Delhi District Court
Cbi vs . 1 Bhajan Singh (A-1) on 6 September, 2014
IN THE COURT OF MANOJ JAIN: SPECIAL JUDGE (PC ACT) (CBI)
SOUTH DISTRICT: SAKET DISTRICT COURTS
NEW DELHI
CC No. 06/2011
RC S18 1999 E0003 &
RC S18 1999 E0004
U/s 120-B r/w 420 of IPC &13(2)r/w13(1)(d) of PC Act.
CBI Vs. 1 Bhajan Singh (A-1)
Son of late Sh. Mela Singh,
@Harbhajan Singh,
Partner in M/s Kohinoor Metals
at 5508, Basti Harphool Singh,
Sadar Bazar, Delhi-06,
Resident of 5E/47, Bungalow Plots (BP)
NIT, Faridabad.
2 Deepak Kumar (A-2),
Son of late Sh. Mohan Lal,
Partner in M/s Kohinoor Metals & Prop. of
M/s K.K. Trading Corporation
at 2B-86, NIT, Faridabad,
Resident of 2-C, 94, Janta Colony,
NIT, Faridabad.
3 Dinesh Kumar Sharma (A-3),
Son of Sh. Damodar Lal Sharma,
Proprietor of M/s Suman Metals
at 461A/4, New Railway Road,
Gurgaon,
Resident of 5N-17A, NIT, Faridabad.
4 Variam Singh (A-4),
Son of Late Sh. Sardar Sundar Singh,
Resident of 328, Sector-15,
Faridabad, Haryana.
5 B.D. Sharma (A-5),
Son of Jai Narayan Sharma,
Resident of B-83, Dena Apartments,
Plot No. 36, Sector-13,
Rohini, New Delhi-85
6 Ravinder Malik, (A-6)
Son of Late Sh. D.N. Malik,
Resident of 90/42-B, Malviya Nagar,
New Delhi.
CC no. 06/2011 CBI Vs Bhajan Singh etc Page 1 of 84
7 Parmod Kumar Sahi, (A-7)
Son of Sh. C.L. Sahi,
Resident of B-108, Dena Apartments,
Plot No. 36, Sector-13,
Rohini, New Delhi.
8 I.S. Suri (Inderjeet Singh Suri), (A-8)
Son of Sh. F.C. Suri,
Resident of D-1/C-36 B,
Janakpuri, New Delh-58.
Date of Institution : 24.01.2001
Date of framing of charge : 08.04.2005
Date on which case was received on
Transfer by this Court : 19.09.2011
Date of conclusion of arguments : 23.08.2014
Date of Judgment : 06.09.2014
Memo of Appearance
Ms. Jyotsna Sharma Pandey, Learned PP for CBI.
Sh. Sachin Dev Sharma and Sh. Hakikat Yadav, Learned Counsels for
Accused Bhajan Singh.
Sh. Jitender Kumar Jha, Learned Counsel for Accused(s) Deepak Kumar and
Dinesh Kumar Sharma.
Sh. N.K. Katyal, Learned Counsel for Accused(s) Variam Singh and I.S. Suri.
Sh. M.S. Khan, Learned Counsel for Accused B.D. Sharma.
Sh. K.K. Patra, Learned Counsel for Accused Ravinder Malik.
Sh. Sushil Kumar, Learned Counsel for Accused P.K. Sahi.
JUDGMENT
VERSION OF PROSECUTION 1.0 All the eight accused (s) have been charge-sheeted for commission of various offences under Indian Penal Code as well as under
Prevention of Corruption Act (in short PC Act).CC no. 06/2011 CBI Vs Bhajan Singh etc Page 2 of 84
1.1 One current account no. 1968 was opened by M/s Kohinoor Metals through its partners A-1 & A-2 with Dena Bank, Maya Puri Branch, New Delhi on 06.12.1995.
1.2 M/s K.K. Trading Corporation through A-2 opened one more account i.e. current account no. 2010 with said Branch on 04.04.1996. A-2 claimed himself to be the proprietor of said firm.
1.3 At the relevant time, Mayapuri Branch was a 'medium level branch' and was headed by Scale-II Manager of the bank known as Manager of Medium Branch (MMB) and he used to be assisted by Scale-II or Scale-I officer of the bank who could also be designated as 'Accountant'. It will be important to note down the posting details of various bank officers of the relevant tenure at the aforesaid branch. These details are as under:-
Sl No. Period Manager Accountant
1 August 1994 to 28.05.1997 B.D. Sharma (A-5) Ravinder Malik (A-6)
2 28.05.1997 to 17.06.1997 J.D.K. Jain --
3 17.06.1997 to 22.06.1997 I.S. Suri (A-8) --
(officiating capacity)
4 23.06.1997 to 13.09.1997 P.K. Sahi (A-7) I.S. Suri (A-8)
1.4 As per the discretionary power book of Dena Bank effective from
01.08.1994, any such MMB/Accountant in Scale-II could purchase cheques and could permit drawings against uncleared effects up to Rs.50,000/- only and had discretionary powers of permitting Temporary Over Draft (TOD) up to Rs.10000/- only. Such powers were revised with effect from 01.06.1997 and as per the revised guidelines, the aforesaid limits were enhanced to Rs. 1 lac and to Rs. 15,000/- respectively.CC no. 06/2011 CBI Vs Bhajan Singh etc Page 3 of 84
1.5 A-5 and A-6, in a fraudulent manner and in terms of criminal conspiracy with the account holders, flouted the established banking norms and guidelines and exceeded their discretionary powers indiscriminately.
They all indulged in various malpractices. These are as under:-
i) Allowing unauthorized TOD beyond discretionary powers
ii) Unauthorized cheque purchase beyond discretionary powers
iii) Dishonest and fraudulent debiting the Imprest Clearing Account
iv) Allowing unauthorized exceedings
v) Falsification of bank records
vi) Failure to realize the interest from the party
vii) Failure to send Control Returns to Regional office 1.6 A-5 and A-6, in order to regularize unauthorized overdraft in the said account of M/s Kohinoor Metals, sanctioned cash credit (hypothecation) limit of Rs. 2 lacs and further recommended its enhancement. Regional office, acting on their recommendation, enhanced CC Limit to Rs. 17 lacs.
However, no cheque purchase facility had been sanctioned in the said account either at branch level or by the Regional Office and A-5 and A-6 permitted unauthorized exceedings in said account up to Rs. 41 lacs. Whenever any cheque, deposited or purchased, returned dishonoured, instead of debiting the same to the account of the party, these were debited to the imprest clearing head of the branch in order to suppress the rising debit balance in the party's account. When A-5 & A-6 learnt about their impending transfer, they started reversing the entries from Imprest Clearing Account to the account of the party. The also did not recover any interest from the party.
1.7 Accused Dinesh Sharma (A-3) along with A-1 Bhajan Singh had opened one current account in the name of bogus firm M/s Suman Metals in CC no. 06/2011 CBI Vs Bhajan Singh etc Page 4 of 84 Allahabad Bank, Gurgaon. A-1 along with A-3 Variam Singh opened bank account with Oriental Bank of Commerce, NIT, Faridabad in the name of bogus firm M/s Star Trading Corporation. M/s Inderjeet Metals Pvt. Ltd. was a sister concern of A-1 maintaining various accounts in different branches of PNB.
1.8 A-2 and A-3 were employees of A-1.
1.9 A-1, having conspired with his said two employees i.e. A-2 and A-3 and also with the help of A-4, started using number of accommodation cheques and both the aforesaid bank officials i.e. A-5 and A-6 purchased such cheques arbitrarily and indiscriminately.
1.10 In the account of M/s Kohinoor Metals, several accommodation cheques pertaining to various concerns i.e. M/s Inderjeet Metal Pvt. Ltd., M/s Shivali Enterprises, M/s Export Industry were purchased by A-5 and A-6 flouting banking norms and discretionary powers.
1.11 In the account of M/s K.K. Trading Corporation also, similarly, several accommodation cheques pertaining to various concerns i.e. M/s Kohinoor Metals, M/s R.S. Hard Metals, M/s Inderjeet Metal Pvt. Ltd., M/s Shivali Enterprises and M/s Konark Metals were purchased by A-5 and A-6.
1.12 A-7 and A-8 succeeded the branch in the capacity of Branch Manager and Accountant respectively and they also, in terms of conspiracy, kept on purchasing the cheques in the similar manner.
1.13 In the account of M/s Kohinoor Metals, they purchased accommodation cheques pertaining to M/s Star Trading Corporation, M/s CC no. 06/2011 CBI Vs Bhajan Singh etc Page 5 of 84 Suman Metals, M/s Balaji Metals and in the account of M/s K.K. Trading Corporation, one accommodation cheque pertaining to M/s Kalinga India Overseas was purchased by A-7 and A-8.
1.14 According to the investigating agency, all such bank officials and private persons had entered into a criminal conspiracy and there was loss of Rs. 69,86,543.82 (excluding interest) to the bank and corresponding gain to A-1 Bhajan Singh & A-2 Deepak Kumar being partners of M/s Kohinoor Metals during the period 18.12.1995 to 12.09.1997 and loss of Rs. 48,38,902.48 (excluding interest) to the bank and corresponding gain to private persons with respect to account of M/s K.K. Trading Corporation.
1.15 Separate FIRs were recorded. As far as account of M/s Krishna Traders is concerned, FIR bearing No. RC S18 1999 E 0003 (Ex. PW26/J) was recorded on 07.04.1999. Another FIR i.e. FIR No. RC S18 1999 E 0004 (Ex. PW26/K) was also recorded same day with respect to the account of M/s K.K. Trading Corporation. Both the cases were registered on the basis of complaint of Sh. G.L. Khandelwal, DGM, Dena Bank.
1.16 Investigation was carried out with respect to the allegations appearing in both the FIRs and a common charge sheet has been filed with respect to both the aforesaid FIRs.
COGNIZANCE AND CHARGES 2.0 Charge-sheet was filed on 24.01.2001 and cognizance was taken by the court on 20.02.2001.
CC no. 06/2011 CBI Vs Bhajan Singh etc Page 6 of 842.1 Arguments on charge were heard and vide order dated 09.03.2005 all the accused persons were ordered to be charged.
2.2 All the accused persons i.e. A-1 Bhajan Singh, A-2 Deepak Kumar, A-3 Dinesh Kumar Sharma, A-4 Variam Singh, A-5 B.D. Sharma, A-6 Ravinder Malik, A-7 P.K. Sahi and A-8 I.S. Suri were charged u/s 120 B r/w 420 IPC and 13 (2) r/w 13 (1) (d) P.C. Act. All the four bank officials were also charged u/s 13 (1) (d) r/w 13 (2) P.C. Act and the remaining three private persons A-1 Bhajan Singh, A-2 Deepak Kumar and A-3 Dinesh Kumar Sharma were charged u/s 420 IPC. They all pleaded not guilty and claimed trial.
PROSECUTION WITNESSES 3.0 Prosecution was directed to lead evidence and has examined 32 witnesses in all. Witnesses can be categorized as under:-
OFFICIALS OF DENA BANK M/S P.K. METALS
PW2 Sh. G.L. Khandelwal (complainant) PW1 Sh. Vijay Kumar Jain.
PW3 Sh. R.C. Dahiya. PW9 Sh. Suresh Goel.
PW4 Sh. Naresh Kumar Sehgal.
WITNESS RELATED TO M/S
PW5 Sh. Sadhu Ram Bansal.
STAR TRADING CORPORATION
PW6 Sh. Vinay Lamba (Regional Office).
PW7 Sh. Pranabendu Sen (Regional Office). PW8 Sh. Ajay Kumar Rai
PW14 Sh. Harsh Bhalla. WITNESSES RELATED TO M/S
SUMAN METALS
PW27 Sh. R.S. Sidhu.
PW30 Sh. Ashwani Kumar.
PW10 Sh. Sunil Khurana.
WITNESSES RELATED TO WITNESSES RELATED TO
M/SLUCKY ENGINEERING WORKS M/S INDO GEM OVERSEAS
PW11 Sh. Kastur Chand Jain.
PW13 Sh. Baldev Raj.
PW12 Sh. Praveen Goel.
PW15 Sh. Madan Mohan Dhupar
CC no. 06/2011 CBI Vs Bhajan Singh etc Page 7 of 84
WITNESSES RELATED TO WITNESSES RELATED TO
M/S SHIVAM ENTERPRISES M/S INTERJEET METALS
PW22 Sh. Rohtash Kumar Mittal. PW16 Sh. Raj Kumar Gulati.
PW32 Sh. Amit Mathur.
PW23 Sh. Gopal.
WITNESSES RELATED TO WITNESSES RELATED TO
M/S INDERJEET METALS M/S KALINGA OVERSEAS
PW16 Sh. Raj Kumar Gulati. PW25 Sh. Ashish Aneja.
PW32 Sh. Amit Mathur. PW28 Sh. Amar Jit Singh.
WITNESS RELATED TO
WITNESSES RELATED TO
M/S Balaji METALS
M/S EXPORT INDUSTRIES
PW19 Sh. Prem Singh Gupta. PW18 Sh. Chunni Lal.
PW22 Sh. Rohtash Kumar Mittal.
WITNESSES RELATED TO M/S R.S. HARD WITNESSES RELATED TO INVESTIGATION
METAL & M/S SHIVALI ENTERPRISES
PW17 Sh. Sarvemitter Gakhar (Sanctioning
Authority).
PW20 Sh. Hari Mittar Aggarwal.
PW21 Sh. Atul Aggarwal. PW26 Sh. Anit Kumar Singh (investigating
officer).
OTHER WITNESSES
PW31 Sh. M.L. Sharma (GEQD).
PW24 Sh. Anil Jindal.
PW29 Sh. Ashok Kumar.
STATEMENTS OF ACCUSED (S) AND DEFENCE EVIDENCE
4.0 Accused, in their respective statements u/s 313 Cr.P.C., pleaded
innocence.
4.1 According to A-1, he never had any intention to cheat the bank.
He claimed that there was tussle between his co-accused B.D. Sharma and another bank official R.C. Dahiya (PW3) and they rather made him a scapegoat to settle their personal vendetta. He also claimed that his all CC no. 06/2011 CBI Vs Bhajan Singh etc Page 8 of 84 accounts stood regularized as proposal submitted by him was accepted by the Head Office and when he offered a collateral security, which was having clear titles, the same was rejected by the Branch Office without any reason He sought permission to examine himself as a defence witness and moved an application u/s 315 Cr. P.C. Such application was allowed and he was examined as DW6.
4.2 As per A-2 Deepak Kumar, he was merely an employee of A-1 Bhajan Singh who misused him. He claimed that his job was merely to prepared the bills and A-1 had pressurized him to open accounts. He was scared of him as he was got beaten by A-1 Bhajan Singh through his another employee Ashish Aneja. He reported such incident to the police and he got himself medically examined as well and thereafter he left the job of Bhajan Singh. He claimed that he was not beneficiary and had no concern with the firms or bank accounts and A-1 had been dealing those accounts exclusively and all by himself. He also claimed that A-5 and A-6 used to visit the house of A-1. He sought permission to examine himself as a defence witness and moved an application u/s 315 Cr.P.C. Such application was allowed and he was examined as DW2.
4.3 A-3 Dinesh Kumar Sharma also claimed that he was merely a driver under his co-accused A-1 and was not having any source of income and since he did not want to leave his job, he was compelled to give in to the dictates of his employer who forced him to open bank account. He also claimed that he was made to sign various blank cheques which were misused by his employer. He sought permission to examine himself as a defence witness and was examined as DW5.
CC no. 06/2011 CBI Vs Bhajan Singh etc Page 9 of 844.4 A-4 Variam Singh pleaded false implication and claimed that he had no role to play in the present matter except for introducing the account of M/s Star Trading Corporation. He, however, did not desire to lead evidence in defence.
4.5 A-5 B.D. Sharma claimed that 'Bhajan Singh Group' was known and close to Sh. S.K. Tandon who was heading the Regional office at the relevant time. According to him, such party had brought deposits worth Rs.50 crores approximately from DDA to the bank. Therefore, Sh. Tandon had instructed that Bhajan Singh Group was to be accommodated as even otherwise their proposal for a limit of Rs. 2.5 crores to Rs. 3 crores was pending consideration and, therefore, under the instructions of Regional office, the party was given limits and the transactions were also intimated to Sh. Tandon. According to him, the bank management had made them scapegoats in order to save their own skins as everything was done to save the higher ups in the bank hierarchy i.e. officials of Regional office including Sh. Tandon. He entered into witness box as DW3.
4.6 A-6 Ravinder Malik also pleaded innocence. He claimed that he acted as per the instructions of his superior and also stated that he was merely posted as accountant in the branch and had no power, even otherwise, to purchase any cheque as discretionary powers were meant only for branch manager. He also claimed that once any cheque had been purchased by the branch manager, being accountant, he had to follow the subsequent instructions. According to him, the communication between the Branch and Regional office was the sole responsibility of the Branch Manager and also that he had no individual role in debiting the imprest clearing account or reversal of any such entry as entries in this regard were done by him as per instructions of the branch manager. He did not desire to lead any CC no. 06/2011 CBI Vs Bhajan Singh etc Page 10 of 84 evidence in his defence.
4.7 A-7 P.K. Sahi also pleaded innocence. He did not dispute the extent of discretionary powers as stipulated by Dena Bank but claimed that whenever any cheque was purchased, he had sought oral permission from the then DGM Sh. S.K. Tandon and even sent statement D-3 in the prescribed format for approval and confirmation. According to him, he always took permission from higher authorities for purchasing local cheque and in case any cheque returned unpaid/unrealized, same was debited to the party's account. He also claimed that he had made proper entries in BP Register and Customer Liability Register and cheque purchase statement was also sent to higher authorities for confirmation. He claimed that after receiving instructions from Regional Office on 14.08.1997 not to purchase any further cheque, no further cheque was purchased by him. He also claimed that he had worked in said Branch only for two and half months and rather sent all the previous control returns, statements and reports to the Regional Office and also reported about the previous irregularities to the higher authorities. He also supplemented that he had purchased 65 cheques in all in Bhajan Singh's various accounts with the consent of higher authorities and 57 such cheques were duly honoured. He also claimed that keeping in view his honesty and integrity, his suspension order was also revoked. He also claimed that he had been told by the higher authorities of the Regional Office that the party was in touch and there was likelihood of sanction of enhancement of limit. He examined himself as DW4.
4.8 A-8 I.S. Suri claimed that he was merely posted as an Accountant and had no independent power related to cheque purchase, TOD, exceedings etc. and only Branch Manager enjoyed such powers. According to him, in order to protect the interest of senior officers of Regional Office and CC no. 06/2011 CBI Vs Bhajan Singh etc Page 11 of 84 Head Office, he has been falsely implicated in the present matter. He also entered into witness box as DW1.
RIVAL CONTENTIONS 5.0 Ms. Jyotsna Sharma Pandey, learned Public Prosecutor for CBI has contended that prosecution has been able to prove its case to the hilt. According to her, bank officials had openly defied the Manual of Instructions and various guidelines of the bank and exceeded their discretionary power and kept on purchasing cheques beyond their discretionary powers and did not even report such fact to the Regional Office. She has contended that officials of Dena Bank, who have graced the witness box, have clearly indicated the malpractices adopted by all the public servants-accused and it stands proved that they had purchased cheques in arbitrary manner and permitted temporary overdrafts on number of occasions.
5.1 She has also contended that there was apparent malafide on the part of bank officials as when the cheque, purchased or deposited, in the accounts in question eventually returned unpaid, these were debited to Imprest Clearing Account and not to the party's account to suppress the debit and the actual position of the account of the party.
5.2 She has also contended that accused Dinesh Kumar Sharma and accused Deepak Kumar had obliged their employer Bhajan Singh and intentionally abetted the commission of offences in question and they cannot take any shelter behind the fact that they were merely employees and were not controlling the accounts which had been though opened in their names.
CC no. 06/2011 CBI Vs Bhajan Singh etc Page 12 of 845.3 She has also argued that as far as accused Variam Singh is concerned, his connivance is very much apparent as he was introducer of one account of M/s Star Trading Corporation and he himself was operating such account as the majority of pay-in-slips and cheques had been filled by him.
5.4 Sh. Hakikat Yadav, learned counsel for A-1 Bhajan Singh has contended that he has been unnecessarily dragged into litigation and the matter was essentially civil in nature and moreover Dena Bank has already filed a civil suit seeking to recover back its dues. Sh. Yadav has also contended that all the accounts related to accused Bhajan Singh were regularized and limits were sanctioned and in terms thereof, accused Bhajan Singh had even submitted a genuine property for collateral purpose but for totally unexplained reasons, such collateral property was not accepted as security. Reliance in this regard has been placed upon the Legal Search Report (LSR) submitted by one Sh. H.N. Takkar.
5.5 Sh. Jitender Kumar Jha has contended that A-2 Deepak Kumar and A-3 Dinesh Kumar Sharma have been falsely implicated. According to him, CBI itself has come up with a clear cut case that A-1 had exploited his employees and used them for opening of the accounts and he himself was actually managing and controlling these accounts. It has been claimed that Dinesh Sharma was merely a driver under Bhajan Singh and Bhajan exploited the situation and made him open account and various blank cheques were got signed and were misutilized. Similarly, he also pressurized his Accountant Deepak Kumar and misused the blank cheques signed by him. He has also contended that there is nothing to show that any such employee had received any benefit whatsoever in any shape. Sh. Jha has also asserted that Sh. S.K. Goel (PW9), Baldev Raj Kathuria (PW13) and CC no. 06/2011 CBI Vs Bhajan Singh etc Page 13 of 84 Ashish Aneja (PW25) were also similarly exploited by Bhajan Singh but they have been rather made witnesses. He has also relied upon two authorities viz V.P. Shrivastava Vs Indian Explosives Ltd. & Ors. 2011 (6) RCR (Criminal) page 1 SC and V.Y. Jose & Anr Vs State of Gujarat & Anr 2009 (1) RCR (Criminal) page 869 SC which I would advert to at appropriate stage.
5.6 Sh. Katyal, learned counsel has contended that A-4 Variam Singh has been made an accused for totally mysterious reasons. He had merely acted as introducer of account of M/s Star Trading Corporation which fact, in itself, cannot infer any criminality. He is neither the part of conspiracy nor beneficiary in any sense whatsoever.
5.7 Sh. M.S. Khan, ld. defence counsel for A-5 has contended that the accused B.D. Sharma has been falsely implicated and has rather been made a scapegoat. His prime contentions are as under:-
i. Nothing was ever hidden from the Regional Office. Whenever, any bill or cheque was purchased, telephonic intimation was given and purchase was with the oral confirmation.
ii. Even as per the testimony of prosecution witnesses, in particular PW3 R.C. Dahiya and PW4 N.K. Sehgal, taking oral instructions was not uncommon.
iii. Purchasing cheques beyond discretionary powers/purchasing local cheques and granting temporary overdraft are inherent in banking transactions and these did per se amount to any misconduct.CC no. 06/2011 CBI Vs Bhajan Singh etc Page 14 of 84
iv. Other similarly situated bank officials have rather been let off which also is indicative of the fact that mere purchase of cheques beyond discretionary power was not a criminal misconduct.
v. No effort whatsoever was made to seize the complete record from the Regional Office and it was ostensibly to hide the misdeeds of higher- ups posted in Regional Office.
vi. Exceedings were given and cheques were purchased as the party was regularly in touch with the Head Office as well as Regional Office and once its proposal was eventually sanctioned by Head Office, the irregularities, if any, got removed automatically.
vii. Debit entries were made in the imprest clear account as per the instructions of Regional Office. Moreover, had there been any malafide on this aspect, he and his co-accused Sh. Ravinder Malik would not have reversed such entries thereby exposing themselves. They started reversing the entries only when they did not get any further concrete information from the Regional Office regarding sanction of proposal submitted by Bhajan Singh group.
viii. Customer liability register was only meant for providing a bird's eye view and moreover all the cheque purchases were clearly mentioned in the Bill Purchase Register Ex. PW4/B (D-8).
ix. Moreover, all such bill purchases have also been mentioned in Outward Bills Collection Register (OBC) (D-9) and also in local clearing register (D-25A and D-25B).CC no. 06/2011 CBI Vs Bhajan Singh etc Page 15 of 84
x. There was even otherwise sufficient stock with the party and the then branch incumbent or the officials from the Regional Office, for the reasons best known to them, did not even attempt to seize the stock. Moreover, the sufficiently high valued collateral security in the shape of immovable property belonging to wife of A-1 was available with the bank and bank could have easily realized outstanding amount by selling those off.
5.8 Sh. K.K. Patra has defended A-6 and his contentions can be summarized as under:-
i. A-6 was posted as Accountant only and in his such capacity he had no power to purchase any cheque or to permit any TOD.
ii. In the absence of Branch Manager, A-6 acted as Branch Manager in officiating capacity and he had purchased very few cheques and when the Branch Manager resumed duties, he approved such action of Accountant and, therefore, no illegality can be found even with respect to those cheques which he had purchased in such officiating capacity.
iii. Vigilance report Ex. PW4/DE (D-3) also clearly indicates the involvement of Regional office. Regional office deliberately did not produce the relevant record which could have very easily established that the branch office was sending regular intimation to them.
iv. Even as per the established procedure, whenever any such bill or cheque is purchased, it is accepted by the dealing clerk. In the instant case, PW Ashwani was such dealing clerk and after the bill was purchased by him, these were submitted directly before the Branch CC no. 06/2011 CBI Vs Bhajan Singh etc Page 16 of 84 Manager for approval and once those bills were approved by the Branch Manager, the role of A-6 was mere formal in nature.
v. For the reasons best known to the prosecution, the testimony of Sh.
Ashwani was left incomplete and, therefore, the best evidence has been held back to the prejudice of defence.
vi. CBI has adopted pick and choose policy and various officials, who were also indicted by the vigilance, were let off. Mr. Dahiya was also under cloud as per the vigilance inquiry report but he has, instead, been made a witness.
vii. Proposal submitted by Bhajan Singh group was eventually considered by the Head Office directly and was even sanctioned and, therefore, even if there were previous minor irregularities, those, automatically, stood regularized by virtue of such sanction.
viii. Sanction of prosecution is mechanical and without application of mind.
It has not been given by a competent authority either.
ix. Moreover, as per the case projected by CBI, the criminality does not lie in purchasing any bill or cheque. If any such bill or cheque, purchased beyond discretionary powers, is duly paid/realized, it will not amount to any misconduct on the part of Public Servant, there being no loss to the bank but the official would be held accountable only in case when any such bill or cheque is eventually returned dishonoured. It has been claimed that for this very reason only, various other bank officials, who dealt with the accounts in question and who also purchased cheques beyond discretionary powers, were not sent up to face trial CC no. 06/2011 CBI Vs Bhajan Singh etc Page 17 of 84 and were rather let off. According to him, at the time of purchase, it cannot be assessed whether the cheque would be honoured or not and, therefore, the bonafide action of purchasing of cheque cannot be labeled as malafide.
5.9 Sh. Sushil Kumar, learned defence counsel for A-7 P.K. Sahi has contended that he has been made a scapegoat and he was not involved in any misconduct. His contentions can be summarized as under:
i. He joined the Branch only on 23.06.1997 and remained posted there till 12.09.1997 and during his short tenure, he rather prepared various Control Returns for previous period and intimated Regional Office promptly. If he was having any malafide intention, he would not have prepared the Control Returns and would not have sent the same to Regional Office.
ii. He had not permitted the opening of account in question which was already in existence. Rather, the moment he was instructed by the Regional Office not to purchase any further cheque, he stopped purchasing any cheque in said account w.e.f. 14.08.1997. Reliance in this regard has been placed upon D-27.
iii. It has been claimed that Sh. Vinay Lamba of Regional Office could have substantiated such fact but his examination was not concluded by the prosecution. Moreover, one another important witness i.e. S.K. Tandon, Deputy General Manager, Regional Office died before his deposition could be recorded and even he would have confirmed that there was verbal direction for purchasing of cheques beyond discretionary power and to continue with the past practice.CC no. 06/2011 CBI Vs Bhajan Singh etc Page 18 of 84
iv. When the departmental inquiry was initiated, nothing substantial surfaced and it was only for that very reason that A-7 P.K. Sahi was reinstated and was let off with minor penalty for minor irregularities.
v. Testimony of concerned officials of Dena Bank does not attribute any misconduct on the part of A-7 P.K. Sahi.
vi. Regional Office had also directed Mr. Sahi to continue with the past practice assuring that proposal of the borrowers pertaining to the present account and various other accounts was under active consideration of the Regional Office and once such proposal was accepted then everything would stand regularized. So much so, the proposal submitted by the borrower was considered and was also sanctioned. Reliance in this regard has been placed upon one letter dated 20.01.1998 written by Chief Manager (Operations Rest of India) addressed to DGM, Dena Bank, annexing therewith memorandum dated 13.01.1998 whereby the Head Office had approved credit facilities to various accounts of borrowers i.e. M/s Krishna Traders, M/s Kohinoor Metals, M/s Balaji Metals and M/s K.K. Trading Corporation. Qua M/s Kohinoor Metals, CC Hypothecation Stock-cum-Book Debts Limit was sanctioned for Rs. 50 lacs and Demand Loan Limit as Rs. 10.61 lacs besides LC (I/F) DP of Rs.15 lacs and bill purchase facility up to Rs. 9.10 lacs. Qua M/s K.K. Trading Corporation, entire outstanding was converted into regular CCL of Rs. 48.50 lacs. Such limits had been sanctioned against stock-cum-book debts and were to be additionally secured by equitable mortgage of immovable property of worth Rs. 2.65 crores.CC no. 06/2011 CBI Vs Bhajan Singh etc Page 19 of 84
5.10 Sh. N.K. Katyal, learned defence counsel has defended A-8 I.S. Suri and has contended that he has been falsely implicated in the present matter. His contentions are as under:
i. His name never surfaced during the investigation and, therefore, even complainant Dr. Khandelwal did not make any mention about his involvement in the matter when the complaint was lodged by him.
ii. His name never surfaced during the alleged vigilance inquiry and even PW4 Sh. N.K. Sehgal has not attributed any misconduct on his part. Moreover, vigilance inquiry report has not been proved by prosecution at all and rather the alleged author of such report i.e. Sh. Vora has not been examined and another Vigilance Officer i.e. Sh. Sehgal has not been able to comment about the contents of such report.
iii. He was posted as Accountant and joined Maya Puri Branch barely on 17.06.1997 and his job was to render assistance to Branch Manager and he never acted independently except for limited period of one week i.e. between 17.06.1997 & 22.06.1997 and thereafter Sh. P.K. Sahi joined as Branch Manager and A-8 Suri, being Accountant, was even otherwise not competent to purchase any cheque or grant any temporary overdraft.
iv. Moreover, other bank officials like Sh. JDK Jain and Sh. Prem Singh Kalyan, who had also handled the account in question, have not been made accused. They have not been cited as witnesses either and thus CBI has adopted pick and choose policy.
CC no. 06/2011 CBI Vs Bhajan Singh etc Page 20 of 84EVALUATION OF EVIDENCE 6.0 I have carefully gone through the entire material on record and given my anxious consideration to the rival contentions and perused the written synopsis filed by the accused(s) as well as the citations relied upon by both the sides.
6.1 I would weigh up the evidence and contentions under the following heads:-
i) Discretionary powers and banking guidelines
ii) Bank accounts of M/s Kohinoor Metals and M/s K.K. Trading
Corporation
iii) Status and constitution of various related accounts
iv) Interconnection between accused Bhajan Singh and Dinesh Kumar
Sharma, Deepak & Variam Singh
v) Vigilance Report of Dena Bank
vi) Role of initial two bank officials i.e. B.D. Sharma and Ravinder
Malik
vii) Role of subsequent two bank officials Pramod Kumar Sahi and I.S.
Suri
viii) Whether the two subsequent bank witnesses are also part of the initial conspiracy
ix) Other defence contentions
x) Conclusion DISCRETIONARY POWERS AND BANKING GUIDELINES 7.0 Bill purchasing/discounting facilities are integral part of banking business. These are sort of self-liquidating type of advance since these stand paid off when any such bill/cheque is eventually realized. Dena Bank had fixed up limits for purchasing/discounting and, therefore, it was required to be ensured by its officials that the bills/cheques are purchased/discounted as per CC no. 06/2011 CBI Vs Bhajan Singh etc Page 21 of 84 the limits and within the limits. It has to be also ensured that only those bills/cheques are purchased which arise out of genuine trade transactions.
7.1 Accommodation cheques, which more often than not are drawn on associate/sister/group concerns or fictitious parties, should not be discounted at all as these are submitted merely for raising temporary finance. Needless to say that special care should be taken to ascertain the bonafide of the party and its past record before venturing into purchase/discount of any such cheque. Prior permission should also be obtained from Regional Office wherever stipulated. It is also the duty of the handling officer to scrutinize any such bill or cheque presented for discounting. It has to be ensured whether the bill is within the sanctioned limit and whether any outstanding is already there or not? It is also required to be seen whether there is any overdue bill and if yes, since when and the amount thereof.
7.2 Normally, cheque, submitted for purchase, should be accompanied by a letter from the customer requesting the bank to purchase the cheque. However, alternatively, any such party may write such request on the counter-foil of the pay-in slip.
7.3 Any experienced bank official would be quick to smell whether any particular cheque is accommodation cheque or not. Most of the times, the cheques for the round amount, the cheques drawn by the parties which are not the usual buyers of the concerned customer, cheques drawn on centres where the customer does not normally sells his goods and cheques drawn by a party who also draws and discounts bills on the customers of the bank and cheques issued by sister/group/associate concern can be safely construed as accommodation cheques. Moreover, any bank official can and should always make an enquiry in this regard from the party and cheque CC no. 06/2011 CBI Vs Bhajan Singh etc Page 22 of 84 should not be purchased in a jiffy.
7.4 After any such bill or cheque is purchased, the voucher should be prepared and entry should be made in Bill Purchase (BP) Register and also in Customers' Liability Register. Customer Liability Register contains party-wise account and if the entries are properly entered in such register then it can always provide a comprehensive and clear view about the account status of the party and outstanding, if any.
7.5 It goes without saying that any such discounted bill or cheque has to be immediately sent for realization and the follow up action should be very quick. Any bill purchased but not sent for realization is bound to raise eyebrows. Entries are also required to be made in Transfer Scrolls and posted in the Customers' Liability Register and also in the party's account. If any such bill or cheque is returned dishonoured, the account holder should be intimated immediately and the amount of the bill should be recovered from him by appropriate debit. Entry, with respect to any such unpaid or dishonoured cheque, is also required to be made in Bill Purchase Register and Customers' Liability Register.
7.6 There is no dispute with the aforesaid aspects related to bill purchase and the recording of entries in BP Register, Customers' Liability Register and party's account. These are also found mentioned in Ex. PW4/Y (D-4) and the bank officials also do not dispute the aforesaid guidelines.
7.7 Discretionary power book has also been proved as Ex. PW13/A (D-6). Reference be made to the testimony of PW14 Sh. Harsh Kumar Bhalla and such discretionary power book was shown to him and he claimed that for the purposes of purchase of local/up country and drawings against un-cleared CC no. 06/2011 CBI Vs Bhajan Singh etc Page 23 of 84 effects, any MMB or Accountant could purchase cheque up to Rs.1,00,000/- and the temporary overdrawn could be given up to Rs. 15,000/-. Such powers were revised with effect from 01.06.1997 from Rs. 50,000/- and Rs. 10,000/- respectively.
BANK ACCOUNTS OF M/S KOHINOOR METALS AND M/S K.K. TRADING CORPORATION.
8.0 Let me now see the two accounts in question i.e. M/s Kohinoor Metals and M/s K.K. Trading Corporation.
8.1 PW3 R.C. Dahiya has deposed that M/s Kohinoor Metals, a partnership firm had opened account with their branch with deposit of Rs. 3000/-. Account opening form dated 07.12.1995 has been proved as Ex. PW3/3 (D-330). Accused Bhajan Singh and Deepak have been shown to the partners of said firm when the account was opened. However, fact remains that there is no partnership deed on record. Merely because name of Deepak is mentioned as a co-holder, I cannot robotically assume him to be the partner of M/s Kohinoor Metals. I also need to emphasize on one important aspect appearing in account opening form itself. As per the special instructions, the cheque signing authority was Sh. Bhajan Singh only. Thus, A-1 alone had been authorized to sign the cheques. Such current account has been opened during the tenure of accused B.D. Sharma and Ravinder Malik and Sh. Dahiya has identified the signatures of Sh. Ravinder Malik also. It is also important to mention that the introducer is not any third person. Accused Bhajan Singh was also proprietor of M/s Krishna Traders and he introduced said account.
CC no. 06/2011 CBI Vs Bhajan Singh etc Page 24 of 848.2 Following accommodation cheques, as per the charge-sheet, have been purchased in the account of M/s Kohinoor Metals:-
Sl. Date BP Cheuqe Issued by Amount in Status Remarks Dealt by Exhibit No. of No No. No. (INR) Related debit/ credit voucher 1 23.1.96 5598 610531 Inderjeet 1,00,000 Not paid Not B.D. Sharma Ex PW31/B1 Metal Pvt. presented Ravinder (D-34) Ltd. Malik 2 2.2.96 5618 610538 Inderjeet 2,00,000 Not paid Not B.D. Sharma Ex PW3/38 Metal Pvt. presented Ravinder (D-162) Ltd. Malik 3 5.2.96 5625 510535 Inderjeet 1,00,000 Not paid Not B.D. Sharma Ex PW3/39 Metal Pvt. presented Ravinder (D-163) Ltd. Malik Ex PW31/B121 (D-296) 4 27.2.96 5686 615483 Inderjeet 2,00,000 Not paid Not B.D. Sharma Ex PW31/B119 Metal Pvt. presented Ravinder (D-294) Ltd. Malik 5 29.2.96 5696 615484 Inderjeet 2,00,000 Not paid Not B.D. Sharma Ex PW3/40 Metal Pvt. presented Ravinder (D-165) Ltd. Malik Ex PW31/B117 (D-292) 6 4.3.96 5709 615486 Inderjeet 2,00,000 Not paid Not B.D. Sharma Ex PW3/41 Metal Pvt. presented Ravinder (D-167) Ltd. Malik 7 4.3.96 5710 615490 Inderjeet 1,00,000 Not paid Not B.D. Sharma Ex PW3/41 Metal Pvt. presented Ravinder (D-167) Ltd. Malik 8 17.4.96 5794 0116485 Export 5,00,000 Not paid Not B.D. Sharma Ex PW4/X18 Industry presented Ravinder (D-157) Malik 9 10.5.96 9123 0116489 Export 5,00,000 Not paid Not B.D. Sharma Ex PW4/X18 Industry presented Ravinder (D-157) Malik 10 27.5.96 9184 2087546 Shivali 4,75,000 Not paid Not B.D. Sharma Ex PW4/X18 Enterprises presented Ravinder (D-157) Malik 11 31.7.97 6452 572141 Star Trading 4,35,000 Not paid Insufficient P.K. Sahi Ex PW3/48 Corporation balance I.S. Suri (D-192) 12 2.8.97 6458 075661 Suman 2,25,000 Not paid Insufficient P.K. Sahi Ex PW31/B149 Metal balance I.S. Suri (D-324) 13 4.8.97 6459 075662 Suman 2,75,000 Not paid Insufficient P.K. Sahi Ex PW31/B150 Metal balance I.S. Suri (D-325) 14 7.8.97 6467 673507 Balaji Meta 4,25,000 Not paid Insufficient P.K. Sahi Ex PW31/B151 balance I.S. Suri (D-326) 15 13.8.97 6482 572149 Star Trading 4,75,000 Not paid Not P.K. Sahi Ex PW31/B133 Corporation presented I.S. Suri (D-308) CC no. 06/2011 CBI Vs Bhajan Singh etc Page 25 of 84 8.3 Dealing with another account i.e. account of M/s K.K. Trading Corporation, PW3 Sh. Dahiya has deposed that it was a proprietory concern of Sh. Deepak. However, the account was introduced by Sh. Bhajan Singh of M/s Krishna Traders and signatures were identified by accused Sh.
Ravinder Malik. Account opening form has been proved as Ex. PW3/5 (D-331).
8.4 As per the charge-sheet, following accommodation cheques, beyond discretionary powers, had been purchased in the said account of M/s K.K. Trading Corporation:-
Sl. Date BP Cheuqe Issued by Amount in Status Remarks Dealt by Exhibit No. of No No. No. (INR) Related debit/ credit voucher 1 8.5.96 9121 2086776 Kohinoor 4,95,936 Not paid Not B.D. Sharma Ex PW4/X29 Metals presented Ravinder (D-238) Malik 2 28.5.96 9190 2086593 R.S. Hard 4,70,000 Not paid Insufficient B.D. Sharma Ex PW4/X29 Metals balance Ravinder (D-238) Malik Ex PW3/51 (D-250) 3 5.6.96 9228 2087547 Shivali 4,25,000 Not paid Not B.D. Sharma Ex PW4/X29 Enterprises presented Ravinder (D-238) Malik Ex PW3/49 (D-246) 4 13.6.96 72028 Inderjeet 4,53,757 Not paid Insufficient B.D. Sharma Ex PW4/X29 Metal Pvt Ltd balance Ravinder (D-238) Malik Ex PW3/55 (D-248) 5 16.8.96 9431 4615805 Konark Metal 2,75,000 Not paid Insufficient B.D. Sharma Ex PW4/X29 balance Ravinder (D-238) Malik 6 12.7.97 6420 872209 Kalinga India 4,75,980 Not paid Insufficient P.K. Sahi Ex PW4/X29 Overseas balance I.S. Suri (D-238) Ex PW 4/F (D-8) 8.5 Aforesaid purchases are naturally beyond the discretionary powers. It is to be seen as to under what circumstances these cheques/bills were purchased by the concerned bank officials. It is also to be evaluated whether the Regional Office was keep posted and intimated or not. It is to be CC no. 06/2011 CBI Vs Bhajan Singh etc Page 26 of 84 seen as to why some of such bills were not sent for realization. It is to be seen whether there is corresponding entries in the related BP Register and Customers' Liability Register. It is also to be assessed whether these cheques are apparently accommodation cheques or not.
STATUS AND CONSTITUTION OF VARIOUS RELATED ACCOUNTS M/S INDERJEET METALS 9.0 PW32 Sh. Amit Mathur, official from Bank of Punjab, Connaught Circus, New Delhi has deposed about one such account held by M/s Inderjeet Metals Pvt. Ltd. According to him, it was a private limited company and having two directors namely Sardar Darshan Singh and Sardar Bhajan Singh (A-1). Such account was opened on 11.12.95 and was given current account number as 1101205. As per the instructions, Darshan Singh had been authorized to operate such account. Account opening form has been proved as Ex. PW32/A (D-241). Statement of account has been proved as Ex. PW32/B (part of D-241). Relevant documents had been furnished by the concerned bank officials to CBI vide Memo Ex. PW32/D. It is important to mention that Sardar Darshan Singh happens to be the real brother of accused Bhajan Singh though he is neither an accused nor a witness here. It seems to me that he was not even contacted during the investigation. Fact, however, remains that it is very much evident that M/s Inderjeet Metals had a direct co-relation with A-1 as A-1 is also its director. Interestingly, when statement of accused Bhajan Singh was recorded u/s 313 Cr.P.C., he pleaded his ignorance about the aforesaid bank account and claimed that he had not opened any such account.
CC no. 06/2011 CBI Vs Bhajan Singh etc Page 27 of 849.1 There is one more account of M/s Inderjeet Metals Pvt. Ltd. which had been opened with PNB, Vikaspuri branch. PW16 Raj Kumar Gulati, official from PNB, Vikas Puri has made reference to the cheque return register of the relevant period and its certified copy has been proved as Ex. PW16/A. He also deposed that following cheques did not find mentioned in the cheque return register.:-
Sl. Cheque Dated Amount in Issued by Issued in favour of No. No. (INR) 1 610531 23.1.96 1,00,000 Inderjeet Metals Pvt. Ltd. Kohinoor Metals 2 610538 2.2.96 2,00,000 Inderjeet Metals Pvt. Ltd. Kohinoor Metals 3 610535 1.2.96 1,00,000 Inderjeet Metals Pvt. Ltd. Kohinoor Metals 4 615483 24.2.96 2,00,000 Inderjeet Metals Pvt. Ltd. Kohinoor Metals 5 615484 26.2.96 2,00,000 Inderjeet Metals Pvt. Ltd. Kohinoor Metals 6 615436 Nil 2,00,000 Inderjeet Metals Pvt. Ltd. Kohinoor Metals 7 615490 Nil 1,00,000 Inderjeet Metals Pvt. Ltd. Kohinoor Metals.
9.2 His testimony clearly indicates that the aforesaid seven cheques were never even presented to their bank for realization. PW32 Amit Mathur also deposed that cheque bearing No. 72027 and 72028 were never debited, though such cheque numbers were part of the cheque book issued to account holder. There is no dispute that these cheques had been purchased and it clearly reveals the culpability on the part of concerned bank officials of Dena Bank. They purchased the cheques but perhaps those were put in cold storage and no action was taken to get the cheques encashed. The inaction on the part of concerned bank officials of Dena Bank cannot be brushed aside merely as a negligent act. Significantly, A-1 Bhajan Singh did not even bother to ask any question to these bank witness.CC no. 06/2011 CBI Vs Bhajan Singh etc Page 28 of 84
M/S SHIVALI ENTERPRISES & M/S R.S. HARD METAL 9.3 Reference be made to the testimony of PW20 Sh. Hari Mittar Aggarwal. He was dealing in aluminum wires under the name and style of M/s R.S. Metal Manufacturing Company. He also identified Bhajan Singh and claimed that he used to go to his company for purchasing aluminum scrap. He, however, deposed that Bhajan Singh had taken loan from him in the name of his two concerns and returned such loan also. He deposed that he had opened one account for his son Atul Aggarwal and such account was opened in the name of M/s Shivali Enterprises in Faridabad. He also deposed that the cheques which he had issued to Bhajan Singh towards loan were from the account of M/s R.S. Hard Metal and M/s Shivali Enterprises and he had not purchased any material of any nature whatsoever from accused Bhajan Singh or from any of his firms. He reiterated that all the cheques which he had given to accused Bhajan Singh were towards the loan being his old acquaintance. He also deposed that he found that some of the cheques given by him to accused Bhajan Singh for loan were not even got encashed by him and when he confronted accused Bhajan Singh in this regard, accused Bhajan Singh gave evasive replies claiming that he had misplaced those cheques or the cheques were with his employee Deepak.
9.4 He also proved account opening form of M/s Shivali Enterprises as Ex. PW20/D (part of D-14) and also copy of statement of account as Ex. PW20/F. He also supplemented that though his son was holding the account of M/s Shivali Enterprises, yet he himself (PW20 Hari Mittar Aggarwal) used to handle the firm as well as the bank account. I have seen the cross examination of PW20 Sh. Aggarwal and it was suggested to him by the counsel for accused Bhajan Singh that all such cheques were towards bank transactions and not towards loan which he denied. Fact remains that merely CC no. 06/2011 CBI Vs Bhajan Singh etc Page 29 of 84 by putting a suggestion, accused Bhajan Singh cannot expect the testimony of PW20 Sh. Aggarwal getting completely dislodged.
9.5 PW21 Atul Aggarwal has also entered into witness box and admitted that his father was managing the affairs of said firm and bank account and he himself did not have any knowledge with respect to the banking transactions related to M/s Shivali Enterprises.
9.6 In the present case, one cheque issued by M/s Shivali Enterprises was purchased in the account of M/s Kohinoor Metals and one cheque in the account of M/s K.K. Trading Corporation had been purchased by accused B.D. Sharma and Ravinder Malik and these were not at all even presented for encashment. Even PW20 Hari Mittar Aggarwal has expressed his astonishment as to why these cheques were not presented for realization and it, therefore, becomes quite evident that accused Bhajan Singh had merely used these cheques in order to extract the financial facility from Mayapuri Branch of Dena Bank. Similarly, one more cheque issued by PW20 Hari Mittar Aggarwal on behalf of M/s R.S. Hard Metals was purchased in the account of M/s K.K. Trading Corporation but the cheque returned dishonoured for insufficient funds.
M/S EXPORT INDUSTRIES 9.7 As per the case of CBI, one Sh. Anil Jindal (PW24) knew accused Bhajan Singh and he had opened various accounts in the names of M/s Export Industries, M/s Hindustan Industries, M/s Shivam Enterprises and M/s Lucky Engineering. with the help of his employees. These accounts were opened as he was coming out with some public issue. As per the case set up by CBI, PW24 Anil Jindal had given blank cheques, drawn by said CC no. 06/2011 CBI Vs Bhajan Singh etc Page 30 of 84 companies, to accused Bhajan Singh with some understanding. Fact, however, remains that PW24 Anil Jindal has not further supported the case of prosecution. However, the version given by him before the court does not help accused Bhajan Singh either.
9.8 According to deposition of PW24 Anil Jindal, he knew Bhajan Singh who was scrap dealer in Faridabad and he also deposed that he (PW24 Anil Jindal) had given loan to his companies M/s K.K. Trading Corporation and M/s Krishna Traders. As far as M/s Krishna Traders is concerned, the loan amount was Rs.75,00,000/-. There was an income tax raid at his business as well as residential premises in Faridabad on 14.8.96. His account books were seized and he was in financial trouble and, therefore, he demanded repayment of loan from Bhajan Singh and Bhajan Singh asked him to open account with Mayapuri Branch of Dena Bank and he then opened an account in Mayapuri Branch of Dena Bank under the name of M/s Bansala Finlease Ltd. and the entire loan amount of Rs.75,00,000/- was returned through cheques. He also claimed that he did not have any relation with M/s Export Industries, M/s Hindustan Industries, M/s Shivam Enterprises and M/s Lucky Engineering. It was suggested to him that there was no loan transaction which was answered in negative by PW24 Anil Jindal. It is quite intriguing as to how accused Bhajan Singh entered into such huge loan transaction and also as to how bank officials permitted to return such huge amount through the account of Krishna Traders. Reference be made to cheques Ex PW 24/1 to Ex PW24/11( D120 to D131). This shows that bank officials were least bothered in monitoring the accounts and permitted Bhajan Singh to operate account as her his will and without following the norms else how cheques could be issued to a finance company from CCL account to pay off debt. Moreover, there is something more than what meet the eyes with respect to such alleged loan between them.
CC no. 06/2011 CBI Vs Bhajan Singh etc Page 31 of 849.9 PW19 Sh. Prem Singh Gupta was posted in Gurgaon Gramin Bank, Ballabh Garh Branch and he has proved various bank documents related to M/s Export Industries, M/s Hindustan Industries and also M/s Shivam Industries. All such documents have been proved as Ex. PW19/A to Ex. PW19/M. 9.10 He categorically deposed that there is no reference of cheque No. 0116485 and 0116489 in statement of account of M/s Export Industries. He made such statement after seeing the statement of account.
M/S KONARK METALS 9.11 PW18 Sh. Chunni Lal, bank official has proved statement of account of M/s Konark Metals as Ex. PW18/D. As per the case set up by the CBI, one Sh. Ankush Jain was its proprietor but he has not been examined and, therefore, it cannot be said whether the cheques issued by M/s Konark Metal were towards any business transactions or mere accommodation cheques procured by accused Bhajan Singh. As far as M/s K.K. Trading Corporation is concerned, it had purchased one cheque drawn by M/s Konark Metal. Such cheque returned dishonoured due to insufficient balance. Such fact has, however, not been specifically deposed by the aforesaid bank official i.e. PW18 Chunni Lal.
M/S SUMAN METALS 9.12 PW10 Sunil Khurana, bank official from Allahabad bank, Gurgaon branch has deposed that Dinesh Sharma (accused herein) was proprietor of said account and the account had been introduced by one Ms. Madhu Sharma. Account opening form has been proved as Ex. PW10/A and CC no. 06/2011 CBI Vs Bhajan Singh etc Page 32 of 84 his testimony also talks about various cheques issued by M/s Suman Metals which eventually returned dishonoured. Accused Dinesh Kumar has already claimed that he was made to open such account by his co-accused Bhajan Singh who had forced him to sign blank cheques as well.
M/S BALAJI METALS 9.13 Similarly, as far as account of M/s Balaji Metal is concerned, it is again owned by accused Dinesh Kumar Sharma and reference be made to the testimony of PW18 Chunni Lal who has deposed that such account was opened on 4.11.96 and the authorized signatory/proprietor was Dinesh Sharma. It is also evident that one cheque issued by M/s Balaji Metal was purchased in the account of M/s Kohinoor Metals and such cheque returned dishonoured. I have already noted that according to accused Dinesh Sharma, he has been forced to open the account and he never ever made any transaction in any such account and rather he was forced to sign various blank cheques by his co-accused Bhajan Singh.
M/S STAR TRADING CORPORATION 9.14 As far as account of M/s Star Trading Corporation is concerned bank record has been proved by PW8 Ajay Kumar Rai and it also becomes evident that cheque No.572141 and 572149 were dishonoured for want of sufficient funds. These cheques were issued in favour of M/s Kohinoor Metals.
9.15 Fact remains that though the cheque issued by M/s Star Trading Corporation returned dishonoured, yet it cannot be said with certainty whether the cheque was towards any genuine trade/business transaction or not as the CC no. 06/2011 CBI Vs Bhajan Singh etc Page 33 of 84 proprietor of the account has not been examined.
M/S KOHINOOR METALS 9.16 Dena Bank, Mayapuri branch very well knew that M/s Kohinoor Metals and M/s K.K. Trading Corporation were enjoying credit facility from them and despite that, for totally inexplicable reasons, one cheque drawn by M/s Kohinoor Metals was purchased by the bank officials in the account of M/s K.K. Trading Corporation. Such cheque was purchased by B.D. Sharma and Ravinder Malik and surprisingly they slept over the cheque as such cheque was never ever presented for encashment.
M/S KALINGA OVERSEAS 9.17 This account also seems to be Benami account of accused Bhajan Singh. Reference be made to the testimony of PW25 Ashish Aneja. He knew accused Bhajan Singh as he was under his employment. He deposed that after two months of his joining accused Bhajan Singh, Bhajan Singh told him to go to Bombay with accused Deepak for starting new business of metal scrap. There they took one flat on rent and Deepak opened one account in the name of M/s Kalinga Overseas. There was no transaction in said bank account and there was no business under said firm. Account opening form has been proved as Ex. PW25/A(D-160). In his cross examination he reaffirmed that he was asked by accused Bhajan Singh to go to Mumbai. He claimed that he stayed for six months and simply opened two accounts and did nothing else. I have seen the cross examination of this witness and it is quite evident that his testimony is virtually unshaken and clearly indicates that he had been merely asked to open the account and there was no actual or genuine transaction in such bank account. Relevant CC no. 06/2011 CBI Vs Bhajan Singh etc Page 34 of 84 bank documents have been proved by PW28 Amarjeet Singh of Punjab and Sindh Bank, Mautunga branch, Mumbai. Interestingly, Amarjeet Singh also knew Bhajan Singh as he had met him in Faridabad. According to him, Bhajan Singh was having a good reputation and was a big dealer in scrap. Here, I would like to supplement that accused Deepak has also claimed that he was made to open such account and there was no business in such account. Reference be made to question No. 74 and 75 wherein he categorically stated that he had gone to Mumbai as per the instructions of Bhajan Singh and opened the account as per his instructions and under his pressure.
INTERCONNECTION BETWEEN BHAJAN SINGH, DINESH SHARMA, DEEPAK KUMAR & VARIAM SINGH 10.0 There are two firms involved i.e. M/s Kohinoor Metals and M/s K.K. Trading Corporation.
10.1 As far as M/s Kohinoor Metals is concerned, it becomes very much apparent from the account opening form Ex. PW3/3 (D-320) that it was opened as if it were a partnership firm. There is an attempt to show that accused Bhajan Singh and Deepak Kumar were partners of such firm but fact remains that there is no partnership deed on record. It is also important to mention here that as per the instructions appearing in the account opening form itself, authority to sign the cheques was with accused Bhajan Singh only. It is also interesting to mention that account had also been introduced by M/s Kohinoor Metals through its proprietor i.e. accused Bhajan Singh.
CC no. 06/2011 CBI Vs Bhajan Singh etc Page 35 of 8410.2 As far as M/s K.K. Trading Corporation is concerned, as per the account opening form Ex. PW3/5, Deepak has been shown to be the proprietor of such firm but introducer is again Bhajan Singh who signed as proprietor of M/s Krishna Traders.
10.3 As far as accused Dinesh Kumar Sharma and accused Variam Singh are concerned, they have as no concern, direct or indirect, with the aforesaid two firms.
10.4 According to CBI, accused Deepak Kumar had conspired with his employer Bhajan Singh and other bank officials with intention to defraud the bank. According to learned Prosecutor, accused Deepak Kumar cannot disown the aforesaid two accounts as he was partner in one firm and the proprietor in other and various accommodation cheques had been purchased in said accounts only. Admittedly, no other allegation has been attributed to accused Deepak Kumar by CBI.
10.5 Sh. Jha has also relied upon the authorities V.P. Srivastava (supra) and V.Y. Josh (supra). I have seen both the aforesaid pronouncement of Apex Court and there cannot be any dispute with respect to the well settled legal position that in order to constitute an offence of cheating, it is required to be established that any such accused had a fraudulent or dishonest intention right from the inception.
10.6 It is now important to see as to what is the stand of accused Deepak Kumar in his statement u/s 313 Cr.P.C. He claimed that he had been misused by accused Bhajan Singh and it was only under his pressure that he CC no. 06/2011 CBI Vs Bhajan Singh etc Page 36 of 84 had to open the account. He claimed that accused Bhajan Singh got him beaten up through his one employee and thereafter he left such employment. He also claimed that he was not beneficiary in any manner whatsoever and had no concern with the firms or the bank accounts and it was accused Bhajan Singh who had been dealing with those accounts. He also entered into witness box as DW2. In his such deposition, he made reference about Civil Suit No. 130/99 filed by M/s Dena Bank and as per the averments made in the plaint, M/s Dena Bank itself had claimed that accused Bhajan Singh had sought conversion of the balance outstanding in the various accounts of the group in term loan and such fact was even admitted by Bhajan Singh in his reply. It has, therefore, been contended that these two accounts were clearly owned by accused Bhajan Singh alone though on papers his name had also been reflected.
10.7 It will be also important to make mention to one letter Mark DW2/A placed on record by accused Deepak Kumar. Contents of such letter clearly indicate that Bhajan Singh admitted that Deepak Kumar was his servant and he (Bhajan Singh) had opened various firms and bank accounts in the name of Deepak Kumar under the name and style of M/s K.K. Trading Corporation, M/s Krishna Traders and M/s Kalinga Overseas. He also claimed that he (Bhajan Singh) was owner of all such firms and was exclusively responsible for the firms and accounts and Deepak was not concerned with the same. Signatures of Bhajan Singh are appearing at point A on Mark DW2/A. Letter is original in the sense that it contains original signatures of accused Bhajan Singh. Surprisingly, when Bhajan Singh, through his counsel, cross-examined Deepak Kumar, he did not disown his such signatures. Signatures were rather admitted but it was claimed that signatures had been obtained on blank papers. This is not comprehensible more so when Bhajan Singh is in a position to dominate and has active confidence over his CC no. 06/2011 CBI Vs Bhajan Singh etc Page 37 of 84 employee. It is not possible for any such employee to obtain signatures of his employer.
10.8 Moreover, if at all accused Bhajan Singh had no concern with the aforesaid two concerns, would he give any plausible explanation as to why he owned up the entire liability existing in the aforesaid two accounts. His counsel is also heavily relying upon sanction of limits in various group accounts. Reference has been made to one letter dated 13.01.1998 whereby limits were sanctioned in various accounts pertaining to Bhajan Singh. In such letter, it has been clearly mentioned that Bhajan Singh was having four accounts which were related to him and for which he was responsible. These were of M/s Krishna Traders, M/s Kohinoor Metals M/s Balaji Metals and M/s K.K. Trading Corporation. Limits were accordingly sanctioned and accused Bhajan Singh even offered to submit collateral worth Rs. 2.65 crores.
10.9 Naturally, he is owning up all these accounts and is even ready to furnish collateral worth Rs. 2.65 crores. As a necessary corollary, it has to be assumed that he is the exclusive controller of all these accounts. This also strengthens the stand taken up by his co-accused Deepak Kumar. It is also important to mention that Bhajan Singh also entered into witness box as DW6 and in his examination-in-chief, he never came up with any such fact or assertion which may show that he had no concern with M/s K.K. Trading Corporation.
10.10 Coming to the role and involvement of accused Dinesh Kumar Sharma, he has been alleged as co-conspirator because he along with his co- accused Bhajan Singh had opened current account no. 1000274 in the name of bogus firm M/s Suman Metals with Allahabad Bank, Gurgaon and various CC no. 06/2011 CBI Vs Bhajan Singh etc Page 38 of 84 accommodation cheques, without business transactions, were issued and which were used in the present accounts and majority of pay-in-slips and cheques related to M/s Suman Metals bearing handwriting of accused Dinesh Kumar Sharma.
10.11 There is no other allegation whatsoever in the entire charge- sheet which can be said to be directed against accused Dinesh Kumar Sharma.
10.12 As far as aspect of filling up of pay-in-slips is concerned, such fact is too insignificant to convert anyone into a criminal. Moreover, admittedly, Dinesh Kumar Sharma was an employee of accused Bhajan Singh and in such capacity, if at all, he had filled up any such slip, it would not invite any criminality.
10.13 When testimony of PW26 Ajit Kumar Singh (IO) was recorded, he did admit that Dinesh Kumar Sharma was mere driver of accused Bhajan Singh. He also admitted that house of Dinesh Kumar Sharma was searched and no incriminating material was recovered from such house search. He also admitted that no evidence came to light showing any sort of connection or graft or bribe between bank officials and private persons. He also admitted that he did not come across any letter from the bank addressed to accused Dinesh Kumar asking for repayment of dues. He admitted that he had examined one Baldev Raj Kathuria as witness during investigation. He also admitted that Baldev Raj Kathuria had also opened one account at the behest of accused Bhajan Singh for discounting of cheques. IO also admitted that such Baldev Raj Kathuria was made witness. Similarly, IO admitted that even Suresh Kumar Goel and Ashish Aneja were cited as witnesses and they also CC no. 06/2011 CBI Vs Bhajan Singh etc Page 39 of 84 obliged Bhajan Singh in the similar manner. Though IO denied that these two persons were also employees of accused Bhajan Singh yet fact remains that their statements recorded u/s 161 Cr.P.C. clearly indicate to the contrary.
10.14 As per PW31 M.L. Sharma, GEQD, it was accused Dinesh Kumar Sharma who had written red enclosed signatures Mark Q404 to Q409 (Ex. PW31/B158 to Ex. PW31/169) and these handwritings matched with the specimen handwriting of accused Dinesh Kumar Sharma which are from S120 to S127 (Ex. PW31/C). Ex. PW31/B158 is merely an account opening form of M/s Bajrang Metal House and Ex. PW31/B159 pertains to account opening form of M/s Balaji Metals. Apart from the account opening forms, PW31 M.L. Sharma has not been able to give any opinion on rest of the items which might incriminate accused Dinesh Kumar Sharma. Thus, there is no convincing material on record to substantiate that the pay-in-slips were also filled up by accused Dinesh Kumar Sharma. Even if, as employee, he had filled up any such slip, that fact would not make him an accused.
10.15 As far as M/s Suman Metals is concerned, only two cheques issued by M/s Suman Metals had been purchased in the account of M/s Kohinoor Metals. Undoubtedly, as per bank record, accused Dinesh Kumar is the proprietor of such bank account but then I cannot shut my eyes to the fact that he was merely an employee of accused Bhajan Singh. In the present case, Dinesh Kumar Sharma has also entered into witness box as DW4 and he deposed that he was not associated with any such firm and some of the cheques presented before Dena Bank were not even signed by him and rather his signatures had been forged by someone. He also claimed that similarly situated employees of Bhajan Singh were let off but he has been falsely implicated in the present case.
CC no. 06/2011 CBI Vs Bhajan Singh etc Page 40 of 8410.16 As already noticed above, PW9 Sh. Suresh Kumar Goel has admitted that he had opened one account with PNB, Palwal at the instance of accused Bhajan Singh. He also signed several blank cheques and one such cheque issued by M/s P.K. Metals was purchased in the other account of M/s Krishna Traders owned by Bhajan Singh. His such testimony is uncontroverted and evidently the role of PW9 Suresh Kumar Goel is at par with the role of accused Dinesh Kumar Sharma, the difference being of account as PW9 Suresh Kumar Goel had opened the account in the name of M/s P.K. Metals and accused Dinesh Kumar Sharma had been forced to open account in the name of M/s Suman Metals.
10.17 PW13 Baldev Raj had also opened account in the name of M/s Indo Gem Overseas and one cheque issued by M/s Indo Gem Overseas was also purchased in the account of M/s Krishna Traders and he also claimed that he was made to sign blank cheques.
10.18 PW25 Ashish Aneja was also under the employment of accused Bhajan Singh and he along with Deepak had gone to Mumbai where accused Deepak had opened one account in the name of M/s Kalinga Overseas as per the instructions of accused Bhajan Singh.
10.19 PW20 Sh. Hari Mitter Aggarwal has merely deposed that he had seen accused Dinesh Kumar Sharma at the office of Bhajan Singh but he does not know any sort of connection between them. Merely because Dinesh Kumar Sharma was found at the premises of his employer, no criminality can be inferred.
CC no. 06/2011 CBI Vs Bhajan Singh etc Page 41 of 8410.20 Undoubtedly, accused Dinesh Kumar Sharma should not have permitted himself to be misused by his employer. He should not have succumbed to any pressure. However, fact remains that there is hardly anything which may suggest that he was part of any criminal conspiracy. There is nothing on record which may show that he had met any of the bank official for the purpose of conspiring or duping the bank. He is a lowly placed employee of accused Bhajan Singh and was mere driver. There is nothing to show that he extracted any sort of pecuniary advantage for himself or for others. Merely because he was forced to open one account and merely because cheque purportedly signed by him was purchased in the accounts in question would not ipso facto make him a co-conspirator.
10.21 As already noticed above, similarly situated other employees have been let off and are rather witnesses. There should not have been any pick and choose policy on the part of CBI.
10.22 Moreover, even if any such cheque issued by any firm is ultimately purchased in the two accounts in question, such other firm or its proprietor cannot be hauled up robotically. There has to be some nexus between the two. Here, even otherwise accused Bhajan Singh was enjoying active confidence over his employee Dinesh Kumar Sharma and was in a position to exploit him. Moreover, when any such blank cheque was signed by accused Dinesh Kumar Sharma, he did not, at all, know as to how and where such blank cheque would be eventually used by accused Bhajan Singh. At that particular moment, he was in complete lurch and, therefore, naturally not having hint that it would be used in the account owned by Bhajan Singh for duping the bank. Thus, when such cheque was written and signed, he had no inkling or intention to cheat the bank.
CC no. 06/2011 CBI Vs Bhajan Singh etc Page 42 of 8410.23 Moreover, as already noted above, accused Bhajan Singh himself owned up the entire account of M/s Kohinoor Metals and M/s K.K. Trading Corporation as well. He directly moved the 'Head Office' for sanctioning of limits in his various said accounts including said account. It also clearly indicates that as far as Dinesh Sharma is concerned, he had no concern with the account of M/s. Kohinoor Metals and M/s K.K. Trading Corporation.
10.24 As far as role and involvement of accused Variam Singh is concerned, case of the prosecution is on sticky wicket. He has been labelled as co-conspirator because as per CBI, he and accused Bhajan Singh had opened current account no. 7149 in the name of bogus firm M/s Star Trading Corporation with Oriental Bank of Commerce, NIT, Faridabad and various accommodation cheques issued from such account were eventually purchased in the present account. There is no other allegation against accused Variam Singh. It is beyond my comprehension as to how CBI was able to make such a specific statement that such account of M/s Star Trading Corporation had been opened by accused Bhajan Singh and Variam Singh. Account opening form of M/s Star Trading Corporation has not been produced or proved by the prosecution. I have seen the testimony of concerned bank official i.e. PW8 Ajay Kumar Rai. He has merely proved the statement of account of account no. 7149 of M/s Star Trading Corporation. Nobody knows as to who is the holder of such account.
10.25 I am also conscious of the fact that in one more connected case i.e. CC No. 5/11, accused Variam Singh has been sent up to face trial merely for the allegation that he had introduced one account opened by Mukhtiar Singh in the name of M/s Star Trading Corporation. Be that as it may, in the CC no. 06/2011 CBI Vs Bhajan Singh etc Page 43 of 84 present case, there is nothing on record to show that accused Variam Singh had any concern with M/s Star Trading Corporation.
10.26 Two cheques issued by M/s Star Trading Corporation had been purchased in the account of M/s Kohinoor Metals but that, ipso facto, would not make accused Variam Singh an accused even if it is assumed for a moment that he was having some concern with bank account of M/s Star Trading Corporation.
10.27 According to CBI, various pay-in-slips were also filled up by him. I have seen the report of Sh. M.L. Sharma, GEQD which has been proved as Ex. PW31/B and it does not indicate anything with respect to handwriting of accused Variam Singh. Even if it is assumed for a moment that some pay-in- slips had been filled by him in connection with account of M/s Star Trading Corporation, that would not mean and indicate that he was a co-conspirator and was having direct concern with M/s K.K. Trading Corporation and M/s Kohinoor Metals and the bank officials of Dena Bank.
10.28 Moreover, there is nothing to indicate that he had received any pecuniary advantage. There is nothing to show that he ever had any conversation with any of the bank officials. Merely because two cheques pertaining to M/s Star Trading Corporation were purchased would hardly be sufficient to brand him as a co-conspirator.
10.29 In view of my foregoing discussion, I feel that prosecution has not been able to show sufficient connecting material to suggest any association for the purpose of conspiracy between accused Bhajan Singh on one side and other three accused, namely, Deepak Kumar, Variam Singh and CC no. 06/2011 CBI Vs Bhajan Singh etc Page 44 of 84 Dinesh Kumar. Sharma on the other. It becomes very much evident that accused Bhajan Singh had rather misused his employees i.e. Deepak Kumar and Dinesh Kumar Sharma and keeping in mind the evidence on record, if the corporate veil is lifted then it would become very much evident that bank accounts were owned and controlled by none other than accused Bhajan Singh. All the three private persons/accused, namely, Deepak Kumar, Dinesh Kumar Sharma and Variam Singh are accordingly given benefit of doubt and are acquitted of all the charges levelled against them in the present case.
ROLE OF ACCUSED B.D. SHARMA & RAVINDER MALIK - INITIAL TWO BANK OFFICIALS 11.0 Posting tenure of accused B.D. Sharma (A-5) and accused Ravinder Malik (A-6) is not in dispute. They both remained posted in Maya Puri Branch of Dena Bank till 28.05.1997. A-5 was posted as Manager. He was assisted by A-6 who was designated as Accountant.
11.1 According to CBI, they had indulged into various malpractices i.e. allowing unauthorized TODs beyond discretionary power, unauthorized purchase of accommodation cheques beyond discretionary power, fraudulent debiting the amount under dishonoured cheques to imprest clearing account instead of party's account, allowing unauthorized exceedings, failure to realize the interest from the party, failure to send control returns to Regional Office regularly and punctually and also falsification of bank records.
11.2 As I have already noticed above, prime defence taken by A-5 is that everything in this regard had been done as per the instructions of Sh. S.K. Tandon of Regional Office and all such transactions were also duly CC no. 06/2011 CBI Vs Bhajan Singh etc Page 45 of 84 intimated to Sh. Tandon.
11.3 I have seen the testimony of PW3 R.C. Dahiya as well as of PW4 Naresh Sehgal. These are two important witnesses.
11.4 Undoubtedly, in some emergent situations and when there is no time to seek formal approval in writing, concerned Branch Head can take telephonic approval. With the advancement of technology, it can always be done but that would not mean that it would absolve any such official to seek formal permission in writing. It is still obligatory and indispensable. In such subsequent formal written request, branch official can always make reference to previous telephonic approval.
11.5 Here with respect to each & every irregularity, the branch officials are found taking shelter behind Sh. Tandon. Sh. Tandon is no more. He died before his deposition could be recorded. However, admittedly, he was questioned in this regard when his statement u/s 161 Cr.P.C. was recorded and he denied having given any such oral instructions. Merely by claiming that Regional Office was kept in loop or that everything was done with the approval of Regional Office or as per the direction of Regional Office would not absolve the bank officials. They could have always reduced such crucial fact in writing and could have also sent the same to Regional Office. If it believed that there was a lawful direction from Regional Office or that Regional Office was appropriately informed, there was no one in the world to prevent them in sending intimation in writing to that effect to Regional Office. Nothing of that sort has been done. As per Section 106 Indian Evidence Act, any such special fact has to be proved by the person who alleges the existence of such fact. Here, except for the bald suggestion and assertion, said two branch officials have not been able to substantiate such fact in any CC no. 06/2011 CBI Vs Bhajan Singh etc Page 46 of 84 manner whatsoever.
11.6 PW3 Sh. R.C. Dahiya, who ultimately succeeded accused P.K. Sahi, deposed that he knew Sh. Tandon who was Regional Controller of their branch. He also admitted that permission from Regional Office can be oral and in writing also. It was suggested to him that Sh. S.K. Tandon had given various directions to Maya Puri Branch from time to time to accommodate the party pending sanction and, therefore, branch had accommodated the party. He, however, answered that he could not say about others but during his tenure he never received any such direction and never accommodated anyone out of way. He also denied that any record had been deliberately hidden from CBI.
11.7 PW4 Sh. Naresh Sehgal has also claimed in his cross- examination that Sh. Tandon was Controlling Head at the relevant time. He also agreed that instructions may not always be in writing and also admitted that sanction could also come ex post facto though in emergent cases also. He also admitted that sanction could be conveyed orally or telephonically in rare cases. It was also suggested to him that he (Naresh Sehgal) was very close to Sh. S.K. Tandon and it was suggested that Dak Inward Register was made to disappear so that Sh. Tandon was protected. He labelled such suggestion as incorrect. He also denied that Maya Puri Branch was regularly informing and corresponding with the Regional Office by sending letters, control returns and dak about the exceedings and purchasing of cheques in the account of Bhajan Singh Groups and others and he (Naresh Sehgal) in connivance with S.K. Tandon got the Dak Inward Register out of sight.
11.8 Both the aforesaid two bank officials i.e. PW3 R.C. Dahiya and PW4 Naresh Sehgal are otherwise very key witnesses for prosecution. They CC no. 06/2011 CBI Vs Bhajan Singh etc Page 47 of 84 both, being the bank officials, made reference to various registers, statements of accounts and vouchers and citing discretionary powers, specified the illegalities and irregularities on the part of these two bank officials.
11.9 Present case relates to M/s Kohinoor Metals and M/s K.K. Trading Corporation and the statement of account of M/s Kohinoor Metals has been proved as Ex. PW4/X-18 (D-157) and statement of account of M/s K.K. Trading Corporation has been proved as Ex. PW4/X-29 (D-238).
11.10 Such statements of accounts actually incorporate all the transactions whether it relates to debit or credit. It seems to me that if any cheque is purchased, entry is required to be made in the statement of account by giving appropriate debit or credit and then entry is simultaneously is also required to be made in 'Bill Purchase Register' and thereafter the entry is to be made in the 'Customers' Liability Register'. Bill Purchase Register is a collective register which contains various bills purchased/discounted with respect to various accounts. However, if one has to find out the liability or outstanding with respect to any particular party or Customer, one has to refer to Customers' Liability Register. Naturally, if any cheque is to be purchased beyond discretionary power, it has to be with the permission and sanction of Regional Office and all the exceedings and bill discounting are also required to be intimated to the Regional Office by sending Control Returns. Bill Purchase Register has been proved as Ex. PW4/B (D-8). It contains various cheques which had been purchased by the official of Dena Bank from time to time. Customers' Liability Registers have been proved as under:
S. No. Period Exhibit Number
1 07.05.1996 to 07.06.1996 PW26/O (D-11)
2 07.09.1993 to 27.03.1997 PW26/N (D-12)
3 March 1997 to August 1998 PW3/75 (D-10)
CC no. 06/2011 CBI Vs Bhajan Singh etc Page 48 of 84
11.11 Account wise details of purchase of cheques as mentioned in
the aforesaid registers are as under:
M/s Kohinoor Metals:-
S. Customers' Liability Page No. Number of cheques Details of BP Number
No. Register purchased reflected
therein
1 Ex. PW3/75 (D-10) 63 14 6279, 6284, 6406, 6434, 6452,
6456, 6457, 6458, 6459, 6460,
6467, 6482 (two local and
unnumbered)
2 Ex. PW26/O (D-11) 11 8 12, 9119, 9120, 9120, 9123,
15, 9169, 9134, 33
3 Ex. PW26/N (D-12) 40 9 5615, 5618, 5636, 5696, 5698,
5709, 5710, 5792, 5794
M/s K.K. Trading Corporation:
S. Customers' Liability Page No. Number of cheques Details of such BP Number
No. Register purchased reflected
therein
1 Ex. PW3/75 (D-10) 69 1 6420
2 Ex. PW26/O (D-11) 14 (Ex. PW4/X-34) 9 9146, 9148, 9168, 9186,
9187, 9190, 9194, 29, 9168
3 Ex. PW26/N (D-12) 33 (Ex. PW4/X-33) 1 5805
11.12 If I have been able to read properly all the three relevant
documents i.e. statement of account, Bill Purchase Register and Customers' Liability Register then it would indicate that there are various purchase entries which are mentioned in 'statement of account'. Comparatively lesser number of entries are found mentioned in 'Bill Purchase Register' and even further lesser in 'Customers' Liability Register'. There are various entries in 'statement of account' which are virtually unexplained and the fault lies with the prosecution as well as with the defence.
CC no. 06/2011 CBI Vs Bhajan Singh etc Page 49 of 8411.13 Though the case of prosecution is quite simple and clear and with respect to cheque purchase, it has been claimed that cheques had been purchased unauthorizedly, indiscriminately and beyond discretionary powers on number of occasions yet the present case of M/s Kohinoor Metals and M/s K.K. Trading Corporation is limited to purchase of 15 & 6 accommodation cheques respectively. This is as per the averments appearing in the charge- sheet itself.
11.14 When the evidence was recorded during the trial, various debit and credit vouchers were proved and even these vouchers alone would indicate that many more accommodation cheques were purchased for discounting in said accounts.
11.15 I have already mentioned about the discretionary powers and naturally depending on the date of purchase, any bill or cheque beyond Rs. 50,000/- or Rs. 1 lac could not have been discounted by the Branch Manager and Accountant without prior permission and sanction of Regional Office.
11.16 Evidence led before the Court clearly indicates that number of such bill/cheques were purchased and discounted by these two bank officials.
11.17 There is nothing on record to show that accused B.D. Sharma and Ravinder Malik had sought any permission in writing before purchasing any such cheque beyond their powers. Moreover, if at all their intention was bonafide, they could have mentioned the same in control returns which are to be forwarded to the Regional Office regularly. Here, I would again like to make reference to the testimony of PW3 R.C. Dahiya. He was shown folder D-27 which contained the control returns of Maya Puri Branch for various months. He has proved various such returns as under:
CC no. 06/2011 CBI Vs Bhajan Singh etc Page 50 of 84S. No. Month Exhibit Number Signed by 1 May 1996 to August 1996 PW3/63 B.D. Sharma & Ravinder Malik 2 September 1996 PW3/64 B.D. Sharma 3 October 1996 PW3/65 Ravinder Malik 4 November 1996 PW3/66 B.D. Sharma & Ravinder Malik 5 December 1996 PW3/67 B.D. Sharma & Ravinder Malik 6 January & February 1997 PW3/68 Ravinder Malik & B.D. Sharma 7 March & April 1997 PW3/69 B.D. Sharma 8 May 1997 PW3/70 I.S. Suri 9 June 1997 PW3/71 P.K. Sahi 10 July 1997 PW3/72 P.K. Sahi & I.S. Suri 11 August 1997 PW3/73 I.S. Suri 12 September 1997 PW3/74 I.S. Suri & PW3 R.C. Dahiya 11.18 I have seen all the control returns very carefully and it becomes
very much apparent that initially the control returns were sent by accused B.D. Sharma and Ravinder Malik, they did not make any mention of TOD, exceedings, overdrafts, bill purchase and irregular CC hypothecation in the account of M/s Kohinoor Metals and M/s K.K. Trading Corporation. Such practice continued till May 1997 and then Sh. P.K. Sahi joined the branch on 23.06.1997 and as far as control returns of June 1997 is concerned, these were signed by P.K. Sahi and in Annexure-3 of Control-I, he clearly reported the outstandings. Qua M/s Kohinoor Metals, such outstandings were shown as Rs. 61.33 lacs against the sanctioned limit of Rs. 17 lacs and qua M/s K.K. Trading Corporation, the outstandings were shown as Rs. 36.06 lacs against the sanctioned limit of Rs. 2 lacs. Similarly, in July 1997, he reported that liability/outstanding in the account of M/s Kohinoor Metals was Rs. 41.77 lacs and in M/s K.K. Trading Corporation, the outstanding was shown as Rs. 14.79 lacs. In the control return pertaining to August 1997, such liability was shown as Rs. 61.11 lacs and Rs. 19.52 lacs respectively. These returns were signed by Sh. I.S. Suri.
CC no. 06/2011 CBI Vs Bhajan Singh etc Page 51 of 8411.19 As far as accused B.D. Sharma and Ravinder Malik are concerned, it is indeed not understandable as to why they did not keep the Customers' Liability Register updated and did not properly report about the exceedings to Regional Office. As already noticed above, if they had been given permission by Sh. Tandon, they could have easily mentioned about such permission in the control returns. Instead of reporting, they rather did not mention any outstanding or any instance of bill purchase in limited Control Returns sent by them to Regional Authority. Their such act is bound to raise eyebrows.
11.20 Moreover, when the cheques purchased in the account in question returned dishonoured, they should have debited the same to the account of party but for totally inexplicable reasons, these were debited to the suspense account known as 'imprest clearing account'. PW3 Sh. R.C. Dahiya as well as PW4 Naresh Sehgal have made extensive reference to various such vouchers which go on to indicate that the cheques, when returned dishonoured, were debited to imprest clearing head and not to the party's account. It is also quite apparent that various cheques purchased by these two bank officials were not even sent for realization. Those were perhaps kept in cold storage. Few such cheques were sent after considerable delay and as already noticed above that when some of such cheques returned dishonoured, these were either debited to imprest clearing head or re-purchased. This was naturally done so that nobody comes to know about the rising outstanding in the party's account. I am not ready to buy the defence theory that even such debit to the imprest clearing head was as per the instructions of Sh. Tandon. I rather feel that they are unnecessarily trying to malign the departed soul. Testimony of PW4 Naresh Sehgal also clearly indicates that temporary overdrafts (TODs) was allowed to M/s Kohinoor Metals and M/s K.K. Trading Corporation on number of occasions.
CC no. 06/2011 CBI Vs Bhajan Singh etc Page 52 of 84Relevant portion of his deposition reads as under: -
"As per statement of account D-157 at page-5, debit balance in the account of M/s Kohinoor Metals was Rs. 2,92,787.25 on 16.04.1996 against sanctioned limit of Rs. 2 lacs i.e. exceeding was granted beyond discretionary powers of Branch Manager. At page-6 of D-157, on 23.05.1996 debit balance was Rs. 2,46,785.55 against sanctioned limit of Rs. 2 lacs. At page-7 of D-157, on 08.07.1997 debit balance was Rs. 8,24,178.55 against sanctioned limit of Rs. 2 lacs. At page-10 of D-157, on 11.02.1997 overdrawing were allowed upto Rs. 8,13,039.90 against sanctioned limit of Rs. 2 lacs. At page-11 of D-157, on 18.03.1997 overdrawing were allowed upto Rs. 15,95,274.90 against sanctioned limit of Rs. 12 lacs (Rs. 2 lacs + Rs. 10 lacs convertible limit). At page-12 of D-157, on 19.04.1997 overdrawing were allowed upto Rs. 26,74,172.93 against sanctioned limit of Rs. 12 lacs. At page-13 of D-157 on 17.05.1997 overdrawing were allowed upto Rs. 40,33,932.90 against sanctioned limit of Rs. 17 lacs (Rs. 2 lacs + Rs. 15 lacs convertible limit)."
.........
.........
"On 22.04.1996 TOD of Rs. 77,025/- was granted to M/s K.K. Trading Corporation against discretionary power of Rs. 10,000/-. On 29.06.1996 TOD upto Rs. 1,24,621/- was granted. On 03.07.1996 TOD upto Rs. 1,95,440/- was granted to M/s K.K. Trading Corporation. TOD of rupees more than 1 lac was also granted on various dates to M/s K.K. Trading Corporation."
11.21 They naturally exceeded their powers regarding grant of TOD as well and again there is no explanation as to why such concession and leverage was given by them to the party. They have merely one answer i.e. it was done at the behest of Sh. Tandon. Their such stand is not believable at all.
11.22 Sh. M.S. Khan, learned counsel for A-5 has contended that there was no malafide on the part of bank officials and they had debited the CC no. 06/2011 CBI Vs Bhajan Singh etc Page 53 of 84 amount to imprest clearing as per the instructions of Regional Office as they were told that sanction was pending consideration and since no concrete information came from Regional Office and they were about to be transferred, they reversed the entries and then debited the amount to the party's account. It has been argued that had there been any malafide intention on their part, they would not have reversed the entries.
11.23 I do not find any merit in such contention. Cheques were purchased indiscriminately and unauthorizedly. It was merely a current account initially with no CC limit and undue favour was shown to the party by purchasing the cheques, time and again, without sending the cheques for realization or without waiting for the realization or even despite the dishonourment of previously purchased cheques. It was also not attempted to ascertain whether the cheques were of genuine trade transactions or were mere accommodation cheques. They had no business to debit the amount under dishonoured cheques to imprest clearing head. By their such act, they have tried to hide the actual outstanding of the party. Merely because they reversed the entries subsequently when they were about to be transferred would not exonerate them. Probably, they knew that some day they are going to be exposed and caught and, therefore, they themselves, before relinquishing the charge, reversed the entries. They cannot be now heard saying that they were having good intention. Rather it was because of their completely insensitive and unjustifiable attitude that the account eventually turned NPA.
11.24 It has been argued that party was in touch with the Regional Authority as well as with the Head Office and despite alleged irregularities and shortcomings, limits were sanctioned in all the accounts including the present account and accused Bhajan Singh was asked to submit a collateral CC no. 06/2011 CBI Vs Bhajan Singh etc Page 54 of 84 worth Rs. 2.65 crores and, therefore, alleged irregularities stood condoned automatically.
11.25 There is no dispute that party had moved Head Office directly. In this regard, reference be made to Ex. PW4/DB. It is a letter dated 20.01.1998 issued by the office of General Manager, Head Office of Dena Bank informing about the approval of certain credit facilities as per the approval accorded by Sh. M.M.R. Umarjee, General Manager on 19.01.1998.
11.26 As far as M/s Kohinoor Metals is concerned, there was outstanding of Rs. 60.61 lacs and unauthorized bill purchase worth Rs. 9.10 lacs against the total sanctioned limit of Rs. 17 lacs and, therefore, the total exceedings in the said account was to the tune of Rs. 52.17 lacs and the sanctioning authority enhanced the CC hypothecation limit from Rs. 2 lacs to Rs. 60.61 lacs and also permitted BP (cheques limit) of Rs. 9.10 lacs.
11.27 Regarding M/s K.K. Trading Corporation, there was outstanding of Rs. 48.39 lacs against the total sanctioned limit of Rs. 2 lacs and, therefore, the total exceedings in the said account was to the tune of Rs. 46.39 lacs and the sanctioning authority converted the outstanding into a regular CCL of Rs. 48.50 lacs which was to be repaid by reducing the limit by Rs. 2 lacs per month.
11.28 Head Office also noticed that the outstanding was exceeding over the sanctioned limit and there were bill purchases also and the concerned Branch Manager had purchased the bills without assessing the account and beyond delegated powers. It was also mentioned that party had expressed that the amount availed from the bank had been invested in the business and, therefore, it requested to renew and enhance the credit facility.
CC no. 06/2011 CBI Vs Bhajan Singh etc Page 55 of 84It was also observed by Head Office that all the accounts i.e. account of M/s Krishna Traders, M/s Kohinoor Metals, M/s Balaji Metals and M/s K.K. Trading Corporation were irregular and the Branch Manager had permitted exceedings beyond discretionary powers. It also noticed that applicant firm was not aware whether limits had been sanctioned or not and whether disbursement made by the Branch Manager was within their powers or not or whether they had taken necessary approval from the appropriate authorities or not. It was only on the basis of assurance given by Bhajan Singh that the limits were enhanced and he was asked to submit collateral worth Rs. 2.65 crores. It can also be seen from such approval that there was some difference of opinion between the party and the Regional Office and, therefore, party had directly approached the Head Office.
11.29 It needs no discerning eyes to notice that Head Office had sanctioned the limits merely in order to recover the dues. It was also apparently annoyed with the overdrawings, exceedings and purchase of bills. However, keeping in mind the best interest of the bank and the request made by the party, limits were granted. It will, however, not mean that previous misdeeds stood wiped out. Merely because limits were renewed and enhanced would not evaporate the illegalities committed by the concerned bank officials and, therefore, bank officials cannot take any shelter behind such grant of limits.
11.30 Undoubtedly, such fact related to sanction of limit should have been disclosed during the investigation by the concerned bank officials also. Except for Mr. Tandon, no other bank official came up with any specific assertion on this score but merely because such fact was not disclosed would not mean that there is a doubt in the case setup by the prosecution.
CC no. 06/2011 CBI Vs Bhajan Singh etc Page 56 of 8411.31 It also really does not matter much whether collateral property was eventually submitted by the party or not or whether the title documents of the property were fake. Even if the Legal Search Report (LSR) confirmed the documents of such collateral property to be in order as per the inspection from the office of Sub Registrar, it is the actual physical possession of the property which matters most. It has been claimed by PW2 Sh. G.L. Khandelwal that property furnished as collateral was found to be fake and such fact has not been challenged by accused Bhajan Singh. PW3 Sh. R.C. Dahiya has also deposed that such property was found to be fake.
11.32 Merely because R.C. Dahiya or Regional Office did not take any step to seize the stock for recovering the outstanding through sale of such stock would not mean that the concerned two bank officials-accused are entitled to exoneration. Naturally, if the bank was already in possession of some property of the borrower firm, it should have immediately taken steps to sell those off in order to recover the outstandings. Nothing of that sort was done for the reasons best known to the concerned bank officials but the inaction on this score would not automatically come to the rescue of accused- bank officials.
11.33 Accountant cannot be permitted to take shelter behind the fact that he had no option but to obey the commands of his superiors. Any Branch Manager is also simultaneously saddled with various other administrative jobs being branch head. Undoubtedly, any such purchase of cheque has to be with his concurrence but it is the Accountant, who prepares and counter signs vouchers related to bill purchase. He has to share the responsibility equally, if not more. Moreover, signatures of two officers are required for such purpose. It is for the purposes of proper scrutiny and cross-checking. Role of other official is not that of a Rubber-stamp. He can always see whether his CC no. 06/2011 CBI Vs Bhajan Singh etc Page 57 of 84 superior has done anything unauthorized or illegal. He cannot be heard claiming that he had no option but to sign blindly on such vouchers of Bill- Purchase. Here accused Ravinder Malik, who was Accountant under Sh. B.D. Sharma never tried to report the irregularities to anyone. He knew that the cheques, which had been returned dishonoured on number of occasions, were to be debited to the party's account and not to the imprest clearing account. He rather permitted entries in imprest clearing account. He knew that the bill could not have been purchased beyond discretionary power and despite that number of bills/cheques were purchased/discounted under his signatures also and the amount was beyond the discretionary powers. There are various instances wherein he himself had also purchased the cheques beyond discretionary power. He has not bothered to explain as to why he purchased cheques when the account was already showing exceedings. Merely, because the Branch Manager also subsequently on resuming duties approved his action would not mean that he stands exonerated. If, as Accountant, he had not signed any such voucher and had not permitted the debiting to imprest clearing account, the things would have been totally different today. His inaction and signing without any protest speaks volumes of his malafide intentions and makes him a co-conspirator.
VIGILANCE REPORT OF DENA BANK 12.0 It is important to mention here that three bank officials of Dena Bank had been directed to investigate the matter. Accordingly, a vigilance inquiry was conducted by Sh. Rameshchandra A. Vora, Sh. A.B. Nargolkar and Sh. Naresh Kumar Sehgal. Vigilance report is also part of relied upon documents. Sh. Vora had forwarded a copy of such report to CBI vide letter dated 20.07.1999 and such report has been proved as Ex. PW4/DE (D-3).
CC no. 06/2011 CBI Vs Bhajan Singh etc Page 58 of 8412.1 Out of the aforesaid three vigilance officers, Sh. Naresh Kumar Sehgal only has graced the witness box. I have seen his testimony and he did depose in his examination-in-chief that investigation was done with respect to irregularities in the accounts of M/s Krishna Traders, M/s K.K. Trading Corporation, M/s Kohinoor Metals and some other accounts. He also deposed that serious and fraudulent irregularities were found in all such accounts. He also deposed that all such firms had been granted temporary overdrafts (TOD) beyond the discretionary powers and cheques were purchased beyond discretionary power and also unauthorizedly and that cash credit limit was also exceeded on various occasions. He also deposed that B.D. Sharma and Ravinder Malik had fraudulently debited Dena Bank's General Ledger Account i.e. imprest clearing account when the cheques returned unpaid/dishonoured and the debit was not made to the CC account of the concerned firms. He deposed that even Sh. P.K. Sahi purchased cheques on various occasions beyond discretionary power and also revealed about the quantum of loss in various such accounts.
12.2 Fact, however, remains that in his examination-in-chief, he did not make any mention about the vigilance inquiry report and it was only when he was cross examined, he was shown such report and then it was exhibited. Importantly, such report bears signatures of Sh. Vora only. Sh. Sehgal deposed that the report had been prepared by Sh. Vora, therefore, and he did not even recall whether he had seen and read such report or not. Sh. Vora was cited as witness but he has not been examined by the prosecution. Sh. Nargolkar is not found cited as witness even in the list of witnesses.
12.3 However, since during course of the arguments, even defence counsels referred to such report, let me see the same.
CC no. 06/2011 CBI Vs Bhajan Singh etc Page 59 of 8412.4 It seems to be a very comprehensive inquiry and various documents and records were seen and report of snap audit conducted by M/s K.K. Goyal & Associates for the period August 1997 and May 1999 was also seen and it was found that the collateral securities were available but these were not properly recorded. There was found non-submission of stock statement. Drawings were allowed without considering the drawing power. There was no confirmation of end use of fund in any of the term loan account. Statutory record for TOD register, DP register etc were not maintained. It was also noticed that Regional Authority had not visited the branch since 1996 and that the Control Returns were sent in irregular manner. As per the vigilance inquiry, the Control Returns had been sent as per the following details:-
Sl. No. Control Returns for the month of Received by Regional Authority 1 April 1996 to June 1996 07.08.1996 2 October 1996 05.03.1997 3 November 1996 15.07.1997 4 December 1996 05.02.1997 5 January, February 1997 15.07.1997 12.5 Such vigilance report would show that accused B.D. Sharma had shown total disregard to the prescribed norms and procedures and he frequently allowed TOD beyond his discretionary power. There was TOD of Rs.2.18 lacs in M/s Krishna Traders and as on 04.03.1996, TOD of Rs. 0.89 lacs in M/s Kohinoor Metals as on 20.07.1996 and of Rs.1.95 lacs in M/s K.K. Trading Corporation as on 03.07.1996. These TODs were neither reported to controlling authority nor any confirmation was sought from the controlling authority. These frequent TODs were regularized subsequently by obtaining sanction of CC limit. There were frequent exceedings with no reporting to Regional Authority. There was unauthorized purchase of cheques and when purchased cheques returned unpaid, they were instead debited to imprest CC no. 06/2011 CBI Vs Bhajan Singh etc Page 60 of 84 clearing account instead of party's account. Local cheque purchase were neither written in B.P. Register nor in Customers' Liability Register. It was also noticed that bills/cheques purchased were handed over to party for hand delivery.
12.6 Regarding role of Sh. Ravinder Malik, posted as Accountant under Sh. B.D. Sharma, it was claimed that he also never reported the bill purchase/exceedings/TOD to the Regional Authority and concealed the true status of accounts and he also abused his position by debiting the amount to imprest clearing account to accommodate customers i.e. Bhajan Singh group of accounts. It was also found that even he had unauthorizedly purchased cheques and such purchased cheques were presented for realization after 6-7 days and moreover when these returned unpaid, these cheques were again represented to avoid showing TOD/exceedings in the accounts.
12.7 As regards Sh. P.K. Sahi, it was mentioned that he had also purchased cheques beyond his discretionary power despite the fact that he was explicitly restrained not to use his discretionary power by NIO vide letter dated 09.08.1997 and he further exposed the bank by purchasing cheques and permitting exceedings. It was also mentioned that Sh. Sahi reported the bill purchase after considerable delay though these were supposed to be reported daily. As regards I.S. Suri, nothing substantial was found with respect to the accounts in question.
12.8 From the side of defence it has been contended that such report clearly indicts one Sh. Ranbir Singh, Senior Manager who also purchased cheques in the similar manner though in different account. It also indicted Sh.
Ashwani Kumar, Clerk who had prepared most of the vouchers but he was exonerated holding that he had merely carried out the instructions of his CC no. 06/2011 CBI Vs Bhajan Singh etc Page 61 of 84 seniors i.e. Sh. B.D. Sharma and Sh. Ravinder Malik. It has also been argued that such report would also show that inward mail register of Regional office was missing which fact was found to be mysterious even by the Vigilance Officials.
12.9 Be that as it may, the ultimate responsibility lies with the Branch Manager and Accountant only.
ROLE OF ACCUSED P.K. SAHI AND I.S. SURI 13.0 It is indeed very challenging to adjudicate the role and involvement of both these bank officials.
13.1 This, to me, seems to be the most difficult and arduous task.
13.2 The accounts in question were already operational and Sh. Sahi had joined the branch subsequently. It is very much evident that the branch was virtually in a mess when Mr. Sahi joined and it was not an easy job for any such incumbent to straighten the record in a very short duration. His job was two-fold. He was to ensure that the recoveries were there and the accounts were made regular and he had also been directed to send the various control returns for the previous period. Simultaneously, he was also to ensure that no account turns NPA eventually.
13.3 I have already noted above that his predecessors were least bothered about preparing proper Control Returns and sending the same to Regional Authority.
CC no. 06/2011 CBI Vs Bhajan Singh etc Page 62 of 8413.4 Sh. Sahi joined on 23.06.1997 and same day itself, he was directed to prepare the Control Returns for various previous period and to send the same without any delay.
13.5 D-27 contains various control returns. The entire bunch has been proved as Ex. PW3/61. Such bunch contains one letter dated 23.06.1997 signed by Sh. Vinay Lamba, the then Chief Manager. It is addressed to Branch Manager and vide such letter dated 23.06.1997, Branch Manager was asked to send the Returns. As per the contents of such letter, which has not been proved by the prosecution to the detriment of accused P.K. Sahi, Regional authority reported that it had not received the Control Returns of November 1996, January 1997, February 1997, April 1997 and May 1997 and branch was requested to submit the same and also to adhere to the time schedule for submission of returns. As per remarks appearing in hand in the same letter, there is a request to Mr. Sahi to pay personal attention and to ensure timely submission of all the control returns.
13.6 It has already been noticed that PW3 Sh. R.C. Dahiya deposed that Sh. B.D. Sharma and his deputy Sh. Ravinder Malik had sent a very few control returns and even those returns did not give clear picture with respect to the accounts in question. Sh. Sahi did prepare all such returns and sent the same to Regional Authority albeit belatedly. Such delay was, even otherwise, expected because the job was herculean one.
13.7 Reference be made to letter No. DB/HYP/ND/97 dated 14.07.1997. It is signed by accused P.K. Sahi and he sent the Control Returns to Chief Manager with respect to November 1996, January 1997, February 1997, January to April 1997 and May 1997. Thus, approximately within 21 days of his joining, he sent all these returns.
CC no. 06/2011 CBI Vs Bhajan Singh etc Page 63 of 8413.8 I would now be compelled to make reference to some of the documents contained in another case of Bhajan Singh Group of Companies i.e. CBI case pertaining to M/s Balaji Metals. Several documents in this regard are contained therein as D-199 to D-287 and surprisingly even those documents are lying unproved. D-275 of that case contains statement of advances granted by the Branch Manager beyond sanction limits/discretionary powers. Such statement is a daily statement known as BR-RO-D-3 and it was received in the office of DGM, Dena Bank on 25.07.1997 as per the stamp-endorsement. It contains the details of cheques purchased in the accounts of M/s Krishna Traders and M/s Kohinoor Metals and it is also mentioned by Sh. P.K. Sahi in such statement that the cheques had been purchased to recover gradually the exceedings in the accounts and the adhoc proposal of BP limit was under consideration and he requested to confirm the action of cheque purchase. He also mentioned in such statement that all such cheques had been duly realized. There is one more similar statement (D-273 of that case) which also gives various details regarding various cheques so purchased and realized as well and Sh. Sahi again mentioned therein that as discussed these cheques had been purchased for gradually reducing the liability and since most of the cheques had been already realized, he requested that the action may be confirmed.
13.9 Undoubtedly, as per the endorsement appearing thereon, the Regional office denied that there was any such discussion and claimed that no such fact was ever brought to their notice. There is also a separate letter issued by Sh. Vinay Lamba, Chief Manager (NIO). Such letter is dated 11.08.1997 (D-274 of that case) whereby the branch was advised not to purchase any such cheque in future without any prior permission. According to accused P.K. Sahi, he received such letter on 14.08.1997 and thereafter, he did not purchase even a single cheque.
CC no. 06/2011 CBI Vs Bhajan Singh etc Page 64 of 8413.10 Accused P.K. Sahi had also sent Control Returns for the month of June 1997 vide letter DB/HYP/CON. RET./97 dated 12.08.1997 (D-216 of that case). He also sent BR-RO-D-3 as on 31.07.1997 (D-217) and gave details of 23 cheques which had been purchased in different accounts and he also mentioned therein "as discussed, the cheques were purchased for gradually reducing the liability since all the cheques have already been realized confirm our action".
13.11 Regional authority responded said letter. Reply is contained in letter dated 22.08.1997 (D-215 of that case) in which Regional Authority directed that the control returns be submitted by 10th of succeeding month positively. Undoubtedly, Regional authority also felt that there was delay in submitting the returns and it also noticed that there were huge exceedings without seeking sanction of the competent authority and it asked for explanation including the names of those officers who permitted such huge exceedings jeopardizing bank's interest.
13.12 Accused P.K. Sahi again informed the Regional authority vide letter No.DH/HYP/ADV/97 dated 11.09.1997 (D-272 of that case) that as discussed during the Branch Manager's review meeting, the cheques had been purchased to gradually reduce over drawn amount as the abrupt stopping of such facility would have resulted in slippage of such accounts to NPA. He also informed about the present accounts status of all such accounts including the account of M/s Kohinoor Metals, M/s Krishna Traders, M/s K.K. Traders Corporation and M/s Balaji Metals. Such letter is also lying unproved in that case.
13.13 All such documents are not made part of present case. These should have been placed here also and someone from Regional Office should CC no. 06/2011 CBI Vs Bhajan Singh etc Page 65 of 84 have made mention of such letters and should have explained the facts properly. I guess, Mr. Lamba was the best person on this score. Fact of the matter is that such crucial letters have not been proved by the prosecution at all. I, therefore, cannot read those letters to the detriment of accused but these can still be looked into if accused wants me to consider those for establishing that these letters were manifestly indicative of the fact that he had made everything crystal clear to the Regional Authority.
13.14 As per the stand taken by accused P.K. Sahi, he had been purchasing the cheques with the oral instructions and for the purposes of reducing liability. He was also compiling the returns and had even intimated the Regional office for obtaining post facto sanction.
13.15 In such a backdrop, it has to be seen whether the role and conduct of accused P.K. Sahi is at par with his predecessor or is any different. I feel that there are several significant differentiation and these can be said to be as under:-
i) His predecessors did not prepare the Control Returns timely and did not send the same regularly. Rather the Regional authority had lamented that the control returns for November 1996, January 1997, February 1997, April 1997 and May 1997 had not even been received by June 1997. It is also very much evident from the testimony of Sh.
Dahiya that few returns which were submitted by his predecessor Sh. Sharma did not even reveal the clear picture as the exceedings and bill purchases were never reported. Here, as far as P.K. Sahi is concerned, he prepared returns for the previous period which was not an easy task and thus kept the Regional authority duly informed.
CC no. 06/2011 CBI Vs Bhajan Singh etc Page 66 of 84ii) As and when any cheque purchased by his predecessors returned dishonoured, they, on various occasions, instead of debiting the same to the party's account, debited the same to the imprest clearing head which act was palpably illegal with object to screen the exceedings in the party's account. No such role is attributed to P.K. Sahi at all. Even as per the charge sheet and the evidence appearing on record, there is no debit entry made by him or during his tenure in imprest clearing head.
iii) His predecessors had purchased cheques on number of occasions and did not make appropriate entries in the relevant registers and the cheques were not even sent for realization. However, as far as accused P.K. Sahi is concerned, allegations against him are not that serious.
13.16 Though the statements of accounts contain various instances of bill purchase or cheque purchase but as per the charge sheet, only six cheques had been purchased by accused P.K. Sahi and I.S. Suri in the accounts in question. They had purchased five cheques in the account of M/s Kohinoor Metals and only one cheque in the account of M/s K.K. Trading Corporation.
13.17 Thus their role seems limited to six cheques only. Moreover, these accounts were old accounts and were not even opened during the tenure of accused P.K. Sahi.
13.18 Importantly the accounts in question were mere CC Accounts and even the limits were sanctioned and enhanced subsequently at a later point of time. Relevant record in this regard pertaining to M/s Kohinoor Metals is contained in D-29 which indicates that such account was sanctioned CC no. 06/2011 CBI Vs Bhajan Singh etc Page 67 of 84 limit of Rs. Two lacs which was thereafter increased to Rs.17 lacs. Fact remains that such documents have not at all been referred to and proved by the prosecution during the trial.
13.19 As per the charge sheet, accused P.K. Sahi and I.S. Suri purchased accommodation cheques in furtherance of criminal conspiracy of their predecessors.
13.20 I am really at bay to understand as to on what premises such assertion has been made.
13.21 There is nothing before me which may indicate that all the four bank officials were hand-in-glove and that they all purchased the cheques in furtherance of a common conspiracy. Undoubtedly, when cheques had been unauthorizedly purchased by accused B.D. Sharma and Ravinder Malik and when they, on several occasions, did not present those cheques anywhere and when they made entries in imprest clearing head and when they reversed the entries subsequently, accused P.K. Sahi and I.S. Suri were nowhere in picture. Accused P.K. Sahi and I.S. Suri cannot be saddled with the conspiracy for those acts committed by their predecessors. Similarly, if there is any irregularity on the part of accused P.K. Sahi and I.S. Suri, their predecessors cannot be made to face trial for the acts committed by their successors.
13.22 Merely, because the alleged irregularity or misconduct continued would not mean that all the four bank officials were part of one and the same conspiracy.
CC no. 06/2011 CBI Vs Bhajan Singh etc Page 68 of 8413.23 Be that as it may, fact remains that as far as accused P.K. Sahi is concerned, he may have also committed a misconduct by purchasing the cheques but since he kept the Regional Authority informed in writing albeit belatedly, his intention cannot be said to be a malafide one. He cannot be branded 'corrupt' for purchasing few cheques during his short tenure as being branch head, he also sincerely wanted to reduce the exceedings.
13.24 Importantly. most of the cheques purchased in his tenure were duly honoured.
13.25 PW3 R.K. Dahiya has also admitted that the Control Returns sent by Sh. P.K. Sahi (Ex. PW3/71) mentioned about the various details in Annexure 3. He also admitted that even during his own tenure i.e. tenure of PW3 R.C. Dahiya, the operation in the accounts of Bhajan Singh Group was being made to reduce the outstanding in the accounts.
13.26 He also admitted that he himself and Mr. Sahi had been deputed to effect recovery in the accounts of Bhajan Singh and Group.
13.27 He also admitted that whenever the cheques were purchased during the tenure of accused P.K. Sahi, the recovery was also made in the account of party and on all the occasions, the debit balance was reduced.
13.28 He also admitted that departmental inquiry was held but accused P.K. Sahi was reinstated. His testimony also indicates that oral permission could also be obtained from Regional authority. PW4 Naresh Sehgal has also admitted in his cross examination that suspension of Sh. Sahi was revoked. He also very specifically admitted that most of the cheques purchased by P.K. Sahi were duly realized. So much so, he also CC no. 06/2011 CBI Vs Bhajan Singh etc Page 69 of 84 admitted that all such cheques purchased by P.K. Sahi were reflected in appropriate registers as per bank rules. He also pleaded his ignorance with respect to certain questions. It will be worthwhile to extract relevant part of his deposition. It reads as under:-
It is correct that a domestic inquiry was initiated against the accused P. K. Sahi. It is correct that his suspension was revoked. It is correct that he is still working in the bank. No account was opened by P. K. Sahi related to account in question. It is correct that most of the cheques purchased by P. K. Sahi were realized.
Q. Whether all the cheques purchased were reflected in appropriate registers as per bank's Rules?
A. Yes.
There was no such instance of debiting in imprest clearing account. Q. Is it correct that all the cheques purchased during the period of P. K. Sahi were reported to the regional office in BRMO, D3 statement with footnote?
A. I do not remember.
I cannot say whether all exceeding temporary over drafts etc were reported to regional office on monthly basis through various control returns by P. K. Sahi. Vol. In prescribed time. It is correct that previous branch managers were also purchasing the cheques from accounts in question.
I am not aware that most of the cheques purchased during the relevant period of P. K. Sahi were realized under 10% cut back policy as permitted by regional office to recover the exceedings in the accounts in question.
Q. Is it correct that due to proper reporting made by Sh. P. K. Sahi to the regional office, the investigation got started from regional office and head office?
A. I cannot say.
Q. Is it correct that P. K. Sahi reported to the regional office the
position and status of the accounts in question through control return, joining report and various statements and only thereafter investigation was started?
A. I cannot say.
CC no. 06/2011 CBI Vs Bhajan Singh etc Page 70 of 84
13.29 Such answers coming from the mouth of an official who
conducted vigilance enquiry are very awkward, gawky and embarrassing to prosecution and have caused serious prejudice to the defence of accused P.K. Sahi.
13.30 PW4 Naresh Sehgal was also confronted with various control returns sent by Sh. P.K. Sahi and he admitted that these were BR-RO-D-3 for the month of June, July and August 1997 and contained the details of cheques purchased during those months.
13.31 In view of my foregoing discussion, Sh. P.K. Sahi and I.S. Suri do not seem to have indulged in any criminal misconduct. They had purchased some cheques for Bhajan Singh Group of accounts but even as per the prosecution witnesses, most of such cheques had been realized.
There were written communication informing the Regional Authority about the purchase of cheques. They also compiled report with respect to various previous period and sent the same to Regional Authority. Even if they were not supposed to have purchased any accommodation cheque without prior sanction, their such act is not found laced with any malafide intention. Perhaps the idea was to reduce the exceedings somehow and to realize the amount. Prosecution has not been able to show as to how the exceedings, during their tenure, exceeded when as per the testimony appearing on record, most of the cheques purchased by them were honoured. Since this aspect has not been elucidated in the proper manner, it would be hazardous to hold them guilty merely on the basis of guess work or imagination. It might be also due to reversal of imprest entries as it seems that several such entries were reversed in July 1997 also.
CC no. 06/2011 CBI Vs Bhajan Singh etc Page 71 of 8413.32 I have thus not been able to come across any real instance of corruption on the part of these two public servants. Surely, they had purchased accommodation cheques and they did not obtain prior approval in writing. But then, it can only be said to be a misconduct and deviation from banking norms. Any act of misconduct does not automatically become an act of criminal misconduct as well. An act of misconduct remains in the realm of negligence and dereliction of duty alone whereas a criminal misconduct demonstrates malafide and dishonest intention. There is nothing to indicate that they were acting in league with the borrowers. There is no material to suggest that they had obtained any pecuniary advantage or valuable security for themselves. There is nothing to indicate that they had indulged in any corrupt practices. There is nothing to indicate that they had abused or misused their official position. Even if they are found to be touch lax, such fact, by itself, would not make them accused or co-conspirators.
13.33 Para 16 and 17 of C.K. Jaffer Sharief v. State, (2013) 1 SCC 205 are worth extracting which clearly go on to show that even if there is an act prohibited by law but not accompanied by malafide intention and not actuated by any malice, it will not attract sec 13(1)(d) PC Act. These Paras read as under:-
"16 A fundamental principle of criminal jurisprudence with regard to the liability of an accused which may have application to the present case is to be found in the work Criminal Law by K.D. Gaur. The relevant passage from the above work may be extracted below:
"Criminal guilt would attach to a man for violations of criminal law. However, the rule is not absolute and is subject to limitations indicated in the Latin maxim, actus non facit reum, nisi mens sit rea. It signifies that there can be no crime without a guilty mind. To make a person criminally accountable, it must be proved that an act, which is forbidden by law, has been caused by his conduct, and that the conduct was accompanied by a legally blameworthy attitude of mind. Thus, there are two CC no. 06/2011 CBI Vs Bhajan Singh etc Page 72 of 84 components of every crime, a physical element and a mental element, usually called actus reus and mens rea respectively."
17 It has already been noticed that the appellant besides working as the Minister of Railways was the head of the two public sector undertakings in question at the relevant time. It also appears from the materials on record that the four persons while in London had assisted the appellant in performing certain tasks connected with the discharge of duties as a Minister. It is difficult to visualize as to how in the light of the above facts, demonstrated by the materials revealed in the course of investigation, the appellant can be construed to have adopted corrupt or illegal means or to have abused his position as a public servant to obtain any valuable thing or pecuniary advantage either for himself or for any of the aforesaid four persons. If the statements of the witnesses examined under Section 161 Cr.P.C show that the aforesaid four persons had performed certain tasks to assist the Minister in the discharge of his public duties, however insignificant such tasks may have been, no question of obtaining any pecuniary advantage by any corrupt or illegal means or by abuse of the position of the appellant as a public servant can arise. As a Minister it was for the appellant to decide on the number and identity of the officials and supporting staff who should accompany him to London if it was anticipated that he would be required to perform his official duties while in London. If in the process, the rules or norms applicable were violated or the decision taken shows an extravagant display of redundance it is the conduct and action of the appellant which may have been improper or contrary to departmental norms. But to say that the same was actuated by a dishonest intention to obtain an undue pecuniary advantage will not be correct. That dishonest intention is the gist of the offence under Section 13(1)(d) is implicit in the words used i.e. corrupt or illegal means and abuse of position as a public servant. A similar view has also been expressed by this Court in M. Narayanan Nambiar v. State of Kerala [AIR 1963 SC 1116 : (1963) 2 Cri LJ 186 : 1963 Supp (2) SCR 724] while considering the provisions of Section 5 of the 1947 Act."
13.34 Be that as it may, I am inclined to grant benefit of doubt to both of them. Moreover, as far as accused P.K. Sahi is concerned, no serious CC no. 06/2011 CBI Vs Bhajan Singh etc Page 73 of 84 action was taken against him in the departmental proceedings and he was let off with a penalty of reduction in scale. Rather the disciplinary authority despite keeping in mind the alleged misconduct regarding exceedings of discretionary powers exonerated him keeping in mind his integrity and honesty. It would be travesty of justice if an honest and upright officer is held guilty on the same set of allegations and punished under Prevention of Corruption Act which primarily is meant to take dishonest and corrupt officials to the task.
OTHER DEFENCE CONTENTIONS 14.0 It has been strongly argued by Sh. M.S. Khan and Sh. K.K. Patra that the sanction given by PW17 Sh. Sarve Mitter Gakhar is without application of mind and also that such sanction has been granted by a authority not competent to accord the same. I have seen testimony of PW17 Sh. Sarve Mitter Gakhar. He has proved sanction orders as Ex. PW17/A and Ex. PW17/B. Ex. PW17/A pertains to sanction of prosecution of accused B.D. Sharma and Ravinder Malik and sanction Ex. PW17/B pertains to accused P.K. Sahi and I.S. Suri. In such sanction orders, Sh. Gakhar, who was at that time posted as Assistant General Manager/Regional Authority, claimed that he was 'competent authority' to remove all such officials from the office and accordingly sanction was granted by him on 15.12.2000.
14.1 In his cross-examination, he claimed that the format of sanction had been prepared through Personnel Department & Legal Department and after going through the same, he had signed. He also claimed that before granting sanction, he had a discussion with the officials of Branches including Personnel Department and Legal Department. He does not seem to be sure about various penal sections as such but fact remains that he categorically CC no. 06/2011 CBI Vs Bhajan Singh etc Page 74 of 84 deposed that he had perused the entire material and thereafter he had accorded the sanction for prosecution. Sanction orders are quite elaborate and contains various details related to the banking transactions as well as the discretionary powers and, therefore, evidently the requisite material was placed before the sanctioning authority.
14.2 Even if Sh. Gakhar had consulted various other departments including Personnel and Legal Departments, that would not ipso facto mean that the sanction was without application of mind. On the contrary, it shows extra application of mind. I would not eschew any word in commenting that even if the draft sanction is placed before any such authority, the grant of sanction does not, by itself, become a sanction without application of mind. Reference be made to DARSHAN LAL VS STATE, CRIMINAL APPEAL NO. 73/2001 (DECIDED ON 31.07.2009), Indu Bhushan Chatterjee Vs. State of West Bengal AIR 1958 SC 1482 and Suresh Kumar Duggal Vs. CBI CRIMINAL APPEAL NO.100/2003 (DECIDED ON 10.07.2013).
14.3 Needless to mention, such provision does not intend that a public servant who is alleged to be guilty should escape the consequences of his criminal act by raising technical plea about invalidity of the sanction. This section safeguards the innocent but does not shield the guilty.
14.4 However, it is still very important to see as to whether the authority who has accorded the sanction is competent or not.
14.5 As I have already noticed above, Sh. Gakhar categorically claimed in his sanction orders that he was competent to remove accused persons from the office. He reiterated such fact even in his examination-in- chief. However, when he was cross-examined, he created a sort of confusion CC no. 06/2011 CBI Vs Bhajan Singh etc Page 75 of 84 by claiming that AGM was not appointing authority of Scale-I & Scale-II officers and AGM could not terminate them either. Relying on such deposition appearing in his cross-examination, defence has contended that sanction is by an authority which is apparently incompetent and, therefore, prosecution is misconceived. Reliance has been placed upon R.S. Nayak Vs. A.R. Antulay (1984) 2 SCC 183, K. Devasis Vs. State of Kerala (2006) 10 SCC 447, State of Utrakhand Vs. Yoginder Nath Arora & Anr. (2013) 14 SCC 299 and P.A. Mohandas Vs. State of Kerala (2003) 9 SCC 504. I have seen said judgments. Undoubtedly, the object behind seeking sanction is that there is no unnecessary harassment to public servants from frivolous and unsubstantiated allegations. Existence of valid sanction is admittedly an important prerequisite to the taking of cognizance and non-existence of sanction may even snap the jurisdiction vested in the Court.
14.6 In the present case, Sh. Gakhar has categorically deposed in his examination-in-chief that he was competent to remove the bank officials in question. Though in his cross-examination, he confused the scenario but fact remains that defence has not been able to establish the aspect of alleged incompetency in the desired manner. No mileage can be granted to defence from isolated and unsubstantiated assertion appearing in cross-examination. Defence could have examined any relevant witness from the Regional Office or Head Office of Dena Bank in order to show that sanction in question was not a valid one. Nothing of that sort has been done. Moreover, in this regard, it would be appropriate to make reference to one recent authority of Supreme Court cited as State of Bihar & Ors. Vs. Rajmangal Ram [Criminal Appeal No. 709-710 of 2010 (DOD: 31.03.2014)].
CC no. 06/2011 CBI Vs Bhajan Singh etc Page 76 of 8414.7 As per the explanation attached to Section 19 of P.C. Act, error in sanction also includes competence of the authority to grant sanction and as per aforesaid judgment of State of Bihar & Ors. Vs. Rajmangal Ram, any error, omission or irregularity in the grant of sanction would not have any adverse affect unless in the opinion of the Court, failure of justice has also been occasioned. Here, defence has not been able to substantiate as to how alleged incompetence of sanctioning authority has resulted in failure of justice. Therefore, defence cannot dig out any real and substantial advantage from the judgments relied upon by them. Ms. Sharma, learned PP is also justified in placing reliance upon one another judgment Ashok Tshering Bhutia Vs. State of Sikkim AIR 2011 SC 1363 which also professes that mere error, omission or irregularity in sanction would not be fatal unless it has resulted in failure of justice.
14.8 It has been further argued from the side of defence that investigation conducted by CBI was biased and unfair. Firstly, entire correspondence record from the Regional Office was not submitted for judicial scrutiny. Secondly, similarly situated bank officials were exonerated and not named as accused and thirdly, factum of sanction of limit of Rs. 2.65 crores in all the accounts of Bhajan Singh Group was deliberately suppressed and hidden in order to protect the senior officials of Regional Office & Head Office. Reliance has been placed upon Sidharatha Vashisht @ Manu Sharma Vs. CBI (2010) 6 SCC Page 1, Babu Bhai Vs. State of Gujarat & Ors. (2010) 12 SCC Page 254 and State Inspector of Police, Vishakhapatnam Vs. Surya Shankaram Karri (2006) 7 SCC 172.
14.9 I have seen all the aforesaid judgment and there cannot be any scope of debate with respect to the fact that fair investigation is expected from the prosecution. Not only the Court but the accused also expects the CC no. 06/2011 CBI Vs Bhajan Singh etc Page 77 of 84 investigation to be impartial and fair. There cannot be any qualm with respect to the fact that investigation should not be indicative of biased mind and every effort should be made to bring the guilty to law as nobody can be said to be standing above law de hors his position and influence in the society.
14.10 However, at the same time, it is also to be seen whether because of any faulty and defective investigation, there is serious miscarriage of justice or not. No investigation, in a serious criminal trial like this, can be said to be foolproof. Many infirmities are bound to be there in any such criminal trial. However, it is to be seen whether the defects pointed out by the defence go to the root of the matter and shake the very foundation of the case or not. Here, admittedly, entire record of Regional Authority is not before me but simultaneously there is nothing to indicate that the previous bank officials i.e. accused B.D. Sharma and Ravinder Malik had sent any regular intimation to the Regional Authority with respect to their exceeding discretionary powers and discounting the cheques on number of occasions. They are trying to take some advantage from the vigilance report whereas their guilty mind stands revealed simply out of the fact that they never maintained the registers properly and moreover whenever any cheque returned dishonoured and unpaid, it was not debited to the party's account but was rather debited to imprest clearing account. Moreover, merely because certain other similarly situated bank officials were let off and not made accused would not automatically mean that the charged bank officials should also be exonerated. They both are rather squarely responsible for the mess and the losses caused to the bank since they both were at the helm of the affairs of Maya Puri Branch.
CC no. 06/2011 CBI Vs Bhajan Singh etc Page 78 of 84CONCLUSION 15.0 Thus my foregoing discussion would clearly indicate that both the earlier bank officials i.e. B.D. Sharma and Ravinder Malik were acting in league with accused Bhajan Singh.
15.1 Sh. M.S. Khan and Sh. K.K. Patra have also relied upon one internal and confidential note of CBI to buttress their claim that both these earlier bank officials i.e. B.D. Sharma and Ravinder Malik have been made scapegoat and there was some conspiracy and understanding between Bhajan Singh and topmost officials of Dena Bank. According to them, accused Bhajan Singh managed to garner substantial short term deposit of around Rs. 50 crores from DDA for Maya Puri Branch of Dena Bank and since Bhajan Singh was to be somehow rewarded for bringing such huge deposit to Dena Bank, a very novel and unique method was devised for rewarding him and he was allowed to open benami accounts and was permitted to purchase cheques as quid pro quo. It has been argued that this becomes apparent from one self contained note of CBI which was even sent to GM (Vigilance), Dena Bank vide letter dated 02.05.2001. Such letter and confidential note have been placed on record by the defence and proved as Ex. PW26/DA and Ex. PW26/DB. I, however, feel that defence contention developed on the basis of aforesaid self contained note of CBI does not at all exonerate the accused persons. Even if for the sake of arguments, I assume that there was any such understanding between Bhajan Singh and top notch officials of Dena Bank, both these two bank officials i.e. B.D. Sharma and Ravinder were not obliged to obey to the alleged illegal dictates of their superiors. There was no reason for them to have accepted the cheques and discounted the same beyond their discretionary powers time and again and then to debit the unpaid cheques to imprest clearing head. This was their CC no. 06/2011 CBI Vs Bhajan Singh etc Page 79 of 84 own conscious and deliberate decision. Even if, they had been asked to do so, they could have and should have refused to obey to any such illegal command. It is too late to hear that they were merely carrying out the commands of their superiors.
15.2 Merely because quite a few cheques returned honoured would not depict the bonafide intention on the part of accused B.D. Sharma and Ravinder Malik. They did not maintain entries in the relevant registers and the act of debiting 'imprest clearing head' speaks volumes of their dishonest intention.
15.3 Merely because prosecution does not possess any evidence to show that even these two bank official i.e. Sh. B.D. Sharma and Sh. Ravinder Malik had received any pecuniary advantage would not mean that they cannot be hauled up u/s 13 (1) (d) of PC Act. Moreover, as per the language used in Section 13 (1) (d) PC Act, a public servant would be said to commit an offence of criminal misconduct if by abusing his position as public servant, he obtains any pecuniary advantage either for himself or for any other person. Here, naturally, because of the illegal acts and omissions on the part of these two public servants, the pecuniary advantage has been drawn, at least, by their co-accused Bhajan Singh.
15.4 It has been contended by defence that there was never any criminal misconduct on their part. Reliance has been placed upon Ramesh Chandra Bhogi Lal Patel Vs. State of Gujarat Criminal Appeal No. 299 of 1996: DOD 02.12.2010: Gujarat High Court. Relying on the aforesaid judgment, it has been argued that crucial ingredient of dishonest intention is very important to haul up anyone for cheating and also that mere dereliction of duty and any error of judgment or breach of performance per se cannot be CC no. 06/2011 CBI Vs Bhajan Singh etc Page 80 of 84 equated with dishonest intention. There cannot be any doubt with respect to the aforesaid aspects. However, as far as these two bank officials are concerned, it cannot be said to be a case of mere negligence and dereliction of duty. As I have already noticed above, there was no written approval with respect to the purchase of cheques beyond discretionary powers and there was no reporting to the Regional Authority either. Moreover, suspense account of the bank i.e. imprest clearing head was debited instead of debiting the account of the party. All these were conscious and deliberate acts to pass on the illegal pecuniary advantage to the party and must have been done with some tacit understanding with the party. The idea was to depict that there was no exceeding in the party's account. On most of the occasions in intricate matters like this, one has to infer the conspiracy. Both the aforesaid two bank officials i.e. B.D. Sharma and Ravinder Malik were naturally acting in connivance with accused Bhajan Singh and such hypothesis and proposition can be very safely inferred without any element of doubt.
15.5 Defence has also relied upon the case of C.K. Jaffar Sharief (Supra). However, it is not a case where said two bank officials had merely violated the rules. Here, dishonest intention is found to be present and, therefore, no advantage can be drawn by the defence from the aforesaid judgment as far as these two bank officials, namely, B.D. Sharma and Ravinder Malik are concerned.
15.6 Ms. Sharma, learned PP for CBI has placed his reliance upon one judgment of Andhra Pradesh High Court delivered in the case of K. Murli Vs. State of AP, Criminal Appeal No. 466 of 2004: Date of Judgment 12.102.011. I have carefully perused the aforesaid judgment and coincidently in that case also, the temporary overdraft was granted by the concerned bank officials and the Controlling Authority was not informed and no approval was CC no. 06/2011 CBI Vs Bhajan Singh etc Page 81 of 84 taken either. In that case also, various cheques returned unpaid for insufficient funds and instead of debiting the same to the party's account, those were rather debited to the imprest clearing head. It was held that the aforesaid acts were not only in violation of the procedure and circulars of the bank but were in abuse of official position amounting to criminal misconduct. Situation is precisely similar in the present case also.
15.7 As far as accused Bhajan Singh is concerned, it becomes apparent that his intention, right from the inception, was to dupe the bank. He ensured that various accommodation cheques are purchased in the accounts in question. It is also very much evident that he siphoned off money from the accounts in question by issuing cheques in the names of his other firms or sister firms or in the names of those firms with whom he had no business transaction related to scrap or metal purchase. It is also quite evident that he used his employees for opening various accounts and then controlled all such accounts all by himself and obtained blank cheques, duly signed from his such employees, who were evidently in a vulnerable position.
15.8 Accused Bhajan Singh also cannot be permitted to dig out any advantage from the fact that collateral security submitted by him was unjustifiably rejected by the Branch. On earlier occasion also, he had bypassed the Branch and even Regional Authority and straightaway approached the Head Office. If he felt that Branch had rejected the collateral property with some ulterior motive, he could have again approached the Regional Authority or Head Office. Nothing of that sort had been done. Accused B.D. Sharma and Ravinder Malik cannot draw any solace from the fact that even their successors had indulged in purchase of cheques and, therefore, it should be assumed that there was direction from the Regional Authority. I have already noted various distinguishing features between their CC no. 06/2011 CBI Vs Bhajan Singh etc Page 82 of 84 acts and the acts of their successors. Their successors were evidently reporting matter to the Regional Authority and they did not indulge in the act of illegal debit to the imprest clearing head at all.
15.9 It is also not a case where there is mere loss to the bank and there was no intention to cheat. Violations committed by these two bank officials are flagrant and blatant and clearly divulge malafide.
15.10 Before parting, I would also add that there should have been separate trials and all the four bank officials should not have been sent up to face charges, as part of one conspiracy, through one common charge-sheet. However, at the same time, I am also conscious of the fact that any such mis- joinder would not ipso fact vitiate the trial. If there is any mis-joinder of charge or offenders, it has to be seen whether it has resulted in prejudice to any accused or that there is no failure of justice because of such mis-joinder. Here, the initial two bank officials i.e. B.D. Sharma and Ravinder Malik very well knew about the charges against them and they were not prejudiced in any manner whatsoever due to such mis-joinder of charges/offenders and, therefore, there does not seem to be any failure of justice.
15.11 Resultantly, I hold as under:
(i) A-2 Deepak Kumar, A-3 Dinesh Kumar Sharma, A-4 Variam Singh, A-7 Parmod Kumar Sahi and A-8 I.S. Suri are acquitted of all the charges leveled against them. Their respective sureties are discharged. They would, however, submit personal bond and surety bond in sum of Rs. 20,000/- each.
CC no. 06/2011 CBI Vs Bhajan Singh etc Page 83 of 84(ii) A-1 Bhajan Singh, A-5 B.D. Sharma and A-6 Ravinder Malik are held guilty and convicted for offences u/s 120B IPC r/w Section 420 IPC r/w Section 13 (2) r/w 13 (1) (d) of PC Act. A-5 B.D. Sharma and A-6 Ravinder Malik are also held guilty and convicted for substantive offence u/s 13 (2) r/w Section 13 (1) (d) of PC Act and A-1 Bhajan Singh is also held guilty and convicted for substantive offence u/s 420 IPC.
Announced in the open Court On this 6th September of 2014.
(MANOJ JAIN) Special Judge (PC Act) (CBI) South Distt: Saket Courts: New Delhi CC no. 06/2011 CBI Vs Bhajan Singh etc Page 84 of 84