Delhi District Court
Development Authority vs . Skipper Construction Company on 13 September, 2018
IN THE COURT OF MS. POOJA TALWAR
CHIEF METROPOLITAN MAGISTRATE (SOUTH)
SAKET DISTRICT COURTS, DELHI
In the matter of :
Digitally
signed by
POOJA
State POOJA TALWAR
TALWAR Date:
2018.09.14
Vs.
17:42:16
Satya Dev Sharma & Ors +0530
FIR No. 494/1998
P.S R.K. Puram (EOW)
JUDGMENT
1. Sr. No. of case 2031484/2016
2. Date of institution 23.03.1999
3. Name of the complainant 1. Dr. Usha Bhadury
W/o Dr. Ronen Bhadury
FIR No. 494/1998 PS R.K. Puram (EOW) Page- 1 of 56
2. Dr. Ronen Bhadury
Both residents of Flat No.
7501/D-7, Vasant Kunj, New
Delhi.
4. Date of commission of offence 10.08.1997
5. Name of accused 1. Satya Dev Sharma @ S.D.
Sharma
S/o Late Lekh Raj Sharma
R/o VPO Fatehpur Billoch,
Tehsil Ballabhgarh, District
Faridabad, Haryana.
2. Kamlesh Sharma
W/o Sh. Satya Dev Sharma
R/o House No. 1646/15, Govind
Puri, Kalkaji, New Delhi
(discharged vide order dated
18.04.2018)
3. Anil Kumar Sharma
S/o Late Basudev Sharma
R/o C-47, Shiv Durga Vihar,
Lakeelpur, Faridabad, Haryana.
4. Manjeet Singh
S/o Late Gopal Singh
R/o Flat No. 81/8, Pockete -8,
Sector-7, Vasant Kunj, ND.
(proceedings abated vide order
dated 01.06.2016).
5. K.K. Chauhan @ Krishan
Kant Chauhan
S/o Sh. Shiv Ram Singh
FIR No. 494/1998 PS R.K. Puram (EOW) Page- 2 of 56
Chauahn
R/o House No. 44, Vikas
Enclave, Vikas Nagar, New
Delhi.
6. Rakesh Kumar
S/o Sh. Chunni Lal
R/o VPO Fatehpur Billoch,
Tehsil Ballabhgarh, District
Faridabad, Haryana.
6. Offence complained of U/s 406/420/120B IPC
7. Plea of accused Pleaded not guilty
8. Date of reserving the judgment 24.08.2018
9. Final order Acquitted
10 Date of such judgment 13.09.2018
BRIEF STATEMENT OF REASONS FOR
THE DECISION OF THE CASE
1. The story of the prosecution is that a complaint was received from one Dr. Usha Bhadury stating that she alongwith her husband Dr. Ronen Bhadury invested Rs. 1,55,000/- with M/s SPG Green Gold Plantation Ltd (hereinafter referred to as FIR No. 494/1998 PS R.K. Puram (EOW) Page- 3 of 56 company) pursuant to advertisement published in the newspaper in August, 1997 and November, 1997. In consideration of the deposits made by complainants, the company issued three post dated cheques and 12 monthly post dated cheques. The cheques furnished by M/s SPG Green Gold Plantation Ltd. dated 28.12.1997 were dishonoured. Upon dishonour, husband of complainant went to the office of company where he met Sr. Vice President Major Manjeet Singh. He assured him that the payment would be released by the end of March alongwith interest. On 04.04.1998, complainant and her husband again visited the office of company where they were informed that the company had shifted. The office of the company was found closed. They searched the name of Directors as Satya Dev Sharma, Kamlesh Sharma, Rakesh Sharma, Khem Chand, Sanjeev Kumar, Shakuntala, Narender Garg from the Registrar of Companies. S.D. Sharma was the Chairman cum Managing Director, Surgeon Vice Admiral Inderjeet Singh, Sh. R.S. Tanwar, Manjeet Singh, Ajeet Kumar, K.K. Chauhan, M.V. Sriniwas, Company Secretary. It came to the knowledge of complainant that Rs. 5 crore was taken by the company from people FIR No. 494/1998 PS R.K. Puram (EOW) Page- 4 of 56 belonging to middle class. The company knew fully well that the post dated cheques issued would not be honoured. Upon receipt of the complaint of complainant, FIR was registered and investigation was carried out. During investigation, it was revealed that Major Manjeet Singh and K.K. Chauhan induced the investors to invest their money in the company. They also signed FDRs and affidavits and assured the investors that the cheques issued by the company would be honoured. Major Manjeet Singh purchased 30 acres land in the name of company in Bhopal, M.P. All the aforesaid accused persons i.e Manjeet Singh, K.K. Chauhan, Rakesh Sharma, Anil Sharma, Kamlesh Sharma, Satya Dev Sharma entered into criminal conspiracy and cheated the investors. Upon completion of investigation, chargesheet was filed.
2. Provisions of Section 207 Cr.P.C. were complied with. On appearance of accused persons before Court and prima facie case having being made out, charge for the offence under section 406/420/120B IPC was framed against accused Rakesh Sharma on 08.02.2005, K.K. Chauhan on 26.10.1999 and Satya Dev Sharma on 18.03.2002 and under section 420/120B IPC against accused Anil Kumar on 18.04.2018. Accused Kamlesh FIR No. 494/1998 PS R.K. Puram (EOW) Page- 5 of 56 Sharma was discharged vide order dated 18.04.2018. Accused Manjeet Singh expired during the trial and proceedings qua him stood abated vide order dated 01.06.2016.
3. In order to prove its case, the prosecution examined 28 witnesses in all.
4. Sh. Kailash Chander was examined as PW1. He deposed that one Parkash Bhagat and Swarna Sohni came to his house. Parkash Bhagat was Manager at branch unit 103 Wazirpur Industrial Branch of SPG Green Gold Plantation Pvt. Ltd. in July,1998. These persons came with some pamphlet of schemes of the company and assured him that their deposit in their company would fetch 24% per annum. On their assurance, he deposited an FD of Rs. 20,000/- and Rs.10,000/- regarding two units of plantations worth Rs. 5,000/- each. On 25.10.1998, both Parkash Bhagat and Swarna Sohni again came to his house and induced him to deposit Rs.25,000/- a fresh amount @ 24% per annum and that they would give him some gift on making this deposit. He deposited Rs.25,000/- by way of cheques, drawn on Punjab National Bank. He made these deposits for a period of 12 months and the period for the plantation units was of five years. He handed over the photocopy of documents to FIR No. 494/1998 PS R.K. Puram (EOW) Page- 6 of 56 the IO which were handed over to him by accused persons. He exhibited copy of FD for a sum of Rs.20,000/- as Ex.PW1/A, affidavit as Ex.PW1/B, another copy of FD for a sum of Rs. 25,000/- as Ex.PW1/C, affidavit as Ex.PW1/D, other copy of FD for a sum of Rs. 10,000/- as Ex.PW1/E, joint venture as Ex.PW1/F. He also handed over copy of licence deed to police on the stamp paper of Rs. 5 each. He also handed over copy of cheques dated 01.03.1998, 01.04.1998, 01.05.1998, 01.06.1998, 01.07.1998, 01.08.1998 and cheque of principal amount issued on behalf of the company. The copy of the cheques jointly are Ex.PW1/G, copy of another cheque issued on 01.08.1998 for sum of Rs.2200/-, 01.08.1999 of the same amount, 01.08.2001 for same amount, 01.08.2000 for same amount and 01.08.2002 for a sum of Rs.20,000/- and the copy of the same are Ex.PW1/H. Copy of cheque dated 02.02.1998 for sum of Rs.1,500/-, 02.05.1998 for a sum of Rs.1,500/-, 02.08.1998 for sum of Rs.1500/-, 02.11.1998 for sum of Rs.1,500/- and dated 02.11.1998 of Rs.1500/- i.e. principal amount are Ex.PW1/I. He exhibited copy of complaint addressed to DCP, IP Estate is Ex.PW1/J.
5. Sh. Ajay Kumar Rai, Clerk, OBC NIT, Faridabad was FIR No. 494/1998 PS R.K. Puram (EOW) Page- 7 of 56 examined as PW2. He produced the record pertaining to account of SPG which the company opened in OBC bank vide current bank account No. 6586. The authorized signatory Chairman and MD S.D. Sharma in accordance with the board resolution accused Satya Dev Sharma was authorized to operate the said account. The copy of certificate of incorporation was attached with the opening form.
6. Sh. Ramit Kauchar, Chartered Accountant was examined as PW3. He deposed that on 03.02.1999, he gave the documents to IO mentioned in seizure memo which is Ex.PW3/A. The documents were of ROC, Income Tax, PAN, balance sheet etc of SPG Green Gold Plantation Ltd and same are Ex.PW3/1. Photocopy of agreement for selling of land at various places is Mark PW3/P, register containing detail of the deposit is Ex.PW3/2, register containing details of rent is Ex.PW3/3, register containing details of SGF, Modi Nagar is Ex.PW3/4. Document pertaining to deposit register is Ex.PW3/5 and similar register of deposit is Ex.PW3/6. Register of RD deposit is Ex.PW3/7, register of deposit is Ex.PW3/8, document register of deposit is Ex.PW3/9. Register of deposit is Ex.PW3/10, register of RD deposit is Ex.PW3/11, register FIR No. 494/1998 PS R.K. Puram (EOW) Page- 8 of 56 containing details of expenses and deposit are Ex.PW3/12 and Ex.PW3/13. Registers containing details of deposit are Ex.PW3/14 and Ex.PW3/15. Another register of miscellaneous paper of SPG Green Gold Plantation Ltd is Ex.PW3/16. He received this document from accused Satya Dev Sharma.
7. Sh. Lalit Mohan Chawla was examined as PW4. He deposed that he deposited an amount of Rs.2,50,000/- as fixed deposit with SPG Green Gold Plantation Ltd. sometime in the year 1997 for a period of one year. He was issued three maturity certificates; one in the name of himself, second in the name of his wife Mrs. Mukta Chawla and third in the name of his son Akhsat Chawla. He produced the original certificates which are Ex.PW4/A1 to Ex.PW4/A4. He produced the seven cheques in original alongwith original bank memo regarding dishonour of the cheques which are Ex.PW4/B1 to Ex.PW4/B7. He also produced the cheque bearing no. 120262 dated 27.12.1997 for a sum of Rs. 7,250/-. Copy of the same is Ex.PW4/C. The cheque bearing no. 120270 was encashed by the concerned bank which was handed over to him by accused persons.
8. Sh. Om Prakash Sikka was examined as PW5. He deposed that he saw the advertisement in the newspapers regarding FIR No. 494/1998 PS R.K. Puram (EOW) Page- 9 of 56 better payment of interest and scheme for plantation projects. In lieu of collateral security, he deposited Rs.1 lac and SPG Green Gold Company gave a collateral security a piece of land measuring 10 acre in the name of two persons comprising five depositors i.e. O.P Sikka and Lalit Mohan Chawla and when the said land was registered in their land, they gave in writing that they would have no other claim against them. He exhibited the original affidavit as Ex.PW5/A and Ex.PW5/B. Photocopy of money back scheme is Ex.PW5/C.
9. SI Ashok Kumar was examined as PW6. He deposed that on 11.06.1999 he was assigned the investigation of the present case by ACP concerned. Three complaints of H.D. Goel, Mrs. Sudha Bhatnagar and Kasturi Lal Ahuja were received alongwith photocopies of annexures which are Mark P1 to Mark P3. He received the reply of UCO Bank alongwith account opening form, passbook, bank statements of the account which are Mark P4 and from Punjab & Sind Bank alongwith account opening form, specimen sign card and statement of account. The same are Mark P5. He placed the affidavits of accused K.K. Chauhan which is Mark P6 and accused Major Manjit Singh (since expired) which is Mark P7. He moved an application for FIR No. 494/1998 PS R.K. Puram (EOW) Page- 10 of 56 issuance of production warrants of accused Rakesh who was in JC. Accused Rakesh was arrested on 07.9.1999 vide arrest memo Ex.PW6/A. Thereafter, he recorded the disclosure statement of accused Rakesh which is Ex.PW6/B. He prepared the supplementary charge sheet and filed through ACP before the Court.
10. Sh. Ramesh C. Upadhyay, Assistant Manager, Vijaya Bank was examined as PW7. He produced the relevant record of current account bearing no. 2724 which was in the name of SPG Green Gold Plantation Ltd. As per the record, accused Satya Dev Sharma was the Chairman and the Managing Director and was authorized to operate the said account. The account opening form is Ex.PW7/B, specimen signature card is Ex.PW7/A, the declaration of nil liability with any other bank by accused Satya Dev Sharma is Ex.PW7/C. Copy of resolution passed in a meeting of board of Directors dated 09.05.1997 is Ex.PW7/D through which it was resolved that the banking accounts be opened with the Vijaya Bank alongwith terms and conditions which were included that accused Satya Dev Sharma, MD was authorized to sign on behalf of company on all documents and forms. The authority letter for collection of FIR No. 494/1998 PS R.K. Puram (EOW) Page- 11 of 56 cheque books of current account No. 2724 is Ex.PW7/E. The list of board of Directors on the letter head of SPG Green Gold Plantation Ltd. is Ex.PW7/F. Photocopy of form No.32 is Mark A and receipt of Registrar of Companies is Mark A1. He also produced the above said records on behalf of Sh. K.R. Hegre, Chief Manager, Vijaya Bank vide letter Ex.PW7/G.
11. W/HC Sushila, Duty Officer was examined as PW8. She deposed that on 29.07.1998, she received a rukka through Ct. Uttam Singh sent by SI Ram Lal. On the basis of rukka, she registered the present FIR and after registration of the same, she handed over the same to Ct. Uttam Singh. She exhibited the copy of FIR as Ex.PW8/A.
12. Sh. Jagdish Aggarwal was examined as PW9. He deposed that on 21.10.1997, he was owner of Alankar Place near Shankar Ashram, Haridwar Rodki Road, Jwalapur, District Haridwar. He prepared the sale agreement with the accused Anil Kumar Sharma to sale the shopping complex of Alankar place shop no. 8/9, first floor in sum of Rs. 2 lacs. He executed the power of attorney in favour of accused Anil Kumar. He received Rs. 1,99,500/- from accused Anil Kumar and balance amount of Rs.500/- was to be taken at the time of registration of FIR No. 494/1998 PS R.K. Puram (EOW) Page- 12 of 56 sale deed on or before 20.10.1999 and possession of above said property was given to accused Anil Kumar to run the office of M/s. SPG Green Gold Plantation Ltd. Accused Anil Kumar told him that he was the director of said company. Accused Anil Kumar opened the office and started running the business for about three months. Thereafter, he locked the abovesaid premises and never visited again at said premises. He gave the photocopy of agreement, power of attorney and will to police at Haridwar which were seized vide memo Ex.PW9/A. Copy of agreement is Mark A, copy of power of attorney is Mark B and copy of will is Mark C.
13. SI Nikhil Singh was examined as PW10. He deposed that on 02.07.2001 since accused Satya Dev Sharma moved an application to surrender himself before the concerned Court in the present case accordingly, on the instruction of Senior Officer, he appeared before the Court and after taking the permission for interrogation and arrest, he formally arrested the accused Satya Dev Sharma and sent him to JC. He also recorded the disclosure statement of accused Satya Dev Sharma which is Ex.PW10/A. Witness correctly identified the accused Satya Dev Sharma before the Court.
FIR No. 494/1998 PS R.K. Puram (EOW) Page- 13 of 56
14. Sh. Raman Babbar was examined as PW11. He deposed that he was registered owner of property bearing khasra No. 89, 90, 91, 92, 93, 96, 97 situated at Village Basapur, Tehsil Budhni, District Sehore, M.P. The said property was 30 acres, out of which 10 acres was sold to SPG Green Gold Plantation Ltd. through its vice president Manjeet Singh, 10 acres of land was sold to SPG Green Gold Plantation Ltd. through its director R.S. Tawar and 10 acres of land was sold to SPG Green Gold Plantation Ltd. through its director i.e. Satya Dev Sharma for a sum of Rs. 4,80,000/- each. The papers were executed on 02.05.1997 for the said property and same was registered at Tehsil Budhni, District Sehore, M.P. Copy of sale deed is Mark A, Mark B, Mark C and D. He received the total amount of Rs. 14,40,000/-. He handed over the possession of the abovesaid property to the respective purchasers and also handed over the original documents to accused Manjeet Singh who met him for the purchase of the above said property in three different names above. Police recorded his statement.
15. HC Suleman Khan was examined as PW12. He deposed that on 25.01.1999, he joined the investigation of the present case alongwith SI Ram Lal Gulati. That day accused Manjeet Singh FIR No. 494/1998 PS R.K. Puram (EOW) Page- 14 of 56 was arrested in this case. Thereafter, he was interrogated and his disclosure statement was recorded which is Ex.PW12/A. At the instance of accused Manjeet Singh, certain documents were seized from his house no. 8108, Sector 8 C (Pocket), Vasant Kunj vide seizure memo Ex.PW12/B. On 26.01.1999, accused Kishan Kant Chauhan was arrested. He was interrogated and his disclosure statement was recorded which is Ex.PW12/C. On 03.02.1999, certain documents were seized vide seizure memo Ex.PW12/D. Thereafter, on 07.09.1999, accused Rakesh Kumar was arrested. He was interrogated and his disclosure statement was recorded which is Ex.PW12/E. His statement was recorded by IO. Witness correctly identified accused Rakesh Kumar and Krishan Kant Chauhan before the Court.
16. Sh. R.D. Kashyap was examined as PW13. He deposed that in the year 1998, he was working as Assistant Registrar of Company, Delhi and Haryana. On 16.09.1998, he sent certain documents to ACP, CBT Section, Crime Branch. The letter is Ex.PW13/A. He produced the certificates of incorporation of SPG, Green Gold Plantation Ltd. (Ex.PA), MOA/AOA (Ex.PB), Form No.1 (Ex.PC), Form No.18 (Ex.PD), Form No.29 (Ex.PF, G, I) and Form No.32 (Ex.PE).
FIR No. 494/1998 PS R.K. Puram (EOW) Page- 15 of 56
17. SI Ikramuddin was examined as PW14. He deposed that on 16.02.1999, he joined the investigation of the case alongwith IO SI Ram Lal. They went to Haridwar for investigation and met Sh. Jagdish Aggarwal who handed over certain photocopy of documents which were seized by IO vide seizue memo alerady Ex.PW9/A.
18. Sh. Kasturi Lal Ahuja was examined as PW15. He deposed that he made investment in SPG Green Gold Plantation Ltd. which was approximately ranging around Rs. 4 to 4.5 lacs. Initially interest of his investment was being repaid but later on the cheques given by the company were dishonored. He gave detailed complaint to police in this regard as his money was not repaid to him which he invested and official had left the office. He gave details to police which is Ex.PW15/A. He produced the original documents in respect of his investment in SPG Green Gold Plantation. Copy of the same are Ex.PW15/B1 to B4, copy of the maturity certificate and affidavit of accused K.K. Chauhan are Ex.PW15/C1 to C3. The copies of cheques alongwith the written memo are Mark X. Witness correctly identified accused Satya Dev Sharma and accused Krishan Kant Chauhan before the Court.
FIR No. 494/1998 PS R.K. Puram (EOW) Page- 16 of 56
19. Sh. R.D. Gupta was examined as PW16. He deposed that he invested around Rs 2 lacs in SPG Green Gold Plantation. His son namely Sandeep Gupta also invested around Rs. 80,000/- in the SPG Green. One official of the company namely Brijesh came to them and later they were introduced to accused Satya Dev Sharma. Some cheques were also issued to them in respect of payment of interest. However, the same were dishonored on presentation. He wrote a complaint to the police which is Ex.PW16/A. Complaint was also made on behalf of his son which is Ex.PW16/B. He marked the copies of cheques as Mark-Z. He further deposed that till date no money was returned back to them. Accused Satya Dev Sharma showed them the rosy picture for making investment on which they parted with the money. Besides him and his son, there were other investors who were also cheated. Witness correctly identified accused Satya Dev Sharma before the Court.
20. Sh. S.N. Aggarwal was examined as PW17. He deposed that in the year 1997, he invested a sum of Rs.15,000/- in SPG Green Gold Plantation Ltd. He came to know about the company through an advertisement and brochures of the abovesaid company and he deposited the above said amount FIR No. 494/1998 PS R.K. Puram (EOW) Page- 17 of 56 through cheque. He received the acknowledgment of the deposit of money in the abovesaid company. The company issued 10 advance post dated cheques including cheques of interest and two FD receipts of the abovesaid amount deposited in the abovesaid company. The cheques were dishonoured on presentation with remarks "insufficient amount". Thereafter, he saw in the newspaper that complaint was made against the abovesaid company for cheating. He made a complaint to the DCP which is Ex.PW17/A. He produced the original record i.e. cheques issued by the company in his name, receipts of FDs issued in his favour and photocopies of the same which are Ex.PW17/X1 to Ex.PW17/X6.
21. Sh. Rajender Singh Tanwar was examined as PW18. He deposed that in October, 1996, he saw an advertisement on behalf of SPG Gold Plantation, inviting deposits from the investors with guaranteed returns. One major i.e. accused Manjeet Singh, Vice-President of the company visited his house at Saket and told him that since he was an Ex-Army Officer, he should believe him and invest the amount by him and his family members. His investment would be 100 % secured and he should not be worried about the investments. He also told him FIR No. 494/1998 PS R.K. Puram (EOW) Page- 18 of 56 that some senior army officers and civil officers were on the board of Directors of the company. On his assurance, he invested Rs.1 lac on 01.11.1996, after which accused Manjeet Singh and Satya Dev Sharma came to his house where his wife namely Smt. Uma Ranjan was also present. They apprised both of them that company's future was really bright as it was mainly dealing in green gold plantation in Madhya Pradesh and in some areas of Punjab and also contemplating to enter in construction work. On their assurance, he further invested Rs.40,000/- on 01.01.1997, in addition his wife Smt. Uma Ranjan invested Rs.40,000/- on 01.01.1997 and his eldest daughter Seema Tanwar invested Rs.50,000/- on 01.01.1997, his son Rajeev Tanwar invested Rs.40,000/- and his daughter Sakshi Tanwar invested Rs.40,000/- on 01.01.1997. In between accused Satya Dev Sharma and accused Manjeet Singh visited his house and told him that they were in dire need of Rs. 2 lacs for meeting out some urgent requirements on loan. But he told them that the amount asked for was not readily available with him. He would try to arrange it in a few days. Accordingly, he loaned him Rs.1,50,000/- on 01.06.1997 for which proper receipt and certificates were given to him. In all Rs. 5,60,000/- FIR No. 494/1998 PS R.K. Puram (EOW) Page- 19 of 56 were invested by him and his family members. Against their total investment, he was given the cheques for a total sum of Rs.8,39,906/- approximately. The cheques were got dishounoured on presentation. He gave his complaint to the police which is Ex.PW18/A. Witness correctly identified accused Satya Dev Sharma as well as accused K.K. Chauhan and Rakesh before the Court.
22. Retired Inspector Ram Lal was examined as PW19. He deposed that on 18.06.1996, a complaint made by Dr. Usha Bhaduri and Dr. Ronan against SPG Green Gold Plantation Ltd. was marked to him for investigation. He prepared the rukka which is Ex.PW19/A and handed over the same to Ct. Uttam Singh for registration of FIR. Accordingly, he went to PS R.K. Puram and got the FIR registered and handed over the copy of FIR and original rukka to him. He recorded the statement of Ct. Uttam Singh. About 15-17 investors also met him and made complaint regarding cheating. He recorded the statement of those complainants under section 161 Cr.P.C. He obtained the documents from Registrar of Companies i.e. Memorandum of Association and Certificate of Incorporation etc. The letter of ROC in this regard is already Ex.PW13/A. Accused Manjeet FIR No. 494/1998 PS R.K. Puram (EOW) Page- 20 of 56 Singh and K.K. Chauhan were already arrested in a case in Kurkshetra, Haryana. Accused persons were summoned through production warrants and they were produced in Patiala House Courts. He arrested accused Manjeet Singh and K.K. Chauhan and recorded their disclosure statements which are already Ex.PW12/A to Ex.PW12/C. He obtained their police custody remand for one day. On 26.01.1999, on the pursuance of disclosure statement of the accused Manjeet Singh, recovery of certain documents i.e minutes of meeting, appointment letter as Vice President etc was effected at the instance of accused Manjeet Singh and same were seized vide seizure memo already Ex.PW12/B. The documents are Ex.P-19-A. During the investigation, Chartered Accountant of the firm SPG Green Gold Plantation Ltd. namely Ramit Kochar handed over the documents related to the firm and same were seized vide seizure memo already Ex.PW12/D. He also came to know that accused persons purchased land properties in Haridwar and M.P. On 16.02.1999, he alongwith HC Ikramuddin went to Haridwar and obtained documents from the owner of shops, who sold the shops to the accused persons/in the name of SPG Green Gold Plantation Ltd. through its director i.e. accused Anil FIR No. 494/1998 PS R.K. Puram (EOW) Page- 21 of 56 Kumar Sharma. He prepared the seizure memo which is Ex.PW19/B. The documents which were obtained from Jagdish Kumar Aggarwal are Ex.P-19-B. On 09.02.1999, he alongwith HC Ikramuddin reached at the office of Sub-Registrar, Tehsil- Burni, District-Sihore, M.P. He made application to Sub- Registrar which is Ex.PW19/C. Certified copies of documents obtained from the office of Sub-Registrar are Ex.PW19/D. It was also revealed that 30 acres of land was purchased in the name of firm SPG Green Gold Plantation Ltd. and the registry was executed in the name of accused Manjeet Singh, R.S. Tanwar and S.D. Sharma. He moved an application in the concerned Court for the attachment of property of the accused persons. He obtained the bank statement from Vijaya Bank, Faridabad, Vijaya Bank, Delhi, Vijaya Bank,Ghaziabad, SBI, Delhi, OBC, Faridabad, Bank of Punjab Ltd., Connaught Place, Delhi of the SPG Green Gold Plantation Ltd. and cited all the concerned persons as witnesses. During the investigation, NBWs were obtained against accused Satya Dev Sharma, Kamlesh Sharma, Anil Kumar Sharma and Rakesh Kumar, all the Directors of SPG Green Gold Plantation Ltd. Thereafter, he was transferred to PS Kirti Nagar and further investigation was FIR No. 494/1998 PS R.K. Puram (EOW) Page- 22 of 56 handed over to SI Ashok Kumar.
23. Sh. Yatender Verma, Assistant Manager, Vijaya Bank, Ghaziabad, U.P. was examined as PW20. He produced the photocopies of account opening form of account No.2302 in the name of SPG Green Gold Plantation Ltd. and the supporting documents filed by the company at that time. He also produced the photocopies of account opening form and supporting documents. The same are Mark A1 to A26. He also produced the original account opening form of account bearing No.2302 in the name of SPG Green Gold Plantation Ltd. alongwith supporting documents filed at the time of opening the account which is Ex.PW20/A.
24. Sh. Dharam Pal, Arms Guard, Vijaya Bank, Faridabad, Haryana was examined as PW21. He deposed that as per the bank record, the account opening form of current account No.3072 in the name of SPG Green Gold Plantation Ltd. was not available on record. He produced a letter signed by Chief Manager, Vijaya Bank mentioning that the above said record was not available in the bank record. The letter is Ex.PW21/A. He also produced the photocopy of certificate of incorporation, certificate of commencement of business and memorandum of FIR No. 494/1998 PS R.K. Puram (EOW) Page- 23 of 56 association of SPG Green Gold Plantation Ltd. The same are Mark X.
25. Sh. Rakesh Kumar, Assistant Manager, UCO Bank, Mayapuri was examined as PW22. He produced the attested photocopy of account opening form of account bearing No.6051 in the name of accused K.K. Chauhan. He also produced the attested copy of statement of the abovesaid account which are Ex.PW22/A and Ex.PW22/B.
26. Smt. Roma Kumari Sharma, Manager, Punjab & Sindh bank, Hemkunt Colony, G.K.-I was examined as PW23. She produced the photocopy of account opening form of account bearing No.3423 of accused Manjeet Singh. As per their record, the original account opening form was handed over to Crime Branch. The photocopy of the same is Mark B1. She also produced the account statement of the above said account from the period 06.11.2001 to 04.09.2014. The same is Mark B-2.
27. Kumari Sudha Bhatnagar was examined as PW24. She denied her signatures on the complaint Ex.PW24/1 (already marked P2). Three pages showing the copy of cheques alongwith receipts vide Mark 24/1 were shown to her to which FIR No. 494/1998 PS R.K. Puram (EOW) Page- 24 of 56 she admitted that the same cheques were given to her by the Abhinva Plantation Ltd.
28. Sh. Santosh Kumar Bind, Dy. Manager, SBI, Janpath was examined as PW25. He produced the system generated statements of account bearing No. 01000074041 from the period of 04.12.1996 till 30.03.2002. The same is Ex.PW25/1. He also produced the certificate under section 65 B of Indian Evidence Act which is Ex.PW25/2. Letter dated 13.01.2015 showing that the account opening form had been destroyed being old accounts which is Ex.PW25/3.
29. Dr. Usha Bhadury was examined as 26. She deposed that at the time of investment i.e in the year 1997 she was residing at Flat No.7501 Sector-D pocket-VII Vasant Kunj. She invested approximately Rs. 1,55,000/- with M/s. SPG Green Gold Plantation Ltd. During August and November, 1997 they came to across advertisements published in the newspapers particularly in The Hindustan Times inviting deposits and investments. The aforesaid advertisements were published by M/s. SPG Green Gold Plantation Ltd. with the objective of inviting innocent people like them to invest in their company. Being induced by the aforesaid advertisement, they made FIR No. 494/1998 PS R.K. Puram (EOW) Page- 25 of 56 payment to M/s. SPG Green Gold Plantation Ltd incorporated under the Companies Act having its registered office at Tughlkabad Extension, New Delhi and corporate office loated at Bikaji Cama Place, New Delhi and its head office at Janpath, New Delhi. She alongwith her husband invested money in the aforesaid company by way of three FDs. Firstly, money back scheme FD dated 14.08.1997. In this scheme they invested Rs.30,000/- for a period of one year. Copy of said FD is Ex.PW26/1. Second was also money back scheme wherein they invested Rs.50,000/- on 28.11.1997 for a period of one year. Copy of said scheme is Ex.PW26/2 and third FD was in the scheme of Agro Bond wherein Rs.75,000/- were invested by her husband and her son Rahul Bhadury on 16.08.1997 for a period of five years. Copy of FD is Ex.PW26/3. As per the said scheme, they were given three post dated cheques bearing numbers 649231, 649232 and 649233 dated 14.02.1998, 14.08.1998 and 14.08.1998, all drawn on Oriental Bank of Commerce and IT Faridabad Branch. Copies of same are Ex.PW26/4. Apart from the said cheques, they were also given 12 monthly post dated cheques bearing numbers 158376 to 158377 dated 28.12.1997 to 28.11.1998 respectively for an FIR No. 494/1998 PS R.K. Puram (EOW) Page- 26 of 56 amount of Rs.1,000/- each. Copies of said cheques are Ex.PW26/5 and one post dated cheque bearing number 158388 dated 28.11.1998 for sum of Rs.50,000/- given against their investment made in money back scheme of Rs.50,000/-. Copy of this cheque is Ex.PW26/6. In reference of the third investment made by her son and her husband in Agro Bond, post dated cheque bearing number 131873 to 131876 for amount of Rs.16,500/- each and one post dated cheque bearing number 131877 for an amount of Rs.1,50,000/- were issued to them by M/s. SPG Green Gold Plantation Ltd. Copies of these cheques are Ex.PW26/7. The first cheque of Rs. 1,000/- was dishonoured on presentation. After dishonour of the cheque in the year 1998, they went to Corporate Office of M/s. SPG Green Gold Planation Ltd at Bhikaji Cama Place and gave a letter to accused Manjit Singh regarding premature encashment of all the investments as they were in urgent need of funds. Copy of letter received on 02.01.1998 is Ex.PW26/8. She further deposed that when she alongwith her husband visited the office in April, 1998, they found that the corporate office had been closed and were informed that the office had been shifted to Tugalkabad Extension. They immediately went to FIR No. 494/1998 PS R.K. Puram (EOW) Page- 27 of 56 Tugalkabad Extension and found the office closed. Later, it was also found that the rent of the office was also due. Thereafter, they reached at the Registrar of Companies office and obtained the address of all the Directors, Companies Executives and Chartered Accountant of the company. They tried all possible ways to trace out the Directors of the company but all in vain. They could only get accused Anil Sharma's mobile number was the brother-in-law of accused Satya Dev Sharma. Copy of advertisement of the company is Ex.PW26/9. Copy of brochure of the company is Ex.PW26/10. Out of aforesaid cheques, cheques bearing numbers 158376 to 158379 of Rs.1,000/- each dated 28.12.1997, 28.01.1998, 28.02.1998 and 28.03.1998, all drawn on Bank of Punjab Ltd., cheque bearing number 131873 drawn on Vijaya Bank for sum of Rs. 16,500/- dated 16.08.1998, cheque of OBC bearing number 649233 for sum of Rs.30,000/- dated 14.08.1998, cheques drawn on OBC dated 649231 to 649232 for sum of Rs.3,600/- each dated 14.02.1998 and 14.08.1998, all the cheques were issued in the name of her husband and all the aforesaid cheques were dishonoured due to insufficient funds. The report of concerned bank officials regarding non-encashment of cheques/bounced is Ex.PW26/11. FIR No. 494/1998 PS R.K. Puram (EOW) Page- 28 of 56 Her complaint is Ex.PW26/A.
30. Sh. Hari Narayan, Patwari was examined as PW27. He produced the certified copies of records pertaining to Khasra No.89/2016, 90/2016, 91/2016, 92/2016, 93/2016, 96/2016, 97/2016, Khasra No.89/2011, 90/2011, 91/2011, 92/2011, 93/2011, 96/2011, 97/2011 and khasra No.89/2017, 90/2017, 91/2017, 92/2017, 93/2017, 96/2017 and 97/2017 of village Basapur, Tehsil, Budni, District Sihor, M.P. The Namantaran Panji and Khasra of the above said land are Ex.PW27/A1 to Ex.PW27/A5.
31. SI Kailash was examined as PW28. He deposed that on 17.09.2015, bail application of accused Anil Kumar Sharma for reply was marked to him in the present case as accused Anil Kumar Sharma was arrested as a proclaimed offender in the present case. On 21.09.2015, reply of bail application was filed, accused Anil Kumar Sharma was interrogated in Saket Court after permission from Court and arrested as per law vide arrest memo Ex.PW28/A. His disclosure statement was also recorded vide disclosure statement memo Ex.PW28/B and sent to judicial custody. On 07.10.2015, accused Anil Kumar Sharma was interrogated and his supplementary disclosure statement FIR No. 494/1998 PS R.K. Puram (EOW) Page- 29 of 56 was again recorded vide disclosure statement Ex.PW28/C. After completion of investigation, supplementary charge sheet was filed by him.
32. The entire incriminating evidence brought on record against the accused persons was put to them and their statement under section 313 CrPC were recorded separately.
33. It is stated by accused Satya Dev Sharma that he is innocent and has been falsely implicated The company was incorporated in year 1995. Major Manjeet Singh and R.S. Tanwar were the founding members of the company. He was around 22 years at that time. The schemes for investments were introduced by them. The schemes were for a period of six months, one year, three months etc. Major Manjeet Singh and R.S. Tanwar used to deal with all the investors. Whatever money of investors during that period was matured were duly paid to them through SBI Account, Connaught Place. They used to deal with day to day affairs of company and he used to follow whatever they directed him to do. Company purchased 200 bigha of land at M.P., 100 bigha at District Ambala, 75 bigha at Kurukshetra and two shops at Haridwar in the name of company. One regulation of SEBI came during that period i.e. 1998 in which it FIR No. 494/1998 PS R.K. Puram (EOW) Page- 30 of 56 was mentioned that these companies would not do any fresh business neither they would sell any of their property. Because of this there was crisis of funds in the company and company was not in a position to pay to the investors and later on in March, 1999 the company went into liquidation by the order of Hon'ble High Court. Company made the payments to several investors during that period. They never induced any person to come forward and invest the money in the company. All the details were duly mentioned in the brochure. He was in JC for the period of eight years from the period of 1998 till 2006, July and also settled with all the investors on his own. He had no personal dealing with the investors and never cheated them.
34. It is stated by accused Anil Kumar Sharma that he is innocent and has been falsey implicated in the present case. He was not associated with this company as he was neither the Director nor the employee in the company. He never visited the office of company nor signed any document of the company. He had not dealt with any of the investor neither he received anything from the company.
35. It is stated by accused K.K. Chuhan that he is innocent and has been falsely implicated. He further stated that he was FIR No. 494/1998 PS R.K. Puram (EOW) Page- 31 of 56 working for a automobile finance company M/s. KMF Ltd. situated at Karol Bagh, New Delhi. During this time he saw a jobs advertisement in the Times of India Ascent Column. He approached this company for better prospects and after having met the senior government retired officers who took his interview and offered him a job in the company vide appointment letter dated 10.02.1997. This was with a probation period of only six months and during this tenure he was assigned various office jobs by his superior officers. Later after six months he was issued a letter wherein a copy of resolution was passed by Board of Directors on dated 09.08.1997 wherein he alongwith few officers who were assigned the task of signing certain documents on behalf of company and he took it as a routine job profile. After few months around October, 1997 there was an order from SEBI wherein all finance investment leasing and plantation companies were debarred from accepting fresh deposits from customers and were also directed not to dispose of any of their properties. Newspapers were filled with this type of news during that period and there was chaos and complete rucus and lot of investors and interest holders started coming into flocks asking for immediate and spot refund of FIR No. 494/1998 PS R.K. Puram (EOW) Page- 32 of 56 their investments which the company did in many of the cases but this led to crisis of funds in the company not only the investors, the company was not even able to pay the salary to its employees and even his salary cheques of Rs.50,000/- for November, 1997 and another of Rs.30,000/- for January, 1998 too were returned unpaid due to insufficient funds in the company's account. He requested to release his salary to the Management vide letter dated 11.02.1998 otherwise to accept his resignation with immediate effect as due to non-payment of salaries from last few months his family was also in financial crises. Later on when he realized that there is no immediate recovery therefore, he submitted his resignation on 06.03.1998 duly acknowledged by HR Manager. He also sent copies of the same vide registered post to Vice-President of company Major Manjeet Singh as well as the Director of company. Later on he joined another company namely Citi Bank Shelters wherein he was looking after home loan cases as he had to look after his family so he had to do one job or other. He never met any investors or told them to deposit any investment in the company nor he cheated anybody.
36. It is stated by accused Rakesh Kumar that he is innocent and FIR No. 494/1998 PS R.K. Puram (EOW) Page- 33 of 56 has been falsely implicated in the present case. He stated that he duly tendered his resignation on 30.09.1996. He only visited the office of company once or twice. He never dealt with the investors of the company neither he had signed anywhere. Whatever dealings happened had happened behind his back. By that time, he had already resigned. SI Ashok arrested him in the year 1999 and thereafter, he remained in JC for around 1 ½ years.
37. Accused Satya Dev Sharma examined himself as DW1. He deposed that in the year 1995, SPG Green Gold i.e a plantation company was registered with ROC, Delhi. Major Manjeet Singh got it registered through his personal CA Mr. Ramit Kochar. The work of the company was to invest in real estate. There were different schemes for general public for the period of three months, six months, one year, three years etc. Company used to receive money from investors and after maturity of the scheme has paid to several of investors. Company also purchased several lands. Thereafter, the regulation of SEBI was issued in the year 1997-98. The same was published in the newspaper which is Ex.DW1/A. In the said newspaper, the name of their company was also mentioned. As per this FIR No. 494/1998 PS R.K. Puram (EOW) Page- 34 of 56 regulation, company was not allowed to do fresh business nor was allowed to dispose of any of its properties. Till the time, company was having money, company was paying to its investors. Thereafter, because of this regulation, there was a financial crunch because of which company was unable to pay to its investors. Thereafter, company went into liquidation by the order of Hon'ble High Court of Delhi. The copy of order is marked as Mark DA. During the time, he was in JC, SEBI sent him me one notice which is Mark DB. He remained in JC in this case from the period of 28.05.1999 and was released on July, 2007. Copy of certification of JC is Mark DC. Thereafter, he settled the matter with other investors also. Major Manjeet Singh was the main person who used to deal with the investors. He was only a sleeping partner. Accused Anil Kumar Sharma was not the Director in the company.
38. Accused K.K. Chauhan examined himself as DW2. He deposed that he joined SPG Green Gold Plantation Ltd on 10.01.1997 as an Assistant Manager. He was assigned back office job. Thereafter, he resigned on 17.02.1998. He had no dealings with the investors. He also sent his resignation through post. He did not receive the salary from the company. His FIR No. 494/1998 PS R.K. Puram (EOW) Page- 35 of 56 cheques of salary were also dishonoured. He was issued certain directions from the Director of company to sign certain documents. He only worked for ten months. He submitted his original documents to SI Ram Lal on 28.04.1998. He remained in JC for period of eight months. Copy of appointment letter, resignation, dishonoured cheques, salary slips, speed post receipts, resolution dated 09.08.1997, statement to Inspector, Crime Branch dated 28.04.1998 are Mark DD.
39. Accused Rakesh Kumar examined himself as DW3. He deposed that he joined SPG Green Gold Plantation Ltd in the month of November, 1995. Thereafter, he resigned from the company in the month of September, 1996. The same was duly conveyed to Registrar of Companies. He had no dealings with the investors. He never received any money from the company. He remained in JC for the period of 1 ½ years. Major Manjeet Singh used to deal with the investors. He was having whole sole authority. He had not cheated anyone. The copy of resignation letter and ROC certificate are Mark DE.
40. Accused Anil Kumar Sharma examined himself as DW4. He deposed that he was not associated with SPG Green Gold in any manner. He was neither the Director nor signed any form of FIR No. 494/1998 PS R.K. Puram (EOW) Page- 36 of 56 ROC. He went to Haridwar on instructions of Major Manjeet Singh. He had not dealt with or met any of the investors. He never visited the office of company. He had not received any money from the company.
41. I have heard Ld. APP for the State and Ld. counsels for accused persons and have also perused the judicial file carefully.
42. It is vehemently argued on behalf of accused persons that the dispute is between the complainants and the company M/s SPG Gold Plantation Ltd which is a separate and independent corporate entity and no vicarious liability can be fastened on the Directors and the General Manager of the company. It is further argued that the Directors and General Managers of the company cannot be prosecuted since the company has not been summoned as an accused.
43. There is no denial of the fact that the acts done by the Directors of the company were actually on behalf of the company and that the company is not an accused before the Court. But it cannot be denied that in case the prosecution is able to prove that the Directors have merely used the company FIR No. 494/1998 PS R.K. Puram (EOW) Page- 37 of 56 as Cloak to defraud the complainants, then the Court can always lift the corporate vell and the Directors who were the head and brain behind the offence and were the actual offenders can be prosecuted despite the fact that the transaction was portrayed as a transaction on behalf of the company.
44. Reliance is being placed on the judgment titled as Delhi Development Authority Vs. Skipper Construction Company (P) Ltd reported as AIR 1996 SC 2005 where it has been held by the Hon'ble Supreme Court that "The concept of corporate entity was evolved to encourage and promote trade and commerce but not to commit illegalities or to defraud people. Where, therefore, the corporate character is employed for the purpose of committing illegality or for defrauding others, the Court would ignore the corporate character and will look at the reality behind the corporate vell so as to enable it to pass appropriate orders to do justice between the parties concerned."
Further, it has been held by the Hon'ble Supreme Court in judgment titled as " Juggilal Kamlapat Vs. Commissioner of Income-tax, UP reported as AIR 1969 SC 932 that "........It is true that from juristic point of view of company is a legal FIR No. 494/1998 PS R.K. Puram (EOW) Page- 38 of 56 personality entirely distinct from its members and the company is capable of enjoying rights and being subjected to duties which are not the same as those enjoyed or borne by its members. But in certain exceptional cases the Court it entitled to lift the vell of corporate entity and to pay regard to the economic realities behind the legal facade. For example the Court has power to disregard the corporate entity if it is used for tax evasion or to circumvent tax obligation or to perpetrate fraud......"
45. In view of the aforesaid law as laid down the fact that company is not an accused does not absolve the liability of the Directors who are arrayed as accused persons before the Court.
46. Accused Rakesh Kumar, Krishan Kant Chauhan and Satya Dev Sharma have been charged under section 406 IPC. The essential ingredients of the said offence are as under:-
Section 406 IPC prescribes punishment for criminal breach of trust as defined in Section 405 IPC. For the offence punishable under section 406 iPC, the following conditions are required to be fulfilled:-
(i) that the accused was entrusted with property or with dominion over it and FIR No. 494/1998 PS R.K. Puram (EOW) Page- 39 of 56
(ii) that he (a) misappropriated it, or (b) converted it to his own use, or (c) used it, or (d) disposed of it The gist of the offence is misappropriation done in a dishonest manner. There are two distinct parts of the said offence. The first involves the fact of entrustment, where in an obligation arises in relation to the property over which dominion or control is acquired. The second part deals with misappropriation which should be contrary to the terms of the obligation which is created. Thus, once it is proved that the beneficial interest in the property was vested in some other person other than the accused and the accused has held that property on behalf of that person, appropriation of that beneficial interest in the property by the accused for his own use amounts to 'criminal breach of trust'.
Misappropriation:- Dishonest misappropriation the essence of this section. Dishonesty is as defined in section 24 IPC, causing wrongful gain or wrongful loss to a person. The meaning of wrongful gain and wrongful loss is defined in section 23 IPC. In order to constitute an offence, it is not enough to establish that the money has not been accounted for or FIR No. 494/1998 PS R.K. Puram (EOW) Page- 40 of 56 mismanaged. It has to be established that the accused has dishonestly put the property to his own use or to some unauthorized use. Dishonest intention to misappropriate is a crucial fact to be proved to bring home the charge of criminal breach of trust.
In the case of State of Gujarat Vs. Jaswantila Nathalal, it has been held that the government sold cement to the accused only on the condition that it will be used for construction work.
However, a portion of the cement purchased was diverted to a godown. The accused was sought to be prosecuted for criminal breach of trust. The Hon'ble Supreme Court held that the expression 'entrustment' carries with it the implication that the person handing over any property or on whose behalf that property is handed over to another, continue to be its owner. Further, the person handing over the property must have confidence in the person taking the property, so as to create a fiductary relationship between them. A mere transaction of sale cannot amount to an entrusetment. If the accused had violated the conditions of purchase, the only remedy is to prosecute him under law relating cement control. But no offence of criminal FIR No. 494/1998 PS R.K. Puram (EOW) Page- 41 of 56 breach of trust was made out.
47. The other aspects have also been considered by the Supreme Court on numerous occasions. In 2002 SCC (Crl) 129 (S.W. Palanitkar and Ors. Vs. State of Bihar and Anr,), the Supreme Court held that " without mens rea a breach of trust may not result in criminal breach of trust. Every breach of trust may not result in penal offence of criminal breach of trust unless there is evidence of a mental act of fraudulent misappropriation. An act of breach of trust involves a civil wrong, in respect of which the person wronged may seek his redress for damages in a civil Court, but a breach of trust with mens rea gives rise to a criminal prosecution as well."
48. Reverting to the facts of the present case, it would be essential that the evidence led by the prosecution to prove the said offence is discussed.
49. It is alleged against the three accused persons that all the three in connivance with each other were entrusted with an amount of Rs. 1,50,000/- of complainant Dr. Usha Bhadury and Dr. Ronen Bhadury alognwith other witnesses mentioned in the list of witnesses. Complainant Dr. Usha Bhadury was examined FIR No. 494/1998 PS R.K. Puram (EOW) Page- 42 of 56 as PW26. She deposed that she alongwith her husband came across an advertisement published in the newspaper Hindustan Times in the year 1997. Investment was made with M/s. SPG Green Gold Plantation Ltd. In consideration of the investment made by them, three post dated cheques were given to them. Alongwith three post dated cheques 12 monthly post dated cheques were given to them. Further, it was also submitted that her son Rahul had also invested in the company. The first cheque in the sum of Rs. 1,000/- when presented was dishonoured. She approached the office of company where they informed that the cheques be again represented in the bank which will be honoured. The cheques given to them were never honoured. Hence, the complaint was filed. Despite raising the demand for return of money, the same was never returned.
50. The other investors examined by the prosecution are PW1 who deposed that he deposited certain amount in the company and was issued 13 cheques. The first FD dated 01.08.1998 yielded interest till February, 1999 but the later cheques were dishonoured. He was informed by SEBI that the company has gone into liquidation and that he should approach the Official Liquidator. In his cross examination, the said witness stated that FIR No. 494/1998 PS R.K. Puram (EOW) Page- 43 of 56 he was earning an interest 11% in the bank and the company offered interest at the rate of 24%. So he voluntarily and consciously took the risk of earning additional 13%.
51. PW4 Sh. Lalit Mohan Chawla settled with the company and did not raise any claim.
52. PW5 Sh. Om Prakash Sikka settled the matter and did not raise claim.
53. PW15 Sh. Kasturi Lal Ahuja deposed that he invested Rs. 4 to 4.5 lacs in the company. Initially interest of investment was repaid but the later cheques got dishonoured.
54. PW16 Sh. R.D. Gupta deposed that he invested Rs. 2 lacs in the company. The cheques given to them for payment of interest were dishonoured. Hence, he filed the complaint before the police.
55. PW17 Sh. S.N. Aggarwal deposed that he had invested a sum of Rs. 15,000/- in the company and 10 advance post dated chques were issued alongwith two FD receipts and interest cheques. The cheques were dishonoured on presentation. He filed a complaint against the company. When he came to know from the newspaper that a complaint is already pending against FIR No. 494/1998 PS R.K. Puram (EOW) Page- 44 of 56 the company. He later filed his claim before Official Liquidator.
56. PW18 Sh. Rajender Singh Tanwar deposed that he had invested money on behalf of himself, his wife and two daughters and son. The cheques issued by the company against the total investment were dishonoured. He filed the complaint with the police.
57. PW 24 Kumari Sudha Bhatnagar deposed that she invested money in Abhinav Plantation. The cheques given to her were dishonoured. She could not produce any document to substantiate her claim. She did not even remember the name of the company in which she invested the amount.
58. Prosecution examined the aforesaid witnesses to prove that the money was invested in the company and the same was misappropriated by the accused persons.
59. In order to bring home the charge, the prosecution is required to prove the entrustment of the property as well as its misappropriation by the accused. In order to prove the misappropriation, prosecution examined PW2 Sh. Ajay Kumar, Clerk from OBC Bank who produced the record of the account in the name of the company. The authorized signatory of the FIR No. 494/1998 PS R.K. Puram (EOW) Page- 45 of 56 said account was accused Satya Dev Sharma.
60. PW7 Sh. Ramesh C. Upadhyay, Assistant Manager, Vijaya Bank proved that accused Satya Dev Sharma was the authorized signatory and was authorized to operate the current account opened in the name of the company.
61. PW20 Sh. Yatender Verma, Assistant Manager, Vijaya Bank produced the account opening form of the company but he could not prove who operated the said account.
62. PW21 Sh. Dharampal, Arms Guard form Vijaya Bank could not produce any record of the company's account with the bank.
63. PW25 Santosh Kumari Bind, Deputy Manager, State Bank of India produced the statement of account of the company in the bank. She did not produce any document to prove that who was the authorized signatory of the bank account.
64. Account details of none of the accused persons have been brought on record to prove that the money of the witnesses invested in the company was misappropriated by the accused persons for their own use. Absolutely no evidence has been brought on record to show that the money invested by the investors was actually used by the accused persons in any FIR No. 494/1998 PS R.K. Puram (EOW) Page- 46 of 56 manner. Moreover, it has come on record that the company has already gone into liquidation and the claims of the investors are dealt with by the Official Liquidator which has also been corroborated in the testimony of PW17 Sh. S.N. Aggarwal who categorically stated that the liquidation of the company is under process and he applied for his claim with the Official Liquidator.
65. It has been brought on record that certain properties were purchased in the name of company through its Directors. The properties had to be purchased through its Directors as the company works through its Director, but no evidence has been led to prove that the properties were used by Directors for personal use.
66. Once the prosecution has failed to prove that the invested money was misappropriated by the present accused persons, offence under section 406 IPC cannot be said to have been committed by the accused persons.
67. All the four accused persons have been charged with the offence under section 420 IPC for issuing post dated cheques and FDRs to the investors which were dishonoured on FIR No. 494/1998 PS R.K. Puram (EOW) Page- 47 of 56 presentation.
68. Before discerning the aforesaid evidence, it would be pertinent to discuss the provision of section 420 IPC.
Cheating has been defined in section 415 which is as follows:
a. The accused must have induced fraudulently of dishonestly a person, b.The deceived should be induced to deliver any property to any person or to consent that any person shall retain any property.
c. If the person deceived, must be intentionally induced by the wrong doer to do or omit to do anything he would not do or omit if such deceived person was not so deceived.
d. The deceived should suffer any damage or harm in body, mind, reputation or property by the deceitful act of the wrong doer.
e. A dishonest concealment of facts is also treated as a cheating.
Section 420 is an aggravated form of cheating. Indian Penal Code defines offence under section 420 IPC that whoever cheats and thereby dishonestly induces the person deceived to deliver any property to FIR No. 494/1998 PS R.K. Puram (EOW) Page- 48 of 56 any person, or to make, alter or destroy the whole or any part of a valuable security, or anything which is signed or sealed, and which is capable of being covered into a valuable security, shall be punished with imprisonment of either description for a term which may extend to seven years, and shall also be liable to fine.
69. In the instant case, the state machinery was brought into action on complaint of one Dr. Usha Bhadury who has been examined as PW26 Perusal of her testimony would reveal that she invested in the company upon coming across an advertisement by the company. Upon seeing the advertisement, she called the company and two representatives of the company namely Ashok Mahapatra and Bibhash Kumar met her. In her entire testimony, she has not stated that she was induced by any of the accused persons to invest in the company.
70. The testimony of other investors examined by the prosecution on discernment would reveal that one Sh. Kailash Chander/PW1 had also invested money in the company. Few cheques handed over to him were honoured whereas the other cheques got dishonoured. He was informed that due to direction FIR No. 494/1998 PS R.K. Puram (EOW) Page- 49 of 56 of SEBI, the cheques were blocked. In his cross examination, he admitted that he had voluntarily, consciously and deliberately invested the amount as he was expecting an additional earning. He does not mention the name of any accused persons for having induced him to invest the money in the company.
71. PW4 Sh. Lalit Mohan Chawla and PW5 Sh. Om Prakash Sikka deposed that they have already received land in lieu of investment and they have no grievance against accused persons.
72. PW15 Sh. Kasturi Lal also deposed that initially he received interest of his investment but later the cheques got dishonoured.
73. PW16 Sh. R.D. Gupta deposed that one Brijesh from the company had approached them and later they were introduced to accused Satya Dev Sharma. He further deposed that accused Satya Dev Sharma showed him rosy piciture for investment. On which, he parted with money.
74. PW17 Sh. S.N. Aggarwal stated that he has already filed his claim before the Official Liquidator. He further stated that none of the accused in the present case has visited his house at the time when made the investment.
FIR No. 494/1998 PS R.K. Puram (EOW) Page- 50 of 56
75. PW18 Sh. Rajender Singh Tanwar deposed that he was told by accused Manjeet Singh that investment is 100% secured and on this he alongwith his family members invested in the company. The cheques given to him were dishonoured. He did not produce any documents to substantiate his statement.
During his cross examination, he was shown a brochure of the company in which his name appeared as Director. He also admitted his photographs were published in the newspaper for promotion of company. He admitted that he did not file any complaint against the Directors for doing the same.
76. As per PW11 Sh. Raman Babbar, he sold his property to company through its Vice President Manjeet Singh and its Director R.S. Tanwar.
77. From the testimony of the aforesaid witnesses not much credence can be given to it as he himself has been shown as Promoter/Director in the brochure as well as newspaper. Even the land as per the testimony of PW11 Sh. Raman Babbar was purchased through him as a Director of the company. Now he has deposed against the accused persons in order to absolve his liability.
FIR No. 494/1998 PS R.K. Puram (EOW) Page- 51 of 56
78. PW24 Kumari Sudha Bhatnagar did not produce any documents to substantiate her claim of investment in the company.
79. On discerning the testimonies of all four investors, it has come on record that few of the investors were paid interest initially but later the cheques were dishonoured. PW4 and PW5 have got their money back. PW1 Sh. Kailash Chander has fairly conceded that he made the investment voluntarily without any inducement from any end. PW17 Sh. S.N. Aggarwal filed his claim before the Official Liquidator and also has not raised any claim against the accused persons or the company.
80. PW26 Dr. Usha Bhadury as well as PW16 Sh. R.D. Gupta are the two investors who have not got their money back. PW26 in her testimony had not named any of the accused persons to have induced to make investment. Hence, the presumption is that she either made investment on inducement of two alleged employees of company namely Ashok Mahapatra or Bibhash or on the basis of the advertisement given on behalf of the company in the newspaper.
81. Once prosecution has failed to prove that any of the accused FIR No. 494/1998 PS R.K. Puram (EOW) Page- 52 of 56 persons induced the investors to make investment, the first major requirement to bring home the charge under section 420 IPC is not fulfiled. Moreover, the dishonest intention which is another ingredient of section 420 IPC is required to be present since inception. In the present case, few of the investors have deposed that initially, their cheques were honoured but later the other cheques got dishonoured. Hence, it cannot be said that the accused persons who were the Directors/General Managers of the company had dishonest intention since the inception.
82. When the accused persons did not intend to cheat any of the investors who were examined, then the presumption weighs in their favour that they did not even have the intention to cheat PW16 Sh. R.D. Gupta.
83. The defence taken by the accused persons is that due to the guidelines issued by the SEBI, they were restrained from returning the money to the investors owing to which the money could not be returned or the interest could not be paid.
84. In order to prove the same, the accused persons themselves stepped into the witness box and filed regulations of the SEBI Ex.DW1/A. As per which, the company was not allowed to do FIR No. 494/1998 PS R.K. Puram (EOW) Page- 53 of 56 fresh business nor allowed to dispose of any property. It is categorically deposed by DW1 Satya Dev Sharma in his testimony that till the time the company had money, the same was paid to the investors. The fact is also substantiated by testimony of PW1 Sh. Kailash Chander and PW15 Sh. Kasturi Lal Ahuja. Thereafter, the company went into liquidation. Hence, the interest could not be paid to the investors.
85. The accused persons failed to produce the certified copies of SEBI Guidelines as per which they were restrained from dealing with the money in the company. However, it has come in the testimony of PW1 Sh. Kailash Chand that he had received a letter from SEBI informing him that the Hon'ble High Court has ordered the winding up of the company. Hence, it can be presumed that the business of the company was stalled to an extent due to certain directions from SEBI.
86. Dishonest intention in the mind of the accused persons since the inception has not been proved beyond reasonable doubt by the prosecution hence, the benefit accrues in favour of accused persons.
87. The prosecution has thus failed to prove that offence under FIR No. 494/1998 PS R.K. Puram (EOW) Page- 54 of 56 section 420 IPC was committed by accused persons.
88. The accused persons have also been charged with the substantive offence under section 120B IPC.
89. Though the conspiracy is always hatched in secrecy and no direct evidence is available to prove the said offence. But the prosecution has to atleast prove on record the meeting of minds of the accused persons to bring home the charge.
90. In the instant case, presence or inducement of the investors by any two persons has not been brought on record. No witness has been examined to prove the modus operandi of the accused persons to commit the alleged offences. There is absolutely no evidence brought on record to prove any interaction planning or meeting of minds between the accused persons. In absence of any evidence brought on record by the prosecution, the offence cannot be said to have been committed.
91. It is a settled proposition of criminal law that prosecution is supposed to prove its case beyond reasonable doubt by leading reliable, cogent and convincing evidence. Further it is a settled proposition of criminal law that in order to prove its case, prosecution is supposed to stand on its own legs and it cannot FIR No. 494/1998 PS R.K. Puram (EOW) Page- 55 of 56 derive any benefit whatsoever from the weaknesses, if any, of the defence of the accused. Further burden of proof of the version of the prosecution in a criminal trial throughout the trial is on the prosecution and it never shifts on to the accused. Also, accused is entitled to the benefit of every reasonable doubt in the prosecution story and such reasonable doubt entitles the accused to acquittal.
92. In view of the above discussion, the prosecution has miserably failed to prove the guilt of accused persons, the benefit of which accrues in their favour. They are accordingly acquitted for the offence under section 406/420/120B IPC.
Announced in the open
Court on 13.09.2018 (POOJA TALWAR)
CMM (South), Saket Courts,
New Delhi
Certified that this Judgment contains 56 pages and each page is signed by me.
(POOJA TALWAR) CMM (South), Saket Courts, New Delhi FIR No. 494/1998 PS R.K. Puram (EOW) Page- 56 of 56