Delhi District Court
Cc No.345/19 Cbi vs . Ravinder Kumar Joshi And Ors. Page 1 on 8 June, 2023
IN THE COURT OF MOHD. FARRUKH
SPECIAL JUDGE (P C ACT) (C B I)-11
ROUSE AVENUE COURT COMPLEX, DELHI
CC No.: 345/19
RC No. 9A-2006-CBI-ACB-New Delhi
Branch - CBI/ACB/ND
U/s: 120-B, 420, 467 & 471 IPC and Section 13(2) read with 13
(1)(d) of PC Act, 1988.
CNR No.: DLCT11-001399-2019
Central Bureau of Investigation
Versus
1. Ravinder Kumar Joshi (Accused No.1)
S/o Late Sh. G.P. Joshi
Occupation : Ex-Govt. Servant, AGM,
UCO Bank, High Court Branch.
Address:
A-303, Plot-80,
Delhi Rajdhani Apartments,
IP Extension, Delhi
New Address:
A-401, Civitech Sampriti,
Sector-77, Noida-201301
2. Chander Kant Dubey (Accused No.2)
S/o Sh. Y.N. Dubey
Occupation : Director of M/s Edge Garments Pvt. Ltd.
Address:
198, Ground floor, Satya Niketan, New Delhi
And
Peeli Kothi, Gali No.2,
H. No. 1/15, Near Escort Agency Shop,
Mirzapur (UP)
3. Tej Kishen Tikoo (Accused No.3)
CC No.345/19 CBI Vs. Ravinder Kumar Joshi and Ors. Page 1
S/o Late Sh. M.L. Tikoo
Occupation : Director of M/s Edge Garments Pvt. Ltd.
Address:
58/C, Pocket-VI, DDA Flats,
Mayur Vihar Phase-III,
New Kondli (Gharoli)
New Delhi
4. Amresh Mishra (Accused No.4)
S/o Sh. Ramji Mishra
Address:C-25, South Extension Part-I,
New Delhi
And
282, Satya Niketan,
New Delhi
5. Anand Mishra (Accused No.5)
S/o Sh. Ram Lal Mishra,
Address:C-25, South Extension Part-I,
New Delhi
And
282, Satya Niketan,
New Delhi
Date of FIR : 21.03.2005
Date of filing of charge-sheet : 22.12.2008
Arguments concluded on : 30.05.2023
Date of Judgment : 08.06.2023
Appearance :
For Prosecution : Sh. Avanish Kumar Chand, Ld.
P.P. for the CBI.
For accused persons : Sh. Anil Kumar, Advocate for
A-1 R.K. Joshi.
Sh. Gurpreet Singh, Advocate for
A-2 Chander Kant Dubey, A-3
Tej Kishan Tikoo, A-4 Amresh
Mishra and A-5 Anand Mishra.
CC No.345/19 CBI Vs. Ravinder Kumar Joshi and Ors. Page 2
JUDGEMENT
1.Accused R.K. Joshi, (A-1), Chander Kant Dubey (A-2), Tej Kishan Tikko (A-3), Amresh Kumar Mishra (A-4) and Anand Mishra (A-5) were sent up by Central Bureau of Investigation (hereinafter referred to as 'CBI') to face trial for commission of offence punishable under Sections 120B read with 420 of Indian Penal Code (hereinafter referred to as 'IPC') and Section 13(2) read with Section 13(1)(d) of Prevention of Corruption Act, 1988 (hereinafter referred to as 'PC Act') in short) and substantive offences thereof.
FACTUAL MATRIX OF THE PROSECUTION CASE IN BRIEF
2.Brief facts of the present case as unfolded from charge sheet, are that on the basis of the complaint received from Sh. V.K. Upadhayay, General Manager, UCO Bank, RO, New Delhi, an FIR was registered alleging that A-1 Ravinder Kumar Joshi, AGM, Ranjeet Banerjee, Senior Manager and D.R. Sonkar, Senior Manager, Officers of UCO Bank, High Court Branch (hereinafter referred to as 'Bank') entered into criminal conspiracy with private persons namely A-2 Chander Kant Dubey and A-3 Tej Kishen Tikoo, both Directors of M/s Edge Garments Pvt. Ltd. (hereinafter referred to as 'Company') and A-4, Amrish Mishra and A-5, Anand Mishra owing to which Bank sustained a wrongful loss of Rs. 1.64 Crores. It is alleged that A-2 Chander Kant Dubey and A-3 CC No.345/19 CBI Vs. Ravinder Kumar Joshi and Ors. Page 3 Tej Kishen Tikoo claiming themselves Directors of the said Company submitted an application for packing credit and bill purchase limit of Rs. 1.50 Crores on 01.12.2004 and A-1 Ravinder Kumar Joshi, the then AGM sanctioned a limit of Rs. 1.78 Crores on 16.01.2005 under advance against bills in course of collection (ABC). The said advance was collaterally secured by way of equitable mortgage against the title of the property No. 282, Satya Niketan, Delhi (hereinafter referred to as 'Property') having estimated value of Rs. 2 Crores. It was further alleged in the complaint that monies were disbursed on the basis of the aforesaid sanction limit without invalid mortgage of the said 'Property' which was offered by the Directors of the 'Company' as security for the loan facility. It was alleged that the said 'Property' being a lease hold property allotted by MCD, could not have been mortgaged without obtaining necessary permission from the competent authority. It was further alleged that against the sanctioned limit of Rs. 1.78 Crores, the aforesaid Company had started presenting bills drawn on the suppliers w.e.f. 23.12.2004 and about 19 bills were submitted out of which 10 were returned unpaid resulting in loss of Rs. 1.64 crores to Bank.
3.The matter was investigated by the CBI and during investigation, it was found that on 07.12.2004, a current Bank account bearing CA No. 2323 was opened in the name of Company i.e. M/s Edge Garments Pvt. Ltd. The address in the aforesaid Bank account was given as 282, Satya Niketan, CC No.345/19 CBI Vs. Ravinder Kumar Joshi and Ors. Page 4 New Delhi. On 01.12.2004, other current Bank accounts in the name of A-5 Anand Mishra (CA-2285) and A-4 Amresh Mishra (CA-2307) were also opened. On 01.12.2004 itself, A- 3 Tej Kishen Tikoo and A-2 Chander Kant Dubey submitted a loan application on behalf of 'Company' with the Bank for packing credit and bill purchase limit of Rs.1.50 Crores. The collateral security of 'Property' was offered and kept by the Bank as equitable mortgage. On 07.01.2005, A-1 Ravinder Kumar Joshi sanctioned a limit of Rs. 1.78 Crores as ACB under course of collection. A-1 Ravinder Kumar Joshi and Senior Manager Sh. Ranjit Banerjee did not seek legal opinion while granting advances and only on 18.05.2005, the Legal Security Report of the collateral security was taken. In the said Report, it was stated that the said documents of the 'Property' did not constitute evidence of title of the scheduled property in favour of 'Company' and hence no equitable mortgage by deposit of title deeds was possible. Agreement to Sell dated 23.08.2004 pertained to undivided and undemarcated 6/7th share in the ground floor in favour of 'Company' and there was a third party interest in the remaining part of 1/7th share as it was let out to a tenant. The entire 'Property' was mutated in the names of legal heirs of original allottee late Sh. Baru and no deed was signed by the legal heirs in favour of 'Company'. The charge created with the Registrar of Companies pertained to Agreement to Sell only held by 'Company' and no charge was created on the CC No.345/19 CBI Vs. Ravinder Kumar Joshi and Ors. Page 5 Agreement to Sell in the name of A-2 Chander Kant Dubey. However, the permission to mortgage was granted to A-2 Chander Kant Dubey and not to the 'Company'. As per the CBI while sanctioning the limit, Sh. Ranjit Banerjee, under the directions of A-1 Ravinder Kumar Joshi processed the loan application ignoring the facts that the Balance Sheet of the 'Company' as on 31.03.2004 did not indicate any experience of export or import; copies of the orders placed on record indicate that the said orders never originated from importers; confidential reports from the existing Bankers were not obtained; fact regarding floating directors was also ignored; securities taken as collateral were never visited for verification and the property was of recent purchase on 17.12.2004 at a price of Rs. 43.70 Lakhs; report of limit sanctioned by AGM within his discretionary powers was not submitted to the Regional Office and A-1 Ravinder Kumar Joshi wrongly stated in his letter dated 31.03.2005 to the Regional Office that 'Company' was not connected to two other companies M/s Sati and M/s Gauri Exim who were also availing credit facility from the Bank despite they had a common address at 52, Yusuf Sarai and 282, Satya Niketan and the Directors kept on interchanging between the companies. The buyers were also common in all the three companies and formats and documentations were also same.
4.As per the investigation, it came to the light that ultimate beneficiaries of sanctioned limits in favour of the Company CC No.345/19 CBI Vs. Ravinder Kumar Joshi and Ors. Page 6 were A-4 Amresh Mishra and A-5 Anand Mishra. The 'Property' bearing No. 282, Satya Niketan was owned by A-5 Anand Mishra, A-4 Amresh Mishra, Sh. Ramji Mishra, Sh. Saroj Kumar Shukla, Smt. Savitri Devi, Sh. Kalyani Mishra and Sh. Akhilesh Mishra. Only for the purpose of securing loans, a small part of said property was shown as sold to A-2 Chander Kant Dubey, one of the Directors of M/s Edge Garments Pvt. Ltd. The house tax file of MCD in respect of this property showed that in 1992 these persons had purchased this Property. The document submitted regarding title of lease hold property No. 282, Satya Niketan, New Delhi was not a valid title of the property and A-4 Amresh Mishra and A-5 Anand Mishra were actual owners of M/s Edge Garments Pvt. Ltd who had colluded with the accused Bank officials, namely, A-1 Ravinder Kumar Joshi and Sh. Ranjit Banerjee, the then Senior Manager. As per the CBI, Sh. D.R. Sonkar, the then Senior Manager of the Bank was there only at the time of releasing of payments whereas sanction was granted and necessary order was passed by A-1 Ravinder Kumar Joshi and thus, Sh. D.R. Sonkar was not impleaded as an accused. Sh. Ranjit Banerjee had expired so the proceedings against him were abated.
5. Investigation has also revealed that on 07.12.2004, a current account of M/s Edge Garments Pvt. Ltd was opened and an overdraft of Rs. 50 Lakhs was allowed in this account by A-1 Ravinder Kumar Joshi even before any credit facilities were CC No.345/19 CBI Vs. Ravinder Kumar Joshi and Ors. Page 7 sanctioned. On 15.12.2004, Rs. 18 Lakhs were transferred in the name of M/s Umesh Impex, one of the sister concerns owned by Sh. Mishra and his family members. Out of the limit sanctioned to M/s Edge Garments Pvt. Ltd, Rs. 24 Lakhs were subsequently transferred to current account (CA-2307) of A-4 Amresh Mishra and Rs. 85 Lakhs were transferred to current account No. 2285 of A-5 Anand Mishra. Moreover, two cheques totalling Rs. 30 Lakhs were found debited on account of purchase of the above property although the purpose of loan was to facilitate export of garments. The current accounts of A-4 Amresh Mishra and A-5 Anand Mishra were closed on 07.04.2005 (CA No-2285) and 12.05.2005 (CA No. 2307) respectively. There were heavy transactions in the current account No. 2323 of M/s Edge Garments Pvt. Ltd but the Branch Manager never reported these transactions under Money Laundering Act. However, at the instance of Regional Office, A-1 Ravinder Kumar Joshi reported these transactions on 10.06.2005. Even in the valuation report dated 23/24.01.2005 of Sh. Virender Arora, Advocate, it was notified to Bank that at the time of sanction of loan that the owners of the property mortgaged i.e. 282, Satya Niketan, New Delhi were A-4 Amresh Mishra (Basement), A-5 Anand Mishra (first floor), Saroj Shukla (front portion of second floor), Smt. Savitri Devi (rear portion of first floor), Kalyani Mishra (front portion of third floor), Akhilesh Mishra (rear portion of third floor) and only a small CC No.345/19 CBI Vs. Ravinder Kumar Joshi and Ors. Page 8 shop on ground floor was belonging to A-2 Chander Kant Dubey. However, the three property documents/sale documents submitted to the Bank for mortgage were showing A-2 Chander Kant Dubey and M/s Edge Garments Pvt. Ltd as the owners of this property.
6.During the course of investigation, it was found that M/s Air Hostess Academy was the tenant of the major portion of the Property and the tenancy agreement was signed by A-4 Amresh Mishra. It was further found that M/s N.J. Enterprises were tenants of A-2 Chander Kant Dubey in respect of ground floor. The permission to mortgage was obtained from MCD only on 10.05.2005 on the application dated 09.05.2005 of the loanee whereas credit limits were sanctioned on 16.01.2005 against the said collateral property. Efforts to examine the legal heirs of the actual owner of the property were made but they could not be contacted. As per the investigation, the bills of lading and shipping were checked and they were found correct as the Company had done business but the amount of exports could not be realized from foreign buyers. So the allegation that the Bank officers connived with the Directors of M/s Edge Garments Pvt. Ltd for negotiating forged and fake bills resulting in wrongful loss of Rs. 1.64 Crores to the Bank could not be substantiated. The investigation could not establish that M/s Edge Garments Pvt. Ltd. submitted the bills without doing any export of carpets and the possibility of preparation of forged documents only to show paper CC No.345/19 CBI Vs. Ravinder Kumar Joshi and Ors. Page 9 transaction of exports could not be established.
7. After completion of the investigation, the instant charge-sheet was filed by the CBI before the Court on 23.12.2008 against the accused persons, namely, A-1 Ravinder Kumar Joshi, AGM, A-2 Chander Kant Dubey, A-3 Tej Kishen Tikoo, A-4 Amresh Mishra and A-5 Anand Mishra for the offences under Section 120-B, 420, 467, 468 & 471 IPC and Section 13(2) read with 13 (1)(d) of PC Act, 1988. Since A-1 Ravinder Kumar Joshi was already dismissed from the service, hence no sanction was required. After compliance of Section 207 Cr. P.C. and supplying copy of the charge-sheet and documents to the aforesaid accused persons, the court took cognizance of the aforesaid offence against all the accused persons vide order dated 06.05.2009 and they were summoned.
CHARGE
8.In terms of detailed order dated 30.07.2011 passed by the Ld. Predecessor of the Court on 03.01.2012, charge for offence under Section 120-B IPC r/w 420, 468 and 471 IPC and Section 13(2) read with Section 13(1)(d) of PC Act, 1988 was framed against all the accused persons ; substantive charge for the commission of offence under Section 13(2) read with Section 13(1) (d) of PC Act, 1988 was framed against A-1 Ravinder Kumar Joshi ; substantive charge for the commission of offence under Section 420 IPC was framed against A-2 Chander Kant Dubey, A-3 Tej Kishen Tikoo, A-4 CC No.345/19 CBI Vs. Ravinder Kumar Joshi and Ors. Page 10 Amresh Mishra and A-5 Anand Ji Mishra and substantive charge for the commission of offence under Section 468 & 471 IPC was framed against A-2 Chander Kant Dubey and A- 3 Tej Kishen Tikoo. All accused persons abjured their guilt and claimed trial.
PROSECUTION EVIDENCE
9.To connect the arraigned accused persons with the offences charged, the CBI in total has examined fourteen witnesses viz (1) Sh. R.K. Saini, Senior Technical Assistant in the office of Registrar of Companies (ROC) as PW-1 ; (2) Sh. R.K. Dogra posted as UDC in March 2008 in the office of Sub Registrar Office-IX, Kapashera, Delhi as PW-2 ; (3) Sh. Surinder Paul Bakarwal and (4) Ms Geeta Sharma Assistant Managers in Bank during the year 2002 to 2004 as PW-3 and PW-4 respectively ; (5) Sh. Anand Prakash who during the year 2004-2006 was posted as Dy. Director in Lease & Liquidation Department in the office of MCD-Slum & JJ Department as PW-5 ; (6) Sh. Subodh Verma posted as Manager in UCO Bank, Delhi High Court Bank during the year 2002 to 2004 as PW-6 ; (7) Sh. Naresh Kumar Midha posted as Senior Manager in Bank from August 2005 to 09.05.2007 as PW-7 ; (8) Sh. Virender Kumar Arora worked as Approved Valuer for UCO Bank from the year 2001 till 2010 as PW-8 ; (9) Sh. D.K. Wadhwan who was working as Special Assistant in UCO Bank, Delhi High Court from 2004- 2005 as PW9 ; (10) Sh. Sukhvinder Singh Gill (Retired) CC No.345/19 CBI Vs. Ravinder Kumar Joshi and Ors. Page 11 Assistant Commissioner, Customs, Indian Customs House, Mumbai as PW-10 ; (11) Sh. Anayesh Kumar Gupta, (Retired) Assistant General Manager, UCO Bank, Zonal Office, New Delhi as PW-11 ; (12) DSP Amit Vikram Bhardwaj, CBI EO-I, New Delhi as PW-12; (13) Sh. Raja Chatterjee, Inspector, CBI, Head Office, New Delhi as PW- 13 and (14) Sh. Subhash Chandra Kuchhal, (Retired) Chief Manager, IBB, Kolkata as PW-14.
10.PW 1 R.K. Saini Senior Technical Assistant in the office of Registrar of Companies (ROC), New Delhi deposed about the documents of ROC pertaining to registration of M/s Edge Garments Private Limited (Ex. PW 1/B (Colly), bearing attestation of Shri V.N. Sharma, Assistant Registrar, Office of ROC. He deposed that he had only handed over these attested documents vide forwarding letter dated 17.01.2007 (Ex PW 1/A) to CBI. He compared the aforesaid documents with the original records brought by him. He further deposed that as per Form No. 32 dated 26.07.2001 (Ex. PW1/D), Shri Sushil Raj Sharma and Shri Tej Kishan Tikoo were the founder Directors of M/s Edge Garments Private Limited and as per Form No. 32 (Ex. PW1/E), Tej Kishan Tikoo resigned as Director from M/s Edge Garments Private Limited on 01.02.2002; as per Form No.32 dated 08.12.2004 (Ex. PW1/F), Shri Tej Kishen Tikoo (co- accused) was appointed as Director of Edge Garments Private Limited and as per Form No. 32 dated 18.05.2004 (Ex. PW1/G), Tej Kishan CC No.345/19 CBI Vs. Ravinder Kumar Joshi and Ors. Page 12 Tikoo resigned as Director from the Company. He further deposed that as per official record of the ROC for the period 02.02.2002 to 17.05.2004 and 19.05.2004 to 07.12.2004, there is no record of Form No. 32 regarding appointment of Sh. Tej Kishan Tikoo as Director of the Company i.e. Edge Garments Private Limited.
11.He further deposed that as per Form No. 18 dated 20.07.2001 (Ex. PW 1/H) filed at the time of incorporation, the official address of M/s Edge Garments Private Limited was 282, Satya Niketan, New Delhi- 110021 and, thereafter, as per Form No. 18 dated 13.01.2004 filed by the company (Ex. PW 1/J), change of address of the company was recorded as 52, Yusuf Sarai, New Delhi w.e.f. 01.01.2004 and thereafter as per Form No. 18 dated 25.04.2005 (Ex. PW 1/K), the address of the company was reported to be changed to 282, Satya Niketan, New Delhi w.e.f. 01.04.2005. He further deposed that as per Form No. 8 dated 04.02.2005 (Ex. PW 1/L) (in fact the date of form is 16.01.2005 and date of stamp of ROC is 04.02.2005), M/s Edge Garments Private Limited had recorded regarding charge of UCO Bank, Delhi High Court Branch on property bearing No. 282, Satya Niketan, New Delhi by way of equitable mortgage as collateral security against loan amount of Rs. 1,78,00,000/- showing estimated value of about Rs. 2,00,00,000/-. He further deposed that as per official record of the ROC pertaining to Edge Garments Private Limited, first (Ex. PW 1/M) and second (Ex. PW CC No.345/19 CBI Vs. Ravinder Kumar Joshi and Ors. Page 13 1/N) Annual Returns were filed by the Company on 24.12.2004. He deposed that as per procedure, period of the Annual Return is to be shown from last AGM meeting of the Company to current AGM meeting on the date of filing Annual Return but in the said returns, last AGM meeting date was not mentioned. He deposed that Edge Garments Private Limited did not file Annual Return after 30.09.2004, as per official record of ROC. He was not cross-examined by accused No. 1.
12.PW-2 Sh. R.K. Dogra posted as UDC in March 2008 in the office of Sub Registrar Office-IX, Kapashera, Delhi deposed about handing over of certified copies of documents. i.e. SPA, Relinquishment Deed, Agreement to Sell, GPA in respect of property No. 282, Satya Niketan, New Delhi (Ex. PW 2/B (Colly) to CBI vide Seizure Memo dated 29.03.2008 (Ex. PW 2/A). He was not cross-examined by A-1 and during cross-examination conducted on behalf of A-2 to A-5, nothing came out to discredit his version.
13.PW 3 Sh. Surinder Paul Bakarwal Assistant Manager, UCO Bank, Delhi High Court Branch, New Delhi during 2002 to 2004, identified the signatures of the accused R.K. Joshi in the account opening form (Ex. PW 3/1) and specimen signature card (Ex. PW 3/2) of Current Account No. 2323 of M/s Edge Garments (P) Ltd. He also identified the signatures of the accused on the sanction letter dated 16.01.2005 (Ex. PW 3/3). He also identified the signatures of the accused CC No.345/19 CBI Vs. Ravinder Kumar Joshi and Ors. Page 14 R.K. Joshi in credit voucher dated 18.01.2005 in respect of Current Account No. 2323 (Ex. PW 3/4), debit voucher dated 02.02.2005 (Ex. PW 3/6), debit voucher dated 31.03.2005 (Ex. PW 3/8). He also identified signatures of D.R. Sonkar, Senior Manager on Debit Voucher dated 25.01.2005 (Ex. PW 3/5) and Debit Voucher dated 16.02.2005 (Ex. PW 3/7). He was not cross-examined by accused.
14.PW 4 Ms Geeta Sharma Assistant Managers, Assistant Manager, UCO Bank, Delhi High Court Branch, New Delhi during 2002-2004 identified the signatures of accused R.K. Joshi on the account opening form (Ex. PW-3/1), sanction letter (Ex. PW 3/3), specimen signature card (Ex. PW 3/2), debit vouchers (Ex. PW 3/5, Ex. PW 3/6 & Ex. PW 3/8), credit vouchers (Ex. PW 3/4), process note (Ex. PW 4/A) and credit and quasi credit facilities sanctioned (Ex. PW 4/B), pertaining to Current Account No. 2323 of M/s Edge Garments Private Limited.
15.During cross-examination, PW 4 was not aware about the term i.e. 'credit and quasi credit form'. She did not identify the signatures of Sh. Ranjeet Banerjee and Sh. D.R. Sonkar, the then Senior Managers on process note, debit vouchers dated 25.01.2005 and 16.02.2005. She was not cross-examined by remaining accused persons.
16.PW 5 Shri Anand Prakash, Deputy Director, Lease and Liquidation Department, Office of M.C.D., Slum and J.J. Department during 2004 to 2006 deposed about production- CC No.345/19 CBI Vs. Ravinder Kumar Joshi and Ors. Page 15 cum-seizure memo dated 10.07.2006 (Ex. PW 5/A) vide which, he had handed one file (Ex. PW 5/B) (D-12) from his office record to CBI. He identified the handwriting of Sh. Rakesh Kumar Sharma, the then Assistant Director and Shankar/UDC on letter (Ex. PW 5/B-1) and note sheet (Ex. PW 5/B-2). He further deposed regarding submission of letter dated 28.01.2005 placed in file at page No. 166/C (file D-12 Ex. PW 5/B Colly) by Shri Chander Kant Dubey (co-accused and Director of M/s Edge Garments Private Limited) to the Deputy Director (L&JJ), M.C.D. for free hold of plot no. 282, Satya Niketan, New Delhi and further deposed that M.C.D. had not taken any action for free hold because the matter was sub-judice. He has also deposed that Chander Kant Dubey had submitted letter dated 09.05.2005 for N.O.C for mortgage of property no. 282 (Satya Niketan, New Delhi), which was accorded vide letter dated 10.05.2005, Ex. PW 5/B-4. PW-5 also deposed about the availability of registered Agreement to Sale, G.P.A., Spl. Power of Attorney in respect of aforesaid property in the file D-12 and also deposed that permission to mortgage the property was given on the basis of the documents of purchase of the property. He identified handwriting of Sh. Rakesh Sharma on letter dated 25.01.2005 (Ex. PW 5/C and Ex. PW 5/C-1) and that of Sh. Manjit Singh on perpetual lease pertaining to plot no. 282 of Moti Bagh, JJ Colony Ex. PW 5/C-2. During cross-examination of PW 5, nothing came out to discredit version of PW 5. CC No.345/19 CBI Vs. Ravinder Kumar Joshi and Ors. Page 16
17.PW 6 Sh. Subodh Verma posted as Manager, UCO Bank, Delhi High Court Branch during 2002-2004 has identified signatures of the accused R.K. Joshi on the documents i.e. Ex. PW 3/1, Ex. PW 3/2, Ex. PW 3 /4, Ex. PW 3/6, Ex. PW 3/8 and Ex. PW 4/A pertaining to Current Account No. 2323 of M/s Edge Garments Private Limited and corroborated the deposition of PW-3 and PW-4. During cross-examination of PW 6, nothing came out to discredit version of PW 6.
18.PW 7 Sh. Naresh Kumar Midha posted as Senior Manager, UCO Bank in Delhi High Court Branch of UCO Bank during August, 2005 to 09.05.2007, deposed that he was working as Loan/Advances In-charge and was aware about the procedure of granting loan by the branch. He has identified his signatures and signatures of Shri A.K. Gupta, the then Chief Manager on letter dated 15.04.2005 (Ex. PW7-/1). He has also deposed about handing over copy of ABC Ledger Account (Ex PW-7/2) of M/s Edge Garments Private Limited for the period 18.01.2005 to 05.09.2005 (Part of D-10) to CBI vide Slip (Ex. PW-7/3). He has identified his signatures on statement of account of M/s Edge Garments Private Limited, A/c No. CA 2323, (Ex. PW-7/4) for the period 07.12.2004 to 04.04.2006. He has further deposed about sending seven vouchers to CBI vide Slip (Ex. PW-7/5) and has identified the signatures of Late Shri Ranjeet Banerjee, Sr. Manager of UCO Bank, Delhi High Court Branch on debit vouchers (Ex. PW-7/6, Ex. PW-7/7, Ex. PW-3/5 to Ex. PW-3/8) and on CC No.345/19 CBI Vs. Ravinder Kumar Joshi and Ors. Page 17 credit voucher (Ex. PW-3/4). He has also deposed about handing over of documents vide Memo/Slip dated 15.04.2006 (Ex. PW-7/8) to CBI. PW-7 has also deposed about handing over of documents vide Production-cum-Seizure Memo (Ex. PW-7/9) and vide Slip dated 15.04.2006 (Ex. PW-7/10) to CBI. He also identified signature of Late Sh. Ranjeet Banerjee on Ex. PW 3/4, Ex. PW 3/5, Ex. PW 3/6, Ex. PW 3/7 and Ex. PW 3/8. During cross-examination, he deposed that he did not have personal knowledge about the present matter and deposed as per record only.
19.PW 8 Sh. Virender Kumar Arora worked as Approved Valuer for UCO Bank, are Bank Officers/Valuer regarding Valuation reports dated 24.01.2005 Ex. PW-8/B; Ex. PW8/B-1, Ex. PW 8/C ; Ex. PW 8/C-1; Ex. PW 8/D; Ex. PW 8/D-1; Ex. PW 8/E ; Ex. PW 8/E-1, Ex. PW 8/F; Ex. PW8/F-1 ; Ex. PW 8/G ; Ex. PW8/G-1 ; Ex. PW 8/H and Ex. PW 8/H-1 in respect of different portions of property constructed at 282, Satya Niketan, New Delhi. During cross-examination, he deposed that in respect of all the properties about which he has given the above valuation reports, Shri Chander Kant Dubey was the GPA holder and value of the property was about 1.98 Lakhs.
20.PW 9 Sh. D.K. Wadhwan posted as Special Assistant, in UCO Bank, Delhi High Court Bank from 2004-2005 deposed that his power regarding cash was upto Rs. 35,000/- and for clearing upto Rs. 1,50,000/- and beyond this limit, the power CC No.345/19 CBI Vs. Ravinder Kumar Joshi and Ors. Page 18 vested with senior officers i.e. Manager, Sr. Manager and Chief Manager. During his cross-examination, nothing came out against the accused.
21.PW 10 Sh. Sukhvinder Singh Gill (Retired) Assistant Commissioner, Customs, Indian Customs House, Mumbai deposed regarding the procedure of export of cargo and issuance of 'Let Export Order' in respect of export consignments. He has also proved the export of carpets/assorted handicraft brass/assorted knitted garments by M/s Edge Garments Private Limited through shipping bills Ex. PW 10/A (colly) to Ex. PW10/H (colly) and Ex. PW 10/J (colly) to Ex. PW 10/L (colly) during 17.12.2004 to April 2005. He has also deposed that the 'Let Export Order' was given by him in respect of above consignments after satisfying with regard to the documents filed by M/s Edge Garments Private Limited. He also proved letters dated 06.02.2008, 31.01.2008 and 07.02.2008 (Ex. PW 10/M colly).
22.PW 11 Sh. Anayesh Kumar Gupta, (Retired) Assistant General Manager, UCO Bank, Zonal Office, New Delhi and. during 2002-04 and from 08.10.2005 till May, 2007, He has identified signatures of Shri V.K. Upadhyay, General Manager, UCO Bank, Zonal Office, New Delhi on complaint dated 20.03.2006 (Ex. PW 11/A) stating that it appears to have been signed by him (Shri V.K. Upadhayay). He has deposed to have sent documents to CBI vide letter Ex. PW CC No.345/19 CBI Vs. Ravinder Kumar Joshi and Ors. Page 19 7/1 and vide production-cum-seizure memo Ex. PW 11/B. He had handed over documents (Ex. PW 11/C) vide Ex. PW 11/B.
23.He further deposed regarding handing over the original file (Mark PW 11/1) of M/s Edge Garments Pvt. Ltd. to CBI. He deposed regarding an application (Mark PW 11/2) dated 01.12.2004 for loan facility for packing credit and bill purchase of M/s Edge Garments Pvt. Ltd. signed on behalf of M/s Edge Garments Pvt. Ltd. ; documents (Mark PW 11/3 Colly) attached with the application requesting for loan by M/s Edge Garments Pvt. Ltd. and inspection report (Mark PW 11/4 Colly) submitted by S. Raja & Company. He further deposed regarding sanction letter of credit facility dated 16.01.2005 (Mark PW 11/5) by the then AGM of UCO Bank, Delhi High Court Branch, addressed to M/s Edge Garments Pvt. Ltd. and credit rating module (Mark PW 11/6) of M/s Edge Garments Pvt. Ltd. operated by the Branch. He further deposed regarding letter dated 29.03.2005 (Mark PW 11/7) issued by UCO Bank Regional Office to AGM, Delhi High Court Branch of certain clarifications and queries in respect of M/s Edge Garments Pvt. Ltd. & Ors. and letter 31.03.2005 (Mark PW 11/8), Delhi High Court Branch replied to the aforesaid letter. He further deposed regarding the documents pertaining to search report along with bill of the documents filed and the charges registered (Mark PW 11/9) in the office of ROC Delhi and Haryana pertaining to CC No.345/19 CBI Vs. Ravinder Kumar Joshi and Ors. Page 20 M/s Edge Garments Pvt. Ltd. submitted by Sehgal & Associates dated 14.12.2004. He further deposed regarding letter (Mark PW 11/10) issued by UCO Bank, Parliament Street, New Delhi Branch to UCO Bank, Delhi High Court Branch bearing subject of Export Bill sent on collection a/c M/s Edge Garments Pvt. Ltd. He further deposed regarding letter dated 29.03.2005 (Mark PW 11/11) issued by UCO Bank, Delhi High Court Branch to UCO Bank, Parliament Street, New Delhi bearing subject for collection of bills. He further deposed regarding letter dated 30.03.2005 (Mark PW 11/12) issued by UCO Bank, Delhi High Court Branch, to UCO Bank, Parliament Street, New Delhi bearing subject for export bill send for collection. He deposed regarding letter dated 29.03.2005 (Mark PW 11/13) issued by UCO Bank, Parliament Street, New Delhi to UCO Bank, Delhi High Court Branch and letter dated 10.05.2005 (Mark PW 11/14) issued by JJ Department, MCD addressed to Chander Kant Dubey bearing subject of permission to mortgage residential plot no. 282. During cross-examination by Ld. PP for CBI, PW 11 deposed that symbolic possession of mortgage property bearing no. 282, Satya Niketan, Delhi was taken by the Bank however, he did not remember if M/s Edge Garments Pvt. Ltd. filed an appeal against the same before DRT-II.
24.During cross-examination conducted by A-1 R.K. Joshi, PW 11 deposed that the documents as mentioned in Ex. PW 7/1 CC No.345/19 CBI Vs. Ravinder Kumar Joshi and Ors. Page 21 were made available to Sh. Raja Chaterjee SI of CBI on his demand. He further deposed that Ex. PW7/1 is dated 15.04.2005 and he volunteered to state that 15.04.2005 is typographical mistake and it must be 15.04.2006 as he had joined the branch in October 2005. He further deposed that he had made statement with respect of file MR II Memo III Serial no. 47 containing pages 1 to 336 (additional documents in terms of order dated 24.09.2018) is also the part of Ex. PW 7/1. He further deposed that he had not dealt with the complaint Ex. PW 11/A in any manner whatsoever except identifying the signature of Sh. V.K. Upadhyay. He deposed that he had worked with Sh. N.K. Midha the then Sr. Manager, UCO Bank, Delhi High Court Branch and identified his signatures on additional documents (Ex. PW 11/DA Colly) filed on application vide order dated 24.09.2018 (MR- II Memo III containing photocopies of total pages 1 to 44) duly signed and certified by Sh. N.K. Midha under his signature and seal of Bank. He deposed that photocopy of page no. 27 of (Ex. PW 11/DA colly) is the possession notice vide which he had taken the symbolic possession of the property mentioned therein on 04.01.2006. After seeing certified copy of the reply and Affidavit both dated 21.03.2006 (Ex. PW 11/DB colly) in proceedings of SA no. 12/2006 before DRT-II New Delhi, he deposed that the same were filed by him under his signatures. He deposed regarding the he original Bank Security register produced by Sh. S.K CC No.345/19 CBI Vs. Ravinder Kumar Joshi and Ors. Page 22 Gupta, Sr. Manager from UCO Bank, Delhi High Court Branch that part of security register at page no. 93, 94 & 95 Ex. PW 11/DC contain the details of the security documents and papers relating to equitable mortgage created in the account of M/s Edge Garment Pvt. Ltd. He volunteered to state that the details of the documents are mentioned on the pasted photocopies bearing 18.02.2006. He further deposed that it is signed by two senior managers and he identified signatures of Sh. N.K. Midha.
25.During cross-examination conducted by A-2 to A-5, he deposed that the property which symbolic possession was taken, as per records, the same was already mortgaged with UCO Bank, Delhi High Court Branch. He further deposed that the Bank security register is maintained in normal course of Banking business for recording loan security documents and the entries in Bank security register are made after receiving the original documents of the property and other relevant loan documents and at the time of disbursement of the loan and entries is made by the official concerned. During cross-examination by Ld. Substitute Sr. PP for CBI, he deposed that entries in the Bank security register are made manually only with date and also duly initialed by concerned official. He did not remember who pasted Ex. PW 11/DC.
26.PW 12 Sh. Amit Vikram Bhardwaj, DSP - the then Inspector CBI. He has deposed regarding FIR No. RC-DAI-2006-A- 0009 dated 29.03.2006 (Ex. PW 12/A) bearing signature of CC No.345/19 CBI Vs. Ravinder Kumar Joshi and Ors. Page 23 Sh. Bhupender Kumar, the then SP ; investigation conducted by him ; production-cum-receipt memos dated 25.02.008 & 29.03.2008 (Ex. PW 12/B & Ex. PW 2/A); production-cum- seizure memo dated 04.09.2008, 16.05.2008 & 09.05.2008 (Ex. PW 12/C, Ex. PW 12/D & Ex. PW 12/E) ; letters dated 13.02.2008 (Ex. PW 12/F & Ex. PW 12/G) and letter dated 22.09.2007 (admitted by accused R.K. Joshi as Ex. P-1).
27.During cross-examination conducted by A-1 R.K. Joshi, he has deposed regarding Ex. PW 11/DA, letter dated 20.01.2005 Ex. PW 12/DA and letter dated 19.01.2005 Ex. PW 12/B ; policies of ECGC (Ex. PW 12/C) in favour of buyers of M/s Edge Garments Pvt. Ltd. under post shipment buyer wise policies of ECGG and letters (Mark PW 12/DX) written by M/s Edge Garments to AGM, UCO Bank, Delhi High Court branch. During cross-examination conducted on behalf of A-2 to A-5, he deposed that the Directors of the companies are responsible for the affairs o the Company. He further deposed that neither accused Anand Mishra nor Amresh Mishra were Directors of M/s Edge Garments at the time of alleged transactions.
28.PW 13 Sh. Raja Chatterjee, Inspector CBI are Investigating Officers of this case who had conducted investigation in this case. He deposed that at the time of assigning investigation of this case, permission U/s 17 was obtained from the Court vide order 10.04.2006 (Ex. PW 13/A) as he was Sub-Inspector at that time. He deposed regarding investigation conducted by CC No.345/19 CBI Vs. Ravinder Kumar Joshi and Ors. Page 24 him and seizure of documents vide production-cum-seizure memo dated 10.07.2006 (Ex. PW 5/A), dated 19.04.2006 (Ex. PW 7/9), dated 22.12.2006 (Ex. PW 11/B) and letters dated 15.04.2005 (Ex. PW 7/1) ; slip (Ex. PW 7/10) and slip dated 15.04.2006 (Ex. PW 7/8) vide which, he received documents from UCO Bank. During cross-examination, he could not tell as to who signed slip (Ex. PW 7/10 & Ex. PW 7/1) and from where he collected the documents mentioned therein. He further deposed that there is no production cum seizure memo in respect of slip Ex. PW 7/10.
29.PW 14 Subhash Chandra Kuchhal - Retired Chief Manager from IBB, Kolkata who remained posted in UCO Bank, Delhi High Court Branch, New Delhi for 2-3 months - deposed regarding letter (Ex. PW 14/A) of M/s Edge Garments Pvt. Ltd. bearing signature of Chandrakant Dubey seeking facility for packing credit and bill purchase ; sanction letter dated 16.01.2005 (Ex. PW 14/B) for credit facility under the signature of R.K. Joshi ; credit rating module (Ex. PW 14/C) of M/s Edge Garments Pvt. Ltd. ; letter dated 31.03.2005 (Ex. PW 14/D) bearing signature of R.K. Joshi ; letter (Mark PW 11/10) issued by UCO Bank, Parliament Street to Delhi High Court Branch bearing signature of Sh. C.P. Jain, the then Chief Manager ; letters dated 29.03.2005, 30.03.2005 (Ex. PW 14/E & Ex. PW 14/F) issued by Delhi High Court Branch of UCO Bank bearing signature of R.K. Joshi ; letter (Ex. PW 14/G) issued by Sh. R. Taneja, the then Manager at CC No.345/19 CBI Vs. Ravinder Kumar Joshi and Ors. Page 25 UCO Bank. He further deposed regarding twenty nine cheques (Mark PW 14/X) drawn on by M/s Edge Garment Pvt. Ltd.; credit and debit vouchers (Mark PW 14/X-1 colly); photocopies of the cheques (Mark PW 14/X-2 colly) of UCO Bank pertaining to different accounts ; photocopy of the cheque of UCO Bank (Mark PW 14/X-3 colly). He also deposed regarding letter dated 02.02.2007 (Mark PW 14/X-
4) addressed to UCO Bank, Delhi High Court branch by ECGC. He has further deposed regarding complaint dated 20.03.2006 (Ex. PW 11/A) signed by the then GM Sh. Upadhyay (since expired). He also explained about the procedure for processing and sanctioning of credit facilities pertaining to packing credit and bill purchase. During his cross-examination conducted by accused persons, nothing could come out to discredit his version.
30.After examining the aforesaid witnesses, on the statement of Ld. Public Prosecutor for the CBI, the prosecution evidence was closed on 30.10.2019.
STATEMENTS OF ACCUSED PERSONS
31.Thereafter, statements of the accused persons under Section 313 Cr.P.C. were recorded wherein all the incriminating evidence on record were put to them to which they pleaded their innocence and sought to lead defence evidence.
32.A-1 R.K. Joshi stated that a false case was filed against him on the basis of the malicious complaint lodged by Shri V.K. Upadhayay, the then General Manager, UCO Bank Zonal CC No.345/19 CBI Vs. Ravinder Kumar Joshi and Ors. Page 26 Office and at the time of lodging the complaint, Shri Upadhayay had the knowledge that the property in question was mortgaged with the Bank. He further stated that Shri Upadhyay at the time of lodging complaint also knew that as per policy of RBI, the Bank credit limits to exporters could be sanctioned without insisting upon the mortgage of collateral security. A-1 further stated that Shri Subash Kuchhal (PW 14) in his cross examination on 07.08.2019 had deposed that no collateral security used to be obtained by UCO Bank in sanctioning credit facility to exporters for export purposes and Shri Anayesh Kumar Gupta (PW 11) had affirmed under oath in his Aaffidavit dated 21.03.2006 filed before Hon'ble DRT that the property situated at 282 Satya Niketan New Delhi was mortgaged to the Bank (Ex. PW11/DB). He further stated that false complaint lodged by Shri VK Upadhyay was without substance and was filed with malicious intent.
33.A-1 R.K. Joshi further stated that the credit limits were sanctioned to a company engaged in the business of exports. The 'Company' submitted with the Bank export bills totaling Rs. 340,90,219/- of Edge Garments Pvt Ltd Control Account against the sanctioned limit of Rs. 178 Lakhs proving that the credit limits sanctioned by the Bank were fully utilized for the purpose for which it was sanctioned. The limits were sanctioned for a period of 12 months from the date of sanction but availability of credit limits was stopped by the Bank after four months. He further stated that due to some CC No.345/19 CBI Vs. Ravinder Kumar Joshi and Ors. Page 27 reasons the foreign buyer could not make payments of some of the export bills. As per Bank's own rules and procedures, Noting and Protesting should have been done in respect of those export bills which were dishonored either due to non acceptance or due to non payment. But this was not done. Bank also filed recovery suit in DRT-II New Delhi and in the proceedings before Hon'ble DRT, New Delhi it was held that the property at 282 Satya Niketan was mortgaged to UCO Bank and a recovery certificate was issued directing that Bank's dues be recovered by sale of the property No. 282 Satya Niketan, New Delhi. However, M/s Edge Garments Private Limited paid all the dues of the Bank under a negotiated settlement as per OTS Scheme of RBI.
34.A-2 Chandrakant Dubey stated that he has been falsely implicated in the present matter. He stated that letter dated 28.01.2005 was submitted by him to the Dy. Director L&JJ, Department of MCD for freehold of Plot No. 282 and MCD had not taken any action for freehold because the matter was sub-judice. He further stated that letter dated 09.05.2005 was submitted by him for NOC for mortgage of property No. 282, after that letter, the file was processed. He denied that the Basement and Ist Floor of the Property was owned by his co- accused Amresh Mishra and Anandji Mishra, however, he stated that he was GPA Holder.
35.A-2 Chandrakant Dubey further stated that the Bank sanctioned credit limit to M/s Edge Garments Pvt. for export CC No.345/19 CBI Vs. Ravinder Kumar Joshi and Ors. Page 28 purposes and PW-10 has also confirmed that the company had exported goods and received duty drawbacks as per the govt rules. He further stated that to secure the credit facility, the Company created an equitable mortgage of the property bearing No. 282 Satya Niketan, Delhi. He further stated that PW-11 confirmed that the possession of the property was taken by the Bank and the Bank filed a case in DRT where it was declared that property bearing No. 282 Satya Niketan, Delhi was mortgaged to the Bank. The company paid the dues of the Bank under the one time settlement scheme of RBI.
36.A-3 Tej Kishen Tikoo stated that he has been falsely implicated in the present matter. He stated that the company Edge Garments Pvt. Ltd. took the loan after complying each and every rules and regulations of the Bank and further the loan facility was duly secured by the mortgage of the collateral security. He further stated that the Bank without any procedure has recalled the loan facility thereby causing losses to the business of the company. He further stated that the complaint made by Shri. V.K. Upadhayay, the then General Manager of UCO Bank Zonal Office, is false and has been made without looking into all the documents i.e. the export bills, the remittance received from abroad. He further stated that the credit limits were sanctioned to a company engaged in the business of exports. The 'Company' submitted with the Bank export bills totaling Rs. 340,90,219/- of Edge Garments Pvt Ltd Control Account against the sanctioned limit of Rs. CC No.345/19 CBI Vs. Ravinder Kumar Joshi and Ors. Page 29 178 Lakhs proving that the credit limits sanctioned by the Bank were fully utilized for the purpose for which it was sanctioned. The limits were sanctioned for a period of 12 months from the date of sanction but availability of credit limits were stopped by the Bank after four months. He further stated that due to some reasons the foreign buyer could not make payments of some of the export bills. As per Bank's own rules and procedures, 'Noting and Protesting' should have been done in respect of those export bills which were dishonored either due to non acceptance or due to non payment. But this was not done. Bank also filed recovery suit in DRT-II New Delhi and in the proceedings before Hon'ble DRT, New Delhi it was held that the property at 282 Satya Niketan was mortgaged to UCO Bank and a recovery certificate was issued directing that Bank's dues be recovered by sale of the property No. 282 Satya Niketan, New Delhi. However, M/s Edge Garments Private Limited paid all the dues of the Bank under a negotiated settlement as per OTS Scheme of RBI.
37.In their statements U/s 313 Cr.P.C., A-4 Amresh Mishra and A-5 Anandji Mishra stated that A-2 Chandrakant Dubey is owner and he is GPA Holder of the property constructed first floor at 282, Satya Niketan, New Delhi. They further stated that in DRT proceedings, UCO Bank had admitted that A-2 Chandrakant Dubey is owner of the said property. They further stated that the valuer was appointed for valuing the CC No.345/19 CBI Vs. Ravinder Kumar Joshi and Ors. Page 30 property and they had no authority to ascertain the ownership of the property. They further stated that they have been falsely implicated in this case. They were neither Director of Edge Garments Pvt. Ltd. nor holding any position in the said Company, but due to business transactions with the said Company, they have been falsely implicated. They further stated that the only allegation them was that amount was transferred from the account of Edge Garments to their account which by all means does not disclose any commission of any offence. They further stated that there is no evidence led against them with respect to commission of any alleged offence.
DEFENCE EVIDENCE
38.To prove his innocence, A-1 examined one witness, namely, DW 1/A1 Subodh Kumar Gupta, Senior Manager, UCO Bank, Delhi High Court Branch, Delhi who tendered copy of circular (Ex. DW 1/A-1/D1) of UCO Bank regarding export credit simplification of procedure and also circular (Ex. DW 1/A-1/D2) issued by the Reserve Bank of India on customer service, simplification of procedure for delivery of export credit and reporting requirements.
39.A-2 examined DW 2/A-1 Rohit Mehra from Debt Recovery Tribunal. He deposed about proceedings held in Debt Recovery Tribunal in the matter of UCO Bank Delhi High Court Branch, New Delhi vs. M/s Edge Garments Pvt. Ltd. He was authorized by Sh. V.S. Rauthan, Assistant Registrar, CC No.345/19 CBI Vs. Ravinder Kumar Joshi and Ors. Page 31 DRT-II, Delhi vide letter dated 22.02.2021 (Ex. DW-2/A- 1/A) to appear before the Court along with summoned records. He tendered Application dated 31.12.2007 [Ex. DW- 2/A-1/D1 (colly)] filed at Debts Recovery New Delhi by UCO Bank, Delhi High Court Branch under Section 19 of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 in OA No. 21 of 2008 in the matter of UCO Bank, Delhi High Court Branch Vs. M/s Edge Garments Pvt. Ltd. (Objected to as to the mode of proof). He also tendered Affidavit dated 07.08.2009 (Ex. DW-2/A-1/D2) filed at Debts Recovery Tribunal-II, New Delhi by Sh. Vikas Chander Mahajan on behalf of UCO Bank, Delhi High Court Branch in the matter of OA No. 21 of 2008 ; Judgment dated 16.12.2013 [Ex. DW-2/A-1/D3 (colly)] passed by the Presiding Officer, Debts Recovery Tribunal-II, New Delhi in OA 21/2008 in the matter of UCO Bank, Delhi High Court Branch Vs. M/s Edge Garments Pvt. Ltd.; Judgment dated 30.04.2012 [Ex. DW-2/A-1/D4 (colly)] passed by the Presiding Officer, Debts Recovery Tribunal-II, New Delhi in SA 12/2006 in the matter of M/s Edge Garments Pvt. Ltd. Vs Assistant General Manager, UCO Bank, Delhi High Court Branch and Sale Proclamation dated 05.09.2014 [Ex. DW- 2/A-1/D5 (colly)] in RC No. 433/2013 issued by Sh. Sube Singh, Recovery Officer, Debts Recovery Tribunal- II. New Delhi. He also tendered Order dated 07.01.2017 [Ex. DW- 2/A-1/D7 (colly)]. issued by Sh. Sube Singh, Recovery CC No.345/19 CBI Vs. Ravinder Kumar Joshi and Ors. Page 32 Officer, Debts Recovery Tribunal-II, New Delhi in the matter of RC No. 433/2013, 435/2013 and 437/2013 confirming receipt of payment of settled amount in all the three RCs. During cross-examination by Ld. Senior PP for CBI, DW 2/A-1 Rohit Mehra deposed that he has no personal knowledge of Ex. DW-2/1A-1/D1 to Ex. DW-2/A-1/D6 (colly) and he had deposed on the basis of records.
40.A-2 to A-5 also examined DW-2/A-2 to A-5 Devi Lal Meghwal, deposed that he was authorised by Sh. A.K. Thakur, Registrar, DRT-III vide letter 20.09.2021 (Ex. DW- 2/A-2 to A-5/D-1) to appear before the Court with the summoned. He tendered certified copies of the entire record file of Recovery Certificate No. 433/2013 (Ex. DW2/A-2 to A-5/D-2) decided by Recovery officer-II, dated titled UCO Bank M/s Edge Garment Pvt Ltd. He also tendered certified copy the O.A No. 21/2008 dated 31.12.2007 (Ex. DW2/A-2 A-5/D-3. During cross-examination conducted by Ld. PP for CBI, he deposed that he had no personal knowledge whether CBI been party to proceedings DRT w.r.t Ex. DW2/A-2 to A- 5/D-2 and Ex. DW2/A-2 had no personal knowledge of Ex.DW2/A-2 A-5/D-2 and A-5/D-3 and deposed only on the basis the records,
41.A-2 to A-5 also examined Khushi Ram, AGM of UCO Bank, Parliament Street, New Delhi as DW 2/A-2 to A-5. He tendered certified copy of One Time settlement dated 22.06.2015 between UCO Bank and M/s Edge Garment Pvt. CC No.345/19 CBI Vs. Ravinder Kumar Joshi and Ors. Page 33 Ltd. (Ex. DW2/A-2 to A-5/D-1). He also brought certified copy of Statement of Account of M/s Edge Garment Pvt. Ltd. bearing No .21289910000021 from the period from 15.10.12 to 30.12.2016 (Ex. DW2/A-2 to A-5/D-2). He also brought certified copy of letter dated 22.12.2017 (Ex. DW2/A-2 to A- 5/D-3) addressed by UCO Bank to M/s Edge Garment Pvt. Ltd. During cross-examination by Ld. PP for CBI, he deposed that he had no personal knowledge of the case as he was transferred to this branch in June 2021 and he deposed only on the basis of the records available with the Bank.
42.A-2 to A-5 examined Kumari Neha, Sr. Manager of UCO Bank, Parliament Street, New Delhi as DW 3/A-2 to A-5 who was authorised to depose in the Court on the directions of AGM Ms. Jyoti Sharma. She deposed that the procedure for 'Noting and Protesting' is that it comes under Article 24 of URC 522 which explains that bills of exchange dishonored due to non realization of export payment are first notified (that is 'Noting') mentioning that bills were dishonored and later on certificate are issued against the bills of exchange that has been dishonored which known as 'Protest'. She further deposed that the Bank has to follow the above rules in case, the bills were dishonored due to non realization or non acceptance of export bills. She further deposed that these conditions mentioned on the exporter and importer contract, are executed before the execution of export. She further deposed that on the basis of the bills of exchange of the CC No.345/19 CBI Vs. Ravinder Kumar Joshi and Ors. Page 34 exporter, they process the covering schedule as per the instructions mentioned in the bill of exchange and commercial documents. Once all the documents are submitted by the exporter and if they are found in order, the Bank starts processing the same viz Bank verifies the shipping bills and all the commercial documents. She further deposed that Export Credit Guarantee Corporation India Ltd. (ECGC) provides insurance coverage against the loss with regard to export of their goods and services. She further deposed if overdue occurs for realization, exporter is informed for the same. During cross-examination by Ld. PP for CBI, she deposed that the aforesaid procedure is based on terms and conditions mentioned in the contract of exporter and importer and as far as, she knew, it is mandatory till there are settled terms between exporter and importer also communicated to the Bank.
43.After examining these witnesses, vide orders dated 15.02.2020, the Court closed defence evidence. ARGUMENTS ON BEHALF OF PROSECUTION
44.It is argued by Ld. PP for CBI Sh. Avanish Kumar Chand that the prosecution has succeeded on the basis of evidence adduced before this Court that A-1 Sh. R.K. Joshi being public servant posted as AGM in UCO Bank, Delhi High Court Branch during 2004-05, allowed opening of current account in the name of non existing company i.e. M/s Edge Garment Pvt. Ltd. showing co-accused A-2 C.K.Dubey, A-3 CC No.345/19 CBI Vs. Ravinder Kumar Joshi and Ors. Page 35 Tej Kishen Tikoo as Directors on the basis of forged documents and thereafter sanctioned credit limit of Rs. 1,78,00,000/- in advance against foreign bill under course of collection without valid collateral security and released an amount of Rs 2.20 Lakhs as advance against 19 exports bills despite the aforesaid current account having already been overdrawn to the tune of Rs. 63.25 lakhs and caused a loss to the tune of Rs. 1,64,00,000/- to the UCO Bank and thus committed an offence punishable u/s 13 (2) r/w 13(1) (d) of P.C. Act.
45.Ld. PP for CBI further argued that the prosecution has succeeded in proving that A-1 entered into criminal conspiracy with accused Nos. 2, 3, 4 and 5 to do illegal act of abusing the office of public servant to cheat UCO Bank in furtherance thereof caused a loss to the tune of Rs. 1,64,00,000/- and thus they committed an offence u/s 120B r/w 420/468/471 IPC and 13(2) r/w 13(1) (d) of P.C. Act. It is submitted that the prosecution has proved that application (Ex. PW-3/3) was submitted with UCO Bank on 01.12.2004 by A-2 and A-3, both claiming themselves directors of M/s Edge Garments Pvt. Ltd. for seeking packing credit and bill purchase limit of Rs. 1.50 Crores while A-3, Sh. Tej Kishen Tikoo was not the director at the relevant time as he had already resigned as director on 01.02.2002. He was subsequently appointed as director as per Form No. 32 dated 08.12.2004 (Ex. PW-1/F). Subsequently, A-1 opened a CC No.345/19 CBI Vs. Ravinder Kumar Joshi and Ors. Page 36 Current Bank Account on 07.12.2004 in the name of M/s Edge Garments Pvt. Ltd and other accounts in the name of A- 4 and A-5 were opened on 01.12.2004. It is also proved that at the time of submissions of Account Opening Form, the address of the company recorded in Form No. 18 dated 13.01.2004 (Ex. PW-1/J) was recorded as 52, Yusuf Sarai, New Delhi w.e.f. 01.01.2004 and the said address was changed to 282, Satya Niketan, New Delhi w.e.f. 01.04.2005 as per Form No. 18 dated 25.04.2005 (Ex. PW-1/K). It is argued that accused No. 1, R.K. Joshi was duty bound to get the said facts verified prior to allowing of the opening of current account.
46.It is further argued that A-1 R.K. Joshi, while accepting title documents of the property bearing No.282, Satya Niketan, New Delhi as a collateral security, ignored that the said titled documents were defective and non-mortgageable for securing loan and the said act of R.K. Joshi was in connivance with other accused persons namely A-2 Chander Kant Dubey, A-3 Tej Kishen Tikoo, A-4 Amresh Mishra and A-5 Anand Mishra. It is argued that it is proved on record the immovable property bearing No. 282, Satya Niketan, New Delhi was allotted to Sh. Baru by Slum & JJ Department. Subsequently, Sh. Randhir Singh, one of the legal heirs of Sh. Baru has submitted an application dated 22.04.2002 to the House Tax Authority mentioning that he was only in possession of Ground Floor and other Floors were sold off to Ms. Savitri CC No.345/19 CBI Vs. Ravinder Kumar Joshi and Ors. Page 37 Devi, Amrish Mishra, Anandji Mishra and Sudhir Shukla. Note sheet dated 24.02.2004 also mentioned the name of Kalyani Mishra, Akhilesh Mishra as buyers of 3rd Floor. The aforesaid buyers submitted separate applications supported by their own affidavits and copies of Agreement to Sell mentioning sale consideration paid in the year 1992 to actual allottee Mr. Baru and contractor M/s Man Tower Pvt. Ltd. for purchasing the respective portions of the aforesaid property for valuable consideration way back in 1992. It is also proved on the basis of aforesaid documents that the House Tax Authority assessed separate House Tax in respect of different portions of this property in the names of respective buyers in 2002 itself. It is argued that the Prosecution has successfully proved the charges against all accused beyond reasonable doubt and they are liable to be convicted for the offences charged.
ARGUMENTS ON BEHALF OF A-1 R.K. JOSHI
47.Written submissions were filed on behalf of accused R.K. Joshi and oral arguments were also advanced by Sh. Anil Kumar, Ld. Counsel on his behalf. It is argued that that prosecution has miserably failed to prove any of the charges U/s 13(1) (d) of P.C. Act. It is submitted that allegation against A-1 for allowing of opening current account No. 2323 on the basis of forged documents in the name of alleged non- existing M/s Edge Garments Pvt. Ltd. was not proved as the requisite documents prescribed at S. No. (b) of indicative CC No.345/19 CBI Vs. Ravinder Kumar Joshi and Ors. Page 38 guidelines for filling up current account of corporate customer for joint stock were submitted by director of the Company at the time of opening of the Bank account and the said documents were found adequate establishing the identity of the customer i.e. M/s Edge Garments Pvt. Ltd. It is submitted that the account in question was opened after Bank officials were fully satisfied with the identity of the Company and the persons authorized to open and operate the account. It is further submitted that the aforesaid account was not opened by accused R.K. Joshi and he only permitted to open the current account and the entire process of account opening was done by lower level branch functionaries. It is submitted that none of the documents submitted by M/s Edge Garments Pvt. Ltd. , was found forged and no illegality was committed by accused in permitting the said account to be opened in the usual course of business of the Bank.
48.It is submitted that A-2 C.K. Dubey and A-3 Tej Kishen Tikoo were authorized to open current account of M/s Edge Garments Pvt. Ltd. with UCO Bank, Delhi High Court Branch by its resolution dated 15.11.2004. Reliance was placed on Article 54 of the Articles and Memorandum of Association of M/s Edge Garments Pvt. Ltd. to contend that the said Article conferred the power of the director to open Bank account, to sign cheques on behalf of the company and to operate Bank accounts of the Company and to receive payments, make endorsement and thus A-3 Tej Kishen Tikoo, CC No.345/19 CBI Vs. Ravinder Kumar Joshi and Ors. Page 39 irrespective, his being a Director or not had the authority to open and operate Bank account of the Company in terms of Article 54.
49.It is further argued that PW-1 Sh. R.K. Sain, Sr. Technical Assistant in the office of Registrar of Company proved on record Form No. 8, 18 and 32 and other documents and the same amply demonstrate that M/s Edge Garments Pvt. Ltd., was not non-existing company but was an operational Company which had also intimated about creation of charge in respect of property of Satya Niketan in favour of UCO Bank as collateral security for a loan of Rs. 1,78,00,000/- sanctioned to it by UCO Bank, Delhi High Court Branch.
50.It is further argued that on the strength of 290 of the Companies Act, 1956 and doctrine of Indore Management that even the acts done by a person as director whose appointment was invalid, shall bind by the Company. Ld. Counsel for A-1 further relied upon the various Judgments of the Superior Courts to contend that even, if, an appointment of the Director is found to be invalid, his action can be called into question and would be valid and binding on the company. It is submitted that the prosecution has not adduced any evidence to show that accused/applicant had knowledge that A-3 Tej Kishen Tikoo was not a director of M/s Edge Garments Pvt. Ltd. prior to 08.12.2004. It is submitted that at the time of sanctioning of loan on 16.01.2005 and execution of documents of loan on 17.01.2005, the said Tej Kishen CC No.345/19 CBI Vs. Ravinder Kumar Joshi and Ors. Page 40 Tikko was Director of the Company and neither the company nor its director had ever claimed that A-3 Tej Kishen Tikko was not the Director of the Company prior to 08.12.2004. It is submitted that no act of A-3 Tej Kishen Tikko was disowned by Company and no foreign buyers had raised any objection of any documents signed by him as a director of M/s Edge Garments Pvt. Ltd.
51.It is submitted that sanctioning of credit limits by A-1 in favour of M/s Edge Garments Pvt. Ltd. was not a illegal act as he had exercised only such powers which were vested in him and he sanctioned the credit limits as per the rules and procedure of the Bank. It is further submitted that no one had ever questioned the grant of credit facility of Rs. 1.78 Crores by Bank to the Company. It is submitted that no collateral security used to be obtained in UCO Bank for sanctioned credit facilities to the exporters for export purpose in accordance with circular issued by RBI and UCO Bank as deposed by PW 14 in his cross examination. It is submitted that as per RBI Circular dated 10.08.2004 (Ex. DW-1/A and 1/D), sanction of fresh/enhanced export credit limit should be made within 45 days from the date of receipt of credit limit application and assessment of export credit limit should be "need based and not directly linked to the availability collateral security" as long as the requirement of credit limit is justified on the basis of "exporters performance and direct record". It is submitted that likewise, the aforesaid circular of CC No.345/19 CBI Vs. Ravinder Kumar Joshi and Ors. Page 41 RBI, loan policy of UCO Bank in 2004-05 provided credit facilities to be supported by adequate tangible collateral securities in the form of liquid securities or fixed assets or immovable properties and when ever found required based on the credit risk perception. It is argued on the strength of the aforesaid circular of RBI and approved Bank policy of UCO Bank that even though no collateral security was required in the sanction of credit facility/present loan to M/s Edge Garments Pvt. Ltd. yet, A-1 obtained collateral security in terms of sanction to secure and protect interest of Bank.
52.It is submitted that prosecution has failed to adduce any evidence on record that any document relating to property at Satya Niketan deposited with UCO Bank Branch as collateral security by the Company was false / forged. It is argued that the title documents of the aforesaid property produced by PW-2 R.K. Dogra from office of the Sub-Registrar (Establishment) that Chander Kant Dubey had valid title of the said property mortgaged with UCO Bank as collateral security for credit securities sanction to the Company. It is submitted that on the basis of said title documents, it was held by Debt Recovery Tribunal (DRT) that valid mortgage was created in respect of the said Property in favour of UCO Bank and accordingly, decreed the suit in favour of UCO Bank to recover its dues by sale of mortgaged property. It is submitted that the Company had subsequently repaid Rs. 1.31 Crores to UCO Bank in one time settlement in the present case as is CC No.345/19 CBI Vs. Ravinder Kumar Joshi and Ors. Page 42 testified by DW-2.
53.It is argued that disbursements in ABC accounts were made on the basis of export bills tendered by Company after it exported the goods and received export resolutions which were credited to the Company's accounts. It is submitted that export proceeds credited to the Company's accounts resulted into availability of further drawing powers and balance in the ABC accounts was always below the sanctioned limits or the drawing powers which was less. It is submitted that UCO Bank made available to the company funds to the extent of Rs. 220 Lakhs, while balance in the ABC accounts, always remains below the sanctioned limit and against total release amounts of Rs. 220 lakhs in the current account, a sum of Rs. 311 lakhs was debited and transferred to various accounts. It is argued that release of disbursement out of sanctioned limit is not an illegal act and payments made to various charges to the debited current account No. 2323 is not an illegal act.
54.It is argued that mere disregard of departmental rules, if any, would not result into conviction against delinquent official. More so, when branch head of the Bank was to meet targets set by higher authorities. It is argued that there is no evidence brought by the prosecution to prove infraction by A-1 of any guidelines of the Bank in regard to sanction of credit limits to M/s Edge Garments Pvt. Ltd. It is argued that no evidence was adduced by the prosecution to prove any quid pro quo in the present case or that A-1 entered into conspiracy with other CC No.345/19 CBI Vs. Ravinder Kumar Joshi and Ors. Page 43 accused at any point of time and thus he is entitled to be acquitted from the aforesaid charges.
ARGUMENTS ON BEHALF OF A-2 TO A-5
55.Written arguments were filed on behalf of A-2 to A-5 by Sh. Gurpreet Singh, Ld. Counsel and he also advanced oral arguments on multiple dates. It is argued that the Bank account in the names of M/s Edge Garments and other accused persons, were opened after following the due procedure and verification of the relevant documents establishing the identities of the accused persons as per the Banking norms and mere opening of Bank account is not an offence as Bank suffered no loss due to the said act of opening of Bank account on behalf of accused persons. It is submitted that none of the accused persons forged and fabricated any document and there is no allegation even in the charge-sheet that signatures were forged by any of the accused persons. It is submitted that prosecution has miserably failed to prove any false document showing any sort of forgery on any of the documents. It is submitted that neither any bill nor any document regarding the property is proved to be forged and fabricated, as no witness of the prosecution testified in this regard. Furthermore, the property which was mortgaged with the Bank was taken into possession and subsequently auctioned in pursuance to the proceedings before DRT and no one came forward to challenge the title of A-2 in respect of said property. It is CC No.345/19 CBI Vs. Ravinder Kumar Joshi and Ors. Page 44 submitted that authenticity of the documents on the basis of which A-2 claimed title in himself, were not doubted even by Bank before DRT. It is submitted that essential ingredient to attract Section 13(2) read with Section 13(1)(d) PC Act is that making of demand in pursuance of which any benefit was made available to public servant. However, the same is absent in the present case as the prosecution has failed to prove that public servant i.e. A-1 in the present case either demanded or accepted any kind of pecuniary benefit etc. from any of the accused. It is further submitted that prosecution has failed to prove any mala fide intention of the accused from the beginning to induce any person and the transaction in which ten bills out of nineteen were released, does not attract Section 420 IPC as it is a case of simple non-payment of genuine bills by foreign buyers for which Bank failed to take action of 'Noting and Protesting'. It is submitted that the Prosecution has miserably failed to prove charges against A-2 to A-5 and they are entitled to be acquitted.
FINDINGS
56.Briefly stated the charges for which the accused persons are facing trial are that A-1 R.K. Joshi being public servant posted as AGM of UCO Bank, Delhi High Court Branch during the year 2004-05, entered into criminal conspiracy with A-2 Chander Kant Dubey, A-3 Tej Kishen Tikoo, A-4 Amresh Mishra and A-5 Anand Mishra and opened current account in the name of non-existing company, namely, M/s CC No.345/19 CBI Vs. Ravinder Kumar Joshi and Ors. Page 45 Edge Garments Pvt. Ltd. showing A-2 Chander Kant Dubey and A-3 Tej Kishen Tikoo as Directors on the basis of forged documents and, thereafter, he sanctioned credit limit of Rs. 1.78 crores as 'Advance Against Foreign Bill under Course of Collection (ABC)' on the basis of invalid title documents of the Property, bearing No. 282, Satya Niketan as collateral security and, thereafter, released an amount of Rs. 2.20 Crores on different dates against 19 export bills despite the said current account already overdrawn to the tune of Rs. 63.25 Lakhs and out of said 19 foreign bill, 10 were returned unpaid by the buyers' Bank and from the aforesaid amount of Rs. 2.20 Crores disbursed by the Bank, Rs. 85 Lakhs was transferred to the account of A-5 Anand Mishra and Rs. 24 Crores to the account of A-4 Amresh Mishra causing loss to the Bank to the tune of Rs. 1.64 Crores. Substantive charge against A-1 R.K. Joshi for abusing the office of public servant was also framed on the allegation that he knowingly allowed opening of current account No. 2323 in the name of company and, thereafter, sanctioned the aforesaid credit limit without any proper collateral security and disbursed an amount of Rs. 2.20 Crores. Substantive charges were also framed under Section 420 IPC against A-2 to A-5 for commission of offence of cheating the UCO Bank to the tune of Rs. 1.64 Crores approx.
57.Since, the allegations against public servant for abusing his office are germane to the charges against other accused CC No.345/19 CBI Vs. Ravinder Kumar Joshi and Ors. Page 46 persons, it will be appropriate to examine whether the prosecution has succeeded in proving substantive charge against A-1 R.K. Joshi for commission of offence under Section 13(2) read with Section 13(1)(d) PC Act. First limb of substantive charge against A-1 R.K. Joshi is that he knowingly allowed opening of the current account No. 2323 in the name of Edge Garments Pvt. Ltd, through accused A-2 Chander Kant Dubey and A-3 Tej Kishen Tikoo. It is the contention of Ld. PP for CBI that the aforesaid account was allowed to be opened by A-1 R.K. Joshi on the basis of false documents showing that A-2 Chander Kant Dubey and A-3 Tej Kishen Tikoo were Directors of the Company while in fact, A-3 Tej Kishen Tikoo had already resigned. Per contra, it is submitted as noted above that account was allowed to be opened by A-1 R.K. Joshi as per the rules and regulations of the Bank.
58.The aforesaid rival contentions of the parties are being considered in the light of documents and evidence adduced by the prosecution and A-1 in his defence.
59.It is to be examined first as to what were the Banking instructions and guidelines to open a new Bank account with UCO Bank. PW 11 tendered Circular dated 16.08.2002 issued by RBI to the Chief Executive of all Commercial Banks directing to follow the guidelines on 'Know Your Customer' (KYC in short) and as per the said KYC policy, KYC procedure would be the key principal for identification of CC No.345/19 CBI Vs. Ravinder Kumar Joshi and Ors. Page 47 individual/corporate opening the account and their identification should entail verification through an introductory reference from an existing account holder/ a person known to the Bank or on the basis of the documents provided by the customer. It has been further provided that the Bank should have in place, adequate policies that establish procedures to verify the bonafide identification of individual/corporate opening an account. A per the circular, the objective of KYC framework is two fold. (i) to ensure appropriate customer identification and (ii) to monitor transactions of a suspicious nature. It is provided that Banks should obtain all information necessary to establish the identity/legal existence of each new customer, based preferably on disclosure by customers themselves and typical easy means of establishing identity would be documents such as passport, driving license etc. and in the absence of such documents, verification by existing account holders or introduction by a person known to the Bank may suffice and it should be ensured that the procedure adopted does not lead to denial of access to the general public for Banking services.
60.In view of the aforesaid guidelines, it is to be seen whether A-1 R.K. Joshi followed the aforesaid directions/guidelines of RBI while allowing the opening of current account in the name of M/s Edge Garments Pvt. Ltd. Record reveals that Account Opening Form (PW-3/1) was supplied to the Director of M/s Edge Garments Pvt. Ltd, vide slip dated CC No.345/19 CBI Vs. Ravinder Kumar Joshi and Ors. Page 48 15.04.2006 (Ex. PW-7/10) and the same was filled in showing accused Chander Kant Duby and Tej Kishen Tikoo having been authorized on behalf of M/s Edge Garments Pvt. Ltd to open current Bank account of the company with UCO Bank, Delhi High Court Branch. The said Account Opening Form stipulates 'Indicative Guidelines' for filing in the same and list of documents to be submitted for opening different kind of accounts with the Bank. In the present case, current account was opened on behalf of M/s Edge Garments Pvt. Ltd, and which is joint stock company and as per the guidelines, following documents were required to be submitted at the time of opening joint stock :
i) Copy of Memorandum and Articles of Association ;
ii) Certificate of incorporation ;
iii) Certificate of commencement of business/registration Certificate ; and
iv) Certificate copy of a resolution board of Directors regulating conduct of such account (as per proforma given in his form).
61.The aforesaid current Account Opening Form is accompanied by memorandum of article of association, copy of certificate incorporation (Ex. PW-11/3) (colly.) the Minutes of Meeting dated 15.11.2004 of Board of Directors authorizing A-2 C.K Dubey and A-3 T.K.Tikoo to sign the cheque and other document on behalf of company, and Form-32. The aforesaid Account Opening Form is also accompanied by copy of CC No.345/19 CBI Vs. Ravinder Kumar Joshi and Ors. Page 49 certificate of Importer Exporter Code (IEC) dated 27.01.2004 issued by Director General, Foreign Trade, Ministry of Commerce, Government of India. In addition to aforesaid documents, following documents were also submitted :-
a) letter dated 26.09.2002 of Income Tax Department allotting PAN number to the company (D-6/13).
b) Photo copy of the pass port of Tej Kishan Tikoo (D- 6/15).
c) Letter dated 20th August 2004 countersigned by HDFC certifying that M/s Edge Garments Pvt. Ltd, was maintaining account number 3362210000029 and Chander Kant Duby was the director of the company.
In this letter the photograph of Chandrakant Dubey was also verified by HDFC Bank. (D-6/16).
d) Letter dated 04.03.2002 of Income Tax Department allotting PAN number of Chandrakant Dubey (D-6/17).
e) Statement of current account of M/s Edge Garments Pvt. Ltd., with HDFC Bank.
f) Statement of current account of M/s Edge Garments Pvt. Ltd, with Canara Bank of the period from 01.10.2004 to 23.11.2004 (D-6/21).
62.Thus, various documents in compliance of guidelines provided in the account opening form and the KYC policy were submitted and no prosecution witness deposed that the requisite documents were not annexed alongwith account opening form or that aforesaid documents submitted by the CC No.345/19 CBI Vs. Ravinder Kumar Joshi and Ors. Page 50 Company were not sufficient to establish identity of M/s Edge Garments Pvt. Ltd, or or that the said documents were forged and fabricated.
63.Ld. PP for CBI has argued vociferously that resolution dated 15.11.2004 authorizing A-2 Chander Kant Dubey and A-3 Tej Kishen Tikoo was a false and fabricated documents as A-3 Tej Kishen Tikoo was not Director of the Company at the relevant time and A-1 R.K. Joshi did not get it verified prior to allowing the opening form. However, ld. PP for CBI has failed to demonstrate from the testimonies of the witnesses and the material that it was incumbent on A-1 R.K. Joshi to get the said resolution verified prior to allowing the opening of current account. In fact, extracts of Minutes of Meeting of the Board of Directors of the Company dated 15.11.2004 shows that A-2 Chander Kant Dubey and A-3 Tej Kishen Tikoo, both were Directors of the Company and were authorised to open the Bank account and to sign the cheques and other documents on behalf of the Company. There was no occasion for A-1 R.K. Joshi to doubt the correctness of the aforesaid Resolution. The prosecution has failed to adduce any evidence to show that A-1 R.K. Joshi had the knowledge that A-3 Tej Kishen Tikoo was not the Director of M/s Edge Garments Pvt. Ltd. on 07.12.2014. Nobody on behalf of the Company ever alleged that A-3 Tej Kishen Tikoo was not the Director of the Company prior to 08.12.2004. Furthermore, at the time of sanctioning credit facility to the company on CC No.345/19 CBI Vs. Ravinder Kumar Joshi and Ors. Page 51 16.01.2005 and subsequently, at the time of execution of documents of loan on 17.01.2005, A-3 Tej Kishen Tikoo was the Director of the Company as per the record produced by PW1. In addition to it, the grant of credit facility of Rs. 1.78 Crores by UCO Bank was never questioned by any one on behalf of the Company on the ground that A-3 Tej Kishen Tikoo was not the authorised person to open the Bank account and to enter into any loan transaction with the Bank. None of the acts of A-3 Tej Kishen Tikoo was disowned by the Company and even no foreign buyer raised any objection on any document signed by A-3 Tej Kishen Tikoo as Director of the Company. The prosecution has failed to show any violations of rules, regulations and norms in the procedure adopted by A-1 for opening of the Bank account in the name of Company.
64.Contention of prosecution that M/s Edge Garments Pvt. Ltd. was not an existing and functional entity, is without any merit as evidence adduced during the course of trial by the prosecution and the defence amply demonstrate that the Company was very much in existence and functional. PW-1 Sh. R.K. Saini, Sr. Technical Assistant from the Office of Registrar of Companies has produced Form-18 dated 20.07.2001 (Ex. PW1/H) showing incorporation of the Company at 282, Satya Niketan, New Delhi and, thereafter, another Forms-18 dated 13.01.2004 (Ex. PW1/J) and 25.04.2005 (Ex. PW1/K) showing change of addresses. He CC No.345/19 CBI Vs. Ravinder Kumar Joshi and Ors. Page 52 tendered in evidence various Forms-32 showing induction and resignation of Directors of the Company on several occasions. The witness has also produced Form-18 dated 04.02.2005 (Ex. PW1/L) showing creation of charge of UCO Bank in 'Property' by way of equitable mortgage as collateral security against loan amount of Rs. 1.78 Crores showing estimated value of the 'Property' about Rs.2 Crores. Furthermore, it has also come on record that the Company made exports to foreign buyers after availing credit facilities as deposed by PW-10 Sh. Sukhwinder Singh Gill, Superintendent (Customs). He deposed about various shipping bills vide which Company made exports of carpets/ assorted handicraft brass/ assorted knitted garments showing that it was genuinely engaged in the aforesaid business. Even, during the course of investigation, it was found as reflected from charge-sheet filed by IO that it could not be established that the Company submitted the bills with the Bank without doing any export of carpets etc. ruling out the possibility of preparation of forged documents by handling agents to show any paper transaction of exports in connivance with accused. The aforesaid evidence amply demonstrate that the Company was not the non-existing company, rather it was a functional one and thus, no criminal intent can be imputed to A-1 R.K. Joshi, who merely allowed to open current Bank account of the Company in accordance with the procedures provided in this regard.
CC No.345/19 CBI Vs. Ravinder Kumar Joshi and Ors. Page 53
65.Second limb of charge against A-1 R. K. Joshi is that he sanctioned a credit limit of Rs. 1.78 Crores as Advance against Foreign bill under course of collection without any proper collateral security as the documents of the Property bearing No. 282, Satya Niketan taken as collateral security in respect of the aforesaid credit limit, were not proper as M/s Edge Garments Pvt. Ltd/Chander Kant Dubey were not having valid title of the said property.
66.Ld. PP for CBI heavily relied upon the various valuation reports in respect of mortgaged property prepared by Sh. Virender Kumar Arora who was examined as PW-8 before this court to contend that entire property was not owned by the Company. As per the said valuation reports, accused Chander Kant Dubey was the owner of only ground floor of the mortgage property. As per his reports, the owners of basement and first floor of the aforesaid property were Amrish Mishra and Anand Ji Mishra respectively. The owners of the front and rear portions of the second floor were stated to be Mr. Saroj Kumar Shukla and Mrs. Savitri Devi respectively. Front and rear portion of third floor were stated to be owned by Sh. Kalyanji Mishra and Sh. Ashish Mishra respectively.
67.Per contra, it is submitted by A-1 that no collateral security was required to be taken from M/s Edge Garments Pvt. Ltd, prior to sanction of the advance against foreign bill under course of collection as per the circulars dated 10.08.2004 (Ex. CC No.345/19 CBI Vs. Ravinder Kumar Joshi and Ors. Page 54 DW-1/A-1/D-2) which provides for simplification of the procedures and reduction of data requirements from exporters for assessment of their credit needs. It is submitted that the said circular further provides that assessment of export credit limits should be on need basis and not directly linked to the availability of collateral security and as long as requirement of credit limit is justified on the basis of export performance and track record, credit should not be denied merely on the ground of non availability of collateral security. It is submitted that in view of aforesaid circular, collateral security was not at all required for providing the loan to M/s Edge Garments, yet, A-1, as a matter of abundant caution, to ensure that the credit facilities / loans be duly supported by adequate tangible collateral security to protect the interest of Bank, took collateral security. It is contended that a valid mortgage was created against aforesaid credit limit by way of valid title documents of the aforesaid property in favour of M/s Edge Garments Pvt. Ltd. It is argued that based upon the aforesaid title documents, Debt Recovery Tribunal (DRT in short) in suit instituted by UCO Bank held that valid mortgage was created in respect of aforesaid property in favour of UCO Bank and thereafter a decree was passed in favour of UCO Bank for recovery of its dues by selling the said property.
68.In view of the contentions of the prosecution and A-1 R.K. Joshi, it is to be examined whether securing of the credit CC No.345/19 CBI Vs. Ravinder Kumar Joshi and Ors. Page 55 facility granted to the Company by way of mortgage of collateral security is required or not. The company as an exporter was sanctioned credit limits as advanced against bills in the course of collection which essentially meant that the company would first make export and, thereafter, submit the export bills to the Bank to obtain advance against those export bills and as per the terms of sanction, the company being exporter would be allowed advance equal to drawing power or the sanctioned limit, which is less subject to maintaining a margin of 25% which means cumulative total of all bills less margin @ 25%. The prosecution has failed to adduce any evidence showing that for granting credit facility against the advanced in course of collection, the collateral security is obligatorily required. Even PW 14 Sh. Subhash Chandra Kuchhal, (Retired) Chief Manager, IBB, UCO Bank, Kolkata, who worked in the same branch of Delhi High Court where A-1 R.K. Joshi has worked, deposed that no collateral security used to be obtained by UCO Bank in sanctioning credit facilities to exporters for export purpose on the basis of circular issued by Reserve Bank of India and Head Office of UCO Bank in this regard. A-1 R.K. Joshi summoned Sh. Subodh Kumar Gupta, Sr. Manager, UCO Bank who was examined as DW-1/A-1 tendered in his testimony copy of circular dated 15.07.1999 issued by Dy. General Manager (Credit), UCO Bank Head Office and the same pertains to export credit simplification of procedure. The aforesaid CC No.345/19 CBI Vs. Ravinder Kumar Joshi and Ors. Page 56 witness has also tendered in his evidence a circular dated 10.08.2004 issued by Reserve Bank of India on customer service simplification of procedure for delivery of export credit and reporting requirements. As per the Reserve Bank of India Circular [Ex.DW1/A1/D2], the sanction of fresh data enhanced export credit limits should be named within 45 days from the date of receipt of application seeking credit limit [Para-1.2.1 - Time Limit for Sanction]. It is further provided that in case of renewal of limits of sanction of ad- hoc credit facilities, time taken by Banks should not exceed 30 days and 15 days, respectively. The said circular has also simplified the procedure for application form and reducing data requirements from exporters for assessment of other credit needs [1.3.2]. It is further provided that assessment of export credit limit should be met and not directly linked to the availability of collateral security as long as the requirement of credit limit is justified on the basis of exporters' performance and direct record and credit should not be denied merely on the ground of non-availability of collateral security. [re- 1(f) of 1.3.2 Guidelines of the aforesaid circular]. Likewise, loan policy (Ex. PW 11/C) of UCO Bank for the year 2004- 05 [AD-II] also provides that it shall be ensured that credit facilities/ loans are supported by adequate/ tangible collateral securities preferably in the form of liquid securities or fixed assets and immovable properties wherever found necessary based on the credit risk perception. It has been further CC No.345/19 CBI Vs. Ravinder Kumar Joshi and Ors. Page 57 provided that availability of collateral security shall not be the only criteria for arriving at credit decision as the performance for which the funds being loan and viability of the operation for due repayment of schedule shall carry more emphasis over security being offered. Even circular dated 15.07.1999 of UCO Bank directed the branches of UCO Bank to comply the directions given by Reserve Bank of India regarding export credit facilities made available to the exporters. It states in para-4 that branches/ offices would observe from the above said circular dated 28.02.1999 issued by Reserve Bank of India that Banks were directed not to insist on submissions of export order or LC for every disbursement of pre-shipment credit from exporters with consistent track record. From the aforesaid material and evidence, it is established sufficiently that for availing credit facility of the ABC sought by M/s Edge Garments Pvt. Ltd., collateral security was not the mandatory requirement in sanction of the said facility and it is specifically mentioned in loan policy of UCO Bank [AD-II] that collateral security shall not be insisted upon in the cases where Reserve Bank of India directives specifically prohibit the Bank from doing so.
69.In the present case, despite the aforesaid discretion conferred upon A-1 R.K. Joshi by way of aforesaid circular, he attached a condition of collateral security for sanction of the aforesaid facility in order to secure and protect the interest of the Bank. Ld. PP for CBI contended that even if it is presumed that A-1 CC No.345/19 CBI Vs. Ravinder Kumar Joshi and Ors. Page 58 R.K. Joshi was having the discretion to take or not to take collateral security for sanctioning the credit facilities to the Bank, however once he exercised that discretion, he should have ensured that the interest of the Bank was protected by way of creating valid mortgage which is absent in the present case.
70.The aforesaid contention of Ld. PP for CBI is being examined keeping in view evidence adduced by the prosecution and A-1 R.K. Joshi. As noted above, the 'Property' was mortgaged in the present case and as per the prosecution case, the said mortgage was not proper in view of valuation reports raising doubt about ownership of the said 'Property' in favour of A-2. During the course of trial, PW-5 Sh. Anand Prakash tendered in his evidence the entire file of Slum and J.J. Department in respect of Plot No. 282, J.J. Colony, Moti Bagh, New Delhi. Perusal of the said file reveals that the aforesaid plot was allotted in the name of one Mr. Baru S/o Sh. Makhan and lease deed was executed in his favour on 13.02.1985. Record further reveals that Sh. Baru and his wife expired on 28.09.1993 and 28.11.1991, respectively leaving behind Sh. Darshan Singh, Sh. Randhir Singh, Sh. Balwan Singh, Sh. Azad Singh, all sons and daughters who had executed relinquishment deed duly registered in the office of Sub- Registrar relinquishing their share in the said Property in favour of their aforesaid LRs except Randhir Singh. Subsequently, all the aforesaid sons of Sh. Baru applied for CC No.345/19 CBI Vs. Ravinder Kumar Joshi and Ors. Page 59 mutation in their favour with Slum & J.J. Department along with 'No Objection Certificate' and affidavit in favour of Randhir Singh. On the basis of aforesaid application, permission was granted on 24.01.2005 (Ex. PW-5/B-2) and a letter dated 25.01.2005 (Ex. PW-5/B-1) was issued by Assistant Director, Lease and Liquidation Branch, Slum & J.J. Department to the aforesaid legal heirs. The file further reveals that an application dated 28.01.2005 was moved by accused No. 2 Chander Kant Dubey before the Dy. Director (L & JJ) J.J. Slum Department seeking free hold of plot No. 282, J.J. Slum Colony. In the said application it is stated that legal heirs of Late Sh. Baru Ram had executed registered GPA, SPA, etc in his favour and a request was made to convert the aforesaid plot to free hold plot in his name. Subsequently, A-2 Chander Kant Dubey had moved another application dated 09.05.2005 before the Dy. Director seeking 'No Objection Certificate' to mortgage the aforesaid plot/property submitting that he had purchased the said property from the previous owners of the property vide valid Agreement to Sell and GPA registered in his favour. Registered SPA, GPA, Agreement to Sale mentioning sale consideration were shown to have been executed by legal heirs of Late Sh. Baru Ram in favour of A-2 Chander Kant Dubey, Director, Edge Garments (P) Ltd. as reflected from the photocopies of aforesaid documents submitted by A-2 Chander Kant Dubey with the Slum and J.J. Department. CC No.345/19 CBI Vs. Ravinder Kumar Joshi and Ors. Page 60 Subsequently, vide letter dated 10.05.2005 issued by Asstt. Director, (L & L & JJ) J. J. Slum Department, A-2 Chander Kant Dubey was granted permission to mortgage the aforesaid residential plot with UCO, High Court Branch with certain terms and conditions.
71.The contention of Ld. PP for the CBI that the aforesaid documents such as SPA, GPA, Agreement to Sale etc. do not confer any right, title and interest in the aforesaid Property in favour of A-2 Chander Kant Dubey and thus, the mortgage was not the valid mortgage, is required to be considered keeping in view the policy of Bank in respect of the aforesaid documents and position of law with regard to the creation of right, title and interest in the aforesaid property on the strength of the aforesaid documents. PW-14 in his testimony deposed that for collateral securities, one should be the owner of landed/house property with clear title of the property in his favour. He further testified that the Bank could not advance the loan on the basis of GPA as collateral security. In his cross examination, he denied the suggestion that in 2004-05, the properties covered by registered GPA and registered Agreement to Sell could be taken as collateral security while sanctioning the loan. However, except the bald statement of the prosecution witness, the prosecution has failed to bring on record any rules, regulations, circulars etc. of the Bank debarring to take the aforesaid documents for the purposes of mortgage. Nothing has been produced by the prosecution to CC No.345/19 CBI Vs. Ravinder Kumar Joshi and Ors. Page 61 demonstrate that no mortgage could have been created on the basis of the registered SPA, GPA, Agreement to sell of the property. Vide GPA (Ex. PW-5/D-2) executed in favour of A- 2 Sh. Chander Kant Dubey, he was given Power of Attorney to mortgage the said plot at such terms of conditions as he thinks fit and proper.
72.Now coming to the validity of the aforesaid documents for conferring right, title and interest in favour of A-2, this Court is conscious of the judgment of the Division Bench in Asha M. Jain vs. Canara Bank 94 (2001) DLT 841 where the Hon'ble Delhi High Court had taken judicial notice of such transactions being prevalent in Delhi holding that considering the large-scale transfer of properties in Delhi by the mode of Agreement to Sell, Power of Attorney etc, the said documents would be considered documents of title. Though the Hon'ble Supreme Court in Suraj Lamp and Industries Private Limited Vs. State of Haryana (2012) 1 SCC 656, has overruled the said judgment only to the extent that such documents do not confer title to immovable property, yet such overruling does not take away the judicial notice taken by the Division Bench of Hon'ble High Court of the prevalence of such transactions and the reason therefor. Moreover the Hon'ble Supreme Court in Maya Devi Vs. Lalita Prasad 2014 SC 1356 held that its direction and decision in Suraj Lamp (supra) was prospective and would not upset the past transactions of sale on the basis of Agreement to Sell and CC No.345/19 CBI Vs. Ravinder Kumar Joshi and Ors. Page 62 registered power of attorneys and thus the documents such as Agreement to Sell, Power of Attorney etc. of a date prior to the pronouncement of the said judgment on 11th October, 2011 are documents of title. In view of the aforesaid settled law facts and circumstances of the present case, coupled with the failure of the prosecution to place on record any policy, rules, circulars etc of Bank restraining A-1 as a Bank Manager not to create mortgage on the strength of the aforesaid documents, this court has no hesitation to conclude that valid mortgage was created in favour of Bank on the strength of the documents executed in the name of A-2.
73.The aforesaid conclusion of this Court is further fortified by the stand taken by the Bank before DRT in the suit instituted by Bank seeking recovery of Rs. 2,39,71,922/-. In its reply (Ex. PW-11/BB), the Bank averred that the applicants M/s Edge Garments Pvt. Ltd, A-2 Chander Kant Dubey and A-3 Tej Kishen Tikko had already mortgaged the property bearing No. 282, Satya Niketan, New Delhi in favour of Bank. It has been specifically stated by the Bank that equitable mortgage was created by M/s Edge Garments with the Bank by depositing agreement to sale, GPA duly registered and executed by legal heirs of late Sh. Baru in favour of company. It has also been averred that the contention of the applicant/company that duly registered agreement to sell was not sufficient for creating collateral security of the property is wrong as from bare perusal of the record itself, it is clarified CC No.345/19 CBI Vs. Ravinder Kumar Joshi and Ors. Page 63 that property stated above was mortgaged by company with an intent to create equitable mortgage of the property with the Bank. It has also stated that the Bank, though had not taken actual physical possession of the property, yet it had taken legal action under Securatization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002.
74.PW-11 in his deposition before this court on having been declared hostile on the request of by Ld. PP, testified that symbolic possession of the aforesaid property mortgaged on behalf of the Company by accused Chandra Kant Dubey was taken by the Bank. In his cross examination conducted on behalf of A-2 to A-5, the witness has further deposed that he had followed the requisite guidelines at the time of taking symbolic possession of the property mentioned in his notice of possession (Ex. PW-11/DA). Even PW-12 Investigation Officer in his cross examination admitted that vide Ex. PW- 11/DA, Bank had already taken the possession of the Property on 04.01.2006.
75.PW-8 as valuer was entrusted duty to evaluate the market value of the property to be mortgaged and it was not in his domain to verify the ownership of the said property and thus to that extent, his reports regarding ownership of the property are beside the mark sans the mandate given to him. Nevertheless, in his cross examination conducted on behalf of A-1, he deposed that in respect of all the properties referred to CC No.345/19 CBI Vs. Ravinder Kumar Joshi and Ors. Page 64 above in his examination in chief about which he had given valuation reports, A-2 Chander Kant Dubey was the GPA holder of the respective portions of the Property. Even A-4 & A-5 in their respective statements denied to have any right, title or interest in the 'Property' and stated that A-2 was having exclusive title in the 'Property'.
76.In view of the aforesaid discussion and the admission of PW-8, who testified that A-2 Chander Kant Dubey was having GPA of the 'Property' in his favour, valid mortgage was created by A-1 R.K. Joshi securing the interest of Bank. Though, A-1 R.K. Joshi was having the discretion not to take collateral security for granting credit facility to the Bank, yet he took the same and due to his farsightedness, the Bank succeeded in the suit instituted before DRT and decree was passed holding the Bank entitled to recover a sum of Rs. 2,39,71,922/- with interest @ 11% per annum [D-2/ A-1] vide Judgments dated 30.04.2012 [Ex.DW2/A1/D4] and 16.12.2013 [Ex.DW2/A1/D3]. In the said judgments, DRT came to the conclusion that valid mortgage was in fact, created. Subsequently, Bank entered into full and final settlement with the Company for an amount of Rs. 1.31 Crores and the said amount was received by the Bank as reflected from the order dated 07.01.2017 passed by DRT-II [Ex. DW2/A1/D6].
77.During the course of arguments, Ld. PP for CBI has vehemently relied upon the observations made by Ld. CC No.345/19 CBI Vs. Ravinder Kumar Joshi and Ors. Page 65 Predecessor of this Court while passing a detailed order dated 30.07.2011 submitting that the title of the mortgaged property is under cloud in view of the records placed in the house tax file of the said property. However, prosecution neither cited any witness to prove the said relevant record nor made any efforts to prove the aforesaid documents and thus, the submission of Ld. PP for CBI have not been substantiated. Per contra as noted above, it has come on record that mortgage of the Property was valid as defect, if any, in mortgage was never agitated by the Bank before DRT and a decree was also passed on the suit instituted by the Bank and none came forward to challenge the authenticity of the ownership vesting in A-2 Chander Kant Dubey and subsequently, Bank had also entered into settlement and an amount of Rs. 1.31 Crores was also paid to it.
78.In view of the aforesaid discussion, it can safely be concluded that prosecution has failed to prove that A-1 R.K. Joshi being a public servant allowed the opening of Bank account of the company malafidely without following the norms of the Bank and obtained invalid documents as security contrary to the Banking norms.
79.Another limb of charge against A-1 R.K. Joshi is that he sanctioned a credit limit of Rs. 1.78 Crores as advance against foreign bill under course of collection (ABC) and released Rs. 2.20 Crores on different dates as advanced against nineteen bills causing loss to the tune of Rs. 1.64 Crores to the Bank CC No.345/19 CBI Vs. Ravinder Kumar Joshi and Ors. Page 66 by abusing the financial position. Though, no charge has been framed raising question about competence of A-1 R.K. Joshi in sanctioning the aforesaid credit limit and discrepancy in the procedure adopted by him for sanctioning of the said loan, perusal of charge-sheet reveals that it was alleged that loan application of the company was processed by Ranjit Banerjee, the then Sr. Manager on the direction of by A-1 R.K. Joshi, the then AGM ignoring various discrepancies while sanctioning credit facility. None of the prosecution witnesses deposed that A-1 R.K. Joshi was not having the power to sanction the questioned credit limit in favour of M/s Edge Garments Pvt. Ltd. or that he did not follow the procedure laid down for granting the aforesaid credit facility. In fact, sanction of loan in the present case would have certainly been within the permitted powers of A-1 R.K. Joshi as the same had never been questioned by the Bank at any stage even during the proceedings before DRT.
80.Perusal of letter dated 16.01.2005 [Ex.PW14/B] sanctioning the credit facilities in favour of the company reflects that the facility was granted subject to various terms and conditions including securing it by the personal guarantee of the Directors of the Company and further by the Property at Satya Niketan as collateral security of equitable mortgage. It further shows that the aforesaid facility was sanctioned subject to further condition of the Bank ensuring that at all times ECGS exporters' policy to be remained in force for a minimum sum CC No.345/19 CBI Vs. Ravinder Kumar Joshi and Ors. Page 67 of Rs. 2 Crores in respect of which premiums were directed to be paid by the Company regularly to ECGC. In view of the aforesaid facts and circumstances, it cannot be said as contended by Ld. PP for CBI that A-1 R.K. Joshi contravened rules and regulations of the Bank while sanctioning the aforesaid credit facility in favour of the Bank.
81.Now coming to the aspect of disbursal of the amount to the Company. As noted above, the Company was sanctioned a limit of Rs.1.78 Crores under ABC and as per the operational requirement of the said facility, the Company as a borrower whenever submitted export bills, the permissible amount by deducting margin @ 25% from the total amount of the export bills so submitted was debited in ABC account keeping the balance below the drawing power or sanctioned limit whichever was lower. As per the aforesaid procedure, disbursements in the account were made on the basis of export bills tendered by the Company showing exporting the goods. As per the aforesaid arrangement, A-1 R.K. Joshi released the amount of Rs. 2.20 Crores on several dates as advanced against nineteen bills, ten of which remained unpaid. Disbursement of funds on the basis of export bills in a tabular form is as under :
Date Particulars Debit Credit Balance
18.01.2005 To Loan disbursed 70,00,000/- 70,00,000/-
24.01.2005 To Loan disbursed 20,00,000/- 90,00,000/-
25.01.2005 To Loan disbursed 20,00,000/- 110,00,000/-
02.02.2005 To Loan disbursed 36,00,000/- 146,00,000/-
CC No.345/19 CBI Vs. Ravinder Kumar Joshi and Ors. Page 68
16.02.2005 To Loan disbursed 35,00,000/- 181,00,000/-
31.03.2005 To Loan disbursed 38,00,000/- 219,00,000/-
82.The aforesaid chart shows, UCO Bank made funds to the extent of Rs. 2.20 Crores available to the Company while the balance in ABC account of the Company always remained below the sanctioned limit as the export proceeds kept credited to the Company's ABC account, resulting into availability of further drawing power in favour of the Company. It is not the case of prosecution that export bills submitted by the Company were forged and fabricated or that no export of the goods took place on behalf of the Company. In fact, the charge-sheet mentions that investigation could not establish that company submitted the bills without doing any exports of carpets and possibility of the fabrication of documents by handling agents to show paper transaction of exports could not be established. It is further stated in the charge-sheet that allegation of submission of false bills along with fake shipping bills, bills of lading etc. could not be substantiated. However, during the course of arguments before this court, Ld. PP for CBI relied upon observation of Ld. Predecessor of this court in the detailed order framing charge submitting that the various flaws were noticed by the court in the bills submitted by the company. No doubt, the aforesaid observations were made by the Ld. Predecessor of this court, however, fact remains that the prosecution neither CC No.345/19 CBI Vs. Ravinder Kumar Joshi and Ors. Page 69 examined any witness nor adduced any evidence to substantiate those observations disproving authenticity of the export bills submitted by the Company with the Bank. In fact, PW-10 Sukhwinder Singh Gills, Superintendent (Customs) in his testimony proved export of carpets/ assorted handicraft brass/ assorted knitted garments by M/s Edge Garments Pvt. Ltd. through various shipping bills [Ex.PW10/A to Ex.PW10/H (colly) and Ex.PW10/J (colly) to Ex.PW10/L (colly)] during the period 17.12.2004 to April, 2005. He deposed that 'Let Export Order' was given by him in respect of above consignment after satisfying with the documents filed by the Company on whose behalf all requisite documents as per shipping bills were filed and he did not find any discrepancy in the said shipping bills. The said witness also provided letters dated 31.01.2008, 06.02.2008 and 07.02.2008 [Ex.PW10/M (colly)] establishing that duty draw back was also sanctioned in respect of exports by M/s Edge Garments Pvt. Ltd. as per policy of Government of India. Upon the analysis of the aforesaid documents and testimony of the witness, this Court has no hesitation to conclude that M/s Edge Garments Pvt. Ltd. was genuinely engaged in the business of exports of the items mentioned in invoices and the Company exported the goods for which the credit facilities were sanctioned by A-1 / UCO Bank.
83.Since accused persons have been charged for the offence of conspiracy alongwith misconduct as prescribed u/S.13(1)(d) CC No.345/19 CBI Vs. Ravinder Kumar Joshi and Ors. Page 70 r/w S. 13(2) of POC Act, 1988, it is necessary to examine whether the misconduct as prescribed u/S.13(1)(d) is made out or not.
Section 13(1)(d) of POC Act, 1988 reads as under :
"13. Criminal misconduct by a public servant: (1) A public servant is said to commit the offence of criminal misconduct, -
(d) if he,-
(i) by corrupt or illegal means, obtains for himself or for any other person any valuable thing or pecuniary advantage; or
(ii) by abusing his position as a public servant, obtains for himself or for any other person any valuable thing or pecuniary advantage; or
(iii) while holding office as a public servant, obtains for any person any valuable thing or pecuniary advantage without any public interest ."
The necessary ingredients of Section 13(1)(d) are as follows :
1) accused was a public servant;
2) accused used corrupt or illegal means or otherwise abused his position; and,
3) accused obtained for himself or for any other person any valuable thing or pecuniary advantage.
84.It is settled law that in service jurisprudence, the employer can not fish out any conduct of employee as misconduct unless it is specifically provided in service rules applicable to the employee. The concept of misconduct in relation to the service jurisprudence came up for discussion before the Hon'ble Apex Court in State of Punjab and Ors. Vs. Ram Singh ExConstable, (1992) 4 SCC 54, in which it was inter alia held that the word 'misconduct' though not capable of precise definition, on reflection receives its connotation from the context, the delinquency in its performance and its effect CC No.345/19 CBI Vs. Ravinder Kumar Joshi and Ors. Page 71 on the discipline and the nature of the duty. It may involve moral turpitude; it must be improper or wrong and unlawful behaviour, willful in character; forbidden act, a transgression of established and definite rule of action or negligence in performance of the duty and the act complained of bears forbidden quality or character. Its ambit has to be construed with reference to the subject matter and the context wherein the term occurs, regard being had to the scope of the statute and the public purpose it seeks to serve. The misconduct also came up for adjudication before the Hon'ble High Court in Anil Maheshwari Vs. CBI 2013 136 DRJ 249 , wherein it was inter alia held that for an offence defined u/S. 13(1)(d) of POC Act, 1988, the prosecution is required to prove the criminality in the misconduct and therefore, the misconduct should be accompanied by culpability i.e. the requisite knowledge that the misconduct is so gross so as to constitute an offence. It has also been held in catena of Judgments that the definition of misconduct U/s 13(1)(d) of POC Act, shows that the pecuniary advantage or advantage of any valuable thing to himself or to the other person should be coupled by either corrupt or illegal means or abusing the position as a public servant or without any public interest.
85.In the present case as discussed above, public servant/ A-1 R.K. Joshi has been alleged to have misconducted himself by not complying rules & regulations of his employer, i.e., UCO Bank while allowing to open the Bank account of the CC No.345/19 CBI Vs. Ravinder Kumar Joshi and Ors. Page 72 Company, sanctioning credit facility to it and, thereafter, disbursing the amount. However, prosecution has failed to bring any specific material and evidence to show as to what rules & regulations were not followed by him and in what manner he had abused his position as a public servant or misconducted in any manner and got any pecuniary advantage for himself. Though, it was expected of him that prior to disbursing loan to the Company, he should have waited for the report of valuer yet, the said conduct of the public servant will not fall within the ambit of financial indiscretion or violation of norms imputing any criminal intent to him, more so when he was having the discretion to sanction the said facility even without asking for collateral security on behalf of the Company and more further, the mortgage was found to be genuine as noted above. It is no longer res integra that for attributing criminal intent to a public servant for any office, acts or omission in his performance of duty, as per the criminal jurisprudence, the prosecution is duty bound to prove its case and the court cannot adjudicate on the basis of presumptions and inferences.
86.In Jimmy J. Daruwalla vs. Central Bureau of Investigation : MANU/MH/2749/2012, the Hon'ble High Court of Bombay was considering the rules, regulations and norms of Bank relating to sanction of loan. The charge was framed by the Ld. Trial Court u/S.120B r/w S.420, 468 and 471 IPC r/w Section 13(2) r/w Section 13(1)(d) of PC Act. CC No.345/19 CBI Vs. Ravinder Kumar Joshi and Ors. Page 73 The Hon'ble High Court of Bombay held that the act of the Bank official may at worst be indiscretion or indiscipline which could be dealt with administratively by the Bank as a departmental delinquency as the material collected did not show that there was either sufficient ground for proceeding against the applicant or that there was material which if unrebutted would warrant the conviction of the applicant on criminal charges of engaging in a conspiracy to forge documents or to cheat and accordingly discharged the public servant. Special Leave to Appeal (Crl) No(s). 5322/2013, against the aforesaid Judgment before the Hon'ble Apex Court was dismissed. In the present case, the prosecution has not brought on record anything showing that some internal departmental enquiry was conducted by Bank against A-1 R.K. Joshi as neither any report of enquiry has been placed on record nor is there anything on record to suggest, if any administrative action was taken against him into the allegations against him in the present case.
87.Further case of the prosecution as per the charges framed against accused persons are that they entered into criminal conspiracy to cheat the Bank and in pursuance of which, an account in the name of the Company was opened by A-2 Chander Kant Dubey and A-3 Tej Kishen Tikoo on the basis of forged documents and Bank account was opened by A-4 Amresh Mishra and A-5 Anand Mishra contemporaneously and credit facilities was availed on behalf of the Company CC No.345/19 CBI Vs. Ravinder Kumar Joshi and Ors. Page 74 and, thereafter, the loan amount disbursed by the Bank was siphoned off to the Bank accounts of A-4 and A-5 causing loss to the Bank. The conspiracy has been defined under Section 120A IPC, which reads as under:
"120A - Definition of criminal conspiracy - When two or more persons agree to do, or cause to be done, -
1. an illegal act, or
2. an act which is not illegal by illegal means, such an agreement is designated a criminal conspiracy:
Provided that no agreement except an agreement to commit an offence shall amount to a criminal conspiracy unless some act besides the agreement is done by one or more parties to such agreement in pursuance thereof. Explanation : It is immaterial whether the illegal act is the ultimate object of such agreement, or is merely incidental to that object."
90.The conspiracy is normally hatched in secrecy and executed in dark. It is seldom an open affair and mostly required to be proved by circumstantial evidence. Usually both existence of the conspiracy and its objects have to be inferred from the circumstances and the conduct of the accused. The well known rule governing circumstantial evidence is that each and every incriminating circumstance must be clearly established by reliable evidence. In order to attribute the offence of criminal conspiracy, the act or conduct of the parties must be conscious and clear to mark as to what should be done. It is not necessary that there must be a clear, categorical and express agreement between the accused persons to constitute an offence of conspiracy. However, an implied agreement must manifest upon relying on principles CC No.345/19 CBI Vs. Ravinder Kumar Joshi and Ors. Page 75 established in the cases of circumstantial evidence. In conspiracy, though, express agreement need not be proved, yet some kind of physical manifestation of agreement between the accused persons is required to be established. In view of the aforesaid, it is to be examined whether the prosecution has succeeded to adduce any evidence whatsoever to satisfy this Court that there was a prior meeting of minds between the accused no. 1 to 5.
88.While discussing evidence against A-1 R.K. Joshi who is a public servant, it has been found that he opened the Bank account in the name of Company after following guidelines and norms laid down by the Bank in this regard and the credit facility of loan was also validly sanctioned and subsequently disbursed as per the norms of the Bank. It has been found that he had not committed any offence for which he has been charged and thus, he is not part of the alleged conspiracy to defraud the Bank.
89.Substantive charge against A-2 Chander Kant Dubey and A-3 Tej Kishen Tikoo had also been framed alleging that they had dishonestly and fraudulently signed account opening form for opening current account No. 2323 in the name of the Company showing themselves as Directors and submitted forged property documents in respect of property No. 282, Satya Niketan, New Delhi and thus they used forged and fabricated documents. The case of the prosecution against A-3 Tej Kishen Tikoo was that he was not the Director of the CC No.345/19 CBI Vs. Ravinder Kumar Joshi and Ors. Page 76 Company at the relevant time of opening the account in the name of Company, but he with criminal intent shown himself as Director by filing of Board of Resolution wherein he was shown as Director. PW-1 in his testimony deposed that A-3 Tej Kishen Tikoo was the Director and subsequently, he resigned on 01.02.2002 as per Form-32. He further deposed that he was director of the Company on 08.12.2004 as per the Form-32. On the basis of the aforesaid testimony, the prosecution contended that A-3 Tej Kishen Tikoo was not the Director on 01.12.2004 when application for seeking credit facility on behalf of the company was filed and on 07.12.2004 when Bank account was opened. It was contended that Board Resolution is false and fabricated. Per contra Ld. Counsel for A-2 Chander Kant Dubey and A-3 Tej Kishen Tikoo submitted that A-3 Tej Kishen Tikoo was the Director on the relevant dates as prosecution has failed to show who were the Directors on 01.12.2004 and 07.12.2004. It is further argued that for the sake of argument even if it is assumed that he was not the Director on the relevant dates, his declaration in the account opening form does not fall within the purview of making false documents. The submission of Ld. Counsel for A-3 has force as A-3 Tej Kishen Tikoo was authorised by the Company as per Board Resolution to open the Bank account and enter into any financial transaction and none came forward on behalf of the Company to challenge the competence and authorisation of A-3 Tej Kishen Tikoo. CC No.345/19 CBI Vs. Ravinder Kumar Joshi and Ors. Page 77
90.The case of the Prosecution against Chander Kant Dubey (A-2) and Tej Kishen Tikko (A-3) is that they forged the documents showing Tej Kishen Tikko as Director of the Company and, thereafter they also fabricated the title documents in respect of Property No. 282, Satya Niketan, Delhi for mortgage. Now coming to the documents showing Tej Kishen Tikko as Director, the Prosecution has relied upon the Board Resolution wherein Tej Kishen Tikko has been shown as Director and, thereafter in the same capacity, he alongwith A-2 Chander Kant Dubey opened the Current Bank Account in the name of the Company and thus, it is to be seen whether the Board Resolution is a forged and fabricated document. At this juncture, it is pertinent to have a look at the definition of 'forgery' and the precedents on this aspect.
463. Forgery: Whoever makes any false documents [or false electronic record] or part of a document [or electronic record,] with intent to cause damage or injury, to the public or to any person, or to support any claim or title, or to cause any person to part with property, or to enter into any express or implied contract, or with intent to commit fraud or that fraud may be committed, commits forgery.
98. It would also be necessary to understand the scope of Sec. 464, I.P.C. in this context. Making a false document. A person is said to make a false document or false electronic record -
First. Who dishonestly or fraudulently :
(a) makes, signs, seals or executes a document or part of a document;
(b) makes or transmits any electronic record or part of any electronic record;
(c) affixes any electronic signature on any electronic record;
(d) makes any mark denoting the execution of a document CC No.345/19 CBI Vs. Ravinder Kumar Joshi and Ors. Page 78 or the authenticity of the electronic signature, with the intention of causing it to be believed that such document or part of document, electronic record or electronic signature was made, signed, sealed, executed, transmitted or affixed by or by the authority of a person by whom or by whose authority he knows that it was not made, signed, sealed, executed or affixed; or Secondly. Who without lawful authority, dishonestly or fraudulently, by cancellation or otherwise, alters a document or an electronic record in any material part thereof, after it has been made, executed or affixed with electronic signature either by himself or by any other person, whether such person be living or dead at the time of such alteration; or Thirdly. Who dishonestly or fraudulently causes any person to sign, seal, execute or alter a document or an electronic record or to affix his electronic signature on any electronic record knowing that such person by reason of unsoundness of mind or intoxication cannot, or that by reason of deception practised upon him, he does not know the contents of the document or electronic record or the nature of the alteration.
Explanation 1:- A man's signature of his own name may amount to forgery.
Explanation 2:- The making of a false document in the name of a fictitious person, intending it to be believed that the document was made by a real person, or in the name of a deceased person, intending it to be believed that the document was made by the person in his life-time, may amount to forgery.
Explanation 3:- For the purposes of this Section, the expression "affixing electronic signature" shall have the meaning assigned to it in clause (d) of sub-sec. (1) of Sec. 2 of the Information Technology Act, 2000.
91.At this stage, it is also pertinent to look at Sections 468 and 471 IPC for which A-2 and A-3 have been charged. Section 468 makes an offence for using forged documents for the purpose of cheating and provides as under :
Section 468 IPC. Forgery for purpose of cheating.-- Whoever commits forgery, intending that the [document or electronic record forged] shall be used for the purpose of cheating shall be punished with imprisonment of either CC No.345/19 CBI Vs. Ravinder Kumar Joshi and Ors. Page 79 description for a term which may extend to seven years, and shall also be liable to fine.
92.A close scrutiny of the aforesaid provision makes it clear that Section 463 IPC defines the offence of forgery, while Section 464 IPC substantiates the same by providing an answer as to when a false document could be said to have been made for the purpose of committing an offence of forgery under Section 463 IPC. Therefore, it can safely be deduced that Section 464 IPC defines one of the ingredients of forgery i.e. making of a false document. Further, Section 468 IPC provides punishment for the commission of the offence of forgery intending that the document shall be used for the purpose of cheating. In order to sustain a conviction under Section 468 and 471 IPC, first it has to be proved that forgery was committed under Section 463 IPC, implying that ingredients under Section 464 IPC should also be satisfied.
Therefore, unless and until ingredients under Section 463 IPC are satisfied a person cannot be convicted under Section 468 IPC and/or Section 471 IPC by solely relying on the ingredients of Section 464 IPC, as the offence of forgery would remain incomplete.
93.In the present case as noted above, the Resolution was passed by the Board of Directors of the Company authorising A-2 & A-3 to open the Bank Account and to conduct other transactions on behalf of the Company. A-3 has been shown as Director of the Company on the date of passing the Board CC No.345/19 CBI Vs. Ravinder Kumar Joshi and Ors. Page 80 Resolution on 15.11.2004 The Prosecution has not brought any record showing that on the aforesaid date, A-3 was not the Director of the Company or some other persons were working as Directors. Nobody came on behalf of the Company to challenge the factum of the Directorship of A-3 as mentioned in the Board Resolution.
94.The Hon'ble Apex Court in the case of Sheila Sebastian Versus R. Jawaharaj and Anr. : 2018 (7) SCC 581 after referring certain other Judgments, has discussed this issue of making a false document and forgery. It has been held as under :
"20. The key to unfold the present dispute lies in understanding Explanation 2 as given in Section 464 of IPC. As Collin J., puts it precisely in Dickins v. Gill, (1896) 2 QB 310, a case dealing with the possession and making of fictitious stamp wherein he stated that to make, in itself involves conscious act on the part of the maker. Therefore, an offence of forgery cannot lie against a person who has not created it or signed it.
21. It is observed in the case Md. Ibrahim and Ors. vs. State of Bihar and Anr., MANU/SC/1604/2009 : (2009) 8 SCC 751 that- a person is said to have made a 'false document', if
(i) he made or executed a document claiming to be someone else or authorised by someone else; or
(ii) he altered or tampered a document; or
(iii) he obtained a document by practicing deception, or from a person not in control of his senses.
22. In Md. Ibrahim (supra), this Court had the occasion to examine forgery of a document purporting to be a valuable security (Section 467, IPC) and using of forged document as genuine (Section 471, IPC). While considering the basic ingredients of both the offences, this Court observed that to attract the offence of forgery as defined under Section 463, IPC depends upon creation of a document as defined under Section 464, IPC. It is further observed that mere execution of a sale CC No.345/19 CBI Vs. Ravinder Kumar Joshi and Ors. Page 81 deed by claiming that property being sold was executant's property, did not amount to commission of offences punishable under Sections 467 and 471, IPC even if title of property did not vest in the executant.
23. The Court in Md. Ibrahim (supra) observed that :
There is a fundamental difference between a person executing a sale deed claiming that the property conveyed is his property, and a person executing a sale deed by impersonating the owner or falsely claiming to be authorised or empowered by the owner, to execute the deed on owner's behalf. When a person executes a document conveying a property describing it as his, there are two possibilities. The first is that he bona fide believes that the property actually belongs to him. The second is that he may be dishonestly or fraudulently claiming it to be his even though he knows that it is not his property. But to fall under first category of 'false documents', it is not sufficient that a document has been made or executed dishonestly or fraudulently. There is a further requirement that it should have been made with the intention of causing it to be believed that such document was made or executed by, or by the authority of a person, by whom or by whose authority he knows that it was not made or executed.
When a document is executed by a person claiming a property which is not his, he is not claiming that he is someone else nor is he claiming that he is authorised by someone else. Therefore, execution of such document (purporting to convey some property of which he is not the owner) is not execution of a false document as defined under Section 464 of the Code. If what is executed is not a false document, there is no forgery. If there is no forgery, then neither Section 467 nor Section 471 of the Code are attracted."
(Emphasis supplied)
95.In the present case as noted above, the case of the prosecution is that A-3 Tej Kishan Tikoo made a false declaration in the account opening form claiming himself to be the Director of the Company on the basis of Board Resolution and thus, he committed an act of forgery. The said declaration was made CC No.345/19 CBI Vs. Ravinder Kumar Joshi and Ors. Page 82 by A-3 Tej Kishen Tikoo in the account opening form on the basis of Board Resolution. Mere making declaration in the account opening form does not amount to forging any document as he has not created the said document. So far as allegation regarding forging of Board Resolution is concerned, admittedly, the prosecution has not proved that the said document was created by A-2 and/or A-3 or that they or any one of them signed the same. As per the settled law reproduced above, a person is said to make a false document or record if, he satisfies one of the three conditions provided under Section 463 IPC. First condition is that the document has been falsified with the intention of causing it to be believed that such document has been made by a person, whom the person falsifying the document knows that it was not made. In the present case, even if it is presumed that Board Resolution was made dishonestly or fraudulently by A- 2 or A-3, it has not been proved by prosecution that same had been made with the intention of causing it to be believed that it was made by or under the authority of someone else. The second condition dealing with the making of false document is where a person without lawful authority alters a document after it has been made. So far as the present case is concerned, there has been no allegation of alteration of Board Resolution in question after it has been made. The third and final condition dealing with the falsification and forging of a document is when a document signed by a person who due to CC No.345/19 CBI Vs. Ravinder Kumar Joshi and Ors. Page 83 his mental capacity does not know the contents of documents which were made because of intoxication or unsoundness of mind etc. Such is not the case in the present.
96.None of the aforesaid three criteria/ conditions, is applicable to the present case. Prosecution has failed to prove that A-2 Chander Kant Dubey and A-3 Tej Kishen Tikoo made any false document invoking Sections 463/468/471 IPC. the Prosecution has failed to prove that the Board Resolution of the Company and declaration made by A-2 was false.
97.So far as the document regarding the property No. 282, Satya Niketan, Delhi is concerned, the evidence have come on record that A-2 was having registered GPA etc. validly executed in his favour qua the said property, the Prosecution has failed to specify as to which document was allegedly forged and fabricated. The Prosecution has further failed to prove that A-1 & A-2 or other accused were having the intention since the beginning to cheat the Bank as the Company had exported the goods shown in invoices which were found to be genuine as deposed PW 10. The Prosecution has failed to prove that the goods were not in fact exported as discussed above.
98.Further more, the resolution dated 15.11.2004 very much authorizes accused no. 3 Tej Kishan Tikoo alongwith accused No. 2 Chander Kant Dubey to open current Bank account of the Company with UCO Bank, Delhi High Court Branch and Article 54 of the Article and Memorandum of Association of CC No.345/19 CBI Vs. Ravinder Kumar Joshi and Ors. Page 84 M/s Edge Garments Pvt. Ltd. specifically recites that Directors shall have the power to open Bank account, to sign cheques on behalf of the Company and to operate all Bank accounts of the Company, to receive payments, make endorsements, draw and accept Negotiable Instruments and Hundis and Bills or may authorize any other person or persons to exercise such powers. Even if, it is assumed that A- 3 Tej Kishen Tikoo was not the Director on 07.12.2014, when the Bank account in the name of the Company was opened, he was very much authorized to exercise such powers, in terms of the aforesaid Article 54. As noted above, no one on behalf of the company has ever challenged the authrorisation of accused No. 3 T. K. Tikoo to open the Bank account in the name of the company and for applying the credit facility.
99.Now, coming to the charge of conspiracy against accused No. 4 Amrish Mishra and accused No. 5 Anand Mishra on the ground that the loan amount credited to ABC account of the Company was subsequently siphoned off through cheques and cash to various persons/firms/companies relating to them. Accused No. 4 and 5 in their statements U/s 313 Cr.P.C. have admitted that the said amount was received in their Account as they were having Business transactions with the Company. Sanction Letter issued by the Bank does not provide that the loan amount received by the Company after tendering any invoices etc. in respect of export goods, could not be transferred to Bank account of any other person. The CC No.345/19 CBI Vs. Ravinder Kumar Joshi and Ors. Page 85 prosecution has failed to bring any material to show that accused No. 4 and 5 were part of any conspiracy to siphon off the loan amount received by the Company. Merely because the address of the companies of the aforesaid all accused have been shown at the Property mortgaged with the Bank, it does not prove the element of conspiracy more so when it was found that the Bank account of Company was validly opened, collateral security of the Property was validly given and disbursal of the loan amount was on the basis of Invoices etc. showing that the Company was every much engaged in the trade of carpet etc., which were exported through valid documents as deposed by PW-10.
100.Having discussed the aforesaid evidence adduced by the prosecution to substantiate the charges against the accused, this Court finds that prosecution has failed to establish charges against the accused persons that they were having a prior meeting of minds between them to cheat the Bank as there is no physical manifestation of such concurrence extractable from surrounding circumstances, conduct of the accused persons and evidence on record. The evidence is bereft of even passive acknowledgment of conspiracy amongst the accused persons. It is settled law that mere suspicion cannot be replaced with the legal requirement of proof of agreement.
101.Basic principle of criminal law, in the matter of proving the guilt of accused in Court, is that the prosecution has to prove CC No.345/19 CBI Vs. Ravinder Kumar Joshi and Ors. Page 86 his own case and except in a case of admission of guilt in Court by an accused, his defence may be seen after the discharge of burden by prosecution when onus shifts. The Court has to record a finding that the charge so framed has been proved by prosecution beyond reasonable doubt. Thereafter onus shifts upon the accused and the Court could see the defence put up by the accused while convicting or acquitting the accused. The defence so put by the accused may be looked into only when the prosecution proves the case beyond reasonable doubt. On the said basic parameters, the legality and propriety of the defence put forth by the accused is required to be examined.
102.The defence of A-1 R.K. Joshi in the present case is that Bank account in the name of company was validly opened after following the rules and regulations of the Bank and, thereafter, credit limits were sanction to the company which was found engaged in the business of exports and, thereafter, amounts were disbursed after company submitted to the Bank export bill totalling Rs. 3,40,90,219/- against the sanctioned limit of Rs. 1.78 Crores proving that the credit limits sanctioned by the Bank were fully utilised for the purposes for which it was sanctioned. However, due to some reasons, foreign buyers could not make payments of some of the export bills. Further, defence of A-1 R.K. Joshi is that as per the Bank's own rules and procedures 'Noting & Protesting' should have been done in respect of those dishonored export CC No.345/19 CBI Vs. Ravinder Kumar Joshi and Ors. Page 87 bills. However, Bank failed to follow the said procedure. Further, defence of the accused is that Bank had already been paid all the dues under a negotiated settlement as per OTS scheme of RBI after recovery certificate was issued in favour of the Bank in pursuance of a decree passed by DRT. During the course of arguments, Ld. Counsel for A-2 to A-5 had supported the defence of A-1 R.K. Joshi submitting that it is the failure of the Bank to adopt the procedure of 'Noting & Protesting' leading to the filing of the present case.
103.Accused No. 2 to 5 have examined DW-3 Ms. Kumari Neha in their defence. The said witness deposed that she was working as a Senior Manager with UCO Bank, Parliament Street Branch and testified with regard to the procedure for 'Noting and Protesting'. She deposed that the said procedure falls under Article 24 of Uniform Rules for Collections (URC) 522 as per which Bill of Exchange which has been dishonored due to non-realisation of export payment, is first notified (i.e. Noting) mentioning that the bill has been dishonored and later on Certificate is issued against the Bill of Exchange that has been dishonored, which is known as Protesting. She further testified that in case Bill of Exchange has been dishonored due to non-realisation or non-acceptance of export bill, Bank has to follow the aforesaid procedure and these conditions are mentioned on the Exporter and Importer Contract before the execution of export. She has further deposed that on the basis of Bill of Exchange of the Exporter, CC No.345/19 CBI Vs. Ravinder Kumar Joshi and Ors. Page 88 Bank processes the covering schedule as per the instructions mentioned in the Bill of Exchange and commercial documents and once all the documents submitted by exporter are found in order, Bank starts processing the same after verifying the shipping bills and all the commercial documents. She further deposed that the Export Credit Guarantee Corporation of India Limited (ECGC) provides insurance coverage against the loan with regard to export of their goods and services and if over due occurs for realization, exporter is being informed for the same.
104.In the present case, the prosecution has not brought any evidence on record to show that when bills were submitted by the Company with Bank were dishonored, it adopted and followed the aforesaid procedure for 'Nothing and Protesting'. There is nothing on record to suggest why the Bank failed to follow the procedure of 'Nothing and Protesting' as provided under Article 24 of URC, which are regulations to be followed for international transactions and help Bankers, buyers and sellers manage their receivables. The primary purpose of the aforesaid guidelines is to safeguard the parties from various risks arising during collection or asset recovery.
105.The aforesaid IRC 522 outlines the rules which Banks must follow while collecting debts from overseas parties. As noted above, Bank in the instant case failed to follow the aforesaid procedure, resulting in loss to it. Accused persons cannot be blamed for the inactions and omissions of Bank for not CC No.345/19 CBI Vs. Ravinder Kumar Joshi and Ors. Page 89 following the procedure of 'Noting and Protesting' as provided under Article 24 of the URC 522.
106.Looking into the entire gamut of the case, it appears that a case of civil nature between the borrowers and the Bank has unnecessarily been given a criminal colour. A-1 R.K. Joshi on behalf of the Bank validly sanctioned the credit limit after ensuring the interest of the Bank protected by way of collateral security on behalf of the borrower/ Company which made exports to foreign buyers who failed to honour the bills resulting in non-payment of loan amount to the Bank. The Hon'ble Supreme Court of India in Satish Chandra Ratan Lal Vs. State of Gujrat Crl. Appeal No. 09/09 decided on 03.01.2018 where a criminal case was registered due to non- payment of loan amount has held that mere inability of the accused to return the loan amount cannot give rise to a criminal prosecution for cheating unless fraudulent or dishonest intention is shown right at the beginning of the transaction as mens rea is the crux of offence. In the present case even if all the facts, circumstances, material and evidence are taken on their face value, no such dishonest representation or inducement could be found or inferred against the accused persons. The Prosecution has failed to prove any of the charges against any of the accused.
107.In view of the discussion made above, A-1 R.K. Joshi, A-2 Chander Kant Dubey, A-3 Tej Kishan Tikoo, A-4 Amresh Mishra and A-5 Anand Ji Mishra are acquitted of charges CC No.345/19 CBI Vs. Ravinder Kumar Joshi and Ors. Page 90 under Section 120B IPC read with Sections 420/468/471 IPC and Section 13(2) read with Section 13(1)(d) of PC Act, 1988. Further, A-1 R.K. Joshi also stands acquitted of charge under Section 13(2) read with Section 13(1)(d) PC Act, 1988. A-2 Chander Kant Dubey, A-3 Tej Kishan Tikoo, A-4 Amresh Mishra and A-5 Anand Ji Mishra are acquitted of charge under Section 420 IPC. A-2 Chander Kant Dubey and A-3 Tej Kishan Tikoo also stand acquitted of charge under Section 468 & 471 IPC.
108.File be consigned to Record Room after due compliance.
Announced in open Court on 08.06.2023 (Mohd. Farrukh) Special Judge (PC Act), CBI-11 Rouse Avenue Courts, New Delhi CC No.345/19 CBI Vs. Ravinder Kumar Joshi and Ors. Page 91