The First Step For Initiating ... vs Bhor Industries Ltd. And Anr. (2005) 10 ... on 6 June, 2018

[Cites 30, Cited by 0]

Delhi District Court

The First Step For Initiating ... vs Bhor Industries Ltd. And Anr. (2005) 10 ... on 6 June, 2018

IN THE COURT OF SH. ARUN BHARDWAJ, SPECIAL JUDGE
 (PC ACT), CBI-05, PATIALA HOUSE COURTS, NEW DELHI

                                CC No.05/16 (Old No. 13/10 & 04/12)
                            RC No.BD.1/2009/E/0004/CBI/BS&FC/ND
                                     CNR No.DLND01-000003-2010

       Central Bureau of Investigation

                     versus

1.     Sh. Ashwani J. Verma (Borrower)
       S/o Late Sh. T. R. Verma,
       R/o D-11, Aishwaryam Apartments, Plot No.17, Sector-IV,
       Dwarka, New Delhi-110078.               ... Accused No.1

2.     Sh. Mohan Lal Arora @ M. L. Arora (Ex-AGM, PNB, South
       Ex.) (Public Servant)
       S/o Late Sh. Khanda Ram,
       R/o H. No.5-N/35A, New Industrial Town (NIT),
       Faridabad (Haryana)                     ... Accused No.2

3.     Sh. Coduru Nagbhushan Rao @ C. N. Rao @ Konathala
       Mahalaxmi @ Mamu (Proclaimed Offender vide orders
       dated 13.10.2010) (Guarantor)
       R/o Flat No.F-3, MIG-II, Godavari Block (Block-19),
       Vishweshwariya Nagar (near Flyover),
       Gajuwaka, Vishakhapatnam (AP)             ... Accused No.3

4.     Sh. P. V. Krishnaji @ Sh. P. V. Krishnajee
       (Govt. Approved Valuer)
       S/o Sh. Subba Rao
       R/o Second Floor, Door No.39-9-2/6,
       Murlinagar, Vishakhapatnam-7 (AP)          ... Accused No.4




CBI v Sh. Ashwani J. Verma & Ors.                       Page No. 1/174
CC No.05/16                                                  DL0375
 5.     M/s. Nanak Steels Pvt. Ltd. (M/s. NSPL) (Borrower)
       (represented through A-1)
       O/o 202, 2nd Floor, Sagar Deep, Plot No.11,
       LSC, Saini Enclave, Vikas Marg Extension,
       Delhi                                ... Accused No.5

6.    Sh. Vinay Tyagi (Private Person)
      S/o Sh. Balraj Singh Tyagi
      R/o H. No.D-312, Govind Puram,
      Ghaziabad (UP)
Also at:-
      Flat No.404, Sitaram Enclave, Street No.10,
      Himayat Nagar, Hyderabad-29 (AP) ... Accused No.6

       Date of Institution                           :     20.05.2010
       Date of Arguments                             :     31.05.2018
       Date of Judgment                              :     06.06.2018

JUDGMENT

1. The first step for initiating prosecution in this case was taken on 07.01.2009 when Sh. Shriman Narayan Sharma, the Chief Manager of Punjab National Bank (PNB), Branch Office: South-Extension, New Delhi, gave a complaint to SP, CBI, Banking Security & Fraud Cell, New Delhi.

2. The gist of the said complaint is that:-

i. M/s. Nanak Steels Private Limited (hereinafter referred as M/s NSPL) through its director Sh. Ashwani J. Verma was sanctioned a CC (Hypothecation) limit of Rs.280.00 lacs, Term Loan of Rs.500.00 lacs, Inland Letter of Credit (ILC) limit of Rs.100.00 lacs and Bank Guarantee of Rs.20.00 lacs by the then Dy. General Manager (Sh. Satbir Singh Dabas), South Delhi Region, New Delhi on 26.09.2005.

CBI v Sh. Ashwani J. Verma & Ors. Page No. 2/174

CC No.05/16 DL0375 ii. The limits were secured by charge on Block Assets of the Company and primary security of hypothecation of raw material (billets/ingots, scrap, furnace oil, work in process), finished goods of TMT bars, machineries etc. and mortgage of factory land and building at A-61/4, UPSIDC Industrial Area, Sikandrabad, Bulandshahar, UP.

iii. Further, the limits were collaterally secured by way of equitable mortgage of three flats at THA residential colony, Ramprasth, Ghaziabad in the name of Sh. Ashwani Verma and Smt. Jyoti Verma, the Directors of the Company. iv. The personal guarantee of the Directors was also obtained in the account.

v. Additionally, collateral security by way of creation of equitable mortgage of Plot No.51, situated at Raja Palem, Village Anakapalle, District Vishakhapatnam (AP) in the name of one Sh. Konathala Mahalaxmi S/o Sh. Konathala Rajayya, R/o 27-2-48, 100 Feet Road, Gajuwaka, Vishakhapatnam (AP) was also taken.

vi. The Branch officials released a sum of Rs.1,12,58,302/- upto 31.10.2005 in the Term Loan account even before the spot verification of the land contrary to the fact that the sanction stipulated that the property at Vishakhapatnam is to be spot verified by the Bank officials before release of the facilities and the Incumbent Sh. M. L. Arora had verified the spot only on 05.11.2005.

vii. The Company during implementation of the project itself changed its project by adding certain machinery and by changing the technology of project and unit suffered time over run as it could not commence production as originally scheduled.

viii. On 29.08.2006, the Branch forwarded parties request to the then Zonal Office, South Delhi Zone of the Bank for the CBI v Sh. Ashwani J. Verma & Ors. Page No. 3/174 CC No.05/16 DL0375 release of immovable property situated at Vishakahapatnam on the plea that the market value of primary security and IP mortgaged with the Bank is already in excess of facility sanctioned and to be sanctioned by the Bank and the company might give some other property worth Rs.50 to Rs.55 lacs approximately.

ix. However, the Zonal Office did not agree for the same and advised the Branch to obtain a report on the immovable property situated at Vishakhapatnam.

x. Sh. J. M. Gupta, the Manager of the Branch, visited Vishakhapatnam in the last week of August, 2006. The then AGM of the Branch Sh. M. L. Arora vide letters dated 12.09.2006 and 18.09.2006 informed the Zonal Office that Sh. J.M. Gupta had visited Vishakhapatnam and discussed the matter with the Bank's approved advocate and valuer who informed that IP at Vishakhapatnam mortgaged with Bank is valid and enforceable and there is no change in the status of the land.

xi. On the basis of this, the Zonal Office vide its letter dated 21.09.2006, permitted release of working capital.

xii. Later, Sh. J. M. Gupta, Manager who had visited Vishakhapatna in August, 2006, informed the then Zonal Office, South Delhi Zone vide his letter dated 30.03.2007 that during his visit to Hyderabad and Vishakhapatnam in the last week of August, 2006, it was found that the land mortgaged with the Bank was not owned by the mortgagor i.e. Sh. Konathala Mahalaxmi. He submitted that he had informed Sh. M. L. Arora, the then Assistant General Manager (Incumbent) of the Branch after his return from Vishakhatpatnam that the land mortgaged with the Bank was not owned by the mortgagor i.e. Sh. Konathala Mahalaxmi and that the letter was duly acknowledged by Sh. M. L. Arora CBI v Sh. Ashwani J. Verma & Ors. Page No. 4/174 CC No.05/16 DL0375 on 07.09.2006.

xiii. The intimation dated 30.03.2007 of Sh. J. M. Gupta, Manager about the immovable property at Vishakhapatnam and of Sh. M. L. Arora, AGM vide letters dated 12.09.2006 and 18.09.2006 were contrary to each other. In the meantime, Sh. M. L. Arora, AGM of the Branch retired from the Bank's service on 31.03.2007.

xiv. During the visit to the factory by the Branch officials on 17.07.2007, it was found that the unit was not working and no stock of raw material, semi-finished goods or finished goods was found in the premises and when the Branch officials visited the factory again on 24.03.2008, the same was found to be closed.

xv. In the given circumstances, the Zonal Office, South Delhi Zone deputed Sh. R. K. Gupta, Sr. Manager (Law) to Vishakhapatnam for verification of original Title Deed and enforceability of mortgage.

xvi. The report of Sh. R. K. Gupta, Sr. Manager (Law) revealed that Sh. Konathala Mahalaxmi, guarantor who had purportedly mortgaged the land situated at Vishakhapatnam had died at about eighteen years back. Thus, Equitable Mortgage of immovable property situated at Anakapalli, District Vishakhapatnam belonging to Sh. Konathala Mahalaxmi was created through impersonation. xvii. It was alleged that M/s. NSPL through its three directors raised credit facilities from PNB, South-Extension Branch by misrepresenting the facts and concealed the information regarding death of Sh. Konathala Mahalaxmi.

xviii. It was further alleged that they also diverted the Bank's funds by disposing off the stocks hypothecated to the Bank. xix. It was alleged that Sh. Ashwani J. Verma, Smt. Jyoti A Verma and Sh. Arukrishansh, directors/promoters of the CBI v Sh. Ashwani J. Verma & Ors. Page No. 5/174 CC No.05/16 DL0375 Company with their dishonest intention have entered into a criminal conspiracy to cheat the Bank to the tune of Rs.784.54 lacs and requested registration of the case and taking up investigation.

3. The charge-sheet was filed in this court on 21.05.2010 against six persons namely A-1 Sh. Ashwani J. Verma, A-2 Sh. Mohan Lal Arora (Sh. M. L. Arora), A-3 Sh. Coduru Nagbhushan Rao @ C. N. Rao @ Konathala Mahalaxmi @ Mamu, A-4 Sh. P. V. Krishnaji, A-5 M/s. NSPL and A-6 Sh. Vinay Tyagi.

4. Sh. Coduru Nagbhushan Rao @ C. N. Rao @ Konathala Mahalaxmi @ Mamu (A-3) was declared as Proclaimed Offender vide orders dated 13.10.2010.

5. The charge-sheet revealed following additional facts :-

i. The description of the collateral security as per mortgage register and other documents was the land bearing 'Zerayati Patta No.51' of Raja Palem village.

ii. The approved valuer of the Bank Sh. P. V. Krishnaji vide his valuation report dated 14.07.2005 valued the collateral security at Rs.3.48 crores but the description of the property was land bearing 'Survey No.51' of Raja Palem Village, Anakapalle Mandal, District Vishakhapatnam. iii. Sh. P. V. Krishnaji conducted the valuation of a different land which was not at all mortgaged to the Bank and submitted an incorrect and fabricated valuation report to the Bank.

iv. The land bearing 'Zerayati Patta No.51' and 'Survey No.51' are entirely different from each other, both on paper and ground.

CBI v Sh. Ashwani J. Verma & Ors. Page No. 6/174

CC No.05/16 DL0375 v. Land bearing 'Zerayati Patta No.51' was purchased by Sh. Konthala Mahalaxmi in the year 1951 and is still in his name whereas, the land bearing 'Survey No.51' is in the name of twenty persons other than Sh. Konathala Mahalaxmi.

vi. The land bearing 'Survey No.51' is adjacent to the National highway No.5 and carries a higher market value whereas, the land bearing 'Zerayati Patta No.51' is far away from the highway and carries lower market value. vii. In the year 1956, survey was conducted in the state of Andra Pradesh and land bearing 'Zerayati Patta No.51' was allotted 'Survey No.149/1 & 149/3'.

viii. A-3 Sh. Coduru Nagbhushan Rao @ C .N. Rao @ Mamu managed to obtain the original papers of the land of Sh. Konathala Mahalaxmi and obtained PAN card No.AMAPK4943Q and ration card/household card No.PAP0383301B0188 in the name of Sh. Konathala Mahalaxmi and used them as identity and residence proof for adopting a new identity as Sh. Konathala Mahalaxmi. ix. A-6 Sh. Vinay Tyagi introduced A-3 Sh. Coduru Nagbhushan Rao @ Konathala Mahalaxmi with A-1 Sh. Ashwani J. Verma and an agreement was signed as per which A-3 Sh. Coduru Nagbhushan Rao agreed to provide collateral security for a commission of Rs.50 lacs payable by A-1 Sh. Ashwani J. Verma.

x. On 28.09.2005, A-1 Sh. Ashwani J. Verma, A-3 Sh. Coduru Nagbhushan Rao and A-6 Sh. Vinay Tyagi visited PNB, South-Extension, New Delhi where A-3 Sh. Coduru Nagbhushan Rao impersonating as Sh. Konathala Mahalaxmi signed the Agreement of Guarantee of loan of A-5 M/s. NSPL pretending to be uncle of A-6 Sh. Vinay Tyagi and childhood friend of A-1 Sh. Ashwani J. Verma.

CBI v Sh. Ashwani J. Verma & Ors. Page No. 7/174

CC No.05/16 DL0375 xi. A-1 Sh. Ashwani J. Verma paid a commission of Rs.25 lacs to A-3 Sh. Coduru Nagbhushan Rao who was impersonating as Sh. Konathala Mahalaxmi through A-6 Sh. Vinay Tyagi.

xii. A-1 Sh. Ashwani J. Verma without consent of the Bank disposed off the primary securities without depositing proceeds thereof with the Bank.

xiii. A-2 Sh. M. L. Arora prepared an incorrect confidential report dated 10.09.2005 regarding the guarantor Sh. Konathala Mahalaxmi to the effect that he was maintaining an amount of Rs.50,000/- in his account at State Bank of Bikaner & Jaipur, Vishakhapatnam whereas no such account was being maintained in the abovesaid Bank. He prepared confidential report on the basis of information supplied by A-1 Sh. Ashwani J. Verma and took the same on record without any independent verification and even failed to note that Sh. Konathala Mahalaxmi had died. xiv. The suggestion of Bank's approved advocate to publish the details of collateral security in the local newspaper, to fix up a hoarding at the site of collateral security and to measure the land in the presence of local revenue officers and Bank's representatives was not complied with and rather A-2 Sh. M. L. Arora stated that the suggestions are cumbersome and third party collateral security be released. xv. A-2 Sh. M. L. Arora neither intimated to the higher authorities about the defects in the collateral security nor ill-health of the account.

6. All the accused were charged with the offence under Section 420 and 120-B readwith Section 419, 420, 468, 471 IPC and Section 13 (2) readwith 13 (1) (d) of Prevention of Corruption Act, 1988.

CBI v Sh. Ashwani J. Verma & Ors. Page No. 8/174

CC No.05/16 DL0375 Additionally, A-1 Sh. Ashwani J. Verma was also charged for the offence under Section 471 of IPC and A-2 Sh. M. L. Arora was additionally charged with offence under Section 13 (2) readwith Section 13 (1) (d) of Prevention of Corruption Act, 1988.

7. All the accused pleaded not guilty and claimed trial.

8. The prosecution examined fifty five witnesses to prove its case. PW1 Sh. Shriman Narayan Sharma, Assistant General Manager, Punjab National Bank

9. The first witness to enter the witness box was Sh. Shriman Narayan Sharma. He was the Chief Manager, PNB, Regional Office/Zonal Office, New Delhi from June 2005 to Februrary, 2008 and from 26.09.2008 to 14.06.2010, he was posted in South Extension Branch of PNB, New Delhi at the post of Chief Manager. Thus, he had dealt with the files pertaining to M/s. NSPL while he was posted in the Regional / Zonal Office as well as in the Branch Office of South Extension Branch of PNB. He was familiar with the handwriting and signatures of A-2 Sh. M. L. Arora and Sh. J. N. Gupta as he had been receiving various correspondence / documents written / signed by both of them.

10. PW1 proved Ex.PW1/A to Ex.PW1/R54 in examination in chief. Few noteworthy exhibits exhibited by him are :-

i. Ex.PW1/A-Complaint dated 07.01.2009 given by him to CBI. ii. Ex.PW1/B-Letter dated 11.03.2011 addressed to CBI vide which he had given Drawing Power (DP) register/stock register of M/s. NSPL.

iii. Ex.PW1/C-Letter dated 22.02.2010 written by him to CBI CBI v Sh. Ashwani J. Verma & Ors. Page No. 9/174 CC No.05/16 DL0375 stating therein that efforts were made to trace out original loan application of M/s. NSPL but could not be found available in the records of the Bank.

iv. Ex.PW1/D-Letter dated 31.08.2009 written by him to CBI submitting a copy of Book of Instructions on Loans of PNB. v. Ex.PW1/E-Seizure Memo dated 01.09.2009 as per which he had given 193 documents, as mentioned in the memo, to CBI. [One of the documents given vide this seizure memo is Ex.PW34/Q which is a letter dated 12.09.2006 written by A-2 Sh. M. L. Arora to the DGM, South-Delhi Zone, Credit Section informing that Zonal office Hyderabad had suggested to take the assistance of Sh. P. Ramakrishna Rao, Approved Advocate and Sh. P. V. Krishnaji, Approved Valuer for the property at Vishakhapatnam. It was also informed in that letter that the property (collateral security offered by Sh. Konathala Mahalaxmi) is demarcated in the revenue records and Field Map Book (FMB) and the same is identifiable. It is also mentioned in this letter that with regard to the query whether noting of Bank's charge in revenue record in the record of Sub- Registrar of assurance is possible and if not, other alternate to give clearcut notice of Bank's charge on the property to the public in general, the approved advocate had advised "Since the property in question belongs to the third party and since the property is some thousands kilometers away from Delhi, it is better to follow my advice mentioned hereinunder in this regard:-

a) Noting the full particulars of the property in question together with schedule and ownership of land to be published in Eenadu local edition in Telugu version and in Hindu Daily to be published informing the public about the charge created by PNB, BO, South-Extension, New Delhi-110049 and to call for any objection by anyone in this regard having sort of interest over the CBI v Sh. Ashwani J. Verma & Ors. Page No. 10/174 CC No.05/16 DL0375 property in question other than the mortgagor Sri Konatala Rajya.

b) To fix up a big size hoarding at the entrance of the site in a way which is visible to the public, informing the public about the charge created over the said property by PNB, South-Extension, New Delhi.

c) To measure the land in the presence of Bank's valuer and legal advisor with the assistance of Mandal Surveyor and thereafter to obtain a certificate to that effect signed by the Mandal Surveyor and countersigned by the MRO, Anakapalli, Vishakhapatnam together with the FMB sketch from the revenue record".

To the query whether the land has been acquired or is proposed to be acquired by the State/any authority, the advise of approved advocate was that the mortgagor has to apply for obtaining separate certificate in this regard from the MRO, Anakapalli town and VUDA, Vishakhapatnam.

However, A-2 Sh. M. L. Arora responded that since the property in question is vacant land and could not be identified independently and the procedure suggested by the advocate is 'very cumbersome', he asked the party to give some other property as was discussed in the meeting on 23.08.2006 and the party submitted their request for release of third party property.

In the seizure memo, the witness had also given certified copy of Page No.16 of the Title Deed Register of PNB Branch office South office, New Delhi showing CBI v Sh. Ashwani J. Verma & Ors. Page No. 11/174 CC No.05/16 DL0375 entry dated 07.11.2005. Here the description of property is land measuring 4 acres or 19360 sq. yds. covered by 'Zirayati Patta 51', Raja Palem village, Anakapalle, Vishakhapatnam.] vi. Ex.PW1/G-Letter dated 03.11.2009 as per which PW1 had clarified that despite best efforts original letter dated 05.11.2005 written by Sh. M. L. Arora and letter dated 05.09.2006 of Sh. J. M. Gupta could not be traced. PW1 had given with this letter a photocopy of Proforma dated 05.11.2005 for Recording the Value of Property Assessed by Incumbent Incharge Sh. M. L. Arora. It is to be noticed that as per this proforma, the description of the property is 'Survey No.51' and not 'Zerayati Patta No.51'. In the column for method adopted for assessing the value of the property (i.e. personally inspecting the property, scrutinizing the valuation certificate issued by Local Authority for taxation purposes, making enquiries through brokers, neighbours, net yield method, the response is 'Local Report of Valuer, Advocate, Circle Rate etc.' Thus, neither as per proforma A-2 Sh. M. L. Arora personally inspected the property nor scrutinized the valuation certificate issued by Local Authority for taxation purposes nor made inquiries from neighbours).

vii. Ex.PW1/J-Seizure Memo dated 17.07.2009 vide which cash deposit slip for Rs.1,00,000/- for credit to the Account No.4481000100008969 of Sh. Konathala Mahalaxmi, Vishakhapatnam vide system entry No.1313412 was handed over to CBI.

viii. Ex.PW1/K-Seizure Memo dated 30.04.2009 as per which statement of account of cash credit account of M/s. NSPL from 27.09.2005 to 20.03.2009, statement of account of Term Loan account of M/s. NSPL from 27.09.2005 to 20.03.2009 and CBI v Sh. Ashwani J. Verma & Ors. Page No. 12/174 CC No.05/16 DL0375 statement of account of current account of M/s. NSPL from 12.07.2005 to 20.03.2009 were handed over to CBI. ix. Ex.PW1/P4-Letter dated 08.11.2005 written by Sh. Konathala Mahalaxmi to the Manager, PNB, South-Extension. Alongwith this letter, Sale Deed dated 08.09.1951 and other documents were handed over to the Manager, PNB, South-Extension Branch which were already exhibited as Ex.PW27/A and Ex.PW27/B. Vide this letter, Sh. Konathala Mahalaxmi had sought acknowledgment receipt of Sale Deed dated 08.09.1951 and mortgage deed 11.12.1948 which were deposited by him with the Bank on 07.11.2005 by way of equitable mortgage to secure the limits sanctioned and moneys advanced or to be advanced to M/s. NSPL as per loan documents executed on 25.09.2005. It is pertinent to note that the description of property in these documents is 'Zerayati Patta No.51'. x. Ex.PW1/Q7-Statement of Assets and Liabilities of Sh. Konathala Mahalaxmi of account of M/s. NSPL dated 29.07.2005 which was handed over by this witness to CBI. Confidential Report of Sh. Konathala Mahalaxmi already exhibited as Ex.PW34/D was also given along with Statement of Assets and Liabilities. xi. Letter of Sanction of various credit facilities dated 26.09.2005 in favour of M/s. NSPL along with terms and conditions of account of M/s. NSPL which was already exhibited as Ex.PW12/B was also handed over by this witness to CBI. [It is pertinent to mention at this stage itself that the sanction had following conditions besides other conditions:-

(a) The land situated at Plot No.51 at Raja Palem Village, Anakapalli, Vishakhapatnam, Andhra Pradesh to be spot verified by the Bank officials before release of facilities. (Emphasis supplied)

(b) Bank's name to be prominently displayed where securities charged to the Bank are kept.

CBI v Sh. Ashwani J. Verma & Ors. Page No. 13/174

CC No.05/16 DL0375

(c) The stocks were to be checked atleast once in a month at regular intervals from the books of the borrower and also physically.

(d) The Bank Manager is advised to get the IPs in the name of the guarantor spot verified by the Bank officials.

(e) No commission to be paid by the borrowers to the guarantor for guaranteeing the credit facilities sanctioned by the Bank to the borrowers. (Emphasis supplied)

(f) During the currency of Bank's Credit Facilities, the borrower shall not, without the prior approval of Bank in writing sell, assign, mortgage, alienate or otherwise dispose of any of the assets of the borrower charged to the Bank. (Emphasis supplied)

(g) Guidelines contained in L&A Circular No.91/98 should be strictly complied with.] xii. Ex.PW1/Q14 (colly)-Statement of cash credit account of M/s.

NSPL alongwith certificate as per Banker's Book of Evidence Act, 1891.

xiii. Ex.PW1/Q15 (colly)-Statement of Term Loan account of M/s. NSPL alongwith certificate as per Banker's Book of Evidence Act, 1891.

xiv. Ex.PW1/Q16-Statement of current account of M/s. NSPL alongwith certificate as per Banker's Book of Evidence Act, 1891.

xv. Ex.PW1/R-Letter dated 27.09.2005. In this letter, while conveying the sanction of various facilities in favour of M/s. NSPL the terms and conditions of sanction were conveyed to the borrower. The witness deposed that borrower did not fulfill the conditions and misled the Bank and removed/disposed off the assets charged to the Bank i.e. plant machineries and other stock charged to the Bank without liquidating Bank dues.

CBI v Sh. Ashwani J. Verma & Ors. Page No. 14/174

CC No.05/16 DL0375 xvi. The report of Local Commissioner Sh. Atul Sharma, Advocate dated 11.06.2009 Ex.PW40/A in which it is mentioned that all the plant and machineries at the factory premises of M/s. NSPL have been removed and the articles available were in bad shape. xvii. Ex.PW1/R3-Board Resolution of M/s. NSPL dated 25.09.2005 vide which Sh. Ashwani J. Verma was authorized by the company to accept the terms and conditions of the sanction of the loan.

xviii. Proposal/Board Format of the loan account of M/s. NSPL. [At the time of recording of evidence, it was decided that at final stage it will be considered whether this document is proved or not. Sh. R. N. Mittal, learned Sr. Advocate for A-2 Sh. M. L. Arora while addressing final arguments had referred and relied on this document to draw the attention of this court that the same was first signed by Sh. J. M. Gupta, Manager (Credit) at point B and only thereafter it was signed by A-2 Sh. M. L. Arora being the Chief Manager at point A. Thus, the same would be read in evidence now.] xix. Ex.PW1/R53-Affidavit dated 26.02.2005 of Sh. Konathala Mahalaxmi as per which the address of Sh. Konathala Mahalaxmi is C/o A-6 Sh. Vinay Tyagi, H No.D-312, Govind Puram, Ghaziabad. This document was objected to for mode of proof. This witness has dealt with the case files pertaining to M/s. NSPL while he was posted in the Regional/Zonal Office as well as in the Branch office of PNB, South-Extension. Thus, he is familiar with the signatures of Sh. Konathala Mahalaxmi, the objection is therefore, over ruled.

xx. Ex.PW1/R54-Letter dated 02.09.2006 of A-4 Sh. P. V. Krishnaji, the approved valuer of the Bank confirming that for the valuation of the mortgaged property of Sh. Konathala Mahalaxmi, the property was shown to him by A-6 Sh. Vinay Tyagi. This document was objected to for mode of proof. This CBI v Sh. Ashwani J. Verma & Ors. Page No. 15/174 CC No.05/16 DL0375 witness has dealt with the case files pertaining to M/s. NSPL while he was posted in the Regional/Zonal Office as well as in the Branch office of PNB, South-Extension. Thus, he is familiar with the signatures of Sh. P. V. Krishnaji, the objection is therefore, over ruled.

11. In cross-examination by learned Counsel for A-4 Sh. P. V. Krishnaji, PW1 admitted that in the sanction letter Ex.PW9/D (sanction letter is Ex.PW12/B), the property is mentioned as 'Plot No.51' and neither it is mentioned as 'Survey No.51' nor as 'Zerayati Patta No.51'.

12. In cross-examination by learned counsel for A-2 Sh. M. L. Arora, PW1 proved various vouchers signed by Sh. J. M. Gupta as Ex.PW1/DX. He also proved the report of Technical Officer dated 15.07.2005 and 14.09.2005 as Ex.PW1/DX1 and Ex.PW1/DX2 respectively. PW1 also proved a letter dated 21.05.2007 written by him to the Assistant General Manager, Zonal Office as Ex.PW1/DX3. In this letter, PW1 had informed the Zonal office that in the property mortgaged by Sh. Konathala Mahalaxmi, the guarantor in the captioned account was fake.

13. He also proved visit report to the factory site of M/s. NSPL as Ex.PW1/DX4. He also proved specimen signature card signed by Sh. J. M. Gupta as Ex.PW1/DX5.

14. Letter dated 23.03.2007 sent to Chief Manager, Credit Section, Zonal Office, South Delhi by Sh. J. M. Gupta forwarding the request of guarantor Sh. Konathala Mahalaxmi to release his property CBI v Sh. Ashwani J. Verma & Ors. Page No. 16/174 CC No.05/16 DL0375 mortgaged in the credit limits sanctioned to A-5 M/s. NSPL was proved as Ex.PW1/DX6.

15. He further stated that the Concurrent Auditor is permanently posted at Branch and his duty is to conduct the audit on daily basis as per the duty assigned from time to time.

16. He also deposed that the primary security was machinery, land and building of the factory and stock of raw materials, semi-finished and finished goods. He also stated that the primary security was adequate for the disbursement of loan till March, 2008 but subsequently, it was disposed off.

17. He deposed that once it comes to the notice of Section Incharge of the Loan that the property mortgaged with the Bank was not owned by a person who mortgaged the same with the Bank, it was his duty to inform the Incumbent Incharge of the Branch. He further clarified that it was not his obligation to inform to higher authorities in case the Incumbent Incharge is not taking steps and he also stated that he should have informed the higher authority. He deposed that after coming to know defects in security, the Loan Incharge should not have allowed the operation of the account any further without permission of higher authorities. He further deposed that Sh. J. M. Gupta ought to have mentioned the adverse feature in review sheets.

PW2 Sh. D. N. Appa Rao

18. This witness had rented out his flat at Vishakhapatnam to a person named as Sh. C. Nagbhushanam Rao. When he was shown agreement of guarantee executed by Sh. K. Mahalaxmi, he deposed CBI v Sh. Ashwani J. Verma & Ors. Page No. 17/174 CC No.05/16 DL0375 that this was the man whom he had rented out his flat. This agreement was exhibited as Ex.PW2/A (The original of the same is Ex.PW10/C).

PW3 Sh. P. Sriniwas Rao

19. This witness proved Death certificate of Sh. Konathala Mahalaxmi, whose date of death recorded thereon is 28.07.1988, as Ex.PW3/A. PW4 Sh. Satyapal Singh, Manager (Industry), PNB, MSME Branch

20. This witness was posted as Manager (Industry) in Regional Office, PNB and his duty was to physically verify the contents of the infrastructure mentioned in the project reports/applications of the applicants for setting up industries. He had visited at industrial area, Sikandrabad alongwith A-2 Sh. M. L. Arora, the then Chief Manager to check the infrastructure mentioned in the application of A-5 M/s. NSPL He proved his report dated 14.09.2005 as Ex.PW4/A. PW5 Sh. Virender Pratap Singh, Government Approved Valuer

21. This witness proved his valuation reports pertaining to properties of A-5 M/s. NSPL as Ex.PW5/A and Ex.PW5/B. He deposed that he had visited the factory premises on 20.03.2008 and at that time, the factory was not working.

PW6 Sh. P. Dharmachander Reddy

22. This witness was posted as Mandal Revenue Officer, Anakapalli on 06.12.2005. He stated that certificate Ex.29/F was not issued under his signatures and somebody has forged his signatures. He deposed similar facts with regard to another certificate Ex.PW54/E issued CBI v Sh. Ashwani J. Verma & Ors. Page No. 18/174 CC No.05/16 DL0375 under his signatures.

23. In cross-examination by learned Counsel for A-6, he proved letter dated 13.11.2009 written by him to CBI as Ex.PW6/DA. In this letter, he had written that certificates dated 06.12.2005 and 20.07 are fake.

PW7 Sh. Mustafa Khan, Registration Clerk, Sub-Registrar Office-IV, Ghaizabad, UP

24. This witness proved three Sale Deeds of three flats of A-1 Sh. Ashwani J. Verma at Ghaziabad as Ex.PW7/A, Ex.PW7/B and Ex.PW7/C. PW8 Sh. Atma Sah, Assistant Registrar of Companies, Office of Registrar of Companies

25. This witness proved Ex.PW8/A, Ex.PW8/B1 to Ex.PW8/B23, Ex.PW8/C and Ex.PW8/D1 to Ex.PW8/D45 and also Ex.PW8/E & Ex.PW8/F1 to Ex.PW8/F18 pertaining to M/s. NSPL.

PW9 Sh. Vimal Kumar Khera, Chief Manager, PNB, Retail Assets Branch, Civil Lines, Allahabad, UP

26. PW9 had conducted internal investigation in respect of A-5 M/s. NSPL in July, 2007 and proved his investigation report as Ex.PW9/A. This report points out lapses at pre-sanction and post-sanction stage. He has also stated in the report that the fraud came to light for the first time after visit of Sh. J. M. Gupta when he submitted his report to A-2 Sh. M. L. Arora, the then AGM of Branch on 07.09.2006.

27. He stated that when he visited the factory, the same was not functioning and there was no raw material and there was also no stock CBI v Sh. Ashwani J. Verma & Ors. Page No. 19/174 CC No.05/16 DL0375 of any kind except the machinery. He stated that the loan was sanctioned for machinery and raw material which was to be processed. As per the terms and conditions of the loan, the finished goods should have been in the factory premises.

28. He further deposed that it was one of the terms and conditions of the loan that the borrower shall not alienate, mortgage, sell, assign or otherwise dispose off any of the assets charged to the Bank without prior approval of the Bank in writing.

29. He further deposed that no commission was to be paid by the borrower to the guarantor for guaranteeing the credit facilities sanctioned by the Bank to the borrower.

30. He deposed that before accepting the guarantee of the guarantor, the assets and liabilities of the guarantor are verified for which the proof of assets and liabilities is required to be submitted by the guarantor. He deposed that in the statement of assets and liabilities of the guarantor, there is no document to show that the guarantor has a cash deposit of Rs.50,000/- in State Bank of Bikaner & Jaipur, Vishakahapatnam like statement of account. He deposed that there is no proof that the guarantor had Rs.Two lacs as cash in hand with him.

31. He proved the Title Deed register where the records of property of Sh. Konathala Mahalakshmi are recorded on 07.11.2005 as Ex.PW9/B.

32. In cross-examination by learned Counsel for A-2 Sh. M. L. Arora, he deposed that Sh. J. M. Gupta, Manager (loan) had processed the loan application and the note prepared by him was forwarded by CBI v Sh. Ashwani J. Verma & Ors. Page No. 20/174 CC No.05/16 DL0375 the Chief Manager A-2 Sh. M. L. Arora to the Regional Office.

33. He further deposed that Sh. J. M. Gupta was assisted by SSI Officers from the Regional Office in processing the loan. He deposed that Sh. J. M. Gupta had satisfied himself from all angles, as required under the Bank norms, before passing the notes for onward submission to Regional Office for sanction. He deposed that Sh. J. M. Gupta had satisfied himself about the identity of the borrowers and guarantors involved in the loan. He deposed that the statement of assets and liabilities of the guarantor A-3 Sh. Konalthala Mahalakshmi (Sh. C. N. Rao) was sent by the Branch alongwith the letter of the recommendation stating therein the source of information regarding the assets and liabilities of the abovesaid guarantor and nothing was concealed from the Regional Office.

34. He deposed that there was nothing wrong with the recommendation of the loan by the Branch at the time when it was recommended as based upon the records then available with the Branch.

35. He stated that some credit facilities were to be released by the Branch in favour of the borrower before actual verification of the Andhra Pradesh Property.

36. He admitted that the Andhra Pradesh property is identified as 'Plot No.51' at Raja Palem Village, Anakapalle, Vishakahapatnam, Andhra Pradesh as per sanction letter dated 26.09.2005 of the Regional Office of Delhi.

37. He deposed that the sanction provided for payment of balance CBI v Sh. Ashwani J. Verma & Ors. Page No. 21/174 CC No.05/16 DL0375 amount of plot allotted by UPSIDC through UPSIDC to enable the Bank to mortgage the said property. The sanction also provided for part release of facilities in favour of borrower equivalent to the amount of the securities that were already mortgaged with the Bank before creation of charge on the Andhra Pradesh property of the guarantor.

38. To a question whether the confusion regarding the identification of the property at Anakapalle, Raja Palem, whether the same is 'Plot No.51', or 'Zerayati Patta No.51' or 'S. No.51' arose as the documents were in Telugu language and the Branch officials and Regional officials were not conversant with the Telugu language, he deposed that the Bank seeks the opinion of their advocate to understand the language of the document.

39. In cross-examination by learned counsel for A-4 Sh. P. V. Krishnaji, he stated that the valuation in respect of property bearing 'S. No.51', Raja Palem Village, Anakapalle District, Vishakhapatnam was carried out on 14.07.2005 and loan was sanctioned on 26.09.2005. He stated that the property to be mortgaged is mentioned in the sanction letter as 'Plot No.51', Raja Palem Village, Anakapalle District, Vishakhapatnam. He could not say whether 'Zerayati Patta No.51' and 'S. No.51' are two separate properties located in the same village. He could not say whether in the sale deed property number is mentioned as 'Zerayati Patta No.51' as the sale deed was in Telugu language. He denied the suggestion that the Bank had never asked the A-4 Sh. P. V. Krishnaji, valuer to conduct valuation in respect of property 'Zerayati CBI v Sh. Ashwani J. Verma & Ors. Page No. 22/174 CC No.05/16 DL0375 Patta No.51'.

PW10 Sh. Satish Kumar, Computer Terminal Operator (B), PNB, R. K. Puram, New Delhi

40. This witness was working in the year 2005 as Computer Terminal Operator, South-Extension Branch of PNB and had signed on Agreements of Guarantee in respect of A-5 M/s. NSPL which were exhibited as Ex.PW10/A, Ex.PW10/B and Ex.PW10/C.

41. He stated that at that time, the guarantor Sh. Konathala Mahalaxmi had shown his ID card as proof of his identity. He also identified signatures of Sh. Konathala Mahalaxmi on an agreement between A-1 Sh. Ashwani J. Verma and Sh. Konathala Mahalaxmi as he had seen Sh. Konathala Mahalaxmi signing in his presence. He also identified receipts of payments issued by Sh. Konathala Mahalaxmi and a letter submitted by him to the AGM of PNB.

42. He also proved Title Deed register where Title Deeds of Sh. Konathala Mahalaxmi are entered as Ex.PW10/D. He proved photocopy of Title Deed register where there is entry of deposit of Title Deed by A-5 M/s. NSPL and is also signed by him at point A. This certified copy of Title Deed register was proved as Ex.PW10/E. The difference between Ex.PW10/D & Ex.PW10/E is that in Ex.PW10/D there are no signatures of Sh. J. M. Gupta which is regarding entry of Title Deeds of Sh. Konathala Mahalaxmi, whereas, the register with the entries of Title Deeds of A-5 M/s. NSPL there are signatures of Sh. J. M. Gupta.

CBI v Sh. Ashwani J. Verma & Ors. Page No. 23/174

CC No.05/16 DL0375

43. He also identified the photograph of Sh. Konathala Mahalaxmi on account opening form and also identified his signatures on the said form.

44. In cross-examination by learned counsel for A-4 Sh. P. V. Krishnaji, he admitted that the sanction letter is having details of collateral security; it does not describe the property as 'Zerayati Patta No.51'; the confidential report of the guarantor does not describe the property as 'Zerayati Patta No.51'.

45. In cross-examination by learned counsel for A-2 Sh. M. L. Arora, he stated that the then DGM, South Delhi Regional Office sanctioned the loan on the recommendations of Sh. J. M. Gupta, Manager and the Chief Manager of the Branch. He stated that he had witnessed Sh. Konathala Mahalaxmi signing some documents and he had also signed as a witness thereof. He identified the signatures of Sh. J. M. Gupta on Ex.PW10/A, Ex. PW10/B & Ex.PW10/C which are Agreement of Guarantee. He also deposed that disbursement of loan to A-5 M/s. NSPL was done by Sh. J. M. Gupta without instructions from any other authority of the Bank.

PW11 Sh. P. Venkateshwar Rao

46. PW11 proved his statement recorded under Section 164 of Cr.PC as Ex.PW11/A. This witness is Chartered Accountant by profession and deposed that A-6 Sh. Vinay Tyagi was referred to him by one of his friends. A-6 Sh. Vinay Tyagi told him that he is also doing Consultancy of arranging 'collateral security guarantors'. A-6 Sh. Vinay Tyagi along with owner of land sought his help to identify CBI v Sh. Ashwani J. Verma & Ors. Page No. 24/174 CC No.05/16 DL0375 the land for valuation. He stated that he had gone with the registered valuer A-4 Sh. P. V. Krishnaji, A-6 Sh. Vinay Tyagi and owner for valuation and identification of land. He deposed that after identification of land, A-4 Sh. P. V. Krishnaji gave valuation report in respect of 'S. No.51'. On seeing the photograph of Sh. Konathala Mahalaxmi on Ex.PW10/C, he identified that he had accompanied him to property 'Survey No.51'.

47. In cross-examination by learned Counsel for A-4 Sh. P. V. Krishnaji, he denied that A-4 Sh. P. V. Krishnaji had not identified the said land. He denied a suggestion that a person from revenue department had come to the spot to identify the land. He denied a suggestion that A-4 Sh. P. V. Krishnaji was not competent to identify the land.

48. In cross-examination by learned Counsel for A-6 Sh. Vinay Tyagi, he deposed that A-6 Sh. Vinay Tyagi was referred to him through his friend Sh. Ali working in Vishakhapatnam, a Real Estate Broker. He denied a suggestion that A-6 Sh. Vinay Tyagi was not present during valuation and identification and the name of A-6 Sh. Vinay Tyagi has been falsely added in order to implicate him in this case.

49. In cross-examination by learned Counsel for A-1 Sh. Ashwani J. Verma & A-5 M/s. NSPL, he deposed that he was not known to A-1 Sh. Ashwani J. Verma and had never received any call or communication from him.

PW12 Sh. Munish Kumar Batra, Chief Manager, PNB, Kolkata CBI v Sh. Ashwani J. Verma & Ors. Page No. 25/174 CC No.05/16 DL0375

50. This witness was Manager (Credit) at South Delhi Regional Office, PNB during June, 2005 to January, 2006 and nature of his duties were to scrutinize the loan proposals sent by the Branches.

51. The loan proposal of A-5 M/s. NSPL sent under signatures of A- 2 Sh. M. L. Arora, Chief Manager and Sh. J. M. Gupta, Manager was also scrutinized by him.

52. He stated that the Branch had proposed to obtain collateral securities of Sh. Konathala Mahalaxmi as guarantor. The market value of the said property was mentioned as Rs.348.48 lacs.

53. He deposed that to the query of the Regional Office regarding relationship between guarantor and borrower, the response from the Branch was that the guarantor is childhood friend of A-1 Sh. Ashwani J. Verma and also relative of one of the distributors of allied concern (Qualichem) for Vishakhapatnam and there was no other consideration.

54. He proved the proposal of Rs.900 lacs as Ex.PW12/A which was approved by DGM subject to completion of required physical verification/valuation/obtaining opinion etc. as recommended in the sanction on 26.09.2005. The sanction was conveyed to the Branch on 26.09.2005 itself vide Ex.PW12/B with additional stipulation that land situated at Plot No.51 at Raja Palem Village, Anakapalli, Vishakhapatnam, Andra Prasesh shall be spot verified by the Bank officials before release of credit facilities. It was also stipulated that mortgage of said property shall be created after getting legal opinion from the Bank's approved advocate.

CBI v Sh. Ashwani J. Verma & Ors. Page No. 26/174

CC No.05/16 DL0375

55. In cross-examination by learned counsels for A-1 Sh. Ashwani J. Verma & A-5 M/s. NSPL, he stated that after satisfying himself he had sent the proposal to DGM through Senior Manager and Chief Manager.

56. In cross-examination by learned counsel for A-4 Sh. P. V. Krishnaji, he stated that the Branch had sent the loan proposal alongwith legal search report and valuation report of the collateral security. He stated that the collateral security address was not 'Zerayati Patta No.51', Raja Palem Village, Anakapalle, Vishakhapatnam and the valuation report was in respect of 'Survey No. 51', Raja Palem Village, Anakapalle, Vishakhapatnam. He also stated that legal search report in respect of Property 'Zerayati Patta No.51', Raja Palem Village, Anakapalle, Vishakhapatnam was obtained on 30.08.2006.

57. In cross-examination by learned counsel for A-2 Sh. M. L. Arora, he deposed that when he signed the process note / proposal dated 23.09.2005, he had satisfied himself that the recommendation as received from the Branch was in order.

PW13 Sh. Satish Gupta, Chief Manager, Canara Bank, Hisar, Haryana

58. This witness proved letter dated 04.09.2009 as Ex.PW13/A vide which he had handed over cheque bearing No.358527 for Rs. Five lacs which was paid on 19.10.2005 by debiting account No.49083, PAN copy of the payee found with the said cheque, photocopy of the account opening form of account No.49083 and specimen signature card of account No.49083 to CBI. The cheque in the name of Sh.

CBI v Sh. Ashwani J. Verma & Ors. Page No. 27/174

CC No.05/16 DL0375 Konthala Mahalaxmi signed by A-1 Sh. Ashwani J. Verma was exhibited as Ex.PW13/B. The Account Opening Form in the name of Sh. Konathala Mahalaxmi and specimen signature card of Sh. Konathala Mahalaxmi were exhibited as Ex.PW13/C & Ex.PW13/D respectively. (By clerical mistake these exhibits are mentioned as Ex.PW13/B & Ex.PW13/C but correct exhibits Ex.PW13/C & Ex.PW13/D have been put on the documents.) PW14 Sh. Jeetender Singh Chauhan

59. This witness was working as a Commission Agent in the trade of Iron Scraps in the year 2004 and knew A-6 Sh. Vinay Tyagi in connection with his business.

60. This witness was told by A-6 Sh. Vinay Tyagi that he helps people in procuring Bank guarantees.

61. This witness was introduced to A-1 Sh. Ashwani J. Verma by a common friend and he came to know that A-1 Sh. Ashwani J. Verma was looking for securities for sanctioning loan.

62. This witness introduced A-1 Sh. Ashwani J. Verma and A-6 Sh. Vinay Tyagi to each other and the later offered a property at Vishakhapatnam for security.

63. He deposed that A-1 Sh. Ashwani J. Verma asked A-6 Sh. Vinay Tyagi to send the valuation report of the property so that the same can be shown to the Bank.

64. On the request of A-1 Sh. Ashwani J. Verma, A-6 Sh. Vinay Tyagi went to Vishakhapatnam and sent the valuation report to him through courier which was handed over by this witness to A-1 Sh.

CBI v Sh. Ashwani J. Verma & Ors. Page No. 28/174

CC No.05/16                                                     DL0375
 Ashwani J. Verma.

65. He stated that on the request of A-1 Sh. Ashwani J. Verma a meeting was arranged in the office of A-1 Sh. Ashwani J. Verma near Karkardooma where A-1 Sh. Ashwani J. Verma, A-6 Sh. Vinay Tyagi, owner of the property and a person claiming to be the son-in-law of the owner of the property and this witness were present.

66. This witness stated that the owner of the property demanded monetary benefits from A-1 Sh. Ashwani J. Verma for property to be used as security.

67. He deposed that during visit of borrower A-1 Sh. Ashwani J. Verma, A-6 Sh. Vinay Tyagi and Sh. Konathala Mahalaxmi to the Bank, he had waited outside and on completion of documentation, A-6 Sh. Vinay Tyagi told him that A-1 Sh. Ashwani J. Verma has given a sum of Rs. Four lacs to A-6 Sh. Vinay Tyagi, out of which Rs. Two lacs were given to the owner of the property and Rs. One lac was given to this witness PW14 and remaining Rs. One lac was retained by A-6 Sh. Vinay Tyagi.

68. The witness identified photograph on Ex.PW10/C, Agreement of Guarantee as of the same person who had met him twice and had gone inside the Bank alongwith A-1 Sh. Ashwani J. Verma and A-6 Sh. Vinay Tyagi for documentation of the loan.

69. He identified Mark X20, the valuation report which he had received through courier from A-6 Sh. Vinay Tyagi (later exhibited as Ex.PW13/DX). (The name, address and mobile number of this witness is mentioned on statement of Assets and Liabilities of Sh. Konathala CBI v Sh. Ashwani J. Verma & Ors. Page No. 29/174 CC No.05/16 DL0375 Mahalaxmi dated 30.09.2005 but he could not say how all these details came to be noted there. He deposed that the address mentioned there is the address of one Sh. Rambir Rana, one of his friends).

70. In cross-examination by learned counsel for A-1 Sh. Ashwani J. Verma, he denied that he himself was dealing in providing collateral securities for the Banks. He stated that A-6 Sh. Vinay Tyagi never told him that he can arrange fake collateral security and always referred to genuine collateral security in present case also. He stated that neither A-1 Sh. Ashwani J. Verma had requested him to arrange a fake collateral security nor he had asked A-6 Sh. Vinay Tyagi to provide a fake security.

71. He deposed that the sale deed of the collateral security that was sent through courier was in Telugu language. He stated that the owner of the property told him that worth of the landed property is Rs.Four- Five crores. He never suspected that the property papers could be forged.

72. He stated that all the initial correspondence from A-6 Sh. Vinay Tyagi to A-1 Sh. Ashwani J. Verma was through him.

73. He stated that A-1 Sh. Ashwani J. Verma had not given Rs. Four lacs to A-6 Sh. Vinay Tyagi in his presence and Rs. One lac was also given to this witness by A-6 Sh. Vinay Tyagi and not by A-1 Sh. Ashwani J. Verma.

74. In cross-examination by learned Counsel for A2 Sh. M. L. Arora, he stated that he had no reason to suspect the identity of Sh. Konathala Mahalaxmi and believed that he was a genuine person and CBI v Sh. Ashwani J. Verma & Ors. Page No. 30/174 CC No.05/16 DL0375 the documents which were used are also genuine. He deposed that if he had known that the identity of Sh. Konathala Mahalaxmi was doubtful and transaction between A-1 Sh. Ashwani J. Verma and Sh. Konathala Mahalaxmi was not permitted by the Bank, he would have not involved himself.

75. In cross-examination by learned Counsel for A-4 Sh. P. V. Krishnaji, he stated that valuation report dated 14.07.2005 was not prepared in his presence and he was not knowing A-4 Sh. P. V. Krishnaji who had prepared this report.

76. In cross-examination by learned counsel for A-6 Sh. Vinay Tyagi, he stated that he has no document or receipt to show that he had received valuation report through courier. However, he denied a suggestion that he had never received the valuation report through courier. He denied a suggestion that he knew Sh. Akbar who had described himself as son-in-law of the property owner Sh.Konathala Mahalaxmi and either he alone or with Sh. Akbar Ali had prior knowledge of Sh.Konathala Mahalaxmi and had introduced Sh. Konathala Mahalaxmi to A-1 Sh. Ashwani J. Verma. He denied a suggestion that there is a dispute between this witness and A-6 Sh. Vinay Tyagi regarding money and to avoid payment of dues, he has deposed falsely at the behest of CBI.

77. In further cross-examination by learned counsel for A-6 Sh. Vinay Tyagi, the witness exhibited his passport Ex.PW14/DA and as per Ex.PW14/DB, which is pay in slip of ICICI Bank, a sum of Rs.30,000/- was deposited in the account of his wife and other cash CBI v Sh. Ashwani J. Verma & Ors. Page No. 31/174 CC No.05/16 DL0375 deposits made in the account of this witness and Sh. Arvind Pathak vide different pay in slips were proved as Ex.PW14/DC, Ex.PW14/DD and Ex.PW14/DE.

PW15 Sh. B. V. Ramana, Deputy Manager, PNB, Gachibowli Branch, Hyderabad

78. This witness was posted at PNB, Vishakhapatnam during the period from August, 2006 to February, 2009.

79. He deposed that Sh. J. M. Gupta, Manager, PNB, South- Extension Branch, New Delhi had visited Vishakhapatnam in the year 2006 to conduct enquiry regarding the property of one Sh. Konathala Mahalaxmi and he had accompanied Sh. J. M. Gupta to the residence of Sh. Konathala Mahalaxmi. The witness identified photograph affixed on specimen signature card Ex.PW16/D, Customer Master Form Ex.PW16/D, Copy of Agreement of Guarantee Ex.PW2/A and original Agreement of Guarantee Ex.PW10/C as the photograph of Sh. Konathala Mahalaxmi, the person whom he had met with Sh. J. M. Gupta.

80. This witness had again gone to meet Sh. Konathala Mahalaxmi with a Sr. Manager of PNB, New Delhi but found this time that he was no more residing there.

81. He deposed that he had given local assistance to the CBI officers when they had come for conducting investigation. He had gone to a site at Raja Palem Village, about one km away from National Highway No.5 and land identification memorandum was prepared in his presence which he proved as Ex.PW15/A. Vide this memo, the CBI v Sh. Ashwani J. Verma & Ors. Page No. 32/174 CC No.05/16 DL0375 land which is subject matter of Sale Deed dated 08.09.1951 and Mortgage Deed dated 27.11.1948 was identified by sons and grandson of real Late Sh. Konathala Mahalaxmi. He also proved as Ex.PW15/B which is a certificate dated 13.11.2009 issued by Sh. P. Dharmachander Reddy, Tehsildar, Vishakhapatnam stating that certificate dated 06.12.2005 and 20.07 (year blank) regarding land survey No.51 was not issued by him. This certificate was issued in the presence of this witness by Tehsildar, Vishakhapatnam. He identified as Ex.PW15/C a certificate issued by Ex-MLA Sh. Saripalli Rangaraju dated 13.11.2009 stating that certificate dated 01.01.2006 regarding identification of Sh. Konathala Mahalaxmi has not been issued by him. This certificate was also issued by the Ex-MLA in the presence of this witness. He proved certificate dated 15.11.2009 as Ex.PW15/D issued by A-4 Sh. P. V. Krishnaji, Approved Valuer admitting that the valuation report dated 14.07.2005 was issued by him, the valuer. This certificate was also given by A-4 Sh. P. V. Krishnaji in the presence of this witness.

PW16 Sh. K. Srinivasa Rao, Senior Manager, PNB, Hyderabad, Andhra Pradesh.

82. In the year 2005, this witness was posted as Manager, Vishakhapatnam. He proved as Ex.16/A, the account opening form, customer master form pertaining to Saving Account No. 4481000100008969 in the name of Sh. Konathala Mahalaxmi. He deposed that this account was opened on 01.08.2006. He deposed that he had spoken to A-4 Sh. P. V. Krishnaji on telephone who requested CBI v Sh. Ashwani J. Verma & Ors. Page No. 33/174 CC No.05/16 DL0375 him to open an account in the name of Sh. Konathala Mahalaxmi as he was known to A-4 Sh. P. V. Krishnaji. He proved specimen signatures form as Ex.PW16/B and nomination form as Ex.PW16/C. The Customer Master Form was also filled up in the name of Sh. Konathala Mahalaxmi and the same was exhibited as Ex.PW16/D. He stated that he had mentioned on Ex.PW16/D that the account has been opened with the introduction of A-4 Sh. P. V. Krishnaji. He also proved cheque bearing No. 109521 dated 11.08.2006 for a sum of Rs.One lac in favour of Sh. B. Mohan as Ex.PW16/H.

83. In cross-examination by learned counsel for A-4 Sh. P. V. Krishnaji, he deposed that introducer is mandatory for opening an account but the account may be opened on the basis of address proof and identity proof like PAN Card, Ration Card, Passport etc. upon satisfaction of the Bank.

84. He deposed that A-4 Sh. P. V. Krishnaji is not having any Bank account in PNB and stated that he is Bank's approved valuer. He denied a suggestion that he had not talked with A-4 Sh. P. V. Krishnaji over telephone at the time of opening the account of Sh. Konathala Mahalaxmi. He denied a suggestion that A-4 Sh. P. V Krishnaji had never referred Sh. Konathala Mahalaxmi for opening his new account.

85. In cross-examination by learned counsel for A-2 Sh. M. L. Arora, he stated that there was no reason for him to suspect the identity of Sh. Konathala Mahalaxmi at the time of opening the account.

PW17 Sh. R. K. Chaturvedi, Assistant Grade-I, UPSIDC CBI v Sh. Ashwani J. Verma & Ors. Page No. 34/174 CC No.05/16 DL0375

86. This witness has proved Lease Deed dated 18.10.2004 in respect of industrial plot situated at A-61/4, Sikandrabad Industrial Area, Bulandshehar as Ex.PW17/A. PW18 Sh. O. P. Aneja, Chief Manager, retired PNB, Circle Office, North Delhi.

87. This witness deposed that the loan proposal of A-5 M/s. NSPL was recommended by A-2 Sh. M. L. Arora Incumbent Incharge and Sh. J. M. Gupta, Manager of the Branch. In the proposal, the Branch had proposed to obtain third party collateral security of the property bearing 'Plot No. 51', Raja Palem, Anakapalle, Vishakhapatnam, A.P. as mortgage. He deposed that after certain clarifications, the proposal was sanctioned by DGM (Regional Head) vide his order dated 26.09.2005.

88. In cross-examination by learned counsel for A-4 Sh. P. V. Krishnaji, he deposed that there is no mention of 'Zerayati Patta No.51' in the sanction letter Ex.PW12/B and the collateral security is described as 'Plot No.51'. He deposed that whatever had been sent to them by the concerned Branch of the Bank regarding collateral property, same was written in the sanction letter.

89. He also stated that valuation is called for the property which is mentioned in the sanction order and the valuation is got done by the concerned Branch of the Bank.

90. In cross-examination by learned counsel for A-2 Sh. M. L. Arora, he deposed that the valuer is approved by the Circle Office or the Head Office of the Bank and not by the Branch. He deposed that CBI v Sh. Ashwani J. Verma & Ors. Page No. 35/174 CC No.05/16 DL0375 Regional Office does not receive the title deeds of the property. He also deposed that after getting all the required information, the proposal was prepared at Regional Office and the loan was sanctioned. He also deposed that source of information regarding identity of accused Sh. Konathala Mahalaxmi, his relationship with borrower was informed to Regional Office which was accepted by the competent authority for sanction.

PW19 Sh. Poorna Chandra Rao, Additional Commissioner, Greater Vishakhapatnam, Municipal Corporation

91. This witness proved as Ex.PW19/A, the Death certificate of Sh. Konathala Mahalaxmi, the date of death as per which is 28.07.1988.

PW20 Sh. Harender Jindal, Chief Manager, PNB, Mumbai

92. This witness was posted as Chief Manager, PNB, South- Extension Branch and had conducted physical verification of A-5 M/s. NSPL in the year 2008. He stated that during his visit to the factory, he found that the machinery was intact but the stock including raw material, stock in process and finished goods were missing.

93. In cross-examination by learned counsel for A-1, he deposed that the borrower had cheated the Bank as he sold the goods without permission of the Bank.

PW21 Sh. Akbar Ali, Railway Contractor

94. This witness knew A-3 Sh. C. N. Rao. He deposed that he came to know A-6 Sh. Vinay Tyagi through another known person. He deposed that A-6 Sh. Vinay Tyagi had told him that he arranges loans. He further deposed that he knew that A-6 Sh. Vinay Tyagi had CBI v Sh. Ashwani J. Verma & Ors. Page No. 36/174 CC No.05/16 DL0375 friendship with A-3 Sh. C. N. Rao (emphasis supplied).

95. He further deposed that A-3 Sh. C. N. Rao had told him that he had ancestral property at Anakapalli, Vishakhapatnam which he wanted to mortgage for collateral security. He further deposed that A-6 Sh. Vinay Tyagi had told him and A-3 Sh. C. N. Rao that his friend some Sh. Verma in Delhi needs property to be pledged to the Bank and this witness alongwith A-6 Sh. Vinay Tyagi and A-3 Sh. C. N. Rao came to Delhi.

96. He deposed that there was some agreement between A-3 Sh. C. N. Rao and A-1 Sh. Ashwani J. Verma.

97. PW21 deposed that A-6 Sh. Vinay Tyagi had introduced him to A-4 Sh. P. V. Krishnaji as Sh. B. Mohan. He deposed that A-6 Sh. Vinay Tyagi and Sh. Konathala Mahalaxmi were negotiating with a borrower A-1 Sh. Ashwani J. Verma for mortgaging the collateral security at PNB, New Delhi against a payment of Rs.50 lacs.

98. He deposed that on the directions of A-6 Sh. Vinay Tyagi, he had obtained the legal opinion on collateral security from Sh. P. Rama Krishna Rao, approved advocate of the Bank and handed it over to A- 6 Sh. Vinay Tyagi.

99. He deposed that in the year 2006, second valuation report was to be obtained on the directions of A-6 Sh. Vinay Tyagi. He had accompanied A-4 Sh. P. V. Krishnaji to a Valuer Sh. I. Rama Rao and A-4 Sh. P. V. Krishnaji introduced PW21 as Sh. B. K. Mohan, a friend of Sh. Konathala Mahalaxmi. He further deposed that A-4 Sh. P. V. Krishnaji had obtained second valuation report from Sh. I. Rama Rao.

CBI v Sh. Ashwani J. Verma & Ors. Page No. 37/174

CC No.05/16 DL0375

100. He further deposed that on the directions of A-6 Sh. Vinay Tyagi, Sh. Konathala Mahalaxmi had opened his account at PNB, Vishakhapatnam which was witnessed by this witness as Sh. B. K. Mohan. He deposed that this account was opened with the reference of A-4 Sh. P. V. Krishnaji and a sum of Rs. One lac deposited in this account was withdrawn by him posing as Sh. B. Mohan. He deposed that out of this amount, he had given Rs.30,000/- to A-4 Sh. P. V. Krishnaji for introducing the account and obtaining second valuation report and Rs.60,000/- to Sh. Konathala Mahalaxmi.

101. He deposed that A-6 Sh. Vinay Tyagi had obtained receipts of more than Rs.30 lacs amount from Sh. Konathala Mahalaxmi but he actually paid Rs.6 to Rs.7 lacs to Sh. Konathala Mahalaxmi. He deposed that four receipts were written by him and signed by Sh. Konathala Mahalaxmi and were given to A-6 Sh. Vinay Tyagi for handing over to A-1 Sh. Ashwani J. Verma. He identified the photograph of A-3 Sh. C. N. Rao on Ex.PW16/B as Sh. Konathala Mahalaxmi.

102. In cross examination by learned counsel for A-4 Sh. P. V. Krishnaji, he denied a suggestion that he had not accompanied A-4 Sh. P. V. Krishnaji to a Valuer Sh. I. Rama Rao or A-4 Sh. P. V. Krishnaji had not referred Sh. Konathala Mahalaxmi for opening of new Bank account in PNB. He deposed that A-4 Sh. P. V. Krishnaji being the approved Valuer of PNB had influence in the Bank and the staff. He denied a suggestion that he had not given Rs.30,000/- to A-4 Sh. P. V. Krishnaji or that he was never introduced with Sh. I. Rama Rao as B. CBI v Sh. Ashwani J. Verma & Ors. Page No. 38/174 CC No.05/16 DL0375 Mohan by A-4 Sh. P. V. Krishnaji.

103. In cross-examination by learned counsel for A-1 Sh. Ashwani J. Verma & A-5 M/s. NSPL, he admitted that he knew Sh. C. N. Rao was using his name as Sh. Konathala Mahalaxmi for the purposes of his ancestral property in the year 2004 and 2005. He admitted that it is correctly recorded in his statement that A-6 Sh. Vinay Tyagi had received Rs.30 lacs out of which Sh. Konathala Mahalaxmi had received Rs.6-7 lacs and Sh. Konathala Mahalaxmi had given him Rs.2-3 lacs.

PW22 Sh. Shriyan Harish, Manager, State Bank of Bikaner & Jaipur, Zonal Office, Mumbai

104. This witness proved letter dated 13.06.2009 vide which he had informed to CBI that there was no account in the name of Sh. Konathala Mahalaxmi at their Branch in the year 2005 or till the time he had furnished the information to CBI. The letter was exhibited as Ex.PW22/A. PW23 Sh. C. V. Pawana Kumar, Joint Commissioner of Income Tax, Chennai

105. This witness proved his letter dated 13.11.2009 as Ex.PW23/A furnishing the details relating to PAN Card bearing No.AMAPK4943Q in the name of Sh. Mahalaxmi Konathala to CBI. He proved the enclosures of the said letter as Ex.PW23/A1. He deposed that this PAN Card was generated on 07.05.2005.

PW24 Sh. Madhusudhan Rao, Assistant Supply Officer, Civil Supply Department, Vishakhapatnam, Andra Pradesh CBI v Sh. Ashwani J. Verma & Ors. Page No. 39/174 CC No.05/16 DL0375

106. This witness proved Ex.PW24/A which is letter dated 14.11.2009 vide which he had stated that ration card No.BAP0383301B0188 was issued in the year 2005 in the name of Sh. Konathala Mahalaxmi. He also proved as Ex.PW24/B, the certified copies of extract of Key Register.

107. In cross-examination by learned counsel for A-6, he reiterated that as per official records i.e. key register available in the office, the ration card No.BAP0383301B0188 is genuine.

PW25 Sh. Gurumurthi Reddy, Ex-MLA, Vishakhapatnam, Rajuwaka, Vikas Nagar, Andra Pradesh

108. This witness deposed that certificate dated 26.07.2006 (Mark 16/A) was not issued by him.

PW26 Sh. P. Krishna Rama Rao, Advocate, Vishakhapatnam, Andra Pradesh

109. This witness is a legal practitioner since 1975 and is on the panel of PNB since 1998. He proved certificate dated 25.08.2005 as Ex.PW26/A. This is a certificate given by him regarding legal investigation of the title and search of records in the registration office of Sub-Registrar, Anakapalle, Vishakhapatnam District. He also proved special report on title of property 'Zerayati Patta No.51', Anakapalli, Sub-Registrar office, Anakapalle, Vishakhapatnam district as Ex.PW26/B. He also proved search report of document No.3102/1951 as Ex.PW26/C. He also proved a note on chain of title as Ex.PW26/D. The letter written by this witness to the Manager, CBI v Sh. Ashwani J. Verma & Ors. Page No. 40/174 CC No.05/16 DL0375 South-Extension Branch for his legal fee was proved as Ex.PW26/E. The letter sent by this witness to the Branch Office, South Extension, New Delhi, clarifying queries was proved as Ex.PW26/F. He deposed that Sh. Mohan had handed over the original Title Deeds of the property and non-encumbrance certificate. He deposed that Sh. Konathala Mahalaxmi had clear title over the said property as mentioned in his legal search report. He further proved certificate dated 25.08.2005 as Ex.PW26/G. In this certificate, he has described the property as 'Survey No.51'. He also proved as Ex.PW26/H, the true translation of the registered Mortgage Deed dated 11.12.1998 bearing No.3421/28 of the Sub-Registrar, Anakapalle, Vishakhapatnam from Telugu to English. In this, the property is mentioned as 'Zerayati Patta No.51'. He also proved as Ex.PW26/J which is certificate dated 04.11.2005 regarding translation from Telugu to English of village account No.3, Audangal Pahani issued by the village secretary of Raja Palem, Gram Panchayat. The photocopy of the Sale Deed in the name of Sh. Konathala Mahalaxmi in Telugu language was exhibited as Ex.PW26/K.

110. In cross-examination by learned counsel for A-4 Sh. P. V. Krishnaji, he stated that the documents were clear and hence, fit for the property to be mortgaged.

PW27 Sh. A. Sitaramayya, Sub-Registrar, Vijay Nagar colony, Gopalapatnam, Vishakhapatnam, Andra Pradesh

111. This witness proved Sale Deed No.3102 of 1951 in respect of land of Sh. Konathala Mahalaxmi and Mortgage Deed No.3421 of CBI v Sh. Ashwani J. Verma & Ors. Page No. 41/174 CC No.05/16 DL0375 1948 as Ex.PW27/A & Ex.PW27/B respectively. He deposed that Certificate of Encumbrance of property village Anakapalli, Survey No.51 of Anakapalli was genuine and proved the same as Ex.PW27/C. He further deposed that the property as mentioned in certificate of Encumbrance Ex.PW27/C is different from the property of Sh. Konathala Mahalaxmi as mentioned in Sale Deed and Mortgage Deed Ex.PW27/A & Ex.PW27/B because the property bears Survey No.51 of Anakapalli as per non-encumbrance certificate but the property of Sh. Konathala Mahalaxmi bears Patta No.51 of Raja Palem village as per Sale Deed and Mortgage Deed. The use of the word "Raja Palem Village" is conspicuously absent in Ex.PW27/C. He further deposed that the name of the applicant for the non-encumbrance certificate is Sh. Konathala Mahalaxmi. He further deposed that the said certificate has been applied for not as an owner but as an applicant and anyone can apply for issuance of such certificate in the name of anyone and can obtain the certificate. (It is to be noted that in this non- encumbrance certificate the applicant is Sh. Konathala Mahalaxmi and it does not say that Sh. Konathala Mahalaxmi is the owner).

112. In cross-examination by learned counsel for A-2 Sh. M. L. Arora, he deposed that prior to 1956, there used to be no provision for survey number and only patta number used to be issued qua property but after 1956 a survey number as well as patta number both are issued against the property.

PW28 Sh. Ram Kishan Gupta, Chief Manager, Assets Recovery Management Branch, PNB, Delhi CBI v Sh. Ashwani J. Verma & Ors. Page No. 42/174 CC No.05/16 DL0375

113. This witness had made an enquiry regarding Sh. Konathala Mahalaxmi and his property. He had visited Vishakhapatnam alongwith Sh. Ramanayya who was associate advocate of Sh. P. K. Arjun. He stated that the original Title Deed was shown to the Sub- Registrar Anakapalli who confirmed that the same was genuine. After completion of enquiry, he had submitted the enquiry report to the Chief Manager, Vigilance, PNB which was jointly signed by him and Sh. Ramanatha, advocate and Sh. K. Niwasan Rao, Manager, Branch office Vishakhapatnam and Sh. P. V. Ramana officer Branch office LIC building Vishakhapatnam. The said report was exhibited as Ex.PW28/A. He further deposed that the Mandal Revenue Office's staff, Anakapalle had visited the property mentioned in the sale deed and found that it was an agricultural land situated approximately one and half kilometer from national highway and is different from the property shown in valuation report submitted to the Bank. He deposed that the PAN card of Sh. Konathala Mahalaxmi on enquiry was found to be genuine but the person whose photo was affixed disguising as Sh. Konathala Mahalaxmi could not be located.

114. He also deposed that the Sale Deed of the above property submitted to the Bank as third party collateral security is different from the one shown in the valuation report.

115. He also deposed that Sh. Konathala Mahalaxmi had already died long back and he has been impersonated by some other person as Konathala Mahalaxmi who stood guarantor in the loan account of A-5 CBI v Sh. Ashwani J. Verma & Ors. Page No. 43/174 CC No.05/16 DL0375 M/s. NSPL and executed relevant documents.

116. The witness proved his report dated 07.06.2006 which he had given after examining the documents pertaining to collateral security of property S. No.51, Raja Palem village, Anakapalli, Vishakhapatnam as Ex.PW28/B. He deposed that the suggestion of Sh. P. Rama Krishna Rao, Advocate, in response to Serial No.vi of his report dated 07.06.2006 to publish in two newspapers informing general public about charge created in favour of PNB and to fix up a big size hoarding at the entrance of the site in a way which is visible to public informing the public about the charge created over the said property PNB, South-Extension, New Delhi was an appropriate suggestion which was to be complied with to protect the interest of the Bank.

117. He further deposed that in the month of September 2007 on the instructions of Chief Manager, PNB, he had gone to Vishakhapatnam for verification of the genuineness of Title Deed of the collateral property and when he visited the residence of Sh. Konathala Mahalaxmi he was not found there. When photograph of this witness was shown to neighbours, they stated that this man had given reception on the marriage of his son and left the place within 2-3 days thereafter. The neighbours showed him the invitation card where the name of Sh. Konathala Mahalaxmi is mentioned as A-3 Sh. Coduru Nagabhushan Rao. The neighbours identified his photograph appearing on the photocopy of the ration card and the invitation card was proved by this witness as Ex.PW28/C.

118. In cross-examination by learned counsel for A-4 Sh. P. V. CBI v Sh. Ashwani J. Verma & Ors. Page No. 44/174 CC No.05/16 DL0375 Krishnaji, he clarified that the property mentioned in the Sale Deed mortgaged with the Bank find mentioned the address of property as "Vishakhapatnam District, Anakapalle, SRO, Raja Palem village, Zerayati Patta No.51" and the address of the property mentioned in valuation report is "S. No.51 of Raja Palem Village, Anakapalle, Vishakhapatnam District".

119. In cross-examination by learned counsel for A-2 Sh. M. L. Arora, he deposed that the documents on record of the Bank i.e. ration card, PAN Card of Sh. Konathala Mahalaxmi were genuine as also the Title Deed submitted by him qua the property mortgaged with the Bank. He deposed that the Bank Branch officials at South-Extension Branch could not have discovered because of the abovestated documents that the person approaching as Sh. Konathala Mahalaxmi was an impersonator.

PW29 Sh. V. Simhadri Rao, Tehsildar, Rajuwaka, Vishakhapatnam, Andra Pradesh

120. This witness was Tehsildar at Anakapalli Mandal in the year 2009. He proved letter dated 12.06.2009 addressed by him to CBI as Ex.PW29/A. In this letter, he had given the names of Mandal Revenue Officers who had worked in that office in the year 2005. He had also given attested copies of Settlement Fair Adangal in respect of S. No.51, Raja Palem village of Anakapalli Mandal as Ex.PW29/B. He also proved as Ex.PW29/C attested copy of Field Measurement Book and Village Map as Ex.PW29/D. He deposed that in the year 1956, the survey work of the land was conducted in the State of Andra Pradesh CBI v Sh. Ashwani J. Verma & Ors. Page No. 45/174 CC No.05/16 DL0375 and the land was allotted the survey number. He deposed that as per Ex.PW29/B, the land at 'Survey No.51' of Raja Palem village, Anakapalle Mandal is not in the name of Sh. Konathala Mahalaxmi but in the name of Salapu Kondiah and is divided in 21 parts / sub- divisions, owned by different persons other than Sh. Konathala Mahalaxmi.

121. He deposed that land at 'Zerayati Patta No.51' of Raja Palem village, Anakapalle Mandal is different from the land at 'Survey No.51' of Anakapalle. This witness also stated that certificate dated 25.08.2005 purportedly given by Village Administrative Officer, village Raja Palem, Anakapalle, Ex.PW29/E is not genuine in as much as there was no designation of Village Administrative Officer in the year 2005.

122. He further deposed that the certificate from Mandal Revenue officer, Ex.PW29/F is also not genuine in as much as the signatures on that certificate are not of Sh. P. Dharamchander Reddy who was the Mandal Revenue Officer at that time.

123. He proved letter dated 18.11.2009 as Ex.PW29/G as per which he had provided to CBI certified copies of revenue record of Raja Palem village of Anakapalle and attested copies of Settlement Fair, Adangal for Survey No.149/1 & 149/3, Adangal copy (fasaly-1414) for survey No.141/1 & 149/3, attested copy of Field Measurement Book (FMB), copy of Survey No.149, attested copy of Rough Village Map of Raja Palem village, certificate certifying that certificate dated 25.08.2005 issued by Village Administrative Officer, Raja Palem CBI v Sh. Ashwani J. Verma & Ors. Page No. 46/174 CC No.05/16 DL0375 village is not genuine one as Ex.PW29/H.

124. He deposed that as per Settlement Fair Mandal, the owner of land bearing 'Survey No. 149/1 & 149/3' is Sh. Konathala Mahalaxmi. He deposed that in the original Sale Deed and mortgage deed, there is no mention as to whether the land pertains to 'survey number' or 'patta number' but 'No.51' is there. On the basis of Ex.PW29/J and Ex.PW29/K which is document No.1969 of 1945 and document No.3421 of 1948, he confirmed that these lands pertain to land wherein 'Zerayati Patta No.51'. As per these documents, the seller is Sh. Kotuni Ramulu S/o Sh. Pedanukanna and purchasers are Sh. Surya Naraina and others and this land was mortgaged by the aforesaid purchasers to Sh. Konathala Mahalaxmi S/o Sh. Rajayaya.

125. This witness proved as Ex.PW29/L, the true translation from Telugu to English of the Sale Deed No.3102 of Book-1, Volume-555, pages 469 to 470 at SRO, Anakapalli, vide which the aforesaid land was mortgaged to Sh. Konathala Mahalaxmi and was purchased by him vide aforesaid Sale Deed.

126. In cross-examination by learned counsel for A-2 Sh. M. L. Arora, he denied a suggestion that when mere number is mentioned in any document pertaining to land, one can interpret this as 'survey number' or 'patta number'. He deposed that before 1956 survey numbers were also there. He also deposed that there are two types of Pattas, one 'Zerayati Patta' and other was 'Assignment Patta'. He deposed that after the government issued the patta of the government land, this would be called 'Assignment Patta'. He also deposed that CBI v Sh. Ashwani J. Verma & Ors. Page No. 47/174 CC No.05/16 DL0375 only survey numbers are being used and patta numbers are not being used in title documents of the land. He deposed that patta numbers may also be used if it is mentioned in the Revenue Records. PW30. Sh. Ved Prakash, Retd. Assistant General Manager, PNB, Central Office, Delhi

127. This witness was working as Chief Manager (Credit) at PNB, South Delhi Zonal Office from June 2004 to June 2007. He deposed that in January 2006, South Delhi Regional Office was merged with South Delhi Zonal Office and thereafter the loan proposals used to be sent to the Zonal Office from different Branches under their jurisdiction. These loan proposals were first scrutinized and processed by concerned Manager or Sr. Manager (Credit) and thereafter they were put up before him. After further scrutiny, his duty was to place the same before the Dy. General Manager.

128. He deposed that he had processed the loan file of A-5 M/s. NSPL during January 2006. He deposed that as per letter dated 26.09.2005, loan facilities which were sanctioned to A-5 M/s. NSPL were conveyed by Regional Office, Credit Section, Delhi to the Chief Manager, South-Extension, New Delhi, showing terms and conditions of the sanction.

129. The witness proved as Ex.PW30/A letter dated 17.03.2006 vide which A-1 Sh. Ashwani J. Verma, the Director of A-5 M/s. NSPL had requested the DGM, Regional Office for additional loan facilities. The witness proved letter dated 17.03.2006 as Ex.PW30/B vide which the Chief Manager, South-Extension Branch had requested to depute CBI v Sh. Ashwani J. Verma & Ors. Page No. 48/174 CC No.05/16 DL0375 Industry Officer to examine the technical aspect for additional term loan and he further stated that Sh. Ved Prakash Manager (Industries) was deputed for this purpose.

130. The witness proved as Ex.PW30/C letter dated 04.05.2006 vide which Zonal Office had received a proposal from South-Extension Branch recommending sanction of additional term loan of Rs.223.05 lacs to A-5 M/s. NSPL for plant and machinery. He proved as Ex.PW30/D the proposal of A-5 M/s. NSPL.

131. He further proved a note dated 17.05.2006 which was already exhibited as Ex.PW32/A and stated that this note was scrutinized by him and same was put up before the DGM Sh. Ved Vyas who approved the same. After approval of the said note, the Branch was intimated that the proposal of additional loan was not found acceptable for consideration.

132. He also proved letter already exhibited as Ex.PW32/B vide which the Branch was instructed not to disburse the working capital limit without consent of Zonal Office. He also proved note dated 02.06.2006 which was already exhibited as Ex.PW32/A. He also proved letter dated 03.06.2006 vide which Sh. Ved Vyas, Manager (Industries) was asked to confirm the power requirement of the unit after including the proposed modernization which was already exhibited as Ex.PW32/B.

133. He also proved letter dated 02.06.2006 vide which the Sr. Manager (Law) was asked to examine the Collateral Security of Sh. Konathala Mahalaxmi and if required, to visit Vishakhapatnam for CBI v Sh. Ashwani J. Verma & Ors. Page No. 49/174 CC No.05/16 DL0375 ascertaining the authenticity of the property / its ownership which was already exhibited as Ex.PW32/C. He proved letter dated 03.06.2006 vide which the Chief Manager was asked to provide certain clarifications about the said account which was already exhibited as Ex.PW32/D. He proved letter dated 03.06.2006 which was already exhibited as Ex.PW32/E vide which A-1 Sh. Ashwani J. Verma was intimated that the project was to be completed by October 2005 and during implementation, the company has changed the project by adding certain machineries, changing the technology and revising the cost of the project to Rs.1123.50 lacs with the advise that any addition/escalation in the cost shall be borne by the company itself.

134. He also proved letter dated 09.06.2006 which was already exhibited as Ex.PW32/F addressed to Zonal Manager, Hyderabad sent by DGM Sh. Ved Vyas in order to verify the genuineness of the Collateral Security at Vishakhapatnam with the request to get the valuation report from the Bank's approved valuer and Incumbent of the Branch Office, Vishakhapatnam by visiting the site and area rate was also to be ascertained from the concerned Revenue Authority and the local person.

135. He also proved reminders dated 06.07.2006 and 11.07.2006 which were sent in this regard and were already exhibited as Ex.PW32/G and Ex.PW32/H to Zonal Manager, Hyderabad and Chief Manager, Zonal Office Hyderabad. He deposed that letter dated 12.07.2006 already exhibited as Ex.PW32/J received from Zonal Office, Hyderabad. Certain documents in respect of Collateral CBI v Sh. Ashwani J. Verma & Ors. Page No. 50/174 CC No.05/16 DL0375 Security were sought and lot of discrepancies found were mentioned.

136. He proved letter dated 01.08.2006 as Ex.PW30/E which was sent by him to the Chief Manager, South-Extension Branch to depute an officer of the Branch for verification of the property who should submit his report to the Zonal Office. He stated that instead of sending an official of the Branch to Vishakhapatnam for verification of the property, the Branch vide letter dated 19.08.2006 forwarded a copy of the Valuation Report dated 12.08.2006 of Valuer Sh. I. Rama Rao of Vishakhapatnam. He proved this letter as Ex.PW30/F.

137. Further, this witness proved as Ex.PW30/G a note dated 24.08.2006 which was prepared after a meeting of A-2 Sh. M. L. Arora, AGM and A-1 Sh. Ashwani J. Verma held on 23.08.2006 with GM, DGM and this witness. He proved letter dated 01.09.2006 as Ex.PW30/H sent to AGM, Branch Office, South-Extension requesting to initiate steps in accordance with the discussion already held on 23.08.2006.

138. He deposed that A-5 M/s. NSPL had requested the Bank to release the third party Collateral Security situated at Vishakhapatnam vide letter dated 02.02.2007 as Ex.PW30/J and the same was recommended and forwarded by A-2 Sh. M. L. Arora, AGM vide Ex.PW30/K.

139. In cross-examination by learned counsel for accused No. 4 Sh. P. V. Krishnaji, he deposed that as per sanction letter dated 26.09.2005, the address of the property mortgaged is Plot No.51, Raja Palem Village Anakapalle, near NH-5, District Vishakhapatnam, Andhra CBI v Sh. Ashwani J. Verma & Ors. Page No. 51/174 CC No.05/16 DL0375 Pradesh.

140. In cross-examination by learned counsel for A-2 Sh. M. L. Arora, he stated that before a loan was sanctioned or rejected, the documents tendered by the proposed borrower including the proposal forwarded by the concerned Branch is scrutinized at various levels i.e. in the Regional or Zonal Office. He deposed that the loan in this case was sanctioned by Senior Regional Manager of erstwhile Regional Office. He deposed that the request to release the property of Sh. Konathala Mahalaxmi was rejected because the alternate security offered and the earlier Collateral Security had a lot of difference between the two.

PW31 Sh. Rajiv Sharma, Freelance Financial Consultant

141. This witness was a Free Lance Financial Consultant for the last eighteen years and in the year 2005 came in contact of A-1 Sh. Ashwani J. Verma at his spiritual guruji's place at Sultanpur, New Delhi.

142. He deposed that he approached Sh. S. S. Dabas, the DGM of PNB, South Zone and apprised him about the project along with A-2 Sh. M. L. Arora, the Chief Manager of South-Extension Branch.

143. He deposed that on visiting the project site and residence of A-2 Sh. Ashwani J. Verma, the Banker's were convinced and requested him to submit the project report as per Bank's norms.

144. He deposed that the Bank requested for additional Collateral Security which this witness and borrower refused to provide as the primary security was sufficient to cover the loan but on the persistence CBI v Sh. Ashwani J. Verma & Ors. Page No. 52/174 CC No.05/16 DL0375 of the Bank, A-1 Sh. Ashwani J. Verma offered Collateral Security of land situated at Vishakhapatnam.

145. A-1 Sh. Ashwani J. Verma told this witness that the land belongs to Sh. Konathala Mahalaxmi, uncle of A-6 Sh. Vinay Tyagi who is one of the distributors of A-1 Sh. Ashwani J. Verma's medicines business for Vishakhapatnam region. He deposed that A-1 Sh. Ashwani J. Verma told him that A-6 Sh. Vinay Tyagi is his old childhood friend. He deposed that A-1 Sh. Ashwani J. Verma provided the photocopy of the property documents of Vishakhapatnam to the Branch and same was legally verified.

146. He deposed that non-encumbrance certificate from the bank's approved lawyer and valuation report by the bank's approved valuer from Vishakhapatnam was obtained.

147. He further deposed that the documentation in PNB, South- Extension Branch had taken place in his presence where A-1 Sh. Ashwani J. Verma introduced him to Sh. Konathala Mahalaxmi and to A-6 Sh. Vinay Tyagi. He deposed that the original ID proof of Sh. Konathala Mahalaxmi was demanded by the Bank and PAN Card and Election Card were shown by the guarantor Sh. Konathala Mahalaxmi who signed on loan documents and on ID proof and also affixed his photographs on the documents. When Agreement of Guarantee was shown to this witness which is Ex.PW10/C, he stated that the same was executed in his presence and identified the photograph of Sh. Konathala Mahalaxmi affixed on the Agreement of Guarantee. He proved a letter written by him to the Chief Manager, PNB, South CBI v Sh. Ashwani J. Verma & Ors. Page No. 53/174 CC No.05/16 DL0375 Regional Office, Atmaram House, Connaught Place, New Delhi as Ex.PW31/A in connection with the queries raised by the Bank and responded by him through this letter.

148. In cross-examination by learned counsel for A-4 Sh. P. V. Krishnaji, he stated that the property which is evaluated is mentioned in the sanction letter.

149. In cross-examination by learned counsel for A-2 Sh. M. L. Arora, he deposed that Sh. J. M. Gupta, Manager (Loan) was present during documentation and Sh. Sharma, Chief Auditor of the Bank was also present during documentation.

150. In cross-examination by learned counsel for A-1 Sh. Ashwani J. Verma, PW31 admitted that he had introduced A-1 Sh. Ashwani J. Verma to Sh. S. S. Dabas, A-2 Sh. M. L. Arora and other officials of PNB. He deposed that A-1 Sh. Ashwani J. Verma did not know them otherwise before that. He stated that he was satisfied about the project viability by visiting site of the plant and he was present on 28.09.2005 when documentation took place. He denied a suggestion that A-1 Sh. Ashwani J. Verma had not introduced Sh. Konathala Mahalaxmi as his childhood friend and as uncle of A-6 Sh. Vinay Tyagi.

151. In cross-examination by learned counsel for A-6 Sh. Vinay Tyagi, he stated that A-6 Sh. Vinay Tyagi was not present when A-1 Sh. Ashwani J. Verma told that Sh. Konathala Mahalaxmi was his childhood friend and uncle of A-6 Sh. Vinay Tyagi. To a pointed question, he deposed that A-1 Sh. Ashwani J. Verma told that A-6 Sh. Vinay Tyagi was his childhood friend and not Sh. Konathala CBI v Sh. Ashwani J. Verma & Ors. Page No. 54/174 CC No.05/16 DL0375 Mahalaxmi.

PW32 Sh. Dinesh Kumar Palliwal, Dy. General Manager, PNB

152. This witness was Senior Manager (Credit), PNB, South Delhi Zonal Office from October 2004 to July 2006. He deposed that in January 2006, the South Delhi Regional Office was merged with South Delhi Zonal Office and thereafter the loan proposals were directly sent to Zonal Office from different Branches. He deposed that initially, the loan proposals are scrutinized by concerned Manager and thereafter they are put up before Chief Manager for its onward transmission.

153. He deposed that he had processed for some period the loan file in the name and style of A-5 M/s. NSPL He stated that on Ex.PW30/B, he had made a noting to depute Sh. Ved Prakash, Industry Officer to carryout techno economic viability of the expansion proposed to be taken out in the account of A-5 M/s. NSPL He proved note dated 17.05.2006 as Ex.PW32/A as per which Smt. Trilochan Anand, Manager (Credit) had concluded that the proposal for additional term loan was not found acceptable for consideration. Further, few confirmations regarding the existing facilities were also sought. He proved letter dated 18.05.2006 addressed to the Chief Manager, Branch Office, South-Extension, New Delhi by Sh. V. P. Khandelwal, Chief Manager conveying that proposal for additional term loan of Rs.223.50 was not found acceptable. He further proved note dated 02.06.2006 as Ex.PW32/A (there seems to be some clerical mistake in giving number to this exhibit).

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154. He also proved letter dated 03.06.2006 written by Sh. V. P. Khandelwal and addressed to Sh. Ved Prakash, Manager asking him to specifically mention the power requirement of the Unit after including the proposed modernization and he was also advised to mention the statutory requirement/approval which are yet to be fulfilled/obtained as Ex.PW32/B.

155. He proved letter dated 02.06.2006 prepared by him and signed by Sh. V. P. Khandelwal, Chief Manager addressed to the Sr. Manager (Law) to examine whether the immovable property located at Raja Palem village, Anakapalli, District Vishakhapatnam, Andhra Pradesh was properly mortgaged and the documents were in order as Ex.PW32/C. He also proved letter dated 03.06.2006 prepared by him and signed by Sh. V. P. Khandelwal addressed to Chief Manager, South-Extension Branch vide which information was sought regarding terms and conditions specifically for the stipulations of sanction dated 26.02.2005 as Ex.PW32/D.

156. He proved letter dated 03.06.2006 as Ex.PW32/E signed by Sh. V. P. Khandelwal and addressed to A-1 Sh. Ashwani J. Verma informing that in terms of the sanction, any addition/escalation is to be borne by the company and they were advised to arrange funds from their own sources to meet the additional cost of the machinery for changing the technology. Further, letter dated 09.06.2006 addressed to the Zonal Manager, Zonal Office, Hyderabad by Dy. General Manager Sh. Ved Vyas vide which some clarification was sought about the property situated at Raja Palem village, District Anakapalle, CBI v Sh. Ashwani J. Verma & Ors. Page No. 56/174 CC No.05/16 DL0375 Vishakhapatnam, Andhra Pradesh in the name of Sh. Konathala Mahalaxmi was proved as Ex.PW32/F. He proved letter dated 06.07.2006 addressed to the Zonal Manager, Zonal Office, Hyderabad by Sh. Ved Vyas, DGM asking for the reply to letter dated 09.06.2006 as Ex.PW32/G and letter dated 11.07.2006 asking for the reply to letter dated 06.07.2006 was proved as Ex.PW32/H. He proved letter dated 12.07.2006 written by Sr. Manager (Law), Zonal Office, Hyderabad to DGM, PNB, Zonal Office, New Delhi asking for some more documents related to the property at Raja Palem village, District Anakapalli, Vishakhapatnam, Andhra Pradesh as Ex.PW32/J. He proved letter dated 14.06.2006 addressed to the Chief Manager, Branch Office, South-Extension vide which the Chief Manager of the Branch was advised to take immediate actions on certain points mentioned therein as Ex.PW32/K. He proved letter dated 26.06.2006 addressed to the Chief Manager, Branch Office, South-Extension by Sh. V. P. Khandelwal regarding some observations raised pertaining to the Quarterly Review Sheet for December 2005 as Ex.PW32/L. He also proved letter dated 06.07.2006 addressed to the Chief Manager, Branch Office, South-Extension signed by Chief Manager regarding reply sought to letter dated 14.06.2006 pertaining to the proposal for additional term loan as Ex.PW32/M. He proved letter dated 11.06.2006 addressed to the Chief Manager, Branch Office, South- Extension signed by Sh. V. P. Khandelwal seeking reply to letters dated 14.06.2006 and 06.07.2006 pertaining to the proposal for additional term loan as Ex.PW32/N. Lastly, he proved letter dated CBI v Sh. Ashwani J. Verma & Ors. Page No. 57/174 CC No.05/16 DL0375 12.07.2006 written by A-2 Sh. M. L. Arora, AGM, Branch Office, South-Extension submitting reply to letter dated 14.06.2006 as Ex.PW32/O. In this letter, it was informed that all the items of machinery etc. have been got checked by the chartered engineer and the valuation has also been obtained which is as under:-

Land               :            240.52 lacs
Main Building      :            21.95 lacs
AC Shed            :            156.00 lacs
Boundary Wall      :            3.75 lacs
Machinery          :            995.51 lacs
Total              :            1415.00 lacs

Distress Sale Value i.e. 20% less : 1100.00 lacs.

157. In cross-examination by learned counsel for A-1 Sh. Ashwani J. Verma, he stated that he cannot comment whether there were any deficiencies on the property papers submitted by A-1 Sh. Ashwani J. Verma since this aspect is dealt with at Branch level. He deposed that upon seeing the papers of Collateral Security, suspicion had arisen regarding its authenticity as the surety was residing at a far away place and was not related to the borrower (emphasis supplied). He deposed that he could not have known the exact address of the property of the Collateral Security by perusing the documents as they were in the regional language. He stated that he had come to know about the address from the proposal given in the Branch at South Extension, so far as he remembered.

158. In cross-examination by learned counsel for A-2 Sh. M. L. CBI v Sh. Ashwani J. Verma & Ors. Page No. 58/174 CC No.05/16 DL0375 Arora, he deposed that he does not remember having noticed any clause in the initial sanction that some disbursement of the loan may take place awaiting report of examination of the property.

159. In cross examination by learned Counsel for A-4 Sh. P. V. Krishnaji, he deposed that the property is first got valued and thereafter mortgaged.

PW33 Sh. Ved Prakash, Senior Manager (Industry), PNB Head Office, Credit Division (Technical Cell), 7 Bhikaiji Cama Place, New Delhi.

160. This witness proved techno economic viability study report dated 15.04.2006 in reference to A-5 M/s. NSPL as Ex.PW33/A. He proved his second report dated 05.06.2006 which he had given at the time of proposal for additional term loan of Rs.223.05 lacs as Ex.PW33/B. He also proved report dated 13.03.2007 in reference to loan account of A-5 M/s. NSPL as Ex.PW33/C.

161. In cross-examination by learned counsel for A-2, he deposed that according to him the project was technically and economically feasible and viable.

PW34 Sh. Ajay Nigam, CTOB, PNB, South-Extension Branch, New Delhi.

162. This witness was Clerk-cum-Cashier in PNB, South-Extension Branch, New Delhi from 2003 to 2008 and during this period had also worked in the Loan Department of the Bank. As such, he was conversant with the handwriting and signatures of A-2 Sh. M. L. Arora, Chief Manager/AGM and Sh. J. M. Gupta, Manager (Loans).

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CC No.05/16 DL0375 He proved writing on loan documents of A-5 M/s. NSPL as Ex.PW34/C and deposed that the same was of Sh. J. M. Gupta. He deposed that on the basis of D-23, Statement of Assets and Liabilities, Confidential Report Ex.PW34/D was prepared. He deposed that on the basis of D-20, Statement of Assets and Liabilities, Confidential Report Ex.PW34/E was prepared. He deposed that on the basis of D-21, Statement of Assets and Liabilities, Confidential Report Ex.PW34/F was prepared. He deposed that on the basis of D-22, Statement of Assets and Liabilities, Confidential Report Ex.PW34/G was prepared. He proved loan documents of A-5 M/s. NSPL as Ex.PW34/H. He proved letter written to Zonal Manager, Hyderabad regarding legal opinion on the property mortgaged as Ex.PW34/J. He proved correspondence file pertaining to loan account of A-5 M/s. NSPL as Ex.PW34/K. He proved agreement dated 28.09.2005 between Sh. Konathala Mahalaxmi and A-1 Sh. Ashwani J. Verma as Ex.PW34/M. He also proved receipts dated 30.09.2005, 26.12.2005, 31.12.2005, 22.01.2006, 09.02.2006 and 31.03.2006 as Ex.PW34/N. He proved letter dated 05.09.2006 of Sh. J. M. Gupta, counter signed by A-2 Sh. M. L. Arora as Ex.PW34/O. He proved documents file of ILC pertaining to loan of A-5 M/s. NSPL as Ex.PW34/P. He also proved letter issued by A-2 Sh. M. L. Arora to Dy. General Manager on 12.09.2006 as Ex.PW34/Q. He proved letter dated 29/30.03.2007 written by Sh. J. M. Gupta and addressed to DGM, Zonal Office, South Delhi as Ex.PW34/R. He proved Debit/Credit Voucher pertaining to loan account of A-5 M/s. NSPL as Ex.PW34/S. He CBI v Sh. Ashwani J. Verma & Ors. Page No. 60/174 CC No.05/16 DL0375 proved letter dated 20.12.2006 by Sh. Konathala Mahalaxmi for the release of Vizag property as Ex.PW34/T.

163. In cross-examination by learned counsel for A-2 Sh. M. L. Arora, he deposed that agreement Ex.PW34/M was found in the document file of the concerned loan account. He deposed that a borrower cannot arrange security for valuable consideration. He deposed that there is a possibility that the file shown to him might have some documents which were not part of the file at the relevant time. He identified the signatures of Sh. J. M. Gupta, Manager (Loan) on Ex.PW34/DA. The Review Sheet for quarter ending 2006 was proved as Ex.PW34/DB. He deposed that for accepting property for mortgage, legal search report from panel advocate and valuation report used to be taken from the approved valuer.

164. In cross-examination by learned counsel for A-4 Sh. P. V. Krishnaji, he deposed that 'Zerayati Patta No.51' is not mentioned in the Confidential Report.

165. In cross-examination by learned counsel for A-1 Sh. Ashwani J. Verma and A-5 M/s. NSPL, he deposed that from the time loan documents are filed by the borrower and taken in the safe custody of the Bank, the chain of custody is dual custody of Loan Incharge who may be Senior Officer or Manager (Loans).

PW35 Sh. G. Venkateshwar Rao, Sr. Manager, PNB, Vishakhapatnam

166. This witness was posted as Manager in PNB, Vishakhapatnam in June 2009. He had handed over to CBI one file containing Account CBI v Sh. Ashwani J. Verma & Ors. Page No. 61/174 CC No.05/16 DL0375 Opening Form, Specimen Signatures Form and Customer Master Form along with enclosures pertaining to SB Account No.4481000100008969 of Sh. Konathala Mahalaxmi vide seizure memo Ex.PW35/A. PW36 Sh. A. K. Garg, Valuer

167. This witness on the request of PNB, South-Extension Branch, had done valuation of Property No.A-61/4, UPSIDC, Industrial Area, Sikandrabad, Bulandshahar, U.P. which was exhibited as Ex.PW36/A.

168. This witness had also done valuation at the request of PNB, South-Extension Branch, New Delhi of Flat No.1, 2 and 3, First Floor, D-262, Sector 12, Ramprastha Colony, Ghaziabad, U.P. as Ex.PW36/B, Ex.PW36/C and Ex.PW36/D. As per the valuation report, the cost of Flat No. 1 was Rs.14,50,000/-, the cost of Flat No.2 was Rs.12,25,000/- and the cost of Flat No. 3 was Rs.15,00,000/-.

PW37 Sh. B. D. Sharma, Valuer

169. This witness had valued property located at Plot No.A-61/4, Industrial Area, G. T. Road, Sikandrabad and has proved his report as Ex.PW37/A. According to him, the valuation for land and building was Rs.3,36,56,000/- and realizable value @ 75% was Rs.2,52,42,000/-. According to him, the value of Flat No.1, First Floor, Plot No. 262, B-Block, Ramprastha Colony, Ghaziabad, U.P. was Rs.12,10,000/- and realizable value @ 80% was Rs.9,68,000/-. Similarly, the valuation of Flat No.2 was Rs.9,33,000/- and realizable value @ 80% was Rs.7,46,000/- and valuation of Flat No. 3 was Rs.11,09,000/- and realizable value @ 80% was Rs.8,87,000/-. These CBI v Sh. Ashwani J. Verma & Ors. Page No. 62/174 CC No.05/16 DL0375 reports are Ex.PW37/B, Ex.PW37/C and Ex.PW37/D. PW38 Sh. Ved Vyas, Dy. General Manager / Circle Head, PNB

170. This witness was the DGM, South Delhi Zone from May 2006 to November 2007. He proved the Loan Account File of A-5 M/s. NSPL as Ex.PW38/A. He also proved Note dated 13.06.2006 as Ex.PW38/B raising queries by Zonal Office on the Loan Proposal submitted by the Branch. He deposed that this proposal was for additional Term Loan of Rs.2.23 Crores and he had written letter dated 09.06.2006 to the Zonal Manager, Hyderabad raising certain queries vide Ex.PW32/F. He proved letter dated 14.06.2006 addressed by him to Chief Manager, South-Extension Branch, regarding proposal for additional Term Loan as Ex.PW32/K. He also proved letter dated 06.07.2006 as Ex.PW32/G which was sent by him to the Zonal Manager, Hyderabad in continuation to his earlier letter dated 09.06.2006. He also identified signatures of Sh. V. P. Khandelwal, Chief Manager, on letter dated 11.07.2006 already exhibited as Ex.PW32/A addressed to Chief Manager, Hyderabad in continuation to earlier letter dated 09.06.2006. He deposed that later on the Branch informed that the borrower has withdrawn the proposal for additional loan and sent the required information with Branch recommendation for permitting to allow only the existing remaining already sanctioned facility. He proved as Ex.PW38/C letter dated 12.08.2006 addressed to Zonal Manager, Hyderabad. He proved letter dated 11.08.2006 addressed to DGM, Zonal Office, South Delhi by A-2 Sh. M. L. Arora, Asst. General Manager, South-Extension Branch as CBI v Sh. Ashwani J. Verma & Ors. Page No. 63/174 CC No.05/16 DL0375 Ex.PW38/D. With this letter, A-2 Sh. M. L. Arora sent a certificate of Mandal Revenue Officer, Anakapalle certifying that the land of Sh. Konathala Mahalaxmi, Survey No.51, does not come under Urban Land Ceiling and is not a government acquired land as per their records. For Life Certificate of Sh. Konathala Mahalaxmi, the Branch had sent certificate of PNB, Vizag dated 05.08.2006 certifying that Sh. Konathala Mahalaxmi was alive. Certificates were also sent by A-2 Sh. M. L. Arora purportedly issued by MLAs, Vishakhapatnam that Sh. Konathala Mahalaxmi was alive. Reliance was also placed on a certificate issued by Village Administrative Officer that the land is not rural and hence, Pattadar Passbook and Pattadar Possessory Title Deeds were not issued in the name of Sh. Konathala Mahalaxmi. On the strength of these documents, a request was reiterated by A-2 Sh. M. L. Arora for early sanction to avoid cost over runs. He referred to letter dated 12.09.2006 addressed by A-2 Sh. M. L. Arora already exhibited as Ex.PW34/Q as per which he mentioned the suggestion of the advocate that the details of mortgaged property be published in local newspapers for inviting any objection of the public, for fixing up a big size hoarding on the site of the property regarding charge of the Bank and for measurement of the property in the presence of the Bank Valuer, Legal Adviser and Local Revenue Authorities. He deposed that it was the duty of A-2 Sh. M. L. Arora to comply with the suggestion of the advocate. He proved a letter dated 18.09.2006 addressed to him by A-2 Sh. M. L. Arora mentioning in that letter that the equitable mortgage created on the immovable property mortgaged as collateral CBI v Sh. Ashwani J. Verma & Ors. Page No. 64/174 CC No.05/16 DL0375 security is valid and legally enforceable as Ex.PW38/E. A-2 Sh. M. L. Arora had stated that the documents relating to equitable mortgage of the properties mortgaged with the Bank were checked by Sr. Manager (Law) deputed by Delhi (South Zone). With reference to letter dated 05.09.2006, addressed by Sh. J. M. Gupta, Manager to the AGM, Branch Office, South-Extension, he mentioned that Sh. J. M. Gupta during his visit to Vishakhapatnam had come to know that Land No. 51 Ward, Anakapalle Town is a government land and certificates dated 20.07.2005 issued by Mandal Revenue Officer certifying that the land does not come under Land Ceiling Act and is not acquired land were forged. The Secretary, Village Raja Palem, Anakapalle informed that mortgaged land i.e. Land Bearing No.51 is not owned by Sh. Konathala Mahalaxmi but is owned by 21 other persons in fragmented portions. It is also mentioned in letter dated 06.09.2006 that the non- encumbrance certificate issued by Sub-Registrar office was also fake. PW-38 stated that the contents of this letter were never informed to the Zonal Office by A-2 Sh. M. L. Arora, Incumbent Branch Incharge. This witness proved note dated 21.09.2006 as per which he permitted release of working capital facility in terms of original sanction of Term Loan and working capital limit as Ex.PW38/F. He proved letter dated 21.09.2006 addressed to AGM, South-Extension Branch by Chief Manager, Zonal Office as Ex.PW38/G. He referred to Ex.PW51/A which is letter dated 29/30.03.2007 written by Sh. J. M. Gupta, intimating the Zonal Office that after his visit to Collateral Security at Vishakhapatnam, it was found that the property was not owned by CBI v Sh. Ashwani J. Verma & Ors. Page No. 65/174 CC No.05/16 DL0375 mortgagor and Title Deeds were fake and in this regard he had already submitted his report to A-2 Sh. M. L. Arora under acknowledgment. The witness proved note dated 30.03.2007 as per which he had taken a serious view of the matter and had directed the Branch Manager to send full facts within three days and to bring this to the notice of General Manager (Zone) as Ex.PW38/H. He proved note dated 18.05.2007 as Ex.PW38/J placing the matter before General Manager Sh. D. L. Rawal. He has also stated that in the quarterly review sheet for the period ending 30.09.206, received by Zonal Office, the A-2 Sh. M. L. Arora and Sh. J. M. Gupta had not mentioned about any defect in the mortgaged property or any adverse report about the account. Rather, it was reported that all the terms and conditions have been fulfilled as per Ex.DW38/K, Serial No.4. He deposed that the Zonal Office had received on 20.03.2007 renewed / review proposal which was exhibited as Ex.PW38/L and in this proposal A-2 Sh. M. L. Arora and Sh. J. M. Gupta had recommended review of working facility, substitution of Collateral Security situated at Vishakhapatnam belonging to Sh. Konathala Mahalaxmi and release of personal guarantee of Sh. Konathala Mahalaxmi. He deposed that in this report, it was not mentioned that the Title Deed of the property was defective or collateral security was not owned by mortgagor Sh. Konathala Mahalaxmi and rather they had mentioned that all terms and conditions of previous sanction have been complied and nothing adverse of loan account for about mortgaged property was brought to the notice of Zonal Office prior to report dated 29/30.03.2007.

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171. In cross-examination by learned counsel for A-2 Sh. M. L. Arora, he deposed that a perusal of the review proposal already exhibited as Ex.PW38/L shows that the same does not mention any defect in the title of the property of Sh. Konathala Mahalaxmi and the same is signed by A-2 Sh. M. L. Arora and Sh. J. M. Gupta. He also deposed that there is a Concurrent Auditor posted in the Branch who audits the Branch on day to day basis and monitors correspondence from Zonal Office to Head Office and submits his report to that office under copy to Zonal Office. He admitted it as correct that the Concurrent Auditor never reported anything adverse in his reports during June 2006 to December 2006 about the property in question of Sh. Konathala Mahalaxmi at Vishakhapatnam.

PW39 Sh. Satbir Singh Dabas, Dy. General Manager (Retd.), Punjab National Bank

172. This witness was posted as Sr. Regional Manager, South Delhi Region in December 2004 and remained so till 31.12.2005. He was the Head of South Delhi Region. He explained the procedure of sanction of loan stating that loan proposals are processed at the Branches and after due process and scrutiny these are recommended to the competent authority by the Branch officials for their sanction. He further deposed that in the Branch, there is a Manager who is assigned the role of credit appraisal and handling thereof as also the Branch Incumbent. He deposed that in this case, he was the competent authority for sanctioning the loan. He proved the correspondence file regarding loan sanctioned in favour of A-5 M/s. NSPL as Ex.PW39/A. CBI v Sh. Ashwani J. Verma & Ors. Page No. 67/174 CC No.05/16 DL0375 He proved letter dated 22.04.2005 as Ex.PW39/B which was sent by Regional Office to the Chief Manager, South-Extension Branch regarding proposal of sanction of FB & NFB limit. It was observed in this letter that relationship of guarantor with the company/directors should be advised and reason for Sh. Mahalaxmi for guaranteeing the account be also given. It was also observed that in the confidential report of Sh. Konathala Mahalaxmi only one item i.e. value of land is reported and all other columns are left blank. From the correspondence file Ex.PW39/A, he proved letter dated 09.09.2005 at page 257 to 259 from Sh. J. M. Gupta, Manager and A-2 Sh. M. L. Arora, Chief Manager of the Branch as Ex.PW39/C. To the query regarding guarantor Sh. Konathala Mahalaxmi, it was responded that the guarantor is childhood friend of A-1 Sh. Ashwani J. Verma, Director and also relative of one of the distributors of allied concern M/s. Qualichem International. It was stated that there is no other consideration for the guarantor to guarantee the loan. To the query regarding confidential report of the guarantor, a fresh confidential report of the guarantor was sent where the worth of this guarantor was only Rs.2,50,000/- in as much as he was having only Rs.50,000/- as cash in hand and Rs.2 lacs in State Bank of Bikaner & Jaipur. Moreover, this confidential report was compiled on the basis of the information provided by the borrower A-1 Sh. Ashwani J. Verma himself. This confidential report does not even show any residential property self occupied by the borrower. He proved letter dated 26.09.2005 addressed to the Chief Manager, South-Extension Branch CBI v Sh. Ashwani J. Verma & Ors. Page No. 68/174 CC No.05/16 DL0375 sanctioning the credit facilities in favour of A-5 M/s. NSPL on the basis of recommendations of the Branch as Ex.PW39/D. One of the stipulations of the sanction was that the land situated at Plot No.51 at Raja Palem Village, Anakapalle, Vishakhapatnam, Andra Pradesh to be spot verified by the Bank officials before release of facilities.

173. In cross-examination by learned counsel for A-4 Sh. P. V. Krishnaji, he proved valuation report dated 14.07.2005 of property 'Survey No.51', Raja Palem village, Anakapalle, Vishakhapatnam as Ex.PW39/DX. He stated that he had not seen this valuation report before sanctioning the loan. He stated that in the approval note Ex.PW12/A, the description of the property is given as 'Plot No.51', Raja Palem village, Anakapalle, Vishakhapatnam owned by Sh. Konathala Mahalaxmi. He admitted that in the approval note neither there is mention of 'Survey Number' nor 'Zerayati Patta Number' of the property given as collateral security. He also narrated that in the approval note, it is mentioned that the valuation of the property is based on the valuation report dated 14.07.2005 given by Sh. P. Venkata Krishnaji (A-4 Sh. P. V. Krishnaji), Bank's approved valuer and the same ought to have been seen by the recommending officials of the Branch before recommending facilities to the Regional Office. (As per Ex.PW39/DX, which is valuation report given by Sh. P. Venkata Krishnaji the description of the property is 'S. No.51' of Raja Palem village, Anakapalle, Vishakhapatnam). He deposed that mortgages are done at the Branch level and Regional Office is not privy to detailed mortgage created by the Branch.

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174. In cross-examination by learned counsel for A-2 Sh. M. L. Arora, he stated that he does not know whether the title documents of the property located in Andra Pradesh were in Telugu language as the Title Deeds were not put up before him at the time of sanction and sanction is made on the basis of recommendation put up by Credit Section of the Regional Office. (emphasis suppled) PW40 Sh. Rajiv Nigam, Dy. Manager, PNB

175. This witness was posted as Dy. Manager, Assets Recovery Management Branch from September, 2008 to August 2014. He dealt with matters which had become NPA and had dealt with the account of A-5 M/s. NSPL He deposed that the Bank had filed a recovery suit against the borrower in DRT and Sh. Atul Sharma, Advocate was appointed as a Local Commissioner to prepare the inventory of hypothecated goods, assets, stock lying at the premises of A-5 M/s. NSPL. He deposed that the Local Commissioner visited the factory site of the borrower on 10.06.2009 and found that all the plant and machineries have been removed from the factory premises and no stocks were available at the site. He proved the report of the Local Commissioner as Ex.PW40/A. He proved his complaint dated 19.10.2009 given to SP, CBI regarding cheating and other offences committed by accused persons as Ex.PW40/B. He deposed that as per terms and conditions of sanction of loan, all the securities created out of Bank finance are charged with the Bank and a borrower cannot alienate the securities hypothecated/charged with the Bank without Bank's permission.

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176. He deposed that the Bank had engaged a detective agency to find out the persons/firm who had purchased the above mentioned material but the same could not be ascertained except that the material was sold in April 2009. He further deposed that to recover the loan amount, the Bank disposed off three flats of the borrower at Ramaprastha Colony, Ghaziabad against consolidated price of Rs.28,45,000/-.

PW41 Sh. S. K. Shyamal

177. This witness had rented out his house bearing Door No.27-2-48 Sri Ram Nagar, Ghajuwaka, Vishakhapatnam in October 2005 and October 2006. When he was shown Ex.PW16/B, specimen signature card of PNB bearing the photograph of Sh. Konathala Mahalaxmi, he deposed that this was the man who had taken his flat on rent at the rate of Rs.1,500/- per month. However, he also deposed that he does not remember his name today.

178. In cross-examination by learned counsel for A-2 Sh. M. L. Arora, he deposed that he had not executed any Rent Agreement with the tenant for renting out the flat.

PW42 Sh. I. Rama Rao, Valuer

179. This witness was on the panel of PNB since 2004. He proved Valuation Report given by him with regard to 'S. No.51' of Raja Palem village, Anakapalle, Vishakhapatnam District as Ex.PW42/A. He deposed that one Sh. Mohan who had introduced himself as a representative of Sh. Konathala Mahalaxmi alongwith A-4 Sh. P. V. Krishnaji, approved valuer of PNB had approached him for the CBI v Sh. Ashwani J. Verma & Ors. Page No. 71/174 CC No.05/16 DL0375 valuation of the property. He deposed that Sh. Mohan had identified the site to him and he valued the same at Rs.3,83,32,800/-.

PW43 Sh. Arun Kumar Ahluwalia

180. This witness was Chief Manager, PNB, Assets Recovery Management Branch from August 2008 to July 2009. This Branch looks after the cases which have become Non Performing Assets (NPA). He deposed that he had taken action under SARFAESI Act and when he went to take possession of the factory, he found there was no activity/work going on in the factory and only scattered parts of machinery were found.

181. In cross-examination by learned counsel for A-2 Sh. M. L. Arora, he deposed that he cannot say whether the assets could have been recovered from the company, had the Bank taken the action at earlier point of time.

PW44 Sh. K. Krishna Rao

182. This witness was posted as Mandal Surveyor, Anakapalli Mandal, District Vishakhapatnam, Andra Pradesh in the year 2007. On the directions of Tehsildar, Sh. V. Simhadari Rao he had accompanied an Inspector from CBI to identify the 'Survey No.51', Raja Palem, Anakapalle. He deposed that he alongwith Village Revenue Officer Sh. J. Surya Narayan and Inspector of CBI visited Raja Palem village for identification of the land. He proved extract of 'Field Measurement Book of Survey No.51' already exhibited as Ex.PW29/C and he identified his signatures on the said Book at point B. He deposed that in this land, there were 21 Sub-Divisions and none of the sub-

CBI v Sh. Ashwani J. Verma & Ors. Page No. 72/174

CC No.05/16 DL0375 divisions was owned by Sh. Konathala Mahalaxmi. He deposed that 'Zerayati Patta No.51' of Raja Palem village is different from the 'Survey No.51' of Raja Palem and he could not locate the property of Sh. Konathala Mahalaxmi bearing 'Zerayati Patta No.51' of Raja Palem village.

183. In cross-examination by learned counsel for A-4 Sh. P. V. Krishnaji, he deposed that the entire land of the village has been allotted survey numbers pursuant to survey conducted in 1956.

PW45 Smt. Asha Agnihotri

184. This witness was posted as Special Assistant, PNB during the year 2001 to 2008 and her duty was to verify cash deposit slips in the Bank. On seeing cash receipt voucher of Rs. One lac deposited in account No.4481000100008969 in the name of Sh. Konathala Mahalaxmi, she deposed that she had verified the amount, account, name of the account holder and had signed the same. The receipt was proved as Ex.PW45/A . She deposed that this amount was deposited in the account of Sh. Konathala Mahalaxmi of Vishakhapatnam as her Branch was CBS Branch in which the amount could be deposited by an account holder in PNB anywhere in the country.

PW46 Sh. Atul Sharma, Advocate

185. This witness was appointed as a Local Commissioner to visit the factory premises of the borrower at Sikandrabad by DRT and proved his report as Ex.PW46/A. This was a photocopy and exhibiting of the same was objected to. Since this report is already exhibited as Ex.PW40/A, the same shall be read in evidence.

CBI v Sh. Ashwani J. Verma & Ors. Page No. 73/174

CC No.05/16 DL0375

186. In cross-examination by learned counsel for A-1 Sh. Ashwani J. Verma & A-5 M/s. NSPL, he denied a suggestion that plant and machineries were available at the factory at the time of his visit. He deposed in affirmative to the suggestion that stocks were not available at the time of his visit to the factory. He denied a suggestion that selective photographs were taken in order to project that plant and machineries have been removed.

PW47 Sh. Abhimanyu Kumar, Government Examiner of Questioned Documents

187. This witness proved letter dated 05.08.2009 from SP, CBI with original documents containing questioned documents/writing, Q1 to Q90 as Annexure-A for comparison with specimen signatures/ writings, S1 to S120 for examination and opinion on six points mentioned in that letter as Ex.PW47/A. He proved his report as Ex.PW47/B. He deposed that the documents alongwith opinion and reasons were forwarded to SP, CBI vide letter dated 05.11.2009 under the signatures of Sh. M. C. Joshi, the then Dy.GEQD. The said letter was exhibited as Ex.PW47/C. The gist of the report is that Ex.PW34/O which is letter dated 05.09.2006 written by Sh. J. M. Gupta, Manager (Credit) PNB, South-Extension Branch bears the signatures of A-2 Sh. M. L. Arora. The report of handwriting expert opining that this letter bears the signature of A-2 Sh. M. L. Arora attains significance considering the fact that it is mentioned in the letter by Sh. J. M. Gupta that Land No.51 Ward Anakapalle is a government land and certificates dated 20.07.2005 stating that the land does not come under CBI v Sh. Ashwani J. Verma & Ors. Page No. 74/174 CC No.05/16 DL0375 Land Ceiling Act and is not an acquired land and another certificate dated 'NIL' stating that land bearing 'Sr. No.51', RS, Ward Anakapalli purportedly issued by MRO, Anakapalli are fake certificates. This letter also mentions that land bearing No.51, village Raja Palem, is not owned by the mortgagor Sh. Konathala Mahalaxmi. Rather, it is owned by 21 persons in fragmented portions. This letter further states that certificate dated 08.07.2005 regarding market value assistance and non-encumbrance certificate issued by Sub-Registrar office were also fake. (emphasis supplied)

188. In cross-examination by learned counsel for A-2 Sh. M. L. Arora, he explained that on the basis of nature of commencement, medial movement of stroke, nature of termination of the figures in both sets of writings are same and on this basis he denied a suggestion that the date of figure below the signature Mark Q90 on Ex.PW34/O i.e. 7/9 does not tally with sample date of figure S79 to S102. He also explained that since original documents were available, they were enlarged directly on the instrument which were seen directly through hand magnifier, stereo microscope and video spectral comparator. Other suggestions contrary to the report by the witness were denied.

PW48 Sh. Emani Ganpati Sharma, Sr. Manager, PNB

189. This witness was Marketing Officer, PNB at Vishakhapatnam from January 2006 to August 2006. When shown Ex.PW38/A which is identification certificate dated 05.08.2006 purportedly issued by this witness, he deposed that the same was not issued by him. He deposed that he does not know any person by the name of Sh. Konathala CBI v Sh. Ashwani J. Verma & Ors. Page No. 75/174 CC No.05/16 DL0375 Mahalaxmi. He exhibited as Ex.PW48/A, the said forged certificate allegedly issued by him. He had sent a fax on 25.09.2007 to the Sr. Manager (Law), Vishakhapatnam informing that he does not know any such person by the name of Sh. Konathala Mahalaxmi which was exhibited as Ex.PW48/B.

190. In cross-examination by learned counsel for A-2 Sh. M. L. Arora, he deposed that stationery used in preparing Ex.PW48/A appears to be of the Bank. He also stated that on Ex.PW48/A, the fax number is available (2570158) but he could not say whether the said number is of the Bank or not. He denied a suggestion that since the photograph on Ex.PW48/A is not visible, therefore, he stated that the said certificate was not issued by him.

PW47 (PW-49) Sh. Konathala Uma Venkata Shiva Satya Naraina @ Uma

191. This witness stated that he is grandson of Sh. Konathala Mahalaxmi who had expired in 1988. He stated that his father Sh. Konathala Krishnu Rao was second son of Sh. Konathala Mahalaxmi. After the Death of his grandfather, the ancestral property was divided amongst his sons. Land bearing Survey No.141/1 & 149/3 situated at village Raja Palem was given to his uncle Sh. Konathala Koteshwar Rao and Sh. Konathala Mahalaxmi Naidu as their share. He stated that he does not know what happened to original papers of the abovestated property and how it reached PNB. When he was shown account opening form purportedly in the name of his grandfather Sh. Konathala Mahalaxmi, Ex.PW16/A, specimen signatures Ex.PW16/B, CBI v Sh. Ashwani J. Verma & Ors. Page No. 76/174 CC No.05/16 DL0375 Customer Master Form Ex.PW16/D, he deposed that photographs pasted on Ex.PW16/B & Ex.PW16/D are not the photographs of his grandfather Sh. Konathala Mahalaxmi. He deposed that his grandfather was conversant with Telugu language and could not sign in English. Thus, he deposed that signatures on Ex.PW16/A, Ex.PW16/B, Ex.PW16/C & Ex.PW16/D are not of his grandfather. He deposed that he had himself come to Delhi for the first time for deposing in this case and his grandfather had never visited Delhi as per his knowledge.

PW48 (PW-50) Sh. Konathala Mahalaxmi Naidu

192. This witness deposed that Sh. Konathala Mahalaxmi was his father who had died in the year 1988. He deposed that his father had seven sons and three out of them have already expired. He deposed that his father had purchased agricultural land in village Raja Palem in the year 1948 and thereafter, the same was divided amongst his sons and the same is still in their possession. He deposed that the said land was not adjacent to National Highway and he is not having the original Sale Deed of the land. On seeing Ex.PW10/C which is Agreement of Guarantee of loan account of A-5 M/s. NSPL, he deposed that the photograph on the same is not of his father Sh. Konathala Mahalaxmi. He reiterated that his father had died on 28.07.1988 as per Death certificate already Ex.PW3/A. On seeing specimen signatures attached with account opening form of PNB Ex.PW16/B, Customer Master Form Ex.PW16/D, he deposed that the photograph pasted on these documents is not of his father CBI v Sh. Ashwani J. Verma & Ors. Page No. 77/174 CC No.05/16 DL0375 Sh. Konathala Mahalaxmi. He further deposed that the signatures on Ex.PW16/A, Ex.PW16/B, Ex.PW16/C & Ex.PW16/D are not of his father as his father only knew Telugu language and was not signing in English language. He deposed that on Ex.PW34/M which is Agreement dated 28.09.2005 his father has not signed as he had already expired by then and was not signing in English language. He deposed that the land in question was still in possession of their family and was described as Zerayati patta palam and 'Palam' stands for low lying land and high land is called Zerayati patta mitta. He deposed that the land in question is known as Zerayati patta palam No.51. He proved photograph of dead body of his father as Ex.PW48/A. PW51 Sh. Jiya Lal Sharma, Chief Concurrent Auditor, PNB

193. This witness was posted as Chief Concurrent Auditor, PNB, South-Extension Branch from 2008 to June 2009. He deposed that his duty was to scrutinize and inspect the documents of the loan account after disbursement of the loan in order to see whether documentations have been done in proper manner or not. He deposed that he was submitting quarterly reports to the Zonal Audit Office and a copy of the same was placed in the Branch record also. In case he observed any deficiencies in documents, he had to point it out in daily and quarterly reports. He deposed that during August-September, 2006, Sh. J. M. Gupta, Loan Incharge was deputed by A-2 Sh. M. L. Arora to verify the property of Sh. Konathala Mahalaxmi which was mortgaged as third party collateral security in the loan account of A-5 M/s. NSPL He proved as Ex.PW51/A letter dated 29/30.03.2007 CBI v Sh. Ashwani J. Verma & Ors. Page No. 78/174 CC No.05/16 DL0375 addressed to DGM, Zonal Office, South Delhi written by Sh. J. M. Gupta. He denied that Sh. J. M. Gupta had apprised him from Vishakhapatnam on his mobile phone about the fact that the mortgaged property was not owned by the mortgagor Sh. Konathala Mahalaxmi and the Title Deeds were fake. He proved Concurrent Daily Audit Register page No. 324 and 325 as Ex.PW51/B where he had written that the production of A-5 M/s. NSPL was delayed beyond the estimated period and the matter should be taken care of by the concerned officer of the Branch i.e. A-2 Sh. M. L. Arora and Incumbent Incharge Sh. J. M. Gupta, Loan Incharge. He proved as Ex.PW51/C Page No.12 of the Movement Register where in Entry dated 17.07.2007, it is mentioned that this witness alongwith Sh. Vimal Khera, the then Chief Concurrent Auditor and Sh. N. P. Singh, the then Chief Manager of the Branch had visited the site and found that no raw material or stock in process or finished goods were lying in the factory premises. He deposed that the visit report of Sh. J. M. Gupta dated 05.09.2006 already exhibited as Ex.PW34/O was neither submitted to him nor intimated to him. He deposed that as per his report Ex.PW51/B, he had mentioned that Provisional Balance Sheet for implementation is not on record and list of machinery already installed with its cost is also not on record.

PW52 Sh. Konathala Koteshwar Rao

194. This witness is one of the sons of Sh. Konathala Mahalaxmi and his testimony is almost similar to the testimony of PW-48 (PW-50). PW53 Sh. Mahender Pratap Singh, Dy. Circle Head, PNB, South CBI v Sh. Ashwani J. Verma & Ors. Page No. 79/174 CC No.05/16 DL0375 Delhi Circle, Rajendra Place, New Delhi.

195. This witness was the Chief Manager/Incumbent Incharge at PNB, South-Extension Branch, New Delhi, from May 2007 to February, 2008. He had visited the factory of A-5 M/s. NSPL on 17.07.2007 alongwith Sh. J. M. Sharma, Concurrent Auditor and Sh. Vimal Khera, the then Chief Internal Auditor and stated that the factory was not in a working condition at that time and there was no raw material/stock or finished goods at the site. He deposed that the borrower had disposed off these assets without permission of the Bank. He deposed that as per Ex.PW1/R, the borrower was bound to comply with the terms and conditions of sanction of loan and to maintain primary security hypothecated with the Bank and by disposing off the primary security, the borrower violated the terms and conditions of the loan. He deposed that it was also a condition that the borrower will not pay commission to the guarantor for guaranteeing the credit facilities sanctioned by the Bank to the borrowers but this condition was breached which is evident from Agreement dated 28.09.2005 between A-1 Sh. Ashwani J. Verma and guarantor Sh. Konathala Mahalaxmi, Ex.PW34/M. He deposed that the Confidential Report of Sh. Konathala Mahalaxmi Ex.PW34/D shows that he was having a cash balance of Rs.50,000/- in his account at State Bank of Bikaner and Jaipur, Vishakhapatnam but no documentary proof in support thereof was taken by the Bank. Rather, it is mentioned that CR was compiled on the basis of information given by A-1 Sh. Ashwani J.

CBI v Sh. Ashwani J. Verma & Ors. Page No. 80/174

CC No.05/16 DL0375 Verma. He deposed that as per the legal opinion Ex.PW26/A, the Advocate of the Bank Sh. P. Rama Krishna Rao of Vishakhapatnam had opined that the title of the property is complete and there is no defect in the title of the person offering mortgage. He deposed that Sh. Konathala Mahalaxmi S/o Sh. Rajayya has a clear, valid and marketable title over the abovesaid property and he is competent to create the mortgage of Property having Zerayati Patta No.51, Anakapalli Sub-Registrar Office, Anakapalli, Vishakhapatnam District. He deposed that the said lawyer had suggested as per Ex.PW26/F, that full particulars of the property in question together with schedule and ownership of land be published in Eenadu local addition in Telugu version and in Hindu daily to be published informing the public about the charge created by PNB and to call for objections, if any in this regard, to fix up a big size hoarding at the entrance of the site in a way which is visible to public informing the charge created over the said property by PNB and to measure the land in the presence of Bank valuer and legal advisor, with the assistance of mandal surveyor and thereafter to obtain a certificate to that effect signed by mandal surveyor and counter signed by MRO, Anakapalli, Vishakhapatnam. He deposed that these suggestions were very important and should have been complied with by the A-2 Sh. M. L. Arora and by Sh. J. M. Gupta.

196. He deposed that the valuation report given by A-4 Sh. P. V. Krishnaji Ex.PW39/DX is for property bearing Survey No.51 of Raja Palem village and value of the same is Rs.3,48,48,000/-. He deposed CBI v Sh. Ashwani J. Verma & Ors. Page No. 81/174 CC No.05/16 DL0375 that A-2 Sh. M. L. Arora in visit report dated 05.11.2005 for physical verification of mortgage property had mentioned the property which was mentioned by the valuer A-4 Sh. P. V. Krishnaji i.e. Survey No.51 of Raja Palem village, Anakapalli, Vishakhapatnam. He proved letter dated 05.09.2006 of Sh. J. M. Gupta as Ex.PW53/B and had stated that on spot verification of the property alongwith A-4 Sh. P. V. Krishnaji land bearing No.51 was not found to be owned by the mortgagor Sh. Konathala Mahalaxmi and it was owned by 21 other persons in-fragmented portions. He deposed that in valuation report Ex.PW39/DX, A-4 Sh. P. V. Krishnaji had stated that owner of the property is Sh. Konathala Mahalaxmi S/o Sh. Rajayya. He deposed that as per certified copy of Title Deed register of PNB, South- Extension, Part-I Branch from 05.10.2005 to 29.12.2005 Ex.PW9/B there are 19 entries for deposit of Title Deeds out of which 18 have been countersigned by Sh. J. M. Gupta but the same is not signed with regard to collateral security of Sh. Konathala Mahalaxmi by Sh. J. M. Gupta. Relying on Ex.PW22/A, he deposed that as per this letter of State Bank of Bikaner & Jaipur, there was no account in the name of Sh. Konathala Mahalaxmi in that Bank during the year 2005. He deposed that the confidential report of the guarantor was prepared only on the basis of information provided by A-1 Sh. Ashwani J. Verma which is in violation of Books of Instructions on Loan by PNB.

197. In cross-examination by learned counsel for A-4 Sh. P. V. Krishnaji, he deposed that valuation is one of the basis of granting loan by the Bank and as per valuation report Ex.PW39/DX, the details CBI v Sh. Ashwani J. Verma & Ors. Page No. 82/174 CC No.05/16 DL0375 of property are 'Survey No.51'. When shown Ex.PW12/B which is sanction letter dated 26.06.2009, he deposed that particulars of the property such as 'Zerayati Patta Number' and 'Survey Number' are not mentioned and the property is described as 'Plot No.51', Raja Palem village, Anakapalle, Vishakhapatnam in the sanction letter. Again on seeing Ex.PW9/B which is Title Deed register of PNB, he deposed that the details of property are simply '51, Raja Palem village, Anakapalle, Vishakhapatnam'. (Observation : Title Deed Register mentions 'Zerayati Patta No.51') On seeing Ex.PW26/B which is non- encumbrance certificate dated 25.08.2005, he deposed that after taking non-encumbrance certificate from the approved advocate of the Bank, the valuation was to be done of the same property by the approved Bank valuer. He deposed that in this case valuation of the property was done before non-encumbrance certificate. He deposed that he cannot say whether the valuer was provided with details of property as 'Survey No.51' or 'Zerayati Patta No.51'.

198. In cross-examination by learned counsel for A-1 Sh. Ashwani J. Verma & A-5 M/s. NSPL, he denied that there was no agreement dated 28.09.2005 executed between A-1 Sh. Ashwani J. Verma and the guarantor Sh. Konathala Mahalaxmi. He also denied a suggestion that the confidential report of the guarantor was not prepared on the basis of information supplied by A-1 Sh. Ashwani J. Verma.

199. In cross-examination by learned counsel for A-2 Sh. M. L. Arora, he deposed that he does not remember whether the translation of the Title Deeds which were in Telugu were available in the record CBI v Sh. Ashwani J. Verma & Ors. Page No. 83/174 CC No.05/16 DL0375 or not. He further stated that the agreement between the borrower i.e. A-1 Sh. Ashwani J. Verma and guarantor Sh. Konathala Mahalaxmi i.e. Ex.PW34/M was not on the record of the Bank and similarly, Ex.PW34/N which are the receipts given by Sh. Konalthala Mahalaxmi to A-1 Sh. Ashwani J. Verma were also not on Bank record. He also deposed that it was mentioned in the confidential report submitted before the sanctioning authority that the source of information of that report of Sh. Konathala Mahalaxmi in SBBJ, Vishakhapatnam account was furnished by A-1 Sh. Ashwani J. Verma.

200. In re-examination, he deposed that it is the prevalent practice that whenever the report was submitted, the Sr. Officer gives the acknowledgment and in case of refusal, an entry regarding the same is made in the DAK register.

PW54 Sh. Jyotirmoy Gupta, Manager, PNB, New Delhi

201. This witness was working as Manager (Loans) at PNB, South- Extension, Part-I Branch from February 2005 to July 2007.

202. This witness reiterated the sequence of events pertaining to sanction of loan in favour of A-1 Sh. Ashwani J. Verma and proved copy of valuation report of A-4 Sh. P. V. Krishnaji with regard to property bearing 'S. No.51' of Raja Palem village, Anakapalle, Vishakhapatnam District as Ex.PW54/A (original thereof is Ex.PW39/DX). He deposed that this report was given to him by A-2 Sh. M. L. Arora for placing the same on record and preparing the proposal for sanctioning loan. (In this report, the valuer has mentioned 'Ref. By : Punjab National Bank date : .......... New Delhi'.The name CBI v Sh. Ashwani J. Verma & Ors. Page No. 84/174 CC No.05/16 DL0375 of the owner(s) of the property is mentioned as Sri Konathala Mahalakshmi s/o Sh. Rajayya. At Col. No. 6. a) Area supported by documentary proof, shape, dimensions and physical features was replied as 'Sale Deed copy, Legal Opinion, Market Value Certificate'. At Col. No. 7, 'Is it free hold or lease hold land, the answer is Free Hold'. At Col. No.11. a) Is the building owner - occupied / tenanted / both ? b) If partly owner - occupied, specify portion and extent of area under owner - occupation, the response is 'Under Owner's Control'. At Col. No.12. a) Name of tenants / Lessees / Licensees etc. b) Portions in their occupations. c) Monthly or Annual rent / compensation / Licence Fee etc. paid by each, is responded as 'Not Applicable'. In the 'Description of the Property', it is stated that present, the above property is being used for commercial crops or kept barren. The declaration made by the valuer states that the property was inspected by him in the presence of owner's representative and the Bank has to obtain the necessary clearances from ULC, Revenue Department etc., before releasing the loan. The certificate is not accompanied with any legal opinion or Market Value Certificate. There is no dimensional site plan though it is stated that the same is attached.) He also stated that confidential report of the guarantor was prepared on the basis of information supplied by the borrower A-1 Sh. Ashwani J. Verma. On the directions of A-2 Sh. M. L. Arora, this witness had visited Vishakhapatnam to meet the guarantor for visiting the mortgaged property in his presence. However, the guarantor did not come for that purpose and the land was identified by the valuer A-4 Sh. P. V. CBI v Sh. Ashwani J. Verma & Ors. Page No. 85/174 CC No.05/16 DL0375 Krishnaji but when this witness visited local Mandal Revenue Office, Anakapalle, he was informed that 'Plot No.51' is a government land. The Mandal Revenue Officer called the Village Secretary with revenue record of village Raja Palem and on scrutinizing the same, A- 4 Sh. P. V. Krishnaji informed that in the revenue record, 'Plot No.51', village Raja Palem, Sh. Konathala Mahalaxmi is not owner of the land. He deposed that he contacted former Mandal Revenue Officer of Anakapalle Sh. P. Dharmachander Reddy who denied having issued Ex.PW29/F which is a certificate certifying that vacant land bearing Survey No.51 of Anakapalli is a non-agricultural land as per revenue records. The witness alongwith A-4 Sh. P. V. Krishnaji had visited the office of Sub-Registrar, Anakapalli and there A-4 Sh. P. V. Krishnaji scrutinized the relevant revenue record of property Plot No.51, village Raja Palem and informed that the same was not in the name of Sh. Konathala Mahalaxmi.

203. He deposed that he informed this fact from Vishakhapatnam to Sh. J. L. Sharma, the Chief Concurrent Auditor of PNB, South- Extension Branch over his mobile phone. He proved letter dated 30.08.2006 of A-4 Sh. P. V. Krishnaji as Ex.PW54/B. He deposed that on returning to Delhi, he filed a report on 05.09.2006 with A-2 Sh. M. L. Arora alongwith Ex.PW54/B letter of A-4 Sh. P. V. Krishnaji and Ex.PW26/F of Sh. P. Rama Krishna Rao the approved Bank advocate. He proved his report which was already Ex.PW34/O. He identified the signatures of A-2 Sh. M. L. Arora on the said report. He further deposed that he had written letter dated 29/30.03.2007 already CBI v Sh. Ashwani J. Verma & Ors. Page No. 86/174 CC No.05/16 DL0375 Ex.PW34/R to Zonal Office informing that the mortgaged land was not owned by Sh. Konathala Mahalaxmi. He deposed that Ex.PW10/C, Ex.PW10/B, Ex.PW10/A, Ex.PW1/P4, Ex.PW34/C, Ex.PW1/P, Ex.PW1/P1, Ex.PW1/P2 and Ex.PW1/P3 were filled up in his handwriting. He proved the entire file pertaining to loan account of A-5 M/s. NSPL as Ex.PW54/D. He deposed that A-1 Sh. Ashwani J. Verma had told that guarantor Sh. Konathala Mahalaxmi is his childhood friend and uncle of A-6 Sh. Vinay Tyagi the distributor of Hyderabad, Vishakhapatnam area of his medicine firm M/s. Qualichem International. He deposed that the collateral security papers Ex.PW7/A were handed over to A-2 Sh. M. L. Arora by A-6 Sh. Vinay Tyagi in his presence. He deposed that A-1 Sh. Ashwani J. Verma had provided him certificate of Mandal Revenue Officer Ex.PW54/E, Identification Certificate given by PNB Ex.PW48/A, letter dated 05.08.2006 given by Sh. S. Rangaraju, MLA, Vishakhapatnam Ex.PW54/F photocopy of Passbook of PNB Ex.PW54/H, copy of PAN Card of Sh. Konathala Mahalaxmi Ex.PW54/J, house hold card of Sh. Konathala Mahalaxmi Ex.PW54/K and he had sent these documents to Zonal Office. He further deposed that copies of above enclosures were given by A-1 Sh. Ashwani J. Verma when he was asked to supply information about Sh. Konathala Mahalaxmi in order to meet out the queries of Zonal Office.

204. In cross-examination by learned counsel for A-4 Sh. P. V. Krishnaji, he admitted that in the sanction letter Ex.PW12/B dated 26.09.2005, it is nowhere mentioned that property to be mortgaged CBI v Sh. Ashwani J. Verma & Ors. Page No. 87/174 CC No.05/16 DL0375 bears either 'Survey Number' or 'Zerayati Patta Number'. He proved certificate purportedly issued by Mandal Revenue Officer as Ex.PW54/D4A with respect to 'S. No.51', Anakapalle, Vishakhapatnam. He deposed that on certificate of encumbrance Ex.PW54/D4B, the address of property is mentioned as 'Survey No.51'. He deposed that in the certified copy of Title Deed register Ex.PW9/B, the description of the property is mentioned as 51, Raja Palem village, Anakapalli, Vishakhapatnam land measuring 04 acres of 19360 sq. yrds. covered by 'Zerayati Patta No.51', Anakapalle.

205. In cross-examination by learned counsel for A-2 Sh. M. L. Arora, he deposed that his statement under Section 161 of Cr.P.C. was recorded voluntarily and was exhibited as Ex.PW54/D2A. The review sheet for quarter ending 31.12.2006 Ex.PW34/DB was prepared by him under his signatures. He also admitted that he had written letter dated 23.03.2007 Ex.PW1/DX6 to Chief Manager, Credit Section, Zonal Office, South-Delhi enclosing therewith letter of guarantor Sh. Konathala Mahalaxmi to release his mortgaged property in respect of loan of A-5 M/s. NSPL.

206. He proved letter dated 20.12.2006 written by Sh. Konathala Mahalaxmi for release of Vizag property which was kept as collateral security with the Bank as Ex.PW54/D2B. The quarter review sheet of A-5 M/s. NSPL for the quarter ending December, 2006 was proved as Ex.PW54/D2C. The credit audit report of A-5 M/s. NSPL was proved as Ex.PW54/D2B. He deposed that review for six months of working capital facility, substitution of collateral security at village Anakapalli, CBI v Sh. Ashwani J. Verma & Ors. Page No. 88/174 CC No.05/16 DL0375 Vishakhapatnam and release of personal guarantee of Sh. Konathala Mahalaxmi, Ex.PW38/L was prepared by him.

207. He deposed that the confidential report of the guarantor Sh. Konathala Mahalaxmi Ex.PW54/D2E was prepared by him on the basis of information supplied by the borrower A-1 Sh. Ashwani J. Verma. He deposed that he had not commented about the title of the property of Sh. Konathala Mahalaxmi in the quarterly review sheet and in the letter written by him to the Zonal Office for substitution of collateral security as he was told by A-2 Sh. M. L. Arora that separate correspondence in this regard was going on. It was also stated by him that A-2 Sh. M. L. Arora had told him that it was not to be written in the letter to Zonal Office for substitution of collateral security that the Title Deeds of Sh. Konathala Mahalaxmi were defective as separate correspondence was going on in that context. He deposed that he had learnt that the title of Sh. Konathala Mahalaxmi was defective and he had reported to A-2 Sh. M. L. Arora and Sh. Jiya Lal Sharma, Concurrent Auditor who did not take any action and he still remained silent and did not report this to higher authorities as proposal for substitution was under way.

208. He deposed that the property was first visited by the Incumbent Incharge in the month of November, 2005 and he did not point anything adverse about the title of the land. He deposed that as per Book of Instructions, Chapter 9, Para-5 (XII) about compilation of confidential report, Branches must prepare the confidential reports carefully. The Incumbent Incharge may depute an officer for CBI v Sh. Ashwani J. Verma & Ors. Page No. 89/174 CC No.05/16 DL0375 compilation of the confidential report. He is said as credit reporter, but it must be understood that responsibility of compilation of CR and ascertaining the genuineness is that of Incumbent Incharge. As per chapter of XI of Book of Instruction, it is the responsibility of the Incumbent Incharge to ascertain the genuineness of the Title of the property mortgaged with the Bank.

209. In cross-examination by learned counsel for A-6 Sh. Vinay Tyagi, he proved his statement recorded under Section 161 of Cr.PC as PW54/DX. He denied that his statement recorded on 07.04.2010 was on account of coercion exercised by CBI. He denied a suggestion that house hold card and Bank card as well as original papers of collateral security were not handed over by A-6 Sh. Vinay Tyagi to A-2 Sh. M. L. Arora in his presence.

210. In cross-examination by learned counsel for A-1 Sh. Ashwani J. Verma & A-5 M/s. NSPL, he denied a suggestion that the confidential report of the guarantor was not prepared on the basis of information supplied by A-1 Sh. Ashwani J. Verma. He further deposed that the verification of the guarantor was got done after acceptance of Agreement of Guarantee.

PW55 Sh. R. N. Mishra, Additional SP, CBI/IO

211. PW55 has reiterated about the allegations made in the complaint given by Chief Manager, PNB, South-Extension Branch, in his deposition.

212. PW55 has also deposed about the investigation conducted by him in this case.

CBI v Sh. Ashwani J. Verma & Ors. Page No. 90/174

CC No.05/16 DL0375

213. PW55 stated that A-4 Sh. P. V. Krishnaji, the Approved Valuer of the Bank, had given his valuation report dated 14.07.2005. On the basis of this report, the loan was sanctioned in favour of the borrower.

214. PW55 has deposed that the valuation report was for 'Survey No.51', whereas, the description of the Collateral Security was 'Zerayati Patta No.51', Raja Palem village, Anakapalle Vishakhapatnam.

215. PW55 deposed that A-4 Sh. P. V. Krishnaji conducted the valuation of a different land which was not at all mortgaged to the Bank and submitted incorrect and fabricated report to the Bank.

216. PW55 has deposed that A-4 Sh. P. V. Krishnaji conducted the valuation of the land on the behest of A-6 Sh. Vinay Tyagi and A-4 Sh. P. V. Krishnaji also obtained the second valuation of the same land from other valuer to give authenticity to his fabricated report.

217. PW55 deposed that land bearing 'Zerayati Patta No.51' and 'Survey No.51' are entirely different from each other, both on paper and on ground. As per the Revenue records, the land bearing 'Zerayati Patta No. 51' was purchased by Sh. Konathala Mahalaxmi in the year 1951 and is still in his name whereas, the land bearing 'Survey No.51' is in the name of twenty-one persons other than Sh. Konthala Mahalaxmi. The land bearing 'Survey No.51' is adjacent to the National Highway No.5 and carries a higher market value whereas, the land bearing 'Zerayati No.51' is far away from the Highway and carries a lower market value.

218. PW55 deposed that survey work was done in the state of CBI v Sh. Ashwani J. Verma & Ors. Page No. 91/174 CC No.05/16 DL0375 Andhra Pradesh in 1956 and Survey number was allotted to the land and in the process the land bearing 'Zerayati Patta No.51' was allotted to 'Survey No.149/1 & 149/3'.

219. PW55 deposed that Sh. Konathala Mahalaxmi who was the owner of the Collateral Security had already died in the year 1988 and after his death, the subject land was given in the share of one of his sons Sh. Konathala Mahalaxmi Naidu during family partition. The original Sale Deed dated 08.09.1951 and original Mortgage Deed dated 11.12.1948 of the land was with Sh. Konathala Mahalaxmi Naidu but since about last ten years he had not seen the same and was not able to say where it is gone.

220. PW55 deposed that A-3 Sh. C. N. Rao @ Konathala Mahalaxmi @ Mamu managed to obtain the original paper of the land and also PAN Card and Ration Card in the name of Sh. Konathala Mahalaxmi which were used by him as identity and residence proof and in this manner, he adopted a new identity as Sh. Konathala Mahalaxmi.

221. PW55 deposed that A-3 Sh. C. N. Rao @ Konathala Mahalaxmi was in close contact with A-6 Sh. Vinay Tyagi and was ready to mortgage the aforesaid land of Sh. Konathala Mahalaxmi as Collateral Security against the monetary consideration.

222. PW55 deposed that A-6 Sh. Vinay Tyagi and A-3 Sh. C. N. Rao @ Konthala Mahalaxmi came to Delhi from Vishakhapatnam and contacted A-1 Sh. Ashwani J. Verma who was in search of a Collateral Security for his loan and for a consideration of Rs.50 lacs, A-3 Sh. C. N. Rao @ Konathala Mahalaxmi agreed to provide Collateral Security.

CBI v Sh. Ashwani J. Verma & Ors. Page No. 92/174

CC No.05/16 DL0375 An agreement was also signed on 28.09.2009 between A-3 Sh. C. N. Rao who was impersonating as Sh. Konathala Mahalaxmi in the presence of A-6 Sh. Vinay Tyagi. On the same day, all the three accused persons visited PNB, South-Extension, New Delhi Branch where A-3 Sh. C. N. Rao impersonating as Konathala Mahalaxmi signed the Agreement of Guarantee on 28.09.2005. In the Bank, A-1 Sh. Ashwani J. Verma introduced A-3 Sh. C. N. Rao @ Konathala Mahalaxmi as his childhood friend and uncle of A-6 Sh. Vinay Tyagi. He deposed that when the Bank official asked for identity proof of Sh. Konathala Mahalaxmi, A-6 Sh. Vinay Tyagi took the PAN Card in the name of Sh. Konathala Mahalaxmi from the A-3 Sh. C. N. Rao and produced before the Bank officials. He also deposed that the original papers of Collateral Security were also presented before the Bank officials by A-6 Sh. Vinay Tyagi after taking them from the A-3 Sh. C. N. Rao.

223. PW55 deposed that A-2 Sh. M. L. Arora had visited Vishakhapatnam for the physical verification of Collateral Security and in his report dated 05.11.2005, he mentioned the description of the Collateral Security as land bearing 'Survey No. 51' as mentioned by the valuer A-4 Sh. P. V. Krishnaji in his valuation report and not as land bearing 'Zerayati Patta No.51' which was the actual land mortgaged with the Bank. He deposed that on the basis of report dated 05.11.2005 of the A-2 Sh. M. L. Arora, the remaining Term Loan was released in favour of the borrower A-1 Sh. Ashwani J. Verma. He deposed that as per the terms and conditions, the loan amount upto CBI v Sh. Ashwani J. Verma & Ors. Page No. 93/174 CC No.05/16 DL0375 Rs.33.50 lacs was to be released only in the subject loan account before the verification of the Collateral Security and creation of mortgage but A-2 Sh. M. L. Arora in gross violation of above conditions and in conspiracy with other co-accused persons allowed to release a sum of Rs.1,13,53,745/- in favour of A-1 Sh. Ashwani J. Verma by 31.10.2005. During August/September 2006, Sh. J. M. Gupta, the then Manager of the Bank was sent for verification of collateral security and on his return he submitted his report dated 05.09.2006 to A-2 Sh. M. L. Arora which was acknowledged by him. He deposed that as per his report, the collateral security was defective but A-2 Sh. M. L. Arora did not intimate this fact to the Zonal Office and vide letters dated 12.09.2006 and 13.09.2006, he requested Zonal Office to release the collateral security. He deposed that on his recommendation, working capital was released. He further deposed that as per terms and conditions of the sanction letter dated 26.09.2005, no commission was to be paid by the borrower to the guarantor for standing guarantee but A-1 Sh. Ashwani J. Verma in violation of terms and conditions of loan, signed an agreement with A- 3 Sh. C. N. Rao who was impersonating as Sh. Konathala Mahalaxmi and also paid Rs.25 lacs to him through A-6 Sh. Vinay Tyagi as commission. He further deposed that as per terms and conditions of the sanction, the borrower was not supposed to sell of the primary securities of plants and machineries and other stocks of the factory which were hypothecated to the Bank without prior approval of the Bank but A-1 Sh. Ashwani J. Verma without consent of the Bank CBI v Sh. Ashwani J. Verma & Ors. Page No. 94/174 CC No.05/16 DL0375 disposed off the primary securities and proceeds thereof were not deposited with the Bank. He deposed that A-3 Sh. C. N. Rao @ Konathala Mahalaxmi and A-6 Sh. Vinay Tyagi identified the land to the valuer A-4 Sh. P. V. Krishnaji for the purpose of valuation and A-6 Sh. Vinay Tyagi also took the photographs of land which were enclosed with the subject valuation report. He deposed that the accused persons A-1 Sh. Ashwani J. Verma, A-2 Sh. M. L. Arora, A-3 Sh. C. N. Rao @ Sh. Konathala Mahalaxmi, A-4 Sh. P. V. Krishnaji and A-5 M/s. NSPL, represented through its Director A-1 Sh. Ashwani J. Verma and A-6 Sh. Vinay Tyagi entered into criminal conspiracy with their common and dishonest intention for cheating the PNB by using the false and forged documents as genuine. He deposed that A-6 Sh. Vinay Tyagi played the role of a middle man between impersonator A-3 Sh. C. N. Rao @ Konathala Mahalaxmi and A-1 Sh. Ashwani J. Verma and also obtained fake valuation report from A-4 Sh. P. V. Krishnaji and thereby cheated the PNB and caused pecuniary loss to the tune of Rs.7,83,24,818/-as on 31.03.2007. He proved FIR bearing RC BD-1/2009/E/0004 dated 06.02.2009 under Section 120-B readwith Sections 420/467/468/471 IPC and under Section 13 (2) readwith Section 13 (1) (d) of PC Act and other substantive offences as Ex.PW55/A.

224. He proved letter dated 10.03.2010 as Ex.PW55/B vide which he had received original application filed by PNB against A-5 M/s. NSPL and others before DRT alongwith copy of valuation report dated 25.03.2008 of plant and machineries received by him and copy of CBI v Sh. Ashwani J. Verma & Ors. Page No. 95/174 CC No.05/16 DL0375 original application filed by PNB against A-5 M/s. NSPL and others in DRT as Ex.PW55/C (colly).

225. PW-55 also proved Ex.PW55/D to Ex.PW55/Z3. Few noteworthy exhibits are :-

i. Ex.PW55/D :- This is letter dated 18.03.2010 addressed to SP, CBI by AGM, PNB enclosing therewith copy of possession notice dated 25.06.2009 issued by PNB alongwith copies of movable and immovable assets which were taken under Bank's possession on 25.06.2009 under SARFAESI Act. In this letter, it is stated that all hardware, plant and machinery and stocks have been removed from the site by the borrower.

ii. Ex.PW55/E :- Copy of possession notice as per which possession of property of M/s. NSPL at Sikandrabad was taken over by the Bank on 25.06.2009.

iii. Ex.PW55/F :- Copy of inventory of movable property taken possession in loan account of M/s. NSPL. iv. Ex.PW55/G :- Copy of inventory of immovable assets taken possession in loan account of M/s. NSPL and letters dated 19.08.2009 and 26.08.2009 of Jain Associates seeking for charges of security guards provided to guard the factory.

v. Ex.PW55/H :- Production-cum-seizure memo dated 08.04.2010 as per which pay-in slips dated 09.08.2005 for Rs.8,000/-, dated 25.08.2005 for Rs.3,500/- and dated 23.09.2005 for Rs.5,000/- pertaining to ICICI Bank Account No.006001518273 (03 pages) were seized by this witness from Sh. Vinay Tyagi.

vi. Ex.PW55/M :- Digital photocopy of document No.3241 of 1948 and document No.3102 of 1951 obtained by PW-55 from Sub-Registrar, Anakapalle, CBI v Sh. Ashwani J. Verma & Ors. Page No. 96/174 CC No.05/16 DL0375 District Vishakhapatnam.

vii. Ex.PW55/N :- Document No.3102 of 1951.

viii. Ex.PW55/O:- Copy of FIR RC No.BD1/2009/E/0004 alongwith copy of complaint dated 07.01.2009 given by Sh. Shreeman Narayan Sharma, Chief Manager, PNB, Branch Office, South Extension, New Delhi.

ix. Ex.PW55/Q :- Seizure memo dated 14.05.2009 for seizure of copy of letter dated 05.09.2006 addressed to the AGM, PNB Branch office, South-Extension, New Delhi, signed by Sh. J. M. Gupta, Manager.

x. Ex.PW55/R :- Production-cum-seizure memo dated 20.05.2009 at the time of seizure of agreement dated 28.09.2005 between A-1 Sh. Ashwani J. Verma and Sh. Konathala Mahalaxmi, receipts of payments dated 30.09.2005, 26.12.2005, 31.12.2005, 22.01.2006, 09.02.2006 and 31.03.2006 and cheque record slip of SB A/c No.49083 Canara Bank, Janpath, New Delhi.

xi. Ex.PW55/U :- Seizure memo dated 07.10.2009 prepared at the time of seizure of receipt dated 30.03.2007 obtained from PNB, South-Delhi Zonal Office on the photocopy of the letter dated 29/30.03.2007 alongwith enclosures.

xii. Ex.PW55/X :- Details of payments made by A-1 Sh. Ashwani J. Verma and A-5 M/s. NSPL to Sh. Konathala Mahalaxmi from A/c No.49083, Canara Bank, Janpath Branch, New Delhi. (This is record slip of Canara Bank, Janpath, New Delhi as per which Sh. Konathala Mahalaxmi was given a sum of Rs.5 lacs vide Cheque No.358527 and there are other entries dated 31.10.2005 and 15.11.2005 for Rs.10 Lac each vide Cheque No.358528 and 358529. However, it is also written CBI v Sh. Ashwani J. Verma & Ors. Page No. 97/174 CC No.05/16 DL0375 against last two cheques 'Not Paid' and 'P').

xiii. Ex.PW55/Y :- Letter dated 27.03.2009 from AGM, Canara Bank handing over statement of Account No.54754 of M/s. Qualichem Int. BV, 22848 of A-5 M/s. NSPL, 49083 of A-1 Sh. Ashwani J. Verma, 49084 of Ms. Jyoti A. Verma and 22516 of Aqurous Ganges Miner. xiv. Ex.PW55/Y1 :- Statement of Account No.22516 of M/s Aqurous Ganges Mineral Pvt. Ltd., Canara Bank w.e.f. 01.09.2005 to 04.06.2008 (D-302, page 61 of File B-27).

xv. Ex.PW55/Y3 :- Statement of Account No.49083 of Sh. Ashwani J. Verma, Canara Bank w.e.f. 01.09.2005 to 04.06.2008 (In this statement of account, there is debit entry of Rs.5 lacs on 19.10.2005 in the name of Sh. Konathala Mahalaxmi against Cheque No.358527). xvi. Ex.PW55/Y4 :- Statement of Account No.22848 of M/s. NSPL, Canara Bank w.e.f. 01.09.2005 to 04.06.2008.

xvii. Ex.PW55/Y5 :- Statement of Account No.54754 of M/s. Qualichem Int. BV, Canara Bank w.e.f. 01.09.2005 to 04.06.2008.

xviii. Ex.PW55/Z :- Statement of Sh. C. V. Pawana Kumar under Section 161 Cr.PC.

xix. Ex.PW55/Z3 :- Book of Instructions of Loan of PNB.

226. In cross-examination by learned counsel for A-4 Sh. P. V. Krishnaji, PW-55 deposed that as per Page 11.9 of Ex.PW55/Z3 which is Book of Instructions of Loan of PNB, before sanctioning of loan, valuation of property is done. Further, on a perusal of Ex.PW12/B, which is sanction letter, PW-55 deposed that the details of Collateral CBI v Sh. Ashwani J. Verma & Ors. Page No. 98/174 CC No.05/16 DL0375 Security is mentioned as 'Plot No.51, Raja Palem village, Anakapalli (Vishakhapatnam), Andhra Pradesh, and the same is not mentioned as Zerayati Patta No.51. He also stated that the Bank's Approved Valuer conducts valuation of the property for which he is instructed by the Bank. It also came on record during evidence of PW55 that he does not remember whether he had seized any letter from the Bank to the Valuer/A-4 Sh. P. V. Krishnaji regarding valuation of the property to be conducted by him in this case. He deposed that during investigation, he had inquired from A-4 Sh. P. V. Krishnaji regarding said letter. However, A-4 Sh. P. V. Krishnaji could not produce any such letter. The witness was shown Ex.PW10/D which is certified copy of Title Deed register where description of property is 'Zerayati Patta No.51' and not 'Survey No.51'. He deposed that another Bank's Approved Valuer Sh. I. Ramarao had also conducted the valuation of the Property bearing S. No.51 of Raja Palem village, Anakapalle, Vishakhapatnam on the instructions of A-4 Sh. P. V. Krishnaji.

227. In cross-examination by learned counsel for A-2 Sh. M. L. Arora, he deposed that Sh. Jiya Lal Sharma was the Chief Concurrent Auditor who was expected to scrutinize the documents of the loan account after disbursal of loan in order to see whether the documentation had been done in a proper manner or not and he had to see whether the valuation and legal opinion of the mortgaged property was taken or not. PW-55 stated that the Chief Concurrent Auditor was sending quarterly reports to the Zonal Audit Office and a copy of the same was placed in the records of the Branch. He further deposed that CBI v Sh. Ashwani J. Verma & Ors. Page No. 99/174 CC No.05/16 DL0375 the PAN Card and Ration Card of Sh. Konathala Mahalaxmi on inquiry was found to be genuine. He denied a suggestion that the Recommending Officer is not responsible regarding authenticity of information, if source of information is mentioned by the Recommending Officer. Circulars dated 07.07.2001 of PNB No.11 of 2001 and dated 21.07.2001 of PNB No.13 of 2001 were put to the witness as Ex.PW55/A2/D1 and Ex.PW55/A2/D2. After putting these circulars to the witness, he was given a suggestion that these circulars do not obligate the Bank to personally verify by visiting the details and documents furnished by its customer regarding KYC Norms at the time of opening of account. (A perusal of Ex.PW55/A2/D1 shows that it provides that 'independent verification of address in all the accounts forms an integral part of the procedure for opening an account and this is required as an additional precaution and not as a substitution'. It is further provided that 'independent verification may also be done by deputing any employee. The employee shall furnish a certificate regarding correctness of address as per Annexure-2 enclosed'. The proforma of certificate regarding personal verification of the address of the account holder is as under :-

              The      undersigned      visited     the      premises
           at_________(addressed        to      be      given)     of
           S/F/CA___________ Account             No._________      of

Sh./Smt./Kumari_________ who opened the said account on_______ (Date of opening of the account) and confirm the correctness of the address so furnished to the Bank in the said account.

Date:

CBI v Sh. Ashwani J. Verma & Ors. Page No. 100/174

CC No.05/16                                                       DL0375
                          SIGNATURE _________
                      NAME OF THE EMPLOYEE _________
                         DESIGNATION __________')

Further, Ex.PW55/A2/D2 provides that 'Independent verification may also be done by deputing an employee and the employee shall furnish a certificate regarding correctness of the address as prescribed'.

228. PW-55 further deposed that Sh. J. M. Gupta had visited the property Survey No.51 as he was misled by A-4 Sh. P. V. Krishnaji in collusion with other accused persons. PW-55 also stated that vide letter dated 12.09.2006 which is Ex.PW34/Q, A-2 Sh. M. L. Arora had informed the Zonal Office to comply with the suggestions given by the Panel Advocate. (Letter dated 12.09.2006 Ex.PW34/Q was in response to a meeting held on 23.08.2006 and in response to queries of the Zonal Office, A-2 Sh. M. L. Arora had shot down the suggestions of the panel lawyer terming it "very cumbersome" and rather forwarded the request of the party for release of third party property). PW-55 admitted that in the confidential report of Sh. Konathala Mahalaxmi which is Ex.PW34/D, it is mentioned that in column No.viii at page 3 that the report is prepared on the basis of information supplied by the borrower, A-1 Sh. Ashwani J. Verma and hence, this fact was not concealed from Regional Office. However, the witness also referred to the Book of Instructions on Loan Ex.PW55/ZE where para No.5 (i) of Chapter-9 (Confidential Reports) provides that information furnished in the loan application by the CBI v Sh. Ashwani J. Verma & Ors. Page No. 101/174 CC No.05/16 DL0375 applicant forms the basis for completing the Confidential Report. The details given in the application should be independently verified through atleast two reports from reliable sources, uninfluenced by the party. A suggestion was given that with regard to precautions suggested by Panel Advocate from A to A1 on Ex.PW9/A that steps were to be taken by the Regional Office with the Hyderabad Office. However, it is already noticed above that the suggestions of the Panel Advocate were shot down by A-2 Sh. M. L. Arora himself stating that the suggestions were "very cumbersome" and by asking the borrower to give some other property, the request of borrower for release of third party property was forwarded to the Zonal Office. He was asked a question whether he had enquired from Sh. J. M. Gupta why he had not mentioned defect in the title of mortgage deed in Ex.PW34/DB. (New Delhi Review For Quarter Ending 31.12.2006, Ex.PW34/DB is silent about any defect in the collateral security with the Bank. The answer of the same can be found in the testimony of PW54 Sh. Jyotirmoy Gupta, Manager, PNB where during cross-examination by learned counsel for A-2 Sh. M. L. Arora, he deposed that he had not commented about the title of the property of Sh. Konathala Mahalaxmi in the Quarterly Review Sheet as well as in the letter written by him to the Zonal Office for substitution of collateral security as he was told by A-2 Sh. M. L. Arora that separate correspondence in this regard was going on.) To a suggestion that Sh. J. M. Gupta had seen the same property on his visit to Vishakhapatnam in the year 2006 which was seen by A-2 Sh. M. L. CBI v Sh. Ashwani J. Verma & Ors. Page No. 102/174 CC No.05/16 DL0375 Arora after the release of the loan, PW55 deposed that whereas Sh. J. M. Gupta had submitted his report with regard to defects in the mortgaged property which was not forwarded by A-2 Sh. M. L. Arora to the Zonal Office and it was cleverly mentioned (by A-2 Sh. M. L. Arora) that mortgaged property is 'Survey No.51' which was near the highway and hence, costlier. He deposed that he did not confront Sh. J. M. Gupta, Manager (Loans) and Sh. Jiya Lal Sharma, the then Concurrent Auditor in the South-Extension Branch of PNB to test the veracity of statement of Sh. J. M. Gupta that he had informed about the defects to Sh. Jiya Lal Sharma which was denied by Sh. Jiya Lal Sharma. Again, the witness was confronted with his statement recorded on 08.08.2017 from point A to A where he had stated that "it was primary duty of A-2 Sh. M. L. Arora to take further steps in that regard", and was asked the basis of saying so not withstanding letter dated 12.09.2006 part of Ex.PW9/A vide which letter of advocate dated 30.08.2006 Ex.PW26/F was forwarded to the Regional Office by A-2 Sh. M. L. Arora asking the Regional Office to ensure taking of steps as advised by the advocate through the local office of the Bank where the land was situated. (All these suggestions were contrary to the record in as much as neither the letter dated 30.08.2006 of the panel advocate was sent to Regional Office by A-2 Sh. M. L. Arora vide his letter dated 12.09.2006 nor A-2 Sh. M. L. Arora had asked Regional Office to ensure taking of steps as advised by the advocate through the local office of the Bank where the land was situated. Rather, the response of A-2 Sh. M. L. Arora was that the suggestions CBI v Sh. Ashwani J. Verma & Ors. Page No. 103/174 CC No.05/16 DL0375 of the panel advocate are 'very cumbersome' and he had asked the party to give some other property and A-2 Sh. M. L. Arora had forwarded the request for release of third party property.). He denied a suggestion that PAN card and Ration card were sufficient to confirm the identity of the guarantor. (It is noticed above that as per circulars Ex.PW55/A2/D1 & Ex.PW55/A2/D2, it is necessary to make independent verification by deputing an employee for this purpose.). PW55 also deposed that A-2 Sh. M. L. Arora had gone to Vishakhapatnam by flight spending govt. money but failed to observe that Sh. Konathala Mahalaxmi had died in the year 1988. He deposed that A-2 Sh. M. L. Arora had gone to verify the mortgage property as well as the guarantor being Head of the Branch.

229. In cross-examination by learned counsel for A-1 Sh. Ashwani J. Verma & A-5 M/s. NSPL, a question was put to the witness that A-1 Sh. Ashwani J. Verma had spent Rs.1.6 Crores at the time of making application of loan. The witness stated that the same can be verified from Bank accounts statement. He deposed that so far as Survey No.51 is concerned, it is owned by twenty-one persons. He deposed that he could not find out how the Sale Deed of Sh. Konathala Mahalaxmi came into the possession of A-3 Sh. C. N. Rao from Sh. Konathala Mahalaxmi Naidu. He deposed that the charge-sheet does not mention the sale amount of plant and machinery so he denied a suggestion that A-1 Sh. Ashwani J. Verma had informed him that he had deposited Rs.76 lacs out of the sale proceeds in the same Bank account with the PNB against the loan and Rs.65 lacs to the electricity CBI v Sh. Ashwani J. Verma & Ors. Page No. 104/174 CC No.05/16 DL0375 department. During cross- examination the witness was put certain documents which are bill-cum-disconnection notice of Paschimanchal Vidyut Vitran Nigam Ltd. Ex.PW55/A1, A-5/D1, demand notice of Paschimanchal Vidyut Vitran Nigam Ltd. Ex.PW55/A1, A5/D2, order of the Hon'ble High Court of Allahabad dated 19.02.2008, Ex.PW55/A1, A-5/D3. He deposed that he did not find during investigation that plant and machinery had been sold by A-1 & A-5 after taking approval from Sh. R. K. Dubey, Regional Manager, Delhi Region, PNB or that any tripartite agreement in this regard had been executed between A-1, A-5, PNB and the purchaser. He denied a suggestion that A-1 Sh. Ashwani J. Verma had suggested that Sh. Konathala Mahalaxmi was not his childhood friend or that no commission had been paid to him or that no receipt was supplied by A-1 Sh. Ashwani J. Verma.

230. In cross-examination by learned counsel for A-6 Sh. Vinay Tyagi, it came on record that this witness had enquired from PW11 Sh. B. Venkateshwara Rao, the name of his friend, who had introduced him to A-6 Sh. Vinay Tyagi but since he was not remembering his name, he could not disclose his name to this witness. It was also noted that this is not part of statement of PW11 Sh. B. Venkateshwara Rao recorded under Section 161 of Cr.P.C. (PW-11 in his evidence has disclosed that he was introduced to A-6 Sh. Vinay Tyagi by his friend Ali). The suggestions that all the incriminating evidence gathered by this witness against A-6 Sh. Vinay Tyagi is false, was denied.

231. On conclusion of prosecution evidence, statements of the CBI v Sh. Ashwani J. Verma & Ors. Page No. 105/174 CC No.05/16 DL0375 accused were recorded under Section 313 of Cr.P.C. and all the incriminating evidence was put to them which was denied by them.

232. A-1 Sh. Ashwani J. Verma examined three witnesses in support of his defence and also entered witness box under Section 315 of Cr.PC.

233. D1W1 : The first witness D1W1 Sh. Brijesh Bahadur Singh stated that he was employed to supervise the civil construction as Manager. He deposed that by the time, loan was procured by A-5 M/s. NSPL most of the civil construction was over. He deposed that the production continued at the site for about 7-8 months but thereafter the same was stopped for want of material. He deposed that the minimum electricity bill was Rs.7-8 lacs per month. He deposed that the electricity connection was disconnected for want of payment of bills and finished goods and scrap was sold to pay the electricity bills.

234. Not much credence can be given to the testimony of this witness for the simple reason that since he was employed only to supervise civil construction and once the said construction was over, there would have been no job for him.

235. D1W2 : D1W2 Sh. Tej Kishan Kaul claimed that he was employed as General Manager with A-5 M/s. NSPL He deposed that the production was stopped for want of raw material and spare parts. This witness deposed that he worked for A-5 M/s. NSPL for 7-8 months but did not take any salary for reasons that the factory owner was his very good friend and he was always facing financial difficulties. He further deposed that he was not given any written CBI v Sh. Ashwani J. Verma & Ors. Page No. 106/174 CC No.05/16 DL0375 appointment.

236. The testimony of this witness is also doubtful as he is a close friend of A-1 Sh. Ashwarni J. Verma and claims that he had left the job with M/s Baxter, Delhi as consultant and joined A-5 M/s Nanak Steels Pvt. Ltd but got no salary which shows that he may have never been employed with A-5 M/s. NSPL

237. D1W3 : D1W3 Sh. Rajnish Singh has also given some details of working of the plant of A-5 M/s Nanak Steels Pvt. Ltd.

238. D1W4 : Lastly, A-1 Sh. Ashwani J. Verma entered in the witness box as D1W4. He has given details of initiating the establishment of A-5 M/s. NSPL at Sikandrabad. He deposed that although primary security offered was sufficient to cover the loan but still the Bank demanded additional collateral security. He deposed that one Sh. Jitender Kumar Chauhan introduced him to A-6 Sh. Vinay Tyagi who gave him papers of the land to be offered as collateral security to the Bank. He deposed that he has no role in valuation and legal report of the collateral security offered. He deposed that he has given Rs. 5-6 lacs to A-6 Sh. Vinay Tyagi for bearing the travel and stay cost of persons who had to come from Vishakhapatnam and for obtaining certain reports. He deposed that Sh. Konakhala Mahalaxmi was seeking some business interest in Delhi with him and for that reason, Ex.PW34/M was executed between them. He produced certain documents pertaining to Excise Returns as Ex.D1W4/A to Ex.D1W4/D. He also proved Ex.D1W4/E to Ex.D1W4/S during his statement. He admitted that he was told by Sh. J. M. Gupta in May-

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CC No.05/16 DL0375 June-2006 that there is a defect in collateral security. He deposed that he was given written permission by PNB to dispose off 'small' part of plant and machinery. He deposed that he had sold plant and machineries for payment of bill of electricity department and sale tax department. He deposed that the Bank sold the factory even below circle rate and if the same was sold properly, not only the Bank would have got its dues but the excess would have been returned to him.

239. While being cross-examined, he could not tell the details of collateral property. He admitted that he had received Ex.PW1/R which is a letter from PNB attaching terms and conditions of loan where the details of property mentioned are 'Plot No.51'. He denied that it was in his knowledge that the property being offered as collateral security was 'Zerayati Patta No.51', Raja Palem, Anakapalle, Vishakhapatnam. He deposed that the title deeds of the collateral security were deposited by guarantor directly in the Bank. He deposed that he never told that Sh. Konathala Mahalaxmi was his childhood friend considering age difference between the two. He deposed that the sale deed was in Telugu and he was not able to read it ever. He deposed that it is not necessary that a borrower borrowing a loan of Rs.7 Crores would make appropriate enquiry with regard to collateral security offered to the Bank for mortgage. He denied the suggestion that he had thoroughly enquired the details of the mortgaged property but as a part of conspiracy with Bank officials and private person concealed these facts. He deposed that he was introduced with Sh. Konathala Mahalaxmi by A-6 Sh. Vinay Tyagi who was present in the CBI v Sh. Ashwani J. Verma & Ors. Page No. 108/174 CC No.05/16 DL0375 Bank with Sh. Konathala Mahalaxmi on the day documentation was done. He deposed that he had no role in valuation of the property of Sh. Konathala Mahalaxmi.

240. In cross-examination by learned counsel for A-6 Sh. Vinay Tyagi, he denied that his deposition with regard to A-6 Sh. Vinay Tyagi is false.

241. In cross examination by learned counsel for A-2 Sh. M. L. Arora, he deposed that he had not told PNB about the agreement between him and Sh. Konathala Mahalaxi.

242. D2W1 : On behalf of A-2 Sh. M. L. Arora, D2W1 Sh. K. B. Relan, Sr. Manager (retired) PNB was also examined. He deposed that there are no guidelines for identifying a guarantor. He deposed that Passport, PAN Card, Identity Card or any other card issued by government agency having photographs of the individual is sufficient proof of identity.

243. Arguments were addressed by Sh. Pankaj Gupta, learned Senior Public Prosecutor for CBI, Sh. Ajit Kumar Singh, learned counsel for A-1 Sh. Aswhani J. Verma and A5 M/s. NSPL, Sh. R. N. Mittal, learned Senior Advocate assisted by Sh. Bharat Bhushan and Sh. B. K. Saini, learned counsels for A-2 Sh. M. L. Arora, Sh. Arvind Singh, learned counsel for A-4 Sh. P. V. Krishnaji and Sh. Shri Singh, learned counsel for A-6 Sh. Vinay Tyagi.

DISCUSSION OF EVIDENCE AND ARGUMENTS ADDRESSED ON BEHALF OF A-2 SH. M. L. ARORA

244. First of all, the evidence against A-2 Sh. M. L. Arora shall be CBI v Sh. Ashwani J. Verma & Ors. Page No. 109/174 CC No.05/16 DL0375 discussed to find out whether the prosecution has succeeded in proving his guilt for the charges framed against him.

245. The charges that are to be proved against A-2 Sh. M. L. Arora are for Criminal Conspiracy punishable under Section 120-B readwith Sections 419, 420, 468, 471 of IPC and under Section 13 (2) readwith 13 (1) (d) of the Prevention of Corruption Act, 1988 and for the offence under Section 13 (2) readwith Section 13 (1) (d) of the Prevention of Corruption Act, 1988.

246. The points for determination vis-a-vis A-2 Sh. M. L. Arora would be whether he has committed any criminal misconduct and whether he conspired with other co-accused to commit the offences of impersonation, cheating, forgery and use of a forged document as genuine thereby resulting in unlawful loss to PNB and unlawful gain to A-1 Sh. Ashwani J. Verma and A-5 M/s. NSPL.

247. For these points for determination, further determination would be required to find out whether A-2 Sh. M. L. Arora abdicated his responsibility of giving clear and specific instructions to the Government Approved Valuer alongwith documents of the property to be valued and accepted whatever valuation report was handed over by the borrower A-1 Sh. Ashwani J. Verma?

248. Whether A-2 Sh. M. L. Arora knowingly accepted valuation report for property "Plot No.51", Raja Palem Village, Anakapalli, District-Vishakhapatman, A.P. in place of "Zerayati Patta No.51" Raja Palem Village, Anakapalli, District-Vishakhatpatnam, A.P.?

249. Whether A-2 Sh. M. L. Arora released loan amount more than CBI v Sh. Ashwani J. Verma & Ors. Page No. 110/174 CC No.05/16 DL0375 permitted by the sanction order of the Regional Office before spot verification of the site at Vishakhapatnam, A.P.?

250. Whether A-2 Sh. M. L. Arora during his visit to Vishakhapatnam, A. P. on 05.11.2005 consciously glossed over the fact that the mortgagor Sh. Konathala Mahalaxmi is not the owner of the land whose valuation report has been acted upon by the Bank for sanctioning loan in favour of A-5 M/s NSPL through A-1 Sh. Ashwani J. Verma?

251. Whether A-2 Sh. M. L. Arora had received letter dated 05.09.2006 from Sh. J. M. Gupta, Manager (Credit) and whether A-2 Sh. M. L. Arora is guilty is suppressing from the higher authorities i.e. Regional Office the said letter where it was mentioned that the two certificates issued by MRO, Anakapalli stating that the land does not come under Land Ceiling Act is not an acquired land and is a non- agricultural land are fake certificates and further informing that Land No.51 Village Raja Palem is not owned by the mortgagor Sh. Konathala Mahalaxmi and is owned by twenty-one persons in- fragmented portions?

252. Whether by concealing the true facts from Regional Office A-2 Sh. M. L. Arora ensured that A-5 M/s NSPL through its Director A-1 Sh. Ashwani J. Verma was released working capital?

253. If the answers to these questions are in affirmative, whether the charge of Criminal Conspiracy and Criminal Misconduct framed against A-2 Sh. M. L. Arora are proved?

254. A-2 Sh. M. L. Arora was the Chief Manager of PNB Bank, CBI v Sh. Ashwani J. Verma & Ors. Page No. 111/174 CC No.05/16 DL0375 South-Extension Branch. Later he was promoted as Assistant General Manager (AGM). In both the capacities, he was Incumbent Incharge of the Branch.

255. The responsibilities of an Incumbent Incharge of the Branch of a Bank are onerous. On the one hand, he has to ensure that the scrutiny of documents and preparation of proposal for sanction by his subordinates i.e. Manager (Credit) are meeting the instructions issued by the Bank and are in order and on the other hand, he has to respond to the queries of the Regional Office as interaction with the borrower is always at the Branch level and the Regional Office/Zonal Office depends on all the proposals received from a Branch under the signatures of Incumbent Incharge of that Bank for sanctioning the loan.

256. In this case, A-5 M/s. NSPL through its Director A-1 Sh. Ashwani J. Verma was desirous of seeking loan for setting up of its factory for production of steel TMT bars at Sikandrabad, U.P. The company had offered the security of industrial plot at Sikandrabad being plot number A-61/4, UPSIDC Industrial Area, Sikandrabad, Bulandshahar, UP and three flats at Ramprastha Colony, Ghaziabad, U.P for securing the loan.

257. The substantial part of balance cost of the industrial plot was yet to be paid to UPSIDC and the cost of each flat offered as security was just around Rs.10 lacs each.

258. On the other hand, the request for loan was for nearly Rs.Ten Crores.

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259. Therefore, PNB, whom the borrower had approached for loan, had demanded additional collateral security for securing the loan.

260. To meet the requirement raised by the Bank, the borrower A-1 Sh. Ashwani J. Verma proposed land described as Zerayati Patta No.51 of Raja Palem Village, Anakapalli, District Vishakhapatnam (AP) owned by one Sh. Konathala Mahalaxmi as collateral security.

261. The next prudent step to be taken by the Bank was to get the valuation of the proposed property done from the Bank's approved valuer at Vishakhapatnam, A.P.

262. A-2 Sh. M. L. Arora did not instruct Manager (Credit) to write a letter enclosing a copy of the Title Deeds proposed as collateral security to its counter part at Vishakhapatnam, A.P for getting the property valued from Banker's approved valuer before processing the loan.

263. A-2 Sh. M. L. Arora also did not instruct Manager (Credit) to write a letter directly, enclosing copy of title deeds proposed as collateral security, to Bank's approved valuer seeking the valuation report.

264. A-2 Sh. M. L. Arora was happily contented by accepting the whatever valuation report was given by the borrower A-1 Sh. Ashwani J. Verma procured by him directly from A-4 Sh. P. V. Krishnaji.

265. PW14 Sh. Jitender Kumar Chauhan, has deposed that he had introduced A-1 Sh. Ashwani J. Verma and A-6 Sh. Vinay Tyagi to each other and on the asking of A-1 Sh. Ashwani J. Verma, A-6 Sh. Vinay Tyagi had sent the valuation report to this witness i.e. PW14 which he CBI v Sh. Ashwani J. Verma & Ors. Page No. 113/174 CC No.05/16 DL0375 had handed over to A-1 Sh. Ashwani J. Verma. This is how the valuation report Ex.PW39/DX dated 14.07.2005 given by A-4 Sh. P. V. Krishnaji reached in the hands of A-2 Sh. M. L. Arora. It has come in the evidence of PW54 that A-2 Sh. M. L. Arora had given him the copy of valuation report. PW54 Sh. J. M. Gupta was Manger (Loan). If the bank had called the report from its approved valuer then PW54 would have written such a letter as he was Manager (Loan). But the valuation report was given to him by A-2 Sh. M. L. Arora which he had got from A-1 Sh. Ashwani J. Verma. It has come in the vidence of PW55 that he had demanded letter from A-4 Sh. P. V. Krishnaji from PNB, if any, requesting him to supply the valuation report which he could not produce. It shows no letter was sent to A-4 Sh. P. V. Krishnaji from PNB to send valuation report. PW14 identified the valuation report which he had received from A-6 Sh. Vinay Tyagi as Mark X-20 which was later exhibited as Ex.PW39/DX. This is the report which he had given to A-1 Sh. Ashwani J. Verma who submitted it with A-2 Sh. M. L. Arora.

266. In the opinion of this court, this is an evidence against A-2 Sh. M. L. Arora which would be taken into consideration while giving findings on the charges framed against him.

267. This valuation report Ex.PW39/DX is for property 'S. No.51' of Raja Palem Village, Anakapalli, Vishakhapatnam, A.P.

268. The property offered as collateral security for securing the loan of A-1 Sh. Ashwani J. Verma is not 'S. No. 51' but ' Zerayati Patta No. 51'.

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269. In Title Deed Register maintained by PNB, South-Extension Branch, Ex.PW10/D, the description of property is 'land measuring 04 acres or 19360 sq. yards covered by 'Zerayati Patta No.51', Anakapalle, Sub-Registrar, Anakapalle, Distt-Vishakhapatnam, A.P'.

270. Therefore, it was amply clear to the Bank officers including A-2 Sh. M. L. Arora that whereas in the Sale Deed deposited with the Bank, the description of the property is 'Zerayati Patta No.51' but in the Valuation Report relied on by the Bank the description is 'S. No.51'.

271. As per Ex.PW26/K available with the Branch, which is true translation of registered Sale Deed dated 08.09.1951 of document No.3102/51, Sub-Registrar, Anakapalli, Distt-Vishakhapatnam, A.P from Telugu Version to English, the details of property are 'Zerayati Patta No.51'.

272. As per Ex.PW26/B dated 25.08.2005, which is special report on title given by Sh. P. Ramakrishan Rao, Advocate on the Bank's Panel since 1988, the details of property are 'Zerayati Patta No.51'. This letter was addressed to the Chief Manager, PNB, New Delhi i.e. A-2 Sh. M. L. Arora.

273. 'Zerayati' is not an expression commonly used in North India. The word by its very nomenclature appears a special word and ought to have attracted the attention of the reader.

274. However, A-2 Sh. M. L. Arora who was an experienced and Senior Bank officer at that time could not observe the conspicuous absence of the expression 'Zerayati' prefixing '51', in valuation report CBI v Sh. Ashwani J. Verma & Ors. Page No. 115/174 CC No.05/16 DL0375 Ex.PW39/DX and this omission cannot be just by over site or human error.

275. Ex.PW34/K is the copy of proposal from PNB, South-Extension Branch to the DGM, Regional Office recommending term loan of Rs.564 lacs, working capital limits of Rs.300 lacs and non funds based limit of Rs.120 lacs. (While recording evidence of PW1 Sh. Shreeman Sharma on 28.05.2015, it was decided that whether the same is proved shall be decided at the final stage. Sh. R. N. Mittal, learned Senior Advocate for A-2 Sh. M. L. Arora while addressing final arguments had referred and relied on this document to draw the attention of this court that the same was first signed by Sh. J. M. Gupta, Manager (Credit) at point B and thereafter by A-2 Sh. M. L. Arora being the Chief Manager at point A. Thus, the same would be read in evidence now). This proposal is sent under the signatures of A-2 Sh. M. L. Arora who was the Chief Manager of PNB, South-Extension Branch at that time.

276. This proposal details the property of guarantor, Sh. Konathala Mahalaxmi as 'Plot No. 51', Raja Palam Village, Anakapalli, Distt- Vishakhapatnam, A.P near NH-05.

277. This proposal ignores 'Zerayati Patta No.51' and substitutes the same without any justification with 'Plot No.51'.

278. Since the Branch under signatures of A-2 Sh. M. L. Arora had given the details of collateral security as 'Plot No.51', the Regional Office in the sanction order, dated 26.09.2005, Ex.PW12/B also refers to the collateral security of guarantor as 'Plot No.51', Raja Palam, CBI v Sh. Ashwani J. Verma & Ors. Page No. 116/174 CC No.05/16 DL0375 village, Anakapalle, Distt-Vishakhapatnam, A.P near NH-05. It has already come in evidence of PW39 Sh. Satbir Singh Dabas, the then DGM of PNB that title deeds are not sent to the Regional Office.

279. This substitution in the details of collateral security from 'Zerayati Patta No. 51' to 'Plot No. 51' is now repeated seamlessly in the sanction letter written under the signatures of A-2 Sh. M. L. Arora to the borrower A-1 Sh. Ashwani J. Verma, Ex.PW1/R which is letter dated 27.09.2005 where the details of collateral security are referred as 'Plot No.51' at Raja Palam Village, Anakapalli, Distt- Vishakhapatnam, A.P near NH-05.

280. In the opinion of this court, this is also an evidence against A-2 Sh. M. L. Arora which would be taken into consideration while giving findings on the charges framed against him.

281. Further, the sanction letter dated 26.09.2005, Ex.PW12/B, permitted two kinds of payments to be released in favour of borrower even before creation of charge on the property situated at village Anakapalle.

282. The first payment permissible was to UPSIDC 'directly' towards balance amount of plot alloted by UPSIDC with a request to permit the Bank to mortgage the property as per legal opinion. This payment was not to be given to the borrower A-1 Sh. Ashwani J. Verma but directly to UPSIDC.

283. The second payment permissible was of an equivalent amount after creating equitable mortgage of three flats at Ramprastha colony, Ghaziabad, U.P. The worth of these three flats as per Ex.PW37/B, CBI v Sh. Ashwani J. Verma & Ors. Page No. 117/174 CC No.05/16 DL0375 Ex.PW37/C and Ex. PW37/D was only Rs.10 lacs approximately per flat.

284. Thus, the sanction letter Ex.PW12/B permitted release of approximately Rs. Thirty lacs only in favour of A-1 Sh. Ashwani J. Verma even before creation of charge on the property situated at village Anakapalle.

285. A-2 Sh. M. L. Arora had gone to Vishakhapatnam on 05.11.2005 and charge was created on the mortgaged property by the deposit of title deed of Sh. Konathala Mahalaxmi on 07.11.2005. However, A-2 Sh. M. L. Arora had already disbursed a sum of Rs.1,13,53,745/- in favour of A-1 Sh. Ashwani J. Verma by 31.10.2005.

286. These payments are also evident from Ex.PW1/Q14, Ex.PW1/Q15 & Ex.PW1/Q16 which are the statements of account of Cash Credit Account, Term Loan Account and Current Account of A-5 M/s NSPL with PNB, South-Extension Branch, New Delhi.

287. Out of these payments, only a sum of Rs.30,70,635/- was released to UPSIDC and after deducting Rs.30 lacs from Cash Credit Account towards the cost of three flats, the rest of the payment was contrary to the terms and conditions of the sanction.

288. In the opinion of this court, this is also an evidence against A-2 Sh. M. L. Arora which would be taken into consideration while giving findings on the charges framed against him.

289. Next, one of the conditions of Ex.PW12/B which is the sanction order dated 26.09.2005 of the Regional Office was that the land CBI v Sh. Ashwani J. Verma & Ors. Page No. 118/174 CC No.05/16 DL0375 situated at 'Plot No. 51' at Raja Palam village, Anakapalle (Vishakhapatnam, A.P) shall be spot verified by the Bank officials before release of facilities.

290. A-2 Sh. M. L. Arora visited Vishakhapatnam on 05.11.2005. As per Ex.PW1/G, copy of letter dated 05.11.2005 was enclosed therewith stating that original of report dated 05.11.2005 was not available in the files and only copy is available. (Since the report dated 05.11.2005 shows A-2 Sh. M. L. Arora in a poor state, it would suggest who would be the beneficiary if the original thereof was removed from the Bank's record.)

291. It is not disputed that A-2 Sh. M. L. Arora had visited Vishakhapatnam and had given report dated 05.11.2005 without observing the discrepancies which were observed by his subordinate Sh. J. M. Gupta during his visit in August, 2006, as per his report dated 05.09.2006, Ex.PW34/O. A-2 Sh. M. L. Arora failed to observe that S. No. 51, Raja Palem Village is not owned by Sh. Konathala Mahalaxmi but is owned by twenty-one other persons and Sh. Konathala Mahalaxmi is not one of them.

292. This visit report by A-2 Sh. M. L. Arora was extremely important in as much as the Regional Office had imposed a condition in the sanction letter Ex.PW12/B that the loan shall be released only after site visit by Bank official.

293. The loan amount is huge in this case.

294. A-2 Sh. M. L. Arora failed to seek the help of any Revenue Officer in identifying the land and finding its owner. If the land whose CBI v Sh. Ashwani J. Verma & Ors. Page No. 119/174 CC No.05/16 DL0375 valuation report Ex.PW39/DX was relied on by the Bank was identified in the presence of any revenue officer, it would have come to the notice of A-2 Sh. M. L. Arora that the land mortgaged with the Bank is different and the land whose valuation report is relied on by the Bank is different.

295. The reason for not taking the help of revenue officers in this regard and returning to Delhi and giving green signal for release of payment to A-5 M/s NSPL through A-1 Sh. Ashwani J. Verma is yet another piece of evidence that will be read against A-2 Sh. M. L. Arora while returning findings of guilt on charges framed against him.

296. When the proposal of borrower A-1 Sh. Ashwani J. Verma for enhancement of loan facility was pending with the Regional Office, on the directions of the Regional Office, A-2 Sh. M. L. Arora had directed PW54, Sh. J. M. Gupta, Manager (Credit) to visit Vishakhapatnam and given its report.

297. The report given by Sh. J. M. Gupta, Manager (Credit) is Ex.PW34/O. This is a copy of letter dated 05.09.2006, where it was informed to A-2 Sh. M. L. Arora that Land No. 51, Ward Anakapalli is a government land. It was further informed that Land bearing No.51, village Raja Palem is not owned by mortgagor Sh. Konathala Mahalaxmi. Rather, it is owned by twenty-one other persons in- fragmented portions. It was further stated in that letter that the certificate dated 20.07.2005, purportedly issued by MRO, Anakapalli, certifying the land does not come under Land Ceiling Act and is not acquired land, is a fake certificate. This letter also states that the non-

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CC No.05/16 DL0375 encumbrance certificate (NEC) was also fake. It was also stated in that letter that the certificate dated 'Nil' stating that Land bearing Serial No.51, R.S Ward, Anakapalli is a non-agricultural land, is also a fake certificate.

298. This letter bears the signatures of A-2 Sh. M. L. Arora. Obviously, since it was given to A-2 Sh. M. L. Arora the original would be with him and in case, the original thereof is not found in the records of PNB, South-Extension Branch, New Delhi the inference is obvious who would have suppressed this document because the beneficiary of concealing this document would be none else but A-2 Sh. M. L. Arora.

299. PW47 Sh. Abhimanyu Kumar, Government examiner of questioned documents has also given his opinion in Ex.PW47/B that signatures at 'Q-90' and 'S-79' to 'S-102' have been written by one and same person (of A-2 Sh. M. L. Arora). It has proved that Ex.PW34/O is signed by A-2 Sh. M. L. Arora.

300. Even after coming to know the contents of Ex.PW34/O, A-2- Sh. M. L. Arora concealed these facts from the Regional Office which made it possible that the working capital Rs.280 lacs was released in favour of the borrower A-5 M/s NSPL through its Director A-1 Sh. Ashwani J. Verma without letting Regional Office know that the property mentioned in the valuation report Ex.PW39/DX is different from the property of the Title Deeds of the guarantor.

301. The response of A-2 Sh. M. L. Arora with regard to Ex.PW34/O in his statement under Section 313 of Cr.PC was simply that whatever CBI v Sh. Ashwani J. Verma & Ors. Page No. 121/174 CC No.05/16 DL0375 was submitted by Sh. J. M. Gupta was forwarded to Zonal Office. However, the records are to the contrary. Moreover, it shows that A-2 Sh. M. L. Arora had indeed received Ex.PW34/O from Sh. J. M. Gupta. He has further deposed during his statement under Section 313 Cr.PC that when he dealt with the account he had no inkling that valuation report and the Title Deeds could be different properties. Not having 'inkling' in the face of Ex.PW34/O, is also sufficient proof of his guilt.

302. A-2 Sh. M. L. Arora vide his letter dated 12.09.2006 Ex.A1 (As also Ex.PW34/Q) addressed to DGM (Credit Section) mentioned that the advice of the Bank's counsel is:-

a) Noting the full particulars of the property in question together with schedule and ownership of land to be published in Eenadu local edition in Telugu version and in Hindu Daily to be published informing the public about the charge created by PNB, BO, South-Extension, New Delhi-110049 and to call for any objection by any one in this regard having sort of interest over the property in question other than the mortgagor Sri Konathala Rajya.

b) To fix up a big size hoarding at the entrance of the site in a way which is visible to the public, informing the public about the charge created over the said property by PNB, South-Extension, New Delhi.

c) To measure the land in the presence of Bank valuer and legal advisor with the assistance of Mandal Surveyor and thereafter to obtain a certificate to that effect signed by the Mandal Surveyor and countersigned by the MRO, Anakapalli, Vishakhapatnam together with the FMB sketch from the revenue record."

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303. Even if in September, 2006 these suggestions were followed and the land was measured with the assistance of Mandal Surveyor and counter signed by Mandal Revenue Officer, Anakapalli, Vishakhapatnam together with the FMB sketch from revenue record, the true facts would have surfaced and atleast further release of funds in favour of A-5 M/s NSPL could have been avoided.

304. PW28 Sh. R. K. Gupta, Chief Manager (Law) has also deposed that in his view the suggestions of Sh. P. Rama Krishna Rao, Advocate at point no.6 was an appropriate suggestion which was to be complied with to protect the interest of the Bank.

305. However, A-2 Sh. M. L. Arora nipped the suggestion of the Banker's counsel in the bud by terming the procedure suggested by the advocate as "very cumbersome" and rather made efforts by pushing forward the proposal for some other property by the borrower and for release of third party property.

306. Surprisingly, suggestions were given to PW55 on behalf of learned counsel for A-2 Sh. M. L. Arora that vide Ex.PW34/Q which is letter dated 12.09.2006, A-2 Sh. M. L. Arora had informed the Zonal Office to comply with the suggestions by the Panel Advocates.

On the other hand, a bare perusal of the said letter shows that A-2 Sh. M. L. Arora had rejected the suggestions given by the Advocate terming them as "very cumbersome" and had suggested release of third party property by asking the borrower to given some other property.

307. So far as the suggestion to fix up a big size hoarding at the CBI v Sh. Ashwani J. Verma & Ors. Page No. 123/174 CC No.05/16 DL0375 entrance of the site is concerned, it is pertinent to mention that the Regional Office vide Ex.PW12/B had also recommended as back as 26.09.2005 "Name plate-Bank's Name to be prominently displayed where securities charged to the Bank are kept". This should have been ensured by Incumbent Incharge A-2 Sh. M. L. Arora but was not followed.

308. Not following the direction of the Regional Office to put up Bank's Name to be promptly displayed where the securities charged are to be kept as suggested in Ex.PW12/B dated 26.09.2005 and by terming the suggestions of Banker's advocate to measure the property in the presence of Mandal Surveyor after counter signature of Mandal Revenue Officer as 'very cumbersome' and side stepping the suggestions by suggesting fresh security from the borrower and suggesting release of third party property is another piece of evidence which would weigh with this court for concluding the guilt of A-2 Sh. M. L. Arora for Criminal Misconduct as well as Criminal Conspiracy.

309. A-2 Sh. M. L. Arora vide his letter dated 18.09.2006, Ex.PW38/E, addressed to the DGM, Delhi (South Zone) mentioned that the equitable mortgage created on the immovable property mortgaged as collateral security with the Bank is valid and legally enforceable. He stated that there is no change in the status of land mortgaged with the Bank whose value is Rs.348 lacs. He recommended that they be permitted to release the working capital facilities already sanctioned to the company so as to meet the working capital requirement of the project.

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310. Relying on the recommendations given by A-2 Sh. M. L. Arora, the Zonal Office vide letter dated 21.09.2006, Ex.PW38/F permitted to release working capital facility already sanctioned to the company. The working capital was whopping sum of Rs. 280 lacs.

311. Thus, A-2 Sh. M. L. Arora even after coming to know that the Title Deeds of collateral security of the guarantor are defective in as much as the guarantor is not the owner of land mentioned in the valuation report, misled the Zonal Office to recommend release of Rs.280 lacs as working capital in favour of A-1 Sh. Ashwani J. Verma and allowed him to walk away with this amount in utter disregard of his responsibilities as an Incumbent Incharge of the Branch.

312. This is another piece of evidence which would be taken into consideration by this court while determining guilt of A-2 Sh. M. L. Arora.

313. However, it is worth mentioning here that the defence of A-2 Sh. M. L. Arora is that he relied on the report given to him by Bank's approved valuer, A-4 Sh. P. V. Krishnajee and he had no reason to believe that the same will be misleading.

314. This argument is not acceptable in as much as it is already noted earlier that A-2 Sh. M. L. Arora gladly accepted the whatever valuation report was handed over to him by the borrower without calling for the same from the approved valuer directly. A-2 Sh. M. L. Arora did not care to find out what instructions have been given to the approved valuer for preparing the report by the borrower. Had A-2 Sh. M. L. Arora given instructions to the valuer, he would have sent copy CBI v Sh. Ashwani J. Verma & Ors. Page No. 125/174 CC No.05/16 DL0375 of mortgage deed and Sale Seed Ex.PW27/A and Ex.PW27/B respectively which would have made it difficult for the valuer to send valuation report for 'Plot No.51' in place of valuation report for 'Zerayati Patta No.51'. However, for reasons best known to A-2 Sh. M. L. Arora, he abdicated his very first responsibility which required of him to ensure that the valuation report is called from the Bank's approved valuer taking all due caution as the valuation report forms basis for the proposal as well as sanction of the loan by the Zonal Office.

315. He has also argued that he had shared the valuer's report with the Regional Office and had not concealed anything from the Regional Office. If the Regional Office also could not find that there is anything amiss, then on the same parity, no action should have been taken against him or the DGM, Sh. S. S. Dabas and other officers of the Regional Office who passed the file for sanctioning the loan should have also been arrayed along with him as co-accused.

316. The court is not persuaded by this argument of A-2 Sh. M. L. Arora for the simple reason that the copy of mortgage deed and copy of Sale Deed of the property of Sh. Konathala Mahalaxmi pertaining to Zerayati Patta No. 51 was not shared with the Regional Office. PW18 Sh. O. P. Aneja, Chief Manager (Retd.) has also stated in the cross-examination by learned counsel for A-2 Sh. M. L. Arora that 'the Regional Office does not receive the Title Deeds of the property'. Same is the statement of PW39 Sh. S. S. Dabas. It is to be noted that the loan proposal duly recommended by A-2 Sh. M. L. Arora, Chief CBI v Sh. Ashwani J. Verma & Ors. Page No. 126/174 CC No.05/16 DL0375 Manager/Incumbent Incharge and Sh. J. M, Gupta, Manager (Credit) relying on Ex.PW39/DX (valuer's report) had mentioned the third party collateral security as 'Plot No.51'. In the undated recommendation sent by the Branch under signatures of Sh. J. M. Gupta, Manager (Credit) and A-2 Sh. M. L. Arora, Chief Manager, the detail of mortgaged property is mentioned as 'Plot No.51' and not as 'Zerayati Patta No.51'. Thus, the Regional Office had no reason to doubt the details of property mentioned in the proposal received from the Branch because the Incumbent Incharge of Branch has a duty and responsibility to verify all these facts before submitting the same to the Regional Office. If the Regional Office has to do all the scrutiny from beginning till end, then there would be no need of any Branch Office.

317. He has also argued that PW54 Sh. J. M. Gupta, Manager (Credit) was regularly sending quarterly reports with regard to loan of A-5 M/s NSPL but never ever mentioned in those reports that the Title Deeds of the mortgagor were defective. He had argued that Sh. J. M. Gupta had also written letters to the Regional Office requesting return of the Title Deeds of the mortgagor in lieu of the some other property to be given by the borrower which belies his submissions that he had pointed out vide Ex.PW34/O that the Title Deeds of the guarantor were defective. He has also argued that contrary to assertions of Sh. J. M. Gupta that he had informed Sh. Jiya Lal Sharma, Chief Concurrent Auditor of the Bank about defects in the title from Vishakhapatnam itself, Sh. Jiya Lal Sharma has denied that such an information was CBI v Sh. Ashwani J. Verma & Ors. Page No. 127/174 CC No.05/16 DL0375 given to him by Sh. J. M. Gupta from Vishakhapatnam. Thus, he has argued that Sh. J. M. Gupta had never given Ex.PW34/O to him and A-2 Sh. M. L. Arora is innocent.

318. So far as not informing the Zonal Office by Sh. J. M. Gupta about defects in Title Deeds of the guarantor, PW1 Sh. Shriman Narayan Sharma has deposed that once it comes to the notice of Section Incharge of the loan that the mortgaged land with the Bank was not owned by a person who mortgaged the same with the Bank, it was his duty to inform the Incumbent Incharge of the Branch. He further stated that it was not his obligation to inform to higher authorities in case the Incumbent Incharge was not taking steps. He however also said that he should have informed the higher authorities.

319. The explanation given by PW54 Sh. J. M. Gupta, Manager (Credit) for not informing the higher authorities is that A-2 Sh. M. L. Arora had told him that correspondence is taking place separately with the Regional Office in this context. He further deposed that he had not mentioned regarding Title Deeds of the guarantor in the letter written by him directly to the Zonal Office for substitution of Collateral Security as the same was told to him by A-2 Sh. M. L. Arora that it was not to be written as separate correspondence was going on in that context. He further deposed that he had learnt about defects in the Title Deeds of Sh. Konathala Mahalaxmi yet did not report this to higher authorities as proposal for substitution was already underway. He deposed that he believed that his report dated 05.09.2006, handed over to A-2 Sh. M. L. Arora had been given to the higher authorities.

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CC No.05/16 DL0375 He further deposed that in the letter dated 12.08.2006, the Zonal Office had said that the further process of additional loan shall be considered after report of Visiting Officer. He deposed that there was no reminder from the Zonal Office that his report has not been submitted and after his report, the proposal for additional loan was dropped by Zonal Office.

320. An argument has also been addressed on behalf of A-2 Sh. M. L. Arora that the witness PW54 Sh. J. M. Gupta had not stated in his statement under Section 161 of Cr.P.C. recorded by CBI during investigation that A-2 Sh. M. L. Arora had told him that separate correspondence is going on with the Regional Office regarding defective Title Deeds of Sh. Konathala Mahalaxmi.

321. So far as these submissions are concerned, it is to be noted that as per Ex.PW34/O which is letter dated 05.09.2006 received by A-2 Sh. M. L. Arora, the Manager (Loan) Sh. J. M. Gupta had informed A- 2 Sh. M. L. Arora a large number of discrepancies in the documents submitted by borrower and the guarantor for obtaining the loan.

322. The signatures of A-2 Sh. M. L. Arora on Ex.PW34/O have been proved by PW34 Sh. Ajay Nigam who was Clerk-cum-Cashier in PNB, South-Extension Branch, New Delhi from 2003 to 2008 and had seen A-2 Sh. M. L. Arora signing during the course of his employment.

323. Moreover, the signatures of A-2 Sh. M. L. Arora on Ex.PW34/O have also been proved by PW47 Sh. Abhimanyu Kumar, Asstt. Government Examiner of Questioned Documents (Scientist-B) CFSL, CBI v Sh. Ashwani J. Verma & Ors. Page No. 129/174 CC No.05/16 DL0375 Chandigarh.

324. Under Section 293 of Cr.P.C., any document purporting to be a report under the hand of a Government Scientific Expert to whom the said section applies may be used as evidence in any inquiry, trial or proceedings under the Code. However, in case, the court thinks fit, it may summon and examine any such expert as to the subject matter of his report.

325. PW47 was examined in this court and was cross-examined on behalf of A-2 Sh. M. L. Arora but nothing could be brought on record to show any illegality or irregularity in his report.

326. Faced with this evidence regarding Ex.PW34/O, Sh. R. N. Mittal, learned Senior Advocate argued that this document may have been got signed from Sh. A-2 Sh. M. L. Arora by Sh. J. M. Gupta, Manager (Credit) at the time of farewell of A-2 Sh. M. L. Arora in good faith while handing over and taking over of charge.

327. This argument addressed is not persuasive for the reason that this was not the stand of A-2 Sh. M. L. Arora during recording of evidence of the witnesses. PW54 Sh. J. M. Gupta, Manager (Credit) was examined at length by learned counsel for A-2 Sh. M. L. Arora but no suggestion was given to him that on Ex.PW34/O signatures of A-2 Sh. M. L. Arora were taken in good faith by Sh. J. M. Gupta, Manager (Credit) without the same being read by A-2 Sh. M. L. Arora. Once, there is no explanation for signatures of A-2 Sh. M. L. Arora on Ex.PW34/O, the conclusion would be that the same is another piece of evidence of Criminal Conspiracy as well as Criminal Misconduct on CBI v Sh. Ashwani J. Verma & Ors. Page No. 130/174 CC No.05/16 DL0375 his part.

328. It is also worth noticing that as per the Pan Card shown to the bank official including A-2 Sh. M.L. Arora, the date of birth of Sh. Konathala Mahalaxmi is 10.02.1940. This is evident from Ex.PW- 23/A1 which is letter dated 15.10.2009 of the Directorate of Income Tax (systems). The true translation of the Mortgage Deed Ex.PW-26/H shows that the Mortgage Deed is dated 11.12.1948. Meaning thereby Sh. Konathala Mahalaxmi had advanced a loan of Rs.2,000/- to the mortgagors and the mortgagors had executed the Mortgage Deed when Sh. Konathala Mahalaxmi was barely 8 years of age. Same is the case with sale deed. The true translation of the sale deed shows that it was executed on 08.09.1951. Meaning thereby that this sale deed was executed in favour of Sh. Konathala Mahalaxmi when he was barely 11 years of age. There is no mention that the mortgage deed in favour of Sh. Konathala Mahalaxmi was executed in his favour through his guardian. The date of birth of Sh. Konathala Mahalaxmi as per PAN Card and the date of Mortgage Deed and Sale Deed should have raised eye-brows and A-2 Sh. M. L. Arora the incumbent incharge failed to notice this anomaly. Conclusion with regard to A-2 Sh. M. L. Arora :

329. At the end, this court is of the view that it is proved against A-2 Sh. M. L. Arora that (i) he did not ensure that the valuation report relied upon by the Branch for sending the proposal to the Regional Office under his signatures, was called by contacting the approved valuer directly by sending him a letter giving the details of the CBI v Sh. Ashwani J. Verma & Ors. Page No. 131/174 CC No.05/16 DL0375 property which was to be evaluated along with copy of its Title Deeds and even failed to give directions telephonically to the approved valuer clearly and specifically giving the details of the property to be evaluated. Being Incumbent Incharge, he rather relied on the whatever valuation report was handed over to him by the borrower; (ii) whereas the property as per Title Deeds is 'Zerayati Patta No.51' but he ignored conspicuous absence of the term 'Zerayati' on valuer's report Ex.PW39/DX which mentioned the details of property as 'Plot No.51';

(iii) he acted upon confidential report of the guarantor which was prepared on the basis of information provided by the borrower. All the facts given in the confidential report including that the guarantor Sh. Konathala Mahalaxmi had a Bank account with State Bank of Bikaner and Jaipur, Vishakhapatnam with a balance of Rs.50,000/- in the account were found to be false; (iv) contrary to the fact that the sanction stipulated that the property at Vishakhapatnam is to be spot verified by the Bank officials before release of the facilities, a sum of Rs.1,12,58,302/- upto 31.10.2005 in the Term Loan account was released even before the spot verification of the land. The Incumbent Incharge A-2 Sh. M. L. Arora had verified the spot on 05.11.2005 and Title Deeds were deposited with the Branch by guarantor Sh. Konathala Mahalaxmi on 07.11.2005 but by then the borrower was already given a sum of Rs.1,12,58,302/- upto 31.10.2005; (v) he went to Vishakhapatnam for spot verification of the site on 05.11.2005 but failed to observe that the valuation report is not for the property whose Title Deeds have been deposited with the Bank by the mortgagor. He CBI v Sh. Ashwani J. Verma & Ors. Page No. 132/174 CC No.05/16 DL0375 made no enquiries from the Revenue Department about ownership of the land whose valuation report the Bank was acting upon. Had he made a single visit to the office of Mandal Revenue Office, Anakapalle he would have come to know immediately that Plot No.51 is owned by twenty-one persons other than Sh. Konathala Mahalaxmi;

(vi) even after receiving Ex.PW34/O, where it is mentioned that Land No.51 Ward Anakapalli is a government land and certificates dated 20.07.2005 stating that the land does not come under Land Ceiling Act and is not an acquired land and another certificate dated NIL stating that land bearing Sr. No.51, RS, Ward Anakapalli purportedly issued by MRO, Anakapalli are fake certificates and land bearing no.51, Village Raja Palem, is not owned by the mortgagor Sh. Konathala Mahalaxmi and rather it is owned by 21 persons in fragmented portions and that certificate dated 08.07.2005 regarding market value assistance and non-encumbrance certificate issued by Sub-Registrar office were also fake, he recommended release of working capital in favour of borrower which was a sum of Rs.280 lacs.

330. Since conspiracy is often hatched up in utmost secrecy, it is mostly impossible to prove conspiracy by direct evidence. It has, oftener than not, to be inferred from the acts, statements and conduct of the parties to the conspiracy. Thus, if it is proved that the accused pursued, by their acts, the same object often by the same means, one performing one part of the act and the other another part of the same act so as to complete it with a view to attainment of the object which they were pursuing, the court is at liberty to draw the inference that CBI v Sh. Ashwani J. Verma & Ors. Page No. 133/174 CC No.05/16 DL0375 they conspired together to effect that object.

331. Thus, A-2 Sh. M. L. Arora is guilty of entering into a criminal conspiracy with other co-accused to cheat the Bank under Section 120 B readwith Section 419, 420, 468, 471 of IPC and Section 13 (2) readwith Section 13 (1) of Prevention of Corruption Act and is also guilty of criminal misconduct as defined in Section 13 (1) (d) of the Prevention of Corruption Act, 1988 punishable under Section 13 (2) of the Prevention of Corruption Act,1988.

DISCUSSION OF EVIDENCE AND ARGUMENTS ADDRESSED ON BEHALF OF A-1 SH. ASHWANI J. VERMA & A-5 M/s. NSPL

332. Now, the evidence against A-1 Sh. Ashwani J. Verma and A-5 M/s NSPL shall be considered to see whether they are guilty of the charges framed against them or not.

333. As noted earlier, A-1 Sh. Ashwani J. Verma is charged with the offence under Section 420 IPC with the allegations that to deceive PNB in respect of genuineness of documents of collateral security and documents pertaining to identity of A-3 Sh. C. N. Rao, A-1 Sh. Ashwani J. Verma falsely introduced A-3 Sh. C. N. Rao as Sh. Konathala Mahalaxmi and as his childhood friend thereby persuading PNB to Sanction Credit Limit facility totalling to Rs.784.54 lacs in favour of A-5 M/s NSPL and thereby caused wrongful loss to PNB and wrongful gain to A-5 M/s NSPL and to himself.

334. He is also charged with the offence under Section 471 IPC with CBI v Sh. Ashwani J. Verma & Ors. Page No. 134/174 CC No.05/16 DL0375 the allegations that being the Director of A-5 M/s NSPL, he approached PNB to obtain Term Loan of Rs.500 lacs, Cash Credit Limit of Rs.280 lacs, ILC of Rs.100 lacs and Bank Guarantee of Rs.20 lacs, totaling Rs.784.54 lacs and with dishonest and fraudulent intention used forged documents of collateral security furnished by A- 3 Sh. C. N. Rao acting as Sh. Konathala Mahalaxmi in respect of property bearing 'Zerayati Patta No.51' of Raja Palem village, Anakapalli Mandal, District Vishakhapatnam (AP) and the documents filed by A-3 Sh. C. N. Rao in support of his identity knowing or having reason to believe the same to be forged documents.

335. A-1 Sh. Ashwani J. Verma is also charged with the offence of Criminal Conspiracy punishable under Section 120-B readwith Sections 419/420/468/471 of IPC as well as under Section 13 (2) readwith Section 13 (1) (d) of PC Act, 1988.

336. A-5 M/s NSPL being a private limited company through its Director A-1 Sh. Ashwani J. Verma is also charged with the offence under Section 420 of IPC.

337. Therefore, with regard to A-1 and A-5, the points of determination would be whether they have cheated PNB and whether fraudulently or dishonestly used any document as genuine which he knew or had reasons to believe to be a forged document and whether they have committed Criminal Conspiracy along with other co- accused to cheat the Bank.

338. For the determination of these points, it will be further required to be determined whether A-1 Sh. Ashwani J. Verma knew that Sh.

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CC No.05/16 DL0375 Konathala Mahalaxmi had died in the year 1988 and A-3 Sh. C. N. Rao was impersonating as Sh. Konathala Mahalaxmi ? Whether A-1 Sh. Ashwani J. Verma knew that the details of property as per Title Deeds being hypothecated with the bank were 'Zerayati Patta No.51' and he consciously submitted the valuation report of 'S. No.51'? Whether A-1 Sh. Ashwani J. Verma knew that the worth of property which is described as 'Zerayati Patta No. 51', is far less than the worth of property mentioned in valuation report namely 'S. No.51' ? Whether A-1 Sh. Ashwani J. Verma sold plant and machinery, raw material, semi finished and finished goods without the leave of the Bank ?

339. Admittedly, initially the loan was applied by A-5 M/s NSPL on the basis of primary security of land at A-61/4, Sikandrabad Industrial Area, plant and machinery, raw material and finished goods. At that time only some initial payments were made to UPSIDC towards the cost of the industrial plot and A-1 Sh. Ashwani J. Verma was searching for loan to set up industry and to pay the remaining cost of approximately Rs.30 lacs to UPSIDC. For obvious reasons, the Bank required to back-up the required loan facility with mortgage of other collateral security as well.

340. Collateral security to be mortgaged with a Bank is not a commodity being traded in the market. The same is not a commodity which can be procured as it is not sold and purchased. There can be absolutely no reason for a third party and a stranger to produce his original Title Deeds in favour of a borrower to help him to get a loan of crores of rupees. In normal circumstances, the collateral security CBI v Sh. Ashwani J. Verma & Ors. Page No. 136/174 CC No.05/16 DL0375 offered for mortgage is either in the names of the Directors of the company borrowing the loan or in the name of their family relations or may be in the name of their business partners. Only such persons can risk their properties believing the entrepreneurship of the borrower. No stranger or a third party would ever risk mortgaging his property worth crores just for the sake of philanthropy. And if a stranger or a third party risks mortgaging his property for a borrower for which there is no justification available on record, the same would suggest some conspiracy between the borrower and the guarantor to cheat the lender.

341. The intention to cheat the Bank in the mind of A-1 Sh. Ashwani J. Verma is evident from the day he started asking strangers referred to him for providing him collateral security.

342. The evidence of PW14 Sh. Jitender Kumar Chauhan is relevant in this regard. PW14 has deposed that he knew A-6 Sh. Vinay Tyagi who was dealing in the business of scrap, letter of credit from banks and helping people in procuring bank guarantees. He has further deposed that he was introduced with A-1 Sh. Ashwani J. Verma by his friend when A-1 Sh. Ashwani J. Verma told him that he was facing some problems in getting the loan sanctioned because of insufficient securities. PW14 told A-1 Sh. Ashwani J. Verma about A-6 Sh. Vinay Tyagi assuring that A-6 Sh. Vinay Tyagi can help him to solve his problem and thus, a meeting was arranged by PW-14 between A-1 Sh. Ashwani J. Verma and A-6 Sh. Vinay Tyagi.

343. In the meeting, A-6 Sh. Vinay Tyagi proposed a property at CBI v Sh. Ashwani J. Verma & Ors. Page No. 137/174 CC No.05/16 DL0375 Vishakhapatnam to be used as security, subject to approval of the Bank.

344. A-1 Sh. Ashwani J. Verma requested A-6 Sh. Vinay Tyagi for valuation report of the property. PW14 has further deposed that a valuation report was sent by A-6 Sh. Vinay Tyagi from Vishakhapatnam to PW14 Sh. Jitender Singh Chauhan through courier who handed it over to A-1 Sh. Ashwani J. Verma. That is how the valuation report was submitted with A-2 Sh. M. L. Arora by A-1 Sh. Ashwani J. Verma.

345. The valuation report Ex.PW39/DX was thus, prepared by Bank's approved valuer A-4 Sh. P. V. Krishnaji on the instructions of A-6 Sh. Vinay Tyagi. There is no evidence on record to show that A-4 Sh. P. V. Krishnaji had received instructions either in writing or telephonically from PNB, South-Extension Branch, New Delhi to give the valuation report of the property whose title deeds were proposed to be deposited with the bank towards loan of A-5 M/s NSPL. It is already noted in evidence of PW55 that during investigation, A-4 Sh. P. V. Krishnaji could not produce any such letter from the bank. Thus, it was open for A-6 Sh. Vinay Tyagi and A-1 Sh. Ashwani J. Verma to introduce a valuer's report by manipulating the details of property evaluated therein.

346. Manipulation is clearly seen when the details of property in the valuer's report Ex.PW39/DX is compared with Title Deeds of the property Ex.PW27/A and Ex.PW27/B. The former is for 'S. No.51' valued Rs.348 lacs and later is for 'Zerayati Patta No.51'.

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347. PW14 has deposed that in a meeting attended by A-1 Sh. Ashwani J. Verma, A-6 Sh. Vinay Tyagi, owner of the property and another relation of the owner of the property, monetary benefits were demanded by the owner of the property from A-1 Sh. Ashwani J. Verma. He has further deposed that on the date of documentation in the bank, A-6 Sh. Vinay Tyagi gave Rs.2 lacs to the owner of the property and Rs.1 lac to PW14 and kept a sum of Rs.1 lac with him and informed PW14 that A-1 Sh. Ashwani J. Verma has given Rs.4 lacs to A-6 Sh. Vinay Tyagi.

348. There was an agreement between A-1 Sh. Ashwani J. Verma and Sh. Konathala Mahalaxmi, Ex.PW34/M. Receipts signed by Sh. Konathala Mahalaxmi on various dates for a sum of Rs.30 lacs are Ex.PW34/N. One payment of Rs.5 lacs was also made by A-1 Sh. Ashwani J. Verma in favour of Sh. Konathala Mahalaxmi by way of a cheque drawn on Canara Bank, New Delhi. To prove this payment, CBI has examined PW13 Sh. Satish Gupta, Chief Manager, Canara Bank who has proved as Ex.PW13/B, the cheque dated 15.10.2005, given by A-1 Sh. Ashwani J. Verma in the name of Sh. Konathala Mahalaxmi for a sum of Rs.5 lacs. He has also proved Account Opening Form and specimen signatures of A-1 Sh. Ashwani J. Verma as Ex.PW13/C and Ex.PW13/D. The statement of account of A-1 Sh. Ashwani J. Verma in Canara Bank was exhibited as Ex.PW55/Y3 as per which a sum of Rs.5 lacs were debited vide Cheque No.358527 in the name of Sh. Konathala Mahalaxmi.

349. The agreement is admitted by A-1 Sh. Ashwani J. Verma.

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350. As per this agreement, A-1 Sh. Ashwani J. Verma agreed to pay Rs.30 lacs after execution of documents, verification of property and subsequent disbursal by the Bank, Rs.10 lacs on or before 15.04.2006 and another Rs.10 lacs on or before 15.05.2006.

351. Thus, A-1 Sh. Ashwani J. Verma practically procured the Title Deeds of a property for submitting with the Bank for creation of mortgage of collateral security for monetary consideration.

352. It is a condition in the agreement Ex.PW34/M that second party will return Rs.30 lacs to the first party at the time of releasing the collateral security by the Bank after a period of three years.

353. It shows that it was known to the parties to the agreement that there is some lacunae in title deeds vis-a-vis mortgagor Sh. Konathala Mahalaxmi / the worth of the property whose Title Deeds were to be mortgaged with the Bank would be far far less than Rs.50 lacs. That is why on the assurance of payment of Rs.50 lacs, the so called owner of the property gave his Title Deeds to A-1 Sh. Ashwani J. Verma.

354. A-1 Sh. Ashwani J. Verma has tried to make sense of this agreement by stating that Sh. Konathala Mahalaxmi was thinking of creating some business interest with A-1 Sh. Ahwani J. Verma at Delhi and that is the reason for his offering his property for mortgage to help A-1 Sh. Ashwani J. Verma to get the loan.

355. However, A-1 Sh. Ashwani J. Verma stops at it and gave no evidence of what kind of business interest Sh. Konathala Mahalaxmi wanted with A-1 Sh. Ashwani J. Verma and what happened to that business interest.

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356. Three witnesses were examined on behalf of A-1 Sh. Ashwani J. Verma in his defence and he also entered the witness box as D1W4 but not a single word was spoken about business interest to be created in favour of Sh. Konathala Mahalaxmi and what happened to that business interest.

357. Thus, the so called business interest is only a feeble attempt on behalf of A-1 Sh. Ashwani J. Verma to justify securing Title Deeds of immovable property from a total third party stranger on payment of money.

358. Therefore, the mere fact A-1 Sh. Ashwani J. Verma almost procured Title Deeds of the property 'Zerayati Patta No.51' from a total stranger and a third party on agreement to pay Rs.50 lacs and considering the fact that approved valuer's report Ex.PW39/DX was procured showing the worth of property 'Plot No.51' as Rs.3,48,48,000/- shows his intention to cause unlawful loss to PNB and unlawful gain to A-5 M/s NSPL. This transaction between A-1 Sh. Ashwani J. Verma and A-3 Sh. C. N. Rao / Sh. Konathala Mahalaxmi in the nature of agreement Ex.PW34/M and receipts Ex.PW34/N shows that A-1 Sh. Ashwani J. Verma had the knowledge or reasons to believe that the worth of property offered as collateral security for mortgage, 'Zerayati Patta No.51' cannot be Rs.348 lacs and he had knowledge or reasons to believe that there is some lacunae in the title deeds / mortgagor.

359. A-1 Sh. Ashwani J. Verma arranged mortgage of property described as 'Zerayati Patta No.51' but supported his loan application CBI v Sh. Ashwani J. Verma & Ors. Page No. 141/174 CC No.05/16 DL0375 with valuation report Ex.PW39/DX describing the property as 'S. No.51' is the next piece of evidence to show that he had intentions to cheat PNB for unlawful gain for A-5 M/s NSPL from the day he introduced the Title Deeds of Sh. Konathala Mahalaxmi as collateral security to be mortgaged supported by valuer's report Ex.PW39/DX.

360. PW31 Sh. Rajeev Sharma has stated in his examination-in-chief that A-1 Sh. Ashwani J. Verma had provided the photocopy of property documents of Vishakhapatnam to the Branch.

361. Why the Title Deeds Ex.PW27/B describe the property as 'Zerayati Patta No. 51' and why the valuation report Ex.PW39/DX describes the property as 'Plot No.51', the argument on behalf of A-1 Sh. Ashwani J. Verma was that the Title Deeds were in Telugu language and therefore, he could not differentiate between 'Zerayati Patta number' and 'Plot number'.

362. The explanation is not acceptable to the court. A-1 Sh. Ashwani J. Verma had worked with Air India and Bharat Petroleum as Senior Manager. He was a businessman since last many years before he approached PNB, South-Extension Branch, New Delhi for loan. Telugu language is not a language for which translators would not be readily available in Delhi. Thus, the denial on the part of A-1 Sh. Ashwani J. Verma that he did not see the difference between 'Zerayati Patta Number' in the title deed and 'Survey Number' in the valuation report is another feeble attempt on his part to show his innocence.

363. The sanction letter dated 27.09.2005 Ex.PW1/R was accepted by A-1 Sh. Ashwani J. Verma under his signatures. In this letter, the CBI v Sh. Ashwani J. Verma & Ors. Page No. 142/174 CC No.05/16 DL0375 mortgaged property is described as 'Plot No.51' as against 'Zerayati Patta No.51' and A-1 Sh. Ashwani J. Verma silently accepted this letter knowing fully well that the Title Deeds submitted by him are for property described as 'Zerayati Patta No. 51' whereas the Regional Office has been induced to believe that the collateral property offered for mortgage is 'Plot No.51'.

364. The property whose Title Deeds were deposited with the Bank namely for 'Zerayati Patta No.51' is at a distance from National Highway and its cost would be therefore much less in comparison to the cost of 'Plot No.51'.

365. Therefore, introducing valuation report of a property showing its worth as Rs.348 lacs for a property described as 'S. No.51' as against 'Zerayati Patta No.51' for which the Title Deeds were submitted with the Bank is another piece of evidence to show that A-1 Sh. Ashwani J. Verma had intention to cheat PNB from the very beginning.

366. The third piece of evidence to show a criminal conspiracy amongst A-1 Sh. Ashwani J. Verma and other co-accused is that as per evidence of PW12 Sh. Munish Kumar Batra who was Manager (Credit) at South-Delhi Regional Office of PNB, the response from the Branch under signatures of A-2 Sh. M. L. Arora was that the proposed guarantor Sh. Konathala Mahalaxmi is childhood friend of A-1 Sh. Ashwani J. Verma, Director of A-5 M/s NSPL. This is mentioned in Ex.PW39/C. Similarly, PW54 Sh. J. M. Gupta who was Manager (Credit) of South Extension Branch has also deposed that information CBI v Sh. Ashwani J. Verma & Ors. Page No. 143/174 CC No.05/16 DL0375 was provided by A-1 Sh. Ashwani J. Verma verbally when he was asked to explain the relation with Sh. Konathala Mahalaxmi, it was stated by A-1 Sh. Ashwani J. Verma that Sh. Konathala Mahalaxmi was his childhood friend and that is why he was offering collateral security for him. PW54 has also deposed that A-1 Sh. Ashwani J. Verma had also told that A-6 Sh. Vinay Tyagi was the distributor of Hyderabad, Vishakhapatnam area of his medicine's firm M/s. Qualichem International and Sh. Konathala Mahalaxmi was uncle of A-6 Sh. Vinay Tyagi.

367. The above assertions are factually incorrect.

368. Faced with this evidence, A-1 Sh. Ashwani J. Verma during his cross-examination deposed that if one sees the PAN Card of Sh. Konathala Mahalaxmi, he is 20 years older than him and therefore, could not be his childhood friend.

369. In this regard, PW31 Sh. Rajeev Sharma has deposed that A-1 Sh. Ashwani J. Verma had told him that A-6 Sh. Vinay Tyagi is his old childhood friend and Sh. Konathala Mahalaxmi is uncle of A-6 Sh. Vinay Tyagi who is one of the distributors of A-1 Sh. Ashwani J. Verma's medicine business for Vishakhapatnam region. PW31 Sh. Rajeev Sharma has denied a suggestion given by learned counsel for A-1 Sh. Ashwani J. Verma that A-1 Sh. Ashwani J. Verma had not introduced Sh. Konathala Mahalaxmi as his childhood friend or as uncle of A-6 Sh. Vinay Tyagi. PW31 Sh. Rajeev Sharma when cross- examined by learned counsel for A-6 Sh. Vinay Tyagi, stated that his statement given in the court that A-1 Sh. Ashwani J. Verma had told CBI v Sh. Ashwani J. Verma & Ors. Page No. 144/174 CC No.05/16 DL0375 that A-6 Sh. Vinay Tyagi is his childhood friend is the correct statement.

370. Be that as it may, the combined testimony of PW12 Sh. Munish Kumar Batra, PW31 Sh. Rajeev Sharma, PW39 Sh. Satvir Singh Dabas and PW54 Sh. J. M. Gupta would suggest that A-1 Sh. Ashwani J. Verma had introduced Sh. Konathala Mahalaxmi as uncle of A-6 Sh. Vinay Tyagi and had introduced A-6 Sh. Vinay Tyagi as one of the distributors of his medicine's business M/s Qualichem International for Vishakhapatnam region. Both these statements are false. Neither Sh. Konathala Mahalaxmi was the uncle of A-6 Sh. Vinay Tyagi nor A-6 Sh. Vinay Tyagi was the distributor of medicine's business of A-1 Sh. Ashwani J. Verma for Vishakhapatnam region.

371. Therefore, whether A-1 Sh. Ashwani J. Verma had introduced Sh. Konathala Mahalaxmi as his childhood friend or A-6 Sh. Vinay Tyagi as his childhood friend, the fact remains that misrepresentations were made before the Bank officers by A-1 Sh. Ashwani J. Verma regarding his relationship with the guarantor Sh. Konathala Mahalaxmi and relationship of A-6 Sh. Vinay Tyagi with the guarantor Sh. Konathala Mahalaxmi.

372. This is yet another piece of evidence that will weigh with this court in pronouncing guilt of A-1 Sh. Ashwani J. Verma to the charges of cheating, criminal conspiracy and using forged documents as genuine, farmed against him.

373. Next incriminating piece of evidence against A-1 Sh. Ashwani J. Verma is that as per Ex.PW1/R which is the sanction letter dated CBI v Sh. Ashwani J. Verma & Ors. Page No. 145/174 CC No.05/16 DL0375 27.09.2005, it is provided that during the currency of Bank's credit facilities, the borrower shall not without the prior approval of Bank in writing sell, assign, mortgage, alienate or otherwise dispose off any of the assets of the borrower charged to the Bank.

374. However, as per Ex.PW40/A which is the report of Sh. Atul Sharma, Advocate who was appointed as a Local Commissioner by the Debt Recovery Tribunal-I, Delhi, vide orders dated 25.05.2009 with directions to visit the Sikandrabad factory of A-5 M/s NSPL, it is stated that he found that all the plant and machinery described in the Original Application (OA) has been removed from the factory premises of A-5 M/s NSPL. He stated that only few articles were found in the factory which were in a bad shape. He has noted that he was informed by the temporary staff posted there that recently, all the hardware plant, machineries and stocks have been removed from the site.

375. PW20 Sh. Harender Jindal has also stated that he had conducted physical verification of M/s. NSPL and had found that stock including raw material, stock in process and finished goods were missing and the factory was not working. PW40 Sh. Rajiv Nigam has also deposed that during physical verification on 10.06.2009, they found that all the plant and machineries had been removed from the factory premises. No stocks were available at the site. PW51 Sh. Jiya Lal Sharma, Chief Concurrent Auditor of PNB has also deposed that on 17.07.2007, when he visited the site, there was no raw material or stock in process or finished goods lying in the factory premises.

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376. When this report is seen in the context of the submission of Valuation Report for property bearing 'Plot No.51' as against 'Zerayati Patta No.51', the intention to cheat is seen writ large in the conduct of A-1 Sh. Ashwani J. Verma.

377. However, learned counsel for A-1 Sh. Ashwani J. Verma argued that the Bank has concealed material documents and A-1 Sh. Ashwani J. Verma has not sold any article without leave of the Bank. He admitted that the articles were sold but sought to draw attention of this court to Mark D1W4/L which according to him are the minutes of the meeting held in the Zonal Office on 13.02.2008. It is written in these minutes that the borrower would deposit the amount mentioned in the minutes by disposing off the attachable assets.

378. This is only a photocopy.

379. A-1 Sh. Ashwani J. Verma has not proved that there was any such meeting and infact, when different witnesses of the Bank entered in the witness box, no suggestion was given to them that in the minutes of meeting dated held on 13.02.2008, the borrower was given permission to dispose off attachable assets.

380. A-1 Sh. Ashwani J. Verma thoroughly availed the opportunity to examine the defence witnesses and examined four witnesses including himself in his defence, but no witness was called from the Zonal Office, PNB to appear with these minutes. So much so a suggestion was given to PW46 Sh. Atul Sharma, Advocate / Local Commissioner that during his visit to factory, plant and machineries were there. Further suggestion was given that selective photographs were taken in CBI v Sh. Ashwani J. Verma & Ors. Page No. 147/174 CC No.05/16 DL0375 order to project that plant and machineries have been removed. This is contradictory to the argument that the assets were sold with the permission of the bank.

381. Thus, no credence can be given to these minutes relied on by A- 1 Sh. Ashwani J. Verma.

382. This court is of the view that the prosecution has proved successfully that A-1 Sh. Ashwani J. Verma disposed off plant and machinery, raw material, finished and semi finished goods without the consent of the Bank and contrary to the terms of sanction of loan mentioned in Ex.PW1/R.

383. Further, there is evidence against A-1 Sh. Ashwani J. Verma that he supplied fake documents in the Bank at the time of seeking loan.

384. Sh. J. M. Gupta, Manager (Credit) who entered witness box as PW54 has stated that a certificate dated 20th July, (year 'NIL') purportedly issued by Mandal Revenue Officer, Anakapalli namely Sh. P. Dharmachander Reddy certifying that the land of Sh. Konathala Mahalaxmi 'S No.51' does not come under Urban Land Ceiling Act and is not a government acquired land as per records was given by A-1 Sh. Ashwani J. Verma when he was asked to give information about Sh. Konathala Mahalaxmi in order to meet out the queries of the Zonal Office. However, PW6 Sh. P. Dharmachandreva, Tehsildar, Vishakhapatnam has deposed that Ex.PW54/E purportedly issued under his signatures was never issued by him and does not bear his signatures. Hence, the said certificate submitted by A-1 Sh. Ashwani J. Verma was a fake certificate.

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385. PW54 Sh. J. M. Gupta also deposed that photocopy of identification certificate dated 05.08.2006 purportedly issued by PNB certifying that Sh. Konathala Mahalaxmi is known to the certifying officer for the last ten years and is very much alive, Ex.PW48/A was also handed over to him by A-1 Sh. Ashwani J. Verma to satisfy the queries of Zonal Office. However, PW48 Sh. Emani Ganpati Sharma, Senior Manager, PNB, Tamil Nadu has deposed that he had not issued the said certificate and the signatures on the same are forged. He stated that he does not know anyone by the name of Sh. Konathala Mahalaxmi as mentioned in the certificate. PW48 was not even cross examined on behalf of learned counsel for A-1 Sh. Ashwani J. Verma.

386. PW54 Sh. J. M. Gupta also deposed that certificate dated 05.08.2006 purportedly issued by Sh. Saripalli Rangaraju, MLA, Vishakhapatnam-II certifying that Sh. Konathala Mahalaxmi is known to him for the last ten years and he is very much alive, Ex.PW54/F was also handed over to him by A-1 Sh. Ashwani J. Verma to answer the queries of Zonal Office. However, PW15 Sh. B. B. Ramana has deposed that as per Ex.PW15/C, Sh. S. Rangaraju (Ex. MLA) has made it clear that certificate dated 05.08.2006 has not been issued by him. The letterhead used is not his letterhead and there is no government of AP Assembly symbol on it and the said letter is a fake letter. PW15 was not even cross examined on behalf of learned counsel for A-1 Sh. Ashwani J. Verma.

387. Similarly, PW54 has also deposed that the photocopy of certificate dated 26.07.2006, Ex.PW54/G was also given to him by A-

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CC No.05/16 DL0375 1 Sh. Ashwani J. Verma and it was sent by him to the DGM, Regional Office. This is a photocopy of certificate issued by one Sh. I Gurumurthi Reddy, MLA certifying that Sh. Konathala Mahalaxmi is known to him for the past ten years and is very much alive. CBI has examined as PW25 Sh. I. Gurumurthi Reddy who deposed that he has not issued any such letter in favour of Sh. Konathala Mahalaxmi. This witness was also not even cross examined by learned counsel for A-1 Sh. Ashwani J. Verma.

388. In the cross examination of PW54 by learned counsel for A-1 Sh. Ashwani J. Verma, no question was put regarding Ex.PW38/A vide which PW54 had given the aforesaid four forged certificates mentioned above to DGM, Regional Office, as received from A-1 Sh. Ashwani J. Verma.

389. A-1 Sh. Ashwani J. Verma in his written submissions has stated that under desperation, he arranged property of Sh. Konathala Mahalaxmi as collateral security. However, desperation does not permit anyone to commit cheating and knowingly use forged documents as genuine. According to him, he met Sh. Konathala Mahalaxmi for the first time on 28.09.2005 and on the same very day, he mortgaged his property (worth Rs.348 lacs) as collateral security in his favour. The mere fact that a stranger who met the borrower for the first time on 28.09.2005 and mortgaged his property in his favour would suggest that there was conspiracy amongst the accused to cheat PNB otherwise it is beyond comprehension why a third person would mortgage his property worth Rs.348 lacs in favour of a total stranger.

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390. He has argued that he had no intention to cheat the bank when he approached it for a loan. The intention of A-1 Sh. Ashwani J. Verma to cheat the bank from the very beginning becomes clear from evidence of PW14 which has shown in what circumstances the valuation report was arranged through A-6 Sh. Vinay Tyagi without any instructions from the bank and the valuation report of property 'S. No.51' was given to the bank whereas the property as per title deeds mortgaged was 'Zerayati Patta No.51'. Interestingly, it is also mentioned in the written submissions of A-1 Sh. Ashwani J. Verma that the bank had informed that his collateral security was defective and he offered to replace the same by another collateral property worth Rs.50-55 lacs but the same was not acceded to.

391. When according to his own submissions A-1 Sh. Ashwani J. Verma came to know the defects in the title deeds of the property, he did not confront the guarantor to find out why defective title deeds were given and A-1 Sh. Ashwani J. Verma went ahead and enjoyed working capital released in his favour without any hesitation.

392. A-1 Sh. Ashwani J. Verma has deposed that he sold raw material, finished goods and stocks lying at the premises in order to clear his dues towards the loan with the consent of the bank. However, there is no shred of evidence of such consent. He has argued that he has deposited Rs.76 lacs by way of cheques and cash in the Cash Credit Account starting from 26.02.2008 till 21.01.2009. These payments are evident from Ex.PW1/Q14. However, A-1 Sh. Ashwani J. Verma has not given accounts and details of sale of plant and CBI v Sh. Ashwani J. Verma & Ors. Page No. 151/174 CC No.05/16 DL0375 machinery, stock, finished and semi finished and raw material. He has not given the details of buyers and mode of purchase by the buyer and value of sold items. A-1 Sh. Ashwani J. Verma has kept the bank and the Court in dark about the sale of these assets charged with the bank.

393. Anyone in possession of a relevant evidence if does not produce the same, gives an inference that if such an evidence was given that would have gone against such a person.

394. Thus, this court makes an opinion that A-1 Sh. Ashwani J. Verma sold the assets charged with the bank for far far higher amount and just deposited a sum of Rs.76 lacs as per his discretion, whims and fancies as pittance to take a high moral stand.

395. A-1 Sh. Ashwani J. Verma has also argued that valuation is done independently by the bank and the borrower had no knowledge when the valuation is done and who will be doing it.

396. This arguments of A-1 Sh. Ashwani J. Verma falls on the ground the moment one reads evidence of PW14 who had deposed that valuation report was arranged by A-6 Sh. Vinay Tyagi from A-4 Sh. P. V. Krishnaji and Ex.PW39/DX was given to PW-14 by A-6 Sh. Vinay Tyagi and PW14 gave it to A-1 Sh. Ashwani J. Verma for handing it in the bank.

397. A-1 Sh. Ashwani J. Verma has relied on a large number of citations on the point of cheating and conspiracy, Anil Mahajan vs. Bhor Industries Ltd. and Anr. (2005) 10 SCC 228, Sukanti Chaudhury vs. State of Orrisa Crl. Rev.No.1407/2008 dated 08.02.2013 of Orissa High Court, C. Chenga Reddy and Ors. vs. State of AP (1996) 10 SCC CBI v Sh. Ashwani J. Verma & Ors. Page No. 152/174 CC No.05/16 DL0375 193, Uma Shankar Gopalika vs. State of Bihar & Anr. (2005) 10 SCC 336, Hridaya Rangan Pd. Verma & Ors. vs. State of Bihar & Anr. Appeal (Crl) 313-314 of 2000 decided by the Hon'ble Supreme Court, Vesa Holdings Pvt. Ltd. and Anr. vs. State of Kerala & Ors. (2015) 8 SCC 293, International Advanced Research Centre for Powder Metallurgy and New Materials (ARCI) & Ors. vs. Nimra Cerglass Technics Pvt. Ltd. & Anr. (2016) 1 SCC 348, CBI, Hyderabad vs. K. Narayana Rao (2012) 9 SCC 512, Nizam & Anr. vs. State of Rajasthan Crl. Appeal No.413/07 dated 04.09.2015 decided by the Hon'ble Supreme Court of India, Padala Veera Reddy vs. State of AP & Ors. 1989 Supp. (2) SCC 706, Paramjeet Singh @ Pamma vs. State of Uttarakhand (2010) 10 SCC 439, State of UP vs. Ashok Kumar Srivastava (1992) 2 SCC 86, State of Goa vs. Sanjay Thakran (2007) 3 SCC 755, Narender Kumar vs. State (NCT of Delhi) Crl. Appeal No.2066-67 of 2009 dated 25.05.2012 decided by the Hon'ble Supreme Court of India, State (Delhi Administration) vs. Shri Gulzari Lal Tandon (1979) 3 SCC 316, Sheila Sebastian vs. R. Jawaharaj & Anr. Etc. Crl. Appeal Nos. 359-360 of 2010 decided by the Hon'ble Supreme Court of India on 11.05.2018 and Prasadi Lal vs. State of Govt. of NCT of Delhi 2012 SCC OnLine Delhi 6426. The citations relied on lay down the law with regard to cheating and criminal conspiracy but each case has to be decided on the facts of that case and those citations are not helpful for exonerating A-1 Sh. Ashwani J. Verma of the charges framed against him and against A-5 M/s. NSPL.

Conclusion with regard to A-1 Sh. Ashwani J. Verma and CBI v Sh. Ashwani J. Verma & Ors. Page No. 153/174 CC No.05/16 DL0375 A-5 M/s. NSPL

398. A-1 Sh. Ashwani J. Verma, contrary to the terms and conditions contained in letter dated 27.09.2005, Ex.PW1/R which prohibited payment of commission by the borrower to the guarantor for guaranteeing the credit facilities sanctioned by the bank to the borrowers, entered into an agreement with the guarantor Sh. Kontahal Mahalaxmi, Ex.PW34/M and agreed to pay a sum of Rs.50 lacs for this guarantee. Rs.5 lacs were also paid by cheque, Ex.PW13/B and remaining amount was paid in cash as per receipts Ex.PW34/N.

399. A-1 Sh. Ashwani J. Verma had submitted title documents of property 'Zerayati Patta No.51' but submitted valuation report of 'S. No.51' as per which the value of the evaluated property was Rs.348 lacs. He did not give valuation report of property 'Zerayati Patta No. 51' because its owner had already died in the year 1988 as proved vide Ex.PW3/A and value of mortgaged land was far less as it was in an inferior location in comparison to property 'S. No.51'. In conspiracy, A-2 Sh. M. L. Arora mentioned the mortgaged property as 'Plot No. 51' worth Rs.348 lacs and thus, secured sanction of loan from the Regional Office without any valuation report of property 'Zerayati Patta No.51' submitted through an impostor A-3 Sh. C. N. Rao.

400. When A-1 Sh. Ashwani J. Verma received sanction letter dated 27.09.2005, Ex.PW1/R the details of property mentioned were 'Plot No.51'. A-1 Sh. Ashwani J. Verma kept mum and began availing the credit facility.

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401. In collusion with A-2 Sh. M. L. Arora, he also enjoyed credit facility beyond permissible limits permitted by the sanction order Ex.PW1/R even before the property was spot visited by A-2 Sh. M. L. Arora. Thus, he enjoyed more than rupees seven crores credit facility from PNB by submitting the title deeds of a property (whose owner was dead) having 'Zerayati Patta No.51' and by mischievously introducing valuation report for 'S. No.51' worth Rs.348 lacs and in collusion with A-2 Sh. M. L. Arora induced PNB to gave him loan of more than Rs.7 Crores.

402. A-1 Sh. Ashwani J. Verma also sold plant, machinery, stock, raw material, finished goods, semi finished goods, contrary to the terms of sanction contained in Ex.PW1/R prohibiting selling, assigning, mortgaging, alienating or otherwise disposing any of the assets of the borrower charged to the bank during the currency of bank credit facilities.

403. He deposited fake certificates and letters purportedly written by MLAs, Ex.MLAs, PNB official, Village Administrative Officer and Mandal Revenue Officer having reasons to believe that they are forged.

404. Therefore, A-1 Sh. Ashwani J. Verma and A-5 M/s. NSPL are guilty of offence under Section 420 and 471 of IPC as well as criminal conspiracy under Section 120 B readwith Section 419, 420, 468 and 471 of IPC and Section 13 (2) readwith Section 13 (1) (d) of PC Act 1988.

DISCUSSION OF EVIDENCE AND ARGUMENTS CBI v Sh. Ashwani J. Verma & Ors. Page No. 155/174 CC No.05/16 DL0375 ADDRESSED ON BEHALF OF A-4 SH. P. V. KRISHNAJEE

405. The charge against this accused is for the offence punishable under Section 420 of IPC alleging that being the approved valuer of PNB, he dishonestly and fraudulently submitted a false valuation report dated 14.07.2005 and obtained second valuation report dated 12.08.2006 in respect of property bearing Survey No.51 of Raju Pallem Village, Anakapalli Mandal, District Vishakhapatnam, AP whereas, he was asked to submit the valuation report of Zerayati Patta No.51 of Raju Pallem Village, Anakapalli Mandal, District Vishakhapatnam, (AP) and thereby deceived the officials of PNB, South-Extension Branch to sanction a loan to the tune of Rs.784.54 lacs in favour of A-5 M/s NSPL through its Director A-1 Sh. Ashwani J. Verma.

406. He is also charged for the offence of Criminal Conspiracy punishable under Section 120-B readwith Sections 419/420/468/471 IPC and under Section 13(2) readwith Section 13 (1) (d) of PC Act, 1988.

407. Admittedly, A-4 Sh. P. V. Krishnajee has given valuation report Ex.PW39/DX for the property of Sh. Konathala Mahalaxmi for S. No.51 of Raja Palem village, Anakapalli Vishakhapatnam District. At point 6 (a) the reply to the 'Area supported by documentary proof, shape, dimensions and physical features' is responded in the valuation report as 'Sale Deed copy, legal opinion, market value certificate'. The inference from response to point 6 referred above is that the valuer CBI v Sh. Ashwani J. Verma & Ors. Page No. 156/174 CC No.05/16 DL0375 had seen copy of Sale Deed of the property evaluated by him. In the Sale Deed available with the Bank, as also available on the records of this court in the form of Ex.PW27/B (English translation whereof is Ex.PW29/L), the description of property is 'Zeroyithi Patta No.51'. There is no copy of Sale Deed for 'S. No.51'. Thus, A-4 Sh. P. V. Krishnajee could have seen only copy of Ex.PW27/B. He has not led any evidence that he had seen copy of Sale Deed of 'S. No.51'. He knew, as he has mentioned in report that he has seen copy of Sale Deeds, that the property of Sh. Konathala Mahalaxmi is 'Zerayati Patta No.51' but cunningly, in conspiracy with other co-accused gave valuation report for property Survey No.51. This valuation report Ex.PW39/DX was also followed without any questions by A-2 Sh. M. L. Arora who mentioned the collateral property as Plot No.51 for submitting the proposal to Regional Office and Regional Office also sanctioned the loan believing that the collateral security offered is indeed Plot No.51 whose worth is Rs.348 lacs. Thus, it became possible for A-1 Sh. Ashwani J. Verma to walk away with huge sum of money without producing Title Deeds of the property whose valuation report was relied on by the Bank for releasing the loan.

408. It is already noted that vide Ex.PW30/E which is letter dated 01.08.2006 from PNB, South-Delhi, Zonal Office addressed to the Chief Manager, Branch Office, South-Extension Branch, New Delhi directions were given that an official from Branch office South- Extension be deputed to Vishakhapatnam/Hyderabad for valuation/verification of property of Vishakhapatnam. In response to CBI v Sh. Ashwani J. Verma & Ors. Page No. 157/174 CC No.05/16 DL0375 this, vide Ex.PW30/F the valuation report of second approved valuer of PNB, Sh. I. Rama Rao was sent to the Regional Office.

409. How and by whom the report of Sh. I. Rama Rao was procured is evident from evidence of PW42 Sh. I. Rama Rao. This witness has deposed that for the valuation of this property one Sh. Mohan who had introduced himself as a representative of Sh. Konathala Mahalaxmi alongwith A-4 Sh. P. V. Krishnajee, approved valuer of PNB had approached him. He has deposed that Sh. Mohan was not known to him initially and he was introduced to him by the official valuer A-4 Sh. P. V. Krishnajee. The valuation report of PW42 Sh. I. Ram Rao is Ex.PW42/A and is for Survey No.51. Thus, A-4 Sh. P. V. Krishnajee was instrumental in procuring another valuation report for Survey No.51 to mislead the officials of Regional Office.

410. PW11 Sh. V. Venkateshwar Rao has also made incriminating statements against A-4 Sh. P. V. Krishnajee and has stated that in the year 2005 he alongwith A-4 Sh. P. V. Krishnajee, A-6 Sh. Vinay Tyagi and the owner of the land had gone for the purposes of valuation and identification of the land. He deposed that after identification of the land, A-4 Sh. P. V. Krishanjee gave his valuation report. He denied a suggestion given by learned counsel for A-4 Sh. P. V. Krishnajee that the land was not identified by A-4 Sh. P. V. Krishnajee meaning thereby the reiteration that the land which was evaluated was identified by A-4 Sh. P. V. Krishnaji.

411. It has also come on record that A-4 Sh. P. V. Krishnajee had requested PW16 Sh. K. Srinivasa Rao, Sr. Manager, PNB, CBI v Sh. Ashwani J. Verma & Ors. Page No. 158/174 CC No.05/16 DL0375 Vishakhapatnam Branch to open Bank Account in the name of Sh. Konthala Mahalaxmi. He has deposed that A-4 Sh. P. V. Krishnajee had informed him on phone that Sh. Konathala Mahalaxmi and Sh. Bodepati Krishna Mohan were known to him and requested to open an account in the name of Sh. Konathala Mahalaxmi. The Customer Master Form Ex.PW16/D at point 14 mentions 'Referred by Sri P. Krishnajee, valuer over phone'. It is also proved that in this account a sum of Rs. One lac was deposited by cash which was withdrawn by Sh. B. Mohan. In cross-examination by learned counsel for A-4, PW16 denied that Sh. Konathala Mahalaxmi and A-4 Sh. P. V. Krishnajee had no relation with each other. Thus, A-4 Sh. P. V. Krishnajee had helped an impostor in opening a bank account in the name of Sh. Konathala Mahalaxmi. The fact that A-4 Sh. P. V. Krishnajee had introduced an impostor as Sh. Konathala Mahalaxmi is also evident from the statement of Sh. Akbar Ali. The valuation report Mark X (which was later on exhibited as Ex.PW39/DX) was also shown by A-4 Sh. P. V. Krishnajee to PW21. PW21 has further deposed that on the directions of A-6 Sh. Vinay Tyagi, Sh. Konathala Mahalaxmi had opened an account at PNB, Vishakhapatnam which was witnessed by Sh. B. K. Mohan. PW21 has deposed that this account was opened on the reference of A-4 Sh. P. V. Krishnajee. PW21 has deposed that he had withdrawn Rs.1 lac from this account and had given Rs.30,000/- to A-4 Sh. P. V. Krishnajee for introducing the account as well as for procuring second valuation report of Sh. I. Rama Rao.

CBI v Sh. Ashwani J. Verma & Ors. Page No. 159/174

CC No.05/16 DL0375

412. In written arguments, A-4 Sh. P. V. Krishnajee has stated that he carried out the valuation of the property upon the directions of the Bank officials. However, evidence of PW14 has already shown that A- 4 Sh. P. V. Krishnajee had given the valuation report on the directions of A-6 Sh. Vinay Tyagi and had not sent the report to the Bank directly but had given to A-6 Sh. Vinay Tyagi who further sent it through courier to PW14 Sh. Jitender Singh Chauhan and PW14 gave it to A-1 Sh. Ashwani J. Verma for submitting it in the Bank. Ex.PW1/R4 which is a letter written by A-4 Sh. P. V. Krishnajee also shows that he had prepared the report of the property which was shown to him for valuation by A-6 Sh. Vinay Tyagi. For the report of 14.07.2005 he raised the bill to the Bank on 02.09.2006 when A-6 Sh. Vinay Tyagi did not turn back and his fees remained unpaid. Thus, he was expecting the fees from A-6 Sh. Vinay Tyagi but when A-6 Sh. Vinay Tyagi did not pay the same, he approached PNB. Therefore, he had not prepared the valuation report on the directions of any Bank Official.

413. It is further argued on his behalf that the Bank official had asked for valuation report of property Survey No.51 and it was not the practice of the Bank to give the written instructions to get the valuation of the property. Even this argument of A-4 Sh. P. V. Krishnajee is not acceptable that he required only details of the property because in Ex.PW39/DX, he has mentioned that Sale Deed was the documentary proof for the area evaluated by him. He has also mentioned in the report that the property was under owner's control and the owner is named as Sri Konatala Mahalaxmi S/o Sh. Rajayya.

CBI v Sh. Ashwani J. Verma & Ors. Page No. 160/174

CC No.05/16 DL0375 Therefore, he cannot get away by arguing that he was just given contents and details of the property and he gave the valuation report.

414. He has further argued that he had asked PNB to identify the land and the Bank had sent representative of the owner of the land to identify the exact land. However, there is no such evidence on record that the Bank had sent the owner of the property to identify the property for the valuer. He has relied on evidence of PW29 Sh. V. Simhadri Rao to argue that Sh. J. Surya Narayan and Sh. K. Krishna Rao were deputed by him to identify the land. This argument was also addressed by learned counsel for A-4 Sh. P. V. Krishnajee at the time of making oral arguments in the court and it was pointed out to him at that stage itself that complete reading of evidence of PW29 shows that he was referring to the year 2009 when he had deputed revenue officials to identify the land. PW29 was not referring to deputing revenue officials in July, 2005 when A-4 Sh. P. V. Krishajee had given his report. However, counsel for A-4 has persisted with this argument in written submissions as well which is again rejected being devoid of merit and result of selective reading of evidence of PW29. Moreover, a suggestion was given on behalf of A-4 Sh. P. V. Krishnaji to PW11 Sh. P. Venkateshwar Rao that a person from Revenue Department had come to the spot to identify the land but the suggestion was denied.

415. He has argued that he had prepared valuation report from non- encumbrance certificate Ex.PW54/D43. However, the valuation report Ex.PW39/DX is totally silent about the non-encumbrance certificate seen by the valuer before preparing the report. Moreover, this is CBI v Sh. Ashwani J. Verma & Ors. Page No. 161/174 CC No.05/16 DL0375 contrary to his own written arguments that he was asked to give valuation report only on the basis of details of the property 'Survey No.51' and no written instructions were given to him. If he had telephonic instructions only, he could not have been given any document like 'NEC' He has also filed along with the written arguments a copy of a valuation certificate from Registration and Stamps Department, Govt. of AP, Market Value Assistance which he claims he had relied on for giving the valuation report. However, no document can be introduced alongwith written submissions at final stage of arguments and therefore, this certificate is of no worth at this stage.

416. He has argued that the title deed register Ex.PW19/B does not mention whether the property is 'Zerayati Patta' or 'Survey Number'. For this he has relied on evidence of PW53. However, a perusal of Title Deed register shows that the property is described as 'land measuring 4 acres or 19360 sq. yards covered by Zerayati Patta No.51, Anakapalli, Sub-Registrar, Anakapalli, District-Vishakhapatnam, AP'. He has relied on a judgment dated 10.08.2009 titled as "L. N. Raja Gopalan v State" passed by the Hon'ble High Court of Madras to argue that a valuer takes the Branch Manager or some authorized agent to the location at the time of inspection for the purpose of identifying the property. He has relied on the observations that the job of identification of the owner falls outside the purview of the assessment of valuation of the property.

417. This judgment is distinguishable from the facts of this case in as CBI v Sh. Ashwani J. Verma & Ors. Page No. 162/174 CC No.05/16 DL0375 much as this court has formed an opinion that A-4 Sh. P. V. Kirshnajee had given valuation report on the asking of A-6 Sh. Vinay Tyagi and not on the asking of the Bank.

418. He has referred to the statement of LW54 Sh. K.T.P. Jyothee Swaran. A-4 Sh. P. V. Krishnajee had sought to examine this witness in his defence as according to him the prosecution had dropped this witness. However, the report came that LW-54 Sh. K.T.P. Jyothee Swaran has already died in the year 2012. Therefore, the statement of LW54 Sh. K.T.P. Jyothee Swaran under Section 161 Cr.PC cannot be looked into for any purpose.

419. He has relied on evidence of PW55 Sh. R. N. Mishra, IO of the case but this court has not found anything in the evidence of PW55 including in the cross-examination of PW55 conducted by learned counsel for A-4 Sh. P. V. Krishnajee of any help to him. Conclusion with regard to A-4 Sh. P. V. Krishnajee :

420. A-4 Sh. P. V. Krishnajee received instructions from A-6 Sh. Vinay Tyagi and gave valuation report Ex.PW39/DX for 'Survey No.51' whereas sale deed as mentioned in his report can only be for property 'Zerayati Patta No.51' as no other sale deed of 'S. No. 51' has been filed on record by A-4 Sh. P. V. Krishnaji. This valuation report is that made all the difference and ensured sanction of loan by the Regional Office in favour of A-5 M/s NSPL. This report is the first step in criminal conspiracy to cheat the bank. But for this report, the Regional Office would have never sanctioned loan in favour of A-5 M/s NSPL. He was instrumental in procuring another valuation report CBI v Sh. Ashwani J. Verma & Ors. Page No. 163/174 CC No.05/16 DL0375 from PW42 Sh. I. Rama Rao for property Survey No.51, Ex.PW42/A. He was instrumental in opening a bank account in the name of impostor Sh. Konathala Mahalaxmi where as a part of further conspiracy the money was withdrawn by PW21 Sh. Akbar Ali for giving to A-4 Sh. P. V. Krishnaji as well.

421. Thus, A-4 Sh. P. V. Krishnaji is guilty of cheating the bank and is also guilty of offence under Section 120B of IPC readwith Section 419, 420, 468 and 471 of IPC and Section 13 (2) readwith Section 13 (1) (d) of PC Act 1988.

DISCUSSION OF EVIDENCE AND ARGUMENTS ADDRESSED ON BEHALF OF A-6 SH. VINAY TYAGI

422. A-6 Sh. Vinay Tyagi has been charged for the offence punishable under Section 420 of IPC with the allegation that he with dishonest and fraudulent intentions misrepresented before the bank officials about the identity of A-3 Sh. C. N. Rao and introduced him as Sh. Konathala Mahalaxmi and thereby persuaded the bank officials to accept the collateral security of Sh. C. N. Rao and sanction the loan / credit limit facility to the tune of Rs.784.54 lacs in favour of A-5 M/s NSPL through its Director A-1 Sh. Ashwani J. Verma and thus committed an offence under section 420 of IPC. Besides that he is also charged with the offence of criminal conspiracy punishable under Section 120-B readwith Sections 419, 420, 468, 471 of IPC and Section 13 (2) readwith Section 13 (1) (d) of PC Act, 1988.

423. This is already noted that A-5 M/s NSPL through its Director A- 1 Sh. Ashwani J. Verma had applied for loan for setting up factory at CBI v Sh. Ashwani J. Verma & Ors. Page No. 164/174 CC No.05/16 DL0375 Sikandrabad on the basis of primary security of land, plant, machinery and stock, raw material, finished and semi finished goods. However, the bank demanded mortgage of collateral security for sanctioning the loan. Surprisingly, instead of arranging collateral security from friends and relations, A-1 Sh. Ashwani J. Verma began hobnobbing with third party total strangers for collateral security.

424. Further light is thrown in this regard by PW14 whose testimony has been noted in detail while dealing the evidence pertaining to the other accused persons. The sum and substance of the evidence of PW14 is that he had introduced A-1 Sh. Ashwani J. Verma with A-6 Sh. Vinay Tyagi. According to PW14, A-6 Sh. Vinay Tyagi was dealing in opening of letters of credit from banks and he was helping people in procuring bank guarantees. According to PW14, it is A-6 Sh. Vinay Tyagi who suggested A-1 Sh. Ashwani J. Verma that a property at Vishakhapatnam can be used as security if the Bank can approve it. On this, A-1 Sh. Ashwani J. Verma asked A-6 Sh. Vinay Tyagi to send the valuation report of the said property so that the same can be shown to the bank.

425. PW14 went on to state that A-6 Sh. Vinay Tyagi sent the valuation report from Vishakhapatnam through courier to him which he handed over to A-1 Sh. Ashwani J. Verma. The witness identified the valuation report as Mark X20 which was later on exhibited as Ex.PW39/DX. It is well known by now that the valuation report was not for the property detailed in the title deeds mortgaged i.e. 'Zerayati Patta No.51' but was for 'Survey No.51'. The worth of the property CBI v Sh. Ashwani J. Verma & Ors. Page No. 165/174 CC No.05/16 DL0375 evaluated was shown as Rs.348 lacs. This valuation report became the basis for sanctioning of loan by the Regional Office in favour of A-5 M/s NSPL. A-6 Sh. Vinay Tyagi had with him title deeds of property 'Zeryati Patta No.51' and he procured and sent valuation report of property 'Survey No.51'. Thus, A-6 Sh. Vinay Tyagi has played most crucial role in the entire sequence of events leaving PNB poorer by more than Rs. Seven Crores. Though, PW14 had not gone inside the Bank on the day the documentation was completed as he claimed that he had remained outside but he stated that he received Rs. One lac from A-6 Sh. Vinay Tyagi and according to him A-1 Sh. Ashwani J. Verma had given to A-6 Sh. Vinay Tyagi a sum of Rs. Four lacs. The owner of the property Sh. Konathala Mahalaxmi was given a sum of Rs. Two lacs by A-6 Sh. Vinay Tyagi and remaining sum of Rs. One lac was retained by A-6 Sh. Vinay Tyagi. This witness also deposed that he had met Sh. Konathala Mahalaxmi twice, once he had come for a meeting with A-1 Sh. Ashwani J. Verma and second time when he had gone to the Bank.

426. PW14 had also identified the photograph of Sh. Konathala Mahalaxmi on Ex.PW10/C of the same person whom he had met twice, as referred above.

427. In cross-examination by learned counsel for A-6 Sh. Vinay Tyagi, he denied a suggestion that there is a dispute between him and A-6 Sh. Vinay Tyagi regarding the sum of money. Though the defence of A-6 Sh. Vinay Tyagi would be that there is a dispute over money between him and PW14 but no further evidence has been led in this CBI v Sh. Ashwani J. Verma & Ors. Page No. 166/174 CC No.05/16 DL0375 regard.

428. So far as other allegations against A-6 Sh. Vinay Tyagi are concerned, testimony of PW21 Sh. Akbar Ali is relevant.

429. PW21 has stated that A-6 Sh. Vinay Tyagi had friendship with A-3 Sh. C. N. Rao (emphasis supplied). PW21 had come to Delhi with A-3 Sh. C. N. Rao and A-6 Sh.Vinay Tyagi regarding mortgage of property of A-3 Sh. C. N. Rao as collateral security for the loan of A-1 Sh. Ashwani J. Verma. PW21 Sh. Akbar Ali deposed that A-6 Sh. Vinay Tyagi had introduced him with A-4 Sh. P. V. Krishnajee as Sh. B. Mohan. He deposed that A-6 Sh. Vinay Tyagi and Sh. Konathala Mahalaxmi were negotiating with A-1 Sh. Ashwani J. Verma for mortgaging the property with PNB against a payment of Rs. Fifty lacs. PW 21 also deposed that A-6 Sh. Vinay Tyagi had also shown him the valuation report given by the bank approved valuer, Mark X. (This report is later exhibited as Ex.PW39/DX.) PW-21 has also deposed that on the directions of A-6 Sh. Vinay Tyagi he had procured legal opinion on collateral security from approved advocate of the bank and handed it over to A-6 Sh. Vinay Tyagi. The witness has also deposed that in the year 2006 also A-6 Sh. Vinay Tyagi had directed him to obtain second valuation report of the collateral security. He had accompanied A-4 Sh. P.V. Krishnaji to another valuer Sh. I. Ramarao and second valuation report was obtained by A-4 Sh. P.V. Krishnaji from PW-42 Sh. I. Ramarao. He has also deposed that on the directions of A-6 Sh. Vinay Tyagi an account was opened at PNB Vishakhapatnam which was opened with the reference of A-4 Sh. P.V. CBI v Sh. Ashwani J. Verma & Ors. Page No. 167/174 CC No.05/16 DL0375 Krishnaji. He has further deposed that a sum of Rs.1,00,000/- was deposited in his account in cash at Delhi and on the directions of A-6 Sh. Vinay Tyagi he had withdrawn a sum of Rs.1,00,000/- out of which Rs.60,000/- were given to Sh. Konathala Mahalaxmi, Rs.30,000/- to A-4 Sh. P.V. Krishnajee. He has further stated that A-6 Sh. Vinay Tyagi had obtained a number of receipts from Sh. Konathala Mahalaxmi amounting to more than Rs.30,00,000/- but he actually paid Rs.Six Lakhs to Rs.Seven Lakhs to Sh. Konthala Mahalaxmi. It is already noted that the receipts are Ex.PW-34/N. From the testimony of PW-21 it is clear that A-6 Sh. Vinay Tyagi had received Rs. Thirty Lakhs from A-1 Sh. Ashwani J. Verma but gave Rs.6 lacs to Rs.7 lacs to Sh. Konathala Mahalaxmi and thus kept with himself the remaining amount of Rs.23 lacs. He has also identified the photographs on Ex.PW-16/B which is specimen signatures card for opening account with PNB Vishakhapatnam to be the photograph of Sh. C.N. Rao who was impersonating as Sh. Konathala Mahalaxmi. Though the witness was cross-examined at length by learned counsel for A-6 Sh. Vinay Tyagi, but except for denying suggestions contrary to his examination in chief nothing worthwhile came on record.

430. PW11 has proved presence of A-6 Sh. Vinay Tyagi along with A-4 Sh. P.V. Krishnajee when they had gone to survey no. 51 of Rajapalem Village, Anakapalli, Vishakhapatnam for valuation report.

431. PW31 Sh. Rajiv Sharma has also proved the presence of A-6 Sh. Vinay Tyagi at the time of documentation at PNB South Extension Branch and has told that A-6 Sh. Vinay Tyagi had come to the bank CBI v Sh. Ashwani J. Verma & Ors. Page No. 168/174 CC No.05/16 DL0375 with Sh. Konathala Vijayalaxmi.

432. Further, Ex.PW-1/R53 is an affidavit given by Sh. Konathala Mahalaxmi deposing that he is the owner of land located at Raju Palem, Anakapalli bearing Survey No.51 of an extent of 4.00 acres under Anakappalle RS Ward. In this affidavit besides the address of Vishakhapatnam, his address is mentioned as 'C/o Mr. Vinay Tyagi, H. No.D-312, Govindpuram Ghaziabad'.

433. The involvement of A-6 Sh. Vinay Tyagi in the conspiracy is also evident from Ex.PW1/R54 which is letter dated 02.09.2006 given by A-4 Sh. P. V. Krishnajee to PNB, South Extension Branch stating that the property was shown by A-6 Sh. Vinay Tyagi but his fees was not paid. It is also written in that letter that Sh. Vinay Tyagi visited him in the month of December 2005 but again he did not turn back and his fees is remaining unpaid. Thus, he requested the bank to pay his fee for giving valuation of property Survey No.51, Raju Palem village, Anakapalle. A reading of this letter shows that A-6 Sh. Vinay Tyagi was involved from the very beginning for procuring valuation report of Survey No.51 contrary to description of mortgaged property in Sale Deed as 'Zirayati Patta No.51'. This letter also shows that the valuer Sh. P. V. Krishnajee was expecting payment of his fees by A-6 Sh. Vinay Tyagi . But when for the report dated 14.07.2005, he was not paid his fees by A-6 Sh. Vinay Tyagi, he had written this letter to the bank after more than one year i.e. on 02.09.2006.

434. Further, the evidence of PW54 Sh. J. M. Gupta, Manager (Credit) also shows that the report of bank approved valuer A-4 Sh. P. CBI v Sh. Ashwani J. Verma & Ors. Page No. 169/174 CC No.05/16 DL0375 V. Krishnajee was given to PW54 by A-2 Sh. M. L. Arora. This further substantiates the evidence of PW14 Sh. Jitender Singh Chauhan that A-6 Sh. Vinay Tyagi had taken the valuation report Ex.PW39/DX which he had sent to PW14 and PW14 gave it to A-1 Sh. Ashwani J. Verma and that is how it reached in the hands of A-2 Sh. M. L. Arora. If, a report was to be called by the bank, then the same would have been called by Sh. J. M. Gupta who was the Manager (Credit). But it is not so. The report was rather given by A-2 Sh. M. L. Arora to PW54.

435. PW54 has also deposed that when he asked about the identity proof of Sh. Konathala Mahalaxmi, A-6 Sh. Vinay Tyagi gave him the household card and PAN Card of Sh. Konathala Mahalaxmi. So much so, the original papers of the collateral security Ex.PW27/A were also handed over to A-2 Sh. M. L. Arora by A-6 Sh. Vinay Tyagi. The above shows that A-6 Sh. Vinay Tyagi had with him the household card and PAN Card of Sh. Konathala Mahalaxmi as well as original title deeds of the property and it is he who introduced an impostor Sh. C. N. Rao as Sh. Konathala Mahalaxmi. Suggestions given to PW54 by learned counsel for A-6 Sh. Vinay Tyagi contrary to his evidence were denied.

436. In his statement u/s 313 of Cr.P.C., A-6 Sh. Vinay Tyagi has stated that he is not a beneficiary of any loan taken by A-1 Sh. Ashwani J. Verma or A-5 M/s. NSPL. However, statement of PW21 Sh. Akbar Ali has shown that A-6 Sh. Vinay Tyagi had taken receipts from Sh. Konathala Mahalaxmi for more than Rs.30 lacs, Ex.PW34/N CBI v Sh. Ashwani J. Verma & Ors. Page No. 170/174 CC No.05/16 DL0375 and had given only Rs.6 lacs to Rs.7 lacs to Sh. Konathala Mahalaxmi. All these receipts show that the recipient Sh. Konathala Mahalaxmi had received this amount from A-1 Sh. Ashwani J. Verma. Evidence of PW21 shows that A-6 Sh. Vinay Tyagi had taken receipts worth Rs.30 lacs from Sh. Konathala Mahalaxmi but had given him only Rs.6 lacs to Rs.7 lacs only. These receipts and the agreement between A-1 Sh. Ashwani J. Verma and Sh. Konathala Mahalaxmi were handed over by A-1 Sh. Ashwani J. Verma to the IO of the case during investigation. Since, these receipts were given by A-1 Sh. Ashwani J. Verma to the IO of the case shows that he would have made payments against these receipts to A-6 Sh. Vinay Tyagi who pocketed Rs.23 lacs and therefore A-6 Sh. Vinay Tyagi cannot argue that he was not the beneficiary of the loan. A-6 Sh. Vinay Tyagi has also stated in his statement u/s 313 of Cr.P.C. that receipts Ex.PW39/N are inadmissible and hence does not constitute any evidence against him. The submissions are rejected for the reason that the receipts were identified by PW34 Sh. Ajay Nigam in whose presence the entire documentation before grant of loan was carried on. In his presence, Sh. Konathala Mahalaxmi had signed various documents, therefore, he was in a position to identify the signatures of Sh. Konathala Mahalaxmi. Moreover, when the receipts were exhibited, no objection was raised and even the witness was not cross examined on behalf of A-6 Sh. Vinay Tyagi. Therefore, at this stage, it cannot be argued by A-6 Sh. Vinay Tyagi that receipts Ex.PW39/N are not admissible. Conclusion with regard to A-6 Sh. Vinay Tyagi :

CBI v Sh. Ashwani J. Verma & Ors. Page No. 171/174

CC No.05/16 DL0375

437. A-6 Sh. Vinay Tyagi has played the most crucial role in the conspiracy to cheat the bank. He introduced title deeds of property No. Zirayati Patta No.51 whose owner Sh. Konathala Mahalaxmi had died in the year 1988. A-6 Sh. Vinay Tyagi was known to A-3 Sh. C. N. Rao impersonating as Sh. Konathala Mahalaxmi. A-6 Sh. Vinay Tyagi procured the valuation report Ex.PW39/DX for property 'S. No.51' as against property mortgaged with the bank namely 'Zirayati Patta No.51', in collusion with A-4 Sh. P. V. Krishnajee. The worth of property 'S No.51' is shown Rs.348 lacs. A-6 Sh. Vinay Tyagi concealed the value of property 'Zirayati Patta No.51' and also the fact that Sh. Konathala Mahalaxmi had already died when the bank granted loan to A-5 M/s. NSPL. A-6 Sh. Vinay Tyagi took receipts worth Rs.30 lacs from impostor Sh. Konathala Mahalaxmi but gave him only Rs. 6 lacs to Rs. 7 lacs and thus, benefited himself for a sum of Rs.23 lacs in the illegal transaction. He had with him a PAN Card in the name of Sh. Konathala Mahalaxmi as well as his Ration Card when he went to PNB for loan documentation. He had with him the original title deeds of property 'Zirayati Patta No. 51' of a deceased man and gave the same to the bank officials concealing true facts. This entire process left the Punjab National Bank poorer by more than Rs.7 Crores. Except for stating that PW14 and PW21 are not trustworthy witnesses and have deposed under pressure of CBI, he has not given any explanation to inculpatory evidence against him.

438. Therefore, the prosecution has proved the charge under Section 420 of IPC as well as under Section 120 B readwith Section 419, 420, CBI v Sh. Ashwani J. Verma & Ors. Page No. 172/174 CC No.05/16 DL0375 468, 471 IPC and also under Section 13 (2) readwith 13 (1) (d) of Prevention of Corruption Act, 1988.

Final Decision :

(a) A-1 Sh. Ashwani J. Verma is held guilty and convicted for the offence under Section 471 of IPC, 420 of IPC and is also held guilty and convicted for the offence under Section 120 B readwith Section 419, 420, 468, 471 IPC and under Section 13 (2) readwith 13 (1) (d) of the Prevention of Corruption Act, 1988.

(b) A-2 Sh. M. L. Arora is held guilty and convicted for the offence under Section 13 (2) readwith Section 13 (1) (d) of Prevention of Corruption Act, 1988 and is also held guilty and convicted for the offence under Section 120 B readwith Section 419, 420, 468, 471 IPC and under Section 13 (2) readwith 13 (1) (d) of the Prevention of Corruption Act, 1988.

(c) A-4 Sh. P. V. Krishnajee is held guilty and convicted for the offence under Section 420 of IPC and is also held guilty and convicted for the offence under Section 120 B readwith Section 419, 420, 468, 471 IPC and under Section 13 (2) readwith 13 (1) (d) of the Prevention of Corruption Act, 1988.

(d) A-5 M/s. Nanak Steels Pvt. Ltd. through A-1 Sh. Ashwani J. Verma is held guilty and convicted for the offence under Section 420 of IPC and is also held guilty and convicted for the offence under Section 120 B readwith Section 419, 420, 468, 471 IPC and under Section 13 (2) readwith 13 (1) (d) of the Prevention of Corruption Act, 1988.

CBI v Sh. Ashwani J. Verma & Ors. Page No. 173/174

CC No.05/16                                                      DL0375
 (e)    A-6 Sh. Vinay Tyagi is held guilty and convicted for the offence

under Section 420 of IPC and is also held guilty and convicted for the offence under Section 120 B readwith Section 419, 420, 468, 471 IPC and under Section 13 (2) readwith 13 (1) (d) of the Prevention of Corruption Act, 1988.

Announced in the open court                (ARUN BHARDWAJ)
on 06.06.2018                         Special Judge (PC Act): CBI-5
                                              PHC, New Delhi.
                                                        Digitally signed
                                                        by ARUN
                                             ARUN       BHARDWAJ
                                             BHARDWAJ   Date:
                                                        2018.06.06
                                                        12:00:54 +0530




CBI v Sh. Ashwani J. Verma & Ors.                         Page No. 174/174
CC No.05/16                                                      DL0375

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