Delhi District Court
Cbi vs Shiv Kumar Sharma Etc. (9) Ms. Sati Exim ... on 23 July, 2024
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IN THE COURT OF MOHD. FARRUKH
SPECIAL JUDGE (P C ACT) (C B I)-11
ROUSE AVENUE COURT COMPLEX, DELHI
CC No.: 372/19
RC No. 2E-2007-CBI-EOW-II/ New Delhi
u/Sec: 120-B/ 420/ 467/ 471 IPC and Section 13(2) read
with 13 (1)(d) of PC Act, 1988.
CNR No.: DLCT11-001465-2019
CENTRAL BUREAU OF INVESTIGATION
VERSUS
1. SHIV KUMAR SHARMA
S/o Sh. Subhash Chand Sharma
Director M/s Sati Exim Pvt. Ltd.
R/o 52, Yusuf Sarai
New Delhi
2. NAVEEN KUMAR SHARMA
S/o Sh. K.C. Sharma
Director M/s Sati Exim Pvt. Ltd.
R/o 52, Yusuf Sarai
New Delhi
3. RAVINDER KUMAR JOSHI
S/o Late Sh. G.P. Joshi
Occupation : Ex-Govt. Servant, AGM,
UCO Bank, High Court Branch.
R/o : (i) A-303, Plot-80,
Delhi Rajdhani Apartments, IP Extension, Delhi
(ii) A-401, Civitech Sampriti,
Sector-77, Noida-201301
CC No. 372/19
CBI Vs. Shiv Kumar Sharma and Ors. Page No. 1 of 104
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4. AMRESH MISHRA @ SUNDER MISHRA
S/o Sh. Ramji Mishra
R/o : (i) C-25, South Extension Part-I,
New Delhi
(ii) 282, Satya Niketan, New Delhi
5. RAMJI MISHRA
S/o Sh. Ram Lal Mishra
R/o : (i) C-25, South Extension, Part-I
New Delhi-49
(ii) 282, Satya Niketan, New Delhi
(iii) Village Bharuhna, Civil Line Road
Mirzapur, UP
6. PARVEEN KUMAR
S/ Sh. Joginder Pal Donga
C/o Pali Photostat, Kisok No. 10, Delhi HighCourt
New Delhi
R/o 498, Nimbri Colony
Ashok Vihar, Delhi-52
7. Swadesh Kumar Mishra @ Munder Mishra @
MUNDER MISHRA
S/o Ramji Mishra
R/o: (i) C-25, South Extension, Part-I
New Delhi-49
(ii) 282, Satya Niketan, New Delhi
(iii) Village Bharuhna, Civil Line Road
Mirzapur, UP
8. ANAND JI MISHRA
S/o Sh. Ram Lal Mishra,
R/o : (i) C-25, South Extension Part-I
New Delhi
(ii) 282, Satya Niketan,New Delhi
CC No. 372/19
CBI Vs. Shiv Kumar Sharma and Ors. Page No. 2 of 104
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9. CHANDER KANT DUBEY
S/o Sh. Y.N. Dubey
Director of M/s Edge Garments Pvt. Ltd.
R/o : (i) 198, Ground floor, Satya Niketan, New Delhi
(ii) Peeli Kothi, Gali No.2, H. No. 1/15,
Near Escort Agency Shop, Mirzapur (UP)
Date of registration of FIR : 23.08.2007
Date of filing of charge-sheet : 22.12.2008
Arguments concluded on : 15.07.2024
Date of Judgment : 23.07.2024
Appearance :
For Prosecution : Sh. Avanish Kumar Chand, Ld. P.P. for the CBI.
For accused persons : Sh. Anil Kumar, Counsel for A-3 R.K. Joshi.
Sh. Manish Tiwari, Counsel for A-6 Parveen Kumar
Sh. Gurpreet Singh, Counsel for A-1 Shiv Kumar
Sharma, A-2 Naveen Kumar Sharma, A-4 Amresh
Mishra, A-5 Ram Ji Mishra, A-7 Swadesh Mishra and
A-9 Chander Kant Dubey.
Sh. Gopal Sharma, Counsel for A-8 Anand Ji Mishra.
JUDGMENT
23.07.2024
1. Accused Shiv Kumar Sharma (A-1), Naveen Kumar Sharma (A-2), Ravinder Kumar Joshi (A-3), Amresh Kumar Mishra @ Sunder Mishra @ Sunder Mishra (A-4), Ramji Mishra (A-5), Parveen Kumar (A-6), Swadesh Kumar Mishra @ Munder Mishra @ Munder Mishra (A-7), Anand Ji Mishra (A-8), Chander Kant Dubey (A-9) were sent up by Central Bureau of Investigation (hereinafter referred to as 'CBI') to face trial for commission of offence punishable under Sections 120B read with 420, 467 & 471 of Indian CC No. 372/19 CBI Vs. Shiv Kumar Sharma and Ors. Page No. 3 of 104 :: 4 ::
Penal Code (hereinafter referred to as 'IPC') and Section 13(2) read with Section 13(1) (d) of Prevention of Corruption Act, 1988 (hereinafter referred to as 'PC Act) and substantive offences thereof.
FACTUAL MATRIX OF THE PROSECUTION CASE IN BRIEF
2. Brief facts of the present case as unfolded from charge sheet, are that on the basis of the complaint of Sh. B.K. Das, General Manager, UCO Bank, an FIR was registered alleging that A-3 Ravinder Kumar Joshi, being public servant and posted as AGM, Delhi High Court Branch, UCO Bank, New Delhi (hereinafter referred as UCO Bank) entered into a criminal conspiracy with private persons, namely, A-1 Shiv Kumar Sharma, A-2 Naveen Kumar Sharma, A-3 R.K. Joshi, A-4 Amresh Kumar Mishra @ Sunder Mishra @ Sunder Mishra, A-5 Ramji Mishra, A-6 Parveen Kumar, A-7 Swadesh Kumar Mishra @ Munder Mishra @ Munder Mishra, A-8 Anand Ji Mishra and A-9 Chander Kant Dubey to defraud UCO Bank and in furtherance of the said conspiracy, R.K. Joshi (A-3) sanctioned a Cash Credit Limit (hereinafter referred to as CC Limit) of Rs.70 lakhs as Advance against Foreign Bill under Course of Collection (hereinafter referred as 'ABC') and Overdraft Limit CC No. 372/19 CBI Vs. Shiv Kumar Sharma and Ors. Page No. 4 of 104 :: 5 ::
(hereinafter referred to as 'OD') of Rs.25 lakhs in favour of M/s Sati Exim Pvt. Ltd. (hereinafter referred as 'M/s SEPL') and released Rs.70 lakhs on 15.12.2004 as ABC and, thereafter, enhanced CC Limit of Rs.1.80 crores on 27.02.2005 and released Rs.2.45 crores against 13 fake and forged export bills and approximately Rs.2,80,08,000/- was withdrawn through 55 cheques in the name of different persons and huge amount was diverted through various cheques in the name of different companies/ firms/ persons and all of them in conspiracy to one another caused wrongful loss to the tune of Rs.1,79,18,000/- to UCO Bank. It was concluded in the complaint that A-3 R.K. Joshi, the then AGM, Sh. Ranjeet Banerjee, the then Senior Manager and D.R. Sonkar, the then Senior Manager, Delhi High Court Branch, Officers of UCO Bank (hereinafter referred to as 'Bank') criminally connived with A-1 Shiv Kumar Sharma and A-2 Naveen Kumar Sharma in the capacity of Directors of M/s SEPL and other accused persons by accepting overvalued property as collateral security against ABC and OD and disbursed the aforementioned amount causing wrongful loss to UCO Bank and therefore requested for institution of criminal case against the aforesaid persons.
3. During investigation into the allegations in the CC No. 372/19 CBI Vs. Shiv Kumar Sharma and Ors. Page No. 5 of 104 :: 6 ::
aforesaid FIR, it was revealed that M/s SEPL showing to have its registered office at 282, Satya Niketan, New Delhi, was incorporated on 21.05.2007 by A-5 Ramji Mishra while A-9 Chandra Kant Dubey and Sh. Sangam Pandey residing at the aforesaid address were shown as its Promoter Directors. Thereafter, Import/ Export Code (hereinafter referred as IEC) in the name of M/s SEPL was obtained by projecting A-1 Shiv Kumar Sharma and A-2 Naveen Kumar Sharma as its Directors as per the contents of Form-32 submitted for obtaining IEC. It was further revealed that these two Directors were shown to have been appointed on 05.04.2004 after two Promoter Directors had resigned on 07.04.2004, however, no such Form-32 showing aforesaid development was found available with the office of Registrar of Companies (RoC). It was disclosed that A-1 Shiv Kumar Sharma as Director of M/s SEPL filed Form-32 with RoC on 15.07.2004 showing resignation of accused A-9 Chander Kant Dubey and Sangam Kumar Pandey with effect from 01.07.2004 however, no Board Resolution passed by M/s SEPL was found available to show that Shiv Kumar Sharma (A-1) and A-2 Naveen Kumar Sharma were appointed Director of M/s SEPL by its Promoter Directors.
4. It was further revealed in the investigation that Current CC No. 372/19 CBI Vs. Shiv Kumar Sharma and Ors. Page No. 6 of 104 :: 7 ::
A/c no. 1955 was opened with UCO Bank on 07.07.2004 in the name of M/s SEPL on the basis of forged documents projecting A-1 Shiv Kumar Sharma and A-2 Naveen Kumar Sharma as Director of M/s SEPL. At the time of opening of the said Bank Account, it was purportedly introduced by one Vijay Pal Singh Pali, Proprietor of M/s Pali Photostat however, it was found that the said Bank Account of M/s SEPL was, in fact, introduced by A-6 Parveen Kumar who impersonated himself as Vijay Pal Singh Pali. The Account Opening Form of M/s Pali Photostat was not found available in UCO Bank's record. It was further revealed that M/s SEPL was not existing at the address 52, Yusuf Sarai, New Delhi shown in its Account Opening Form and Promoter Directors A-9 Chander Kant Dubey and Sh. Sangam Pandey were the Directors of M/s SEPL. The opening of said Bank Account was authorised by A-3 R.K. Joshi in the capacity of the then AGM of UCO Bank.
5. It was further revealed during investigation that M/s SEPL applied for allowing the facility of Rs.50 Lakhs under Foreign Bill purchase of Rs.15 Lakhs as packing credit vide letter dated 09.07.2004. Upon the receipt of the aforesaid request/ applications, a Process Note dated 12.12.2004 was prepared by A-3 R.K. Joshi and he also obtained signature of CC No. 372/19 CBI Vs. Shiv Kumar Sharma and Ors. Page No. 7 of 104 :: 8 ::
his junior officer late Sh. Ranjit Banarjee, the then Senior Manager on the said Process Note. Vide the said Process Note, Rs.70 Lakhs was recommended as ABC and Rs.25 Lakhs as temporary overdraft (OD). Title deed of plot bearing no. 362/ 5, area 941 sq. ft. and settlement plot no. 363/2 area 8372.5 sq. ft and a house constructed thereon bearing municipal property no. 13/131 situated at village Tarana, Ward Shivpur, Paragna Shivpur, District Varanasi (hereinafter referred as 'Property') was submitted as collateral security. The aforesaid 'Property' was shown in the name of M/s SEPL having value of Rs.2.01 Crore as per the valuation report dated 13.08.2002 prepared by one Sh. J.P. Srivastava. It is revealed that on the strength of the aforesaid request on behalf of M/s SEPL accompanied with collateral security in the form of aforementioned 'Property', A-3 R.K. Joshi sanctioned aforesaid facility to M/s SEPL on 13.12.2004 and thereafter A-3 R.K. Joshi released Rs.70 Lakhs in favour of M/s SEPL on 15.12.2004 against four handknotted woolen carpets export bills during the course of collection. Subsequently, it was revealed that the aforesaid four bills submitted by M/s SEPL were forged and fabricated as no payment of these bills was received by the Bank. It was also revealed that M/s SEPL was not having the aforesaid mortgage 'Property' in its name as on the date of the CC No. 372/19 CBI Vs. Shiv Kumar Sharma and Ors. Page No. 8 of 104 :: 9 ::
sanction of the aforesaid facility i.e 13.02.2004, it was owned by A-7 Swadesh Mishra and Kalyan Ji Mishra. Subsequently, the aforesaid 'Property' was transferred in the name of accused A-1 Shiv Kumar Sharma on 10.01.2005 vide registered sale deed showing sale consideration of Rs.17.50 Lakhs.
6. It was further revealed that the aforesaid 'Property' was purchased by Kalyan Ji Mishra and A-7 Swadesh Mishra from one Pandit Ravi Shankar for Rs.5 Lakhs on 26.03.1997 through three separate sale deeds which were pledged with different Banks. Valuation of this property was available with Mishra Family as the same was got conducted on 13.08.2002 from Sh. J.P. Srivastava who was not an empanelled valuer of the UCO Bank. A-3 R.K. Joshi obtained Legal Search Report dated 13.01.2005 from Sh. Anup Kumar Srivastava, Advocate of Varanasi who informed the Bank that the said sale deed was registered in the name of A-1 Shiv Kumar Sharma, Director of M/s SEPL but pointed out that the 'Property' was not mutated in the name of A-1 Shiv Kumar Sharma in the revenue records A-3 R.K. Joshi failed to ensure the same.
7. The UCO Bank, Regional Office, Varanasi got searched the property from its empanelled Advocate Sh.
CC No. 372/19CBI Vs. Shiv Kumar Sharma and Ors. Page No. 9 of 104 :: 10 ::
Paras Nath Yadav who submitted his report dated 07.09.2007 informing the Bank that the 'Property' was neither mutated in the name of A-1 Shiv Kumar Sharma nor dimensions of the Property were mentioned in the sale deed filed with the Bank. Furthermore upon inspection of the 'Property', it was revealed that it was a part of a big lot consisting of three different plots having one common gate and the building at site was in possession of the Mishra Family and therefore, it was difficult to identify the 'Property'. The said 'Property' was also got evaluated by the Regional Office of the Bank from Sh. Anil Singh, who was an empanelled valuer of the Bank and as per his Report, the said 'Property' was valued at Rs.40,85,500/- and realizable sale value was shown as Rs.34,72,500/-.
8. It was further revealed during investigation that on the request of M/s SEPL vide letter dated 25.01.2005 submitted by A-2 Naveen Kumar Sharma along with Board Resolution of the same date signed by both the Directors, A-3 R.K. Joshi prepared an undated credit rating module under his own signatures for further enhancement of the CC Limit to Rs.180 lakhs and accordingly conveyed the same to M/s SEPL. This enhancement was done on 17.01.2005 against the same 'Property' which was shown as mortgaged as per CC No. 372/19 CBI Vs. Shiv Kumar Sharma and Ors. Page No. 10 of 104 :: 11 ::
Bank record. After enhancement of CC Limit, A-3 R.K. Joshi released further advances to the M/s SEPL against 13 fake and forged export bills. Payments against three of these bills were received through UCO Bank, Parliament Street in March and April 2005 but in respect of six sets of documents were accepted by foreign buyer but no payment was received and Bills of Exchange duly accepted by foreign buyer, were returned by the foreign Bank. Four sets of documents were not accepted by foreign buyer and hence returned by foreign Bank.
9. Further investigation revealed that M/S SEPL exported 16 consignments through its customs hired agent M/S ABC Consultants, Mumbai from Nhava Sheva Port, Mumbai and one consignment from Calcutta Port. A-4 Amresh Mishra got fake Bills of Lading prepared from ATCL Container Private limited and submitted the same to UCO Bank with covering letters of the Directors of M/s SEPL. In the said fake bills, M/s SEPL was shown as the Shipper and the foreign buyer as Consignee whereas the material was actually transported through Bills of Lading issued by HI-
TOS Liner Agency Private Limited and Norasia Marine Service Private Limited showing M/s ATCL Container Line Private Limited as the Shipper and M/s Mari Shipping & CC No. 372/19 CBI Vs. Shiv Kumar Sharma and Ors. Page No. 11 of 104 :: 12 ::
Transport, Rotterdam, Netherland as the Consignee. The material was got released by the said consignee on the basis of these Bills of Lading and not on the basis of Bills of Lading lodged with UCO Bank.
10. Investigation has further revealed that from 15.12.2004 to 20.12.2005, a sum of Rs.315 lakhs was advanced to M/s SEPL on the basis of the advance against collection of bills. After adjusting the payments received through various sources, the loss on account of non receipt of the payment came to Rs.179.18 lakhs. In investigation, it was also noticed that Rs.280.08 lakhs were withdrawn through 55 cheques in cash in the name of the various persons and were utilized by Mishra family. It was further revealed that M/s Dubey Exports of A-1 Shiv Kumar Sharma was paid Rs.51.50 lakhs through cheques/ PO. M/s Edge Garments was paid a sum of Rs.67 lakhs through five cheques of which A-9 Chander Kant Dubey, Ram Behari Tiwari and Sushil Rai Sharma were Directors. A-1 Shiv Kumar Sharma had also been shown as the Director in the Bank account opened with HDFC, Vasant Vihar, New Delhi.
A cheque of Rs.7,32,571/- was issued to M/s Travel Planner Private Limited which released $6500 to Sh. Ashutosh Mishra who was the brother-in-law of A-5 Ramji Mishra, for CC No. 372/19 CBI Vs. Shiv Kumar Sharma and Ors. Page No. 12 of 104 :: 13 ::
his visit to South Africa in addition to funds for medical policy to cover his foreign visit. A cheque of Rs.10 lakhs and a PO of Rs.20 lakhs were credited in the Bank account of M/s K.K. International owned by Smt. Ritu Mishra, wife of A-7 Swadesh Mishra and brother-in-law of A-5 Ramji Mishra. A sum of Rs.50 lakhs was paid by M/s SEPL on 09.03.2005 to M/s Shivnath Rai Haryana (India) Limited but repayment of this amount was taken by accused A-7 Swadesh Mishra in the form of a cheque and deposited in the Bank account of his wife Smt. Ritu Mishra, Proprietor of M/s K.K. International. The said Bank account was operated by A-7 Swadesh Mishra. A sum of Rs.16 lakhs was transferred to A-4 Amresh Kumar Mishra @ Sunder Mishra, son of A-5 Ramji Mishra through a cheque dated 17.03.2005 by way of internal transfer. A-8 Anandji Mishra, real brother of A-5 Ramji Mishra, received Rs.46 lakhs by way of internal transfers through cheques. M/s Umesh Impex received Rs.16 lakhs and one Sh. Umesh Kumar Dubey was shown as proprietor of this firm but his parentage mentioned on PA/n Card and Driving License was different. This account was introduced by A-1 Shiv Kumar Sharma and the Bank Account was opened by A-3 R.K. Joshi. M/s SEPL was transferred Rs.6 lakhs by way of cheque and one Manoj Sharma, brother of A-1 Shiv Kumar Sharma was disclosed to CC No. 372/19 CBI Vs. Shiv Kumar Sharma and Ors. Page No. 13 of 104 :: 14 ::
be its Director. As per CBI, all the funds disbursed by the Bank were utilized for the purpose other than those for which the said sums were sanctioned.
11. Investigation further revealed that all the funds disbursed by the Bank were utilised by the said Company for purpose other than those for which the same was sanctioned and hence, the aforesaid acts of accused persons, namely, A- 1 Shiv Kumar Sharma, A-2 Naveen Kumar Sharma, A-4 Amresh Mishra, A-5 Ramji Mishra, A-6 Parveen Kumar, A- 7 Swadesh Kumar Mishra @ Munder Mishra @ Munder Mishra, A-8 Anand Ji Mishra and A-9 Chander Kant Dubey, all private persons and accused A-3 Ravinder Kumar Joshi, the then AGM, UCO Bank, Delhi High Court Branch constitute commission of offences under Section 120-B read with 419/ 420/ 467/ 468/ 471 IPC and Section 13 (2) read with Section 13(1)(d) of PC Act, 1988 and substantive offences thereof; A-1 Shiv Kumar Sharma, A-2 Naveen Kumar Sharma committed substantive offences under Section 420/ 467/ 468/ 471 IPC; whereas accused persons, namely, A-4 Amresh Kumar Mishra @ Sunder Mishra, A-5 Ramji Mishra, A-7 Swadesh Kumar Mishra @ Munder Mishra , A-8 Anand Ji Mishra and A-9 Chander Kant Dubey committed the offence under Section 420 IPC; A-3 Ravinder CC No. 372/19 CBI Vs. Shiv Kumar Sharma and Ors. Page No. 14 of 104 :: 15 ::
Kumar Joshi, the then AGM committed substantive offence under Section 13 (2) read with Section 13(1)(d) of PC Act, 1988; and A-6 Parveen Kumar committed offence under Section 419 IPC.
12. After the completion of the investigation, the instant charge-sheet was filed by the CBI before the Court on 12.12.2008 against the accused persons, namely, A-1 Shiv Kumar Sharma, A-2 Naveen Kumar Sharma, A-3 Ravinder Kumar Joshi, A-4 Amresh Mishra, A-5 Ramji Mishra, A-6 Parveen Kumar, A-7 Swadesh Kumar Mishra @ Munder Mishra @ Munder Mishra, A-8 Anand Ji Mishra and A-9 Chander Kant Dubey for the offences under Sections 120-B/ 420/ 467/ 468/ 471 IPC and Section 13(2) read with Section 13 (1)(d) of PC Act, 1988. Since A-1 Ravinder Kumar Joshi already stood dismissed from the service, hence no sanction under Section 19 PC Act was required to be filed.
13. After compliance of Section 207 Cr. P.C. and supplying copy of the charge-sheet and documents to the aforesaid accused persons, the Court took cognizance of the aforesaid offence against all the accused persons vide order dated 28.01.2009 and they were summoned.CC No. 372/19
CBI Vs. Shiv Kumar Sharma and Ors. Page No. 15 of 104 :: 16 ::
CHARGE
14. In terms of detailed order dated 30.07.2011 passed by the Ld. Predecessor of the Court on 12.12.2011, charge for offence under Section 120B IPC read with Sections 419/ 420/ 467/ 468/ 471 IPC and Section 13(2) read with Section 13(1)(d) of PC Act, 1988 was framed against all the aforesaid accused persons; substantive charge for the commission of offence under Section 13(2) read with Section 13(1) (d) of PC Act, 1988 was framed against A-3 Ravinder Kumar Joshi; substantive charge for the commission of offence under Section 419 IPC was framed against A-6 Parveen Kumar, substantive charge for the commission of offence under Sections 468/ 471 IPC was framed against A-1 Shiv Kumar Sharma and A-2 Naveen Kumar Sharma and substantive charge for the commission of offence under Sections 468/ 471 IPC was framed against accused A-1 Shiv Kumar Sharma, A-2 Naveen Kumar Sharma, A-3 Amresh Mishra, A-5 Ram Ji Mishra, A-7 Swadesh Mishra, A-8 Anand Ji Mishra and A-9 Chander Kant Dubey. All accused persons abjured their guilt and claimed trial.
PROSECUTION EVIDENCE
15. To connect the arraigned accused persons with the CC No. 372/19 CBI Vs. Shiv Kumar Sharma and Ors. Page No. 16 of 104 :: 17 ::
offences charged, the CBI in total examined fifty three witnesses. The prosecution witnesses can be categorised into seven categories viz. complainant, witnesses pertaining to seizure/ production/ supply of documents, witnesses pertaining to taking of specimen signatures, Bank officials, expert witnesses pertaining to explaining the procedure of export/ import and CBI officials.
16. PW-1 Sh. Brajender Kumar Dass, the then General Manager, UCO Bank, Delhi High Court Brach is the complainant and filed a complaint dated 22.08.2007 Ex.PW1/A against Bank officials as well as outsiders for defrauding the Bank on the basis of an internal enquiry conducted under his supervision. During his examination in the Court, he identified A-3 Ravinder Kumar Joshi to be AGM of Delhi High Court Branch of UCO Bank during the relevant time.
17. PW-2 Sh. S.K. Punhani is the witness to the taking of specimen signatures of the accused persons at the CBI Office.
18. PW-3 Sh. Sudeeptha Kumar, PW-9 Sh. V.K. Gupta, PW-10 Ms. Rita Vohra, PW-13 Sh. Umesh Prasad Singh.
PW-14 Sh. Naresh, PW-18 Sh. T.R. Gulati, PW-19 Sh. Vikas CC No. 372/19 CBI Vs. Shiv Kumar Sharma and Ors. Page No. 17 of 104 :: 18 ::
Chander Mahajan, PW-20 Sh. B.K. Sood, PW-21 Sh. Ramesh Kumar Taneja, PW-22 Sh. Ajit Singh, PW-25 Sh. Pravesh Kumar, PW-26 Sh. Vidya Bhushan Thakkar, PW-27 Sh. Subhash Chander Kuchhal (explained process of sanction of advance against foreign bill under course of collection), PW-31 Sh. Arjun Chand, Sh. Pramod Kumar Aggarwal, PW-41 Sh. Desh Raj Sonkar, PW-42 Sh. D.P. Suman, PW-44 Sh. Yeshwant Singh Thakur, PW-47 Sh. Satinder Kumar Gupta are Bank officials.
19. PW-4 Sh. S.S. Negi, PW-8 Sh. Data Ram, PW-11 Sh.
Ramesh Chandra Singh, PW-23 Sh. Rajender Mohan Kapoor, PW-29 Sh. Chandan Prasad, PW-33 Sh. Sachin Ratnakant Bhagat, PW-37 Sh. Vinay Madhusudan Nandgonkar, PW-38 Sh. L.S. Sahi, PW-39 Sh. Harsh Vardhan Tewari, PW-40 Sh. Surya Dash, PW-43 Sh. Ashok Ahuja, PW-45 Sh. V.M. Bhagi, PW-46 Sh. K. Panda are witnesses of seizure/ production of documents to CBI.
20. PW-5 Sh. Rajat Dua, PW-6 Ms. Nandini Vithal Dhotre, PW-7 Sh. Sukhwinder Singh Gill, PW-12 Sh. Rajesh Kumar Arora, PW-15 Sh. Anup Kumar Srivastava (Panel Advocate), PW-16 Sh. Anil Singh (Valuer), PW-17 Sh. Narinder Pandey (CA), PW-32 Sh. Sumitro Mukherjee, PW- 35 Sh. Anand Devram Tambe, PW-36 Sh. Sanjiv Batra (CA), CC No. 372/19 CBI Vs. Shiv Kumar Sharma and Ors. Page No. 18 of 104 :: 19 ::
PW-48 Sh. Abhimanyu Kumar, PW-53 Sh. T. Joshi [GEQD] are expert witnesses.
21. PW-24 Sh. Ganesh Gulati had explained about certain transactions. PW-49 Sh. Surender Singh Bindra had got an account opened in the name of a firm namely B. Exim International Pvt. Ltd. in UCO Bank, Delhi High Court Branch at the instance of A-5 Ram Ji Mishra, however, he got the same closed as some fraud had been committed by accused Ram Ji Mishra through the said account. PW-50 Sh.
S.T. Shivsharan had explained about the duty draw back received in the account of M/s SEPL against shipping bills. Testimony of PW-52, Smt. K. Banerjee pertains to the confirmation of death of her husband, Mr. Ranjeet Banerjee.
22. PW-28 Sh. Sheetla Prasad Singh is the witness to the inspection of Property at Tarana by CBI Team. PW-30 Sh. Satya Prakash who was the witness to handing over certain documents to CBI on behalf of one Sh. L. S. Sahi turned hostile and was cross-examined by Ld. PP for CBI.
23. After conclusion of prosecution evidence, PE stood closed vide order dated 21.12.20023. Relevant prosecution evidence shall be appreciated in detail at the time of discussion in the later part of this judgement.
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24. Thereafter, statements of the accused persons under Section 313 Cr. P.C. were recorded on different dates wherein all the incriminating evidence on record were put to them to which they pleaded their innocence and opted to adduce evidence in their defence.
25. In order to prove their innocence, all accused except A-6 Parveen Kumar examined four witnesses in their defence, namely, DW-1 Sh. Pradeep Raj, DW-2 Sh. Saurabh Yadav, DW-3 Sh. Amit Kumar and DW-4 Sh. Lalit Kumar. After conclusion of defence evidence, DE stood closed on 10.04.2024.
ARGUMENTS ON BEHALF OF CBI
26. Sh. Avanish Chand, Ld. PP for CBI argued that on the basis of evidence adduced before this Court, the prosecution has successfully proved its case that a conspiracy was hatched amongst the accused persons to defraud the Bank; A-3 R.K. Joshi being public servant connived with accused A-1 Shiv Kumar Sharma and A-2 Naveen Kumar Sharma and allowed to open current account in the name of M/s SEPL, without following the Banking norms/ circulars/ guidelines etc. applicable. It is submitted that A-3 R.K. Joshi failed to verify the genuineness of the documents submitted by A-1 Shiv Kumar Sharma and A-2 Naveen Kumar Sharma CC No. 372/19 CBI Vs. Shiv Kumar Sharma and Ors. Page No. 20 of 104 :: 21 ::
along with the Account Opening Form and got the said account opened by him after getting it introduced by A-6 Parveen Kumar Sharma, who impersonated himself as Vijay Kumar Pali, proprietor of M/s Pali Photostat. It is further submitted that the Prosecution has established by leading evidence that M/s SEPL being new company was allowed an overdraft facility of Rs.70 lakhs and despite that, A-3 R.K. Joshi allowed the credit and overdraft facility on the said loan.
27. Ld. PP for CBI argued that A-3 R.K. Joshi ignored the Banking guidelines in respect to the loan facility secured by viable collateral security by M/s SEPL. It is submitted that A-3 R.K. Joshi failed to get the property offered by M/s SEPL for mortgage, verified for its ownership and value as per the Banking guidelines. It is argued that A-3 R.K. Joshi not only sanctioned the credit facilities in favour of M/s SEPL, but also disbursed the loan amount on the basis of forged and fabricated invoices submitted by A-1 Shiv Kumar Sharma and A-2 Naveen Kumar Sharma on behalf of M/s SEPL. It is submitted that despite payment having not been received from foreign buyer, A-3 R.K. Joshi continued to disburse the loan amount in favour of M/s SEPL without verifying as to whether M/s SEPL was in fact exporting the CC No. 372/19 CBI Vs. Shiv Kumar Sharma and Ors. Page No. 21 of 104 :: 22 ::
goods as shown in the invoices. It is submitted that in order to falsely introduce opening of Bank account in question, A- 6 Parveen Kumar impersonated himself as Vijay Kr. Pali and signed the Account Opening Form. It is further submitted that this fact stands established by way of testimony of expert witness who tendered his GQED report confirming that A-6 Parveen Kumar signed the Account Opening Form of M/s SEPL impersonating himself to be Vijay Kumar Pali.
28. In respect of A-4 Amresh Kumar Mishra @ Sunder Mishra, A-5 Ram Ji Mishra, A-6 Parveen Kumar, A-7 Swadesh Kumar Mishra @ Munder Mishra, A-8 Anand Ji Mishra and A-9 Chander Kant Dubey, it is argued that the disbursed amount against the loan facilities was diverted/ siphoned off in their accounts notwithstanding that they were not having any business transaction with M/s SEPL. It is submitted that Prosecution has succeeded in proving beyond reasonable doubt that all of the accused persons conspired amongst themselves to defraud the Bank and in furtherance of their conspiracy Bank suffered a loss of Rs.1,79,18,000/- and thus, they are liable to be convicted for the charges framed against them.
CC No. 372/19CBI Vs. Shiv Kumar Sharma and Ors. Page No. 22 of 104 :: 23 ::
ARGUMENTS ON BEHALF OF A-1 SHIV KUMAR SHARM AND A-2 Naveen KUMAR SHARMA
29. It is argued on behalf of both the accused persons that the prosecution has miserably failed to prove any of the charges framed against them and rather it has been proved on record that M/s SEPL was the existing company and not a dormant one, as claimed by the Prosecution. It is argued that it is proved from the testimony of PW-8 Sh. Data Ram, Jr. Technical Assistant, O/o RoC, as he had deposed that Form No. 32 (MarkPW8/X) testified that A-1 Shiv Kumar Sharma and A-2 Naveen Kumar Sharma were appointed as Directors of M/s SEPL on 08.04.2004. It is submitted that the said witness in his testimony admitted that it was not possible that every document reached the File of the Company in the RoC Office as the same may be available with Record Section of RoC Office. It is submitted that PW-8 admitted cash counter receipt of Form No. 32 (Ex.PW8/D3-1) claiming the same to be of RoC. On the strength of the aforesaid, it is argued that it is established that both A-1 Shiv Kumar Sharma and A-2 Naveen Kumar Sharma were Directors of SEPL at the time of opening of Bank account and there was no fabrication of any document. It is further submitted that the Company was in fact functioning from the address submitted with the Bank, as various witnesses deposed in this regard.
CC No. 372/19CBI Vs. Shiv Kumar Sharma and Ors. Page No. 23 of 104 :: 24 ::
30. It is further argued that the Prosecution has miserably failed to prove any forgery and fabrication of any invoices as PW-5 Sh. Rajat Dua, PW-6 Ms. Nandini Vithal Dhotre, PW- 7 Sh. Sukhwinder Singh Gill, PW-12 Sh. Rajesh Kumar Arora and PW-14 Sh. Naresh testified about the genuineness of the bills submitted with the Bank. It is submitted that the prosecution has failed to prove any allegations against A-1 Shiv Kumar Sharma A-2 Naveen Kumar Sharma. It is further argued that the prosecution has failed to even establish any diversion of funds or siphoning off of the amount to their respective Bank Accounts. It is submitted that the prosecution has failed to prove on record any material and evidence oral or circumstantial to prove any meeting of mind between the accused persons.
ARGUMENTS ON BEHALF OF A-4 Amresh Kumar Mishra @ Sunder Mishra, A-5 RAM JI MISHRA, A-7 Swadesh Kumar Mishra @ Munder Mishra, A-8 ANAND JI MISHRA AND A-9 CHANDER KANT DUBEY
31. It is submitted that accused persons and M/s SEPL were having business transactions even prior to sanctioning of the loan, as is reflected from statements of accounts showing various transaction amongst them even prior to disbursement of the loan. It is submitted that merely because CC No. 372/19 CBI Vs. Shiv Kumar Sharma and Ors. Page No. 24 of 104 :: 25 ::
the amounts were transferred from the Bank account of M/s SEPL, same itself is not sufficient to establish the charge of conspiracy or any other substantive offence. On the basis of the aforesaid submissions, it is submitted that the prosecution has miserably failed to prove the charges against them and they are entitled to be acquitted for the offences.
ARGUMENTS ON BEHALF OF A-3 R.K. JOSHI
32. Sh. Anil Kumar, Ld. Counsel filed written arguments on behalf of the accused and also addressed oral arguments submitting inter alia that the prosecution has miserably failed to substantiate any of the charges even to the extent of preponderance of probability let alone to establish the charges beyond reasonable doubt. In respect to the allegations against A-3 R.K. Joshi that he being public servant was responsible for opening the Bank accounts and that he allowed the opening of the account in the name of M/s Sati Exim Pvt. Ltd. on the basis of forged documents, it is submitted that no such allegation was levelled even in the complaint (Ex.PW1/A) filed by UCO Bank, which ultimately resulted in registration of present RC. It is further submitted that the documents prescribed in the Account Opening Form (Ex.PW19/A) for a joint stock company were taken by the Bank along with the aforesaid Account Opening CC No. 372/19 CBI Vs. Shiv Kumar Sharma and Ors. Page No. 25 of 104 :: 26 ::
Form and thus, there is no infirmity in allowing opening of the Bank account in the name of M/s SEPL. It is submitted that the prosecution has failed to bring on record any rules/ circulars/ guidelines of the Bank requiring A-3 R.K. Joshi to obtain Board Resolution of the Company for appointing A-1 Shiv Kumar Sharma and A-2 Naveen Kumar Sharma as Directors of M/s SEPL prior to permitting the account to be opened.
33. It is submitted that in addition to the prescribed documents such as memorandum and articles of association (Ex.PW44/D); resolution of the company (Ex.PW44/A and Ex.PW44/C), additional documents, such as letter dated 12.05.2004 of Income Tax Department allotting PAN Number to the Company (Ex.PW19/DB); copies of driving licences of A-1 Shiv Kumar and A-2 Naveen Sharma (MarkPW44/1 and MarkPW44/2, respectively), form-32 showing appointment of the aforesaid accused as Directors of SEPL w.e.f. 08.04.2004 (MarkPW8/X); Copy of PAN Card of A-2 Naveen Sharma were taken. It is submitted that none of the aforesaid documents were found to be forged during the course of trial. It is submitted that the aforesaid documents taken by A-3 R.K. Joshi at the time of allowing of the Bank account in the name of M/s SEPL were in CC No. 372/19 CBI Vs. Shiv Kumar Sharma and Ors. Page No. 26 of 104 :: 27 ::
consonance with the guidelines stipulated vide RBI Circular dated 16.08.2002 (Ex.DW1/E). As per the aforesaid circular, the objection of KYC, framework is to ensure appropriate customer identification and to monitor the transaction of suspicious nature and the documents obtained from M/s SEPL for opening current Bank account no. 1955 were enough to establish the identity of the account opening as well as its authorized operators. It is further submitted that A-3 R.K. Joshi only permitted opening of the current account in question while entire processing of the Account Opening Form was undertaken by PW-4 Yashwant Singh Thakur, as reflected from his deposition recorded on 02.03.2021. The said witness has categorically deposed that the aforesaid current account in the name of M/s SEPL was opened on the direction of A-3 R.K. Joshi and at that time, A-1 Shiv Kumar Sharma and A-2 Naveen Kumar Sharma were present along with two other Directors. It is submitted that the said witness in his cross-examination dated 06.04.2021 testified that he, after verifying and satisfying himself of all the documents filed on behalf of M/s SEPL, had opened the current Bank account in question after having completed the account opening procedure prescribed by the Bank.CC No. 372/19
CBI Vs. Shiv Kumar Sharma and Ors. Page No. 27 of 104 :: 28 ::
34. It is further submitted that the aforesaid testimony of PW-44 was further corroborated by testimony of PW-41 Sh.
D.R. Sonkar who deposed that Account Opening Form (Ex.PW19/A) was executed as per rules and regulations of the Bank. It is submitted that the prosecution has failed to establish the violation of any circular/ guidelines of the Bank regarding opening of the current account in the name of M/s SEPL.
35. With regard to the allegation of the non-existence of M/s SEPL at the address Yusuf Sarai, it is submitted that no evidence has been adduced by the prosecution to establish that M/s SEPL was not functional/ existing at the aforesaid address rather, there are several documents on record filed along with the charge-sheet showing the aforesaid address of the Company. It is submitted that PW-17 Sh. Narinder Pandey and PW-47 Sh. Satinder Kumar Gupta in their respective testimonies deposed that M/s SEPL was not a dormant Company.
36. With regard to the allegation of false introduction of the account opening in the name of M/s SEPL by A-6 Parveen Kumar impersonating as Vijay Pal Singh at the instance of A-3 R.K. Joshi, it is submitted that the prosecution has failed to bring on record Account Opening CC No. 372/19 CBI Vs. Shiv Kumar Sharma and Ors. Page No. 28 of 104 :: 29 ::
Form and specimen signature card of the current account of M/s Pali Photostat. It is submitted that rubber stamp of M/s Pali Photostat was affixed along with the signature as Vijay Pal Singh Pali on the earmarked space of "Introduced By". It is submitted that on the rubber stamp of 'Signature Verified', there is initial/ small signature of an official of the Bank who compared the signature of the proprietor of M/s Pali Photostat with the signature on record and the official concerned had put his initial within round stamp in confirmation of matching introducer signature in the Bank record. It is submitted that there is no wrong/ false identification/ introduction of the account opener M/s SEPL by the introducer.
37. It is submitted that the proprietor of M/s Pali Photostat having current account identified SEPL on the basis of Certificate of Incorporation correctly as the said certificate was disputed neither by the complainant i.e. UCO Bank nor the prosecution. It is submitted that the identification of opening of current account in the name of M/s SEPL would remain unaffected notwithstanding identity of the proprietor of M/s Pali Photostat as so long as the identity of SEPL was not in question. It is further submitted that none of the prosecution witnesses testified that account was introduced CC No. 372/19 CBI Vs. Shiv Kumar Sharma and Ors. Page No. 29 of 104 :: 30 ::
by A-6 Parveen Kumar at the instance of A-3 R.K. Joshi rather, PW-47 Sh. S.K. Gupta deposed that when Sh. Vijay Pal Singh Pali was questioned by him, he agreed that he had put his signature with the stamp as Introducer to the account in question.
38. It is submitted that IO/ PW-51 Sh. S.K. Garg failed to collect the Account Opening Form and specimen signature card of M/s Pali Photostat during investigation. It is argued that even PW-47 Sh. Satinder Kumar Gupta deposed that the purpose of obtaining introduction was correct identification of the account opening and the Company incorporated under Companies Act is identified by Certificate of Incorporation issued by the Registrar of the Companies.
39. Ld. Counsel for A-3 R.K. Joshi argued that the prosecution has failed to establish that the sanction of credit facility in favour of M/s SEPL and disbursement thereof, without obtaining collateral security as proprietor, which was not in the name of the firm on the date of sanction, i.e., 13.12.2004 and subsequent enhancement thereof, on the basis of over-valued collateral security is contrary to Banking norms, regulations and circulars. It is submitted that PW-47 Sh. Satinder Kumar Gupta has categorically deposed that credit facilities in the present case are loan against CC No. 372/19 CBI Vs. Shiv Kumar Sharma and Ors. Page No. 30 of 104 :: 31 ::
immovable property and in fact, are working credit facilities sanctioned for export business of the Company. It is submitted that even PW-18 Sh. T.R. Gulati in his deposition corroborated the aforesaid facts testifying that the credit facilities to an exporter are sanctioned against the security of stock and booked at as working capital facility and the same could not be termed as loan against mortgage of immovable property.
40. Ld. Counsel for A-3 R.K. Joshi has placed reliance on RBI Circular dated 10.08.2004 (Ex.DW1/B), which provides that Banks should adopt any of the methods viz. projecting balance-sheet method, term over method or cash project method for assessment on working capital requirements of their exporters, customers whichever is most suitable and appropriate to their business. It is submitted that while assessing the working capital requirements of M/s SEPL, the projected balance-sheet method was adopted and in the process note Ex.PW41/A calculations for working capital assessments were shown as permissible Bank finance assessed at Rs.185 lakhs. It is submitted that during the aforesaid process of assessment permissible Bank finance, there is no mention of the value of collateral security offered by M/s SEPL and thus, credit limits sanctioned to M/s SEPL CC No. 372/19 CBI Vs. Shiv Kumar Sharma and Ors. Page No. 31 of 104 :: 32 ::
are incumbent of the value of collateral security offered on behalf of M/s SEPL. It is submitted that the request of M/s SEPL for the enhancement of credit limit was considered and the 'process note for increase in limit' produced by DW- 1 Sh. Pradeep Raj of UCO Bank from security register of the branch (Ex.DW1/M) shows that while assessing the enhanced working capital requirements, the same format of CMA Data was used as was used in the process note for sanction of Rs.70 lakh. It is submitted that the aforesaid process note amply demonstrate that enhanced credit limits, working capital requirements were assessed on the basis of projected as well as of M/s SEPL and not on the basis of value of security offered by it as collateral security. The reliance has been placed on the aforesaid circular of RBI (Ex.DW1/B) which states that 'no worthwhile export order should be denied export credit from the Banks'.
41. It is submitted that disbursements were made to M/s SEPL under the ABC Limit against the received total export realization of Rs.2,22,74,956.76 showing that M/s SEPL was engaged in the export business of Rs.3.15 crores. It is submitted that even as per the aforesaid RBI circular, assessment of export credit limit should be for need basis and not directly linked to the availability of the collateral CC No. 372/19 CBI Vs. Shiv Kumar Sharma and Ors. Page No. 32 of 104 :: 33 ::
security and as long as the requirement of credit limit is justified on the basis of exporter performance and track record, the credit should not be denied only on the basis of non-availability of the collateral security. It is submitted that even PW-27 Sh. Subhash Chander Kuchhal the then Chief Manager, UCO Bank in his testimony deposed that generally no collateral security used to be obtained in export finance.
42. PW-47 Sh. S.K. Gupta of UCO Bank has also deposed that as per circular of UCO Bank and RBI in-vogue at the relevant time, taking of equitable mortgage of property as collateral security was not mandatory in case of export finance. On the basis of the aforesaid submission, it is contended that even though the collateral security was not required in the sanction of present loan, still A-3 3 R.K. Joshi put a condition of collateral security in terms of sanction to secure and protect interest of the Bank. It is submitted that the allegations of the prosecution that no proper collateral security was taken by A-3 R.K. Joshi are without any merits in view of the aforesaid submissions.
43. With regard to the allegation of sanction and disbursement of loan on the basis of forged export bills, it is submitted that the evidence on record completely negate the allegation of prosecution that export bills in question were CC No. 372/19 CBI Vs. Shiv Kumar Sharma and Ors. Page No. 33 of 104 :: 34 ::
forged and the evidence on record to the contrary established the genuineness of the export bills. It is submitted that PW-5 Sh. Rajat Dua, PW-6 Ms. Nandini Vithal Dhotre, PW-7 Sh. Sukhwinder Singh Gill, PW-12 Sh. Rajesh Kumar Arora, PW-46 Sh. K. Panda and PW-50 Sh. T. Shivsharan from the custom department; PW-33 Sh. Sachin Ratnakant Bhagat and PW-35 Sh. Anand Devram Pandey of M/s ATCL; PW-37 Sh. Sanjiv Batra of SBI; PW-38 Sh. L.S. Sahi of M/s hi-Tos Linar Agency Pvt. Ltd.; PW-32 Sh. Sumitro Mukherjee of Maersk India Pvt. Ltd.; PW-43 Sh. Ashok Ahuja of UCO Bank have conclusively established the genuineness of export carried out by M/s SEPL and on the basis of the aforesaid genuine bills, credit facilities were sanctioned and disbursed by UCO Bank.
44. With regard to the allegation of over valuation of mortgaged property and no physical verification thereof, by A-3 R.K. Joshi, it is submitted that the property in question was transferred in the name of A-1 Shiv Kumar Sharma on 10.01.2005 and mortgage thereof, was created in favour of UCO Bank on 17.01.2005 and the valuation report dated 03.08.2002 to Sh. J.P. Srivastava qua the aforesaid property was proper as there is nothing on record to doubt the said valuation. It is further submitted that the aforesaid property CC No. 372/19 CBI Vs. Shiv Kumar Sharma and Ors. Page No. 34 of 104 :: 35 ::
was taken as additional security to protect the interest of the Bank despite there being no requirement for the same. It is submitted that the valuation report dated 14.09.2007 was prepared by Sh. Anil Singh qua the abovesaid property without taking measures and entering the property as is reflected from the valuation report itself and thus, no reliance can be placed upon the same. It is submitted that the allegation of the prosecution that the property mortgaged with UCO Bank was already mortgaged to Union Bank of India is false as non encumbrance certificate dated 26.04.1999 issued by Sh. Shudhir Kumar Srivastava and panel advocate of Union Bank of India reflects that both the properties were different.
45. Ld. Counsel for A-3 R.K. Joshi has further contended that no credibility to the valuation report of PW-16 Sh. Anil Singh qua the valuation of the property assessed at Rs.40,85,500/- can be attached as the very empanelment of Sg, Anil Kumar Singh has not been prepared. It is submitted that his name was not found in the list of valuer who were on the approved panel of UCO Bank of Varanasi region. It is further submitted that no motive can be attributed to A-3 R.K. Joshi in accepting the valuation report given by another valuer J.P. Srivastava who was not on the panel of UCO CC No. 372/19 CBI Vs. Shiv Kumar Sharma and Ors. Page No. 35 of 104 :: 36 ::
Bank. The prosecution is also relying on valuation report of PW-16 Sh. Anil Singh who was not on the panel of UCO Bank.
46. Ld. Counsel for A-3 R.K. Joshi adverted the attention of this Court to various flaws in the valuation report prepared by PW-16 Sh. Anil Singh and argued that the said report reserved to be rejected and should not be taken into consideration.
47. In respect of allegation of enhancement by extending the mortgage of the same over-valued property. It is submitted that the said allegations are misconceived as the enhancement in CC limit was assessed on the basis of export order in hand without having any connection with the valuation of collateral security as the said facilities sanctioned in favour of M/s SEPL were not loan against the immovable property, but working capital limits sanctioned for export activity and collateral security by equitable mortgage of immovable property as a matter of abundant precaution to protect the interest of the Bank. It is submitted that during the period 20.01.2004 to 24.01.2005, M/s SEPL had submitted the export bills amounting to Rs.2,26,28,048.89 with the Bank on the basis of which credit limits were enhanced to Rs.180 lakhs. It is submitted that CC No. 372/19 CBI Vs. Shiv Kumar Sharma and Ors. Page No. 36 of 104 :: 37 ::
enhancement of the aforesaid limits in favour of M/s SEPL was not mortgaged loan, but credit limits to meet the working capital needs of M/s SEPL as deposed by PW-18 Sh. T.R. Gulati and PW-47 Sh. Satinder Kumar Gupta.
48. With regard to the allegations of the diversion of funds and excessive cash withdrawn by M/s SEPL, it is submitted that the entire amount of disbursement made to M/s SEPL aggregate Rs.315 lakh and exporter contribution of Rs.41.23 lakhs was used in purchasing the goods meant for export and thus, no question arose for diversion of funds. It is submitted that the allegation of cash withdrawn through cheques and disbursement in cash on behalf of M/s SEPL are also false, as the credit facilities in favour of M/s SEPL were not disbursed in cash, but were credited in its current account by debiting ABC account and M/s SEPL utilized the funds from the said account either by withdrawing cash or through transfer or clearing by using the cheques as per their requirement of business and the aforesaid procedure neither illegal nor irregular. It is submitted that there is no circular of the Bank prohibiting M/s SEPL withdrawing cash from its current account.
49. It is further argued that the disbursements in the account of M/s SEPL were made on the basis of real and CC No. 372/19 CBI Vs. Shiv Kumar Sharma and Ors. Page No. 37 of 104 :: 38 ::
genuine export Bills tendered by it. As the goods mentioned in the said export bills were in fact exported or deposed by various prosecution witnesses and therefore, M/s SEPL received export realizations in its account, resulting into availability of further drawing power, however, balance in the ABC account was always below the sanction limits or the drawing power, whichever was less. In respect to the allegations that A-3 R.K. Joshi allowed cash withdrawals of Rs.2,80,08,000 through 55 cheques in the name of different companies/ firms/ persons and caused loss to the Bank to the tune of Rs.1,79,18,000, it is submitted that the Bank made available to M/s SEPL funds to the extent of Rs.315 lakhs (Rs.70 lakhs and Rs.245 lakhs) while the balance in the ABC account always remained below the sanctioned limit of Rs.180 lakhs. It is submitted that IO has failed to bring true and correct facts in the investigation by not taking into consideration total withdrawals in cash and other modes. It is submitted that against the total released amount of Rs.315 lakhs in the current Bank account of M/s SEPL, the same of Rs.494.51 lakhs was debited and transferred to various accounts, however, out of the aforesaid amount Rs. 179.51 lakhs were the Companies own funds which SEPL had liberty to utilise the same as per its requirement. It is submitted that sum total of 17 Bills submitted with the Bank CC No. 372/19 CBI Vs. Shiv Kumar Sharma and Ors. Page No. 38 of 104 :: 39 ::
was Rs.3,56,22,960 and in order to export the goods worth the said amount, M/s SEPL would have made purchases of equivalent amount and therefore, the payments made from the current Bank Account of M/s SEPL are the payments made to its suppliers for purchase of goods and services required for execution of the export orders. It is submitted that the investigation agencies failed to collect the documents relating to the sale and purchase transaction between M/s SEPL on one hand and its supplier on the other and falsely concluded that the cheques issued/ payments made by M/s SEPL to different companies/ firms/ persons were diversion of funds. It is submitted that withdrawal of Rs.494.51 lakhs from the current Bank account of M/s SEPL are not only more than the amount disbursed by the Bank, but also more than the value of goods exported by M/s SEPL. On the strength of the aforesaid submissions, it is argued that the prosecution has miserably failed to prove the diversion of funds/ siphoning off the amount by SEPL in favor of accused persons as alleged.
50. Ld. Counsel for A-3 R.K. Joshi argued that prosecution has failed to establish that loss to the tune of Rs.1,79,18,000/- was caused to the Bank on account of default by M/s SEPL or the act or emissions of A-3. PW-41 CC No. 372/19 CBI Vs. Shiv Kumar Sharma and Ors. Page No. 39 of 104 :: 40 ::
Sh. Deshraj Sonkar, the then Senior Manager, UCO Bank, though deposed that Bank had suffered loss of Rs.2 crores due to the sanctioning disbursement of the over-mentioned facilities in favour of M/s SEPL, yet he failed to bring on record or identify any document corroborating the aforesaid allegations. It is submitted that A-3, during his tenure with UCO Bank, Delhi High Court Branch till 06.05.2005, received no intimation about non-payment of the export Bills by the foreign buyer and he took every possible steps as a Branch Head to the best of his capabilities to protect the interest of the Bank. It is submitted that default payment in the case of M/s SEPL cannot be put in the category of loss to the Bank on account of willful conduct of A-3 R.K. Joshi as the default occurred in the natural course of business transaction of exporter of M/s SEPL.
51. Reliance has been placed on the judgment of the Hon'ble High Court of Kerala titled Ramesh Chennethala Vs. State of Kerala and Anr.1, to submit that while proving any loss caused to the Government or Public Exchequer, the Prosecution shall also have to prove corresponding gain to the public servant or somebody else in whom he is interested or with whom he has vicious nexus and merely because some loss was caused to the Government or to the public 1O.P (Crl.) No. 83/ 17 decided on 15.10.2018 CC No. 372/19 CBI Vs. Shiv Kumar Sharma and Ors. Page No. 40 of 104 :: 41 ::
exchequer or to any public Undertaking in corporation or public body by the discharge of functioning of public servant, he cannot be prosecuted for corruption or criminal misconduct under PC Act. Further, reliance was placed on A. Shiv Prakash Vs. State of Kerala2, submitting that it was observed therein that even when violations and irregularities were committed by public servant in violation of circulars, that by itself cannot be held sufficient to prove that criminal case was made out. Ld. Counsel of A-3 R.K. Joshi has further relied upon the judgment of Hon'ble Supreme Court in C. Chenga Reddy & Ors. Vs. State of A.P 3 for the aforesaid propositions.
52. On the strength of the aforesaid submissions, it was argued that prosecution has failed to bring on record anything to substantiate the charges under Section 13(2) read with Section 13(1)(d) of PC Act against A-3 R.K. Joshi. It is further submitted that M/s SEPL had paid the dues under settlement with UCO Bank, in respect of the loan facilities in question and no due certificate Ex.DW1/L was issued by the Bank and as such no loss was caused to the Bank. It is argued that mortgage of property in question was found in order by Debt Recovery Tribunal-II (DRT-II) and order for 2(Crl.) Appeal No. 131/07 decided on 10.05.2016 3 (1996) 10 SCC, 193 CC No. 372/19 CBI Vs. Shiv Kumar Sharma and Ors. Page No. 41 of 104 :: 42 ::
recovery of the dues from M/s SEPL based on the mortgage of the property.
53. With regard to the charge of criminal conspiracy against A-3 R.K. Joshi, it is submitted that prosecution has failed to establish during trial that there was any prior meeting of mind of A-3 with any other accused persons/ persons, as there is no evidence (order/ documentary/ circumstantial) to establish that A-3 R.K. Joshi had any knowledge of any sort of conspiracy. Finally, it is submitted that the policies of Export Credit Guarantee Corporation (ECGC) were taken to protect the interest of the Banks in case of any defraud by M/s SEPL and the same was one of the conditions of sanction letter dated 13.12.2004. The aforesaid factum was proved by way of deposition of DW-3 Sh. Amit Kumar, AGM, ECGC through documents Ex.DW3/DA and deposition of DW-4 Sh. Lalit Kumar of UCO Bank through documents Ex.DW4/DB which establish the bona fide of A-3 R.K. Joshi that he acted in the best interest of the Bank to protect its interest. It is submitted that M/s SEPL regularly paid the premium to ECGC, however, UCO Bank, Parliament Street failed to take any action against the drawee of the bills of exchange, as per international law as deposed by PW-21 Sh. Ramesh Kumar CC No. 372/19 CBI Vs. Shiv Kumar Sharma and Ors. Page No. 42 of 104 :: 43 ::
Taneja of UCO Bank. It is submitted that A-3 R.K. Joshi cannot be held responsible for no action on the part of UCO Bank to recover the dues under international law, as unpaid Bills returned from abroad were forwarded/ intimated to UCO Bank, Delhi High Court Branch only after A-3 R.K. Joshi had left the said branch.
54. It is submitted that prosecution has failed to bring on record any evidence of any quid pro quo in the present case and there is nothing on record that A-3 R.K. Joshi demanded/ obtained/ received any pecuniary benefit in the present case. It is submitted that sanction of the loan being within the permitted powers of A-3, he acted bona fide with a view to promote the business of the Bank after taking every possible cautions and safeguards to protect the interest of the Bank. It is submitted that prosecution has miserably failed to prove any allegations against -3 R.K. Joshi and, therefore, he may be acquitted from all charges.
ARGUMENTS ON BEHALF OF A-6 Parveen KUMAR
55. Written submissions were filed on behalf of the aforesaid accused and oral arguments were also addressed by Ld. Counsel submitting inter alia that prosecution has miserably failed to establish the charge against him that he CC No. 372/19 CBI Vs. Shiv Kumar Sharma and Ors. Page No. 43 of 104 :: 44 ::
entered into conspiracy with other accused persons and falsely introduced the opening of current Account no. 1955, in the name of M/s SEPL impersonating as Vijay Pal Singh Pali, Proprietor of Pali Photostat. It is submitted that even during the course of international vigilance enquiry of the Bank, on the basis of which complaint Ex.PW1/A was lodged, triggering the criminal law in motion, no case of opening the Bank account in the name of M/s SEPL was unearthed. It is submitted that the Bank account was opened as per the guidelines for opening a current account by a corporate custom/ joint stock company and requisite documents as provided in the Account Opening Form were enclosed by M/s SEPL. It is further submitted that the documents filed alongwith Account Opening Form were not found to be forged as existence of SEPL and true identities of its Directors were established. Ld. Counsel for A-6 Parveen Kumar has further relied upon the testimony of PW-44 Sh. Yashwant Singh Thakur, submitting that the said witness has categorically deposed that he opened the Bank account in question after duly complying with all the requirements and verifying the requisite documents including the identity of the company and the persons authorized to open and operate the account. It is submitted that the said witness nowhere stated that introduction for the CC No. 372/19 CBI Vs. Shiv Kumar Sharma and Ors. Page No. 44 of 104 :: 45 ::
said Bank account was false or that the same was not introduced by the person whose signature and identity were mentioned thereon. It is submitted that the said witness has testified that at the time of opening the account, A-1 Shiv Kumar Sharma and A-2 Naveen Kumar Sharma were present and they were correctly identified by him in the court. The said witness has also identified various documents submitted along with the Account Opening Form clearly establishing the identity of M/s SEPL and its Directors. It is submitted that the current Account Opening Form (Ex.PW19/A) in respect of M/s SEPL categorically establishes the presence of
(i) signature of introducer; (ii) rubber stamp of the introducer form; (iii) rubber stamp of "signature verified"; and (iv) initials of Bank officials and the aforesaid facts further established that (i) the introducer was present at the time of opening of Bank account; (ii) introducer put his signature and rubber stamp on his firm; and (iii) the identity and signature of the introducer/ proprietor of M/s Pali Photostat were verified, as per the Bank's record. It is submitted that the allegation of the prosecution that Vijay Pal Singh Pali did not append his signature on the Account Opening Form could have been established by comparing his admitted handwriting and signature with the questioned handwriting and signature on the aforesaid Account Opening Form.CC No. 372/19
CBI Vs. Shiv Kumar Sharma and Ors. Page No. 45 of 104 :: 46 ::
However, the prosecution failed either to obtain or send the specimen handwriting/ signature for any comparison with the questioned handwriting and signature and therefore, in the absence of the aforesaid, it cannot be proved that Vijay Pal Singh Pali did not put his signature on the ear-marked place on the Account Opening Form.
56. It is further argued that the PW-47 Satinder Kumar Gupta, official of the Bank who conducted vigilance investigation has deposed that when Vijay Pal Singh Pali was inquired about the signatures in question, he agreed that he had put his signatures with stamps as introducer. It is contended that even otherwise, various documents submitted along with the Account Opening Form clearly establishes the identity of M/s SEPL and, therefore, it does not lie fair in the mouth of prosecution to contend that there was a false introduction of M.s SEPL and its directors. It is submitted that the prosecution has failed to bring on record any material or witness to show that the account in question was introduced by A-6 Parveen Kumar and not by Vijay Pal Singh Pali. It is submitted that reliance placed by the prosecution on GEQD Report Ex.PW48/C is misplaced to establish that it was A-6 Parveen Kumar who signed on the said Account Opening Form.CC No. 372/19
CBI Vs. Shiv Kumar Sharma and Ors. Page No. 46 of 104 :: 47 ::
57. It is submitted that the prosecution has failed to prove that any specimen signature of A-6 Parveen Kumar was taken as PW-2 Sh. S.K. Punhani, did not subsequently depose that the specimen signature of A-6 Parveen Kumar were taken in his presence and thus, possibility of fabrication of the specimen signatures/ handwriting shown to have been appended by A-6 Parveen Kumar are fabricated. It is submitted that GEQD report is perfunctory as the same has several lacunae. It is submitted that letter of CBI vide which exhibits were sent to CFSL does not mention the number of documents/ sheets received at GEQD and, thereafter, at the time of sending the report, exhibits were not sent. It is submitted that as per the testimony of PW-48 Sh.
Abhimanyu Kumar, the said exhibits were not in sealed conditions and the same remained in open condition from 17.09.2008 till the opinion was prepared. It is submitted that though it is shown that GEQD report was conditionally signed by Sh. M.C. Joshi, nevertheless appended reasoning was not signed by him. It is submitted that as per the deposition of PW-48 Sh. Abhimanyu Kumar, forty seven cases were received between 17.9.2008 to 26.11.2008 at GEQD and thus, no proper examination of such voluminous documents could have been possibly conducted within such CC No. 372/19 CBI Vs. Shiv Kumar Sharma and Ors. Page No. 47 of 104 :: 48 ::
short period giving rise to preparation of report hastily.
58. With regard to the probability value of GEQD report, it is submitted that upon the comparison of questioned documents and alleged specimen signature, it transpires that in the specimen signature, the oval sharp in alphabet 'P' does not terminate at the bottom of straight line of 'P', but crosses the same at the middle of its straight line, while in questioned signature oval in the alphabet 'P' at both places terminates at the bottom of its straight line. It is further submitted that in the specimen signatures the two lines in the alphabet 'A' are joined in curve form at the top 'A' while in questioned signatures two lines in the Alphabet 'A' are joined sharply at the top. It is further submitted that evidence of an expert is rather weak and cannot be considered as offering conclusive proof and it is not safe to rely on the same without seeking independent and reliable corroboration.
59. Ld. Counsel for A-6 Parveen Kumar has placed reliance on the judgment of Hon'ble Supreme Court in Fakruddin Vs. State of MP4, Magan Bihari Lal Vs. State 4 AIR 1967 SC 1326 CC No. 372/19 CBI Vs. Shiv Kumar Sharma and Ors. Page No. 48 of 104 :: 49 ::
of Punjab5 , Murari Lal Vs. State of MP6 to contend that the Hon'ble Apex Court has time and again observed that it is unsafe to base a conviction solely on expert's opinion without substantial corroboration and this rule has been universally acted upon turning it as almost a rule of law. On the basis of the aforesaid submission, it is submitted that prosecution has failed to substantiate any of the charges by leading cogent and admissible piece of evidence with a degree of proof with reasonable due and, therefore, A-6 Parveen Kumar is entitled to be acquitted of all the charges.
ANALYSIS AND APPRECIATION OF EVIDENCE AND FINDINGS
60. In nutshell, the case of the prosecution is that all the accused persons hatched a criminal conspiracy amongst themselves for the grant of credit facility, release of the limits i.e. packing credit limit after the sanction and passing of Forex Bills for the purpose of discounting in total disregard to the Banking norms and thereafter diversion of funds amongst accused persons. It is also alleged that illegalities were committed by A-3 being public servant in pursuance to the criminal conspiracy with private accused persons with the object to cheat UCO 5(1977) 2 SCR 1007 6(1980) 2 SCR 249 CC No. 372/19 CBI Vs. Shiv Kumar Sharma and Ors. Page No. 49 of 104 :: 50 ::
Bank. It is a settled law that conspiracy to commit a crime is in itself punishable as a substantive offence and every individual offence committed pursuant to the conspiracy is separate and distinct offence for which individual offenders are liable to be punished independent of the conspiracy. In the present case, conspiracy is the most pivotal part of the prosecution case, as the same is the primary charge being axis around which revolves the other charges against the accused persons.
61. Section 120A IPC which defines "criminal conspiracy" as when two or more persons agree to do, or cause to be done (i) an illegal act, or (ii) an act which is not illegal, by illegal means such an agreement is designated as "criminal conspiracy". In view of this definition, the gist of the offence is "an agreement to break the law". The basic ingredients of the offence of criminal conspiracy are: (i) an agreement between two or more persons; (ii) the agreement must relate to doing or causing to be done either (a) an illegal act; or (b) an act which is not illegal in itself but is done by illegal means.
62. Condition precedent for holding the accused persons to be guilty of a charge of criminal conspiracy must be considered on the anvil of the facts viz. meeting of minds of CC No. 372/19 CBI Vs. Shiv Kumar Sharma and Ors. Page No. 50 of 104 :: 51 ::
two or more persons for doing or causing to be done an illegal act or an act by illegal and the said facts must be established by the prosecution. It is well established that the courts while drawing an inference from the materials brought on record to arrive at a finding as to whether the charges of the criminal conspiracy have been proved or not, must always bear in mind that a conspiracy is hatched in secrecy and it is difficult, if not impossible, to obtain direct evidence to establish the same. The manner and circumstances in which the offences have been committed and the accused persons took part are relevant. For the said purpose, it is necessary to prove that the propounders had expressly agreed to it or caused it to be done, and it may also be proved by adduction of circumstantial evidence and/ or by necessary implication. [See Mohammad Usman Mohammad Hussain Maniyar and Ors. v. State of Maharashtra7. In Mohmed Amin @ Amin Choteli Rahim Miyan Shaikh and Anr. Vs. C.B.I. through its Director8 after taking recourse to law governing the field, the Hon'ble Supreme Court noted thus:
"55. The principles which can be deduced from the above noted Judgments are that for proving a charge of conspiracy, it is not necessary that all the conspirators know each and every details of the conspiracy so long as they are co-participators in the main object of conspiracy. It is also not necessary that all the conspirators should 71981 INSC 53 8(2008) 15 SCC 49 CC No. 372/19 CBI Vs. Shiv Kumar Sharma and Ors. Page No. 51 of 104 :: 52 ::
participate from the inception of conspiracy to its end. If there is unity of object or purpose, all participating at different stages of the crime will be guilty of conspiracy."
(Emphasis Supplied)
63. The Hon'ble Apex Court in Esher Singh Vs. State of A.P.9 has held as under :
"A few bits here and a few bits there on which the prosecution relies cannot be held to be adequate for connecting the accused in the offence of criminal conspiracy. The circumstances before, during and after the occurrence can be proved to decide about the complicity of the accused".
64. Ld. Counsels for all the accused vociferously contended that prosecution has failed to adduce any direct evidence to substantiate that there was any meeting of minds between the public servant and private accused. It is further submitted that in the absence of any direct evidence, the conspiracy could only be established on the basis of such circumstantial evidence as to form a chain of events, leading to an irresistible conclusion about guilt of the accused, but the prosecution has failed to adduce any such circumstantial evidence.
65. This Court has considered the submissions advanced by Ld. PP for CBI and Ld Defence Counsel and has perused 9(2004) 11 SCC 585 CC No. 372/19 CBI Vs. Shiv Kumar Sharma and Ors. Page No. 52 of 104 :: 53 ::
the law laid down by Hon'ble Apex Court in the precedents relied upon by Ld. Defence Counsel.
66. There is no denying the fact that Hon'ble Apex Court while holding that the offence of conspiracy is committed in secrecy and can be proved only by circumstantial evidence, has held that the circumstances should be proved beyond reasonable doubt leading to the guilt of the accused. For the purposes of considering the conduct of the accused so as to deduce about their complicity with the conspiracy, a "rule of caution" has been laid down by Privy Counsel in case reported10 as as under:-
"In a joint trial care must be taken to separate the admissible evidence against each accused and the judicial mind should not be allowed to be influenced by evidence admissible only against others".
67. These words of caution were reiterated by Hon'ble Apex Court in State Vs. Nalini11. The relevant portion is reproduced hereunder:-
"There is a need to guard against prejudice being caused to the accused on account of the joint trial with other conspirators. The learned Judge observed that "there is always difficulty in tracing the precise contribution of each member of the conspiracy but then there has to be cogent and convincing 10AIR 1954 PC 140 111999 (5) SCC 253 CC No. 372/19 CBI Vs. Shiv Kumar Sharma and Ors. Page No. 53 of 104 :: 54 ::
evidence against each one of the accused charged with the offence of conspiracy".
68. In view of aforesaid settled law, prosecution has first to establish that all the accused persons facing trial, were in fact parties to the alleged conspiracy with which they have been charged and for the purposes of appreciating the evidence on record with respect to the allegations of conspiracy, circumstances in which accused acted, their actions and mannerism are required to be considered, which this court shall look into, mindful of the words of caution laid down by Hon'ble Apex Court in above referred precedents. Whether or not, conspirators will be liable for substantive offence other than the conspiracy and if so, to what extent, has to be proved on record by the prosecution on the basis of evidence which shall be adverted to hereinafter.
69. As noted above, the case of the prosecution is that during 2004-05, all the accused persons conspired amongst themselves to defraud the Bank and in furtherance of the said conspiracy, A-3 R.K. Joshi being public servant posted as AGM of UCO Bank, Delhi High Court Branch agreed to do illegal act of abusing the office of public servant by allowing opening of current account in the name of non-
CC No. 372/19CBI Vs. Shiv Kumar Sharma and Ors. Page No. 54 of 104 :: 55 ::
existing company, M/s SEPL falsely showing A-1 Shiv Kumar Sharma and A-2 Naveen Kumar Sharma as its Directors on the basis of forged documents; and which Bank account was falsely introduced by A-6 Parveen Kumar impersonating himself as Vijay Pal Singh Pali; thereafter, CC Limit of Rs.70 lakhs as ABC and ODL of Rs.25 lakhs were sanctioned in favour of M/s SEPL by collaterally securing with the 'Property' which was not in the name of M/s SEPL; and thereafter, released Rs.2.45 crores on the basis of various forged and fabricated export Bills and a cash amount of Rs.2,80,08,000 was diverted through cheques to A-4 Amresh Kumar Mishra @ Sunder Mishra, A-5 Ram Ji Mishra, A-7 Swadesh Kumar Mishra @ Munder Mishra, A-8 Anand Ji Mishra and A-9 Chander Kant Dubey causing loss to the tune of Rs.1,79,18,000/-.
70. The case of the prosecution opens with the allegations against A-3 R.K. Joshi who has been charged for abusing his public office by extending pecuniary advantage to private persons, i.e., the accused mentioned above and thus, allegedly committed an offense punishable under Section 13(2) read with Section 13 (1)(d) of PC Act. The aforesaid allegation against A-3 for abusing his office are germane to the charges against other accused persons. It will be CC No. 372/19 CBI Vs. Shiv Kumar Sharma and Ors. Page No. 55 of 104 :: 56 ::
appropriate to examine first whether the prosecution has succeeded in establishing aforesaid substantive charges against A-3 R.K. Joshi. The contention of Ld. Counsel for A- 3 R.K. Joshi is that there is no averment or allegation in the entire charge sheet of extension of any illegal gratification on the part of private accused persons, to the accused public servant and the prosecution has failed to prove that A-3 R.K. Joshi obtained any pecuniary advantage from any person and, therefore, by no stretch of imagination, the provisions of Section 13(1)(d) of PC Act, could have been invoked. It is contended that on this ground itself, the case cannot proceed and A-3 R.K. Joshi is liable to be acquitted.
71. In view of aforesaid submissions, before adverting to appreciate the prosecution and defence evidence which have come up on record vis-a-vis the charges against the accused persons, it is deemed appropriate to deal with that contention which has been raised by Ld. Defence Counsel, on purely legal aspects, in their quest to demolish the prosecution case at its threshold.
72. In order to deal with this contention of Ld. Defence Counsel, it is pertinent to make a mention of the relevant provisions of Section 13(1)(d) of POC Act, 1988 reads as under :
CC No. 372/19CBI Vs. Shiv Kumar Sharma and Ors. Page No. 56 of 104 :: 57 ::
"13. Criminal misconduct by a public servant: (1) A public servant is said to commit the offence of criminal misconduct, -
(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 ."
The necessary ingredients of Section 13(1)(d) are as follows :
1) accused was a public servant;
2) accused used corrupt or illegal means or otherwise abused his position; and,
3) accused obtained for himself or for any other person any valuable thing or pecuniary advantage.
73. In Runnu Ghosh vs. CBI12, it was held that:-
"66. ........ A new offence (or sub-species, of the existing offence) has been carved out, in Section 13(1)(d)(iii) which criminalizes, as "criminal misconduct" the act of a public servant, holding office, which results in someone else ("any person") benefiting by getting a valuable thing or pecuniary advantage, "without any public interest "
There is no doubt that Parliament created this new offence of criminal misconduct, where abuse of office, or use of corrupt or illegal means by a public officer, is inessential to 121996 (39) DRJ 221 CC No. 372/19 CBI Vs. Shiv Kumar Sharma and Ors. Page No. 57 of 104 :: 58 ::
prove the crime. What the prosecution has to establish, in accordance with law, is that the public officer, obtained for someone else - not necessarily by abusing his office, or using corrupt or illegal means -
pecuniary advantage or a valuable thing -
without public interest."
xxxxxxxx
78. Therefore, when a public servant‟s decision exhibits complete and manifest disregard to public interest with the corresponding result of a third party obtaining pecuniary advantage or valuable thing, he is fastened with responsibility for "criminal misconduct" under Section 13(1) (d) (iii).
xxxxxx (emphasis supplied)
74. The phrases namely "corrupt , illegal means" and "by abusing his position as public servants" are different categories of corrupt practices, which are conjuncted by the words "or" and not by the conjunction "and". This in itself indicates that these three different categories are alternate misconduct on the part of public servant and either of these three practices, if done by public servant, the same can constitute an offence under this Section.
75. The phraseology "By abusing his official position as Public Servant" covers the acts done by the public servant otherwise than by corrupt or illegal means. The gist of the offence under this clause is, that a public officer abusing his position as "public servant" obtains for himself or for other CC No. 372/19 CBI Vs. Shiv Kumar Sharma and Ors. Page No. 58 of 104 :: 59 ::
person, any valuable thing. The word "abuse" used by the Legislature means "misuse", i.e., using his position for something which is not intended. That abuse of the position may be by corrupt or illegal means or otherwise than those means". In view thereof, the Legislature never intended that there has to be an express evidence of illegal gratification before invocation of this section. In case, there are instances and allegations that a person has abused his position as a public servant, in order to cause advantage to anyone, that in itself is sufficient for invocation of this Section. The contention raised by Ld. Defence Counsel that the provisions of P. C. Act cannot be invoked in the absence of any allegations by the prosecution on the part of public servant of demand and acceptance of illegal gratification for showing any favor to a private individual is far-fetched and devoid of merits. The applicability of Section 13(2) of the PC Act is not dependent on the fact that A-3/public servant should have obtained a valuable thing or a pecuniary advantage for himself. An offence under Section 13 of PC Act can be said to have been in terms of Sections 13(1) (d)(ii)(iii), when a public servant abuses his position and obtains for himself or for any other person any valuable thing or pecuniary advantage; or while holding office as a public servant, obtains for any person any valuable thing or pecuniary CC No. 372/19 CBI Vs. Shiv Kumar Sharma and Ors. Page No. 59 of 104 :: 60 ::
advantage without any public interest. Hence, it is not necessary that pecuniary advantage or a valuable thing has been procured by public servant for himself, it could be a third party. As there are allegations of abuse of official position by the public servant A-3 R.K. Joshi in order to cause pecuniary advantage to their co-accused, this clause of P.C. Act very much comes into play.
76. In view thereof, the contention advanced by Ld. Defence Counsel that in the present case there are no allegations on record that A-3 R.K. Joshi, the public servant, adopted any corrupt or illegal means or obtained any pecuniary advantage for himself, thus Section 13(1)(d) of P.C. Act cannot be invoked, is rejected. Needless to mention that the prosecution has to establish necessary ingredients of the offences with which A-3 R.K. Joshi has been charged, on the basis of the evidence adduced before this Court.
77. Having dealt with the aforesaid contention urged by Ld. Defence Counsel on behalf of A-3 R.K. Joshi on purely legal grounds, this Court shall now dwell upon to prosecution evidence which has come up on record vis-a-vis the allegations against A-3 R.K. Joshi for abusing his office. The first limb of allegation against A-3 R.K. Joshi is that he knowingly allowed opening of the current account no. 1599 CC No. 372/19 CBI Vs. Shiv Kumar Sharma and Ors. Page No. 60 of 104 :: 61 ::
in the name of M/s SEPL, A-1 Shiv Kumar Sharma and A-2 Naveen Kumar Sharma on the basis of false documents showing them as Directors of M/s SEPL while in fact they were not the Directors as per ROC record at the relevant time. The said allegations were countered by A-3 R.K. Joshi submitting that aforesaid account was allowed to be opened by him as per the rules and regulations applicable for opening of current Bank Account in the name of the Company with the Bank. In view of the aforesaid, now it is required to be examined first as to what were the Banking instructions, norms and guidelines to open a new current account with the Bank in respect to Company.
78. DW-1 tendered RBI Circular dated 16.08.2002 issued to the Chief Executive of all Commercial Banks directing to follow the guidelines on 'Know Your Customer' (KYC in short) and as per the said KYC policy, KYC procedure would be the key principal for identification of individual/ corporate opening of account and their identification should entail verification through an introductory reference from an existing account holder/ a person known to the Bank or on the basis of the documents provided by the customer. It has been further provided that the Bank should have in place, adequate policies that establish procedures to verify the bona CC No. 372/19 CBI Vs. Shiv Kumar Sharma and Ors. Page No. 61 of 104 :: 62 ::
fide identification of individual/ corporate opening of an account. As per the circular, the objective of KYC framework is two fold, (i) to ensure appropriate customer identification; and (ii) to monitor transactions of suspicious nature. It is provided that Banks should obtain all information necessary to establish the identity/ legal existence of each new customer, based preferably on disclosure by customers themselves and typical easy means of establishing identity would be documents such as passport, driving license etc. and in the absence of such documents, verification by existing account holders or introduction by a person known to the Bank may suffice and it should be ensured that the procedure adopted does not lead to denial of access to the general public for Banking services.
79. In view of the aforesaid guidelines, it is to be examined whether A-3 R.K. Joshi followed the aforesaid directions/ guidelines of RBI while allowing the opening of current account in the name of M/s SEPL. As per record, Account Opening Form (Ex.PW19/A) filled up on behalf of M/s SEPL shows A-1 Shiv Kumar Sharma and A-2 Naveen Kumar Sharma as Directors who had been authorized to open current account in the name of M/s SEPL with UCO Bank, Delhi High Court Branch. The said Account Opening CC No. 372/19 CBI Vs. Shiv Kumar Sharma and Ors. Page No. 62 of 104 :: 63 ::
Form stipulates 'Indicative Guidelines' for filling in the form and list of documents to be submitted for opening different kind of accounts with the Bank. In the present case, current account was opened on behalf of M/s SEPL, which is a joint stock company and as per the guidelines, following documents were required to be submitted at the time of opening joint stock :
i) copy of Memorandum and
Articles of Association;
ii) certificate of incorporation ;
iii) certificate of commencement
of business/ registration
certificate; and
iv) certificate copy of a resolution
board of Directors regulating
conduct of such account (as per
proforma given in his form).
80. As per the case of the prosecution, the aforesaid Account Opening Form was accompanied by duly certified memorandum and article of association (Ex.PW44/D), copy of certificate of incorporation, certificate of importer exporter code dated 14.05.2004 issued by Director General Foreign Trade, Ministry of Commerce, Government of India CC No. 372/19 CBI Vs. Shiv Kumar Sharma and Ors. Page No. 63 of 104 :: 64 ::
in favour of M/s SEPL and the resolution of M/s SEPL (Ex.PW44/A) and (Ex.PW44/C). In addition to the aforesaid documents, following documents were also submitted :-
a) letter dated 12.05.2004 of
Income Tax Department allotting the
PAN number to the Company, Ex.
PW-19/DB (D-55).
b) photocopy of the Driving
Licence of Shiv Kumar Sharma,
MarkPW44/1 (D-52).
c) photocopy of the Driving
Licence of A-2 Naveen Kumar
Sharma D-53 (MarkPW44/2).
d) photocopy of Form-32
appointing A-1 Shiv Kumar Sharma
and A-2 Naveen Kumar Sharma as
directors of M/s Sati Exim Pvt. Ltd.
w.e.f. 08.04.2004, MarkPW8/X (D-
6).
e) photocopy of the PAN Card of
A-2 Naveen Kumar Sharma (D-58).
81. Thus, various documents in compliance with
CC No. 372/19
CBI Vs. Shiv Kumar Sharma and Ors. Page No. 64 of 104
:: 65 ::
guidelines provided in the Account Opening Form and the KYC policy were submitted and no prosecution witness deposed that the requisite documents were not annexed along with the said Form or that aforesaid documents submitted by the company were not sufficient to establish identity of M/s SEPL, or that the said documents were forged and fabricated. However, Ld. PP for CBI has vehemently argued that the resolutions passed by the Board of Directors of M/s SEPL showing A-1 Shiv Kumar Sharma and A-2 Naveen Kumar Sharma as Directors and authorizing them to open and operate the current account in the name of M/s SEPL is false being contrary to the records available with RoC in respect to M/s SEPL. It is further argued that M/s SEPL was not existing at 52, Yusuf Sarai, New Delhi, as per the RoC record. The aforesaid contention of Ld. PP for CBI were countered by Ld. Counsel for accused submitting that documents filed along with the charge-sheet by prosecution itself show the existence of M/s SEPL at the aforesaid address. The aforesaid submission and counter-submissions are being considered in view of the evidence on record.
82. PW-8 Sh. Data Ram is the witness who deposed with regard to the record of M/s SEPL maintained with Registrar of Companies. He deposed that he handed over documents CC No. 372/19 CBI Vs. Shiv Kumar Sharma and Ors. Page No. 65 of 104 :: 66 ::
Ex.PW8/A to Inspector, CBI, vide seizure memo Ex.PW8/B. Ex.PW8/A is the Certificate of Incorporation along with Annexures such as Form No. 18, Forms No. 32, Form No. 5, copy of Resolution dated 12.08.2004 and Annual Return. As per the said documents, at the time of incorporation of M/s SEPL on 21.05.2002, the address of the said company was shown as 282, Satya Niketan, New Delhi and A-9 Chander Kumar Dubey and another accused Sangam Pandey were shown as Directors as per the detail given in Form No. 32. Subsequently, vide another document Form No. 32 A-9 Chander Kumar Dubey and Sangam Pandey were shown to have resigned on 01.07.2004, and Raj Singh and Sukhwinder were shown to have joined the Company on 12.11.2004. There is nothing on record with RoC showing A-1 Shiv Kumar Sharma and A-2 Naveen Kumar Sharma as Directors of M/s SEPL. However, as per the document that is Import Export Code, they were shown Directors of the aforesaid company on 14.05.2004. They were also shown Directors on 07.07.2004, at the time of opening of account with the Bank.
83. Upon analysis of testimony of PW-8 Sh. Data Ram and PW-51 Sh. S.L. Garg, Inspector, CBI, it is revealed that entire record maintained with the Registrar of Companies in respect of M/s SEPL was not handed over to IO. In fact, CC No. 372/19 CBI Vs. Shiv Kumar Sharma and Ors. Page No. 66 of 104 :: 67 ::
when PW-8 Sh. Data Ram was confronted with D-56 which is Form-32 of M/s SEPL showing A-1 Shiv Kumar Sharma and A-2 Naveen Kumar Sharma as Directors of M/s SEPL on 08.04.2004, the witness stated that so far as he remembered the aforesaid document was not with RoC, however, during his cross-examination conducted by Ld. Counsel for A-3 R.K. Joshi, he admitted that in April 2004 all the documents in RoC Office used to be received at its cash counter in duplicate with requisite fee and receiving clerk used to return the copy of such documents with computerized generated receipt affixed over it to the person who submitted the said documents after retaining one copy. The witness has further deposed that first, those filed documents used to go to record section and, thereafter, kept in the file maintained for each company separately. He admitted that a complete file of M/s SEPL was also maintained in their office, however, that file was not shown to him. The witness also added that if filed documents at the counter were not received in the record room, the same would not be available in the file. The witness admitted that Ex.PW9/D1(Form-13) and Ex.PW9/D2 (Form No. 8) bear the stamp of RoC Office and the said documents were received in RoC Office on 23.03.2005. The witness has also identified the cash counter computerized receipt showing the CC No. 372/19 CBI Vs. Shiv Kumar Sharma and Ors. Page No. 67 of 104 :: 68 ::
receipt of Form No. 32 in RoC Office, with regard to the documents Ex.PW8/D3-1 which shows A-1 Shiv Kumar Sharma and A-2 Naveen Kumar Sharma as Directors of M/s SEPL on 08.04.2004. The aforesaid testimony of the witness raises a possibility that Form No. 32, Ex.PW8/D3-1 was received in RoC Office, but the same did not reach the file of the M/s SEPL. Furthermore, the witness himself admitted that he had not seen the entire file in respect of M/s SEPL or that he did not furnish entire documents pertaining to M/s SEPL to the IO. In view of the aforesaid evidence having come on record, the prosecution has failed to prove beyond reasonable doubt that A-1 Shiv Kumar Sharma and A-2 Naveen Kumar Sharma were not the Directors of M/s SEPL on the date of opening of the current account in the name of M/s SEPL. Furthermore, it is not the case of the prosecution that some other persons were the Directors of M/s SEPL at the relevant time as no such evidence was adduced by the prosecution.
84. Now, coming to the other limb of the arguments of the prosecution that A-3 R.K. Joshi allowed the opening of the current account in the name of M/s SEPL on the false introduction by A-6 Parveen Kumar despite being fully cognizant of the fact that A-6 was impersonating himself as CC No. 372/19 CBI Vs. Shiv Kumar Sharma and Ors. Page No. 68 of 104 :: 69 ::
Vijay Pal Singh Pali; first it has to be examined as to what is the evidence brought by the prosecution to establish that it was A-6 Parveen Kumar who signed as introducer of the account in question. The prosecution has established that Vijay Pal Singh Pali as proprietor of M/s Pali Photostat was having a current account no. 399 with the Bank. It is the case of the prosecution that the aforesaid current account was being operated by A-6 Parveen Kumar on behalf of Vijay Pal Singh Pali. During the course of the investigation, statement of Vijay Pal Singh Pali was recorded by IO under Section 161 Cr. P.C, wherein he stated that Pali Photostat located at Kiosk No. 10, situated in Delhi High Court premises was being run by him from November, 1990 till May, 1993 and, thereafter, due to his illness and old age, he handed over the said kiosk to A-6 Parveen Kumar for lump- sum amount. He further stated that at that time, he failed to close his current account no. 399 maintained with UCO Bank, Delhi High Court Branch, however, he never operated the said account and it came to his notice only after receiving notice from CBI on 07.03.2008 that the said Bank account was being operated by A-6 Parveen Kumar. Upon showing Account Opening Form of M/s SEPL, he stated that he had never introduced the aforesaid Bank account and the same was introduced by A-6 Parveen Kumar by impersonating CC No. 372/19 CBI Vs. Shiv Kumar Sharma and Ors. Page No. 69 of 104 :: 70 ::
himself as proprietor of Pali Photostat.
85. Vijay Pal Singh Pali was not examined before this Court due to his demise and, therefore, the case of the prosecution that the aforesaid current account of M/s Pali Photostat was being run by A-6 Parveen Kumar and it was he who signed on the Account Opening Form of M/s SEPL impersonating as Vijay Pal Singh Pali could not be established by best evidence which would have been the testimony of Vijay Pal Singh Pali before this court. Now, it is to be examined whether prosecution is able to establish the aforesaid allegation from other admissible and reliable evidence.
86. PW-47 Sh. Satinder Kumar Gupta, who was deputed for conducting vigilance investigation in respect of current Bank account of M/s SEPL, stated to have submitted a report with the Bank, however, the said report has not seen the light of the day as the same is not part of the charge-sheet. The prosecution has failed to give any explanation much less the plausible explanation as to why the said report was not made part of the charge-sheet and why this witness was included in the list of prosecution witnesses in the absence of the report prepared by him. Non-filing of the report by him gives rise to draw adverse inference against the prosecution more CC No. 372/19 CBI Vs. Shiv Kumar Sharma and Ors. Page No. 70 of 104 :: 71 ::
particularly in view of testimony of this witness before this Court testifying that upon the enquiry having been made by him from Mr. Vijay Pal Singh Pali, though he denied to have been acquainted with proprietor of M/s SEPL, he had admitted to have affixed his signature as introducer for the current account of the aforesaid company on the asking by A-3 R.K. Joshi. Upon confrontation with Account Opening Form Ex.PW19/A, the said witness testified that Sh. Vijay Pal Singh Pali had introduced the current account of M/s SEPL by putting his signatures and stamps at point Q-5. He deposed that, "when Mr. Vijay Pal Singh Pali was asked by him, he agreed that he had put his signatures with stamps as introducer, when asked by Sh. R.K. Joshi, Branch Manager, though he was not knowing the current account holder that is M/s Sati Exim Private Ltd". PW-47 also testified that during the course of his enquiry/ investigation, he had also recorded the statement of Sh. Vijay Pal Singh Pali who had admitted in writing the introduction of current account of M/s SEPL by him at the instance of A-3 R.K. Joshi.
87. The aforesaid witness was neither re-examined nor sought to be declared hostile on the aspect Sh. Vijay Pal Singh Pali admitting to have signed the Account Opening Form of M/s SEPL. There is nothing on record to discredit CC No. 372/19 CBI Vs. Shiv Kumar Sharma and Ors. Page No. 71 of 104 :: 72 ::
the testimony of this witness. Furthermore, other evidence with regard to the allegations of false introduction of the opening of account of M/s SEPL by A-6 Parveen Kumar impersonating as Vijay Pal Singh Pali would have been the examination of disputed signature on the Form with the admitted specimen signature of Vijay Pal Singh Pali on signature card of the current account of M/s Pali Photostat. However, no efforts have been made by investigating agency to take the aforesaid steps. The contention of Ld. PP for CBI that the said specimen card was not found available with the Bank is contrary to the testimony of PW-47 Sh. Satinder Kumar Gupta, who deposed in his cross-examination that he had checked specimen signature card of the current account of M/s Pali Photostat during his internal investigation. However, even if it is presumed that specimen signature card of M/s Pali Photostat was not available with the Bank, the proper course for the investigation agency was to obtain specimen signatures of Vijay Pal Singh Pali and send the same to GEQD for its comparison with the disputed signature in the same manner as done in the case of A-6 Parveen Kumar.
88. In GEQD report Ex.PW48/A (Colly), it has been opined by Sh. M.C. Joshi, Deputy Government, Examiner of CC No. 372/19 CBI Vs. Shiv Kumar Sharma and Ors. Page No. 72 of 104 :: 73 ::
Questioned Documents and PW-48 Sh. Abhimanyu Kumar, Assistant Government Examiner of Questioned Documents that the questioned signatures and handwritings on the Account Opening Form tallied with the specimen signatures and handwritings of A-6 Parveen Kumar. Ld. PP for the CBI on the basis of the aforesaid report submits that it has been established by the prosecution beyond reasonable doubt that A-6 Parveen Kumar signed on the Account Opening Form of M/s SEPL impersonating himself as Vijay Pal Singh Pali. Per contra, Ld. Counsel for A-3 R.K. Joshi and A-6 Parveen Kumar have vehemently objected for placing reliance upon the said report submitting that the said report is flawed on various counts and the same cannot be the sole basis to establish the allegations against A-3 R.K. Joshi and A-6 Parveen Kumar .
89. Prosecution in order to prove the aforesaid report of handwriting expert had examined PW-48 Sh. Abhimanyu Kumar, who supported his report testifying that he had duly examined both the questioned signature and handwriting with the specimen signatures and handwriting and, thereafter, gave a reasoned report. Though, the report has also been signed by Sh. M.C. Joshi, Deputy Government, Examiner of Questioned Documents however, the reasoning CC No. 372/19 CBI Vs. Shiv Kumar Sharma and Ors. Page No. 73 of 104 :: 74 ::
in support of the aforesaid report has not been signed by Sh. M.C. Joshi. The contention of the Ld. Counsel for A-6 Parveen Kumar that prosecution has failed to prove that the exhibits containing questioned and specimen signature and handwriting were actually sent to GEQD is not tenable, as prosecution has established that the aforesaid exhibits were sent vide forwarding letter Ex.PW48/A in sealed conditions. Further, contention of Ld. Counsel for A-6 Parveen Kumar that since 47 cases were received between 17.09.2008 to 26.11.2008 at GEQD, therefore, a perfunctory report was prepared at the asking of CBI, is also without merit.
Furthermore, the contention of A-6 Parveen Kumar that alphabet 'P' and alphabet 'A' in the questioned and admitted signatures and handwritings are different, is also without any merit as this court has compared the questioned signature on Ex.PW19/A and specimen handwriting Ex.PW2/A-31 - Ex. PW2/A-42 at Q-5 and found similarity between the same.
90. However, the aforesaid report of the handwriting expert is required to be considered keeping in view the law settled by the Hon'ble Superior Courts. Expert testimony is made relevant by Section 45 of the Indian Evidence Act and where the Court has to form an opinion upon a point as to the identity of handwriting in question, the opinion of a CC No. 372/19 CBI Vs. Shiv Kumar Sharma and Ors. Page No. 74 of 104 :: 75 ::
person 'specially skilled' as to identity of handwriting', is expressly made a relevant fact. It has been contended by learned Counsel for A-6 Parveen Kumar that no conviction can be recorded on the basis of uncorroborated report of Handwriting Expert. This court is conscious that the Hon'ble Supreme Court of India in Santosh Kumar (supra), where the trial court considered the report of the handwriting expert admissible and based its findings solely thereupon, has held as under:
"65. The underlying principle deducible from the observations extracted above is that though it is not impermissible to base a finding with regard to authorship of a document solely on the opinion of a handwriting expert but, as a rule of prudence, because of imperfect nature of the science of identification of handwriting and its accepted fallibility, such opinion has to be relied with caution and may be accepted if, on its own assessment, the Court is satisfied that the internal and external evidence relating to the document in question supports the opinion of the expert and it is safe to accept his opinion.
66. In the instant case, with regard to authorship of the suicide letter, the Trial Court though returned a finding in favour of the prosecution by relying solely on the expert report but did not record its satisfaction having regard to its own observations with respect to the admitted and disputed writings. It also did not examine whether in the proven facts and circumstances of the case it would be safe to CC No. 372/19 CBI Vs. Shiv Kumar Sharma and Ors. Page No. 75 of 104 :: 76 ::
rely on the expert report. It be noted that Section 73 of the IEA, 1872 enables a Court to compare the words or figures written by a person present in Court with any words or figures alleged to have been written by such person. The Trial Court therefore could have undertaken such an exercise. But, in the instant case, there appears no such exercise undertaken by the Trial Court.........."
91. Thus, reliance can be placed upon the opinion of the handwriting expert without any corroboration, but caution has been provided so that reasons for the opinion must be carefully probed by keeping into consideration other relevant evidence. It has been held in the aforesaid judgement that cases where reasons for the opinion are convincing and there is no evidence throwing doubt upon the testimony of handwriting expert, the same may be accepted. Now, it is to be examined as to whether report of handwriting expert is so convincing and reliable as to render conviction of A-6 Parveen Kumar on the basis of sole uncorroborated report.
92. In the present case, as noted above, best evidence to establish that Vijay Pal Singh Pali did not introduce the opening of the current account in the name of M/s SEPL and in his place A-6 Parveen Kumar introduced the same, was to compare the signature and handwriting of Vijay Pal Singh Pali by taking his admitted signature. The Prosecution has CC No. 372/19 CBI Vs. Shiv Kumar Sharma and Ors. Page No. 76 of 104 :: 77 ::
failed to obtain specimen signature card of Vijay Pal Singh Pali from UCO Bank for the reason best known to it. If the case of the prosecution is that the said specimen signature card was not available, the investigation agency must have taken his specimen signature and handwriting and sent the same to GEQD. Bank Official who conducted internal investigation has also deposed that Vijay Pal Singh Pali admitted before him that he introduced the account in question by putting his signature and handwriting on Account Opening Form. The aforesaid facts and circumstances raise serious doubts about the introduction of the Bank account in question by A-6 Parveen Kumar instead of Vijay Pal Singh Pali and handwriting report cannot be the sole basis to bring home the guilt of A-3 R.K. Joshi and A-6 Parveen Kumar.
93. Now, this Court shall deal with the allegations of the prosecution against A-3 R.K. Joshi that he allowed the immovable property which was over-valued, as collateral security against the CC Limits sanctioned by him. The contention of Ld. Counsel for A-3 R.K. Joshi is that the credit facility sanctioned in the present case by A-3 R.K. Joshi are not the loan against immovable property rather a working capital facility sanctioned for export business of the CC No. 372/19 CBI Vs. Shiv Kumar Sharma and Ors. Page No. 77 of 104 :: 78 ::
M/s SEPL. This Court has gone through the material and evidence on record on the aspect of the aforesaid allegations against A-3 R.K. Joshi and finds that the prosecution has not brought any material or evidence suggesting that the credit facilities sanctioned in favour of M/s SEPL was obligatorily required to be secured by immovable property. In fact PW-18 Sh. T.R. Gulati in his testimony recorded on 13.12.2017, deposed that credit facilities sanctioned to an exporter against security of stock and book debt was a working capital facility and could not be called loan against mortgage of immovable property. PW-47 Sh. Satinder Kumar Gupta has also deposed in the same manner and admitted the suggestion given to him during his cross-examination that 'as per the circulars of UCO Bank and RBI in vogue at the relevant time, taking of equitable mortgage of property as collateral security was not mandatory in case of Export Finance'. Furthermore, A-3 R.K. Joshi has examined DW-1 and he tendered RBI Circular dated 10.08.2004 (Ex.DW1/B) wherein at Para-1.3.2 (b), it is mentioned that with Banks should adopt any of the method viz, projected balance-sheet method, turn-over method or cost budget method for assessment of working capital requirements of their export customers whichever is most suitable and appropriate to their business. While applying the aforesaid circular to the facts CC No. 372/19 CBI Vs. Shiv Kumar Sharma and Ors. Page No. 78 of 104 :: 79 ::
and circumstances of the present case, it is transpired that in process notes, Ex.PW41/A at serial no. 10, calculation for working capital assessment was shown and the permissible Bank finance had been assessed at Rs.185 lakhs. It is further reflected from the aforesaid document that while assessing permissible Bank finance, no mention has been made to the value of collateral security offered by M/s SEPL, and thus, it can easily be inferred that assessment of permissible Bank finance had nothing to do with the value of security offered as the credit limits sanctioned to M/s SEPL were independent of the value of collateral security.
94. It is also transpired from letter dated 25.01.2005 Ex.PW48/B4 that M/s SEPL after availing the sanctioned limits of Rs.70 lakhs, approached the Branch informing that during 20.11.2004 to 24.01.2005, it submitted export documents worth Rs.2,26,28,048.89/- and further informed that existing limits were not sufficient to maintain the export level at which they were working and thus, requested for enhancement of credit limits. The aforesaid request of M/s SEPL was considered and process note for enhancement of the credit limit was prepared. Security register of the Branch Ex.DW1/M was produced by Sh. Pradeep Raj of UCO Bank. The extract from the said security register reflects that while CC No. 372/19 CBI Vs. Shiv Kumar Sharma and Ors. Page No. 79 of 104 :: 80 ::
assessing the enhanced working capital requirements, the same format of CMA data which was used in the process note for sanction of Rs.70 lakhs, was used. Thus, even for the enhanced credit limits, working capital requirements were assessed on the basis of projected sales of M/s SEPL and the credit facilty was not enhanced on the basis of value of immovable property offered by the company as collateral security. As per RBI circular dated 10.08.2004 (Ex.DW1/B), the sanction of fresh/ enhanced export credit limits should be made within 45 days from the date of receipt of credit limit application and it has been further stipulated that Banks should simplify the application form by reducing data requirements from exporters for assessment of their credit needs and the same should not be directly linked to the availability of collateral security. It is further provided in the aforesaid circular that as long as the requirement of credit limit is justified on the basis of performance and track record of exporter, the credit should not be denied merely on the ground of non-availability of collateral security. Even PW-27 Sh. Subhash Chander Kuchhal, the then Chief Manager of UCO Bank testified that generally no collateral security used to be obtained in export finance.
95. In view of the aforesaid evidence on record, it can CC No. 372/19 CBI Vs. Shiv Kumar Sharma and Ors. Page No. 80 of 104 :: 81 ::
safely be concluded that since M/s SEPL was sanctioned credit facilities for its export business on the basis of working capital requirements, the collateral security in the shape of immovable property was not at all required and A-3 R.K. Joshi was required only to see the projected balance- sheet of M/s SEPL. As per the evidence on record, M/s SEPL was disbursed a sum of Rs.3.15 crores and it received a total export realization of Rs.2,22,74,956.76 as is reflected from the details given in the charge-sheet itself. Thus, it shows that M/s SEPL was in fact engaged in the export business and A-3 R.K. Joshi was within his power to sanction the credit facilities without securing the same against any collateral security. Nevertheless, A-3 R.K. Joshi as matter of abundant caution in order to protect the interest of the Bank, asked M/s SEPL for immovable property as collateral security, though the same was not at all required. However it is the contention of the Ld. PP for CBI that once the collateral security was made part of the terms and conditions of the sanction of the facility, it was incumbent upon A-3 R.K. Joshi to apply all the safeguards which are adopted for advancement of loan against immovable property, however he had sanctioned the credit facilities prior to getting the immovable property verified on the basis of private valuer. The aforesaid contentions of prosecution are CC No. 372/19 CBI Vs. Shiv Kumar Sharma and Ors. Page No. 81 of 104 :: 82 ::
required to be considered in the wake of RBI circulars dated 10.08.2004 (Ex.DW1/B) which provides that no worthwhile export order should be denied export credit from the Banks.
Even otherwise A-3 accepted immovable property as collateral security on the basis of the valuation report assessing value of the said property for Rs.2.1 crore. The contention of the prosecution that the said valuation report over-valued the property is based on no evidence as there is no material on record suggesting incorrectness of value or that A-3 R.K. Joshi was aware of any other value of the said property. Reliance placed by the prosecution on the valuation report dated 14.09.2007 as counter to the valuation report submitted by M/s SEPL, is also misplaced as PW-16 Sh. Anil Singh who valued the said property failed to take the measurements of the said property and its market value. Prosecution has also failed to prove that the said valuer was on the Bank's Panel. Furthermore, the said property was made subject matter of the suit instituted by the Bank in DRT, where the Bank settled the dispute with M/s SEPL and its Directors. Nothing has come on record to suggest that the valuation of the said property was not proper due to which Bank had to suffer losses.
96. So far as disbursement of amount in pursuance to the CC No. 372/19 CBI Vs. Shiv Kumar Sharma and Ors. Page No. 82 of 104 :: 83 ::
sanction of the credit facilities in favour of M/s SEPL is concerned, the same is as per the operational requirement of the said facility under ABC as whenever M/s SEPL submitted export bills, the permissible amount was calculated by deducting margin at the rate of 25% from the total amount of export bills. The said permissible amount was debited in ABC account of M/s SEPL keeping the balance below the drawing power or sanction limit whichever was lower. As per the procedure for disbursement under ABC, disbursements in the current Bank Account of M/s SEPL were made on the basis of export bills tendered by M/s SEPL, showing export of the goods and export realization thereof. As per the case of the prosecution, the Bank made available to M/s SEPL funds to the extent of Rs.315 lakhs (Rs.70 lakh and Rs.245 lakh) while the balance in the ABC account always remained below the sanctioned limit of Rs.180 lakhs.
97. Further case of the prosecution is that a sum of Rs.2,80,08,000/- was withdrawn in cash from the current account of M/s SEPL and in addition to it, withdrawal by other mode, i.e., by cheques and by transfer were also made from the current account of M/s SEPL and thus, a total withdrawals of Rs.494.51 lakhs was made, as per the details CC No. 372/19 CBI Vs. Shiv Kumar Sharma and Ors. Page No. 83 of 104 :: 84 ::
given in the charge-sheet. An amount of Rs.315 lakh was released in the current account of M/s SEPL, while a sum of Rs.494.51 lakhs was debited and transferred to various accounts and thus, Rs.179.51 lakh was the additional amount which M/s SEPL had the discretion to utilise as per its own requirement. It has also come in evidence that 17 export bills amounting to Rs.3,56,22,960/- were submitted with the Bank and for exporting goods for the aforesaid amount, M/s SEPL had spent such amount from its current account for making payment to the suppliers of goods and services required for execution of the export orders. The prosecution has failed to establish any Banking norms, circulars and guidelines showing disbursement out of the sanctioned limit as illegal act as there was neither withdrawal exceeding the sanctioned limit nor more than the value of the goods exported by M/s SEPL.
98. Further case of the prosecution is that the export invoices/ bills submitted by M/s SEPL with the Bank are forged and fabricated, however, the prosecution failed to discharge its burden to establish the same. It has come in evidence during trial that export bills submitted by M/s SEPL comprises of (i) bills of exchange; (ii) invoice; (iii) packing list; (iv) certificate of origin; (v) EP copy of CC No. 372/19 CBI Vs. Shiv Kumar Sharma and Ors. Page No. 84 of 104 :: 85 ::
shipping bills; and (vi) bill of lading. The bill of exchange, invoice and packing list were prepared by M/s SEPL while shipping bills were issued by custom authorities and the custom officials who handled these shipping bills or had issued 'Let Export Order' have testified before this Court. It has also come in evidence that at the time of preparation of the Shipping Bills, goods were examined and, thereafter, signatures of the persons concerned were appended on the said bills. Likewise, Bill of Ladings issued by M/s ACTL Containers Private Limited have also been proved by the officials issuing those Bills. The details of the export bills of M/s SEPL on the basis of which credit facilities were sanctioned and disbursed in favour of M/s SEPL are as under:-
S. No. Date of Invoice No. Foreign Amount Equivalent P. St. Ref. Set No. Document Invoice Currency (In foreign (In Rs.) No. No. currency) 1 20.10.2004 KK1/70/04 Euro 35,312.83 18,71,579/- C/050470/04 1 D-15, D-31 2 25.11.2004 SAT/05 Euro 51,104.25 27,08,512/- C/050489/04 2 D-16, D-32 3 25.11.2004 SAT/06 Euro 57,048,.75 30,23,544/- C/050488/04 3 D-17, D-33 4 28.09.2004 SEPL/07/04 Euro 17,423.88 29,86,921/- C/050463/04 4 D-18, D-34 5 25.11.2004 SAT/14/04 Euro 17,423.88 9,23,419/- C/050010/05 5 D-19, D-35 6 25.11.2004 SAT/12/04 Euro 16,524.9 8,75,772/- C/050009/05 6 D-20, D-36 7 09.12.2004 SAT/16/04 Euro 14,784.00 7,83,552/- C/050019/05 7 D-21, D-37 8 09.12.2004 SAT/09/04 Euro 17,740.80 9,40,220/- C/050012/05 8 D-22, D-38 9 05.01.2005 SAT/17/04 Euro 45,848.81 24,29,944/- C/050048/05 11 D-23, D-41 10 09.12.2004 SAT/08/04- Euro 21,428.4 11,35,705/- 9 D-39 05 11 09.12.2004 SAT/15/04- Euro 14,140.8 7,49,462/- C- 10 D-40 05 050008/05 12 22.02.2005 SAT/18-04 Euro 89,025.60 47,18,325/- C/050128/05 12 D-24, D-42 13 31.03.2005 SEPL/29/05 Euro 75,178.32 42,85,116/- C/050192/05 13 D-25, D-43 14 15.03.2005 SEPL/23/05 Euro 40,546.80 23,21,304/- C/050183/05 14 D-26, D-44 15 15.03.2005 SEPL/23/05 Euro 38,958.00 22,30,345/- C/050184/05 15 D-27, D-45 16 15.03.2005 SEPL/24/05 Euro 38,691.60 22,15,094/- C/050185/05 16 D-28, D-46 17 31.03.2005 SEPL/30/05 Euro 24,985.40 14,24,145/- C/050191/05 17 D-29, D-47 TOTAL 6,55,100 3,56,22,960/-
(Above mentioned documents have been tendered by CC No. 372/19 CBI Vs. Shiv Kumar Sharma and Ors. Page No. 85 of 104 :: 86 ::
PW 21 and PW 33 in their respective testimonies).
99. The aforesaid export bills were duly tendered in evidence by PW-5 Sh. Rajat Dua, PW-6 Ms. Nandini Vithal Dhotre, PW-7 Sh. Sukhwinder Singh Gill, PW-12 Sh. Rajesh Kumar Arora, PW-46 Sh. K. Panda, PW-50 Sh. S.T. Shivsharan (all from customs department); PW-33 Sh. Sachin Ratnakant Bhagat, PW-35 Sh. Anand Devram Tambe (from M/s ATCL); PW-37 Sh. Vinay Madhusudan Nandgonkar of SBI, PW-38 Sh. L.S. Sahi of M/s Hi-Tos Liner Agency Pvt. Ltd., PW-32 Sh. Sumitro Mukherjee of Maersk India Pvt. Ltd. and PW-43 Sh. Ashok Ahuja of UCO Bank have conclusively established the genuineness of exports carried out by M/s Sati Exim Pvt. Ltd., thus, establishing the genuine nature of the export bills submitted by M/s Sati Exim Pvt. Ltd. on the basis of which the credit facilities were sanctioned and disbursed by UCO Bank. PW- 5 Sh. Rajat Dua deposed that he dealt with export consignment of M/s Sati Exim Pvt. Ltd and the procedure laid down for exports was properly complied with. PW-6 Ms. Nandini Vithal Dhotre has also identified her signatures and signatures of other custom officials on the export documents relating to M/s Sati Exim Pvt. Ltd. and also deposed that the procedure laid down for export of goods was duly complied CC No. 372/19 CBI Vs. Shiv Kumar Sharma and Ors. Page No. 86 of 104 :: 87 ::
with. PW-7 Sh. Sukhwinder Singh Gill also identified his signatures on shipping bills and let export orders relating to the export documents of M/s Sati Exim Pvt. Ltd. in his very detailed deposition in respect of various bills of M/s Sati Exim Pvt. Ltd. He also deposed that the procedure laid down for export of goods was duly complied with in this case. PW- 12 Sh. Rajesh Kumar Arora also identified his signatures on various documents relating to export by M/s Sati Exim Pvt.
Ltd., the subject matter of this case and also deposed that all the documents submitted by the exporter at the time of examination were in order. PW-46 Sh. K. Panda has deposed about handing over of various documents relating to export by M/s Sati Exim Pvt. Ltd. to CBI vide seizure memo Ex.PW46/A (D-261). He also established handing over of such export documents to CBI vide Ex.PW33/A (D-241) and Ex.PW35/A (D-258). PW-50 Sh. S.T. Shivsharan has proved the payment of duty drawback to M/s Sati Exim Pvt. Ltd. on the basis of the export bills, the subject matter of investigation of the present case vide Ex.PW50/A. PW-37 Sh. Vinay Madhusudan Nandgonkar has also deposed about credit of duty drawback received from the government in the account of M/s Sati Exim Pvt. Ltd. [Ex.PW37/C (D-233)] which further substantiates that exports were carried out by M/s Sati Exim Pvt. Ltd. on the basis of genuine bills and CC No. 372/19 CBI Vs. Shiv Kumar Sharma and Ors. Page No. 87 of 104 :: 88 ::
because of that only duty drawback was paid to M/s Sati Exim Pvt. Ltd.
100. PW-33 Sh. Sachin Ratnakant Bhagat in his deposition has also proved mate receipt, copy of shipping bills, master bill of lading, etc. relating to export by M/s Sati Exim Pvt.
Ltd. He also deposed that after the goods are handed over to the shipping lines, bill of lading is issued in triplicate set to the exporters and the mate receipt is the final proof of shipping the consignment. PW-38 Sh. L.S. Sahi also deposed that High T. Company used to load containers provided by its shippers on various carrier vessels and deposed about handing over certain documents to CBI pertaining to M/s Sati Exim vide his letter Ex.PW38/A (D-278).
101. PW-32 Sh. Sumitro Mukherjee deposed about six mate receipts related to M/s Sati Exim Pvt. Ltd. etc, part of Ex.PW32/B (colly) (part of D-280). PW-33 Sh. Sachin Ratnakant Bhagat in his cross-examination deposed that mate receipt is the final proof of shipping the consignment. PW-35 Sh. Anand Devram Tambe also deposed about the export documents pertaining to M/s Sati Exim Pvt. Ltd. and also deposed that all the procedure required to be followed, was followed in the present case. PW-43 Sh. Ashok Ahuja of UCO Bank, Treasury Branch, Mumbai has also deposed CC No. 372/19 CBI Vs. Shiv Kumar Sharma and Ors. Page No. 88 of 104 :: 89 ::
about receipt of seven foreign remittances in favour of M/s Sati Exim Pvt. Ltd. thus, establishing the genuineness of the export carried out by M/s Sati Exim Pvt. Ltd.
102. In fact, it is revealed from the documents collected by CBI from SBI and Custom Department, that M/s SEPL was actively doing export business and it also received 'Duty Drawbacks' from the Government for such export. The details of the Duty Drawback is as under:-
Sati Exim Pvt. Ltd. - Export Bills as per SBI AS PER D-261 Account (D-233) and as per provided by Customs Department (D-261) As per SBI Account Statement (D-233) INVOICE DOC. S. No. Shipping Bill Date S. Date Shipping Amount NO. No. No. Bill No. Credited
1. 30.12.20043074415 154659 Kki/70/04 D-262 1 3074415 28.10.2004
2. 20.01.20053128240 232392 SAT 05 D-263 2 3128240 29.11.2004
3. 20.01.20053128226 259424 SAT 06 D-264 3 3128226 29.11.2004
4. 10.02.20053169808 79233 SAT/14/04 D-265 4. 3169808 21.12.2004
5. 10.02.20053169806 75145 SAT/12/04 D-266 5. 3169806 21.12.2004
6. 10.02.20053169814 65544 SAT16/04 D-267 6. 3169814 21.12.2004
7. 10.02.20053169802 78983 SAT/ D-268 7. 3169802 21.12.2004 09/04-05
8. 10.02.20053169799 96135 SAT/ D-269 8. 3169799 21.12.2004 08/04-05
9. 10.02.20053169810 62961 SAT/ D-270 9. 3169810 21.12.2004 15/04-05
10. 20.04.20053222634 211354 SAT/ D-271 10. 3222634 19.01.2005 17/2005
11. 10.06.20053311669 206653 SEPL/ D-272 11. 3311669 28.02.2005 18/05
12. 06.07.20053403800 80656 SEPL/ D-277 12. 3403802 12.04.2005 30/05
13. 06.07.20053372043 143941 SEPL/ D-274 13. 3372043 28.03.2005 22/05
14. 06.07.20053382683 138294 SEPL/ D-275 14. 3382683 31.03.2005 23/05
15. 06.07.20053382673 137355 SEPL/ D-276 15. 3382673 31.03.2005 24/05
16. 06.07.20053403802 254294 SEPL/ D-273 16. 3403800 12.04.2005 29/05
17. 07.07.20053464676 184121
18. 07.07.20053464632 258832
19. 20.01.20053128223 202330
103. It is pertinent to mention here that as per the statement CC No. 372/19 CBI Vs. Shiv Kumar Sharma and Ors. Page No. 89 of 104 :: 90 ::
of current account of M/s SEPL maintained with SBI, duty drawback was received for nineteen shipping bills as shown above, however, as per D-261, only sixteen shipping bills were seized from custom officials. The export bills mentioned at serial numbers 17, 18 and 19 were not seized and produced by the investigation agency before the Court.
104. Further allegations of the prosecution are that the disbursed amount of Rs.3.15 crores was diverted/ siphoned off by A-1 Shiv Kumar Sharma and A-2 Naveen Kumar Sharma acting on behalf of M/s SEPL in favour of A-4 Amresh Kumar Mishra @ Sunder Mishra, A-5 Ram Ji Mishra, A-7 Swadesh Kumar Mishra @ Munder Mishra, A-8 Anand Ji Mishra and A-9 Chander Kant Dubey as per charge-sheet, the details of the disbursement is as under:-
DATE PARTICULARS DEBIT BALANCE (In Rs.)
15.12.2004 To loan disbursed 70,00,000 70,00,000.00
26.02.2005 To loan disbursed 25,00,000 95,00,000.00
14.03.2005 To advance 60,00,000 1,55,00,000.00
17.03.2005 To advance 25,00,000 1,80,00,000.00
18.03.2005 To advance 36,00,000 2,16,00,000.00
18.03.2005 To advance 30,00,000 2,46,00,000.00
30.03.2005 To advance 16,00,000 2,62,00,000.00
19.04.2005 To advance 25,00,000 2,87,00,000.00
20.04.2005 To advance 8,00,000 2,95,00,000.00
25.04.2005 To CA 1955 20,00,000 3,15,00,000.00
S. No Date Amount (In Docume Exhibit No.
Rs.) nt
Number
1 20.04.2005 8,31,227/- D-127 PW41/EE
2 17.03.2005 12,45,846/- D-128 PW41/GG
3 17.03.2005 8,21,331/- D-129 PW41/HH
CC No. 372/19
CBI Vs. Shiv Kumar Sharma and Ors. Page No. 90 of 104
:: 91 ::
4 17.03.2005 21,75,671/- D-131 PW41/D-6(A-3)
5 21.03.2005 23,53,953/- D-133
6 19.04.2005 24,92,694/- D-134 PW41/D-8(A-3)
7 25.04.2005 20,00,818/- D-136 PW41/D-10(A-3)
8 11.11.2004 31,84,183/- D-138 PW41/D-
12colly(A-3)
9 07.01.2005 43,74,162/- D-139 PW41/D-13(A-3)
10 28.01.2005 11,34,883.76 D-140 PW41/D-14(A-3)
11 29.03.2005 16,60,188/- D-141
TOTAL 2,22,74,956.76
105. As per the case of the prosecution, out of Rs.315 lakhs made available by the Bank of M/s SEPL under credit facilities, Rs.2,86,43,524/- were diverted in favour of A-4 Amresh Kumar Mishra @ Sunder Mishra, A-5 Ram Ji Mishra, A-7 Swadesh Kumar Mishra @ Munder Mishra, A-8 Anand Ji Mishra and A-9 Chander Kant Dubey in the following manner.
S. No. Name of Cheque No. Date of Amount Document No. Crediting Bank
company/ firm Cheque (In Rs.)
309821 01.09.2004 4.50 lakhs D-197 HDFC Bank
1. 309827 05.11.2004 15 lakhs D-198 Ltd., Anand
Dubey Exports 309842 20.11.2004 20 lakhs D-200 Niketan New
309854 10.12.2004 12 lakhs D-199 Delhi
SUB-TOTAL 51.50 LAKHS
309833 06.11.2004 10 Lakhs D-202 HDFC Bank
Ld., Anand
Niketan, New
Delhi
309841 20.11.2004 20 lakhs D-203 For pay order
2. 309851 03.12.2004 20 lakhs D-204 IDBI Bank,
Edge Garments K.G. Marg,
New Delhi
309871 08.01.2005 10 lakhs D-205 Internal
transfer
957916 18.03.2005 7 lakhs D-206 HDFC Bank,
Anand
Niketan, New
Delhi
SUB-TOTAL 67 LAKHS
3 Pandey Narendra309860 02.01.2005 5,500/- D-207 Canara Bank,
& Co. Vasundhra Enc
4 S. Anand309875 20.01.2005 52,654/- D-208 Federel Bank
Clearing & Ltd. Service
Forwarding Pvt. Branch, New
Ltd. Delhi
5 M/s Travel957909 14.03.2005 7,32,571/- D-209 OBC, OCS-
Planners Pvt. Ltd. 005
CC No. 372/19
CBI Vs. Shiv Kumar Sharma and Ors. Page No. 91 of 104
:: 92 ::
309835 11.11.2004 20,02,220/- D-210 Pay Order
K.K. 957917 18.03.2005 10 lakhs D-211 HDFC Bank,
6 International Anand
Niketan, New
Delhi
SUB-TOTAL 30,02,220/-
7 Amresh Kumar957914 17.03.2005 16 lakhs D-212 Internal
Mishra @ Sunder Transfer
Mishra
309868 07.01.2005 9 lakhs D-215
957903 26.02.2005 17 lakhs D-215 Internal
8 Anand Ji Mishra 957925 23.03.2005 15 lakhs D-213 Transfer
309870 08.01.2005 5 lakhs D-216
SUB-TOTAL 46 LAKHS
9 Umesh Impex 957931 19.04.2005 16 lakhs D-217 Internal
Transfer
10 Pay order in95799 09.03.2005 50,04,130/- D-218, D-218A For pay order
favourn of Shiv
Nath Rai
Harnarayan
(India) Ltd.
11 Gauri Exim Pvt.309815 02.08.2004 6 lakhs D-226 Internal
Ltd. transfer
(A) SUM TOTAL (1 TO 11) 2,74,47,075/-
List of cheques issued from current account number 1955, but omitted by IO in Table at Par-16 of Charge-sheet 1 Dass Computers309825 30.10.2004 40,000/- D-221 HDFC Bank, and Tele- Anand communications Niketan, New Delhi 2 Dr. Pravesh309824 01.11.2004 25,000/- D-222 Syndicate Miglani Bank, Vasant Vihar, New Delhi 957912 14.03.2005 16,258/- D-228 HDFC Bank 3 ECGC Ltd.
957940 28.06.2005 1,80,250/- D-229 For Pay order
4 Income Tax 309856 16.12.2004 34,941/- D-224 Internal
Transfer
5 Lamba Book957907 09.03.2005 3 lakhs D-220 OBC Vishal
Depot Enclave
6 Panipat Wool957911 17.03.2005 1 lakh D-219 Bank of
Trader Rajasthan Ltd.,
Sikha Colony,
Delhi Road,
Sonipat
7 Randheer Singh 309844 01.12.2004 5 lakh D-223 Punjab
National Bank,
Model Town,
Sonipat
(B) SUB-TOTAL (1 TO 7) 11,96,449/-
GRAND TOTAL (A + B) 2,86,73,524/-
106. The prosecution has succeeded in establishing the transfer of the afore mentioned amounts in favour of A-4 CC No. 372/19 CBI Vs. Shiv Kumar Sharma and Ors. Page No. 92 of 104 :: 93 ::
Amresh Kumar Mishra @ Sunder Mishra, A-5 Ram Ji Mishra, A-7 Swadesh Kumar Mishra @ Munder Mishra, A-8 Anand Ji Mishra and A-9 Chander Kant Dubey, however it has failed to establish that M/s SEPL was not authorised to utilise the said amount in the manner it has been done. No circular of the Bank has been brought on record to show that A-3 R.K. Joshi was duty bound to monitor the transfer of the amount made available to M/s SEPL under credit facilities. The prosecution has failed to bring on record any material suggesting or indicating that the aforesaid amount were transferred from the current account of M/s SEPL out of the credit facilities. In fact, statement of account of the entities in which there is alleged diversion of funds, reflects that there are transfer to the said accounts even prior to the sanction of the credit facilities. In view of the aforesaid evidence the prosecution has failed to establish that there was any transfer of amount in the Bank account of A-4 Amresh Kumar Mishra @ Sunder Mishra, A-5 Ram Ji Mishra, A-7 Swadesh Kumar Mishra @ Munder Mishra, A-8 Anand Ji Mishra and A-9 Chander Kant Dubey out of the credit facilities granted by the Bank in favour of M/s SEPL.
107. So far as the allegations of the loss to the tune of Rs.1,79,18,000/- to the Bank is concerned, it is revealed CC No. 372/19 CBI Vs. Shiv Kumar Sharma and Ors. Page No. 93 of 104 :: 94 ::
during the course of the trial that such loss, if any, to the Bank is not attributable to any lapse or misconduct on the part of A-3 R.K. Joshi. In fact, PW-41 Sh. Deshraj Sonkar, the then Senior Manager, UCO Bank in his testimony failed to disclose the basis of his assertion that Bank had suffered loss of Rs.2 crore in respect to the credit facilities granted to M/s SEPL in his statement given to CBI under Section 161 Cr. P.C and he could not identify any document showing such loss to the Bank. Furthermore, A-3 R.K. Joshi was deputed in UCO Bank, DHC Branch only till 06.05.2005 and by that time no intimation about non-payment of export bills by foreign buyer had been received.
108. Prosecution has failed to bring on record any evidence that any loss was caused to the Bank by any willful conduct of A-3 and merely because the loan was classified as NPA, shall not raise the presumption of the guilt of accused. Default in payment by foreign buyer might be in the natural course of business transfer. The prosecution has failed to show that A-3 R.K. Joshi being public servant was having any meeting of mind or vicious link or nexus with other accused persons and by his act or omissions benefit accrued to the accused. There is nothing on record to substantiate allegations against the accused amounting to offence under CC No. 372/19 CBI Vs. Shiv Kumar Sharma and Ors. Page No. 94 of 104 :: 95 ::
Section 13(2) read with Section (13)(1)(d) of PC Act.
109. Perusal of the sanction order dated 13.12.2004, shows that one of the conditions for sanction of credit facilities was that export bills tendered by M/s SEPL to the Bank for collection shall be covered under the whole turnover post- shipment credit facilities of ECGC and the premium was payable by the exporter. It is further provided that the aforesaid ECGC shall remain in force at all times for a minimum of sum of Rs.2 crore and the premiums were to be paid regularly to ECGC. In accordance with the aforesaid condition of the sanction of credit facilities, policies with ECGC were taken to protect the interest of the Bank in case of default of payment by foreign buyer. The aforesaid facts have been duly proved in the deposition of DW-3, Sh. Amit Kumar, AGM, ECGC who proved on record documents Ex.DW3/DA and in the deposition of DW-4 Sh. Lalit Kumar of UCO Bank who tendered in his evidence document Ex.DW4/DB (Colly). It has also come on record that M/s SEPL regularly paid the premium to ECGC as is reflected from the statement of account of M/s Sati Exim Pvt. Ltd. The details of the premium paid to ECGC as under:-
S.No Date Amount debited in current
account for payment to
ECGC
1 17/07/2004 11000
CC No. 372/19
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:: 96 ::
2 08/01/2005 200
3 08/01/2005 32139
4 10/02/2005 500
5 14/02/2005 500
6 25/02/2005 25447
7 14/03/2005 16258
8 17/03/2005 16258
9 28/03/2005 500
10 20/04/2005 35483
11 28/06/2005 180250
110. In view of the aforesaid policy, upon non-payment of the bill amount by foreign buyers, the Bank was within its rights to invoke ECGC. In fact, DW-3 Sh. Amit Kumar in his detailed testimony has deposed about the procedure to invoke ECGC policies for covering of risk in case of non- payment by foreign buyers. He testified that ECGC provides post-shipment risk insurance policy to the exporters to cover insurance for non-payment risk in their export consignment to foreign country. He deposed that in case of default in making payment to the exporter by buyer, the exporter would submit report of default to the ECGC within 45 - 60 days from due date agreed between buyer and exporter for payment and, therefore, ECGC would send letter to exporter advising exporter not to make further shipment to the same buyer and establishing communication with the buyer and, thereafter, send letter to Indian Embassy in the said country for recovery of payment and initiate the steps for Noting & CC No. 372/19 CBI Vs. Shiv Kumar Sharma and Ors. Page No. 96 of 104 :: 97 ::
Protesting. The witness clarified about the procedure Noting & Protesting deposing that first, the exporter would approach its Bank in India for Noting & Protesting and the said Bank of exporter would communicate to the buyer Bank who would in turn communicate with the buyer to discuss the reason for non-payment of shipment. He testified that the reasons given by the buyer for non-payment shall be communicated to the Bank of exporters in India by the buyer Bank. He further elaborated that the said steps taken by exporter would be communicated to ECGC and the exporter would have the discretion to file claim with the ECGC for the loss suffered by the exporter for the said shipment of ECGC would process the said claim as per its internal guidelines as decision of its approval or rejection would be taken and accordingly, communicate to the exporter. The witness has further deposed that even the Bank of exporter may also take Wholeturnover pre-shipment and post- shipment risk cover for non-payment by the borrowers/ exporters. He stated that in the present case, pre-shipment and post-shipment loss suffered by the Bank were covered under the said risk cover obtained from ECGC against the default of buyers. He stated that in case, borrower/ exporter defaulted in making payment, the exporter Bank would classify the account of the said borrower as NPA and CC No. 372/19 CBI Vs. Shiv Kumar Sharma and Ors. Page No. 97 of 104 :: 98 ::
accordingly, communicate to ECGC. After verifying the aforesaid facts from the Bank, ECGC would request the exporter Bank to submit the claim which would be processed as per the internal guidelines by competent authority. The said witness has tendered in his evidence Whole turnover Policy (Ex.DW3/DA) whereby, ECGC provided insurance cover for all credit risk under export made by M/s SEPL. The witness stated that under the aforesaid Bank, exporter has applied for approval for cover of eight buyers for particular amount and as per terms of payment mentioned in the application submitted by the exporter and as per the record reflected in the computer system of ECGC, the exporter communicated report of default on five buyers under the policy of ECGC. In his cross-examination by Ld. PP for CBI, the said witness deposed that exporter is provided only post- shipment cover while the Bank is provided pre as well as post-shipment cover under the policy of ECGC.
111. DW-4 Sh. Lalit Kumar, Chief Manager, UCO Bank tendered ECG Policies issued to M/s SEPL by ECGC during July, 2004 and deposed that purpose of the said policies (Ex.DW4/DB) was to cover the risk of the Bank in case of default by M/s SEPL. From the testimonies of the aforesaid two defence witnesses and the documents tendered by them CC No. 372/19 CBI Vs. Shiv Kumar Sharma and Ors. Page No. 98 of 104 :: 99 ::
in their respective testimonies, it is clear that in case of default by the exporter to the Bank, the Bank was required to invoke the aforesaid policies mentioned under the ECGC to recover the non-payment of the credit facilities. Admittedly, the Bank has not adopted the aforesaid course of action as deposed by DW-3 to make efforts to recover and minimize the risk.
112. Upon analysis of the evidence adduced by the prosecution and the accused in their defense, this court has no hesitation to conclude that prosecution has failed to establish that any conspiracy was hatched amongst the accused person to defraud the Bank. A-3 R.K. Joshi had acted in a bona fide manner while allowing opening of the Account in the name of M/s SEPL, as the requisite documents as per the Banking norms were obtained for opening of the said Bank account, it was not incumbent upon him to get the documents submitted by A-1 Shiv Kumar Sharma and A-2 Naveen Kumar Sharma on behalf of M/s SEPL verified from Registrar Office as contended by the prosecution. The prosecution has also failed to bring on record any Banking norms/ circular/ regulation casting doubt upon A-3 R.K. Joshi to get the documents submitted for KYC purposes at the time of opening of account verified CC No. 372/19 CBI Vs. Shiv Kumar Sharma and Ors. Page No. 99 of 104 :: 100 ::
prior to accepting the same. Prosecution has also failed to prove beyond reasonable doubt that A-6 Parveen Kumar introduced the said Bank account impersonating himself as Vijay Kumar Pali, as evidence adduced by the prosecution does not inspire confidence of this Court to return a finding of guilt against A-6 Parveen Kumar. The report of handwriting expert opining that A-6 Parveen Kumar had signed on the Account Opening Form impersonating himself as Vijay Kumar Pali can not be the sole basis of convicting him in view of attendinf evidence. The Prosecution witness PW-47, Satender Kumar Gupta deposed that Vijay Kumar Pali signed the Account Opening Form as per his statement recorded by him during the course of internal investigation. Prosecution has also failed to prove beyond reasonable doubt that the credit facilities sanctioned in favour of M/s SEPL was mandatorily required to be secured by collateral security as mentioned in the preceding paras of the judgment. In fact, prosecution witnesses have deposed before this court that the credit facilities sanctioned in favour of M/s SEPL were working capital loan for which no securities were required to be taken except the hypothecation of stocks. Furthermore, the prosecution has also failed to establish beyond reasonable doubt that the immovable property kept as collateral security was already mortgaged or the same was CC No. 372/19 CBI Vs. Shiv Kumar Sharma and Ors. Page No. 100 of 104 :: 101 ::
over-valued. Prosecution has also failed to prove that the export bills submitted by M/s SEPL were forged and fabricated as the prosecution witnesses during the course of their respective testimonies have established that export as mentioned in the said documents had indeed taken place. The case of the prosecution that there is diversion of funds on loan amount in favour of A-4 Amresh Kumar Mishra @ Sunder Mishra, A-5 Ram Ji Mishra, A-7 Swadesh Kumar Mishra @ Munder Mishra, A-8 Anand Ji Mishra and A-9 Chander Kant Dubey, is also not established as the prosecution has failed to prove that M/s SEPL could not have utilised the said amount as per its discretion and the amounts transferred to their respective Bank accounts pertained to the credit facilities granted in favour of M/s SEPL.
113. The prosecution has also failed to prove that the accused persons were having any intention since the inception or afterwards to induce the Bank to deliver credit facilities and, thereafter, to defraud the Bank.
114. In fact, it has come on record that the Bank failed to secure its interest by adopting the procedure of 'Noting and Protesting' under ECGC for which premium was paid by M/s SEPL. If the bills submitted by the Company with Bank CC No. 372/19 CBI Vs. Shiv Kumar Sharma and Ors. Page No. 101 of 104 :: 102 ::
were dishonored, the Bank must have adopted and followed the aforesaid procedure for 'Nothing and Protesting' which is to be followed for international transactions as it helps Bankers, buyers and sellers manage their receivables to cover risks arising during collection or asset recovery. Noting and Protesting is the procedure which Bank must have followed while collecting debts from overseas parties but it has failed to follow the aforesaid procedure resulting in loss to it. Accused persons cannot be blamed for the inactions and omissions of Bank for not following the procedure of 'Noting and Protesting' .
115. It is established from evidence on record that A-1 R.K. Joshi on behalf of the Bank validly sanctioned the credit limit after ensuring the interest of the Bank protected by way of collateral security on behalf of the borrower/ Company which made exports to foreign buyers who failed to honour the bills resulting in non-payment of loan amount to the Bank. The Hon'ble Supreme Court of India in Satish Chandra Ratan Lal Vs. State of Gujrat13 where a criminal case was registered due to non-payment of loan amount has held that mere inability of the accused to return the loan amount cannot give rise to a criminal prosecution for cheating unless fraudulent or dishonest intention is shown 13Crl. Appeal No. 09/09 decided on 03.01.2018 CC No. 372/19 CBI Vs. Shiv Kumar Sharma and Ors. Page No. 102 of 104 :: 103 ::
right at the beginning of the transaction as mens rea is the crux of offence. In the present case even if all the facts, circumstances, material and evidence are taken on their face value, no such dishonest representation or inducement could be found or inferred against the accused persons. The Prosecution has failed to prove any of the charges against any of the accused.
116. In view of the discussion made above, A-1 Shiv Kumar Sharma, A-2 Naveen Kumar Sharma, A-3 R.K. Joshi, A-4 Amresh Kumar Mishra @ Sunder Mishra, A- 5 Ram Ji Mishra, A-6 Parveen Kumar, A-7 Swadesh Kumar Mishra @ Munder Mishra, A-8 Anand Ji Mishra and A-9 Chander Kant Dubey stand acquitted of charges under Section 120B IPC read with Sections 419/420/467/468/471 IPC and Section 13(2) read with Section 13(1)(d) of PC Act, 1988. Further, A-3 R.K. Joshi also stands acquitted of charge under Section 13(2) read with Section 13(1)(d) PC Act, 1988. A-6 Parveen Kumar stand acquitted of charge under Section 419 IPC; A-1 Shiv Kumar Sharma and A-2 Naveen Kumar Sharma stand acquitted of charges under Sections 420/467/468/471 IPC; and A-4 Amresh Kumar Mishra @ Sunder Mishra, A-5 Ram Ji Mishra, A-7 Swadesh Kumar Mishra @ Munder CC No. 372/19 CBI Vs. Shiv Kumar Sharma and Ors. Page No. 103 of 104 :: 104 ::
Mishra, A-8 Anand Ji Mishra and A-9 Chander Kant Dubey stand acquitted of charges under Sections 420 IPC. All the accused persons accordingly, stand acquitted.
117. File be consigned to Record Room after due compliance.
Announced in the open Court Digitally signed by MOHD MOHD FARRUKH on this 23rd day of July, 2024 FARRUKH Date: 2024.07.23 15:36:14 +0530 (Mohd. Farrukh) Special Judge (PC Act), CBI-11 Rouse Avenue Courts, New Delhi 23.07.2024 CC No. 372/19 CBI Vs. Shiv Kumar Sharma and Ors. Page No. 104 of 104