Delhi District Court
Cbi vs . 1 Dinesh Kumar Sharma, on 6 September, 2014
IN THE COURT OF MANOJ JAIN: SPECIAL JUDGE (PC ACT) (CBI)
SOUTH DISTRICT: SAKET DISTRICT COURTS
NEW DELHI
CC No. 05/2011
RC S18 1999 E0005
U/s 120B r/w 420 IPC &
U/s 13 (2) r/w 13 (1) (d) of PC Act
Unique case I.D. No. 02406R00481999
CBI Vs. 1 Dinesh Kumar Sharma,
Son of Sh. D.L. Sharma,
Resident of 5N-17A, NIT,
Faridabad.
(Hereinafter referred to as A-1)
2 Bhajan Singh,
Son of late Mela Singh,
Resident of 5E/47, Banglow Plots (BP),
NIT, Faridabad.
(Hereinafter referred to as A-2)
3 Variam Singh,
Son of late Sardar Sunder Singh
Resident of 328, Sector-15,
Faridabad.
(Hereinafter referred to as A-3)
4 Pramod Kumar Sahi,
Son of late Sh. C.L. Sahi,
Resident of 108 Dena Apartment,
Sector-13, Rohini, Delhi-85.
(Hereinafter referred to as A-4)
5 Inderjeet Singh Suri,
Son of Sh. F.C. Suri,
Resident of D-1/C-36B,
Janak Puri, Delhi-58.
(Hereinafter referred to as A-5)
Date of Institution : 30.12.1999
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 : 14.08.2014
Date of Judgment : 06.09.2014
CC No. 05/2011 CBI Vs. Dinesh Kr. Sharma etc. Page 1 of 44
Memo of Appearance
Ms. Jyotsna Sharma Pandey, learned PP for CBI.
Sh. Jitender Kumar Jha, learned counsel for A-1 Dinesh Kr. Sharma.
Sh. Sachin Dev Sharma & Sh. Hakikat Yadav, learned counsels for A-2 Bhajan Singh.
Sh. N.K. Katyal, learned counsel for A-3 Variam Singh & A-5 I.S. Suri.
Sh. Sushil Kumar, learned counsel for A-4 P.K. Sahi.
JUDGMENT
PROSECUTION STORY 1.0 All the five accused persons have been sent up to face trial for commission of various offences punishable under IPC and Prevention of Corruption Act 1988 (in short PC Act).
1.1 Let me give a very brief backdrop of the prosecution case.
1.2 A Current Account No. 2094 was opened with Dena Bank, Maya Puri Branch, New Delhi on 29.01.1997. It was in the name of M/s Balaji Metals and A-1 had described himself to be its proprietor. Actually, it was A-2 Bhajan Singh, who was the benami owner of said account of M/s Balaji Metals, which had been got opened by him in the name of his employee A-1 Sh. Dinesh Kumar Sharma.
1.3 Sh. B.D. Sharma was posted as Branch Manager of Dena Bank, Maya Puri Branch at that time. He remained posted there till 28.05.1997. He permitted temporary overdrafts (TODs) in the said account beyond his delegated powers and such TODs were not even reported to the controlling authority. His such act resulted in exceedings of Rs. 5,38,050/- as on 02.04.1997. According to CBI, since his act of permitting TODs was merely a violation of banking norms and not actuated by any malafide, his name was put in column no. 2 and departmental action for initiation of major CC No. 05/2011 CBI Vs. Dinesh Kr. Sharma etc. Page 2 of 44 penalty proceedings was recommended against him.
1.4 A-5 I.S. Suri worked as acting Branch Manager of said Branch from 17.06.1997 to 22.06.1997 and A-4 Sh. P.K. Sahi took over charge of said Branch as Branch Manager w.e.f. 23.06.1997 and remained posted there till 13.09.1997. A-5 Sh. I.S. Suri, except the aforesaid period when he worked as acting Branch Manager, remained posted as Accountant in said Branch till January 1999.
1.5 Both the aforesaid public servants i.e. A-4 & A-5 entered into criminal conspiracy, for cheating the bank, with all the private persons and they unauthorizedly and fraudulently purchased number of accommodation cheques beyond their discretionary powers and also permitted TODs beyond their discretionary powers. Various such accommodation cheques purchased by A-4 & A-5 had been drawn by M/s Suman Metals, M/s Star Trading Corporation and M/s P.K. Metals.
1.6 M/s Suman Metals, a proprietary concern of A-1, had opened Account No. 100274 in Allahabad Bank, Gurgaon at the instance of A-2.
1.7 M/s Star Trading Corporation had one Current Account No. 7149 with Oriental Bank of Commerce, NIT Faridabad and said account was opened by one Sh. Mukhtiar Singh. Said account was introduced by A-3 Variam Singh and majority of pay-in-slips and cheques were bearing handwriting of A-3 and he was also thus part of the conspiracy.
1.8 M/s P.K. Metals was having Current Account No. 643 with PNB, Palwal and such account was opened by one Sh. S.K. Goel on behalf of A-2 and Sh. S.K. Goel was also working as Peon under A-2 Bhajan Singh. Thus, CC No. 05/2011 CBI Vs. Dinesh Kr. Sharma etc. Page 3 of 44 it was also a sort of benami account of A-2.
1.9 In terms of criminal conspiracy, accommodation cheques were purchased indiscriminately and temporary overdraft facility had been granted much beyond the discretionary powers. As per the banking norms, purchase of cheques and TODs were to be reported in the specific control returns to the Regional Office. However, such control returns were not reported in time. These were rather reported after considerable delay for post facto confirmation. Majority of the cheques were purchased without waiting for the realization of earlier purchased cheques. Cheques were also purchased despite the fact that various previous cheques were received back unrealized from the payee banks. Majority of the cheque purchased were from the account of M/s Suman Metals, M/s Star Trading Corporation and M/s P.K. Metals and those firms were not having any genuine trade transactions at all.
1.10 Sanction for prosecution of both the public servants was obtained as their acts resulted in loss of more than Rs. 31 lacs to the Bank.
1.11 It is in these circumstances that all the accused persons have been sent up to face trial.
1.12 All the accused, except A-3, were charge-sheeted for commission of offences u/s 120-B r/w Section 420 IPC & u/s 13 (2) r/w 13 (1)
(d) PC Act. All the three private persons were charge-sheeted for offence u/s 420 r/w Section 120B IPC and both the public servants for substantive offence u/s 13 (2) r/w Section 13 (1) (d) PC Act.
CC No. 05/2011 CBI Vs. Dinesh Kr. Sharma etc. Page 4 of 44COGNIZANCE AND CHARGES 2.0 Charge sheet was filed in the court on 30.12.1999 and cognizance was taken by the court on 17.02.2000 and all the accused were accordingly ordered to be summoned.
2.1 All the five accused persons were ordered to be charged u/s 120-B r/w Section 420 IPC & u/s 13 (2) r/w Section 13 (1) (d) of PC Act. Simultaneously, both the public servants were charged for substantive offence u/s 13 (1) (d) r/w Section 13 (2) PC Act and all the three private persons were charged u/s 420 IPC for causing loss of Rs. 31,38,109/- to Dena Bank, Maya Puri Branch, New Delhi.
2.2 Charges were framed on 08.04.2005 and all the accused persons pleaded not guilty and claimed trial.
PROSECUTION WITNESSES 3.0 Prosecution was directed to adduce its evidence and has examined 19 witnesses.
3.1 Witnesses can be categorized as under:-
(i) Witnesses from Dena Bank:-
PW2 Sh. R.C. Dahiya, Dena Bank, Maya Puri Branch.
PW3 Dr. G.L. Khandelwal, General Manager, Dena Bank. PW4 Sh. Naresh Sehgal, Vigilance Officer, Regional Office, Dena Bank. PW6 Sh. Vinay Lamba, Chief Manager, Regional Office, Dena Bank. PW7 Sh. Pranabendu Sen, Assistant General Manager, Dena Bank. PW13 Sh. Harish Kr. Bhalla, Manager, Dena Bank.
PW17 Sh. Ashwani Kumar, Cashier-cum-clerk, Dena Bank.
CC No. 05/2011 CBI Vs. Dinesh Kr. Sharma etc. Page 5 of 44(ii) Witnesses related to M/s P.K. Metals:
PW1 Sh. Vijay Kumar Jain, Sr. Manager, PNB, Palwal.
PW10 Sh. Suresh Kumar Goel, Peon of A-2 Bhajan Singh.
PW16 Sh. Anand Prakash Gupta, PNB, Palwal.
(iii) Witnesses related to M/s Star Trading Corporation:
PW11 Sh. Sunil Khurana, Head Cashier, Allahabad Bank, Gurgaon.
(iv) Witnesses related to M/s Suman Metals:
PW8 Sh. Ajay Kr. Rai, Computer Operator, OBC, Neelam Chowk, Faridabad. PW14 Smt. Madhu Sharma (introducer and relative of A-1).
(v) Witnesses related to investigation and sanction:-
PW5 Sh. R. Sridharan, Dena Bank (Sanctioning Authority). PW18 Sh. M.C. Joshi, GEQD.
PW19 Sh. Ajit Kumar Singh, Investigating Officer.
(vi) Other private witnesses:
PW9 Sh. Ankush Jain.
PW12 Sh. Hem Chand Gupta. (Acquaintance of A-2) (who had given property on rent to A-2).
PW15 Sh. Kamal Kant. (Acquaintance of A-2).
STATEMENTS OF ACCUSED(S) AND DEFENCE EVIDENCE
4.0 Statements of accused were recorded u/s 313 Cr.P.C.
4.1 Crux of the stand taken by A-1 is to the effect that he was merely a driver of A-2 and has been falsely and unnecessarily implicated in the present matter. According to him, A-2 made him open all such accounts and that he (A-1) had no relation with those firms at all and rather A-2 had obtained his signatures on blank cheques. He also claimed that bank officials used to meet A-2 frequently. A-1 did not lead any evidence in defence though claimed that he had already led evidence in defence in CC No. 05/2011 CBI Vs. Dinesh Kr. Sharma etc. Page 6 of 44 connected matters (CC No. 4/11 & CC No. 6/11) and same may also be read in the present case.
4.2 A-2 did aver that A-1 hailed from a poor family and that he helped him in starting business but supplemented that account in question was operated by A-1 alone. He also asserted that he never hatched any conspiracy and was never involved in any cheating and he rather always cooperated with the bank. According to him, there was tussle between two bank officials i.e. Sh. B.D. Sharma (accused herein) and Sh. R.C. Dahiya and in order to settle their own personal issues, he was made a scapegoat. He also claimed that he had even offered the stock available with him to be seized by the bank and also to take collateral security in the shape of immovable security but Mr. Dahiya did not do anything in this regard. He also examined DW1 Sh. H.N. Takkar in his defence in order to show that he had offered a genuine property as collateral security.
4.3 A-3 pleaded innocence claiming that he had no role to play in the present matter except for introducing the account of M/s Star Trading Corporation. He also claimed that his defence evidence in the connected case i.e. CC No. 6/2011 may be read in the present case as well though fact remains that he had not led any evidence in said connected case.
4.4 A-4 also pleaded innocence. He admitted his posting tenure and 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-III 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, CC No. 05/2011 CBI Vs. Dinesh Kr. Sharma etc. Page 7 of 44 same was debited to the party's account. He also claimed that he had made proper entries in BP Register and Customer's 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 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 the previous irregularities to 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, suspension order was revoked and he was reinstated. He also claimed that defence evidence led by him in the connected case i.e. CC No. 6/2011 may be read in the present case as well.
4.5 A-5 claimed that he was merely posted as an Accountant and he 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 Head Office, he has been falsely implicated in the present matter. He also did not desire to lead evidence in defence and added that evidence led by him in the connected matter i.e. CC No. 6/11 may be read in the present case also.
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 powers CC No. 05/2011 CBI Vs. Dinesh Kr. Sharma etc. Page 8 of 44 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 elaborated about the malpractices adopted by both the public servants- accused and it stands proved that they had purchased cheques in arbitrary manner and permitted temporary overdrafts on number of occasions. She has also admitted that M/s Balaji Metals was, actually, a benami account held by A-2 and he had used his driver/employee Dinesh Kumar Sharma (A-1) as a tool to exploit the public money but added that A-1 had obliged him for such act of cheating and conspiracy and he cannot take any shelter behind the alleged exploitation by a shrewd employer.
5.1 She has also argued that as far as A-3 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.
5.2 Sh. Jitender Kumar Jha has contended that A-1 has been falsely implicated. According to him, CBI itself has come up with a clear cut case that the account in question was though opened by M/s Balaji Metals through A-1 as its proprietor yet such account was controlled by A-2 only. According to him, even in the charge-sheet, it has been specifically mentioned that it was benami account of A-2. It has been claimed that A-1 was merely a driver under A-2 who exploited the situation and made him open accounts and made him sign various blank cheques which were misutilized. He has also contended that there is nothing to show that he had received any benefits whatsoever in any shape. Sh. Jha has also asserted that one Sh. S.K. Goel (PW10) and some other employees were also similarly exploited by Bhajan Singh but were made witnesses.
CC No. 05/2011 CBI Vs. Dinesh Kr. Sharma etc. Page 9 of 445.3 Sh. Hakikat Yadav, learned counsel for A-2 has contended that A-2 has been pointlessly 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. It has been argued that A-2 had merely helped A-1 in opening an account in the name of M/s Balaji Metals but such account was operated by A-1 alone. Sh. Yadav has also contended that all the accounts related to accused Bhajan Singh were regularized and limits were sanctioned and in terms thereof, A-2 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 DW1 Sh. H.N. Takkar.
5.4 Sh. Katyal, learned counsel has contended that A-3 has been made an accused meaninglessly. 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.
5.5 Sh. Sushil Kumar, learned defence counsel for A-4 has contended that he has been made a scapegoat and was not involved in any misconduct. His contentions can be summarized as under:
(i) A-4 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 rather prepared the Control Returns and would not have sent the same to Regional Office.CC No. 05/2011 CBI Vs. Dinesh Kr. Sharma etc. Page 10 of 44
(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-217 & D-273 of the present case as well as D-27 of connected cases i.e. CC N. 04/2011 & CC No. 06/2011.
(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.
(iv) When the departmental inquiry was initiated, nothing substantial surfaced and it was only for that very reason that A-4 P.K. Sahi was reinstated and was let off with minor penalty for alleged irregularities.
(v) Testimony of concerned officials of Dena Bank does not attribute any misconduct on the part of A-4.
(vi) Regional Office had also directed A-4 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, requesting thereunder that memorandum dated 13.01.1998 approving credit facilities to various accounts CC No. 05/2011 CBI Vs. Dinesh Kr. Sharma etc. Page 11 of 44 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 Balaji Metals CC Hypothecation Stock-cum- Book Debts Limit was sanctioned for Rs. 20 lacs and Demand Loan Limit as Rs. 11.65 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.
5.6 Sh. N.K. Katyal, learned defence counsel has defended A-5 and has contended that he has been falsely implicated in the present matter. His contentions are as under:
(i) Name of A-5 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) Even PW4 Sh. N.K. Sehgal has not attributed any misconduct on his part. Moreover, vigilance inquiry report has not been deliberately placed on record and the other two Vigilance Officers i.e. Sh. Vora and Sh.
A.N. Nargalokar have not even been cited as witnesses.
(iii) A-5 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 A-4 joined as Branch Manager and A-5, being Accountant, was even otherwise not competent to purchase any cheque or grant any temporary overdraft.
(iv) Major part of the investigation had been conducted by Sh. Ramnish. He has not been examined by the prosecution which has also seriously prejudiced the defence. Moreover, CBI, for totally inexplicable CC No. 05/2011 CBI Vs. Dinesh Kr. Sharma etc. Page 12 of 44 reasons, exonerated one another bank official Sh. B.D. Sharma who had also allegedly purchased the cheques in the similar manner prior to joining of A-4 & A-5. Moreover, other bank officials like Sh. JDK Jain and Sh. Prem Singh Kalyan, who had also handled the account in question, have been let off. They have not been cited as witnesses either and thus CBI has adopted pick and choose policy.
EVALUATION OF EVIDENCE 6.0 I have carefully gone through the entire material on record and given my anxious consideration to the rival contentions.
6.1 I would now weigh up the evidence and contentions under following heads:-
1 Bank account of M/s Balaji Metals & related bank accounts of other firms.
2 Interconnection between Bhajan Singh and Dinesh Sharma 3 Role of Variam Singh 4 Discretionary powers and bank guidelines 5 Role of both the Bank Officials 6 Conclusion BANK ACCOUNT OF M/S BALAJI METALS AND RELATED BANK ACCOUNTS OF OTHER FIRMS 7.0 Account in question is of M/s Balaji Metals.
7.1 PW2 Sh. R.C. Dahiya has made reference to account opening form. Such account was opened on 29.01.1997 and it contains the name and signatures of A-1 as authorized signatory and his occupation has been CC No. 05/2011 CBI Vs. Dinesh Kr. Sharma etc. Page 13 of 44 shown as business. It was introduced by M/s Konica Overseas and was signed by one Sh. Jai Prakash as introducer. Account opening form has been proved as Ex. PW2/A (D-6). Statement of account has been proved as Ex. PW2/B (D-8). There is no dispute that such account had been opened by A-1. A-1 also admits the factum of opening of the account though according to him, account had been opened as per instructions of A-2.
7.2 It was merely a current account with no cash credit limit or facility.
7.3 Various cheques had been issued from the said account of M/s Balaji Metals. Details of such cheques are as under:-
S. Cheque Date Amount In favour of Exhibit & Amount
No. No. (in Rupee) D Number received by
1 446338 30.07.97 3,60,000/- M/s Star Trading Corp. PW2/V2 Payee
(D-61)
2 446332 29.07.97 2,80,000/- M/s Indo Gems Overseas PW2/V Payee
(D-62)
3 446337 29.07.97 3,75,000/- M/s Suman Metals PW2/V1 Payee
4 480909 26.08.97 2,00,000/- M/s Osra Engineers PW2/V4 Payee
(D-64)
5 480902 14.08.96 4,75,000/- M/s Suman Metals PW2/V3 Payee
6 886675 13.03.97 5,00,000/- M/s Konica Overseas PW18/B1 Payee
India (D-66)
7 446331 28.07.97 3,50,000/- Self PW18/B2 Bhajan Singh
(D-67)
8 446328 26.07.97 2,60,000/- M/s Star Trading Corp. PW2/V8 Payee
(D-68)
9 889453 27.03.97 5,00,000/- M/s Krishna Traders PW18/B-3 Payee
(D-69)
10 446333 29.07.97 3,25,000/- M/s Star Trading Corp. PW2/V9 Payee
(D-70)
11 480904 19.08.97 3,66,700/- M/s B.K. Jewellery House PW2/V-16 Payee
(D-71)
12 446344 05.08.97 1,50,000/- Self PW18/B-4 Bhajan Singh
(D-72)
13 889462 28.06.97 75,065/- M/s B.K. Jewellery House PW2/V10 Payee
(D-73)
14 446340 01.08.97 3,25,000/- M/s Suman Metals PW2/V11 Payee
(D-74)
CC No. 05/2011 CBI Vs. Dinesh Kr. Sharma etc. Page 14 of 44
15 446346 08.08.97 3,25,000/- M/s Star Trading Corp. PW2/V12 Payee
(D-75)
16 446349 09.08.97 3,00,000/- M/s Osra Engineers PW18/B5 Payee
(D-76)
17 480908 20.08.97 50,000/- M/s Osra Engineers PW2/V-15 Payee
(D-77)
18 446334 29.07.97 1,00,000/- Self PW18/B6 Payee
(D-78)
19 446330 26.07.97 3,10,730/- M/s Suman Metals PW2/V13 Payee
(D-79)
20 446345 07.08.97 2,00,000/- M/s Ramdev Metal Store PW2/V14 Payee
(D80)
21 889466 10.07.97 1,00,000/- Self PW2/V5 Bhajan Singh
(D-81)
22 889463 10.07.97 2,50,000/- M/s Krishna Traders PW2/V7 Payee
23 889465 10.07.97 50,000/- Self PW2/V6 Bhajan Singh
(D-83)
24 889452 19.03.97 5,00,000/- M/s Konica Overseas PW18/B7 Payee
India (D-84)
7.4 A-2 has also evidently received amount under said self-
cheques. He is thus ostensibly a beneficiary as well.
7.5 PW11 Sh. Sunil Khurana, official from Allahabad Bank, Gurgaon Branch, Gurgaon has deposed that M/s Suman Metals had opened one account in their branch in 1997 and Dinesh Kumar Sharma was shown as its proprietor. Such account was given Current Account No. 100274 and its introducer was Mrs. Madhu Sharma, his close relative. PW14 Madhu Sharma has also entered into witness box and deposed that A-1 used to work under A-2. She also admitted that her husband was working in Allahabad Bank, Gurgaon where she was having one account and she admitted herself to be the introducer of said account claiming that she introduced the account as per the request of A-1. Account opening form has been proved as Ex. PW11/A (D-142). Such account was closed in terms of letter Ex. PW11/B (part of D-142). Statement of account of M/s Suman Metals has been proved as Ex. PW11/F. Cheque Issuance Register related to said account has been proved as Ex. PW11/E. CC No. 05/2011 CBI Vs. Dinesh Kr. Sharma etc. Page 15 of 44 7.6 It will be, however, pertinent to mention that original account opening form has not been placed on record and only photocopies have been submitted. Attested copy of statement of account of M/s Suman Metals is found to be there in record as D-14 but same has not been proved by anyone. Admittedly, secondary evidence can be led but only with the permission of the Court and as per the provision contained in Indian Evidence Act. However, simultaneously, I cannot lose sight of the fact that A-1himself admitted in his statement u/s 313 Cr.P.C. that such account was opened by him though he supplemented that such account had been opened under the instructions of his co-accused A-2.
7.7 Let me now see the other two accounts as well i.e. bank accounts of M/s P.K. Metals and of M/s Star Trading Corporation.
7.8 PW10 Sh. Suresh Kumar Goel has deposed that he knew accused Bhajan Singh and he worked with him for 4-5 days. He also deposed that A-2 had given him Rs. 3,000/- for opening account with PNB, Palwal and assisted him in opening of such account. He also deposed that cheque book was given to him by the bank and A-2 obtained his signatures on several blank cheques and then took such cheque book from him. He claimed that A-2 did not assign any reason as to why he was obtaining his signatures on blank cheques and when questioned, A-2 rather snubbed him and told him to mind his own business. He also deposed that A-2 also got prepared one seal of M/s P.K. Metals and such seal was also put on all such blank cheques. According to him, he never did any business under said name of M/s P.K. Metals and he was not given any specific work by A-2 and since he was afraid that his signatures had been obtained on blank cheques, he got the bank account closed. He also deposed that his signatures had been obtained after making him consume Roohafza. He was then shown CC No. 05/2011 CBI Vs. Dinesh Kr. Sharma etc. Page 16 of 44 relevant bank record and he admitted his signatures on the account opening form as well as on the account-closure application.
7.9 PW1 Sh. Vijay Kumar Jain is the concerned bank official from PNB, Palwal who had handed over relevant documents to CBI during the investigation and he has also made reference to account opening form, affidavit furnished by account holder Sh. S.K. Goel, statement of account and closure of account. He has also deposed that PNB, Palwal had received four cheques for clearance i.e. cheque nos. 509601 to 509604 and all such cheques returned dishonoured for funds insufficient. It will be important to mention that reference was made to photocopies only and when he was asked to bring the originals, he revealed that such record was no longer available as there was some fire in PNB, Palwal in 2008.
7.10 As regards M/s Star Trading Corporation, reference be made to the testimony of PW8 Ajay Kumar Rai, OBC, Neelam Chowk Faridabad. He has deposed that such account was opened by M/s Star Trading Corporation through its proprietor Sh. Mukhtiar Singh and it was introduced by M/s Parsoan Chemicals and accused Variam Singh had signed on behalf of M/s Parsoan Chemicals and his signatures were at point A19 on account opening form Ex. PW8/C (D-213). PW8 Ajay Kumar Rai has also made reference to Cheque Return Register Ex. PW8/E (D-13).
INTERCONNECTION BETWEEN BHAJAN SINGH AND DINESH SHARMA 8.0 Current account by M/s Balaji Metals had been opened up prior to the joining of Sh. P.K. Sahi (A-4).
CC No. 05/2011 CBI Vs. Dinesh Kr. Sharma etc. Page 17 of 448.1 I have already made reference about the cheques which had been issued from the account of M/s Balaji Metals.
8.2 It will now be useful to make reference to those cheques which had been purchased in the account of M/s Balaji Metals. Such accommodation cheques, as per charge-sheet, are as under:-
S. Date BP Issued by Amount Exhibit & D Vouchers (debit & credit)/ Honoured/ No. No. (in Rs.) No. deposit slip dishonoured 1 29.07.97 6296 M/s P.K. 3,65,330/- - - Dishonoured Metals 2 10.07.97 - M/s Star 3,30,270/- PW18/B43 Ex. PW2/V17 Honoured Trading (D-146) 3 12.07.97 - - 4,70,000/- - Ex. PW2/F, PW2/G & Honoured PW2/V-18 4 19.07.97 - - 1,90,370/- - Ex. PW2/V19 Honoured 5 22.07.97 - (Not 3,70,000/- - Ex. PW2/V-20, PW2/h & Honoured mentioned in PW2/I BP) 6 24.07.97 6424 M/s Suman 3,25,000/- PW18/B-17 Ex. PW2/E & PW2/E1 Honoured Metals (D-117) 7 24.07.97 6425 M/s Suman 1,72,000/- PW18/B24 Ex. PW2/E & PW2/E2 Honoured Metals (D-124) 8 26.07.97 6435 M/s Suman 4,72,370/- PW18/B-23 Ex. PW2/U & PW2/V-21 Honoured Metals (D-123) 9 28.07.97 6441 M/s Star 3,65,000/- PW18/B55 Ex PW2/D( D-239) Honoured Trading (D-159) Corporation 10 28.07.97 6445 M/s Gee-A- 4,30,000/- - Ex. PW2/K, PW2/J & Dishonoured Vee Ex PW2/V-22 Construction s 11 30.07.97 6451 M/s Suman 5,50,000/- PW2/V35 Ex. PW2/L & PW2/M Dishonoured Metals (D-23) 12 04.08.97 6461 M/s Suman 4,75,000/- PW2/V-37 Ex. PW2/V-23 & Dishonoured Metals (D-28) PW2/V-24 13 06.08.97 6465 M/s Suman 4,75,000/- PW18/B35 Ex. PW2/N, PW2/O, Honoured Metals (D-135) PW2/V-24 & PW2/V-25 14 07.08.97 6468 M/s Suman 2,90,000/- PW18/B36 Ex. PW2/P, PW2/Q, Honoured Metals (D-136) Ex PW2/V-27 & PW2/V-26 15 07.08.97 6470 M/s Star 5,25,000/- PW18/B-80 Ex. PW2/V-28 & PW2/V26 Honoured Trading (D-183) Corporation 16 12.08.97 6476 M/s Star 4,50,000/- PW2/V-33 Ex. PW2/R, Dishonoured Trading (D-19) PW2/V-29 & PW2/V-26 Corporation 17 13.08.97 6481 M/s Star 4,25,000/- PW2/V-34 Ex PW2/S, Dishonoured Trading (D-21) PWV-32 & PW2/V26 Corporation 18 13.08.97 6488 M/s Suman 4,75,000/- PW2/V-38 PW2/V-30 Dishonoured CC No. 05/2011 CBI Vs. Dinesh Kr. Sharma etc. Page 18 of 44 Metals (D-30) 19 13.08.97 6489 M/s Suman 4,25,000/- PW2/V-36 Ex. PW2/T & Dishonoured Metals (D-26) PW2/V-31 8.3 Said accommodation cheques are gravamen of the charge.
8.4 A-1 is crying hoarse that though the accounts M/s Balaji Metals and M/s Suman Metals had been opened in his name yet these were actually owned, controlled and transacted by his co-accused A-2.
8.5 Sh. Jha has asserted that even as per CBI, such accounts were owned by Bhajan Singh. Interestingly, even as per CBI's charge-sheet, such account was benami account of accused Bhajan Singh (A-2). It means that even CBI admits that such account was owned by accused Bhajan Singh only.
8.6 Bhajan Singh had made his employees open bank accounts in various names. These include accused Dinesh Kumar Sharma (A-1 herein), PW 10 S.K.Goel, Baldev Kathuria (witness in connected case) and one Deepak Kumar (co-accused in connected matter).
8.7 Question arises whether such 'employees are also co- conspirators or not. Whether such 'employees' can be permitted to profess that they have been exploited and should be exonerated automatically?
8.8 I have already referred to the deposition of one such employee. PW10 S.K. Goel has revealed that he was paid a sum of Rs. 3,000/- for opening such account and he did not do any work and A-2 had obtained his signatures on blank cheques and used those cheques. To some extent, he was also equally liable and he should not have surrendered to any CC No. 05/2011 CBI Vs. Dinesh Kr. Sharma etc. Page 19 of 44 temptation. Fact remains that testimony of PW10 Sh. S.K. Goel clearly indicates that he was also used or, should I say misused, by A-2. A-1 has, therefore, justifiably, raised a grouse that even he (A-1) should have been let off being a similarly situated person.
8.9 A-1 claimed in his statement u/s 313 Cr.P.C. that he had been implicated by Bhajan Singh. According to him, he was driver under him and A-2 made him open all such accounts related to M/s Balaji Metals and M/s Suman Metals and one M/s Bajrang. He himself had no relations with those firms. Blank signed cheques were obtained by Bhajan Singh and only he could tell as to how and why he used those cheques.
8.10 It has been argued by Ms. Pandey that if at all he was made to sign against his wishes, he should have reported such illegal act of A-2 to the concerned authorities - be it police or bank. He did not do so and it was only when CBI had registered a case and called him for investigation, he took plea of his signing under pressure of Bhajan Singh. As per CBI, he voluntarily, consciously and knowingly permitted himself to be used without any reason much less a plausible one. It has been argued by Ms. Pandey that he was admittedly an employee of A-2 Bhajan Singh but then he had no business to become a partner in his illegal activities. He was his willy-nilly partner and by opening these two accounts, even at the instance of his employer, he very obviously made the job of his employer easy. A-2 wanted these bank accounts to be opened so that he could use such accounts to draw credit facilities. A-2 also misused the cheques issued under such accounts by getting those signed from him. As per Ld. PP, he became a facilitator and his such act was deliberate and conscious and thus he cannot be heard saying that he did not know the purpose behind opening of such accounts or behind obtaining of his signatures on blank cheques.
CC No. 05/2011 CBI Vs. Dinesh Kr. Sharma etc. Page 20 of 448.11 Question is whether merely by acting as puppet in the hands of his employer, A-1 can be said to have aided and abetted the commission of offence of cheating and helped A-2 in his malevolent designs.
8.12 Need I say that when it comes to make both the ends meet, any such lowly placed employee can also give in tamely.
8.13 On papers, yes, of course, A-1 was the controller of all the three aforesaid accounts of M/s Balaji Metals, M/s Suman Metals and M/s P.K. Metals. But then, sometimes, it becomes mandatory and obligatory to lift the corporate veil. If such veil is lifted, it would become perceptible that such account was controlled and owned by accused Bhajan Singh and Bhajan Singh alone.
8.14 Reason is not far to seek.
8.15 If at all accused Bhajan Singh had no concern with M/s Balaji Metals, would he give any explanation as to why he owned up the entire liability existing in the aforesaid account? His counsel is also heavily relying upon sanction of limits in various group accounts. Reference has been made to one Sanction Memorandum 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.
CC No. 05/2011 CBI Vs. Dinesh Kr. Sharma etc. Page 21 of 448.16 Naturally, he is owning up all these accounts and is even ready to shell out collateral worth Rs. 2.65 crores. As a necessary corollary, it has to be assumed that he is the sole and exclusive controller of all these accounts. This also strengthens the stand taken up by his co-accused Dinesh Sharma.
8.17 Admittedly, Dinesh Kumar Sharma was driver of accused Bhajan Singh but that alone would not convert him into a criminal. No incriminating material was recovered from his house search. He is not a beneficiary in any sense whatsoever. No evidence came to light showing any sort of connection or transaction of graft or bribe between bank officials and him. There is no letter from the bank addressed to accused Dinesh Kumar asking for repayment of dues.
8.18 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 officials for the purpose of conspiring or duping the bank. Merely because he was forced to open bank account would not ipso facto make him a co- conspirator. At the time of opening of such account, he did not know that such account would be used in such a fashion. Thus, crucial ingredient of existence of dishonest intention from very beginning is clearly missing qua accused Dinesh Kumar Sharma. Sh Jha is also right in placing reliance upon 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 also declare 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.
CC No. 05/2011 CBI Vs. Dinesh Kr. Sharma etc. Page 22 of 448.19 Moreover, accused Bhajan Singh was enjoying active confidence over his employee Dinesh Kumar Sharma and was in a position to exploit him. Whenever 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 a hint that it would be used for duping the bank.
8.20 When testimony of PW19Ajit Kumar Singh (IO) was recorded, he did admit 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 obliged Bhajan Singh in the similar manner.
8.21 Be that as it may, I am inclined to grant benefit of doubt to accused Dinesh Kumar Sharma as there is no sufficient and convincing material on record to brand him as a co-conspirator.
ROLE OF VARIAM SINGH 9.0 As far as A-3 is concerned, it is very much palpable that there is nothing on record which may show him to be a co-conspirator or beneficiary even remotely.
9.1 Mere introducing any bank account will not attract any criminality or illegality.
CC No. 05/2011 CBI Vs. Dinesh Kr. Sharma etc. Page 23 of 449.2 A-3 was admittedly holding one current account no. 6118 in the name of M/s Parsoan Chemicals with Oriental Bank of Commerce, Faridabad. Such account opening firm has been proved as Mark-A. When M/s Star Trading Corporation had opened one current account with same Branch of OBC, Faridabad, he signed as introducer. I have already made reference to such account opening form Ex. PW8/C (D-213).
9.3 Curiously, introducer Variam Singh has been made accused but CBI has not bothered to even inform as to why the account holder i.e. Sh. Mukhtiar Singh (proprietor of M/s Star Trading Corporation) has not been sent up to face trial. If introducer is guilty, the status of account holder is certainly on a worse pedestal. It has not been made clear whether any attempt was ever made to arrest him. It has not been made clear whether he was a fictitious person or a living person. Since his name was never put in column no. 2, prosecution does not feel his involvement. It seems quite strange and confusing. Cross examination of part I.O. Mr. Singh indicates that such Mukhtiar Singh was mere employee of Variam Singh but then nobody knows as to what's the supporting material for making such assertion. It was never even mentioned in the challan either.
9.4 Be that as it may, merely because A-3 had stood introducer would not mean anything to me. Even if he had filled up pay-in-slips of M/s Star Trading Corporation, such fact would also not make him a co- conspirator.
9.5 There is nothing on record which may even remotely suggest that he had received any pecuniary benefit or advantage in any shape whatsoever and, therefore, I have no hesitation in acquitting him.
CC No. 05/2011 CBI Vs. Dinesh Kr. Sharma etc. Page 24 of 44DISCRETIONARY POWERS AND BANK GUIDELINES 10.0 As per instructions and guidelines issued by Dena Bank and which came into effect on 01.06.1997, a bank Manager of Scale-II could purchase any cheque upto Rs. 1 lac and could permit Temporary Overdraft upto Rs. 15,000/-.
10.1 There is no dispute with respect to the aforesaid discretionary powers. These are found contained in Ex PW4/Y (D-4).
10.2 Moreover, PW13 Harish Kumar Bhalla, Manager, Dena Bank and PW7 Sh. P. Sen have also deposed about such discretionary powers.
10.3 There is no requirement of dealing with other ancillary powers as the present case pertains to purchase of cheques beyond discretionary power and grant of temporary overdraft beyond discretionary powers only.
ROLE OF BOTH THE BANK OFFICIALS 11.0 Let me now see as to whether the two bank officials, facing trial at the moment, can also be dubbed as co-conspirators. It is to be seen whether they had abused or misused their public office and whether they ventured into any criminal misconduct and obtained any pecuniary advantage for themselves or for their co-accused persons.
11.1 As already noticed, there are only two violations or alleged deviations from banking guidelines attributed to them. These are as under:-
CC No. 05/2011 CBI Vs. Dinesh Kr. Sharma etc. Page 25 of 44i) Accepting cheques beyond discretionary powers.
ii) Permitting temporary over draft beyond discretionary powers.
11.2 Banking business essentially involves a bit of risk element also. Bank earns profits by lending money and by getting interest in return. Banking business is, at times, done on speculation and guesswork by taking some calculated risk. It is not always essential that in every case where facilities are granted with complete exactitude and alertness, the account would never turn bad. Vice versa, even when there are lapses on the part of bank officials, the bank may end up making profits. There is no dispute that bank guidelines do permit purchase of cheques. It is also not in dispute that such guidelines also permit temporary overdraft. If these things are not allowed, probably the party will not be in any real position to flourish its business. A-4 might have also swayed away by the various previous actions of his predecessors who are sitting merrily.
11.3 It is quite evident that the bank would be principally aggrieved by those purchases wherein the cheques ultimately returned dishonoured. Naturally, if any cheque so purchased is also duly honoured, it will not cause any loss to the bank at all though bank official should always be wary and conscious of his powers and should work within its spheres.
11.4 It would, therefore, circuitously signify that even if any such accommodation cheque is purchased beyond discretionary power, it may not be a criminal misconduct per se. Needless to say, at the time of purchasing of cheques it can never be said with certainty whether the cheque would ultimately return honoured or dishonoured.
CC No. 05/2011 CBI Vs. Dinesh Kr. Sharma etc. Page 26 of 4411.5 In the account in question, 19 cheques were purchased by the public servants involved and most of those were realized as well.
11.6 I would, right here, like to mention that Sh. B.D. Sharma was initially posted as Manager in Dena Bank and he remained in said branch till 28.05.1997. He is also a co-accused in two other connected matters related to Bhajan Singh Group of accounts. Thereafter, Sh. J.D.K. Jain replaced him as Manager and he remained posted as Manager in said branch till 17.06.1997. Very curiously Sh. B.D. Sharma had also indulged in purchasing cheques and grant of TOD beyond discretionary power and Sh. J.D.K. Jain as well. Posting tenure of various bank officials is as under:-
Sl No. Period Manager Accountant
1 August 1994 to 28.05.1997 B.D. Sharma Ravinder Malik
2 28.05.1997 to 17.06.1997 J.D.K. Jain --
3 17.06.1997 to 22.06.1997 I.S. Suri (A-5) --
(officiating capacity)
4 23.06.1997 to 13.09.1997 P.K. Sahi (A-4) I.S. Suri (A-5)
11.7 Complaint was made to CBI by PW3 G.L. Khandelwal and his
such complaint has been proved as Ex. PW3/A.
11.8 Sh. Khandelwal has come up with a very scanty deposition. He
has not even bothered to elaborate the manner of alleged fraud and cheating. He did depose that the matter was internally investigated by the vigilance branch but surprisingly such vigilance inspection report has been held back for totally inexplicable reasons. It is not part of the present record though it finds place in the other two connected cases. Such connected matters are also being disposed of today vide separate judgments.
CC No. 05/2011 CBI Vs. Dinesh Kr. Sharma etc. Page 27 of 4411.9 It is evident that a vigilance enquiry was conducted by three bank officials. They are PW4 Sh. N.K. Sehgal, Sh. Vora and Sh. A.N. Nargalokar. Such internal report, conducted by banking experts, could have been a very vital piece of document from prosecutions' angle. Sh. Sehgal has entered into witness box but even he deposed that he could not comment about the report as Mr. Vora had prepared the same without consulting him.
11.10 Reverting back to act and conduct of Mr. B.D. Sharma, Sh. Khandelwal, when he was examined u/s 161 Cr.P.C., clearly claimed as under:-
"I further confirm that Shri B.D. Sharma, the then Branch Manager of Dena Bank, Mayapuri branch, New Delhi unauthorisedly and indiscriminately permitted temporary overdrafts to M/s Balaji Metals to the extent of Rs. 5,38,050/- as on 2.4.97 which was much beyond his delegated powers of Rs.10,000/- only. Shri B.D. Sharma not only permitted this unauthorised overdrafts in the account of M/s Balaji Metals, but also that he concealed this fact from the Controlling Authority by not reporting and seeking confirmation from the Regional Authority's Office at New Delhi".
11.11 Even the charge sheet is clearly indicative of the fact that Sh. B.D. Sharma had accepted cheques beyond his discretionary power. He permitted overdraft and did not even report such fact to the regional office. It is really not comprehensible and graspable as to why he has not been sent up as an accused. Charge sheet contains a recital that his acts did not depict any criminal malafide intention and were considered only as violation of bank norms. This is totally incongruous if I scrutinize the alleged lapses on the part of Mr. Sahi and Mr. Suri. They are also saddled with similar allegations. CBI has manifestly attempted to treat the similarly situated bank officials diametrically opposite. One public servant who commits the same CC No. 05/2011 CBI Vs. Dinesh Kr. Sharma etc. Page 28 of 44 violation is labeled as corrupt and the other is let off and his acts are labeled as mere violation of bank norms. Thus there is inherent paradox in the case projected by CBI. If Sh. B.D. Sharma has merely violated the bank norms, so is true with his successor. There was no reason whatsoever to have asked his successor to stand trial for being corrupt for the same very acts and omissions.
11.12 Quite the reverse, I would go on record to place my appreciation for Mr. Sahi. If I have been able to pore over the entire record correctly, Sh. Sahi needs to be complemented. His predecessors never even bothered to keep the regional authority informed. They never prepared complete control returns. They never sent any return to the regional authority in time. Mr. Sahi rather tried to clear up the muddle by preparing all such returns and sent those to Regional office.
11.13 The account in question was 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 turned NPA eventually.
11.14 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.
CC No. 05/2011 CBI Vs. Dinesh Kr. Sharma etc. Page 29 of 4411.15 One File related to Regional Authority is relied upon by CBI as D-27 in two connected matters of CBI against Bhajan Singh i.e. CC No. 4/11 and CC No. 6/11. Such folder contains various control returns. The entire bunch has been proved as Ex. PW3/61in said case. 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. Interestingly, Mr Sahi had also joined Mayapuri Branch same day only.
11.16 Admittedly, 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 various accounts of Bhajan Singh Group. 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.
11.17 Reference be made to letter No. DB/HYP/ND/97 dated 14.07.1997 contained in said bunch. 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. 05/2011 CBI Vs. Dinesh Kr. Sharma etc. Page 30 of 4411.18 Several documents in this regard are contained herein also in D-199 to D-287 and surprisingly even these documents are lying unproved. D-275 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 various accounts of Bhajan Singh 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 herein) 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.
11.19 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) 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.
11.20 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).
CC No. 05/2011 CBI Vs. Dinesh Kr. Sharma etc. Page 31 of 44He 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".
11.21 Regional authority responded said letter. Reply is contained in letter dated 22.08.1997 (D-215) 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.
11.22 Accused P.K. Sahi again informed the Regional authority vide letter No.DH/HYP/ADV/97 dated 11.09.1997 (D-272) 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 Balajee Metals. Such letter is also lying unproved.
11.23 All such documents are very important from prosecution angle as well as from the angle of defence and someone from Regional Office should have made mention of such letters and should have explained the contents properly. I guess, Mr. Lamba was the best person on this score.
CC No. 05/2011 CBI Vs. Dinesh Kr. Sharma etc. Page 32 of 44Fact 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.
11.24 As per the stand taken by accused P.K. Sahi also, 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. Said unproved letters do show that he was informing the Regional Authority about purchase of cheques and was also seeking post facto confirmation. Taking worst, he may have also committed misconduct by purchasing the cheques without prior permission in writing 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.
11.25 PW2 R.K. Dahiya has come up with a comparatively sketchy deposition in the present case. In said two connected matters, he, in no uncertain terms, admitted that the Control Returns sent by Sh. P.K. Sahi mentioned about the various details about purchase of cheques and account status. He also admitted that he himself and Mr. Sahi both had been deputed to effect recovery in the accounts of Bhajan Singh and Group. He also admitted therein 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.
CC No. 05/2011 CBI Vs. Dinesh Kr. Sharma etc. Page 33 of 4411.26 Two other key witnesses of Dena bank have come up with evasive answers and it seems that they don't want A-4 to walk free. PW4 Sh. Sehgal ducked some of the questions and similarly PW13 Sh. Bhalla also gave evasive answers.
11.27 PW4 Naresh Sehgal has deposed as under in his cross examination:-
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?CC No. 05/2011 CBI Vs. Dinesh Kr. Sharma etc. Page 34 of 44
A. I cannot say. 11.28 Such answers coming from the mouth of an official who
conducted vigilance enquiry are very awkward, gawky and embarrassing to prosecution. His deposition, however, does indicate that aspect of cheque purchase was duly recorded in the bank registers.
11.29 Similarly, another key bank witness PW 13 Mr. Bhalla gave disappointing answers. These are as under:-
Q Are you aware that BRO MO-II Statement which contains the annexure pertaining to exceeding TOD beyond discretionary powers of Branch Manager are reported to Regional Office every month?
Ans. Some such statements are sent. Exactly I do not remember.
Q Are you aware about the purpose of using D-III statement?
Ans. I have no knowledge. 11.30 Control Returns statements also known as DIII statements and strangely, Mr. Bhalla is unaware about the same. 11.31 It is quite ironical that the earlier Branch Head who had
purchased the cheques without informing the Branch and permitting TODs has not been taken to task. Sh. B.D. Sharma has been let off. His same acts are dubbed as act of mere violation of banking norms. Sh. J.D.K. Jain has also been similarly let off but the one who put in hard work and prepared the control returns for the various previous period as well has been made accused in the present case.CC No. 05/2011 CBI Vs. Dinesh Kr. Sharma etc. Page 35 of 44
11.32 Interestingly, as per charge-sheet, A-4 has been made accused because he did not send the control returns within time. These returns could be sent by 10th of each succeeding month as per one afore-referred letter sent by Regional office. A-4 was not given any breathing time at all. Even if, he took some time in preparing control returns and transmitted the same to Regional office belatedly, such delay of mere 21 days will not convert him into a criminal.
11.33 I had called for the case diary and a careful perusal of case diary having serial no. 49 and dated 25.08.99 disclosed that even Sh. B.D. Sharma had been asked as to why he had purchased the cheques and permitted TOD and he had answered that same had been purchased as per the oral clearance given by Sh. Tandon, the then DGM. Mr. Sahi is also crying at full volume the same thing. His predecessor is believed and made witness but he is not and rather made an accused.
11.34 Case diary having serial no. 47 dated 23.08.99 would also indicate that Sh. J.D.K. Jain had also appeared in CBI office. He had also purchased one cheque in the account of M/s Balaji Metals and permitted TOD and he took the plea that he was having additional charge of the bank and that he had purchased the cheque as per the previous practice in the Branch and he did not have sufficient time to go through the records of the bank. He is neither a witness nor an accused.
11.35 In such a situation, Mr. Sahi should also not have been dealt with any differently.
11.36 Complete correspondence file from the Regional Office has not been submitted before the court for comprehensive judicial scrutiny. Sh.CC No. 05/2011 CBI Vs. Dinesh Kr. Sharma etc. Page 36 of 44
Lamba did claim during the investigation that Regional Office was not kept in the loop but it was his evidence before the Court which really mattered. His incomplete testimony does not take the case of prosecution anywhere. No other witness from Regional Office has either been cited or examined and, therefore, even if there is delay in sending the control returns by A-4, that will not be inviting any criminal action more so when his predecessors were completely negligent and uncaring and had not sent number of control returns for the previous period.
11.37 It seems quite apparent that Bhajan Singh Group of Companies had submitted a proposal for regularization of its all accounts and its proposal was also accepted. As per decision taken by Head Office, total limit of Rs. 2.65 crores was sanctioned to Bhajan Singh Group and as far as M/s Balaji Metals is concerned, by such approval, the entire outstanding stood, so to say, regularized.
11.38 Such sanction was, however, dependent upon on furnishing of collateral security which was not furnished by the borrower. A-2 examined one witness i.e. DW1 Sh. Hari Narain Takkar in order to show that the collateral property, which he had offered, was having clear title. Such fact has, however, not been substantiated by A-2 in the desired manner. Perhaps legal search report (LSR) pertaining to such collateral property had been given by DW1 Sh. Takkar who was on the panel of Dena Bank but since the original record was not summoned from the bank, Sh. Takkar could not make any comment about the photocopy of his alleged report. No step was taken by accused to call for the original report from bank either. Moreover, even said LSR was as per the inspection of official record. Sh. Takkar never visited the property and he rather clarified that aspect of physical possession be got checked and as per Sh. Dahiya when such property was visited by his CC No. 05/2011 CBI Vs. Dinesh Kr. Sharma etc. Page 37 of 44 Manger (Legal), name of some other owner was found displayed over there. 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.
11.39 Interestingly, such fact regarding proposal processed and approved by Head Office should have been revealed by the prosecution witnesses themselves but they were found avoiding giving correct answers. They rather pleaded ignorance. Reference be made to deposition of PW7 Mr. P Sen and PW4 Mr. Sehgal. PW3 Dr Khandelwal, complainant albeit admitted such fact in his cross examination. He did admit that such proposal was sanctioned. Curiously, this important development was not mentioned by him in his complaint. I do not know whether it was designedly held back to save some senior officer.
11.40 Moreover, as far as accused P.K. Sahi is concerned, no serious 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 and he was given one more opportunity to serve the bank. 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 for which he has virtually been exonerated at department level.
CC No. 05/2011 CBI Vs. Dinesh Kr. Sharma etc. Page 38 of 4411.41 As far as A-5 is concerned, he has claimed that he was merely an Accountant in the Branch and was not even competent or authorized to purchase the cheques. A-5 also entered into witness box as defence witness in one other case in which also he was sent up to face trial i.e. CBI Vs. Bhajan Singh etc. CC No. 4/11. Certified copy of his such deposition has also been placed in the present matter and on the basis of such deposition, it has been reasserted that power to purchase cheques vested in Branch Manager only.
11.42 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 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 CC No. 05/2011 CBI Vs. Dinesh Kr. Sharma etc. Page 39 of 44 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."
11.43 In view of my foregoing discussion, I would conclude by saying that I have not been able to come across any instance of corruption or criminal misconduct on the part of two public servants. Moreover, 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 A-4 and A-5 were acting in league with the borrower. There is no material to suggest that they had CC No. 05/2011 CBI Vs. Dinesh Kr. Sharma etc. Page 40 of 44 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. 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.
11.44 In view of my foregoing discussion, Sh. P.K. Sahi and I.S. Suri do not seem to have indulged in any criminal misconduct. I am, therefore, inclined to grant them benefit of doubt.
CONCLUSION 12.0 It is not unusual modus operandi that credit facilities are first sought and then money is withdrawn, misused and mis-utilized. There is tendency to open bogus, non-existent and paper-firms and then these firms open bank accounts which are used for the purpose of siphoning off the money.
12.1 The manner in which immediately after opening of the account, various cheques were submitted for purchase clearly indicates the dishonest intention on the part of A-2. There were no genuine business transactions and these cheques, which had been submitting for being purchased, were in CC No. 05/2011 CBI Vs. Dinesh Kr. Sharma etc. Page 41 of 44 the shape of accommodation cheques. It is quite apparent that there were no genuine business transactions even in the other concerns which belonged to A-2 and the bank accounts were opened merely to show that these firms were into some sort of business. Cheque issued by one firm was submitted for being purchased in the other accounts and so on.
12.2 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.
12.3 Sh. Hakikat Yadav, learned counsel has contended that bank knew very well that A-2 had substantial stock and such fact itself indicates that A-2 had genuine business transactions. He has also contended that even various prosecution witnesses have claimed that A-2 was a man of substantial business. According to him, in Faridabad, A-2 was known as "Metal King". In that case, rather, it was expected that he would show some material to indicate that he was into serious business. No document has been placed on record. Bank transactions tell a different story and circular transactions contradict his stand. I have also not been able to come across any specific convincing bank document which might suggest that any bank official had himself inspected such stock. Merely because such fact is mentioned in eventual sanction letter of January 98 would not mean that there was, in fact, such stock. Even if I assume that stock worth Rs. 28.40 lacs pertaining to M/s Balaji Metals existed on 30.01.1997, it will not provide any relief to accused Bhajan Singh. Non-seizure of such stock was sort of CC No. 05/2011 CBI Vs. Dinesh Kr. Sharma etc. Page 42 of 44 lapse on the part of Regional Authority as it could have made up substantial loss. It would have reduced the civil liability but would not have absolved accused Bhajan Singh of criminal liability.
12.4 Moreover, PW 12 Hem Chand Gupta has deposed that A-2 had taken premises from him on rent but he also claimed on oath that he never saw any activity being run from there. Rather according to him, such premises used to remain closed. He claimed that he never heard about any business of any such firm run from there. Interestingly, such fact remained completely unrebutted and uncontroverted.
12.5 Even if it is believed that A-2 was a scrap dealer and had a substantial business at one point of time, as far as the present case is concerned, intention behind the opening of the account through his employee was to usurp the funds. Dishonest intention was in existence from day one. It cannot be said to be a case where the account was opened with any noble intention and that it was only because of the poor management of business that the account had turned Non Performing Asset (NPA).
12.6 IO Ramnish was admittedly a crucial witness as the bulk of investigation was conducted by him. He should have been examined by the prosecution but fact remains that his non-examination would not mean that the offences evaporate altogether. Moreover part I.O. A.K. Singh has made up the loss in this regard.
12.7 Even if Dena Bank has filed a civil suit for recovery, it will not mean and indicate that there was no cheating at all. There is no embargo in taking simultaneous remedial action. Civil action and criminal action can go together. Merely because some civil action has been initiated, it cannot be CC No. 05/2011 CBI Vs. Dinesh Kr. Sharma etc. Page 43 of 44 robotically said that criminal action was uncalled-for or unjustifiable. Sh. Hakikat Yadav has asserted that it was mere civil case. I, however, do not find any substance in such contention. My forgoing discussion tells a completely different story and is manifestly suggestive of dishonest intention.
12.8 In view of my foregoing discussion, A-1, A-3, A-4 & A-5 stand acquitted of all the charges.
12.9 A-2 Bhajan Singh is held guilty for committing offence u/s 420 IPC.
Announced in the open Court On 6th day of September, 2014. (MANOJ JAIN) Special Judge (PC Act) (CBI) South Distt: Saket Courts: New Delhi CC No. 05/2011 CBI Vs. Dinesh Kr. Sharma etc. Page 44 of 44