Cbi vs . (I) Ram Niwas Singhal(A1) on 11 August, 2015

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Delhi District Court

Cbi vs . (I) Ram Niwas Singhal(A1) on 11 August, 2015

                                                       1

IN THE COURT OF SH. SANJEEV AGGARWAL SPECIAL JUDGE
                                  CBI03 (PC ACT) DELHI

CC No.03/15                                   RC : 4(E)/09
                                                       CBI/EOUII/ND
                                              U/s : 120B r/s 420, 467, 468 & 471 IPC and
                                                       Section 13(2) r/w 13(1)(d) of PC Act.


CBI Vs.               (i)         Ram Niwas singhal(A1)
                                  S/o Late Sh. Shiv Charan Dass


                      (ii)        Kamal Kumar Singhal(A2)
                                  S/o Ram Niwas Singhal


                      (iii)       Neeraj Singhal(A3)
                                  S/o Ram Niwas Singhal
                                  All R/o Anaj Mandi, Safidon, Dist Jind, Haryana
                                  Director, M/s Raj Fibres Pvt. Ltd, 85 Km Mile Stone,
                                  Vil Siwah, GT Road, Panipat, Haryana


                      (iv)        Kailash Garg(A4)
                                  S/o Sh. Balbir Prasad
                                  R/o Village Nangal Kheri, GT Road, Panipat Haryana


                      (v)         Vijay Singhal(A5)
                                  S/o Ram Niwas Singhal
                                  R/o Anaj Mandi, Safidon, Dist Jind, Haryana
                                  Director, M/s Raj Fibres Pvt. Ltd, 85 Km Mile Stone,
                                  Vil Siwah, GT Road, Panipat, Haryana


                      (vi)        Revathy Ranjan Roy(A6)
                                  S/o Sh. M.N.Roy
                                  R/o 114 C, Selimpur Road, Kolkata, West Bengal 700031


                      (vii)       Devender Kumar Balani(A7)

RC NO. 4(E)/2009
CBI vs. Ram Niwas Singhal & Ors                                                        1 of 150
                                                      2

                                  S/o Late Sh. H.C.Balani
                                  R/o Flat No. 89, SFS, Rajouri Apartments, Mayapuri,
                                  New Delhi 110064


Date of Institution                     : 17.11.2009
Judgment Reserved                       : 17.07.2015
Judgment Delivered                      : 07.08.2015


JUDGMENT

1. In brief prosecution story is that an FIR in this case was registered on 08.06.2009, on the basis of complaint dated 04.06.2009 received from Sh. Rajesh Kumar Arora, Assistant General Manager, United Bank of India , Asaf Ali Road, New Delhi(hereinafter referred to as UBI) U/s 120B r/w 420/467/468 & 471 IPC and substantive offences thereof against one Ram Niwas Singhal and his sons Kamal Singhal and Neeraj Singhal who were all directors of M/s Raj Fibres Pvt Ltd(hereinafter referred to as Raj Fibres) and Kailash Garg, an employee of said M/s Raj Fibres. It was alleged in the complaint that M/s Raj Fibres was sanctioned credit facility for an overall limit of Rs. 295 lacs(term loan of Rs. 175 lacs and Cash Credit limit of Rs. 120 lacs) by taking over the loan account from Punjab National Bank, Panipat Branch.

2. It was further alleged that out of the term loan of Rs. 175 lacs, RC NO. 4(E)/2009 CBI vs. Ram Niwas Singhal & Ors 2 of 150 3 an amount of Rs. 173.17 lacs was disbursed for supply of machineries to G.M.Engineering Co.(hereinafter referred to as G.M.Engineering) by means of pay orders/Demand Drafts and that the same was collected through an account of M/s G.M.Engineering with Andhra Bank, Panipat Branch opened by Kailash Garg, an employee of M/s Raj Fibres fraudulently and not by the original owner Sh. Pritpal Singh, Prop. of G.M.Engineering, hence they cheated the bank.

3. Investigation in the present case reveals that M/s Raj Fibres having their factory at Village Siwah, Panipat Haryana through its Directors Ram Niwas Singhal(hereinafter referred to as A1), Kamal Kumar Singhal(hereinafter referred to as A2), Neeraj Singhal(hereinafter referred to as A3) in conspiracy with the bank officials namely Revathi Ranjan Roy, Chief Manager(hereinafter referred to as A6) and Devender Kumar Balani Senior Manager(hereinafter referred to as A7) had applied for credit facilities to the tune of Rs. 295 lacs(CC limit Rs. 120 lacs and term loan Rs. 175 lacs) from UBI under the request of A2, its Director. The applicant had submitted that they were already maintaining Cash Credit(CC) facility with Punjab National Bank, GT Road, Panipat and required CC RC NO. 4(E)/2009 CBI vs. Ram Niwas Singhal & Ors 3 of 150 4 facilities of Rs. 120 lacs and term loan of Rs. 175 lacs out of which Rs. 160 lacs was for purchase of machinery and Rs. 15 lacs for construction of shed in their factory premises.

4. It is further stated in the Charge Sheet that in pursuance to conspiracy between aforesaid accused persons four fake quotations of M/s G.M.Engineering, Panipat showing details of machineries and its rates were submitted alongwith the proposal.

5. Investigation further reveals that A6, then Branch Manager visited the factory on 26.05.05 and submitted his pre advance factory inspection report dated 30.05.05 in which he has clearly mentioned that no stock register, production register, employees details were maintained by the factory and only source of power was diesel generator. A7 was working as Senior Manager(Advances) also visited the factory premises of M/s Raj Fibres on 15.06.05 had submitted a pre sanction visit report dated 16.06.05 in which he reported that the company had stocks worth Rs. 1.05 crores in contradiction to the earlier report of his Chief Manager that no stock register were available, therefore misrepresented the facts.

6. Investigation further reveals that the loan proposal submitted RC NO. 4(E)/2009 CBI vs. Ram Niwas Singhal & Ors 4 of 150 5 by M/s Raj Fibres was appraised and recommended by A7 and finally approved by A6 on 17.06.2005. Most of the appraisal report which was complied by the bank officials is in the handwriting of A3 one of the Directors of Ms. Raj Fibres and only portions are in the handwriting of A7 D.K.Balani. The sanction letter/advice dated 20.06.2005 was signed by A6, whereby M/s Raj Fibres had been sanctioned an overall limit of Rs. 295 lacs of which Rs. 120 lacs was as cash credit(CC) limit and Rs. 175 lacs as term loan.

7. The primary security for the CC limit was hypothecation of stock and book debt, plant and machinery and proposed new factory shed. The additional security was the personal guarantee of all the three directors and collateral security by equitable mortgage of land and building property bearing khasra no. 48, Killa No. 18/2(418) and Kila No. 13/2(218) and 18/1(29), khasra no. 48, Killa No. 11/2(31), 12/1(218) all situated at Vill Siwah. The other terms and conditions of the loan had been mentioned in the sanction order. The same was accepted by all the three directors namely A1, A2 and A3. The sanction advice also stated about hypothecation of stocks to the value of Rs. 1.60 crores and the records does not show RC NO. 4(E)/2009 CBI vs. Ram Niwas Singhal & Ors 5 of 150 6 on what basis the value was calculated as the borrower was not maintaining any stock register/production register.

8. Investigation further revealed that based on sanction, Cash Credit Account(CC No. 18233) and Term loan A/c No. 5330 were opened on 20.06.2005 in the name of M/s Raj Fibres Pvt. Ltd., in the Union Bank of India, Asaf Ali Road, Delhi. The account was opened on the verification of photographs and signatures by A7 and the account was introduced and authorized to be opened by A6.

9. Investigation further revealed that out of the CC limit of Rs.

120 lacs an amount of Rs. 1,19,94,393.50 was paid on 23.06.05 by means of demand draft to Punjab National Bank, G.T. Road, Panipat for taking over of CC facilities of M/s Raj Fibres.

10.Investigation further revealed that after sanction the branch had obtained security documents from M/s Raj Fibres Pvt. Ltd., and its Directors namely hypothecation of movable plant and machinery, memorandum of agreement of term loan, leter of confirmation dated 22.06.05 for creation of equitable mortgage, copy of the recital register, original title deed of land and building, letter dated 20.06.2005 from bank to Tehsildar, RC NO. 4(E)/2009 CBI vs. Ram Niwas Singhal & Ors 6 of 150 7 Panipat for creating lien, search report on the registration of charge in the ROC.

11.Investigation further revealed that out of term loan of Rs. 175 lacs an amount to the tune of Rs. 1,71,48,600/ was disbursed as follows:

   SL              Date of            Amount                        Remarks
  NO.              Debit
     1       21.06.2005 Rs. 8,00,000/                By transfer to the CC A/c No.
                                                      18233 of M/s Raj Fibres Pvt Ltd.
     2       23.06.2005 Rs.1,39,26,000/ Disbursed by means DD No.
                                                      051422    favouring     M/s     G.M
                                                      Engg. Co., Panipat for purchase
                                                      of machinery
    3.       21.07.2005 Rs. 18,16,950/               Disbursed by means DD No.
                                                      051476         favouring         M/s
                                                      G.M.Engg.      Co.,   Panipat      for
                                                      purchase of Generator sets.
    4.       21.07.2005 Rs.6,00,000/                 By transfer to the CC A/c No.

(a draft for Rs. 18233 of M/s Raj Fibres Pvt Ltd. 6,05,650/ paid) From this A/s, an amount of Rs.

6,05,650/ was disbursed by means of DD No. 051477 favouring M/s G.M Engg. Co.,.

Panipat drawn on Panipat for purchase of Generator sets.

TOTAL Rs. 1,71,48,600/ RC NO. 4(E)/2009 CBI vs. Ram Niwas Singhal & Ors 7 of 150 8

12.Investigation further revealed that on an undated letter of M/s Raj Fibres Ltd requesting for disbursement of first installment of Rs. 8 lacs was disbursed on 21.06.2005 from the term loan A/c No. 5330 by transfer to the CC A/c No. 18233 of M/s Raj Fibres for construction of shed. Out of this an amount of Rs. 7 lacs had been withdrawn in cash on the same day by means of self cheque no. 220701 by A2. As per disbursement requirements the borrower had to submit bills to show the utilization of funds which had not been done by the Directors of M/s Raj Fibres and the bank officials namely A6 and A7 had also not taken any documents to show the construction, nor any bills were available on record.

13.Investigation further revealed that an amount of Rs.

1,39,26,000/ was disbursed on 23.06.2005 from the term loan A/c No. 5330 by means of DD No. 051422 favouring M/s G.M.Engg. Co. Panipat for purchase of machinery as per the quotations submitted alongwith proposal and application by the borrower. The four quotations submitted by the party were bogus and forged and were not given by M/s G.M.Engineering Co. The proprietor of the said company denied of having issued any such quotations at any point of time.

RC NO. 4(E)/2009
CBI vs. Ram Niwas Singhal & Ors                                                8 of 150
                                                9

14.Investigation further revealed that in pursuance to the conspiracy a current account No. 512 in the name of G.M.Engineering was opened on 24.06.2005 by Kailash Garg as per the Proprietor of the said firm in Andhra Bank, HUDA Panipat at the instance of the Directors of M/s Raj Fibres and even though he had been shown as the proprietor of M/s G.M.Engineering, he further authorized A5 Vijay Singhal S/o Ram Niwas Singhal to operate the said account.

15.Investigation further revealed that the draft of Rs.

1,39,26,000/ was forwarded by UBI, Asaf Ali Road Branch to M/s G.M Engg., Panipat vide letter dated 22.06.2005. The letter and draft without being sent directly to M/s G.M.Engg. Co., was handed over to Kamal Kumar Singhal A2, who had signed the said letter having received the same. In the said letter the Company was informed that the amount is being paid for the purchase of machinery by M/s Raj Fibres under the finance of United Bank of India and the machinery be delivered accordingly and the bill be raised jointly in the name of party and the bank. The said draft was deposited in the said bogus account of M/s G.M.Engg., in Andhra Bank on 27.06.2005. The margin money had to be paid by the RC NO. 4(E)/2009 CBI vs. Ram Niwas Singhal & Ors 9 of 150 10 purchaser for the purchase of machinery and that A2 had submitted four cash receipts in the letter head of M/s G.M.Engg to show that margin money had been paid to M/s G.M.Engg. These four cash receipts produced and submitted by A2 in bank were fake and forged and same were never issued by M/s G.M.Engg.

16.Investigation further revealed that an amount of Rs.

18,16,950/ was disbursed on 21.07.2005 from the term loan account No. 5330 by means of DD favouring M/s G.M.Engg., Panipat for purchase of two diesel generator sets for Rs. 24,22,600/ as per the quotation submitted by the borrower. The margin money had to be paid by the purchaser for purchase of generator sets and that payment of the margin money was also made using the bank's fund, it revealed that for this purpose an amount of Rs. 6 lacs was transferred from the Term Loan A/c of M/s Raj Fibers to the CC A/c and the margin money of Rs. 6,05,650/ was paid from the CC A/c by means of DD No. 051477 favouring M/s G.M.Engg., Panipat. The two drafts for Rs. 18,16,950/ were forwarded by the UBI, Asaf Ali Road Branch to M/s G.M.Engg., vide letter dated 21.07.2005. In the said letter the company was informed that RC NO. 4(E)/2009 CBI vs. Ram Niwas Singhal & Ors 10 of 150 11 the amount was being paid for the purchase of two diesel generator sets by Ms/ Raj Fibres under the finance of UBI and the same be delivered. The letter and draft were also not sent directly to M/s G.M.Engg Co., were handed over to Kamal Kumar Singhal A2, who signed on the said letter having received the same. The original proprietor of M/s G.M.Engg., denied having received the said amounts from M/s Raj Fibres and stated that he does not produce or deal with Generator sets. The said drafts were deposited in the above said bogus account of M/s G.M.Engg., on 22.07.2005 in Andhra Bank.

17.Investigation further revealed that the amounts so deposited in the bogus account of M/s G.M.Engg., were siphoned off by Neeraj Singhal(A3), Vijay Singhal(A5), Kamal Kumar Singhal(A2) and Ram Niwas Singhal(A1) as under:

S. DD No.                  Date      of Amount             Remarks
No                         Credit
1       051422 27.06.205               Rs. 1,39,26,000/    1) Rs. 27 lacs withdrawn in
        dated                                              cash between 28.06.2005
        23.06.05                                           and 0507.2005 by means
                                                           of 3 self cheques
                                                           2) Rs. 70 lacs transferred
                                                           having A/c with Oriental
                                                           Bank       of   Commerce,
                                                           Oveseas Br., Panipat


RC NO. 4(E)/2009
CBI vs. Ram Niwas Singhal & Ors                                                  11 of 150
                                                 12

2.      051476             22.07.2005   Rs.6,05,650/      1)      Rs,    24,40,000/
                                                           withdrawn in cash between
                                                           25.07.2005            and
                                                           05.08.2005 by means of 3
                                                           self cheques
3       051477 22.07.2005               Rs. 18,16,950
        dated
        21.07.05
        TOTAL                           Rs 1,63,48,600/

18.Investigations further revealed that Rs. 70 lacs and Rs. 40 lacs from the A/c of M/s G.M.Engg., as stated in the above table were transferred to the account of M/s M.S.Traders and M/s Matu Ram Shiv Charan Dass by means of clearing cheques. Both the said accounts were opened on 19.03.2005. Ram Niwas Singhal(A1) was shown as the proprietor of M/s Matu Ram Shiv Charan Dass. He was introduced by Kamal Kumar Singh(A2) for opening the said account. Similarly Vijay Kumar Singhal opened account as proprietor of M.S Traders. The said account was introduced by Vijay Kumar Singhal(A5). Both the said accounts were opened in the OBC, Panipat. The details of the cheques are given below:

RC NO. 4(E)/2009 CBI vs. Ram Niwas Singhal & Ors 12 of 150 13 Sl Cheque & Amount Remarks No Date

1. 135103 Rs. 40 lacs This cheque was presented in dated clearing by M/s Matu Ram Shiv 27.06.2005 Charan Dass through their bank A/c No. 3311

2. 135102 Rs. 50 lacs This cheque was presented in dated clearing by M/s M S Traders 27.06.2005 through their bank A/c no. 3320

3. 135105 Rs. 15 lacs This cheque was presented in dated clearing by M/s M S Traders 29.06.2005 through their bank A/c No. 3320

4. 135101 Rs. 5 lacs This cheque was presented in dated clearing by M/s M S Traders 27.05.2005 through their bank A/c No. 3320 TOTAL Rs.110 lacs

19.Investigation further revealed that an amount of Rs. 40 lacs deposited in the account of M/s Matu Ram Shiv Charan Dass(hereinafter referred to as Matu Ram) was further transferred on the same day to the account of M/s M S Traders by means of cheque no. 218505 dated 29.06.2005 signed by A1. The total amount of Rs. 110 lacs so deposited in the account of M/s M.S Traders had been withdrawn by means of self cheque in cash or by transfer to the accounts of RC NO. 4(E)/2009 CBI vs. Ram Niwas Singhal & Ors 13 of 150 14 M/s Raj Fibres with OBC, Overseas Branch, Panipat.

20.Investigation further revealed that most of the amount out of the total disbursed term loan of Rs. 1,71,48,600/ (Rs. 7 lacs from CC A/c + Rs. 51.4 lacs from A/c of M/s Engg Co. + Rs. 80.50 lacs from the account of M/s M S Traders) were withdrawn in cash by means of self cheques on various dates by Neeraj Singhal(A3), Kamal Kr. Sinhal(A2) and Sh. Vijay Singhal(A5).

21.Investigation further revealed that as per disbursement requirements the borrower had to submit bills to the bank to show the supply of machinery and diesel generator sets. No bills had been submitted by the party and bank officials namely A6 and A7 did not ask for the same and therefore facilitated the accused persons in commission of crime.

22.Investigation further revealed that between the period June July 2005, Directors of M/s Raj Fibres namely A1, A2 and A3 in conspiracy with the bank officials A6 and A7, then working as Branch Manager and Senior Manager(Advances) of United Bank of India, Asaf Ali Road had applied for CC facilities and term loan and submitted four fake quotations of M/s G.M.Engg., for supply of machinery. A6 and A7 were RC NO. 4(E)/2009 CBI vs. Ram Niwas Singhal & Ors 14 of 150 15 fully aware at the preliminary stage itself that the company was not maintaining proper books like stock register, production register etc., therefore had shown undue favour to the Raj Fibres and dishonestly and fradulently granted CC limits of Rs. 120 lacs and term loan of Rs. 175 lacs.

23.At the time of disbursement the Directors of M/s Raj Fibres furnished to the bank four fake cash receipts and one fake quotation of M/s G.M.Engg., which were accepted by the said bank officials on the face of it to be genuine in pursuance of conspiracy. A6 and A7 did not ensure the end use of the funds and in connivance with Directors of M/s Raj Fibres, allowed them to misutilize the bank funds to the tune of Rs. 1,73,38,600/ by disbursing the term loans and violated the bank's norms. The drafts meant for M/s G.M.Engg., were given by A7 directly to A2. The bills/invoices to show proper utilization of the funds were also not submitted by M/s Raj Fibres or insisted upon by the said bank officials. Thus the said amount was utilized by the Directors of Raj Fibres and Vijay Singhal i.e A5 by opening a bogus account by Kailash Garg A4, in the name of M/s G.M.Engg., in Andhra Bank, Panipat in pursuance of the said conspiracy. The account was RC NO. 4(E)/2009 CBI vs. Ram Niwas Singhal & Ors 15 of 150 16 opened by Kailash Garg who was the Manager of M/s Raj Fibres and thereby facilitated the directors of M/s Raj Fibres to misutilize the term loan/funds disbursed by the bank. After completion of investigations CBI filed the chargesheet submitting the above facts, thereby stating that an offence(s) punishable U/s 120B r/w 420/467/468/471 IPC and Section 13(2) r/w S 13(1)(d) of PC Act 1988 were made out against A1 to A7.

24.After submitting the chargesheet copies were supplied to the accused persons to their satisfaction. Vide detailed order dated 07.12.10, charge(s) U/s 120B r/w 420/468/471 IPC and Section 13(2) r/w S 13(1)(d) of Prevention of Corruption Act 1988 was made out against A1 to A7. Besides that A1, A2, A3. A4 & A5 were also charged for substantive offence(s) U/s420/471 r/w 465 IPC. Further A6 was charged substantively for the offence U/s 420 IPC. A7 was also charged for substantive offence U/s 420 IPC, besides that accused A6 was also substantively charged U/s 13(2) r/w S 13(1)(d) of Prevention of Corruption Act(hereinafter referred to as PC Act) and and similarly A7 was also charged for substantive offence U/s 13(2) r/w S 13(1)(d) of PC Act and RC NO. 4(E)/2009 CBI vs. Ram Niwas Singhal & Ors 16 of 150 17 finally A4 was also charged for substantive offence U/s 468 IPC.

25.Detailed charge(s) were framed against all the accused persons on 07.01.11 to which accused pleaded not guilty and claimed trial.

26.Thereafter prosecution has examined 20 witnesses in support of their claim.

27.PW1 is Sh. Pawan who has deposed that he was the proprietor of M/s L.X. Textiles, Panipat and he had introduced the account opening form of M/s G.M.Engg Co., opened by Kailash Garg in the name of Kailash Garg showing himself as the proprietor of the same. The said account opening form was ExPW1/A. He also stated that he had introduced the said account at the request of A2 and A3.

28.PW2 is Sh. Sanjeev Kumar, who has stated that he was working in M/s G.M.Engg Co., as mechanic. The said company deals in manufacturing and sale of blow room machines which is used to clean cotton and Mr. Pritam Singh was the proprietor of the same having its address at New Grain Market, Khadi Ashram, G.T.Road, Panipat(Haryana). On being shown the quotation form of M/s G.M.Engineering in RC NO. 4(E)/2009 CBI vs. Ram Niwas Singhal & Ors 17 of 150 18 favour of M/s Raj Fibres, Panipat he stated that the said quotation mark PW2/A was not issued by Sh. Pritam Singh or by his company. He was further shown four cash receipts which were marked PW2/B1 to B4, he stated that the same did not bear the writing of Pritam Singh or his signatures.

29.PW3 is Sh. Gurcharan Singh is another employee of G.M.Engg.,Panipat. He stated that he was working in G.M.Engg., as Purchaser cum Manager. He reiterated that Pritam Singh was the proprietor of the same. He was also shown quotation form of Mark PW2/A of G.M.Engg., he also stated that the signatures on the same were not of Pritam Singh or any other employee of the company. He was further shown four cash receipts ExPW2/B1 to B4, he corroborated the testimony of PW2 that same does not bear the signatures or handwriting of proprietor or any other employee of G.M.Engg.

30.PW4 is Sh. Raj Singh, the witness from Andhra Bank, Panipat Branch who was working as a cashier in the said branch at the relevant time. He has proved that payment on various cheques were made to A5 on the self cheques drawn by A4 dated 28.06.05, 05.08.05 and 08.08.05, on the reverse of all these RC NO. 4(E)/2009 CBI vs. Ram Niwas Singhal & Ors 18 of 150 19 cheques bears the signature of the person receiving the amount of the said self cheque(s) for example on the self cheque ExPW4/A, the signatures of the person receiving the payment are that of A5 and that of ExPW4/B dated 05.08.05 are that of A3, finally on ExPW4/C self cheque dated 08.08.05 signatures are of A5. Though in cross examination, he has stated that signatures on the self cheques cannot be identified by him, but the same have not been denied specifically in the statement U/s 313 Cr.P.C by A3 or A5. In any case, A5 had the authority to mandate and operate the said account of G.M.Engg., of which A4 was the proprietor, only the payment could have been made on the order of A4 and A5 and none else, therefore the payment of two self drawn cheques have been made to A5 and one to A3 and the said payments are made only after due verification of the specimen signatures which are available with the bank.

31.PW5 is Sh. Rajesh Kumar Arora, who was working as Asstt.

General Manager, United Bank of India, Asaf Ali Road branch , who had filed the initial complaint to the CBI on 04.06.2009. The said complaint made by him is ExPW5/A on the basis of which an FIR ExPW5/B was registered. He has RC NO. 4(E)/2009 CBI vs. Ram Niwas Singhal & Ors 19 of 150 20 proved various documents with regard to account opening form of M/s Raj Fibres with regard to CC limit and other account debit voucher and credit voucher with regard to issuance of drafts in favour of M/s G.M.Engg., with regard to disbursement of term loan on various dates. The said documents are ExPW5/C1 to C19. He has also proved production cum seizure memo dated 14.07.2009 by virtue of which he handed over certain documents to IO of this case C.S.Naryanan. The said memo is ExPW5/D and the documents handed over to the IO are ExPW5/D1 to D12. He has also proved the production cum seizure memo dated 15.05.2009 by virtue of which he further handed over certain documents to the IO. The memo is ExPW5/E and the documents are ExPW5/E1 to E8.

32.PW6 is Sh Anil Kumar who has deposed that on 11.06.2007 he was working as Chief Manager of Union Bank of India, New Delhi and as a Chief Manager he was authorized to act as Authorized Officer under Sarfesi Act, 2002. He had deposed that he was advised by then Regional Manager to act as Authorized Officer in the case of M/s Raj Fibres and therefore he issued the possession notice for taking over the possession RC NO. 4(E)/2009 CBI vs. Ram Niwas Singhal & Ors 20 of 150 21 of the factory of M/s Raj Fibres at Panipat, which is Ex PW5/E2 and thereafter he proceeded to the spot and took over the possession of the said factory and prepared punchnama dated 1106.07 which is ExPW5/E3. He also prepared the schedule1 which has been exhibited as Ex PW5/E4 and inventory ExPW5/E5.

33.PW7 is Sh. Balwan Singh from Andhra Bank, Panipat Haryana in which A4 Kailash Garg allegedly opened the fake account of G.M.Engineering bearing current account No. 512. He has proved that self cheque book ExPW7/A to F were presented in their branch issued by A4 Kailash Garg and on the reverse of the said self cheque endorsement of Vijay Singhal was there as well as Neeraj Singhal and the payments were made to the said persons mentioned in the said cheques on various dates between 30.06.05 and 08.08.05.

34.PW8 is Sh. Dinesh Kumar Gupta witness from OBC, Overseas Branch, Panipat. He has proved account opening form in the name of Raj Fibres having their office at 85 Kms Stone, Opposite BBMP Project, Village Siwaha, G.T. Road, Panipat. He has stated that as per the account opening form A1 and A2 were the directors of Raj Fibres and the account opening RC NO. 4(E)/2009 CBI vs. Ram Niwas Singhal & Ors 21 of 150 22 form has been proved as ExPW8/A bearing account no. 2871 having photograph on the same. He has also stated that this account was introduced by M/s Shakti Trading Company and proprietor Mr. Mahesh Kumar was the introducer. Alongwith the said account opening form there are identity documents of the company as well as of A1 and A2 which are ExP1 and P8. He has also proved specimen signature card which is Ex PW8/B.

35.PW9 is Sh. Ramesh Kumar Saroha, who is a formal witness of the fact that he had taken loan of Rs. 5 lacs from Kailash Garg through cheque and his Chartered Accountant had introduced him. He stated that loan of said amount was paid by Kailash Garg to him, which was later on repaid.

36.PW10 is Sh. Bimal Kumar Sharma. He was working as an officer at Asaf Ali Road of UBI. He has proved account opening form of CC A/c no. 18233 of M/s Raj Fibres, which was opened on 20.06.2005 at Asaf Ali Road branch which is ExPW5/C1 which was authorized to be opened by A7 and A6, as per which the Directors of Raj Fibres were A1, A2 and A3. Their photographs were also pasted on the said form. He has also proved the interview cum loan appraisal form RC NO. 4(E)/2009 CBI vs. Ram Niwas Singhal & Ors 22 of 150 23 which is ExPW5/C8. The overall limit of Rs. 295 lacs was recommended by D.K.Balani(A7) and sanctioned by R.R.Roy(A6). He has also identified his signatures on the said documents. He was also shown sanction letter ExPW5/D1 which was issued under the signature of A6 the then Chief Manager. He has also proved the demand drafts for an amount of Rs. 18,16.950/ and 6,05,650/ favouring G.M.Engg. & Co., dated 02.07.05(Sic), which is infact dated 21.07.05, which was issued on the basis of credit voucher which is Ex PW5/C6. He deposed that the drafts were prepared by him and signed by him and his signatures were there on the said drafts which are ExPW10/A and B respectively. He further stated that the said two drafts had been issued on the account of term loan account of M/s Raj Fibres. He has also proved debit voucher pertaining to the same. He has also proved the statement of account pertaining to the term loan account 5330 of Raj Fibres which is ExPW5/D12 and statement of account pertaining to CC account 18233 ExPW5/D11.

37.PW11 is Sh. Surinder Kumar Gupta, Assistant General Manager, OBC, Overseas Branch, Panchuina Road. He has deposed regarding opening account form relating to M/s Matu RC NO. 4(E)/2009 CBI vs. Ram Niwas Singhal & Ors 23 of 150 24 Ram Shiv Charan Dass, which was opened on 19.03.2005. He stated that he permitted to open the said current account. The said account opening form has been proved as ExPW11/A and the signature of the applicant Ram Niwas Singhal(A1) as a proprietor was verified by one V.S.Bajaj. The address of the firm is Anaaj Mandi, Safidon, District Jind, Haryana. The said account opening form is also having the photograph of A1. He also stated that the said account was introduced by A2 Kamal Kumar, Managing Director of Raj Fibres having current account No. 2871 with their branch. The identity documents of Ram Niwas Singhal(A1) are ExPW11/1 to ExPW11/3 submitted alongwith the same.

38.He has further proved another account opening form pertaining to M/s M.S.Traders stating he had permitted to open the said current account under his signatures. The said account opening form is ExPW11/C and the signature of A1 as a proprietor of the said firm had been verified by Sh. V.S.Bajaj. The signature of V.S.Bajaj is at point A on the specimen card ExPW11/D. The account had been introduced by A1 already having a current account No. 2871 with their branch and the identity and address documents submitted by RC NO. 4(E)/2009 CBI vs. Ram Niwas Singhal & Ors 24 of 150 25 A5 Vijay Kumar Singhal alongwith the account opening form is ExPW11/4 to ExPW11/6.

39.PW12 is Sh. Pritam Singh, the proprietor of M/s G.M.Engg.

Company. He has deposed that the said company deals in manufacturing and sale of textile blow room line, rag tearing machine. They had no business relation with M/s Raj Fibres, but he knew Neeraj Singhal(A3) as he had contacted him for supply of machinery for their company, but they never placed any order for supply of any machinery, which their company was manufacturing. He was also shown the quotations dated 05.06.05 for Rs. 14,50,000/, 01.06.05 for Rs. 1,26,88,000/, another dated 05.06.05 for Rs. 18,25,000/ and another one dated 05.06.05 for Rs. 46,80,000/.

40.After seeing those quotations he stated that the signatures on the said quotations purportedly of its proprietor are not belonging to him. The format of quotation was also not of his company, though the letter head of G.M.Engg., was similar to the letterhead of his company. Same was proved by him as ExPW12/1 to ExPW12/3. He also proved the catalogue of G.M.Engg., which has been proved as ExPW12/A and another quotation was shown to him dated 18.07.05 which is RC NO. 4(E)/2009 CBI vs. Ram Niwas Singhal & Ors 25 of 150 26 ExPW5/C19. He stated that the said quotation was not issued from his firm. He further proved that the cash receipts ExPW5/C14 to 17 were never issued by him and the same did not belong to him. He also stated that their firm had never any account with Andhra Bank,. HUDA, Panipat, nor he had received any payment from Raj Fibres by means of draft for Rs. 1,39,26,000/ and Rs. 6,05,650/. He had never any transaction with them, nor he received any letter dated 22.06.05 and 21.07.05 ExPWC/13 and ExPWC/18 from UBI, Asaf Ali Road.

41.PW13 is Sh. Raju Shrivastava working as freelance accountant. He worked with Raj Fibres from March 2006 to September 2006 as accountant. He has deposed that his job was to maintain accounts on the computer and to make entries regarding the bill. He used to make entries on the computer on the directions given by A1, A2 and A5. He deposed in his examination in chief on being shown cash receipts Ex PW5/C14 to C17, he cannot say as to in whose handwriting they are, but they are in the handwriting of either Kamal or Neeraj. The same was his answer with regard to the signatures appearing thereon. Similarly he was also shown RC NO. 4(E)/2009 CBI vs. Ram Niwas Singhal & Ors 26 of 150 27 quotations ExPW12/2, ExPW12/3 and ExPW12/4, he stated that the same was in the handwriting of A3 Neeraj Singhal, but he was not 100% sure, whether the quotations marked as Mark PW12/1 was in the handwriting of A3 Neeraj Singhal, but the same resembles with the quotations marked as Mark PW12/2 to ExPW12/4. He also deposed pertaining to pay in slips with regard to deposit of certain amount in the Andhra Bank, Panipat Branch, the said pay in slip pertaining to an amount of Rs. 1,39,26,000/ dated 25.06.05 and another dated 22.07.05 for Rs. 605650/ and another dated 22.07.05 for Rs. 1816150/ , by virtue of which the said amounts had been deposited in the account of G.M.Engg., Andhra Bank, Panipat Branch bearing current account no. 512. The said pay in slip is ExPW13/B to D.

42.He also stated that the said pay in slips are in the handwriting of A5 Vijay Singhal. He was further shown six cheques bearing signatures of proprietor of G.M.Engg., A4 Mr Kailash Garg. The cheque dated 27.05.05 for Rs. 40 lacs in the name of Matu Ram Shiv Charan Dass which is ExPW13/E and another cheque dated 27.06.2005 in favour of M.S.Traders submitted by A4 Kailash Garg for Rs. 50 lacs is ExPW13/F RC NO. 4(E)/2009 CBI vs. Ram Niwas Singhal & Ors 27 of 150 28 and another cheque for Rs. 15 lacs issued by A4 Kailash Garg dated 29.06.2005 in favour of M/s M.S.Traders is Ex PW15/G and one more cheque dated 30.06.05 which is a self cheque for Rs. 5 lacs and another cheque for Rs. 5 lacs in favour of M.S. Traders dated 27.05.05 issued by A4 Kailash Garg is ExPW13/H.

43.PW14 is Sh. Rakesh Kumar Nigam. He stated that he was posted as Sr. Manager in Panipat Branch of UBI from December 2004 to December 2007 and the CC limit of Rs. 1,20,000/ and term loan of Rs. 1.75 lacs were sanctioned in favour of Raj Fibers by their Asaf Ali Road Branch. They also sent a letter dated 13.07.2005 regarding sub limit of Rs. 60 lacs to M/s Raj Fibres which he had allowed and he alongwith then chief manager Sh. Tarun Kumar Sinha had inspected the factory of M/s Raj Fibres to check the status of the unit on 01.09.2006, since the account of the firm was not running satisfactorily. When he visited the factory premises, they observed that the factory was running in low profile. They had prepared a joint report and submitted the same to Asaf Ali Road Branch. The inspection report is ExPW14/A and during their inspection stock register was not found at the factory RC NO. 4(E)/2009 CBI vs. Ram Niwas Singhal & Ors 28 of 150 29 premises. The factory was functioning only on the diesel generator. They again inspected the said premises on 01.02.07, but at that time the factory was not functioning. There was no stock/raw material or finished goods founds. No books like stock register, sale register or purchase registers were made available. There was no power supply. A detailed report was also prepared which is ExPW14/B bearing the signatures of Mr. Tarun Kumar Sinha. He also deposed that he was one of the team member after issuance of possession notice to Raj Fibres for taking over the possession of the firm and at the time of taking possession the inventory was also prepared.

44.PW14 is Sh. Rakesh Kumar Nigam, Sr. Manager from Panipat Branch, UBI. He has deposed that he had received a letter dated 13.07.05 vide which Asaf Ali Road Branch had instructed and intimated that on the basis of request of the company, it was decided by Asaf Ali Road branch to allow the company to avail cash credit limit of Rs. 60 lacs out of total cash credit sub limit of Rs. 120 lacs and further it was requested by Asaf Ali Branch to their branch to open a cash credit account in the name of the company after closing RC NO. 4(E)/2009 CBI vs. Ram Niwas Singhal & Ors 29 of 150 30 current account no. 727 at their branch. On the basis of this letter, the current account No. 727 was converted into CC2007 on 14.07.05 which is ExPW14/H.

45.PW15 is Sh. Rakesh Guglani , Chartered Accountant who was hired by M/s Raj Fibres for preparation of loan project documents. He has deposed that A1, A2 and A3 approached him in the year 2005 for preparing the project report of M/s Raj Fibres, which had been prepared with a view to enhance their credit limits and fresh term loan and they provided him with quotation of machinery, estimate of building and their existing balance sheet for the 20022003. He proved the project report containing the proposal and marketing plan of Raj Fibres which was complied by his company. The said proposal and marketing plan is ExPW15/A. The proposal was for working capital of Rs. 120 lacs and the term loan for Rs. 175 lacs. The covering letter by virtue of which the same was submitted to the Chief Manager OBC is ExPW15/B and the annexure1 containing the project report at Glance submitted by A2 is ExPW15/C. He has also proved the provisional balance sheet dated 21.04.05 ExPW15/B and he was further shown a certificate on the letterhead of his company bearing RC NO. 4(E)/2009 CBI vs. Ram Niwas Singhal & Ors 30 of 150 31 his signatures ExPW15/E by virtue of which he had certified that M/s Raj Fibres Pvt. Ltd., G.T.Road Panipat had incurred expense of Rs. 12,36,300/ on new building shed upto 19.07.05.

46.PW16 is Sh. Dinesh Kapoor another witness from Andhra Bank Panipat Branch. He deposed that he remained posted as an officer in the said branch from January 2002 till May 2008. As an officer his duties were daily routine operation, loan, recovery and other allied works. He was shown three pay in slips of Andhra Bank pertaining to current account No. 512 of M/s G.M.Engineering. He has proved three pay in slips Ex PW13/B to D and he stated that the these pay in slips were verified and authorized for making the payment mentioned therein. All the three pay in slips had been deposited in the account no. 512. Alongwith pay in slip ExPW13/B the bank drafts bearing no. 051477 dated 21.07.2005 was attached with the bank and the same was presented on 27.07.2005 for payment. Same was sent to UBI for payment and on confirmation the amount was credited in the account of M/s G.M.Engg(which is of Rs. 13926000/). The said draft is Ex PW16/A. He has further deposed that alongwith the pay in slip RC NO. 4(E)/2009 CBI vs. Ram Niwas Singhal & Ors 31 of 150 32 ExPW13/C a bank draft bearing no. 051477 dated 21.07.2005 was attached. The same was presented on 27.07.2005 for payment to Panipat Branch, UBI and on confirmation the amount was credited in the account of G.M.Engg for Rs. 605650/. He also stated that alongwith pay in clip ExPW13/D a bank draft bearing no. 051476 dated 21.07.2005 was attached and same was also cleared in the account of Ms/ G.M.Engg. The said drafts are ExPW10/B and ExPW10/A respectively. He has again proved a cheque ExPW13/E which has already been proved by PW13.

47.He has also sated that the said cheques were presented in their bank for clearing in due course. He has also deposed that one cheque of Rs. 50,000/ which was a self cheque was presented on 05.08.05 by G.M.Engg., same was authorized by him for payment and he also processed the said cheque and on the reverse of the cheque the payment had been made to one Neeraj. Similarly he had seen self cheque issued by G.M.Engg., for Rs. 90,000/ dated 08.08.05 which was also processed by him and the payment was made to A5 Vijay Singhal mentioned on the reverse of the same and he was also shown a cheque for Rs. 20 lacs ExPW4/A which was RC NO. 4(E)/2009 CBI vs. Ram Niwas Singhal & Ors 32 of 150 33 also a self cheque dated 28.06.05 which was also processed by him and the payment was made to A5 Vijay Singhal mentioned on the reverse of the same. Similarly he was also shown a self cheque for Rs. 5 lacs dated 01.07.05 which was also processed by him and the payment was made to Neeraj mentioned on the reverse of the same. He was also shown another cheque for Rs. 2 lacs which was also a self cheque dated 04.07.05 which he also processed. He stated that the payment was made to A5 Vijay Singhal as per his signatures appearing on the reverse of the said cheque. He has proved the statement of account of M/s G.M.Engg., for the period 24.06.05 to 23.12.05 bearing their seal of their bank, Panipat Branch. He stated that the transaction of Rs. 13926000/ on 27.06.05, Rs. 6,05,650/ on 22.07.05 and Rs. 1816950 on 22.07.05 had been duly reflected in the statement of account at point X1, X2 and X3. The same is ExPW16/B.

48.PW17 is Sh. Veerender Kumar Sarna. He is another witness from Andhra Bank, Panipat Branch. He stated that he was posted as Asst. Branch Manager in Andhra Bank between 2004 to 2006. He was looking after the service counter mostly relating to payment/receipts, deposits and other daily RC NO. 4(E)/2009 CBI vs. Ram Niwas Singhal & Ors 33 of 150 34 operations. He was shown the application for opening current account No. 512(already ExPW1/A) pertaining to M/s G.M.Engg., He has stated that he had verified the same on processing the same and account was allowed to be opened by the then Branch Manager namely Sh. K. Konappa whose signatures has been affixed at point D. The introducer was M/s L.S.Textile whose proprietor was Mr. Pawan Kumar and his signatures are also appearing on the same.

49. He also stated that A4 Kailash Garg had filed the photocopy of PAN card and electricity bill for identification and address proof. The same are Marked PW17/1 and PW17/2. He also stated that the current account No. 512 pertianing to M/s G.M.Engg., is closed on 23.12.05 as reflected in the statement of account which is ExPW16/B. He was shown an authority letter given by A4 Kailash Garg to A5 Vijay Singhal to operate the said account which is ExPW13/D1. He also stated that he processed a self cheque of Rs. 20 lacs issued by G.M.Engg., and payment was made to A5 Vijay Singhal. Similarly, he also processed the cheque of Rs. 40 lacs issued by G.M.Engg., presented by Matu Ram, he authorized the said payment and payment was made in due course and he was RC NO. 4(E)/2009 CBI vs. Ram Niwas Singhal & Ors 34 of 150 35 also shown a cheque of Rs. 50 lacs issued by G.M.Engg.,presented by M.S.Traders and he authorized the payment and payment was made in due course. The cheques for Rs. 40 lacs and 50 lacs are ExPW1/E and ExPW1/F. He also stated that he also processed a cheque for Rs. 15 lacs issued by G.M.Engg., ExPW13/G, presented through M.S.Traders. He was also shown a self cheque of Rs. 5 lacs which is ExPW7/A and the payment was made to A2 Neeraj Singhal issued by G.M.Enterprises. He was also shown another self cheque for Rs. 2 lacs ExPW1/B and the payment was made to A3 Vijay Singhal and he was also shown a cheque of Rs. 5 lacs issued by G.M.Engg., in favour of M.S.Traders which was processed and payment was made in due course. The same is ExPW13/H.

50.He also stated that the cheque ExPW9/A was presented by Ramesh Saroha and payment was made in due course and another self cheque ExPW7/C for Rs. 6 lacs issued by G.M.Engg., and payment was made by him after processing the same. He also stated that another cheque ExPW7/D is a self cheque for Rs. 8 lacs which was processed by him. He also stated that a cheque ExPW7/E for Rs. 8 lacs was RC NO. 4(E)/2009 CBI vs. Ram Niwas Singhal & Ors 35 of 150 36 processed by him and the payment was made to A5 Vijay Singhal and another cheque for Rs. 1 lakh ExPW7/F which was also signed, verified and processed by him and payment was made to A5 Vijay Singhal and he also processed one cheque ExPW4/B for Rs. 50,000/ which is a self cheque issued by G.M.Engineering and payment was made to Neeraj A3 on 05.08.05. He was also shown a self cheque for Rs. 90,000/ issued by G.M.Engg., ExPW4/C and statement of account ExPW16/B with regard to the amount.

51.PW18 is Sh. Lalit Hasija who was posted as an officer in OBC, SSI Branch, Model Town, Panipat. He stated that he was posted in the OBC, Oversees Branch Panipat from August 2001 till August 2005. At that time he was looking after the transaction of import and export. He was shown a cheque of M/s M.S.Traders having current account No. C/A 3320 for an amount of Rs. 4 lacs. After seeing the cheque he stated that he processed the same and it was a self cheque which is Ex PW18/A(on the reverse of the said cheuqe signatures of A4 Kailash Garg and that of A5 Vijay Singhal appears). He also stated that the pay in slip dated 04.07.05 a cheque of Andhra Bank for Rs. 5 lacs was deposited in their branch which he RC NO. 4(E)/2009 CBI vs. Ram Niwas Singhal & Ors 36 of 150 37 processed. The pay in slip is ExPW18/B. He also stated that another cheque of M.S.Traders which was a self cheque of Rs. 15 lacs was presented dated 06.07.05 issued by A5 Vijay Singhal, same is ExPW18/C(on the back side of the said cheque signatures of Kamal Kr. Singhal(A2) are appearing).

52.He also stated that another cheque of M.S.Traders which was a self cheque of Rs. 10 lacs was processed by him which is ExPW11/F(same bears the signatures of A5 Vijay Singhal and payment was also received by him). He was also shown another cheuqe of M.S.Traders for Rs. 4,05,000/ in favour of Raj Fibers. After seeing he stated that the the said amount was transferred in favour of Raj Fibres which is ExPW18/D. He has also stated that one cheque of M.S.Traders for Rs. 2 lacs issued by M.S.Traders in favour of Raj Fibres was processed which is ExPW18/F. Similarly there was another cheque for a sum of Rs. 15 lacs dated 08.07.05 by which payment was made to the proprietor A5 Vijay Singhal which is ExPW18/G. He was also shown another cheuqe of Rs. 10 lacs which was a self cheque ExPW18/H, which he processed the same and payment was made to A5 Vijay Singhal. He also processed the cheque in favour of Raj Fibres issued by RC NO. 4(E)/2009 CBI vs. Ram Niwas Singhal & Ors 37 of 150 38 M.S.Traders for Rs. 2 lacs which is ExPW18/J. He was also shown one cheque for Rs. 1 lakh issued by M.S.Traders in favour of Raj Fibres which was processed by him which is Ex PW18/K.

53.PW19 is Sh. Ram Dass Gambhir. He deposed that he remained posted in UBI, Asaf Ali Road Branch from November 2004 till April 2008. The credits were given by their bank to the borrower i.e cash credit, overdrafts and term loan. He stated that in cash credit the security was stock and book debts and also included mortgage of immovable property i.e collateral security, personal guarantee of borrowers supported by additional securities. The term loan was provided mostly for development of infrastructure, purchase of plant & machinery equipments. The cash credit facility was provided for purchase of stocks, raw materials, running operations of the company. For availing these facilities, the borrower had to submit proposal for seeking facility under any of the above loan advances. After receiving the proposal from the borrower, bank scrutinize the same. In the scrutiny, the feasibility of the proposal was seen by the bank. Bank scrutinizes the balance sheet, pre sanction visit of the premises of the borrower and RC NO. 4(E)/2009 CBI vs. Ram Niwas Singhal & Ors 38 of 150 39 also scrutinizes the collateral security submitted for loan. On satisfaction of the bank, the loan was appraised by the officer of the bank who recommended the sanction of loan. The processing and recommending officer can be the same if the branch is small and if there is inadequate staff, but in full fledged branch, the officers may be different. After processing and recommendation, the same was approved by the branch head competent to sanction the same. If the loan exceeds the limit of the branch then the proposal was recommended to next higher authority i.e generally regional head. After approval of proposal for grant of loan, the branch issued a sanction letter containing terms & conditions of the loan, details of collateral security, rate of interest etc. Thereafter process of disbursement was taken. He has only corroborated the facts already proved by PW1 and PW5 with regard to the loan proposal appraisal and documents submitted by Raj Fibres. He has deposed and given explanation with regard to different documents submitted by Raj Fibres including their proposal documents, approval documents, report and documents admitted by Chartered Accountant and execution of transaction documents in question.

RC NO. 4(E)/2009
CBI vs. Ram Niwas Singhal & Ors                                                 39 of 150
                                               40

54.PW20 is IO of this case Insp. C.S.Prakash, who had investigated the case. After completion of investigations, the charge sheet was prepared and filed by him in the court.

55.After completion of prosecution evidence the entire incrimination evidence appearing against the accused persons was put to them in their statements U/s 313 Cr.P.C.

56.In statement U/s 313 Cr.P.C of accused Ram Niwas Singhal(A1) with regard to the documents submitted by them for taking of loan with the UBI, Asaf Ali Road and disbursement of loan have not been specifically denied. In answer to these questions put to him, he has stated that it is a matter of record thereby not specifically denying the same. His defence was that it was a false case. However, it is submitted that the property which accused persons had mortgaged has more than double market value than the amount of loan which was advanced. It was further submitted that the accused persons were very good pay masters and PNB bank had given the certificate to that effect and further United Bank also issued certificate to Syndicate Bank confirming the same. It was further submitted that it was only a recovery matter which was of nature of civil case and not a criminal case which it has RC NO. 4(E)/2009 CBI vs. Ram Niwas Singhal & Ors 40 of 150 41 been turned into. It was further submitted that case is pending for recovery before the Hon'ble DRT3 titled as Raj Fibers Vs United Bank of India, in this case auction had already taken place and proceeds of the property were already in possession of United Bank of India. However bank has sold the property at throw away price at minimum rate. It is further submitted the bank had already recovered outstanding amount from Raj Fibers. The above said case is still pending adjudication.

57.Similarly in his statement U/s 313 Cr.P.C Kamal Kumar Singhal(A2) also did not deny the submitting/execution of relevant documents with the UBI for taking loan and disbursement of loan of Rs. 295 lacs including cash credit limit of Rs 120 lacs and term loan of Rs. 175 lacs. His defence was that the entire case was false and was similar to that of accused no. 1, therefore same is not being reproduced again for the sake of brevity.

58.Further the accused Neeraj Singhal in his statement U/s 313 Cr.P.C did not deny the documents submitted by them with the UBI, Asaf Ali Road and disbursement of cash credit limit and term loan and disbursement of same. His defence was also RC NO. 4(E)/2009 CBI vs. Ram Niwas Singhal & Ors 41 of 150 42 the same as was taken by A1 and A2. Accused Kailash Garg (A4) in his statement U/s 313 Cr.P.C denied the entire incriminating evidence put to him. He stated that he was only a machine mechanic with Raj Fibres. He did not take any benefit/pecuniary advantage from anybody in this case. He did not know anything about the loan in question sanctioned by UBI and also about account of G.M.Engineering Co, with Andhra Bank, Panipat and the withdrawals therefrom. He was asked by the directors of M/s Raj Fibres that he would have to stand surety for them and for this purpose his signatures had been obtained and was also told by them that an account was required to be opened and they had also got singed some blank cheques from him. He had no knowledge about any fraudulent transaction. He was innocent and had been falsely implicated in this case.

59.In his statement U/s 313 Cr.P.C, Vijay Singhal(A5) stated that the entire case was false. However, he denied the submission of necessary documents by A1 to A3 with the bank and sanctioning of the cash credit limit and term loan and disbursement of same. His defence was that it was a false case and was similar to that of A1, A2 and A3. Therefore the RC NO. 4(E)/2009 CBI vs. Ram Niwas Singhal & Ors 42 of 150 43 same was not reproduced again for the sake of brevity.

60.Now coming to the statement of accused R.R.Ray U/s 313 Cr.P.C who was the Senior Manager of UBI, Asaf Ali Road. He did not deny the submission of necessary proposals/project report by M/s Raj Fibres. The pre sanction report submitted by him for sanction of loan under his signatures and disbursement of the same, but he denied other facts for want of knowledge. His defence was that he was working with United Bank of India at its Asaf Ali Road Branch as Chief Manager and was enjoying financial discretionary power to the extent of Rs.4 crore.

61.The Directors of M/s Raj Fibers Pvt. Ltd., who were enjoying credit facilities from Punjab National Bank, Panipat Branch, approached the Asaf Ali Road branch of United Bank of India for credit facilities of Term Loan over and above the cash credit limit enjoyed by them from Punjab National Bank since the Manager of Punjab National Bank was not having financial power to sanction term loan over and above cash credit limit sanctioned. Series of discussion took place with the Directors of M/s Raj Fiber Pvt. Ltd. and on being satisfied with the viability of the proposal, factory was visited by me on RC NO. 4(E)/2009 CBI vs. Ram Niwas Singhal & Ors 43 of 150 44 26.05.2005. During the said factory visit no abnormality in the matter of running of the factory and its production was detected except for nonmaintenance of certain Registers, which were reported to be not maintained in such nature of factories in the area. In the report of such visit no adverse remarks were incorporated regarding non viability of the proposal as well as non existence of stock.

62.Subsequent to the said visit another senior officer of the Bank was deputed to visit the factory before actual sanction of the loan facility as sought by M/s Raj Fibers in their loan proposal. After perusal of the said visit report it was finally decided to allow credit facilities to M/s Raj Fibers and processing of the loan proposal was done by the authorized senior officer of the Bank and was submitted to him with the recommendation for sanction. On being satisfied with the same, the loan was sanctioned by him to the extent of Rs.175.00 lacs as term loan and Rs.120.00 lacs as cash credit limit which was to be taken over from Punjab National Bank.

63.While sanctioning the said loan facilities to M/s Raj Fibers, quantum of loan amount were properly secured by creating equitable mortgage of the immovable properties and RC NO. 4(E)/2009 CBI vs. Ram Niwas Singhal & Ors 44 of 150 45 hypothecation of movable properties which was valued at more than the loan amount.

64.Since there was no prescribed form for applying for cash credit and term loan, the proposal submitted on the letter heads of the company was considered for processing of loan proposal as per norms prevailing and as per regular course of business.

65.Since the borrower had to open an account for availing of the sanctioned loan amount, the account opening form was duly introduced by as an account holder of the branch. In this connection it is pertinent to mention that any account holder of the branch, including the employee of the bank, was authorized to introduce any opening of new account, he introduced the opening of the account of M/s Raj Fibers Pvt. Ltd. with sole purpose of development of branch. This introduction by him had never been objected to either by the Controller of the Branch or by any auditing/inspecting official of Bank's Head Office. Even under the banking rules there was no such rule which prohibited any bank employee from introducing the bank account of any customer.

66.All the activities of the Manager of the Branch is under RC NO. 4(E)/2009 CBI vs. Ram Niwas Singhal & Ors 45 of 150 46 supervision and control of the Controlling Authority, i.e. Chief Regional Manager and the said Chief Regional Manager had not observed any irregularity either in sanctioning of the loan proposal or in introduction in account opening form. The functioning of the branch was also subject matter of Banks inspection/audit and in no occasion irregularities in this respect had ever been found by the authorities.

67.Generally all the transactions of the bank were done under the joint supervision of two officials and no officer was individually responsible for any transaction.

68.Disbursement of loan amount was done from time to time by Bank's authorised officers and on all such occasion it was released under the signatures of two officers. He did not release loan amount on his own since operational work of the branch was not done by one single officer and many more officials were involved in the process. This aspect of release of fund was also reported to the controlling authority periodically and no negative action was ever taken by the said authority.

69.Bank's rules prescribed for post sanction inspection to ascertain the end use of funds sanctioned. The factory of M/s RC NO. 4(E)/2009 CBI vs. Ram Niwas Singhal & Ors 46 of 150 47 Raj Fibers and its working was duly inspected by the authorized officers excluding him on number of occasions after sanction and disbursement of loan. No adverse/negative opinion was ever observed by the inspecting officials even by the auditors of Bank's Head Office Inspection Dept. in the matter of non utilisation of the loan amount sanctioned and availed by M/s Raj Fibers Pvt. Ltd.

70.As there was no written procedure of mode of delivery of pay order the pay order favouring the vendor was handed over to the borrower with covering letter meant for the vendor for procuring the machinery, as per prevalent norms and practice. Such norms had always been adopted by him, while working at the Asaf Ali Road branch on number of occasions in various accounts and during the regular and periodical inspections and internal audits such act had never been objected to by the controller of the branch. By handing over the pay order to one of the Director of M/s Raj Fibers Pvt. Ltd. no irregularities or violation of rules had been done by him.

71.He had always done his duty with utmost sincerity and even in this case he had done the same, he had not gained any financial and or other benefits either in cash or kind by RC NO. 4(E)/2009 CBI vs. Ram Niwas Singhal & Ors 47 of 150 48 sanctioning the loan to M/s Raj Fibers Pvt. Ltd. in any manner what so ever and it was done in accordance with the regular course of our banking business.

72.After the sanctioning of loan amount, certain amount was also repaid by M/s Raj Fibers Pvt. Ltd. to the bank. However, United Bank of India had also recovered an amount of more than Rs.2 Crores by disposing off the mortgaged property of M/s Raj Fibers.

73.In the present case the complaint was made against M/s Raj Fibers for non repayment of loan amount and the complaint was not made against any of the bank employee(s)

74.Similarly statement of accused D.K.Balani(A7) was also recorded U/s 313 Cr.P.C. He did not deny the submission of loan proposal by Raj Fibres and recommendation of same as well as his pre sanction visit and sanctioning of the same by A6. It is stated that the loan was sanctioned according to prescribed norms and practice. The defence of A7 was that that he is innocent and had not committed any offence. He had no connection with the other accused in the present. He has performed his duties diligently observing all banking norms. The said loan was sanctioned only after furnishing of RC NO. 4(E)/2009 CBI vs. Ram Niwas Singhal & Ors 48 of 150 49 adequate security for securing the loan to be advanced. No discrepancy was observed by the bank in its review report of the loan sanctioned which is prepared every year. Even the snap audit report Ex.PW19/DC prepared by independent staff of the bank did not report any discrepancy in the loan sanctioned to Raj Fibers. There is no hard and fast rule or any banking norm for disbursement of loan amount by post only. In fact, it has been observed that if sent by post, the same is often lost, delayed and there are chances of misappropriation thus causing undue hardships to the customers.

75.Therefore, as per normal practice, the loan is disbursed by way of crossed and account payee bankers cheque in the name of vendors of machine/equipments and handed over to the borrower/customers so that their work is not delayed. In fact, the only grievance of United Bank of India in the present case was regarding non recovery of loan amount which was a civil dispute and the same was given a criminal colour by CBI officials in connivance with bank. The loan sanctioned in the present case was sufficiently secured by way of securities prior to its sanction. In fact the present case has been filed by the bank only to create pressure and recover their loan RC NO. 4(E)/2009 CBI vs. Ram Niwas Singhal & Ors 49 of 150 50 amount. The original complaint by the bank was not against any banker and it was only because of unfair and shoddy investigation that he has been falsely implicated in the present case. He has performed his duty properly observing all the banking norms and practices and has always worked in the interest of the bank. He was not the final authority and could not sanction or deny any loan proposal on his own. In the present case, the customer was already enjoying the facility from Punjab National Bank and the said bank had certified that the account of the said customer was running satisfactorily. After his leaving the Asaf Ali Road branch on 09.03.2006, the account of M/s Raj Fibers Pvt.Ltd. was running good which is proved by the certificate produced by the bankand marked as Ex.PW19/DA wherein the Chief Manager United Bank of India has informed the Chief Manager, Syndicate Bank that M/s Raj Fibers Pvt. Ltd. is availing credit facility since June 2005 and the conduct ofthe account was good. All the accused persons submitted they would lead evidence in their defence.

76.However only DW1 and DW1A were examined by accused persons A1, A2, A3 & A5. DW1 is Sh.Anil Kumar, Chief Manager with UBI, Asaf Ali Road Branch. He stated that the RC NO. 4(E)/2009 CBI vs. Ram Niwas Singhal & Ors 50 of 150 51 CC account and term loan of M/s Raj Fibres had been transferred to Assets, recovery branch situated at Cannaught Circus, Delhi and he had no personal knowledge about the sale by auction of the property of M/s Raj Fibres at Panipat.

77.DW1A is Sh. Vivek Kumar Mishra. He has proved the sale certificate of the property bearing no. 85, KM Stone, Village Siwaha, Panipat including plant and machinery. He stated that the same was sold for Rs. 2.01 crores in favour of Mr. Sewa Ram Goel and sale proceeds of Rs. 2.01 crores were adjusted against the accounts of Raj Fibres. The photocopy of sale certificate is ExDW1/A. He had brought the summoned record pertaining to term loan ExDW1A/A and CC loan ExDW1A/B. He stated that both the accounts were merged on 28.07.2009 and new number was given by the bank which is ExDW1A/C. As both the accounts were declared NPA(non performing asset), system does not show interest, therefore a manually prepared statement of account was prepared which is Ex DW1A/D, which shows total outstanding amount of Rs. 29100741.57. He stated that entire land & building, plant and machinery was sold for Rs. 2 Crores 1 lakh for recovery purpose under SARFAESI ACT on 29.03.2010. No other RC NO. 4(E)/2009 CBI vs. Ram Niwas Singhal & Ors 51 of 150 52 witness was examined by accused persons.

78.I have heard Ld. PP for CBI Sh. V.K.Ojha. I have also heard Ld. counsel for A1, A2, A3 and A5 Sh. Anindya Malhotra. I have also heard Ld. counsel for A7 Sh. Dharmender Priani. I have also heard Ld. counsel Sh. Manish Kumar for A6 and have also perused the written submissions filed on behalf of A7. Counsel for A1, A2, A3 and A5 has relied upon the the following judgments:

1. AIR 1973 SC 326 titled as State of Kerala Vs. Pareed Pillai and Anr.

2. (2013) 1 SCC 205 titled as C.K.Jafeer Sarief Vs. State

3. (2005) 12 SCC 631 titled as K.R.PUrshothaman Vs. State of Kerela

4. 1980 CRL. L.J 220 titled as Abdulla Mohammed Pagarkar etc., Vs. State

5. AIR 1963 SC 1572 titled as Dr. Vimla Vs. Delhi Administration

6. (2015) 1 GLR 696 titled as Kokilabed Devjibhai Makwana & Ors Vs. State of Gujrat & Ors

7. AIR 1997 SC 3424 titled as Jibrial Diwan Vs. State of RC NO. 4(E)/2009 CBI vs. Ram Niwas Singhal & Ors 52 of 150 53 Maharashtra

8. AIR 1997 SC 3425 titled as Ajit Prasad Gupta Vs. State of U.P

9. (2009) 8 SCC 751 titled as Mohammed Ibrahim & Ors Vs. Stae of Bihar & Anr.

On the other hand Ld. PP for CBI has relied upon the following judgments:

1. AIR 1963 SC 11116 titled as M.Narayanan Nambiar Vs. State of Kerala

2. Runu Ghosh Vs. CBI in criminal appeal No. 482/2002, 509/2002 and 536/2002, decided on 21.12.2011 by Hon'ble High Court

79.Ld. counsel for A1, A2, A3 and A5 has argued that the entire case of the prosecution was false. The accused persons had applied for term loan and cash credit facility with the UBI, Asaf Ali Road. All the requisite documents were submitted including loan application project report which was appraised by the bank officials. A pre inspection visit was also done by A6 as well as A7, everything was found in order only after careful scrutiny of documents submitted by them, term loan RC NO. 4(E)/2009 CBI vs. Ram Niwas Singhal & Ors 53 of 150 54 and cash credit facility was sanctioned in their favour.

80.He has also argued that the accused persons had no dishonest or fraudulent intention to cheat or deceit the bank at any point of time. He has further argued that the property which was mortgaged by above accused persons with the bank at the time of availing of above loan facility was more than the double value of the loan amount which was advanced.

81.He has further argued that M/s Raj Fibres to whom the loan was advanced was a very good pay masters and they were previously availing account with cash credit limit with PNB Panipat, who had issued a certificate to this effect that they were A + category customers. The said certificate was also issued by UBI, Panipat in favour of Syndicate Bank. He has further argued that the loan account was running satisfactorily which is evident from the testimony of various bank officials examined by the prosecution who had also deposed that the account of M/s Raj Fibres was regularly audited on various occasions and it was subjected to periodical inspections. The bank account was running satisfactorily till the year 2006, when due to some difficulties the firm M/s Raj Fibres went into RC NO. 4(E)/2009 CBI vs. Ram Niwas Singhal & Ors 54 of 150 55 loss. He argued that the running of business enterprise and consequent loss in the same does not amount to fraudulent intention on the part of the above accused persons. He has further argued that the present case was in the nature of civil remedy and it has been forcefully converted into criminal case, as proceedings for recovery were already pending before DRT in the case titled as M/s Raj Fibres Vs. UBI. He has further argued that sale has already taken place of land, plant & machinery of the factory of Raj Fibres and the proceeds of the same are already in the possession of UBI. Same have also been adjusted towards the arrears of cash credit and term loan. He has further argued that the bank had sold the property at throw away prices at minimum rate and they had already recovered more than the loan amount which was due from Raj Fibres.

82.He has further argued that from the cross examination of the witnesses examined by the bank including IO PW20, it has come on the record that the rules of the bank prescribed for post sanction inspection to ascertain the end use of funds, which has also been done in the present case. No RC NO. 4(E)/2009 CBI vs. Ram Niwas Singhal & Ors 55 of 150 56 adverse/negative opinion was ever observed by inspecting officials and auditor of the bank and there was no written procedure or mode pertaining to delivery of pay order favouring the Vendor i.e G.M.Enginnering, as per prevalent normal practice which is in vogue. Same was therefore handed over to the Directors of Raj Fibres. He has challenged the testimony of the witnesses who had stated that factory was running at low profile and there was no stock register and another register available in the factory. He has questioned the said inventory and report submitted by the said officials.

83.He has further argued that there is no evidence of siphoning of loan amount disbursed to Raj Fibres. He has further argued that there are many G.M.Engineering operating in Panipat and testimony of PW2, PW3 and PW12 in this regard does not prove that G.M.Engg., of which A4 was the proprietor was a fake firm. He has also argued that prosecution had to establish by leading positive evidence on the record that there was only one G.M.Engg., operating in Panipat which has not been done. He has further argued that A4 has only signed the account opening form of G.M.Engg., with Andhra Bank, Panipat branch as a proprietor thereof. He is not representing RC NO. 4(E)/2009 CBI vs. Ram Niwas Singhal & Ors 56 of 150 57 himself to be the proprietor of G.M.Engg., being run by PW12 or being its authorized agent. He has also argued that even in the address column he has given his own address and not that of PW12. He has further argued that even the identity documents submitted by him belongs to him. Therefore he has argued that no evidence has been lead by the prosecution to show that the A4 had any fraudulent or dishonest intention to create any false documents, as defined in Section 464 of IPC. He has further argued that none of the accused persons had practiced any deception upon the bank officials by making a false or misleading representation or made any dishonest concealment of any Act or omission, nor they had fraudulently or dishonestly induced the bank to sanction the loan in their favour. He has further argued that the prosecution has miserably failed to prove that there was any conspiracy or meeting of minds between all the accused persons in furtherance of their common objective.

84.He has further argued from the evidence lead on record by the prosecution, there cannot be a charge of conspiracy, as there is no link to show that the accused persons agreed to deceive the bank, or induced them to sanction the loan in their favour RC NO. 4(E)/2009 CBI vs. Ram Niwas Singhal & Ors 57 of 150 58 by submitting false documents in furtherance of his common objective availing said loan. Therefore he has argued that prosecution has failed to make out offence of the conspiracy U/s 120 B r/w S 420/468 & 471 IPC and Section 13(2) r/w 13(1)(d) of PC Act and they have also failed to prove the substantive offence(s) U/s 420/468/471 IPC which have been framed against A1, A2, A3 and A5.

85.Ld. counsel for A4 has more or less adopted the arguments addressed by above counsel and has stated that G.M.Engg., of which account was opened by A4 was not a fake firm. It is not the case of prosecution that PW4 had opened the said account representing himself as proprietor of G.M.Engg., being run by PW12 or being his authorized agent, nor he has submitted any document showing that he had any connection with the said persons rather he has submitted his own identity documents and had also given his own address, therefore he did not make any false document as defined U/s 464 IPC. He has further argued that A4 was only a mechanic working with Raj Fibres, his signatures were obtained on certain blank documents and cheque and acknowledgment which was later on misused. He also argued that above A4 did not obtain any RC NO. 4(E)/2009 CBI vs. Ram Niwas Singhal & Ors 58 of 150 59 benefit/pecuniary advantage from anyone in this case in this case and he was not even having any knowledge about the loan being sanctioned by UBI, Asaf Ali Road in favour of Raj Fibres, nor he was aware about the account of G.M.Engg.,with Andhra Bank, Panipat and withdrawal therefrom and he was asked by the Directors of Raj Fibres that he would have to stand surety for bank and for this purpose were obtained on blank cheques without having knowledge of transaction, therefore he has argued that the accused persons were neither member of any criminal conspiracy, nor he worked as a member with any common objective of the conspiracy, as no evidence has been lead on the record that there was any agreement, meeting of minds between him and other accused persons. Therefore he has argued that no offence is made out against the accused.

86.Ld. counsel for A6 has argued that the firm Raj Fibres was enjoying credit facility from PNB, Panipat branch, approached Asaf Ali Road Branch of UBI for credit facilities of term loan over and above cash credit limit enjoyed by them from PNB since the manager of PNB was not having financial power to sanction term loan, over and above cash credit limit, same RC NO. 4(E)/2009 CBI vs. Ram Niwas Singhal & Ors 59 of 150 60 was sanctioned. Series of discussion took place with the Directors of M/s Raj Fibre and on being satisfied with the viability of proposal, factory was visited by him on 26.05.2005. During his visit no abnormality was found in the factory. Subsequent to his visit another Sr. officer of the bank was deputed to visit the factory for actual sanction. After perusal to the said report, it was finally decided to provide the credit facility to M/s Raj Fibre and processing of the loan was done by the authorized Sr. Officer of the bank, who submitted report with the recommendation for sanction.

87. On being satisfied with the same, he sanctioned the term loan of Rs. 175 lacs as well as cash credit. At the time of sanction of loan to Raj Fibres, quantum of loan amount was properly secured by creating equitable mortgage of the immovable properties and hypothecation of movable assets. Since the borrower had to open account for availing of the sanctioned loan amount, the account opening form was duly introduced by as an account holder of the branch and there was no irregularity to the same which prohibited any bank employee from introducing the bank account of any customer. The functioning of the branch was also subject to bank inspection RC NO. 4(E)/2009 CBI vs. Ram Niwas Singhal & Ors 60 of 150 61 and no occasion irregularities for the same was found. Disbursement of loan amount was done from time to time and it was released under the signatures of two officers. The bank rules also prescribe for post sanction inspection to ascertain the end use of fund sanctioned. The factory of M/s Raj Fibres was running satisfactorily and no adverse/negative opinion was observed by the inspecting officials even by the auditors of the bank in the matter of non utilization of the loan amount. He has argued that there was no written procedure of mode of delivery of pay order the pay order favouring the vendor, same was handed over to the borrower for procuring the machinery, as per the prevalent norms and practice, which has already been adopted by him while working with UBI, Asaf Ali Road Branch and no irregularities or violation of rules had been done by him. He has further argued that accused no. 6 had done his duty with utmost sincerity. He had not gained any financial or other benefits by sanctioning the loan to M/s Raj Fibre and whatsoever he had done, he had done in accordance with the regular course of banking business. He has further argued that even after sanctioning of the loan amount, certain amount was also repaid by Raj Fibre to the RC NO. 4(E)/2009 CBI vs. Ram Niwas Singhal & Ors 61 of 150 62 bank and bank had also recovered more than Rs. 2 Crores by disposing off the assets of Raj Fibres by public auction. Ld. counsel for A6 has further argued that there was no abuse of office or use of corrupt/illegal means by A6 being a public servant, nor he had opened the account of anyone i.e Raj Fibres, or obtained any pecuniary advantage or valuable thing by abusing his office without any public interest. Therefore he has stated that no offence U/s 13(1)(d) is made out, nor any evidence has been lead to make out an offence of conspiracy or active participation of A6, nor there is any evidence to show that there was meeting of mind or agreement between A6 and other accused persons to defraud the bank by sanctioning the loan in favour of M/s Raj Fibres.

88.Regarding the arguments of Ld. Defence counsel for A7, his arguments are substantially similar to that of A6. Therefore they are not been repeated again for the sake of brevity. Besides that he has argued that in the present case A7 was not the final authority to sanction or not to sanction the loan. A7 was to fill the appraisal form as per the information gathered from the borrower and place the same before senior officers. It is the discretion of senior officers whether to RC NO. 4(E)/2009 CBI vs. Ram Niwas Singhal & Ors 62 of 150 63 sanction or not to sanction loan. He has further argued that it is the admitted fact as per the prosecution witnesses that the value of the security provided by Raj Fibres was much more than the loan facility availed by them. It is further argued that A7 took utmost care and caution while issuing drafts for disbursement of sanctioned loan amounts to Raj Fibres . All the drafts which were issued were account payee. A7 had no connection with any other accounts in which the same were cleared.

89.He has further argued that it has also been proved on record that the credit facility sanctioned to Raj Fibres was reviewed after one year by independent officials of UBI, but no anomaly or discrepancy was reported and no action was taken, further as per evidence the investigation team could review the terms and conditions and other important documents executed by Raj Fibres, but after inspection they did not find any discrepancy in the account of Raj Fibres. He has further argued that most of the demand drafts were issued by two persons i.e two signatories, he has further argued that as per the snap audit report prepared by Sr. Officers of UBI from time to time no irregularity was found in the firm of Raj Fibres, nor RC NO. 4(E)/2009 CBI vs. Ram Niwas Singhal & Ors 63 of 150 64 the same was ever detected during surprise checks and audit. He has further argued that the valuation in the pre sanction report dated 16.06.05 was done as per banking norms in force at that relevant time, as also as per the actual verification of stock and machinery at the site which was inspected by A7. He has also argued that the said valuation report is also corroborated by the testimony of PW15 Chartered Accountant Sh. Rakesh Gulani who had prepared the proposal and marketing plan of Raj Fibres ExPW15/A.

90.The said witness has also proved other documents including the provisional balance sheet dated 21.04.05. He has argued that PW15 was the prosecution witness who has proved the documents including the proposal and marketing plan of Raj Fibres as well as project report. Since the said documents have been relied upon by the prosecution themselves, prosecution cannot be allowed to turn around and say that the said documents were fudged by Raj Fibres in connivance with A6 or A7. He has further argued that it is not the case of prosecution that PW15 was also one of the accused in the alleged conspiracy.

91.He has further argued that accused has not committed any RC NO. 4(E)/2009 CBI vs. Ram Niwas Singhal & Ors 64 of 150 65 cheating, nor misused his official position at any point of time, he has simply been made a scape goat. It is further argued that at the relevant time A7 was simply holding the post of Assistant Manager and had no discretionary power of sanctioning or non sanctioning the loan. Therefore in nutshell he has argued that A7 has not has not caused any wrongful gain to himself, nor made any wrongful loss to the UBI. It is argued that A7 has clear antecedents and had acted with utmost caution and care and took each and every step to secure the loan advanced by UBI to Raj Fibres. He has further argued that A7 had acted bonafidely and had not committed any cheating, nor misused his official position, therefore it is argued that no offence is made out against him.

92.On the other hand, Ld. PP for CBI has controverted the arguments of counsel for the accused persons, as he has argued that there cannot be any direct evidence of conspiracy in any case, same can be gathered from circumstantial evidence lead on the record. He has argued that from the entire circumstantial evidence lead on the record by the prosecution it has been proved beyond the reasonable doubt that the acts and conduct of the accused persons were RC NO. 4(E)/2009 CBI vs. Ram Niwas Singhal & Ors 65 of 150 66 conscious and clear to infer their conduct, as per their own designs and consequences and the proof of conspiracy has to be inferred cumulatively taken as a whole. He has argued that the accused persons i.e A1, A2 and A3 had intention to defraud the bank from the very beginning which is evident from the fact that they were not having any stock register, production register, employment register and other necessary documents which was also mentioned in the pre sanction report dated 30.05.2005 of A6, yet a contrary pre sanction report dated 15.06.2005 was given by A7 saying that there was a stock of Rs. 1.05 Crores. It is not clear on what basis A7 had evaluated the value of the stock at Rs. 1.05 crores. He has further argued that in furtherance of conspiracy a fake account was opened by A4 with Andhra Bank, Panipat Branch in the name of G.M.Engg., and for this purpose a term loan of Rs. 175 lacs was sanctioned by UBI, Asaf Ali Road which was deposited in the said account on the basis of forged cash memos showing the payment of margin money.

93.He has further argued that accused persons had also forged proforma invoices of G.M.Engg., in order to induce the bank i.e UBI to sanction CC limit of Rs. 120 lacs and term loan of Rs.

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175 lacs. He has further argued that the Demand Drafts and forwarding letter were handed over to directly to the accused persons instead being sent directly to G.M.Engg., which also shows that the agreement to commit offence between the parties. He has further argued that the said demand drafts were deposited into the fake account of G.M.Engg., but no bills/invoices were raised in the name of A1, A2 and A3 or were ever produced, as they were to be raised in joint name(s) of Raj Fibres and the UBI Asaf Ali Road. He has argued that no end use of funds was ensured.

94.He has also argued that the drafts which were issued for purchase of generator sets were also deposited in the said account of G.M.Engg., without purchasing generator sets from G.M.Engg. In any case, he has argued that it has been proved on the record by PW12 that they had never dealt with selling of generator sets, nor any bills/invoices regarding purchase of generator sets were produced on the record.

95.He has further argued that the fake account of G.M.Engg., was opened by A4 on 24.06.05 which was introduced by PW1 at the instance of A1 and A2 which has come in the testimony of PW1 which also proves the conspiracy. He has RC NO. 4(E)/2009 CBI vs. Ram Niwas Singhal & Ors 67 of 150 68 further argued that A4 has further given mandate in favour of A5 for operating the said account of G.M.Engg., and A4 & A5 issued self cheques and withdrew the substantive amounts from the said fake account of M/s G.M.Engg., and some amount of money deposited in the fake account of G.M.Engg., from UBI Asaf Ali Road branch was transferred/diverted into another account opened on 19.03.05 in the name of Matu Ram opened by Proprietor Ram Niwas Singhal(A1) which was introduced by A2 bearing account no. 3311, OBC Panipat Branch.

96.He has further argued that remaining substantive amount of money was transferred/diverted into another account opened on 19.03.05 in the name of M.S.Traders by proprietor A5 which was introduced by A1 and from the said account of M.S.Traders the money was withdrawn by various self cheques which proves the conspiracy between the accused persons. He has further argued that for proving the offence U/s 13(1)(d) the prosecution has not to prove mens rea.

97.Relying upon the judgment of Runu Ghosh(SUPRA), he has argued that prosecution in order to prove offence U/s 13(1)(d)

(iii) has only to establish that the public servant obtains for RC NO. 4(E)/2009 CBI vs. Ram Niwas Singhal & Ors 68 of 150 69 someone else not necessarily by abusing his office, or using corrupt/illegal means, pecuniary advantage or a valuable thing without public interest. In any case, prosecution has been able to prove that M/s Raj Fibres of which A1 to A3 were Directors was not having any stock register, production register, employment register which was reported in the pre sanction report dated 30.05.05 by A6, a contrary report was given by A7 on 15.06.05 saying that there was a sanction of Rs. 1.05 crores, thereafter loan was recommended by A7 and vide sanction letter dated 20.06.05 the loan was sanctioned by A6 which was accepted by A1, A2 and A3 and it was the incumbent duty of bank officers in this case to take bills/invoices of the machinery allegedly purchased by A1, A2 and A3 from M/s G.M.Engg., including generator sets and the bills regarding construction of factory shed which was never taken on the record.

98.The project report submitted by A1, A2 and A3 which was prepared by PW15 their Chartered Accountant was also not objectivity evaluated and the amount of the project was highly inflated and the drafts were directly handed over to A1 to A3 instead of sending the same directly to the Vendor i.e G.M.Engg. If the same would have been done then the accused persons RC NO. 4(E)/2009 CBI vs. Ram Niwas Singhal & Ors 69 of 150 70 would have been caught at thresh hold, further no end use of funds was ensured by A6 & A7, which shows that there was a conspiracy between all the accused persons. He has further argued that prosecution has also been able to prove that A1, A2 and A3 had deceptively induced UBI, Asaf Ali Road to sanction the loan in their favour by opening a fake account in the name of G.M.Engg., which firm infact belonged to PW12, therefore prosecution has been able to prove the conspiracy as well as substantive offences for which the accused persons have been charged.

99.I have gone through the rival contentions. The Star witness of the prosecution namely PW5 who is the complainant Rajesh Kumar Arora on whose complaint an FIR ExPW5/B was registered by CBI has proved various relevant documents on the record. Firstly, it is to be seen whether the prosecution has been able to prove the conspiracy part i.e offence(s) U/s 120B r/w S 420/468/471 IPC and Section 13(1)(d) r/w S 13(2) of PC Act which have been framed against all the accused persons.

100.The law in this regard is well settled in Catena of Judgments.

The relevant extract of the judgment relied upon by Ld. Counsel for A1, A2, A3 & A5 in this regard is reproduced as RC NO. 4(E)/2009 CBI vs. Ram Niwas Singhal & Ors 70 of 150 71 under:

101. In a case decided by Hon'ble Supreme Court titled K.R.Purushothaman Vs State of Kerala (2005) 12 Supreme Court Cases 631, it was held as under:

11. Section 120A IPC defines "criminal conspiracy". According to this Section when two or more persons agree to do, or cause to be done (i) an illegal act, or (ii) an act which is not illegal by illegal means, such an agreement is designated a criminal conspiracy. In Major E.G.Barsay V. State of Bombay Subba Rao J., speaking for the Court has said :(SCR p.228) "The gist of the offence is an agreement to break the law. The parties to such an agreement will be guilty of criminal conspiracy, though the illegal act agreed to be done has not been done. So too, it is not an ingredient of the offence that all the parties should agree to do a single illegal act. It may comprise the commission of a number of acts."

12. In State V. Nalini it was observed by S.S.M. Quadri, J. at JT para 677: (SCC pp.56869, para

662) "In reaching the stage of meeting of minds, two or more persons share information about doing an illegal act or a legal act by illegal means. This is the first RC NO. 4(E)/2009 CBI vs. Ram Niwas Singhal & Ors 71 of 150 72 stage where each is said to have knowledge of a plan for committing an illegal act or a legal act by illegal means. Among those sharing the information some or all may form an intention to do an illegal act or a legal act by illegal means. Those who do form the requisite intention would be parties to the agreement and would be conspirators but those who drop out cannot be roped in as collaborators on the basis of mere knowledge unless they commit acts or omissions from which a guilty common intention can be inferred. It is not necessary that all the conspirators should participate from the inception to the end of the conspiracy;

some may join the conspiracy after the time when such intention was first entertained by any one of them and some others may quit from the conspiracy. All of them cannot but be treated as conspirators. Where in pursuance of the agreement the conspirators commit offences individually or adopt illegal means to do a legal act which has a nexus with the object of conspiracy, all of them will be liable for such offences even if some of them have not actively participated in the commission of those offences."


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13. To constitute a conspiracy, meeting of minds of two or more persons for doing an illegal act or an act by illegal means is the first and primary condition and it is not necessary that all the conspirators must know each and every detail of the conspiracy. Neither is it necessary that every one of the conspirators take active part in the commission of each and every conspiratorial acts. The agreement amongst the conspirators can be inferred by necessary implication. In most of the cases, the conspiracies are proved by the circumstantial evidence, as the conspiracy is seldom an open affair. The existence of conspiracy and its objects are usually deduced from the circumstances of the case and the conduct of the accused involved in the conspiracy. While appreciating the evidence of the conspiracy, it is incumbent on the court to keep in mind the wellknown rule governing circumstantial evidence viz. each and every incriminating circumstance must be clearly established by reliable evidence and the circumstances proved must form a chain of events from which the only irresistible conclusion about the guilt of the accused can be safely drawn, and no other hypothesis against the guilt is possible. Criminal conspiracy is an independent offence in the Penal Code. The unlawful agreement is sine RC NO. 4(E)/2009 CBI vs. Ram Niwas Singhal & Ors 73 of 150 74 qua non for constituting offence under the Penal Code and not an accomplishment.

Conspiracy consists of the scheme or adjustment between two or more persons which may be express or implied or partly express and partly implied. Mere knowledge, even discussion, of the plan would not per se constitute conspiracy. The offence of conspiracy shall continue till the termination of agreement.

14. Suspicion cannot take the place of legal proof and prosecution would be required to prove each and every circumstance in the chain of circumstances so as to complete the chain. It is true that in most of the cases, it is not possible to prove the agreement between the conspirators by direct evidence but the same can be inferred from the circumstances giving rise to conclusive or irresistible inference of an agreement between two or more persons to commit an offence. It is held in Noor Mohd.

Mohd. Yusuf Momin V. State of Maharashtra, that: (SCC pp.699700, para 7) "[I]n most cases proof of conspiracy is largely inferential though the inference must be founded on solid facts.

                                  Surrounding           circumstances          and
                                  antecedent      and    subsequent     conduct,

among other factors, constitute relevant material."


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                       15.        It is cumulative effect of the proved

circumstances which should be taken into account in determining the guilt of the accused. Of course, each one of the circumstances should be proved beyond reasonable doubt. The acts or conduct of the parties must be conscious and clear enough to infer their concurrence as to the common design and its execution. While speaking for the Bench it is held by P. Venkatarama Reddi, J. in State (NCT of Delhi) V. Navjot Sandhu (p.63) as follows:

(SCC pp.69192, para 103) "103. We do not think that the theory of agency can be extended thus far, that is to say, to find all the conspirators guilty of the actual offences committed in execution of the common design even if such offences were ultimately committed by some of them, without the participation of others. We are of the view that those who committed the offences pursuant to the conspiracy by indulging in various overt acts will be individually liable for those offences in addition to being liable for criminal conspiracy; but, the non participant conspirators cannot be found guilty of the offence or offences committed by the other conspirators.

There is hardly any scope for the application of the principle of agency in RC NO. 4(E)/2009 CBI vs. Ram Niwas Singhal & Ors 75 of 150 76 order to find the conspirators guilty of a substantive offence not committed by them. Criminal offences and punishments therefor are governed by the statute. The offender will be liable only if he comes within the plain terms of the penal statute.

Criminal liability for an offence cannot be fastened by way of analogy or by extension of a common law principle.

102. Now the evidence has to be analyzed to see whether the prosecution has been able to prove the offence of conspiracy in view of the law laid down above. The conspiracy angle in this case can be broken into various stages for the purpose(s) of clarity.

(A) Submitting of loan application, its appraisal and sanctioning.

103. The case of the prosecution starts with the loan appraisal form when A1,A2 & A3 applied for CC limit and term loan with the PNB Asaf Ali Road, PNB, amounting to CC limit of Rs. 120 lacs and term loan of Rs. 175 lacs. Regarding the documents pertaining to the loan i.e loan proposal and marketing plan was prepared by PW15 CA hired by A1, A2 and A3 namely Sh. Rakesh Guglani. He has proved the RC NO. 4(E)/2009 CBI vs. Ram Niwas Singhal & Ors 76 of 150 77 proposal and marketing plan which was for working capital of Rs. 120 lacs and term loan of Rs. 175 lacs which is Ex PW15/A and covering letter pertaining to the same is Ex PW15/B and ExPW15/C containing the project report of Raj Fibres submitted by A2 bearing his signatures. ExPW15/D is the balance sheet for the year ending 31.03.05 which is a provisional balance sheet dated 31.03.2005. ExPW1/E is the certificate dated 20.07.05 certifying that they had incurred an expense of Rs. 1236300/ on the project. ExPW5/B is the proposal application for working capital of Rs. 120 lacs plus term loan of Rs. 175 lacs.

104. Thereafter it seems that on 30.05.05 in order to evaluate the proposal/project report submitted by A1, A2 and A3 of M/s Raj Fibres. A6 who was working as Chief Manager with UBI Asaf Ali Road visited the factory premises of Raj Fibres at Panipat vide entry No. 31 of his pre sanction report of the said date ExPW5/C11, it is mentioned "company is not maintaining register of stock, production or employment. It is reported that no such record is being maintained in other similar units at Panipat".



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105. Further in para 31(d) of the said report it is stated that " proper books are not maintained".

106. Thereafter it seems that A7 who was working as Sr. Manager also visited the factory of A1, A2 and A3 and in his report dated 15.06.05, which is also a pre sanction report, he has reported that there was a stock of Rs. 1.05 crores available with the Raj Fibres in entry no.14 of the said report. No basis of evaluating the stock to be having value of Rs. 1.05 crores has been indicated in the said report. Thereafter loan application proposal was appraised and vide endorsement dated 17.06.05 an application for term loan and cash credit limit of M/s Raj Fibres was recommended by A7 and was sanctioned on the same day by A6. The appraisal of loan proposal application is ExPW5/C8. In the said approval with regard to primary security it is stated that "primary security is hypothecation of stock and book debt and machinery, additional security and factory land and building and existing machinery".

107. Finally term loan and cash credit limit was sanctioned vide letter dated 20.06.05 which was sanctioned by RC NO. 4(E)/2009 CBI vs. Ram Niwas Singhal & Ors 78 of 150 79 A6 which is ExPW5/D1 accepted by A1, A2 and A3. B. Opening of fake account bearing no. 512 of G.M.Engg., with Andhra Bank, Panipat by A4 on 24.06.05 and transfer of money pertaining to term loan into said account by UBI, Asaf Ali Road and deposit of money into the said account.

108. Regarding the said account it has been proved by PW1 that he had been running his business in the name of L.X. Textile(s) at Panipat, he has deposed that on the current account with Andhra Bank bearing no. 512 HUDA Panipat branch, which is in the name of G.M.Engg., his signatures are appearing at point A. The said account opening form has been proved as ExPW1/A and Kailash Garg who was the manager of M/s G.M.Engg., signed at point A showing himself as proprietor. He further stated that he introduced the account at the instance of Neeraj Singhal(A3) and Kamal Singhal(A2).

109. PW17 another witness from Andhra Bank Panipat Branch namely Veerender Kumar Sarna who was working as Asstt. Manager at the relevant time stated that he had verified the said account opening form which is ExPW1/A. Account was allowed to be opened by then branch manager Sh.



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K.Konappa which was opened on 24.06.05, whose proprietor was Kailash Garg whose photographs has also been affixed on the same and introducer was Mr. Pawan Kumar whose signatures are also appearing and Mr. Kailash Garg had also submitted the electricity bills and PAN card which are Ex PW17/1 and 2 respectively.

110. Further PW13 Raju Shrivastava has proved that vide document ExPW13/D1 A4 gave authorization to A5 Vijay Singhal to operate the said current account bearing No. 512 of M/s G.M.Engg., Andhra Bank Panipat.

111. PW5 has proved that after sanction of term loan and cash credit limit request for disbursal of loan for construction of building for Rs. 8 lacs was made which is Ex PW5/C12 vide endorsement dated 21.06.05 made by A7 it has been remarked "we may allow Rs. 8 lacs for construction of shed as requested by the borrower and credit to CC account with request(sic) by the borrower to submit the bills".

112. Thereafter vide ExPW5/C13 letter was written by UBI signed by A7 addressed to G.M.Engg., company RC NO. 4(E)/2009 CBI vs. Ram Niwas Singhal & Ors 80 of 150 81 opposite Gram Market post office Khadi Ashram, G.T.Road Panipat for purchase of machinery by Raj Fibres. In the said letter dated 22.06.2005 it is stated that they are enclosing a DD No. 051422 for Rs. 13926000/ of said date as per their quotations for purchase of machines by Raj Fibres, the balance amount shall be paid by the party and it is also stated that the means of delivery to the party and bills be raised in the joint name of UBI and Raj Fibres. ExPW5/C2 is the debit voucher dated 23.06.05 of term loan account No. 5330 of Raj Fibres which was opened with UBI, Asaf Ali Road for an amount of Rs. 13926000/ ExPW5/C3 is a credit document for issuance of draft of Rs. 13926000/ in favour of G.M.Engg., dated 23.06.05. ExPW5/C4 is a debit voucher dated 21.07.05 debiting the amount of CC A/c No. 18233 of M/s Raj Fibres for purchase of generator sets for Rs. 605650/.

113. Thereafter vide ExPW5/C5 which is a debit voucher dated 21.07.05 debiting the term loan account No. 5330 of Raj Fibres with UBI, Asaf Ali Road for Rs. 1816950 which was to be paid for purchase of two diesel generator sets in favour of G.M.Engg., Panipat was prepared as per the quotations submitted by the borrower. The margin money was RC NO. 4(E)/2009 CBI vs. Ram Niwas Singhal & Ors 81 of 150 82 to be paid by the borrower. Debit voucher was prepared for the said amount as the total quotation was Rs. 2422600/.

114. There is also ExPW5/C6 credit voucher dated 21.07.05 for issuance of demand draft in favour of G.M.Engg., for a term loan of Raj Fibre for Rs. 2422600/ for this purpose an amount of Rs. 605650 was paid from the CC account of M/s Raj Fibres with Asaf Ali Road Branch, whereas as per the agreement between the parties the margin money had to be paid by the purchaser. ExPW5/C7 is the debit voucher for Rs. 6 lacs for release of second installment dated 21.07.05 in favour of Raj Fibres in their term loan account No. 5330. ExPW5/D9 is the letter dated 20.06.05 addressed to PNB Panipat Branch enclosing DD No. 051419 of Rs. 11994393.50 for an outstanding balance in their account of M/s Raj Fibres and to hand over the title deed to A7, whereby UBI Asaf Ali Road took over the liability of Raj Fibres with regard to their cash credit account which they were maintaining with PNB Panipat Branch. ExPW5/D11 is the statement of account with regard to CC A/c No. 18223 opened with UBI Asaf Ali Raod for the period 01.01.2000 to 26.05.2007.

115. Similarly statement of account pertaining to term RC NO. 4(E)/2009 CBI vs. Ram Niwas Singhal & Ors 82 of 150 83 loan account no. 5330 with UBI Asaf Ali Road of Raj Fibres for the period 01.01.2000 to 26.05.2007 is ExPW5/D12 showing that an amount of Rs. 8,00,000/, 13926000/, 6,00,000/, 1816950/ had been transferred to G.M.Engg., Panipat. The statement of account of G.M.Engg., Andhra Bank Panipat branch shows that the said account was opened on 24.06.05 by depositing cash of Rs. 3500/ and evidencing the receipt of the said amount of Rs. 13926000/, 605650 and 1816950 have been duly reflected in the statement of account and the said account was ultimately closed on 23.12.05. The said statement of account is ExPW16/B. Further the conspiracy angle is further strengthened by the fact that the said draft of Rs. 13926000/ was deposited in the said account No. 512 of M/s G.M.Engg., vide pay in slip dated 25.06.05 in the handwriting of Neeraj Singhal(A3) as per the testimony of PW13 Raju Shrivastava who was working as freelance accountant with M/s Raj Fibres from March 2006 to September 2006, he should know about handwriting and signatures of directors of M/s Raj Fibres as he had worked with him and dealt with the account of M/s Raj Fibres in the official course of business. Similarly the draft of Rs. 605650/ RC NO. 4(E)/2009 CBI vs. Ram Niwas Singhal & Ors 83 of 150 84 was deposited in account no. 512 Panipat Branch, the relevant pay in slip is in the handwriting of Vijay Singhal(A5) and similarly a draft of Rs. 1816950/ was deposited in the said account was also in the handwriting of A5. The same has to be proved in the handwriting of Vijay Singhal and Neeraj Singhal as per the testimony of PW13 Raju Shrivastava, who was working as freelance accountant with them and should have known his signatures having worked with them. Nothing has come out in his cross examination to impinge his credibility.

116. Regarding the alleged fake quotations and cash receipts submitted by A1, A2 and A3 of G.M.Engg., company, the prosecution has examined three witnesses namely PW2 Sanjeev Kumar who was working as a mechanic in the said G.M.Engg., of which Pritam Singh was the proprietor opposite New Grain Market,Opposite Grain Market, Khadi Ashram, G.T.Road, Panipat(Haryana). He submitted that the quotation form Mark PW2/A was not having signatures of Pritam Singh nor cash receipts which were marked as PW2/B1 to B4. Similarly PW3 another witness from the same G.M.Engg., being run by Pritam Singh also stated that the said RC NO. 4(E)/2009 CBI vs. Ram Niwas Singhal & Ors 84 of 150 85 cash receipts ExPW2/B1 to B4 does not bear the signatures and writing of Pritam Singh, nor quotations form mark PW2/A bears his signatures or that of Pritam Singh or any other employee of G.M.Engg. PW12 is Pritam Singh himself has deposed that he had no business relationship with M/s Raj Fibres. He was running G.M.Engg., of which he was the proprietor dealing in manufacturing and sale of textiles blow room line, rag tearing machines with Raj Fibres Ltd., he knew Neeraj Singhal(A3) and A2 who had contacted him for supply of machinery to their company and he had informed about the product which their company was manufacturing, but he never placed an order for supply of any machinery.

117. He was shown four quotations dated 05.06.05 for Rs. 1450000/, dated 01.06.05 for Rs. 12688000 and another dated 1825000/ and one more dated 05.06.05 for Rs. 4680000/. After seeing the quotations he stated that the signatures of Proprietor on the said receipts was not his, nor they had been issued by his company. The format of quotation was also not of his company, though the letterhead of G.M.Engg., was similar to letterhead of his company. The said quotations were Marked as Mark PW12/1 to ExPW12/3. The RC NO. 4(E)/2009 CBI vs. Ram Niwas Singhal & Ors 85 of 150 86 catalogue of G.M.Engg., which is on the record is ExPW12/A. He was further shown another quotation dated 18.07.05 already exhibited as ExPW5/C19, he stated that the said quotations was not issued by his company. He was further shown cash receipts ExPW5/C14 to C17, he stated the signatures appearing on the said receipts was not his. During the period when quotations were purported to have been issued the telephone number of his company was 261827 and mobile number 9812053527 and he never had any account with Andhra Bank, HUDA Sector 11 Panipat, nor he received any payment from Raj Fibres by means of draft for Rs. 13926000/ or Rs. 605650/. He had no transaction with them at any point of time.

118. Nothing has come out in his cross examination or in that of PW2 and PW3 which could diminish with the credibility or objectivity of the said witnesses. The testimony of PW12 on this point converges with the testimony of PW2 and PW3, who were his employees. Now prosecution has been able to prove that all the quotations and cash receipts purported to have been issued by G.M.Engg., which was being run by PW12 Pritam Singh were forged and fabricated and RC NO. 4(E)/2009 CBI vs. Ram Niwas Singhal & Ors 86 of 150 87 they were not issued by said Pritam Singh at any point of time. Counsel for A1, A2, A3 and A5 has argued that the prosecution has failed to prove that the said G.M.Engg., of which Kailash Garg was the proprietor was a fake entity. He has further argued that Kailash Garg had opened the said account as proprietor of the said firm, while opening said account, he had also given his own address which was not that of G.M.Engg., belonging to Pritam Singh and he had also submitted his identity documents only. Therefore he had no intention to forge the said account, the said account cannot be said to be fake account for which he has relied upon the judgment (2009)8 SCC 751 Mohammed Ibrahim & Ors(SUPRA).

119. The said arguments of Ld. counsel for A1, A2, A3 and A5 though attractive is fallacious, as when the accused persons are questioning the the identity of the said firm, they should have shown by leading some sort of evidence that a similar firm by similar name was also operating in Panipat or in rest of Haryana, therefore the quotations form and cash receipts submitted by them may be belonging to RC NO. 4(E)/2009 CBI vs. Ram Niwas Singhal & Ors 87 of 150 88 those identities or concerns. It was for the accused persons to prove by leading cogent evidence on the record that the said G.M.Engg., which was having the same address as that of being operated by Pritam Singh PW12 opposite New Grain Market,Opposite Grain Market, Khadi Ashram, G.T.Road, Panipat(Haryana) was an independent identity being run by some other proprietor, same could have done by putting the relevant record at the time of cross examination of the IO or by leading defence evidence in this regard.

120. If the same would have been proved same would have created a strong doubt with regard to identity of G.M.Engg., and could have shown that there were so many G.M.Engg., being run in the area of Panipat or in Haryana to which the proforma invoices and cash receipts submitted by the accused persons might pertain. Since for that they had to prove there was another G.M.Engg., having the same address as had been mentioned in the invoices and cash memo being run at Panipat who had issued the quotation form to whom the money in cash had been paid for procuring the machines/generator sets as margin money. In the absence of any such evidence, no doubt with regard to identity of RC NO. 4(E)/2009 CBI vs. Ram Niwas Singhal & Ors 88 of 150 89 G.M.Engg., regarding which the evidence has been lead on the record by the prosecution, as belonging to one Pritam Singh PW12 has been created by accused persons from which they could be benefited. It is like if there is a accused by the name of Simon Jones, he can show that he lives in a particular locality in which there are many persons by the name of Simon Jones of same built up and of same age to create doubt, with regard to his identity having committed the offence.

121. No such defence evidence has been lead despite opportunity being granted and taken for leading defence evidence. Further accused Kailash Garg has not lead any evidence on the record to show that he was doing any business in the name of G.M.Engg., of which he was the proprietor, which is evident from the account which he had opened with Andhra Bank Panipat Branch on 24.06.05 and the said account was closed on 23.12.05. He has not produced any bank statement of any bank or any business invoices on the record to show that any G.M.Engg., of which he was the proprietor was doing business barring opening of the current account bearing no. 512 with Andhra Bank Panipat branch RC NO. 4(E)/2009 CBI vs. Ram Niwas Singhal & Ors 89 of 150 90 which was opened on 24.06.05. The very fact quotations are dated 01.06.2005, 05.06.05 and cash receipts are dated 01.06.05, 11.06.05, 07.06.05 and 08.06.05, having the same address as that of concern being run by PW12, shows that same are forged and fabricated, as it seems that the said G.M.Engg., account was opened only after sanctioning of loan to A1, A2 and A3 on 20.06.05 and no operation of any business of any nature whatsoever has been shown to have been undertaken by said G.M.Engg., of which Kailash Garg was the proprietor pertaining to which quotations and cash receipts had been submitted with the UBI, Asaf Ali Road for procuring loan in question.

122. Though the prosecution has failed to prove that the said account was forged by A5, as A5 had opened the said account, after showing himself as a proprietor thereof and he had also given his address as that of village Nangli Khera G.T.Road and he had also submitted his own identity documents with regard to opening of said account, therefore he cannot be said to have made a false document with the intention of causing it to believe that the such documents or part of documents were made signed or executed by the party RC NO. 4(E)/2009 CBI vs. Ram Niwas Singhal & Ors 90 of 150 91 or any other person, in this case by Pritam Singh or under the authority of said Pritam Singh, as no such documents had also been submitted by him showing that he was the agent or employee of Pritam Singh and was authorized to open the said account in his name. Therefore the prosecution has failed to make out a case U/s 468 IPC against the accused Kailash Garg, but it has been proved it was surely a false account opened only for a specific purpose that of siphoning of money from said account. However, at the same time prosecution has been able to prove beyond any sort of doubt that A1, A2 and A3 had used forged documents i.e forged proforma invoices and cash receipts in the name of G.M.Engg for obtaining loan from UBI Asaf Ali Road Delhi.

(C) Siphoning of money form the account of M/s G.M.Engg., Andhra Bank, Panipat Branch bearing no. 512 by self cheque as well as into the account of Matu Ram and M.S.Traders and bearing account no. 3311 and 3320 with OBC Panipat opened on 19.03.05 and thereafter withdrawal of money from the said account by way of self cheque.

123. As discussed in previous ingredients, the account RC NO. 4(E)/2009 CBI vs. Ram Niwas Singhal & Ors 91 of 150 92 of G.M.Engg., was opened by A5 with Andhra Bank Panipat Branch on 24.06.05 which was introduced by PW1 Pawan Kumar at the behest of A1 and A2 into which the money from the term loan account of Raj Fibre from UBI Asaf Ali Road was deposited/transferred. It appears from the evidence lead on the record that thereafter instead of purchasing the machines for which the money was transferred to M/s G.M.Engg., which was infact a fake account, the said money was channeled into two different accounts i.e into the account of Matu Ram bearing account no. 3311 with OBC Panipat Branch opened on 19.03.05 by its proprietor Ram Niwas Singhal introduced by A2 of Raj Fibres having current account no. 271 with the same branch, the identify documents were submitted by A1 alongwith his affidavit which are ExPW11/1 to ExPW11/3 and specimen card containing the signatures of A1 is ExPW11/B.

124. Similarly account pertaining to M.S.Traders was also opened on 18.03.05 with OBC Panipat bearing account no. 3320 by proprietor A5 which was introduced by A1 bearing account no. 2871 of M/s Raj Fibres in support of opening of said account. A5 submitted the identity documents including affidavit which are ExPW11/4 to ExPW11/6 and his RC NO. 4(E)/2009 CBI vs. Ram Niwas Singhal & Ors 92 of 150 93 specimen signature card is ExPW11/D. The money which should have been utilized for the purchase of machinery from G.M.Engg., as well as for the purchase of generator sets, was siphoned off from these account by means of self cheques, as also by transfer interse into these account by financial jugglery, for instance a cheque of Rs. 40 lacs dated 27.05.05 ExPW13/E was issued by Kailash Garg in favour of Matu Ram and another cheque ExPW13/F was issued by A4 in favour of M.S.Traders dated 27.06.05 for Rs. 50 lacs. Thereafter further cheque dated 29.06.05 was issued by A4 in favour of M.S.Traders of Rs. 15 lacs and thereafter a cheque was issued by A4 in favour of M.S.Traders for Rs. 5 lacs dated 27.05.05 which is ExPW13/H. Thereafter money was withdrawn by various self cheque which are being explained herein below.

125. Vide cheque ExPW4/A which was a self cheque of Rs. 20 lacs issued by A4 as proprietor of G.M.Engg., the said self cheque was given to A5 to withdrew the said amount of Rs. 20 lacs. From the said account similarly vide cheque Ex PW7/D of Rs. 8 lacs issued by A4 proprietor of G.M.Engg., which was a self cheque, money was again withdrawn by Vijay RC NO. 4(E)/2009 CBI vs. Ram Niwas Singhal & Ors 93 of 150 94 Singhal A5 whose signatures are appearing on the reverse of the said cheque(s). Thereafter another self cheque dated 25.07.05 was issued again by A4, the money was again withdrawn by A5, the said cheque bears the signatures of A5 Vijay Singhal who received money with regard to said self cheque drawn by A4. Further vide self cheque dated 27.07.05 for Rs. 1 lakh by A4, money was again taken by A5 and similarly vide self cheque ExPW4/B and C respectively an amount of Rs. 50,000/ and Rs. 90,000/ was withdrawn by A5 Vijay Singhal.

126. Thereafter vide another self cheque dated 30.06.05 ExPW7/A of Rs. 5 lacs which bears the signatures of A5 Vijay Singhal and A3 Neeraj Singhal on reverse shows that money had been taken by A3 Neeraj Singhal. Similarly a self cheque of Rs. 2 lacs was again drawn by A4 was collected by A5 which is ExPW7/B. Vide another self cheque ExPW7/C dated 25.07.05, another amount of Rs. 6 lakh was collected by Vijay Singhal A5 whose signatures appearing on the reverse of the same.

127. Thereafter vide cheque ExPW11/E for Rs. 40 lacs dated 29.06.05 the money was transferred in favour of RC NO. 4(E)/2009 CBI vs. Ram Niwas Singhal & Ors 94 of 150 95 M.S.Traders for Rs. 40 lacs by way of cheque issued by Matu Ram and vide self cheque of Rs. 10 lacs an amount of Rs. 10 lacs was withdrawn by A5 Vijay Singhal proprietor of M.S.Traders on 07.07.05. Similarly a cheque of Rs. 3 lacs dated 22.07.05 was issued in favour of Raj Fibres by M.S.Traders, proprietor A5 Vijay Singhal ExPW11/G. Ex PW11/D is the cheque of Rs. 4,05,000/ issued by M.S.Traders proprietor Vijay Singhal(A5) in favour of Raj Fibres dated 28.07.05 ExPW18/D. Thereafter two self cheques dated 08.07.05 and 09.05.05 for Rs. 15 lacs and Rs. 10 lacs which were the self cheques, money was withdrawn by A5 Vijay Singhal proprietor of M.S.Traders.

128. By this financial craftsmanship the entire amount which was meant for the purchase of machinery/generator gunsets by Raj Fibres for which a term loan was sanctioned to them by UBI Asaf Ali Road was siphoned off into different accounts as explained above and by interse transfer and withdrawals of money which was actually meant for the purchase of machinery and generator sets was utilized by accused persons A1, A2, A3 A4 & A5 themselves for other reasons. It appears that the accused persons mentioned RC NO. 4(E)/2009 CBI vs. Ram Niwas Singhal & Ors 95 of 150 96 above digged a tunnel in the shape of shell firms in the name of G.M.Engg., and from the said bigger tunnel they furrowed up smaller tunnels in the name(s) of Matu Ram and M.S.Traders from which the entire money was sanctioned and transferred to the fake account of G.M.Engg., escaped into the hands of these persons.

129. It is not the case of the accused persons including Vijay Singhal(A5), Kailash Singhal(A4) and that of Neeraj Singhal(A3) that the said signatures appearing on the back of the said self cheque does not belong to them, as no such defence has been taken in their statement U/s 313 Cr.P.C, nor any contrary defence has been taken or lead any defence.

(D) Role of A6, A7 in conspiracy

130. In this regard testimony of PW5 complainant Rajesh Kumar Aora, PW10 another witness from UBI Bimal Kumar Sharma, PW14 Rakesh Kumar Nigam another witness from UBI, PW19 Ram Dass Gambhir another witness from UBI and PW20 IO of this case C.S.Prakash Narayan are relevant and would be discussed.

131. To see whether at all A6 and A7 are the part of conspiracy for which they have been charged alongwith A1, RC NO. 4(E)/2009 CBI vs. Ram Niwas Singhal & Ors 96 of 150 97 A2, A3 and A5.

132. PW6 & PW7 have relied upon the cross examination of aforesaid witnesses to show that they followed all the norms in sanctioning of loan as per banking guildelines issued from time to time. No established banking norms was flouted by them which is evident from the cross examination of this witness. For instance in the cross examination of PW5 complainant by A6 he has stated that post inspection can be carried out to ensure compliance with terms of sanction of the loan extended. It is also correct that post sanction inspection is done to see end use of loan granted. It was correct that as per bank rules, stock statement has to be submitted by the borrower of CC account every month. He was also asked the following question:

Q. See the document ExPW5/C11 and tell what are the remarks of then manager ?

Answer was as under:

"The remarks of Chief Manager is that company is not maintaining register of stock, production or employment. It is reported that no such record is being maintained in other RC NO. 4(E)/2009 CBI vs. Ram Niwas Singhal & Ors 97 of 150 98 similar units at Panipat"

133. In cross examination of this witness who was the complainant by A7 he has stated that it was correct that when the loan facility was applied in the bank, it was supported by a certificate issued by PNB in which it was stated that the term was being satisfactorily running. It was correct that the sanction letter of PNB refers Raj Fibres Pvt. Ltd., as A+ category borrower. It was correct that the bank was sufficiently secured by the borrower Raj Fibres against the loan facility availed by them.

134. It is stated that it was correct that generally when a borrower is sanctioned loan facility and he comes forward with the invoices/bills for the purchase of capital items, he is handed over demand draft or pay order in the name of firm or company of which he furnishes invoices and thereafter the relevant bill/challan kept on the record and it was correct that after a year and half of disbursement of loan the loan account are reviewed and loan can be recalled, but he could not come across any document to show after disbursement any irregularity was reflected and loan was recalled. He further RC NO. 4(E)/2009 CBI vs. Ram Niwas Singhal & Ors 98 of 150 99 stated that letter ExPW5/DA was written to chief manager Syndicate Bank, wherein it was stated that Raj Fibres was maintaining credit facility comprising of term loan and cash credit since 2005 and conduct of account was good and said letter was sent by chief manager UBI.

135. He further deposed that as per general practice, when a customer avails loan facility for purchase of capital item or machinery, the customer used to be handed over the pay order/cross DD in favour of said vendor. Similarly PW10 Bimal Kumar Sharma who had proved that the CC A/c No. 18233 of Raj Fibres was opened on 20.06.2005 at Asaf Ali Road Branch which is ExPW5/C1. The said account had been authorized to be opened by A7 officer of the bank and A6 its chief manager and as per the same director of Raj Fibres were A1, A2 and A3. The account was introduced by A6. The interview cum appraisal of loan proposal is ExPW5/C8, as per which overall limit of Rs. 295 lacs was recommended by A7 and sanctioned by A6. The said sanction letter has been proved as ExPW5/D1 which was issued under the signatures of A6, then chief manager. In his cross examination by A6 the said witness stated that manager can introduce an account RC NO. 4(E)/2009 CBI vs. Ram Niwas Singhal & Ors 99 of 150 100 to enhance business of the branch, and in cross examination on behalf of A7 he stated that it is a part of loan processing which includes loan application and details of the person seeking loan. Loan appraisal is basically details from loan application as provided by the loan seeker.

136. Thereafter PW14 Rakesh Kumar Nigam another witness from UBI stated that the Chief Manager of UBI had inspected the factory of Raj Fibres to check the status of the unit on 01.09.2006. Since the account was not running satisfactorily during inspection. He found that the factory was running in low profile. He also stated that during inspection the stock register was not found at factory premises. The factory was functioning only on the diesel generator. He again inspected on 01.02.07, the factory was not functioning at all, there was no stock/raw material or finished goods. No books like stock register, sale register or purchase register were made available and there was no power supply. The aforesaid witness was also subject to cross examined by A7. In his cross examination he stated that on the day of his visit, he found unit to be running at low profile. 810 people were working there. The unit was running on generator set and raw RC NO. 4(E)/2009 CBI vs. Ram Niwas Singhal & Ors 100 of 150 101 material was found scattered at various spots in the factory. It was correct that the unit was surrounded by boundary wall with the main entry gate and security guards posted and fire fighting measures in the unit were also found installed.

137. PW19 R.D.Gambhir is another witness from UBI, in his cross examination by A7 he has stated that loan of Raj Fibres was to be reviewed after one year and from time to time it was inspected by audit teams, snap audits, internal audit and statutory audit. It is correct that the loan facility being availed by Raj Fibres could be recalled if anything if anything found wrong or any irregularity was detected. It is correct that the loan facility was not recalled during inspections. It was correct that Mr. D.K.Balani was not the final authority to sanction or not to sanction loan, his duty was to fill the appraisal form as per the information gathered from the borrower and place the same before Senior officers. It is the discretion of senior officers to sanction the loan or not, after sanctioning of loan it is periodically reviewed. The procedure followed is that inspections and audits are conducted and adequacy of the security provided by the borrower is checked, whether the bank is sufficiently secured. It is correct that as per valuation RC NO. 4(E)/2009 CBI vs. Ram Niwas Singhal & Ors 101 of 150 102 the security provided by Raj Fibres was much more than the facility availed by them. At the time of disbursement of loan Mr. Balani was junior to him. He cannot say demand draft at the time of disbursement is handed over to the customer for purchase of machinery. It is correct that there is no hard and fast banking rules or banking norms for disbursement of loan by post only. The banker cheque can be sent by post and can also be handed over to the borrower/customer.

138. PW20 Prakash Narayan IO of the present case who had done thorough investigation of this case, who had also filed charge sheet, has deposed that the entire investigation was carried out by him including the collection of evidence pertaining to this case. In his cross examination by A7 he has stated that it was correct that he did not seize the snap audit report, nor investigated anything relating to the same. It was correct that he did not investigate regarding review report of loan sanctioned by UBI prepared every year for the loan sanctioned. Therefore he cannot say, whether as per banking norms, voucher/drafts can be directly handed over to customers or not. It is correct that the loan sanctioned by the bank in the present case was sufficiently secured by way RC NO. 4(E)/2009 CBI vs. Ram Niwas Singhal & Ors 102 of 150 103 of securities prior to its sanction. It is correct that he had not investigated the filing of the recovery suit by UBI.

139. In view of the evidence lead on the record, as discussed above by the prosecution, it has to be seen whether prosecution has been able to prove offence U/s 13(1)(d)(iii) of PC Act. The law in this regard is laid down in the following judgments:

In a case decided by Hon'ble Supreme Court titled M.Narayanan Nambiar Vs State of Kerala 1963(2) Cri.L.J.186, it was held as under:

6. As the first contention turns upon the provisions of S.5(1), it will be convenient to read the same:

5.(1) A public servant is said to commit the offence of criminal misconduct in the discharge of his duty

(a) if he habitually accepts or obtains or agrees to accept or attempts to obtain from any person for himself or for any other person, any gratification (other than legal remuneration) as a motive or reward such as is mentioned in S. 161 of the Indian Penal Code, or

(b) if he habitually accepts or obtains or agrees to accept or attempts to obtain for himself or for any other person, any valuable RC NO. 4(E)/2009 CBI vs. Ram Niwas Singhal & Ors 103 of 150 104 things without consideration or for a consideration which he knows to be inadequate from any person whom he knows to have been, or to be, or to be likely to be concerned in any proceeding or business transacted or about to be transacted by him, or having any connection with the official functions of himself or of any public servant to whom he is subordinate, or from any person whom he knows to be interested in or related to the person so concerned, or

(c) if he dishonestly or fraudulently misappropriates or otherwise converts for his own use any property entrusted to him or under his control as a public servant or allows any other person so to do, or

(d) if he, by corrupt or illegal means or by otherwise abusing his position as public servant, obtains for himself or for any other person any valuable thing or pecuniary advantage.

We are concerned in this case with S.5(1) (d) of the Act. Under that clause if a public servant by corrupt or illegal means or by otherwise abusing his position as public servant obtains for himself or for any other person valuable thing or pecuniary advantage, he will be guilty of criminal misconduct, punishable under S. 5(2) of the Act with imprisonment for a term which shall not be less than one year and RC NO. 4(E)/2009 CBI vs. Ram Niwas Singhal & Ors 104 of 150 105 which may extend to 7 years, and shall also be liable to fine. The learned counsel contends that clause (d) being a penal provision, shall be strictly construed; and that if so construed, it would only take in cases of direct benefit obtained by a public servant for himself or for any other person from a third party in the manner described therein and does not cover a case of a wrongful loss caused to the Government by abuse of his power.

10. ................ . First taking the phraseology used in the clause, the case of a public servant causing wrongful loss to the Government by benefiting a third party squarely falls within it. Let us look at the clause "by otherwise abusing the position of a public servant," for the argument mainly turns upon the said clause. The phraseology is very comprehensive. It covers acts done "otherwise" than by corrupt or illegal means by an officer abusing his position. The gist of the offence under this clause is, that a public officer abusing his position as a public servant obtains for himself or for any other person any valuable thing or pecuniary advantage. "Abuse" means misuse i.e. using his position for something for which it is not intended. That abuse may be by corrupt or illegal means or otherwise than those means. The word 'otherwise' has wide connotation and if no limitation is placed on it, RC NO. 4(E)/2009 CBI vs. Ram Niwas Singhal & Ors 105 of 150 106 the words 'corrupt', 'illegal', and 'otherwise' mentioned in the clause become surplusage, for on that construction every abuse of position is gathered by the clause. So some limitation will have to be put on that word and that limitation is that it takes colour from the preceding words along with which it appears in the clause, that is to say, something savouring of dishonest act on his part. The contention of the learned counsel that if the clause is widely construed even a recommendation made by a public servant for securing a job for another may come within the clause and that could not have been the intention of the Legislature. But in our view such innocuous acts will not be covered by the said clause. The juxtaposition of the word 'otherwise' with the words 'corrupt or illegal means', and the dishonesty implicit in the word "abuse" indicate the necessity for a dishonest intention on his part to bring him within the meaning of the clause. Whether he abused his position or not depends upon the facts of each case; nor can the word 'obtains' be sought in aid to limit the express words of the section. 'Obtain' means acquire or get. If a corrupt officer by the said means obtains a valuable thing or a pecuniary advantage, he can certainly be said to obtain the said thing or a pecuniary advantage; but it is said that in clauses (a) and (c) the same word is used and RC NO. 4(E)/2009 CBI vs. Ram Niwas Singhal & Ors 106 of 150 107 in the context of those clauses it can only mean getting from a third party other than the Government and therefore the same meaning must be given to the said word in clause (d). 'Obtains' in clauses (a) and (b) in the context of those provisions may mean taking a bribe from a third party, but there is no reason why the same meaning shall be given to that word used in a different context when that word is comprehensive enough to fit in the scheme of that provision. Nor can we agree that as dishonest misappropriation has been provided for in clause (c), the other cases of wrongful loss caused to the Government by the deceit practised by a public officer should fall outside the section. There is no reason why when a comprehensive Statute was passed to prevent corruption this particular category of corruption should have been excluded therefrom because the consequences of such acts are equally harmful to the public as acts of bribery. On a plain reading of the express words used in the clause, we have no doubt that every benefit obtained by a public servant for himself, or for any other person by abusing his position as a public servant falls within the mischief of the said clause.

In a case decided by Hon'ble High Court of Delhi titled Runu Ghosh Vs CBI RC NO. 4(E)/2009 CBI vs. Ram Niwas Singhal & Ors 107 of 150 108 Crl.A.482/2002, P.Rama Rao Vs CBI Crl.A. 509/2002 and Sukh Ram Vs CBI Crl.A. 536/2002 decided on 21.12.2011, it was held as under:

66. This question lies at the core of the reference to this Division Bench. The material portion of the reference, while adverting to Sections 13(1)(d) and then dealing with the phraseology of Section 13(1)(d)(iii) and other preceding subclauses, reads thus:

Whether the absence of adverbs like wilfully, fraudulently, dishonestly, corrupt or illegal means to qualify the verb obtains in this clause would mean that a public servant commits criminal misconduct if he while holding such office obtains for any person (and not for himself) any pecuniary advantage which is without any public interest? The statute appears to offer no guidance as to what can be said to be a decision or act that is without public interest.

Though the reference order elaborately lists out the salient facts in the Appeals, notes rival contentions, and even notices relevant case law, it is necessary to recapitulate the pre existing law, i.e. Section 5(1)(d) of the 1947 Act, and juxtapose it with the 1988 Act. The RC NO. 4(E)/2009 CBI vs. Ram Niwas Singhal & Ors 108 of 150 109 controlling clauses, in both provisions, are in pari materia (a public servant is said to commit the offence of criminal misconduct if he ...). Section 5(1)(d) reads as follows:

(d) if he, by corrupt or illegal means or by otherwise abusing his position as public servant, obtains for himself or for any other person any valuable thing or pecuniary advantage...Section 13(1)(d)(i), (ii) and (iii), on the other hand, read thus:

(i) by corrupt or illegal means, obtains for himself or for any other person any valuable thing or pecuniary advantage; or Crl.A.Nos. 482/02, 509/02 & 536/02 Page 45

(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 servant, obtains for any person any valuable thing or pecuniary advantage without any public interest.... It is clear from the above comparison that in clause (i), the reference to "corrupt or illegal" means, (of a RC NO. 4(E)/2009 CBI vs. Ram Niwas Singhal & Ors 109 of 150 110 public servant obtaining for himself, or someone elseany valuable thing or pecuniary advantage) has been retained. However, the reference to doing of such an act "otherwise" (which was there in the previous law, i.e. Section 5(1)(d) has been omitted. The latter parts of Section 5(1)(d), i.e. the public servant obtaining for himself or for any one else any valuable thing or pecuniary advantage, by abusing his position as a public servant has been retained, in Section 13(1)(d)(ii).

A new offence (or subspecies, 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) benefitting 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 prove the crime. What the prosecution has to establish, in accordance with law, is that the public officer, obtained for someone elsenot necessarily by abusing his office, or using corrupt or illegal means RC NO. 4(E)/2009 CBI vs. Ram Niwas Singhal & Ors 110 of 150 111 pecuniary advantage or a valuable thing without public interest.

79. What then is the behaviour or act which attracts such opprobrium as to result in criminal responsibility? It is not every act which results in loss of public interest, or that is contrary to public interest, that is a prosecutable offence. There can be no doubt that all acts prejudicial to public interest, can be the subject matter of judicial review. In those cases, courts consider whether the decision maker transgressed the zone of reasonableness, or breached the law, in his action. However, it is only those acts done with complete and manifest disregard to the norms, and manifestly injurious to public interest, which were avoidable, but for the public servants overlooking or disregarding precautions and not heeding the safeguards he or she was expected to, and which result in pecuniary advantage to another that are prosecutabe under Section 13(1)(d)(iii). In other words, if the public servant is able to show that he followed all the safeguards, and exercised all reasonable precautions having regard to the circumstances, despite which there was loss of public interest, he would not be guilty of the offence. The provision aims at ensuring efficiency, and responsible behaviour, as much as it seeks to outlaw irresponsibility in RC NO. 4(E)/2009 CBI vs. Ram Niwas Singhal & Ors 111 of 150 112 public servants functioning which would otherwise go unpunished. The blameworthiness for a completely indefensible act of a public servant, is to be of such degree that it is something that no reasonable man would have done, if he were placed in that position, having regard to all the circumstances. It is not merely a case of making a wrong choice; the decision should be one such as no one would have taken.

81. As noticed previously, the silence in the statute, about the state of mind, rules out applicability of the mens rea or intent standard (i.e. The prosecution does not have to prove that the accused intended the consequence, which occurred or was likely to occur). Having regard to the existing law Section 13(1)(e) (which does not require proof of criminal intent) as well as the strict liability standards prevailing our system of law, therefore, a decision is said to be without public interest, (if the other requirements of the provision, i.e. Section 13(1)(d)(iii) are fulfilled) if that action of the public servant is the consequence of his or her manifest failure to observe those reasonable safeguards against detriment to the public interest, which having regard to all circumstances, it was his or her duty to have adopted.

140. Section 13(1)(d)(iii) of PC Act which criminalizes criminal RC NO. 4(E)/2009 CBI vs. Ram Niwas Singhal & Ors 112 of 150 113 misconduct by a public servant holding post which results in someone else i.e any person benefiting by getting a valuable thing or pecuniary advantage without any public interest and the prosecution has to establish while proving the said offence that public officer obtains for someone else not necessarily abusing his office or using corrupt or illegal means, pecuniary advantage or valuable thing without public interest, it has also been held in the said judgment of Runu Ghosh(SUPRA) that mens rea is not necessary ingredients of said section. It has been further held in the said judgment that it is only those acts done with complete and manifest disregard to the norms, and manifestly injurious to public interest, which were avoidable, but for the public servants overlooking or disregarding precautions and not heeding the safeguards he or she was expected to, and which result in pecuniary advantage to another that are prosecutabe under Section 13(1)(d)(iii). In other words, if the public servant is able to show that he followed all the safeguards, and exercised all reasonable precautions having regard to the circumstances, despite which there was loss of public interest, he would not be guilty of the offence.

141. In view of the abovesaid law laid down in the RC NO. 4(E)/2009 CBI vs. Ram Niwas Singhal & Ors 113 of 150 114 aforesaid judgment Runu Ghosh(SUPRA) it has to be seen whether A6 and A7 followed all the norms and also took all precautions and safeguards reasonably. In this regard though the account of Raj Fibres was introduced by A6 , but it has come in the cross examination of PW10 Vimal Kumar Sharma, witness from UBI that manager can introduce the account to enhance the business of the branch, therefore by doing so A6/A7 could not have breached any norm.

142. Regarding handling over the demand drafts directly to the party, which was prepared out of the term loan sanctioned to Raj Fibres for purchase of machinery, invoices of which were to be prepared in the joint name of Raj Fibres as well as UBI. It has also come in the testimony of PW5, PW19 as well as that of IO PW20 that the drafts/cheque could be handed over directly to the borrower instead of sending to the vendor by post. Therefore the act of handing over the demand draft/cheque directly to the borrower i.e Directors of Raj Fibres A1 and A2 cannot be said to be breach of any bank norms by either A6 or A7.

143. Now adverting to the pre sanction report dated 30.05.2005 given by A6 who was working at that time as RC NO. 4(E)/2009 CBI vs. Ram Niwas Singhal & Ors 114 of 150 115 Chief Manager UBI Asaf Ali Road who visited the factory premises of Raj Fibres on 20.05.05. He has specifically mentioned in entry no. 31 of the said pre sanction report that there was no stock register, production register, or employment register, but he further stated that no such record was being maintained by similar units in Panipat. Thereafter factory was visited again for the purpose(s) of pre sanction or appraisal of the loan by Sr. Manager A7 D.K.Balani who gave contradictory pre sanction report dated 15.06.05. In the said report prepared by A7 he has stated that there was a stock of Rs. 1.05 crores available with Raj Fibres. It is not clear on what basis A7 had evaluated the stock in possession of Raj Fibres at Rs. 1.05 crores. If there was no stock register at the time of visit by A6 on 30.05.05 then how on 15.06.05 without production of any stock register, production register or employment register, stocks were evaluated at Rs. 1.05 crores by A7.

144. No basis whatsoever has been given by A7 in his report, as to what made him to reach the said figures thereafter, after the loan proposal application it was recommended by A7 on the same, the pre sanction report is RC NO. 4(E)/2009 CBI vs. Ram Niwas Singhal & Ors 115 of 150 116 also enclosed, unit was also visited by Chief Manager R.R.Ray, loan was sanctioned by R.R.Ray. It appears that despite being two contrary diametrically opposite pre sanction reports prepared by A6 & A7 it is not clear what made them to concur suddenly while sanctioning loan proposal of Raj Fibres vide ExPW5/C8, when Raj Fibres were not maintaining any production register and employment register. It is not clear on what basis they evaluated the stock, machinery and other men force being employed by Raj Fibres. This sudden concurrence of A6 & A7 in recommending and sanctioning the proposal of Raj Fibres shows that something had happened in the interregnum 30.05.05 to 15.06.05 and thereafter sanctioning of loan on 20.06.05, what had happened has not been explained. Simply because the other units at Panipat were not maintaining the said said registers does not mean that there was any custom prevailing in Panipat area that no firm would maintain any such register. No such custom has been proved on the record. In any case, if Raj Fibres was not maintaining any stock register or employment register A6 and A7 were under bounden duty to ask them, as to why they were not doing so and on what basis they had correctly RC NO. 4(E)/2009 CBI vs. Ram Niwas Singhal & Ors 116 of 150 117 evaluated the value of stock. That itself was sufficient reason to reject the loan application proposal of the Raj Fibres at the thresh hold. Instead of doing so they went ahead and loan was recommended by A7 and sanctioned by A6 which is papably contrary to all existing banking norms, which requires the exercize of due diligence in doling out public money. A6/A7 were the custodian/trustees of the public money, they were under an obligation to take all such precautions that public money is not squandered in loaning out on unviable projects backed by forged and fabricated documents while keeping their eyes closed with regard to the end use of such loans.

145. Further PW15 says in his examination in chief that he had not seen any of the registers like stock, production, sales as well as voucher bills for preparing the project report which was submitted by Raj Fibres to the UBI Asaf Ali Road, PW15 was their Chartered Accountant. It appears that he was paid by Directors of Raj Fibres to prepare a favourable bank project report so as to produce those figures which could justify the sanctioning of loan in favour of Raj Fibres without having any net worth for availing the loan which has been sanctioned in their favour by UBI Asaf Ali Road. It was the RC NO. 4(E)/2009 CBI vs. Ram Niwas Singhal & Ors 117 of 150 118 duty of the PW6 and PW7 to evaluate the project report submitted by PW15 objectively. More so when he stated that he had not seen stock register, production register, sale register and voucher bill to prepare the said report, therefore it appears that the project report was deliberately tailor made and the figures in the same were fudged to suit the requirements of Raj Fibres and figures in the said project report appears to be inflated and on what basis A6 and A7 valued those figures has not been indicated in their sanction or recommendation for loan. A6 & A7 were the senior officers who must have been dealt with these kinds of loan on daily basis and they would should have known how to separate chaff from wheat rather it seems they closed their eyes for reasons best known to them.

146. No doubt from the testimony of bank witnesses it is apparent that the bank drafts could be handed over to the borrower , but it was the bounden duty of A6 and A7, to see that there was proper utilization and end use of funds for which the term loan and cash credit limit had been sanctioned to M/s Raj Fibres.

147. The were not to be swayed by A+ certificate issued RC NO. 4(E)/2009 CBI vs. Ram Niwas Singhal & Ors 118 of 150 119 by PNB Panipat saying that Raj Fibres were very good borrowers and their account was excellent, they should have conducted their own discrete inquiry to find out the net value as well as reliability of the project of Raj Fibres by due diligence which was not done.

148. Merely because the assets or value of assets including the collateral security was more than the loan advanced does not make any difference. As discussed above, the act of deceiving/inducing the bank was complete when forged receipts and invoices were submitted based on factually incorrect pre sanction report and the money from term loan account of Raj Fibres from UBI, Asaf Ali Road Branch was transferred into the fake account of G.M.Engg.,Andhra Bank, Panipat from where the loan amount was channeled into two separate accounts of Matu Ram and M.S.Traders and from there the amount was withdrawn by way of self cheque and interse transfers, shows that the A1, A2 and A5 had intention to deceive or induce the bank to sanction loan in their favour which they would not have done, if they would have done due diligence and would have carried out discrete inquiry into project report submitted by Raj Fibres RC NO. 4(E)/2009 CBI vs. Ram Niwas Singhal & Ors 119 of 150 120 independently.

149. Further it has been proved from the statement of account ExPW5/D11 which was the cash credit account no. 18233 opened with UBI, Asaf Ali Road for facilitation of loan as well as term loan account no. 5330 opened in the concerned branch with UBI, which is ExPW5/12, an amount of Rs. 8 lacs was disbursed on 21.06.05 from term loan account no. 5330 by transfer to cash credit account No. 18233 of Raj Fibres for construction of shed out the said amount Rs. 7 lacs was withdrawn on the same day by cash. As per the terms and conditions of disbursement of loan, the borrower had to submit the bills for utilization of funds i.e he had to submit the bills that the said amount had been utilized for construction of factory shed in the premises of Raj Fibres at Panipat, but no such bills admittedly were submitted by A1, A2 and A3, nor were asked for by A6 and A7, which also shows breach of official duty on the part of A6 and A7.

150. Further as discussed above, an amount of Rs. 13926000 was disbursed on 23.06.05 from the term loan account No. 5330 into the account of G.M.Engg., No. 512 with Andhra Bank, Panipat branch for purchase of machinery and RC NO. 4(E)/2009 CBI vs. Ram Niwas Singhal & Ors 120 of 150 121 vide letter dated 22.06.05 the vendor was asked to raise the invoices in the joint name of borrower and UBI Asaf Ali Road, but no such documents were ever submitted by the borrower, nor they were ever asked for by A6 and A7 at any point of time, it was the duty of A6 and A7 being chief manager and senior manager to ask for the invoices of the amount for which the said amount of Rs. 13926000/ had been sanctioned to be deposited into the account of G.M.Engg.

151. Further as discussed above, four cash receipts showing the payment of margin money for the purchase of said machine has been proved to be forged and fabricated which are ExPW5/C14 to C17, the cash receipts dated 01.06.05 is regarding the receipt of Rs. 10 lacs in cash, the another one dated 11.06.05 is for the receipt of 11 lacs in cash and that of 04.06.05 is regarding the receipt of Rs. 8 lacs in cash and another dated 08.06.05 is of Rs. 12 lacs in cash. Any prudent banker should have asked the borrower, as to how they were making cash payment of said huge amount of Rs. 10 lacs, 11 lacs and 8 lacs to the vendor, generally such high end payments are never made in cash, but they are made from the account of the company and the vendor also does not RC NO. 4(E)/2009 CBI vs. Ram Niwas Singhal & Ors 121 of 150 122 take so much money in cash, as same have serious ramifications under the Income Tax Act.

152. In any case, the said receipts have been proved to be forged and fabricated, the bankers eyebrow should have been raised on seeing such cash receipts of astronomical amount and they should have verified the credentials of G.M.Engg., by making atleast one phone call at the numbers written on the same, more so especially when they had branch at Panipat. They could have asked them to verify, whether any G.M.Engg., was existing to whom the said huge amount of margin money had been paid in cash was not done. This shows the clear cut breach of duty of safeguarding the bank assets/funds which was incumbent upon A6 and A7 which they did not apply or adhere to. Further an amount of Rs. 1816950/ was disbursed from the term loan account no. 5330 with UBI, Asaf Ali Road in favour of G.M.Engg., for purchase of two generator sets. The margin money was to be paid by the purchaser for purchase of generator sets, the margin money was also made by using the bank funds, as it was revealed that an amount of Rs. 6 lacs was transferred from the term loan account to CC account on 21.07.05 and an amount RC NO. 4(E)/2009 CBI vs. Ram Niwas Singhal & Ors 122 of 150 123 of Rs. 6,05,000/ was paid from CC account in favour of G.M.Engg., and the two drafts of Rs. 1816950 and 605650/ were forwarded to G.M.Engg. Vide letter dated 22.07.05 Ex PW5/C18.

153. As per the testimony of PW12, it has come that he has never dealt with manufacture of generator sets, nor any bill regarding the purchase of generator sets were ever submitted by A1, A2 and A3 with A6 and A7, nor they were asked for by them which also shows clear cut breach of duty by A6 and A7 to look after the assets/funds of the bank responsibly. The aforesaid jugglery of account and entry from the CC limit account into term loan account and vice versa clearly shows that A6 and A7 were neck deep in conspiracy or agreement with A1, A2, A3, A4 & A5, they were all working towards common objective to defraud or deceive the bank by submission of false receipts and invoices, thereby inducing UBI to sanction loan in question to A1, A2 and A3. In case due diligence had been done as per established banking norms it would never have been the case, though no evidence has come that A6 or A7 obtained themselves any pecuniary advantage, but the offence U/s 13(1)(d)(iii) is RC NO. 4(E)/2009 CBI vs. Ram Niwas Singhal & Ors 123 of 150 124 complete when public officers i.e public servant obtains for someone else i.e A1, A2, A3, A4 and A5, pecuniary advantage or valuable thing in the shape of sanctioning of the loan to which they were not entitled which has resulted in the loss to the bank, which is therefore against public interest, as it cannot be in the interest of public that the borrower submit forged and fabricated bills/invoices or memos thereby inducing the bank to sanction them loan on the basis of inflated, false or fudged project reports without maintaining any stock production or any register to support those, in any case mens rea is not the requirement of Section 13(1)(d)(iii) of PC Act as per the judgment of Runu Ghosh(Supra).

154. Further with regard to arguments A6 and A7 that there were ample safeguards and provisions available in the internal working of the bank in the shape of snap inspection, internal audit and valuation of loan of the borrower on periodical basis in which nothing abnormal could be detected, further coupled with the fact that the amount of collateral security was more than the loan which was disbursed to Raj Fibres shows that they were not culpable.




RC NO. 4(E)/2009
CBI vs. Ram Niwas Singhal & Ors                                                 124 of 150
                                                 125

155. This arguments of A6/A7 is also without any substance, as merely because there was provision of snap inspection internal audit or other safeguards in the banking system which could not detect the fraud earlier, when it was ultimately detected in this case, which resulted in PW5 filing the complaint on the basis of which the present case was registered and accused were chargesheeted does not absolve A6 or A7 from the culpability as the transaction with regard to lending/ sanctioning the credit limit and term loan facility was complete when money was transferred to take over the cash credit loan liability of Raj Fibres with PNB Panipat and when the term loan amount was transferred into the fake account of G.M.Engg., which was for the purchase of machinery/generator sets and building of factory shed which was never purchased, nor the bills submitted, nor the factory shed constructed. The Ex post facto inspection even if the same would have detected financial irregularities in the loan sanctioned and recommending of sanction by A6 and A7 would not have mitigated the culpability of A6 & A7 in the present case.

156. Regarding the arguments of A1, A2, A3 and A5 RC NO. 4(E)/2009 CBI vs. Ram Niwas Singhal & Ors 125 of 150 126 that as per the testimony of DW1A the land and building alongwith plant and machinery was sold at Rs. 2 crores 1 lakh for recovery purposes under SARFAESI Act on 29.03.10, whereas as per valuation report proved by DW1A the total valuation of the said plant and machinery vide letter dated 14.12.05 was Rs. 2 Crores 30 lacs which shows that the plant and machinery had been sold at gross undervalue. Therefore they have argued that bank has already recovered more than the amount which they had lent including interest as per statement of account which has come in the testimony of DW1A.

157. As per the valuation report of the bank valuer itself which is ExDW1A/E the value of land and building alongwith plant and machinery is Rs. 2,38,00,000/, whereas as it was sold only at Rs. 2 Crores 1 lakh, which shows that plant and machinery and land & building of the borrower has been sold at much less amount deliberately in order to foist a false case upon the borrower and its directors. They have also submitted that the statement of account proved by DW1A is also false, as it shows an arrear of 2 Crores 91 lacs as on 31.03.05 which is due towards the borrower which amount is highly inflated, as RC NO. 4(E)/2009 CBI vs. Ram Niwas Singhal & Ors 126 of 150 127 bank is charging interest and late fee charges on non existing amount for which money suit is also pending before DRT.

158. Regarding the auction sale of land, plant & machinery in the year 2010, these things are determined by market forces. Judicial notice can be taken of the fact that property prices were highest around the year 2008, thereafter they have dipped heavily, merely because the land, plant & machinery was valued at Rs. 2 Crores 38 lacs and was ultimately sold at Rs. 2 Crores 1 lakh does not mean that the same was deliberately done. In any case in any public auction the bank may be forced to sell the same at lesser price if any higher bidder was not willing to pay more for the same as per the prevailing market prices. Further, in any case the same does not make any difference to the outcome of the present case, as discussed above, merely because the value of assets including plant & machinery and collateral was more than the loan advanced does not make any difference, as the act of deceiving/inducing the bank to sanction loan in favour of Raj Fibres was complete when highly inflated loan appraisal form and other forged and fabricated documents were submitted. The project report was submitted by them without supporting RC NO. 4(E)/2009 CBI vs. Ram Niwas Singhal & Ors 127 of 150 128 data or basis of which the said figures had been arrived at, further when the forged cash receipt and invoices were submitted from non existing G.M.Engg., of which fake account was opened on 24.06.05 after sanctioning of loan on 20.06.05 by A4 and was ultimately closed in December 2005 after entire loan had been siphoned off, withdrawn/transferred into the account of M.S.Traders and Matu Ram, the act of inducement/deceivement was complete when the money was completely transferred into the fake account of G.M.Engg. Therefore this argument that assets of the borrower i.e land, plant & machinery were more than the loan advanced or that substantial loan amount could be retrieved by better bidding process does not make the culpability of accused persons any less.

159. From the aforesaid detailed discussion with regard to separate heads which were highlighted in order to simplify the discussion, in addition to that as per the settled law to constitute a conspiracy the meeting of minds of two or more persons for doing an illegal act or an act by illegal means is the first and primary condition and it is not necessary that all the conspirators must know each and every detail of the RC NO. 4(E)/2009 CBI vs. Ram Niwas Singhal & Ors 128 of 150 129 conspiracy. Neither is it necessary that every one of the conspirators should take active part in the commission of each and every conspiratorial acts. The agreement amongst the conspirators can be inferred by necessary implication, as no direct evidence would be available in any case for the same simply for the reason that conspiracy are hatched in secrecy and no direct evidence with regard to hatching of conspiracy would be available.

160. Therefore in most of the cases the evidence with regard to conspiracy which would come on the part of the prosecution would be circumstantial evidence. The existence of conspiracy and its objectives are usually inferred from the circumstances of the case or from the conduct of the persons involved in the conspiracy. From the above discussion, the prosecution has been able to prove each and every incriminating circumstances by reliable and cogent evidence and the circumstances so proved on the record form the chain of events from which only irresistible conclusion can be drawn is that of guilt of accused persons which has been established beyond any sort of reasonable doubt and no other hypothesis showing the innocence of the accused has been established RC NO. 4(E)/2009 CBI vs. Ram Niwas Singhal & Ors 129 of 150 130 on the record which could absolve them from the present case.

161. Regarding the role of A4, he has taken a defence that he was only an employee of Raj Fibres and he was made to sign on certain blank documents on the pretext that the same was required for surety purposes. However, no such defence evidence has been lead by him, but at the same time as discussed above in ingredient no. B that prosecution has failed to prove the offence U/s 468 IPC. But at the same time the said account of G.M.Engg., was opened on 24.06.05 after the sanctioning of the loan on 20.06.05 into which the entire money for the term loan out of total of Rs. 175 lacs was deposited including an amount of Rs. 13926000/ as well as Rs. 18 lacs for the purchase of machinery and generator sets, who in turn gave mandate to operate the account of A5 which amount was siphoned off by way of self cheque(s) which was withdrawn by A3 and A5, further substantial amount therefrom was routed into the account of M.S.Traders of which A5 was the proprietor which was introduced by A1 and also into the account of Matu Ram in which A1 was the proprietor introduced by A2 and the said account was RC NO. 4(E)/2009 CBI vs. Ram Niwas Singhal & Ors 130 of 150 131 ultimately closed in December, 2005 after the purpose of conspiracy was over. This shows that A4 was deeply entrenched in conspiracy for siphoning of the funds meant for purchase of machinery and generator sets by using forged and fabricated documents by opening a fake account into which the amount of term loan disbursed in favour of A1, A2 and A3 was deposited who in turn induced and deceived to lend them loan on the basis of forged and fabricated documents in active connivance of A6 and A7. Though role of A4 was very limited to that extent he did not met the bank officers at any point of time, nor induced or deceived them, therefore role of accused A4 is only with regard to conspiracy, no substantive offence is made out against him.

162. Regarding role of A5, his role is also limited to the conspiracy part, as he was given mandate by A4 for operating the fake account of G.M.Engg., from which he withdrew substantial amount of money by various self cheque(s) and thereafter quite a lot of money was transferred into another account opened by him on 19.03.05 in the name of M.S Traders which was introduced by Ram Niwas A1 from which also substantial amount was siphoned off by way of cheques RC NO. 4(E)/2009 CBI vs. Ram Niwas Singhal & Ors 131 of 150 132 and financial wizardly. Therefore the prosecution though has failed to lead any evidence that he was involved in deceivement or inducement or falsely representing the bank for sanctioning of loan, but at the same time his active participation with A1, A2, A3 & A4 and agreement with them towards the common objective with regard to the conspiracy, which they had hatched is established beyond any sort of reasonable doubt.

163. Regarding A6 & A7 they are also not liable for the substantive offence(s) U/s 420 IPC, as there is no evidence that they had deceived the bank by making any misleading representation or fraudulently or dishonestly induced the bank to deliver/sanction the loan to the borrower A1, A2 and A3, their complicity is with regard to offence U/s 13(1)(d) part (iii) as discussed in details above.

164. Regarding A1, A2 and A3 they would be definitely liable for substantive offence(s) U/s 420 IPC, as they had deceived the UBI Asaf Ali Road branch by making false, misleading representation by preparing an inflated project report with fraudulent and dishonest intention to induce the bank to sanction the loan based upon forged and fabricated RC NO. 4(E)/2009 CBI vs. Ram Niwas Singhal & Ors 132 of 150 133 receipts of G.M.Engg., and also by not utilizing the funds i.e by not using the term loan for which it was sanctioned, thereafter siphoning off the same into different accounts in the name of Matu Ram and M.S.Traders, from their in connivance with A4 & A5 withdrew substantial amount by way of self cheques, thereby utilizing the same for other purposes. Therefore A1, A2 & A3 are all guilty of substantive offence(s) U/s 420 IPC. Regarding the offence U/s 471 IPC, it has also been proved beyond any reasonable doubt that A1, A2 and A3 had submitted forged and fabricated cash receipts ExPW5/C14 to C17 and proforma invoices with the UBI Asaf Ali Road for inducing them to sanction the loan of Rs. 295 lacs. Therefore A1, A2 and A3 had fraudulently with the intention of causing wrongful gain to themselves and to cause wrongful loss to the bank, while fully knowing that the said cash receipts were forged and fabricated, and were never issued by G.M.Engg., to which they had purported, therefore they are all guilty of offence(s) U/s 471 r/w 465 IPC.

165. However, the prosecution has failed to prove the offence(s) U/s 468 IPC, against any of the accused persons, including A4 as there is no evidence on the record who had RC NO. 4(E)/2009 CBI vs. Ram Niwas Singhal & Ors 133 of 150 134 forged those cash receipts and cash invoices pertaining to G.M.Engg., as PW13 Raju Shrivastava was examined by prosecution who was working as freelance accountant with Raj Fibres, but he could not categorically say as to in whose handwriting the said invoices and cash receipts were. In any case, no further corroborative evidence in the shape of handwriting expert was examined by the prosecution, nor forged receipts were sent for forensic evaluation after taking the specimen handwriting of any of the accused persons A1, A2, A3, A4 and A5 Therefore offence U/s 468 IPC is not made out against any of the accused persons in this case.

166. In view of the aforesaid discussion A1, A2 and A3 stands convicted U/s 120B r/w S 420/471 r/w 465 IPC and Section 13(1)(d)(iii) r/w S 13(2) of PC Act. Besides that A1, A2 and A3 are also convicted for substantive offence(s) individually U/s 420/471 r/w 465 IPC. Regarding A4 he is only liable with regard to conspiracy part as discussed above and he stands convicted U/s 120 B r/w Section 420 and 471 IPC and Section 13(1)(d)(iii) r/w Section 13(2) IPC. A5 also stands convicted U/s 120 B r/w Section 420 and 471 IPC r/w 465 IPC and Section 13(1)(d)(iii) r/w Section 13(2) IPC. Lastly both the RC NO. 4(E)/2009 CBI vs. Ram Niwas Singhal & Ors 134 of 150 135 accused A6 & A7 stands convicted for the offence(s) U/s 120 B r/w Section 420 and 471 IPC r/w 465 IPC and Section 13(1)

(d)(iii) r/w Section 13(2) IPC and for substantive offence(s) U/s 13(1)(d)(iii) r/w S 13(2) of PC Act individually.

167. Now to come up for hearing on quantum of sentence on 10.08.2015 at 12:00 P.M. ANNOUNCED IN THE OPEN (Sanjeev Aggarwal) COURT ON 07.08.2015 Special Judge, CBI03 (PC Act) Delhi RC NO. 4(E)/2009 CBI vs. Ram Niwas Singhal & Ors 135 of 150 136 IN THE COURT OF SH. SANJEEV AGGARWAL SPECIAL JUDGE CBI03 (PC ACT) DELHI CC No.03/15 RC : 4(E)/09 CBI/EOUII/ND U/s : 120B r/s 420, 467, 468 & 471 IPC and Section 13(2) r/w 13(1)(d) of PC Act.

CBI Vs.               (i)         Ram Niwas singhal(A1)
                                  S/o Late Sh. Shiv Charan Dass


                      (ii)        Kamal Kumar Singhal(A2)
                                  S/o Ram Niwas Singhal


                      (iii)       Neeraj Singhal(A3)
                                  S/o Ram Niwas Singhal

All R/o Anaj Mandi, Safidon, Dist Jind, Haryana Director, M/s Raj Fibres Pvt. Ltd, 85 Km Mile Stone, Vil Siwah, GT Road, Panipat, Haryana

(iv) Vijay Singhal(A5) S/o Ram Niwas Singhal R/o Anaj Mandi, Safidon, Dist Jind, Haryana Director, M/s Raj Fibres Pvt. Ltd, 85 Km Mile Stone, Vil Siwah, GT Road, Panipat, Haryana

(v) Revathy Ranjan Roy(A6) S/o Sh. M.N.Roy R/o 114 C, Selimpur Road, Kolkata, West Bengal 700031

(vi) Devender Kumar Balani(A7) RC NO. 4(E)/2009 CBI vs. Ram Niwas Singhal & Ors 136 of 150 137 S/o Late Sh. H.C.Balani R/o Flat No. 89, SFS, Rajouri Apartments, Mayapuri, New Delhi 110064 ORDER ON SENTENCE

1. Vide judgment dated 07.08.2015 A1, A2 and A3 were convicted U/s 120B r/w S 420/471 r/w 465 IPC and Section 13(1)(d)(iii) r/w S 13(2) of PC Act. Besides that A1, A2 and A3 are also convicted for substantive offence(s) individually U/s 420/471 r/w 465 IPC. Regarding A4 he was convicted with regard to conspiracy part and he was therefore convicted U/s 120 B r/w Section 420 and 471 IPC and Section 13(1)(d)

(iii) r/w Section 13(2) IPC. A5 also convicted U/s 120 B r/w Section 420 and 471 IPC r/w 465 IPC and Section 13(1)(d)(iii) r/w Section 13(2) IPC. Lastly both the accused A6 & A7 were convicted for the offence(s) U/s 120 B r/w Section 420 and 471 IPC r/w 465 IPC and Section 13(1)(d)(iii) r/w Section 13(2) IPC and for substantive offence(s) U/s 13(1)(d)(iii) r/w S 13(2) of PC Act individually.

2. I have heard Sh. V.K.Ojha, Ld PP for CBI and Ld. Defence counsel Sh.Anindya Malhotra, Ld.counsel for A1,A2,A3 and A5, Sh. Anil Kumar, Ld.counsel for A5, Sh.Manish Kumar, RC NO. 4(E)/2009 CBI vs. Ram Niwas Singhal & Ors 137 of 150 138 Ld.counsel for A6 and Sh.Dharmender Priani, Ld.counsel for A7.

3. Ld.PP for CBI submits that convicts A1,A2, A3 in conspiracy with A4,A5 and A6 and A7, who are public servants, influenced them to disburse the funds without any supporting bills or vouchers against established banking norms, based on forged and fabricated documents thereby causing wrongful gain for the borrowers and wrongful loss to the bank. Therefore, stringent punishment should be awarded to all the accused persons to send a strong signal to the society at large.

4. On the other hand Ld. counsel for convicts A1, A2, A3 and A5 Sh.Anindya Malhotra has argued that all the above convicts have no previous history of involvement in any other case, no criminal case is pending against them in any Court of law, all of them have clean antecedents and roots in the society, they also belong to respectable families.

5. Regarding convict Ram Niwas Singhal (A1), it is stated that he is a senior citizen, aged around 62 years of age, he is also suffering from diabeties and high blood pressure, his wife is also old, around 60 years of age and is completely dependent RC NO. 4(E)/2009 CBI vs. Ram Niwas Singhal & Ors 138 of 150 139 upon him. It is also stated that a rod has also been inserted into his left thigh after surgery, which causes severe difficulty in walking and doing daily pursuits. Therefore, it is prayed that lenient view be taken against him.

6. Regarding A2, it is stated that he is 37 years of age, has 2 minor children aged 12 years and 10 years respectively, who are school going and wife aged 34 years who is housewife and all are dependent upon him for earning and sustenance.

7. Regarding A3 , it is stated he is 36 years of age, was also patient of diabeties also has 2 minor children aged 10 years and 6 years respectively, who are school going and wife aged 34 years who is housewife and dependent upon him for earning and sustenance. It is also stated that due to incarceration of A2 and A3, their career will be impacted adversely.

8. Regarding A5 it is stated he is 34 years of age, it is stated that he had only been married in December 2014, his wife is th aged 30 years who is housewife and is presently in the 8 month of pregnancy, solely dependent upon him for earning and sustenance. It is further stated that she would require the presence of the accused for medical and emotional assistance RC NO. 4(E)/2009 CBI vs. Ram Niwas Singhal & Ors 139 of 150 140 in the coming days.

9. It is further stated that A1 is the father, A2, A3 and A5 are the sons and if all of them are sent behind bars, then there will be nobody to look after the family and the entire family would be on the road, which will cause severe hardship. It is further stated that the property of the convicts was mortgaged with the bank, same has been auctioned by the bank, thereafter amount of more than 2 crores has also been recovered and adjusted due to which there is no actual loss which has been caused to the bank. It is also stated that A5 has only been convicted for conspiracy part, and he was very young at relevant only aged around 23 years of age at the time of transaction.

10.Regarding A6, it is stated by Ld. counsel Sh.Manish Kumar that A6 is aged 67 years of age at present, he has got wife aged about 59 years of age. It is also stated that convict is suffering from High Blood Pressure and his wife is also suffering from severe Hypertension and diabeties. It is also stated that convict is a resident of Calcutta, if he is sent behind bars, there will be nobody to look after his wife as his children are living separately. It is also stated that the convict has no RC NO. 4(E)/2009 CBI vs. Ram Niwas Singhal & Ors 140 of 150 141 previous involvement and deep roots in the society.

11.Regarding A7, it is stated by Ld. counsel Sh. Dharmender Priani that convict is aged about 61 years has several grave health issues, he has already undergone Angioplasty and stents were also put into his heart, he is also suffering from high blood pressure, he has also undergone both hip joint replacement and is a patient of ankylyzing spondalitis, due to which he has a limping posture, and he is unable to sit on the ground, besides that it is stated that he is a patient of acute diabeties and takes regular insulin injections. It is also stated that due to this he is also suffering from foot ulcer, if he does not maintain proper foot hygiene, which will not be possible, if he is sent behind bars, then there are possibilities that his foot may have to be amputated. He has also filed disability certificate of A7 dated 19.04.2000, showing that he is disabled to the extent of 65% It is also stated that his wife is also old aged around 59 years and is housewife, totally dependent upon him. He has no previous history of involvement in any other case. It is also stated that he is regularly appearing in the Court throughout the trial. It is also stated that he was even admitted in the jail hospital due to RC NO. 4(E)/2009 CBI vs. Ram Niwas Singhal & Ors 141 of 150 142 these problems.

12.It is further argued by all the Ld.Defence counsels that all the convicts have been on bail throughout the trial and had never misused the concession of bail at any point of time. Therefore they submit all of them deserve leniency.

13.It has been held in judgment Roop Chand Vs. State(CBI), reported as 2011 Legal Eagle(DHC) 42 that (8) The circumstances which could be considered in alleviation of punishment can be the minority of the offender, old age of the offender; the condition of the offender, i.e wife, appretice; and the state of health and the sex of the delinquent.

14.In the present case allegations against the convicts are grave and serious in nature. The convicts had conspired together and had cheated UBI, Asaf Ali Road inducing the said bank to sanction the term loan and cash credit for Rs. 295 lacs based upon forged and fabricated documents without proper end use of funds. For this purpose amount of term loan was siphoned off into the fake account opened in the name of RC NO. 4(E)/2009 CBI vs. Ram Niwas Singhal & Ors 142 of 150 143 G.M.Engineering by A4 from which the said money was diverted into two different accounts of M/s Matu Ram Shiv Charan Dass and M/s M.S.Traders from where it was withdrawn by way of self cheques. Therefore it is crystal clear that convict A1 Ram Niwas Singhal was the king pin of the present conspiracy alongwith A2 and A3 who are his sons and he was the master mind of the entire conspiracy alongwith A2 and A3, however, it is stated that Convict A1 Ram Niwas Singhal is a senior citizen, aged around 62 years of age is suffering from diabeties and high blood pressure and a rod inserted into his left high thigh after surgery, which causes immense difficulty in walking and following daily pursuits.

15.Considering the overall circumstances of the case, the interest of justice shall be met if the convict A1 Ram Niwas Singhal is sentenced to R.I for 1½ years U/s 120 B r/w S 420/471 r/w S 465 IPC and Section 13(1)(d)(iii) r/w S 13(2) of PC Act and also sentence to pay the fine of Rs. 5000/ and in default S.I for 3 months. He is further sentenced to rigorous imprisonment of 3 years U/s 420 IPC with further fine of Rs. 10000/, in default SI for 4 months. He is further sentenced to R.I for 1 year U/s 471 r/w S 465 IPC with further fine of Rs. 3000/, in RC NO. 4(E)/2009 CBI vs. Ram Niwas Singhal & Ors 143 of 150 144 default S.I for 2 months.

16.Lesser sentence has been awarded to A1 considering his age and the fact that he is suffering from various ailments, which causes difficulty in walking and following daily pursuits.

17.Regarding A2 and A3 there are no mitigating circumstances, they were the master mind of the entire conspiracy in connivance with A1 and they had deceived/induced the bank in sanctioning the term loan and cash credit of Rs. 295 lacs to them, based upon forged and fabricated documents by opening a fake account in the name of G.M.Engg., from where money was siphoned off into two different accounts and thereafter withdrawal by way of self cheques. No bill/invoices for the purchase of machinery/generator sets for which funds were sanctioned by UBI Asaf Ali Road were produced. In these circumstances, acts of convicts A2 and A3 does not deserve any leniency, as public money cannot be allowed to be swindled in this manner a strong message has to go in the society that these kind of crimes have strong repentances, consequently both of them i.e A2 and A3 are sentenced to R.I for 1½ years U/s 120 B r/w S 420/471 r/w S 465 IPC and Section 13(1)(d)(iii) r/w S 13(2) of PC Act and also sentenced RC NO. 4(E)/2009 CBI vs. Ram Niwas Singhal & Ors 144 of 150 145 to pay the fine of Rs. 5000/ and in default S.I for 3 months. They are further sentenced to rigorous imprisonment of 4 years U/s 420 IPC with further fine of Rs. 10000/,in default SI for 4 months. They are further sentenced to R.I for 1 year U/s 471 r/w S 465 IPC with further fine of Rs. 3000/, in default S.I for 2 months.

18.Role of A5 was only confined to conspiracy part, as he had not actively hobnobbed with the bank officials for inducing them to sanction the term loan/cash credit limit at the same time. Though he was also neck deep in conspiracy, as he had opened account in the name of M.S.Traders into which some of the money/term loan of Rs. 175 lacs was diverted in connivance with A1, A2 and A3 who are his father and brothers, thereafter money was withdrawn by way of self cheques. It is stated that he was aged about 23 years at the time of transaction, his wife is stated to be in very advanced stage of pregnancy. The interest of justice shall be met if he is sentenced to R.I for 1½ years U/s 120B r/w S 420 and 471 IPC r/w S 465 IPC and Section 13(1)(d)(iii) r/w Section 13(2) IPC with fine of Rs. 5000/, in default S.I for 3 months.




RC NO. 4(E)/2009
CBI vs. Ram Niwas Singhal & Ors                                        145 of 150
                                                  146

19.Regarding A6, he was the chief manager at the relevant time and the said term loan and credit limit was sanctioned by him in favour of Raj Fibres of whom A1, A2 and A3 were the directors, A6 had sanctioned the loan based upon contradictory pre sanction report in which he himself stated that Raj Fibres were not maintaining stock, sales and employment registers, it has been stated that he is around 67 years of age and is suffering from high blood pressure and his wife is also suffering from hypertension and diabeties. There is nobody to look after his wife and he has no previous involvement, has deep roots in the society. In these circumstances, ends of justice shall be met if he is sentenced R.I for 2½ years with fine of Rs. 10000/, in default SI for 4 months under U/s 13(1)(d)(iii) r/w S 13(2) of PC Act. He is further sentenced to 1½ years RI U/s 120 B r/w Section 420 and 471 IPC r/w 465 IPC and Section 13(1)(d)(iii) r/w Section 13(2) IPC with a fine of Rs. 5,000/, in default SI for 3 months.

20.Role of A7 is akin to that of A6, as both of them were instrumental in sanctioning the loan to M/s Raj Fibres of which A1, A2 and A3 were directors without ensuring any end use of said funds against established banking norms.

RC NO. 4(E)/2009
CBI vs. Ram Niwas Singhal & Ors                                                 146 of 150
                                         147

21.Regarding A7 it is stated by Ld. Counsel Sh. Dharmender Priani that he is aged about 61 years has serious health issues, he has already undergone Angioplasty and stents were also put into his heart, he is also suffering from high blood pressure, he has also undergone both hip joint replacement and was patient of ankylyzing spondalitis, due to which he had a limping posture, and he is unable to sit on the ground, besides that it is stated that he is a patient of acute diabeties and takes regular insulin injections. It is also stated that due to this he is also suffering from foot ulcer, if left unattended his foot may be amputated, he has also filed disability certificate of A7 dated 19.04.2000 showing that he is disabled to the extent of 65%.

22. in view of the judgment of Roop Chand(SUPRA), there are mitigating circumstances to award him lesser sentence, therefore interest of justice shall be met if A7 is sentenced R.I for 1½ years with fine of Rs. 10000/, in default SI for 4 months under U/s 13(1)(d)(iii) r/w S 13(2) of PC Act. He is further sentenced to 1½ years RI U/s 120 B r/w Section 420 and 471 IPC r/w 465 IPC and Section 13(1)(d)(iii) r/w Section 13(2) IPC with a fine of Rs. 5,000/, in default SI for 3 months.

RC NO. 4(E)/2009
CBI vs. Ram Niwas Singhal & Ors                                          147 of 150
                                       148

23.All the sentences of all the convicts shall run concurrently with each other. Convicts shall also be given the benefit of Section 428 Cr.P.C for the period already undergone by them during the trial,(if any). Copy of the judgment and that of point of sentence has been given free of cost to all the convicts. It is ordered accordingly.




ANNOUNCED IN THE OPEN                       (Sanjeev Aggarwal)
COURT ON 11.08.2015                         Special Judge,
                                             CBI03 (PC Act)
                                             Delhi




RC NO. 4(E)/2009
CBI vs. Ram Niwas Singhal & Ors                                     148 of 150
                                                 149

IN THE COURT OF SH. SANJEEV AGGARWAL SPECIAL JUDGE CBI03 (PC ACT) DELHI CC No.03/15 RC : 4(E)/09 CBI/EOUII/ND U/s : 120B r/s 420, 467, 468 & 471 IPC and Section 13(2) r/w 13(1)(d) of PC Act.

CBI Vs.               Ram Niwas singhal & Ors


                      Kailash Garg(A4)
                      S/o Sh. Balbir Prasad

R/o Village Nangal Kheri, GT Road, Panipat Haryana ORDER ON SENTENCE Regarding A4, it is stated by Ld. Counsel for the said convict Anil Kumar that convict is 47 years of age, his wife is aged 45 years of age and has only one son aged 18 years old and daughter studying in 10th class, mother is aged around 80 years of age. The whole family is dependent upon him and he was the only employee of A1, A2 and A3 and he is only a mechanic and only earning meagre Rs. 8000/ per month. It is stated that he never misused the concession of bail, he had also suffered fracture of ribs at the time of taking into custody, therefore it is prayed that a lenient view be taken.

Role of A4 was only confined to conspiracy part, he was only employee of A1, A2 and A3, as he had not actively RC NO. 4(E)/2009 CBI vs. Ram Niwas Singhal & Ors 149 of 150 150 hobnobbed with the bank officials for inducing them to sanction the term loan/cash credit limit, but at the same time he was also neck deep in conspiracy, as he had opened fake account in the name of G.M.Engg. Co, into which the entire term loan of Rs. 175 lacs was deposited, thereafter from there, it was diverted into two separate accounts in the name of Matu Ram and M.S.Traders in connivance with A1, A2 and A3, who were his employers, thereafter money was withdrawn from said accounts by way of self cheques. The interest of justice shall be met if he is sentenced to R.I for 1 ½ years U/s 120B r/w S 420 and 471 IPC and Section 13(1)(d)(iii) r/w Section 13(2) IPC with fine of Rs. 5000/, in default S.I for 3 months.




ANNOUNCED IN THE OPEN                   (Sanjeev Aggarwal)
COURT ON 11.08.2015                     Special Judge,
                                         CBI03 (PC Act)
                                         Delhi




RC NO. 4(E)/2009
CBI vs. Ram Niwas Singhal & Ors                                   150 of 150

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Cbi vs . (I) Ram Niwas Singhal(A­1) on 11 August, 2015

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