitled to such payments in its own right, and not for and on behalf of M/s Mani Management Consultants Pvt. Ltd. Thus, it cannot be said that the accused No. 1 allowed the misappropriation of Rs.1,30,75,020/- (36 x 3,63,195/-) by M/s Mani Management Consultants Pvt. Ltd. under his control/dominion as public servant, or on 29.8.1989, after discounting of the bills by Standard Chartered Bank, Bombay, the money, if any, received by M/s Mani Management Consultants Pvt. Ltd. and M/s Indodan Industries Ltd. was stolen property taken by way of criminal misappropriation or breach of trust.
195. The result of above discussion in respect of the transaction pertaining to LC No. 43/48 is as follows: (1) the prosecution has failed to prove that in the months of July-August, 1989 the financial condition of accused No. 2 M/s Indodan Industries Ltd. was bad to the extent that the Central Bank of India was not inclined to give any credit or other facility to it; (2) the prosecution has failed to prove that to defraud the bank or to misappropriate its money any meeting took place between H.S. Jalan and S. Anand, or Rakesh Vashist and N. Ramakrishnan, or N. Ramakrishnan and H.S. Jalan; (3) the Criminal Case No. 01/2023 Page No. 228 of 262 prosecution has failed to prove that resolution Ex.PW8/K2 was passed by the Board of Directors of M/s Indodan Industries Ltd. after any agreement between S. Anand and H.S. Jalan; (4) the prosecution has failed to prove that after rejection of the application for issuing LC by N. Ramakrishnan any meeting took place between N. Ramakrishnan and H.S. Jalan and Rakesh Vashist on the said subject; (5) the prosecution has failed to prove that the agreement dated 17.7.1989 was delivered to K.C. Jain by accused Rakesh Vashist; (5) the prosecution has failed to prove that LC was opened by N. Ramakrishnan without production of copy of agreement dated 17.7.1989 before him; (6) the prosecution has failed to prove that analysis report on the reverse side of application Ex.PW8/E was any impediment as per the rules of the bank in opening the LC in favour of Mani Management Consultants Pvt. Ltd.; (7) the prosecution has failed to prove that after discounting of bills, a sum of Rs.1,00,46,222/- was transferred to the account of M/s Indodan Industries Ltd. on 29.8.1989, and even if it was so the said money could be treated as stolen property in the hands of Mani Management Consultants Pvt. Ltd. or M/s Indodan Industries Ltd. which was taken from the possession of Central Bank of India by criminal breach of trust with the aid of accused N. Ramakrishnan; and (8) the prosecution has failed to prove that payment made under the bills Ex.PW8/J and Ex.PW8/J1 to Ex.PW8/J32 drawn under LC Ex.PW9/L remained unpaid by the accused No. 2. In these circumstances, it is not proved that after the month of July, 1989 A-1, Criminal Case No. 01/2023 Page No. 229 of 262 A-2, A-4, A-5, A-6, A-7 and A-8 entered into the criminal conspiracy regarding the transaction under LC No. 43/48.
196. The next point for determination is: whether the accused persons entered into any criminal conspiracy in respect of LC No. 44/21 opened at the instance of M/s Indodan Industries Ltd. in favour of M/s Deepak Dairy?
197. In the matter of LC No. 44/21 opened in favour of M/s Deepak Dairy no evidence has been led by the prosecution to prove that in respect of the said LC any meeting took place between accused N. Ramakrishnan and accused Rakesh Vashist or H.S. Jalan. It is also not proved that in respect of the said LC any meeting took place between accused N. Ramakrishnan and any of the directors of M/s Mani Management Consultants Pvt. Ltd. From the evidence led by the prosecution it has been proved that application for opening of LC was made by PW8 K.C. Jain in pursuance of resolution Ex.PW8/K4 passed by the Board of Directors of M/s Indodan Industries Ltd. in its meeting held on 30.3.1990, but M/s Deepak Dairy has not been named in the said resolution, and even otherwise on the basis of the said resolution the conspiracy between the parties cannot be inferred. It is argued for the prosecution that M/s Deepak Dairy was non existent, and the agreement on the basis of which LC was applied to be opened in its favour was forged, which was delivered to PW8 K.C. Jain by accused No. 4 Rakesh Vashist. On this point, as already discussed, the prosecution has not examined two crucial witnesses, namely, Manoj Criminal Case No. 01/2023 Page No. 230 of 262 Kumar Goel and N. Menon, who allegedly signed the agreement produced before the bank for opening LC No. 44/21. Further, in proof of the fact that the said agreement was delivered by accused No. 4 Rakesh Vashist to PW8 K.C. Jain, the prosecution relies on the sole testimony of PW8 K.C. Jain, who, just like PW25 Satya Sen and PW26 Vijay Kumar, in the light of the law laid down by the Hon'ble Supreme Court in Rai Sandeep alias Deepu v. State (NCT of Delhi), (2012) 8 SCC 21 cannot treated as witness of sterling quality; and his testimony on this point, in the absence of corroborative evidence, cannot be relied upon. To prove that M/s Deepak Dairy was fictitious and did not exist at Gali Bajrang Bali, Chowri Bazar, Delhi the prosecution has has relied upon the testimonies of PW1 Raj Kumar Jain, PW2 B.R. Kakkar, PW3 Akhilesh Gupta, PW5 Satya Narain and PW6 Hitesh Chander Sharma, but on the basis of their testimonies it cannot be taken as proved that M/s Deepak Dairy did not exist, for from a perusal of the police report it has emerged that PW33 Bhupinder Kumar was investigating M/s Deepak Diary and not M/s Deepak Dairy, at Gali Bajrang Wali. The prosecution has also failed to prove by calling Manoj Kumar Goel, who allegedly signed bills Ex.PW8/K7(1) to Ex.PW8/K15 as their maker and indorser that he put his signatures on bills Ex.PW8/K7(1) to Ex.PW8/K15 as Raj Kumar, and thus, the prosecution has failed to prove that the LC was got opened in the name of M/s Deepak Dairy on the basis of forged agreement or that the bills/hundis under the said LCs were forged Criminal Case No. 01/2023 Page No. 231 of 262 which were drawn and indorsed in the name of fictitious person.
198. In connection with the LC No. 44/21 in favour of M/s Deepak Dairy it is argued on behalf of the prosecution that accused N. Ramakrishnan, who was part of the criminal conspiracy did not take any margin money or other security and opened the LC in violation of the rules and instructions passed by the head office of the bank. As already observed, no rule, regulation etc. passed by Central Bank of India or Reserve Bank of India has been brought to the notice of the court to show that the accused No. 1 as Chief Manager of the branch was not competent to open the revolving LC. On the other hand a perusal of Ex.PW9/G shows that such LC could be opened. In so far as opening of such LC in the face of exposure of Rs.1,62,91,814.32/- and without margin money is concerned, as per the writing in green colour on the reverse of Ex.PW8/K7(1) the exposure was to the tune of 141.02 lakh rupees and not Rs.1,62,91,814.32/-. Further, as already observed, in the light of Ex.PW27/D1 and Ex.PW9/C the bank had adequate security against any loss at the hands of accused No. 2 M/s Indodan Industries Ltd. Apart from this, as per Ex.PW9/G accused No. 2 N. Ramakrishnan acted on the premise that the opening of LCs was within the delegated powers conferred upon him, whereas the prosecution has not produced any admissible evidence, except opinions of bank officers which are not admissible, to show that accused No. 2 had no such delegated powers to open LCs. Therefore, no fault can be found on the part of the accused No. 1, who, Criminal Case No. 01/2023 Page No. 232 of 262 apparently, acted within his powers and discretion, and in that matter, in the opinion of the court, even if he exceeded his powers and discretion it cannot be said that he abused his position as the public servant and misconducted.
199. It is argued on behalf of the prosecution that the alleged M/s Deepak Dairy was doing business in Delhi, whereas the accused No. 2 while making application Ex.PW22/2 for opening the LC requested. "on due date, proceeds of draft shall be available with CBI, Addison Building branch, Madras", and thus, it can be inferred that there was conspiracy between the accused No. 2 and the directors of M/s Mani Management Consultants Pvt. Ltd., who were having their offices at Madras. As per the record, M/s Mani Management Consultants Pvt. Ltd. was also having its offices in Bombay. The circumstance that though M/s Deepak Dairy was carrying on business in Delhi, but the accused No. 2 choose Central Bank of India, Addison Buildings branch, Madras for payment may seem something unusual on the part of the accused No. 2, but on the basis of this circumstance, solely or in conjunction with any other, it cannot be inferred that there was any conspiracy between the accused persons.
200. In so far as discounting of the bills under LC No. 44/21 is concerned the prosecution has not proved any account book of the accused No. 2 to show that on or about 21.5.1990 the sum of Rs.1,25,00,000/- was received in the account of M/s Indodan Industries Ltd. after discounting of bills/hundis at the instance of M/s Criminal Case No. 01/2023 Page No. 233 of 262 Mani Management Consultants Pvt. Ltd. As discussed above, from the testimonies of PW13 Hemantha Kumar D and PW15 K.P. Punitha it is not proved that on or about 21.5.1990 by cheque Rs.1,30,21,192/- was transferred to M/s Indodan Milk Products, from which Rs.1,25,000,00/- was transferred by draft to the accused No. 2.
201. In so far as the question of misappropriation of the funds under LC No. 44/21 is concerned, as per the prosecution's case the last six bills/hundis under the said LC were to mature on 23.12.1990, 23.01.1991, 23.02.1991, 23.3.1991, 23.4.1991 and 23.5.1991. It is a matter of record that on 28.11.1990 the accused No. 1 N. Ramakrishnan, after his transfer, relinquished charge as the Chief Manager, and thus, it cannot be said that even after 28.11.1990 he had any control/dominion on the funds of Central Bank of India, Janpath branch, Delhi which were paid in discharge of liability in respect of the said bills/hundis.
202. LC No. 44/21 in favour of M/s Deepak Dairy, the ledger copy of which is Ex.PW8/K6 was opened by the accused No. 1 on 17.5.1990 and, as per its terms and conditions, first bill/hundi under the same was to mature on 23.6.1990, and thus, before the said date payee M/s Deepak Dairy or its indorsee could not have claimed, and the Central Bank of India itself or its agent was not under any obligation to make, any payment on any of the bills/hundis, including Ex.PW8/K7(1) to Ex.PW8/K15. If the money was to be paid as an obligation under Act 26 of 1881 and under the provisions of the Criminal Case No. 01/2023 Page No. 234 of 262 Uniform Customs & Practice for Documentary Credit on or after 23.6.1991 on the bills as per their tenor, then, in the opinion of the court, it can not be said that the money was misappropriated with the aid of the accused No. 1 by the accused No. 2 and M/s Mani Management Consultants Pvt. Ltd. on or about 21.5.1990 as the prosecution claims. Further, if prosecution's case is believed, after discounting of the bills on 21.5.1990 ANZ Grindlays Bank, Madras had become the holder in due course of the bills/hundis for consideration, and therefore, as an obligation under Act 9 of 1872 and Act 26 of 1881, and under the provisions of the Uniform Customs & Practice for Documentary Credit, on and after 23.5.1990 till payment on the last draft/bill/hundi. accepted by PW8 K.C. Jain for the accused No. 2, was made, Central bank of India was liable to pay to ANZ Grindlays Bank, Madras on the usance drafts. The ANZ Grindlays Bank, Madras was entitled to such payments in its own right, and not for and on behalf of M/s Mani Management Consultants Pvt. Ltd. Thus, it cannot be said that the accused No. 1 allowed the misappropriation of Rs.1,44,00,000/- (12 x 12,00,000/-) by M/s Mani Management Consultants Pvt. Ltd. under his control/dominion as public servant, or on 21.5.1990, after discounting of the bills by ANZ Grindlays Bank, Madras, the money received by M/s Mani Management Consultants Pvt. Ltd. and M/s Indodan Industries Ltd. was stolen property taken by way of criminal misappropriation or breach of trust.
Criminal Case No. 01/2023 Page No. 235 of 262203. The result of above discussion in respect of the transaction pertaining to LC No. 44/21 is as follows: (1) the prosecution has failed to prove that the milk supply agreement on the basis of which LC No. 44/21 in favour of M/s Deepak Dairy was applied for was forged document; (2) from the police report it has emerged that the IO of the case was making investigation in respect of M/s Deepak Diary and not M/s Deepak Dairy, and thus from the testimonies of PW1 Raj Kumar Jain, PW2 B.R. Kakkar, PW3 Akhilesh Gupta, PW5 Satya Narain and PW6 Hitesh Chander Sharma it is not proved that M/s Deepak Dairy was fictitious and the agreement for milk supply on the basis of which LC was opened and bills Ex.PW8/K7(1) to Ex.PW8/K15 were drawn and indorsed were forged; (3) the prosecution has failed to prove that resolution Ex.PW8/K2 was passed by the Board of Directors of M/s Indodan Industries Ltd. after any agreement between the directors of M/s Indodan Industries Ltd. and M/s Mani Management Consultants Pvt. Ltd.; (4) the prosecution has failed to prove that the agreement for milk supply and Bills Ex.PW8/K7(1) to Ex.PW8/K15 were prepared by any of the directors of Mani Management Consultants Pvt. Ltd. and were delivered to K.C. Jain by accused Rakesh Vashist; (5) the prosecution has failed to prove the writing in blue colour on the reverse of Ex.PW8/K7; (6) the prosecution has failed to prove that analysis report on the reverse side of application Ex.PW8/K7 was any impediment as per the rules of the bank in opening the LC; (7) the Criminal Case No. 01/2023 Page No. 236 of 262 prosecution has failed to prove that after discounting of bills a sum of Rs.1,25,00,000/- was transferred to the account of M/s Indodan Industries Ltd., and even if it was so the said money could be treated as stolen property in the hands of Mani Management Consultants Pvt. Ltd. or M/s Indodan Industries Ltd. which was taken from the possession of Central Bank of India by criminal breach of trust with the aid of accused N. Ramakrishnan; and (8) the prosecution has failed to prove that payment made under the bills/hundis Ex.PW8/K7(1) to Ex.PW8/K15 drawn under LC Ex.PW8/K6 remained unpaid by the accused No. 2. In these circumstances, it is not proved that after the month of July, 1989 A-1, A-2, A-4, A-5, A-6, A-7 and A-8 entered into the conspiracy regarding the transaction under LC No. 44/21.
204. The next point for determination is: whether the accused persons entered into any criminal conspiracy in respect of LC No. 43/98 opened in favour of M/s Manu Steel?
205. In respect of the three LCs Nos. 43/98, 44/15 and 44/21 got issued by accused No. 2 M/s Indodan Industries Ltd. in the names of M/s Manu Steel and M/s Manu Steels, PW8 K.C. Jain has made false statements from the witness box that the same were got opened on the basis of the resolution passed by the Board of Directors of M/s Indodan Industries Ltd., for no such resolution has been produced and proved. Ex.PW8/K2 and Ex.PW8/K4 do not pertain to LCs opened in favour of M/s Manu Steel and M/s Manu Steels. From the testimony of PW24 Viveksheel Nayyar, who wrote letter Ex.PW9/H to Central Criminal Case No. 01/2023 Page No. 237 of 262 Bank of India and others in respect of LC No. 44/48, the ledger copy of which is Ex.PW8/L, it has been proved that he was one of the partners in Manu Steels. On this point, the court, even in the absence of proof of the partnership deed, believes the testimony PW24 Viveksheel Nayyar, who had no grudge against the accused persons, or any of them, that Manu Steels was a partnership firm comprising of him, his brother and his father. From the evidence led by the prosecution it has been proved that LC No. 43/98 was applied for in the name of M/s Manu Steel on the basis of copies of forged bills in the name of Manu Steels, but the official concerned of the bank, who prepared analysis report, acted negligently and ignored this vital fact. Had the official concerned been vigilant this fact could have been brought to the notice of the accused No. 1. In the light of the testimony of PW25 Satya Sen the prosecution has succeeded in proving that bill Ex.PW8/K27 under LC No. 43/98 was purportedly drawn and indorsed by PW25 Satya Sen by committing forgery, but he is not an accused in this case. Further, it has not been proved by the prosecution that the said PW25 Satya Sen was an employee of M/s Indodan Industries Ltd. During his examination PW25 Satya Sen has named accused Mahesh Gupta as the person who instigated him to put his signatures on Ex.PW8/K27 as proprietor of M/s Manu Steels, but his testimony on this point, in the absence of corroborative evidence and given the fact that he himself committed the offence of forgery, cannot be accepted, and hence it is not proved that accused Mahesh Gupta Criminal Case No. 01/2023 Page No. 238 of 262 abetted PW25 Satya Sen to forge Ex.PW8/K27.
206. PW22 N.C. Baheti, the acceptor of bill/hundi Ex.PW8/K27 during his examination nowhere deposed that Ex.PW8/K27 for acceptance was delivered to him by Rakesh Vashist, therefore, it is not proved that accused Rakesh Vashist had any role in respect of forgery of Ex.PW8/K27.
207. From the contents of Ex.PW8/K27 it is evident that although the said bill/hundi in his fictitious capacity was drawn by PW25 Satya Sen on M/s Indodan Industries Ltd., but the same was not accepted by PW22 N.C. Baheti on behalf of M/s Indodan Industries Ltd. In fact Ex.PW8/K27 was accepted on behalf of non entity INDUSTRIES LTD. In these circumstances, any discounting of Ex.PW8/K27 by Standard Chartered Bank and ultimate payment on the same by Central Bank of India was making of their own negligence and it cannot be said that the accused persons entered any conspiracy to commit offences in respect of LC No. 43/98 and bill of exchange Ex.PW8/K27. In these circumstances, it is not proved that after the month of July, 1989 A-1, A-2, A-4, A-5, A-6, A-7 and A-8 entered into the conspiracy regarding the transaction under LC No. 44/21.
208. The next point for determination is: whether the accused persons entered into any criminal conspiracy in respect of LC No. 44/15 opened in favour of M/s Manu Steels?
209. In so far as role of the accused No. 1 in opening the LC is concerned, no material has been placed before the court to suggest that Criminal Case No. 01/2023 Page No. 239 of 262 he was not competent to open the LC at the instance of the accused No. 2, or in opening LC No. 44/15 he violated any rule or regulation of the bank. From the evidence led by the prosecution it has been proved that the bank even opened LC in respect of advertisement expenditure (see paragraphs No. 10 and 11 of the police report), therefore, it cannot be said that opening of LC No. 44/15, under which, on its face value, only balancing equipments were to be arranged, was wrong. It is argued on behalf of the prosecution that LC No. 44/15 was opened by the accused No. 1 when against the sanctioned limit of 125 lakh rupees the accused No. 2 had outstanding of 164.45 lakh rupees. From the contents of Ex.PW27/D1 and Ex.PW28/1 it is evident that in the year 1990 the accused No. 2 had LC limit of 125 lakh rupees and LG limit of 80 lakh rupees. As per the version of the accused No. 1 in the matter of non fund based facilities the limits of LC and LG were taken together, therefore, it cannot be said that the outstanding liability of 164.45 lakh rupees against the accused No. 2 was an impediment in opening LC No. 44/15.
210. It is further argued on behalf of the prosecution that LC No. 44/15 was opened by the accused No. 1 at the instance of the accused No. 2 through PW22 N. C. Baheti on the basis of forged invoices in the name of M/s Manu Steels and thereafter, at the instance of PW26 Vijay Kumar signed bill of exchange (hundi) Ex.PW8/K37 as drawer and indorser of the said forged bill. It is also argued on behalf of the prosecution that subsequently in conspiracy with M/s Mani Criminal Case No. 01/2023 Page No. 240 of 262 Management Consultants Pvt. Ltd. the accused No. 2 handed over bill Ex.PW8/K37 to M/s Mani Management Consultants Pvt. Ltd. who, under the signature of accused No. 7 N. Muralidharan got discounted the said bill through ANZ Grindlays Bank and had received an unspecified but definite amount of stolen money (property), out of which a big part of unspecified but definite amount of stolen money was received by accused No. 2 M/s Mani Management Consultants Pvt. Ltd. From the testimony of PW8 K.C. Jain it has been proved that application for opening the LC (44/15) in favour of M/s Manu Steels was made by PW22 N.C. Baheti, who signed the application on his behalf. Unlike the application for LC No. 43/98 which was opened on 13.01.1990, it is not proved in the matter of LC No. 44/15 that the application made by N.C. Baheti on behalf of K.C. Jain was accompanied by any document, much less any forged document, although the said LC was got opened to arrange certain spares and balancing equipment for the maintenance of dairy plant. As found above, after opening of the LC a forged bill of exchange Ex,PW8/K37 was drawn and indorsed by PW26 Vijay Kumar, the stenographer of PW8 K.C. Jain. As per the testimony of K.C. Jain bill Ex.PW8/K37 was prepared by the office of M/s Money Management Consultants Pvt. Ltd. and the same was handed over to him by accused Rakesh Vashist. As per the prosecution case, however, PW26 Vijay Kumar forged the bill Ex.PW8/K37 at the instance of K.C. Jain, therefore, it cannot be believed that Ex.PW8/K37 was prepared by the office of M/s Criminal Case No. 01/2023 Page No. 241 of 262 Mani Management Consultants Pvt. Ltd. and was handed over to K.C. Jain for acceptance by accused Rakesh Vashist, thus, his testimony on these two points is false. During his examination PW26 Vijay Kumar has not named any person who instigated him to forge Ex.PW8/K37, and PW8 K.C. Jain has also not explained as to at whose instance he asked PW26 Vijay Kumar to forge bill Ex.PW8/K37. Neither K.C. Jain nor Vijay Kumar have been charged and put on trial in the case. Further, it has not been proved by the prosecution that the said PW26 Vijay Kumar was an employee of M/s Indodan Industries Ltd. In these circumstances the prosecution has failed to show that Bill/hundi Ex.PW8/K37 was forged at the instance of accused No. 2 M/s Indodan Industries Ltd. or accused No. 4 Rakesh Vashist.
211. No evidence has been led by the prosecution to show as to under what circumstances the bill Ex.PW8/K37 reached in the hands of M/s Mani Management Consultants Pvt. Ltd.; and to prove that accused No. 2 M/s Indodan Industries Ltd. and the directors of Mani Management had entered into criminal conspiracy, reliance has been placed on the circumstance that in the application for opening the LC the address of the corresponding bank was mentioned as Central Bank of India, Addison Buildings branch, Madras. The argument is that if the beneficiary was having its place of business in Delhi then what was the need on the part of the accused No. 2 to have the address of corresponding bank as Addison Buildings branch of Central Bank of India at Madras. According to the learned Public Prosecutor the LC Criminal Case No. 01/2023 Page No. 242 of 262 was got opened and bill Ex.PW8/K37 was forged after the accused No. 2 through its directors and employees and M/s Mani Management Consultants Pvt. Ltd. through its directors hatched a conspiracy. To give strength to its argument the prosecution has not adduced any credible evidence, and in the absence of evidence the argument remains only an allegations. There is no evidence on record to suggest that M/s Mani Management Consultants Pvt. Ltd. or any of its directors, who have been put on trial had had any role in preparation and making of application Ex.PW8/K34, whereby Central Bank of India was requested to open LC No. 44/15 with stipulation that LC would be advised through Addison Buildings branch, Madras. No material has been brought to the court to show as to when and under what circumstances any agreement to commit illegal acts was entered into between the accused No. 2 and M/s Mani Management and which directors of those two companies participated in such agreement. It is noteworthy that M/s Mani Management Consultants Pvt. Ltd. is not an accused in this case, therefore, in the absence of some credible evidence its directors cannot not be held liable for conspiracy on the basis of surmises or suspicion.
212. In so far as question of misappropriation of the funds of Central Bank of India and receipt of stolen property is concerned, no evidence has been led by the prosecution to prove that bill Ex.PW8/K37 was discounted in favour of M/s Mani Management Consultants Pvt. Ltd. And thus, it is not proved that any money was Criminal Case No. 01/2023 Page No. 243 of 262 received by M/s Mani Management Consultants Pvt. Ltd. out of which as discussed above in respect of LC No. 43/48 and 44/21, the bank was under obligation to pay under LC No. 44/15 only after 180 days from 02.5.1990. Any payment received on the forged bill tendered by purported indorsee of the drawer of Ex.PW8/K37 for discounting to its bank as such can not amount to misappropriation of the property of Central bank of India. And as held in other matters, no account book has been produced to show or no other evidence has been led to show that after discounting money was credited to the account of the accused No. 2. In these circumstances, it is not proved that after the month of July, 1989 A-1, A-2, A-4, A-5, A-6, A-7 and A-8 entered into the conspiracy regarding the transaction under LC No. 44/15.
213. The next point for determination is: whether the accused persons entered into any criminal conspiracy in respect of LC No. 44/98 opened in favour of M/s Manu Steels?
214. In respect of LC No. 44/98 the application and the documents on the basis of which the said application was made have not been produced before the court. No evidence has been led by the prosecution if the application was accompanied by any invoice etc. in the name of Manu Steels, and who had forged the said documents. The prosecution has not produced the original bill/hundi or complete copy of the same. Only copy of front part of bill has been produced as Ex.PW8/N, and in respect of the said bill also no evidence has been given as to who forged the same. PW8 K.C. Jain deposed that the bill Criminal Case No. 01/2023 Page No. 244 of 262 was prepared by the office of Mani Management Consultants Pvt. Ltd. and was handed over to him by Rakesh Vashist, but his testimony on this point cannot be accepted, for similar claim was made by him in respect of other bill which is found false. The testimony of K.C. Jain is not corroborated by any other evidence. In the absence of production of the original bill it is not proved as to how many times the bill was indorsed before it was ultimately reached in the possession of M/s Mani Management Consultants Pvt. Ltd. Further, no payment was ever made by Central Bank of India in respect of the bill/hundi and it had suffered no loss. In these circumstances, it is not proved that after the month of July, 1989 A-1, A-2, A-4, A-5, A-6, A-7 and A-8 entered into the conspiracy regarding the transaction under LC No. 44/98.
215. The next point for determination is: whether accused No. 1 N. Ramakrishnan had committed the offences for the commission of which he was put on trial, including the offence punishable under section 13(2) of Act 49 of 1988?
216. Section 13 of Act 49 of 1988, at the relevant time, read as follows:
13. Criminal misconduct by a public servant.--(1) A public servant is said to commit the offence of criminal misconduct,--
(a) if he habitually accepts or obtains or agrees to accept or attempts to obtain from any person for himself or for any other person any gratification other than legal remuneration as a motive or reward such as is mentioned in section 7; or
(b) if he habitually accepts or obtains or agrees to accept or attempts to obtain from any person for himself or for any other person, any valuable thing without consideration or for Criminal Case No. 01/2023 Page No. 245 of 262 consideration which he knows to be inadequate from any person whom he kows to have been, or to be, or to be likely to be concerned in any proceeding or business transacted or about to be transacted by himself, or having any connection with the official functions of himself or of any public servant to whom he is subordinate, or from any person whom he knows to be interested in or related to the person so concerned; or
(c) if he dishonestly or fraudulently misappropriates or otherwise converts for his own use any property entrusted to him or under his control as a public servant or allows any other person to do so; or
(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 position 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) if he or any person on his behalf, is in possession or has, at any time during the period of his office, been in possession of which the public servant cannot satisfactorily account, of pecuniary resources or property disproportionate to his known source of income.
Explanation.--For the purpose of this section, "known source of income" means income received from any lawful source and such receipt has been intimated in accordance with the provisions of any law, rules or orders for the time being applicable to a public servant. (2) Any public servant who commits criminal misconduct shall be punishable with imprisonment for a term which shall be not less than four years but which may extend to ten years and shall also be liable to fine.
217. Apart from offence punishable under section 120B of the Indian Penal Code read with sections 409, 420, 467, 468 and 471 of the said Code read with section 13(2) read with section 13(1)(d) of Act 49 of 1988, accused No. 1 N. Ramakrishnan was sent for trial for the commission of offences punishable under section 409 of the Indian Penal Code and section 13(1)(d) of Act 49 of 1988. He was ultimately Criminal Case No. 01/2023 Page No. 246 of 262 put on trial for the commission of offence punishable under section 120B of the Indian Penal Code read with (i) section 13(2) read with section 13(1)(c) and (d) of Act 49 of 1988, (ii) section 109 read with section 467 of the Indian Penal Code, (iii) section 471 read with section 467 of the Indian Penal Code, (iv) section 411 of the Indian Penal Code, and (v) section 109 read with section 411 of the Indian Penal Code. He was also charged with the commission of offence punishable under section 409 of the Indian Penal Code, section 471 read with section 467 of the Indian Penal Code , section 471 read with section 464 of the Indian Penal Code, section 109 read with section 467 of the Indian Penal Code and section 13(2) read with section 13(1)
(c) and (d) of Act 49 of 1988 read with section 120B of the Indian Penal Code.
218. In respect of accused No. 1 it has been proved that he was the only public servant who was charged, inter alia, for the commission of substantive offence punishable under section 13 of Act 49 of 1988. The prosecution has failed to prove that before taking cognizance of offences in this case accused No. 1 N. Ramakrishnan was dismissed as such public servant, therefore, no sanction under section 19 of Act 49 of 1988 was required to prosecute him. As determined by this court, the prosecution has also failed to prove that in and after the month of July, 1989 accused No. 1 N. Ramakrishnan, while working as Chief Manager, Central Bank of India, Janpath branch, Delhi entered into any conspiracy with the other accused Criminal Case No. 01/2023 Page No. 247 of 262 persons. During above discussion it has been found that though accused No. 1 N. Ramakrishnan initially refused to open LC No. 43/48 in favour of accused No. 2 M/s Indodan Industries Ltd., but he subsequently, opened such LC after obtaining the necessary permission from its higher authorities, who had no problem in enhancing the limits set by the bank regarding credit and other facilities extended by the bank to the accused No. 2. During above discussion it has also been found that before opening LC N. 43/48 in favour of M/s Mani Management Consultants Pvt. Ltd. a copy of agreement dated 17.7.1989 executed by M/s Mani Management Consultants Pvt. Ltd. was produced before him. From the evidence led by the prosecution it is not proved that accused No. 1 N. Ramakrishnan had any role in drawing of bills of exchange/hundis in respect of any of LCs issued in favour of M/s Mani Management Consultants Pvt. Ltd., M/s Deepak Dairy, M/s Manu Steel and M/s Manu Steels, their acceptance on behalf of M/s Indodan Industries Ltd., their indorsement and ultimately their discounting, if any. The prosecution has also failed to prove by proving the ledger or account books pertaining to Cash Credit or other accounts of M/s Indodan Industries Ltd. that after discounting any money was received in the account of the accused No. 2. Further, in the the light of the contents of LCs, other evidence led by the prosecution, the provisions of Act 26 of 1881 and the Uniform Customs & Practice for Documentary Credit this court is satisfied that any money received by M/s Mani Criminal Case No. 01/2023 Page No. 248 of 262 Management Consultants Pvt. Ltd. and M/s Indodan Industries Ltd. on the basis of the bill/hundis, accepted by the accused No. 1, before the date of maturity of such bill/hundi will not tantamount to misappropriation of the funds of the bank, even if after the date of maturity of such bill/hundi the same was paid by the bank as per the contract entered into between it and the accused No. 2. Further, the prosecution has failed to prove that accused No. 1 had had any role in the forgery of bills drawn under LC Nos. LCs Nos. 43/98, 44/15 and 44/21. In these circumstances, notwithstanding the fact that accused No. 1 N. Ramakrishnan has passed away and the proceedings against him have been declared abated it is not proved that he committed any offence in respect of any of LCs.
219. The next point for determination is: whether accused No. 4 Rakesh Vashist has committed the offences for the commission of which he has been put on trial?
220. Apart from offence punishable under section 120B of the Indian Penal Code read with sections 409, 420, 467, 468 and 471 of the said Code read with section 13(2) read with section 13(1)(d) of Act 49 of 1988, accused No. 4 Rakesh Vashist was sent for trial of offences punishable under sections 420 and 471 of the Indian Penal Code. He was ultimately put on trial for the commission of offence punishable under section 120B of the Indian Penal Code read with (i) section 13(2) read with section 13(1)(c) and (d) of Act 49 of 1988, (ii) section 109 read with section 467 of the Indian Penal Code, (iii) section 471 Criminal Case No. 01/2023 Page No. 249 of 262 read with section 467 of the Indian Penal Code, (iv) section 411 of the Indian Penal Code, and (v) section 109 read with section 411 of the Indian Penal Code. He has also been charged with the commission of offence punishable under section 109 read with section 411 of the Indian Penal Code, section 409 of the Indian Penal Code, section 471 read with section 467 of the Indian Penal Code, section 471 read with section 464 of the Indian Penal Code, section 109 read with section 467 of the Indian Penal Code and section 13(2) read with section 13(1)
(c) and (d) of Act 49 of 1988 read with section 120B of the Indian Penal Code.
221. As discussed above, the prosecution has failed to prove that accused Rakesh Vashist along with other accused persons entered into any conspiracy to commit any offence as charged against him.
222. The whole basis on which accused Rakesh Vashist has been put on trial is that at the relevant time he was a director in accused No. 2 M/s Indodan Industries Ltd.; and that in his statement made before PW39 Deepak Garg under section 164 of Cr.P.C. PW8 K.C. Jain Implicated him. From the testimony of PW8 K.C. Jain it has been established that he is not a witness of sterling quality whose testimony can be relied on without being supported by corroborative evidence. The prosecution has not adduced any corroborative evidence on the point that the agreements on the basis of which LCs Nos. 43/48 and 44/21 were opened were supplied by him to PW8 K.C. Jain. The prosecution has also not adduced any corroborative evidence on the Criminal Case No. 01/2023 Page No. 250 of 262 point that bills/hundis Ex.PW8/K7(1) to Ex.PW8/K15, Ex.PW8/K27, Ex.PW8/K37 and the bill/hundi, a copy of which is Ex.PW8/N were supplied to PW8 K.C. Jain and PW22 N.C. Baheti for acceptance by accused No. 4 Rakesh Vashist after the same were prepared by M/s Mani Management Consultants Pvt. Ltd. The prosecution has also failed to prove that accused Rakesh Vashist had any role in preparation of bills Ex.PW8/K27 and Ex.PW8/K37 and any use of them. Further, the prosecution has failed to prove that accused Rakesh Vashist in any manner induced the accused No. 1 to abuse his official position or induced him to help any of the accused to misappropriate the funds of Central Bank of India. In these circumstances it is not proved that accused Rakesh Vashist has committed any of the offences charged against him.
223. The next point for determination is: whether accused No. 5 Mahesh Gupta had committed the offences for the commission of which he was put on trial?
224. Accused No. 5 Mahesh Gupta was sent for trial for the commission of offences punishable under 120B of the Indian Penal Code read with sections 409, 420, 467, 468 and 471 of the said Code read with section 13(2) read with section 13(1)(d) of Act 49 of 1988 only. He was ultimately put on trial for the commission of offence punishable under section 120B of the Indian Penal Code read with (i) section 13(2) read with section 13(1)(c) and (d) of Act 49 of 1988, (ii) section 109 read with section 467 of the Indian Penal Code, (iii) Criminal Case No. 01/2023 Page No. 251 of 262 section 471 read with section 467 of the Indian Penal Code, (iv) section 411 of the Indian Penal Code, and (v) section 109 read with section 411 of the Indian Penal Code, and offence punishable under section 109 read with section 467 of the Indian Penal Code.
225. During the trial only evidence adduced against accused No. 5 Mahesh Gupta is that during his examination PW25 Satya Sen has deposed that he put his signatures as proprietor of M/s Manu Steels on bill Ex.PW8/K27 at the instance of accused No. 5 Mahesh Gupta. From the testimony of PW25 Satya Sen it can be discerned that he was the person who actually forged Ex.PW8/K27. The prosecution neither booked him nor sent him as an accused. He was made a witness without being tendered any pardon. He had all reasons to depose against accused No. 5 Mahesh Gupta to save himself from legal punishment. Just like PW8 K.C. Jain PW25 Satya Sen is not a witness of sterling quality. In the absence of any corroborative evidence to support the testimony of PW25 Satya Sen his testimony is not found reliable, and thus, it is not proved that accused No. 5 Mahesh Gupta entered any criminal conspiracy with other accused persons to commit any of the offences as charged against him. The prosecution has also failed to prove that accused No. 5 Mahesh Gupta instigated PW25 Satya Sen to forge bill Ex.PW8/K27.
226. The next point for determination is: whether accused No. 2 M/s Indodan Industries Ltd. has committed the offences for the commission of which it has been put on trial?
Criminal Case No. 01/2023 Page No. 252 of 262227. In Sunil Bharti Mittal v. Central Bureau of Investigation, AIR 2015 SC 923 in respect of criminal liability of a company and its directors the Hon'ble Supreme Court, inter alia, held as follows:
64. So far as India is concerned, the legal position has been clearly stated by the Constitution Bench judgment of this Court in Standard Chartered Bank v. Directorate of Enforcement (2005) 4 SCC 530 . On a detailed consideration of the entire body of case laws in this country as well as other jurisdictions, it has been observed as follows: (SCC p.
541, para 6) "6. There is no dispute that a company is liable to be prosecuted and punished for criminal offences. Although there are earlier authorities to the effect that corporations cannot commit a crime, the generally accepted modern rule is that except for such crimes as a corporation is held incapable of committing by reason of the fact that they involve personal malicious intent, a corporation may be subject to indictment or other criminal process, although the criminal act is committed through its agents."
It is abundantly clear from the above that the principle which is laid down is to the effect that the criminal intent of the "alter ego" of the company, that is the personal group of persons that guide the business of the company, would be imputed to the company/corporation. The legal proposition that is laid down in the aforesaid judgment is that if the person or group of persons who control the affairs of the company commit an offence with a criminal intent, their criminality can be imputed to the company as well as they are "alter ego" of the company.
In the present case, however, this principle is applied in an exactly reverse scenario. Here, company is the accused person and the learned Special Magistrate has observed in the impugned order that since the appellants represent the directing mind and will of each company, their state of mind is the state of mind of the company and, therefore, on this premise, acts of the company is attributed and imputed to the appellants. It is difficult to accept it as the correct principle of law. As demonstrated hereinafter, this proposition would run contrary to the principle of vicarious liability detailing the circumstances under which a direction of a company can be held liable.
(iii) Circumstances when Director/Person in charge of the affairs of Criminal Case No. 01/2023 Page No. 253 of 262 the company can also be prosecuted, when the company is an accused person:
No doubt, a corporate entity is an artificial person which acts through its officers, directors, managing director, chairman etc. If such a company commits an offence involving mens rea, it would normally be the intent and action of that individual who would act on behalf of the company. It would be more so, when the criminal act is that of conspiracy. However, at the same time, it is the cardinal principle of criminal jurisprudence that there is no vicarious liability unless the statute specifically provides so.
Thus, an individual who has perpetrated the commission of an offence on behalf of a company can be made accused, along with the company, if there is sufficient evidence of his active role coupled with criminal intent. Second situation in which he can be implicated is in those cases where the statutory regime itself attracts the doctrine of vicarious liability, by specifically incorporating such a provision. When the company is the offendor, vicarious liability of the Directors cannot be imputed automatically, in the absence of any statutory provision to this effect.
In Sunil Bharti Mittal case (supra) the Hon'ble Supreme Court further held as follows:
The Penal Code, 1860 save and except in some matters does not contemplate any vicarious liability on the part of a person. Commission of an offence by raising a legal fiction or by creating a vicarious liability in terms of the provisions of a statute must be expressly stated. The Managing Director or the Directors of the Company, thus, cannot be said to have committed an offence only because they are holders of offices. The learned Additional Chief Metropolitan Magistrate, therefore, in our opinion, was not correct in issuing summons without taking into consideration this aspect of the matter. The Managing Director and the Directors of the Company should not have been summoned only because some allegations were made against the Company.
228. As discussed above, the prosecution has failed to prove that Rakesh Vashist, one of the directors of M/s Indodan Industries Criminal Case No. 01/2023 Page No. 254 of 262 Ltd., who has been put on trial has committed any of the offences as charged against him.
229. As per the police report, accused M/s Indodan Industries Ltd. was sent for trial for the commission of offence punishable under section 420 of the Indian Penal Code. It has not been put on trial for the commission of the said offence, and instead it has been put on trial for the commission of offence punishable under section 120B of the Indian Penal Code read with (i) section 13(2) read with section 13(1)
(c) and (d) of Act 49 of 1988, (ii) section 109 read with section 467 of the Indian Penal Code, (iii) section 471 read with section 467 of the Indian Penal Code, (iv) section 411 of the Indian Penal Code, and (v) section 109 read with section 411 of the Indian Penal Code. It has also been charged with the commission of offences punishable under section 109 read with section 411 of the Indian Penal Code, section 409 of the Indian Penal Code, section 471 read with section 467 of the Indian Penal Code, section 471 read with section 464 of the Indian Penal Code, section 109 read with section 467 of the Indian Penal Code and section 13(2) read with section 13(1)(c) and (d) of Act 49 of 1988 read with section 120B of the Indian Penal Code.
230. From the above discussion it has been proved that in pursuance of resolutions Ex.PW8/K2 and Ex.PW8/K4 passed by the Board of Directors of the accused No. 2, two LCs bearing Nos. 43/48 and 44/21 were opened at the instance of M/s Indodan Industries Ltd. by Central Bank of India. It has been found that in connections with Criminal Case No. 01/2023 Page No. 255 of 262 the said LCs and the bills/hundis drawn under the same the accused No. 1 did not abuse his power and position and did not commit any misconduct or breach of trust as a result of which Central Bank of India was relieved of its property by the accused person illegally. It has not been proved that the agreements at the strength of which LCs, Nos. 43/48 and 44/21 were opened were sham or forged; or that the bills/hundis drawn under LC No. 44/21 were forged, which were drawn by a fictitious person or non existent entity M/s Deepak Dairy at the instance of, and for the benefit of, accused No. 2 M/s Indodan Industries Ltd. Further, it has been proved that in respect of other three LCs Nos. 43/98, 44/15 and 44/98, got opened in the names of M/s Manu Steel and M/s Manu Steels, no resolution was passed by the Board of Directors of the accused No. 2. It has been proved that bill Ex.PW8/K27 drawn under LC No. 43/98 was forged by PW25 Satya Sen, but it has also been proved that the said bill was accepted on behalf of the accused No. 2. Further, the said PW25 Satya Sen was an employee of M/s Foremost Industries (India) Ltd. and not of the accused No. 2. Thus it cannot be said that the accused No. 2 had any role in commission of offence in respect of the transaction pertaining to LC No. 43/98 and bill Ex.PW8/K27 drawn under the same.
231. In respect of LC No. 44/15 and the bill Ex.PW8/K37 drawn under the same, though it has been proved that the said bill Ex.PW8/K37 was forged by PW26 Vijay Kumar, but it has not been proved as to who induced him to do so. In connection with Criminal Case No. 01/2023 Page No. 256 of 262 Ex.PW8/K37 the prosecution's version is that the said bill was forged by PW26 Vijay Kumar at the instance of PW8 K.C. Jain. In the words of PW26 Vijay Kumar he was an employee of M/s Foremost Industries (India) Ltd., and the prosecution has failed to prove that the directors of M/s Indodan Industries Ltd. and M/s Foremost Industries (India) Ltd. were same. In these circumstances it is not proved that M/s Indodan Industries Ltd. had entered into any conspiracy to commit the offences as charged against it. It is also not proved that bill Ex.PW8/K37 was forged at the instance of M/s Indodan Industries Ltd. The prosecution has also failed to prove by leading proper and cogent evidence that after discounting of the bills/hundis under LCs Nos. 43/48, 44/21, 43/98 and 44/15 any money out of the discounted amount was received by the accused No. 2. Further, the prosecution has failed to prove that due to discounting of the bill/hundi under LC No. 44/98 any wrongful loss was caused to Central Bank of India, Janpath branch, New Delhi. Even otherwise the money received on discounting of usance drafts/bills/hundis which were to get matured after the date of discounting cannot be treated as misappropriated or stolen property. The money received by Standard Chartered Bank and ANZ Grindlays Bank from Central Bank of India after maturity of bills of exchange/hundis cannot be treated as the money taken by way of criminal breach of trust or criminal misappropriation. In these circumstances it is not proved that accused No. 2 M/s Indodan Industries Ltd. has committed the offences, or any of them, as charged Criminal Case No. 01/2023 Page No. 257 of 262 against it.
232. The next point for determination is: whether accused C. Subramnaiam and S. Anand have committed, or N. Muralidharan had committed, the offences charged against them?
233. Accused C. Subramaniam and S. Anand have been, and N. Muralidharan was, charged and put on trial as at the relevant time they were the directors of M/s Mani Management Consultants Pvt. Ltd. The said M/s Mani Management Consultants Pvt. Ltd. has not been put on trial for the commission of any offence, including criminal conspiracy. Although, the prosecutions' case is that the said M/s Mani Management Consultants Pvt. Ltd. through C. Subramaniam entered into a sham agreement with the accused No. 2, on the basis of which LC No. 43/48 was opened, and thereafter, it drew 36 bills under the signatures of C. Subramaniam, which, after their acceptance on behalf of the accused No. 2 were got discounted by it through Standard Chartered Bank under the signatures of C. Subramaniam, but the prosecution has failed to prove those facts. The prosecution has also failed to prove that in connection with LC No. 43/48 any meeting or discussions took place between H.S. Jalan and accused S. Anand. The prosecution has also failed to prove that under the signatures of N. Muralidharan M/s Mani Management Consultants Pvt. Ltd. got discounted the bills/hundis drawn under LC No. 44/21, 43/98, 44/15 and 44/98. In these circumstances, in the absence of any evidence against the said three accused persons, and in the absence of M/s Mani Criminal Case No. 01/2023 Page No. 258 of 262 Management Consultants Pvt. Ltd. being an accused in this case it is found that the prosecution has failed to prove the offences as charged against accused C. Subramaniam, N. Muralidharan and S. Anand.
234. In conclusion, as a sequel to above discussion, the prosecution has failed to prove the charges against the accused persons, and accordingly accused M/s Indodan Industries Ltd., Rakesh Vashist, C. Subramaniam and S. Anand are not found guilty of the commission of any of the offences for which they have been put on trial, Therefore, accused M/s Indodan Industries Ltd., Rakesh Vashist, C. Subramanian (C. Subramaniam) and S. Anand are acquitted in the following manner:
(1) accused M/s Indodan Industries Ltd., Rakesh Vashist, C. Subramanian and S. Anand are acquitted of offence punishable under section 120B of the Indian Penal Code read with (i) section 13(2) read with section 13(1)(c) and section 13(1)(d) of the Prevention of Corruption Act, 1988, (ii) section 109 read with section 467 of the Indian Penal Code, (iii) section 471 read with section 467 of the Indian Penal Code, (iv) section 411 of the Indian Penal Code, and (v) section 109 read with section 411 of the Indian Penal Code.
(2) In respect of LC No. 43/48: (a) accused M/s Indodan Industries Ltd., Rakesh Vashist, C. Subramanian and S. Anand are acquitted of offences punishable under section 409 of the Indian Penal Code, section 13(2) read with section 13(1)(c) and section 13(1)(d) of the Prevention of Corruption Act, 1988 read with section 120B of the Criminal Case No. 01/2023 Page No. 259 of 262 Indian Penal Code; (b) accused M/s Indodan Industries Ltd. is acquitted of offence punishable under section 411 of the Indian Penal Code; and (c) accused Rakesh Vashist, C. Subramanian and S. Anand are acquitted of offences punishable under section 109 read with section 411 of the Indian Penal Code read with section 120B of the Indian Penal Code.
(3) In respect of LC No. 44/21: (a) accused M/s Indodan Industries Ltd. and Rakesh Vashist are acquitted of offences punishable under section 409 of the Indian Penal Code, section 471 read with section 467 of the Indian Penal Code and section 13(2) read with section 13(1)(c) and section 13(1)(d) of the Prevention of Corruption Act, 1988 read with section 120B of the Indian Penal Code; (b) accused M/s Indodan Industries Ltd. is acquitted of offence punishable under section 411 of the Indian Penal Code; and (c) accused Rakesh Vashist, C. Subramanian and S. Anand are acquitted of offences punishable under section 109 read with section 411 of the Indian Penal Code read with section 120B of the Indian Penal Code.
(4) In respect of LC No. 43/98: (a) accused M/s Indodan Industries Ltd. and Rakesh Vashist are also acquitted of offences punishable under section 409 of the Indian Penal Code, section 471 read with section 467 of the Indian Penal Code, section 471 read with section 464 of the Indian Penal Code and section 13(2) read with section 13(1)(c) and section 13(1)(d) of the Prevention of Corruption Act, 1988, read with section 120B of the Indian Penal Code; (b) Criminal Case No. 01/2023 Page No. 260 of 262 accused M/s Indodan Industries Ltd. is also acquitted of offence punishable under section 411 of the Indian Penal Code; and (c) accused Rakesh Vashist, C. Subramanian and S. Anand are also acquitted of offences punishable under section 109 read with section 411 of the Indian Penal Code, read with section 120B of the Indian Penal Code.
(5) In respect of LC No. 44/15: (a) accused M/s Indodan Industries Ltd. and Rakesh Vashist are also acquitted of offences punishable under section 409 of the Indian Penal Code, section 471 read with section 467 of the Indian Penal Code, section 109 read with section 467 of the Indian Penal Code, section 471 read with section 467 of the Indian Penal Code and section 13(2) read with section 13(1)
(c) and section 13(1)(d) of the Prevention of Corruption Act, 1988, read with section 120B of the Indian Penal Code; (b) accused M/s Indodan Industries Ltd. is also acquitted of offence punishable under section 411 of the Indian Penal Code; and (c) accused Rakesh Vashist, C. Subramanian and S. Anand are also acquitted of offences punishable under section 109 read with section 411 of the Indian Penal Code, read with section 120B of the Indian Penal Code.
(6) In respect of LC No. 44/48: (a) accused M/s Indodan Industries Ltd. and Rakesh Vashist are also acquitted of offences punishable under section 409 of the Indian Penal Code, section 471 read with section 467 of the Indian Penal Code, section 471 read with section 464 of the Indian Penal Code and section 13(2) read with Criminal Case No. 01/2023 Page No. 261 of 262 section 13(1)(c) and section 13(1)(d) of the Prevention of Corruption Act, 1988, read with section 120B of the Indian Penal Code; (b) accused M/s Indodan Industries Ltd. is also acquitted of offence punishable under section 411 of the Indian Penal Code; and (c) accused Rakesh Vashist, C. Subramanian and S. Anand are also acquitted of offences punishable under section 109 read with section 411 of the Indian Penal Code, read with section 120B of the Indian Penal Code.
235. Bonds and bail bonds executed by the said Rakesh Vashist, C. Subramanian (C. Subramaniam) and S. Anand under section 439 of Cr.P.C. are cancelled; their sureties under section 439 of Cr.P.C. are discharged. Their bonds and bail bonds executed and accepted under section 437A of Cr.P.C., however, shall remain in force for next six months.
Digitally
signed by
MANOJ
MANOJ KUMAR
236. File be sent to records. KUMAR Date:
2024.12.03
12:55:36
+0530
Pronounced in the open court (Manoj Kumar)
on 27th of November, 2024. District Judge (Commercial Court)-5, Central district, Tis Hazari, Delhi.
*(See: rule 4 of Part A of Chapter 24 of Volume III of the Rules framed by the Hon'ble Delhi High Court).
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