Delhi District Court
Register Pertaining To The Consigned ... vs . on 6 April, 2018
IN THE COURT OF KOVAI VENUGOPAL, SPECIAL JUDGE,
PC ACT (CBI) - 09, CENTRAL, TIS HAZARI COURTS, DELHI
CC No. 41/2011 (532301/2016)
R.C. No. 2(E)/06/CBI/EOW-II/ND
CNR No. DLCT01-000368-2008
CENTRAL BUREAU OF INVESTIGATION
VERSUS
1. SH. V.K. JOLLY (PUBLIC SERVANT)
S/O LATE SH. DHARAM DEV JOLLY
THE THEN SR. MANAGER
PUNJAB NATIONAL BANK
AZADPUR BRANCH, NEW DELHI.
R/O B-457, MAJLIS PARK
DELHI - 33 ......(DISCHARGED)
2. SH. D.K. MALHOTRA (RETD. PUBLIC SERVANT)
R/O HOUSE NO. 58
SEC.-G, SANIK COLONY
JAMMU
3. SH. BACHHU SINGH
S/O LATE MUKUNDI LAL
PROP. M/S. SRIRAM LPG CARRIER
R/O A-1562/1563, JAHANGIRPURI, DELHI
Date of Institution : 21.08.2008
Date of Arguments : 23.03.2018
Date of Judgment : 28.03.2018
JUDGMENT
1. This case was registered by the CBI on 31.05.2006 against CC No. 41/11 (532301/16) 1/88 accused persons, namely, (1) V.K. Jolly, (2) D.K. Malhotra and (3) Sewa Lal on the basis of a written complaint received from Sh. Ved Prakash Deputy Zonal Manager, Punjab National Bank, Zonal Office (North), Delhi. The allegations against the accused persons namely V.K. Jolly and D.K. Malhtora, were that they had acted in violation of the Bank's Guidelines issued with regard to the advance against the uncleared cheques. CASE OF THE PROSECUTION AS MENTIONED IN THE CHARGE SHEET
2. During the period from May 2001 to 08.07.2004, accused V.K. Jolly was posted as Senior Manager, Incharge, Punjab National Bank, Azadpur Branch, Delhi. Accused D.K. Malhotra the then Chief Manager, Punjab National Bank, Azadpur Branch, succeeded accused V.K. Jolly w.e.f. July 2004 but on 10.11.2004, his discretionary powers had been withdrawn.
3. During the investigation, it is revealed that as per the instructions /guidelines issued by the Punjab National Bank vide their Circular No. 130 dated 31.12.2002, the Senior Manager and the Chief Manager had discretionary powers to purchase cheques (DD Discounting) up to Rs. 3.75 Lacs and Rs. 20 Lacs CC No. 41/11 (532301/16) 2/88 respectively, in respect of genuine trade transactions and not qua the transactions accommodative in nature. Vide the said guidelines, Senior Manager /Chief Manager were also authorized to sanction clean overdraft /temporary overdraft to the extent of Rs. 30,000/- and Rs. One Lac respectively.
4. As per the prosecution case, the modus operandi adopted by the Bank officers in connivance with the private parties was by way of fraudulent purchases of cheques in the accounts, which were issued by their associates / sister concerns. In some of the cases, the beneficiary themselves had opened the account with other banks and had issued cheques in their favour. In the process, the parties used to get immediate cash and the bank on its part got the commission. It is alleged that the practice of getting the cheques purchased was later on misused by the private parties in connivance with accused V.K. Jolly and after him, accused D.K. Malhotra and other officials of the Bank.
5. Investigation has further revealed that the cheques so purchased were frequently returned unpaid from the Drawee bank for want of "Sufficient Funds". Thereafter, the said cheques were either adjusted by purchasing of fresh cheques or CC No. 41/11 (532301/16) 3/88 by allowing advance against the cheques sent for clearing or by depositing the amount in cash.
6. Investigation has revealed that the funds so generated as a result of discounting of cheques on two consecutive days were used by the account holders for their business purposes, whereas the funds generated on the third consecutive day were utilized for payment by depositing the amount in the concerned Bank account.
7. It is alleged that accused V.K. Jolly and accused D.K. Malhotra exceeded their powers frequently and accommodated the various account holders in violation of the rules and regulations laid down in Banking norms/rules and regulations. The return of all the cheques had also not been reported to the Regional Office by accused V. K. Jolly and D.K. Malhotra.
8. The private person namely Bachhu Singh in criminal conspiracy with the bank officials had his current account with Punjab National Bank, Azadpur Branch, Delhi in the name of M/s Shree Ram LPG Carrier where he availed the facilities of DD discounting. For the purpose of getting cheques purchased in the aforesaid account, Bachhu Singh opened account with SBI, CC No. 41/11 (532301/16) 4/88 Jahangirpuri, Delhi in the name of M/s Kamal Carriers and from this account, accommodatory cheques were issued and the same were purchased at the above fraudulent accounts of PNB, Azadpur, Delhi.
9. Investigation revealed that M/s Shree Ram LPG Carriers is a Proprietorship concern of Bachhu Singh and that its current account was opened on 21.06.2003 with Punjab National Bank, Azadpur Branch, Delhi. Several cheques were purchased in the said account and its proceeds withdrawn through "Self" cheques. However, when these cheques were subsequently returned unpaid by drawee bank, the same were adjusted by way of purchase of other cheques. The cheques were purely accommodatory in nature in as much as such cheques were issued by Bachhu Singh himself as Prop. M/s Kamal Carriers drawn on its account maintained with State Bank of India, Jahangir Puri Branch, Delhi.
10. All the cheques were returned unpaid by drawee Bank for want of 'sufficient funds'. An amount of Rs. 8,13,343/- was outstanding in the said account as on date of lodging the complaint.
CC No. 41/11 (532301/16) 5/88
11. The documents filed along with the charge-sheet reveal that the accused Bachhu Singh presented six cheques of M/s Kamal Carriers. A set of three cheques amounting to Rs. 4,95,000/- was purchased on 06.11.2004 and another set of three cheques amounting to Rs. 5,60,000/- was purchased on 08.11.2004 by accused D.K. Malhotra, the then Incumbent Incharge of Punjab National Bank Azadpur Branch, Delhi. The documents further reveal that the accused Bachhu Singh withdrawn the entire amount of Rs. 4,95,000/- and Rs. 5,60,000/- on the very same dates i.e. 06.11.2004 and 08.11.2004. The documents further reveal that M/s Kamal Carrier from whose account the cheques in question were issued and M/s Shree Ram LPG Carrier into whose account, cheques were purchased, both belong to accused Bachhu Singh. Hence, it is alleged by the Prosecution that the accused Bachhu Singh in connivance with D.K. Malhotra have cheated the Bank to the tune of Rs. 10,55,000/- by adopting the method of cheque purchase facility in violation of the prescribed norms of the Bank.
12. After obtaining the sanction for prosecution against accused V.K. Jolly from the competent authority, CBI filed charge-sheet CC No. 41/11 (532301/16) 6/88 against all the accused persons for the offences punishable u/s 120-B IPC r/w Section 420 IPC and Section 13(2) r/w Section 13(1)(d) of The Prevention of Corruption Act, 1988, as well as substantive offences thereof.
13. Vide Order dated 13.08.2012, this Court held that there is sufficient material placed on record by the Prosecution to frame charges against accused no. 2 D. K. Malhotra and accused no. 3 Bachhu Singh for the offences punishable under Section 120- B read with Section 13(2) read with Section 13(1)(d) of The Prevention of Corruption Act, 1988, and Section 420 of IPC respectively. Vide the same order, accused no. 1 V.K. Jolly was discharged for the offences under which he was booked by the CBI.
14. On 21.08.2012, charges against accused no. 2 D.K. Malhotra and accused no. 3 Bachhu Singh were framed for the offences punishable under Section 120-B read with Section 13(2) read with Section 13(1)(d) of The Prevention of Corruption Act, 1988, and Section 420 of IPC respectively. Substantive Charge against accused no. 2 D. K. Malhotra was also framed for the offences punishable under Section 13(1)(d) punishable under CC No. 41/11 (532301/16) 7/88 Section 13(2) of the Prevention of Corruption Act, 1988. Substantive Charge against accused Bachhu Singh was also framed for the offence punishable under Section 420 of IPC. Both the accused persons pleaded not guilty to the charges and claimed trial.
EVIDENCE OF THE PROSECUTION
15. The prosecution in order to prove its case has examined 20 witnesses.
16. PW-1 is Sh. Ved Prakash. He deposed that he was posted as Dy. Zonal Manager, North Delhi Zone, Rajendra Place, New Delhi from January, 2006 to May, 2007. He identified the complaint Ex. PW1/A addressed to Superintendent of Police, CBI made on behalf of Punjab National Bank under his signatures dated 31.05.2006. This complaint relates to commission of fraud at their branch office at Azadpur, Delhi.
17. He identified the letter dated 15.06.2006 Ex. PW 1/B sent by Zonal Office under his signature by which certain documents are mentioned in the letter, were forwarded to Sh. Ajeet Singh, Inspector CBI. He identified the copy of letter dated 29.10.2004 Ex. PW 1/B1 received by Zonal Office, Delhi from Bank of CC No. 41/11 (532301/16) 8/88 Baroda, Azadpur branch.
18. He also identified part of document D-41 and deposed that it is an internal investigation report Ex. PW 1/B3 which was prepared after an internal investigation carried out in the bank at the level of Chief Inspector. It is signed by Sh. B.B. Chawla and Sh. R.C. Ahuja. He also identified the signatures of Sh B.B. Chawla appearing and Sh. R.C. Ahuja appearing at points A and B. He also identified covering letter Ex. PW 1/B4 by which the said investigation report was sent to Zonal Office. He also deposed that the total loss caused to the Bank as a result of fraud for which the complaint was made to CBI was to the tune of about Rs. 3.5 Crores.
19. PW 2 is Sh. Ram Kawar Singhmar. During the period from 18.09.2006 to 23.03.2010, he was posted at New Sabzi Mandi, Azadpur Branch, Delhi of Punjab National Bank as Manager.
20. He identified Ex. PW 2/A vide which he had produced certain documents to CBI i.e. Account opening Form of M/s Shree Ram LPG Carrier bearing Current Account No. 12671 Ex. PW 2/A1 (colly.) along with Form No. 60 and copy of PAN Card., which was opened by accused Bachhu Singh on behalf of M/s Shree CC No. 41/11 (532301/16) 9/88 Ram LPG Carrier on 21.06.2003.
21. PW 3 is Sh. Bharat Bhushan Chawla. He deposed that he retired from Punjab National Bank on 31.03.2012 from BRS Nagar, Ludhiana as Chief Manager. From August, 2004 to May, 2006 he was Chief Concurrent Auditor with PNB and was posted at Nehru Place, new Delhi. His duties were to do day to day audit i.e. auditing the accounts of the Branch where he was posted on daily basis. He further deposed that there were times when he was deputed for special investigation of some branches.
22. He identified Ex. PW 1/B3 and B4. He deposed that Ex. PW 1/B3 is the report which was jointly prepared by him and Sh. R.C. Ahuja. This report was prepared with regard to the audit which was conducted by them of PNB Azadpur Branch on 07.01.2005. He further deposed that Ex. PW 1/B4 is the forwarding letter signed by him and Sh. R.C. Ahuja. By this letter, report Ex. PW 1/B3 was forwarded to Deputy General Manager, Zonal Office, Delhi Zone; to Chief FPIS, Head Office, New Delhi ; DGM Inspection and Audit Division and Deputy General manager, Zonal Office, NIT Faridabad. This inspection / CC No. 41/11 (532301/16) 10/88 audit was conducted by him as per the directions of Inspection & Audit Division, New Delhi with regard to the unauthorised accommodation by way of purchasing of cheques in certain accounts.
23. He further deposed that it was found in certain accounts that cheques were purchased by the Branch which were returned unpaid and to accommodate the said unpaid amount, fresh cheques were purchased to square off the unpaid amount resulting from the purchase of earlier cheques returned unpaid. PW 3 had given reference to the same in his report in detail. At the end of his report, PW 3 had given under the head General Observations, the irregularities observed by them during the inspection. The same have been noted in the portion X1 to X1. They had also specifically pointed out the lapses committed by the Bank officers. The same have been given in detail in the portion X2 to X2 of the report.
24. PW 4 is Sh. Raj Bali Yadav. PW 4 has a shop of Ayurvedic medicines in the name of M/s Yadav and Co. at A-1551, Jahangir Puri, Delhi-110033. He has a current account No. 106666741776 with SBI, Jahangir Puri. He identified Bachhu CC No. 41/11 (532301/16) 11/88 Singh and he knows him for long. He identified his signature appearing on account opening form Ex. PW 4/A of Bachhu Singh. He deposed that he knows Bachhu Singh personally for long but he is not familiar with his signatures. However, at the time when he had introduced the said account, Bachhu Singh was with him. This document also has the photographs of Bachhu Singh pasted at points X1 and X2.
25. He further deposed that Bachhu Singh was having a transport business by the name of M/s Kamal Carriers. He does not know the address of M/s Kamal Carriers, however, it is located in Transport Nagar. He had given the above introduction for the opening of the account in the name of M/s Kamal Carriers.
26. PW 5 is Sh. Bhagwan Dass Gola. He has deposed that he has a small business in the name of M/s Gola Battery House. He knows Bachhu Singh and identified him. He had a bank account in the name of M/s Gola Battery House at Punjab National Bank, Panchwati, Adarsh Nagar. PW5 deposed that Bachhu Singh was running his business in the name of M/s Shriram something. He does not remember the full name of his business establishment now. Bachhu Singh had one bank account in the CC No. 41/11 (532301/16) 12/88 same branch of Punjab National Bank where he had his account. PW5 identified his signature appearing on Ex. PW 2/A1 i.e. bank account opening form in the name of M/s Shriram LPG Carrier. He further deposed that he had introduced this account of Bachhu Singh and Bachhu Singh had signed this account opening form in his presence.
27. PW 6 is Sh. Prem Kumar. PW 6 is serving with Punjab National Bank as Clerk. In the year 2008, he was posted as Clerk at the Azadpur Branch of the Bank. His duties were to post the cheques in the records and to issue Fixed Deposit receipts. He identified his signature on the photocopy of production cum seizure memo Ex. PW 6/A. By this memo, he had supplied to CBI the cheques and deposit vouchers as mentioned in the memo. He also identified Ex. PW 5/A-1 to A-12 (wrongly mentioned as Ex. PW 5/A-1 to A-12 instead of Ex. PW 6/A-1 to A-12 in the evidence of PW 6) which he had supplied vide memo Ex. PW 6/A.
28. PW 7 is Sh. K.K. Gaur. In the year 2003-04, PW 7 was posted as Dy. Manager with Azadpur Branch of Punjab National Bank. This witness explained the procedure involved in purchase of CC No. 41/11 (532301/16) 13/88 cheques by the Bank. Through this witness PW-7, the prosecution has brought on record certain cheques and credit vouchers as Ex. PW7/A1 to A21. Exhibits Ex. PW7/A16 to A21 are the 6 cheques in question, according to prosecution by which accused have committed the offences as charged. Ex. PW 7/A10 to PW 7/A15 are the corresponding credit vouchers of the six cheques in question. Ex. PW 7/A1 is the self cheque by which accused Bachhu Singh withdrew the amount on 06.11.2004.
29. PW 8 is Sh. Ashok Kumar Kapoor. He was posted as Manager Scale-II at Punjab National Bank, Azadpur branch in the year 2006-07. He identified his signature on certificate Ex. PW 8/A under Section 2(A) of the Bankers Book Evidence Act with regard to the statement of Account of current Account No. 21-126717 of M/s Shri Ram LPG Carrier. This certificate was in respect of statement of account of M/s Shri Ram LPG Carrier Ex. PW 8/A1. He identified his signature on Ex. PW 8/A1. He also identified the seizure memo Ex. PW 8/B by which he had handed over the documents to CBI mentioned therein including the cheques Ex. PW 7/A1 to Ex. PW 7/A9. He also identified his CC No. 41/11 (532301/16) 14/88 signature on the photocopy of production cum seizure memo i.e. Ex. PW 8/C by which he had handed over the documents i.e. statement of demand drafts received back unpaid Ex. PW 8/C1 ; certified copy of details of cases pending in the Court of Ld. MM U/s 138 of NI Act Ex. PW 8/C2A1 ; letters dated 01.09.2003, 01.11.2004 and 14.09.2004 written by Branch to Sr. Manager (Audit), Regional Office Ex. PW 8/C2A2 to PW 8/C2A4; letters received from PNB North Delhi Region Audit Section dated 22.08.2003, 30.10.2004, 13.09.2004 and 26.08.2004 Ex. PW 8/C2A5 to PW 8/C2A8 and letter dated 09.09.2004 Ex. PW 8/C2A9 received from Bank of Baroda to CBI mentioned therein.
30. PW 9 is Raj Pal. He deposed that during the period from 2001 to 2005, he was posted at Panchwati Branch of PNB at Azadpur as Computer Operator. He identified the entry number put by him on the cheque Ex. PW 7/A1 and deposed that the number put on the cheque was automatically generated by the Computer. He further deposed that as against the cheque Ex. PW 7/A1, payment was made to Bachhu Singh from the account of M/s Shree Ram LPG Carrier.
31. PW 10 is Shri Ram Kumar Chawla. He deposed that in July, CC No. 41/11 (532301/16) 15/88 2007 he was posted at North Delhi Zonal Office at Rajendra Place, New Delhi in the inspection department. He identified Circular No. 130 dated 31.12.2002 Ex. PW10/A defining the loan powers of the officers of the different levels and how they are to be sanctioned and released from time to time. He deposed that in terms of circular, the powers of a Senior Manager and Chief Manager with regard to the purchase of cheques were Rs. 3.75 lacs and Rs. 20 lacs respectively.
32. PW 10 identified document i.e. seizure memo Ex. PW 10/B by which he had handed over various documents to CBI as mentioned therein. He further deposed that bunch of documents Ex. PW 10/B1 (colly.) was received by him from the Azadpur Branch of PNB was passed on to CBI. He also identified document letter Ex. PW 10/C. By this letter, he had handed over certified copies of various documents.
33. PW 11 Sh. Suresh Kumar Gupta. He deposed that from September, 2004 to June, 2005, he was posted at Azadpur Branch of PNB as Concurrent Auditor. The Azadpur Branch of PNB and Khan Market Branch of PNB were in his jurisdiction. During his tenure at Azadpur Branch as Concurrent Auditor Sh.
CC No. 41/11 (532301/16) 16/88 D.K. Malhotra was the Chief Manager, Sh. V.K. Saini was the Manager and Sh. K.K. Gaur was the DD Incharge. He further deposed that he had conducted the audit of Azadpur Mandi Branch for the period 02.09.2004 to 11.09.2004.
34. He further deposed that he prepared a detailed report Ex.
PW11/A of all such accounts and pointed out the irregularities which were committed in respect of the said accounts and had submitted the same to their Zonal Audit Office at Faridabad and also sent a copy of the same to Zonal Manager, Sr. Regional Manager and Chief Manager of the Branch. Thereafter, special investigation was directed to be conducted by Sr. Concurrent Auditor Sh. R.C. Ahuja and Chief Concurrent Auditor Sh. B.B. Chawla.
35. PW 12 is Sh. R.C. Ahuja. From the period July, 2003 to August, 2005, PW12 was posted at Subzi Mandi, Ghanta Ghar Branch, Delhi as Sr. Concurrent Auditor. An investigation with regard to the irregularities committed in Azadpur Branch of Punjab National Bank was marked to him by the Zonal Audit Office, Faridabad and on receipt of orders, he had conducted the investigation with his senior colleagues with Sh. B.B. CC No. 41/11 (532301/16) 17/88 Chawla, Chief Internal Auditor. After concluding the investigation, report Ex. PW 1/B3 was submitted by them to the Zonal Office. He also identified his signature on covering letter Ex. PW 1/B4 by which Ex. PW 1/B3 was forwarded.
36. PW 13 is Sh. Raj Kumar, Service Manager of SBI Jahangir Puri Branch, Delhi. He identified Account Opening Form of M/s Kamal Carriers bearing Current A/c No. 63419. This Account Opening Form is already Ex. PW 4/A.
37. PW 14 is Sh. Neeraj, Junior Judicial Assistant in Record Room, Rohini Courts, Delhi. He has brought the Goshwara Register pertaining to the consigned file in the matter of PNB vs. Kamal Carriers bearing CC No. 10424/1/05 decided on 28.05.2010. The said file has been destroyed vide order dated 10.10.2013.
38. PW 15 is Ms. Ramanjeet Kaur. PW 15 deposed that documents i.e. cheque Nos. 750542, 750543, 750544 dated 08.11.2004 drawn on State Bank of India, Jahangir Puri Branch, Delhi along with their pay in slips were submitted by their Branch in the Court of Ms. Aparna Swami, Ld. CMM, Rohini, Delhi. She further deposed that all the said documents were not CC No. 41/11 (532301/16) 18/88 available in PNB Azadpur Branch, Delhi.
39. PW 16 is Sh. Ajay Malhotra. He deposed that he was posted in PNB Azadpur Branch, Delhi w.e.f. April, 2003 to April, 2006 as Deputy Manager. During his tenure, Sh. V.K. Jolly Senior Manger was the Incumbent Incharge and D.K. Malhotra was the then Chief manager became the Incumbent Incharge of the branch. During the period of D.K. Malhotra as Incumbent Incharge, PW 16 was in the said branch.
40. PW-17 is Sh. Ashwani Kumar Gupta. He has deposed that during the period July 2002 to November 2007, he was posted as a clerk at PNB, Azadpur Branch, Delhi. He has further deposed that during that period, Sh. V. K. Jolly the then Senior Manager was the Incumbent Incharge and after him, Sh. D. K. Malhotra the then Chief Manager had become Incumbent Incharge of the said Branch.
41. PW-17 has further deposed that his work was to look after the posting of cheques at the counter of the Bank and forward the same to the officer for passing. When the cheque was presented for encashment at the counter, the name of the person, who present the cheque was mentioned on the cheque CC No. 41/11 (532301/16) 19/88 and the entry of the said cheque was posted in the account of the parties on computer. The computer creates a specific ID number for particular entry and the same number was mentioned on the cheque. A stamp "Pay to" was also put on cheque where the name of person, who presented the cheque for receiving was written. After that, the cheque was presented before the officer for passing the same.
42. PW-17 has further deposed that in case there was insufficient balance in the account of the person who issued the cheque, then they brought this fact to the knowledge of the officer /Passing Authority. If the Passing Authority asked for entering the cheque then they enter and after following the above said procedure, the cheque was sent to the Officer for passing the same. After that, the payment was made by the Cashier.
43. PW-17 has further deposed that Cheques Ex. PW-7/A2, Ex.
PW-7/A3, Ex. PW-6/A1, Ex. PW-6/A2, Ex. PW-6/A3, Ex. PW- 6/A4 were presented before him for the encashment by accused Bachhu Lal and after entering the same in the computer, he put the entries number generated by the computer in his handwriting. He also put the stamp "Pay to" on the said CC No. 41/11 (532301/16) 20/88 cheques.
44. PW-18 is Inspector Ajeet Singh. He has deposed that FIR Mark PW-18/A of this case was registered on the basis of written complaint from PW-1 Ved Prakash, the then Zonal Manager, PNB, which was assigned to him for investigation.
45. PW-18 has further deposed that during investigation, he collected relevant documents from Azadpur Branch of PNB and also from other Banks vide different Seizure Memos and forwarding letters. He also examined the relevant witnesses and recorded their statements.
46. PW-18 has further deposed that vide Production cum Seizure Memos Ex. PW-2/A, Ex. PW-8/B, Ex. PW-18/B, Ex. PW-6/A, Ex. PW-8/C, Ex. PW-10/B, letter Ex. PW-18/D, letter Ex. PW-1/B, copy of Internal Investigation Report Ex. PW-1/B3 and copies of letter dated 29.10.2004 Ex. PW-1/B1 and letter dated 09.09.2004 Ex. PW-1/B2 of Bank of Baroda were seized by him.
47. PW-18 has further deposed that he has collected the certified documents Ex. PW-7/A10, Ex. PW-7/A11, Ex. PW-7/A12, Ex. PW-7/A16, Ex. PW-7/A17, Ex. PW-7/A18 and Ex. PW7/DX1, Ex. PW-7/A13, Ex. PW-7/A14, Ex. PW-7/A15, Ex. PW7-A/19, Ex.
CC No. 41/11 (532301/16) 21/88 PW-7/A20, Ex. PW-7/A21 and Ex. PW-7/DX2 from PNB, Azadpur Branch, during investigation.
48. PW-18 has further deposed that after completion of the investigation, he had prepared and submitted the charge sheet in the court against the accused persons mentioned in the charge sheet on the basis of evidence collected during investigation.
49. PW-19 is Bajrang Lal. He brought the certified true copy (5 pages) issued by DRT III, Delhi of cheques bearing No. 750542 for an amount of Rs. 2,20,000/- Ex. PW 7/A16 in favour of Shree Ram LPG Carrier, cheque bearing No. 750543 for an amount of Rs. 2,40,000/- Ex. PW 7/A17 in favour of Shree Ram LPG Carrier and cheque bearing No. 750544 for an amount of Rs. 1,00,000/- Ex. PW 7/A18 in favour of Shree Ram LPG Carrier, all dated 08.11.2004.
50. PW 20 is Sh. D.K. Chaudhary. PW-20 was posted as S.P. in EOW-II Branch of CBI in the year 2006. On 31.05.2006, he had registered the FIR Ex. PW-18/A of the present case and said FIR was marked to Inspector Ajeet Singh for investigation.
CC No. 41/11 (532301/16) 22/88 STATEMENTS OF ACCUSED PERSONS U/S 313 Cr.P.C.
51. After completion of the prosecution evidence, the statements of the accused persons were recorded u/s 313 Cr.P.C. All the incriminating evidence which has come on record against the accused persons were put to the accused persons in their Statements recorded under Section 313 Cr.P.C.
52. Accused D. K. Malhotra has stated in his statement recorded under Section 313 Cr.P.C. that he remained posted as Chief Manager of the Branch from July 2004 to 10.11.2004. On 10.11.2004, he was placed under suspension and was asked to report to Regional Office. The party was already having an account in the Bank before his joining in the said Branch. The party was a known customer of the Bank and the cheques purchased were within his financial powers and pertained to genuine trade transactions. On earlier occasions also, the cheques of this party were being purchased by his Predecessor. Since he relinquished the charge and asked to sit in the Regional Office, he could not contact the party to deposit the amount. By now, the entire amount has been recovered from the party.
CC No. 41/11 (532301/16) 23/88
53. Accused Bachhu Singh has stated in his statement that he is innocent. He has been falsely implicated in the false case. Investigation was not conducted fairly. No loss was caused to the Bank due to any wrong act on his part. He has paid all the dues to the Bank.
DEFENCE EVIDENCE
54. Accused D.K. Malhotra did not prefer to lead any evidence in his defence. Accused Bachhu Singh, has examined witness Anoop Saxena as DW 1 in his defence.
55. DW-1 is Sh. Anoop Saxena. This witness is working as Chief Manager of Punjab National Bank, Asset Recovery Branch, Rajendra Place, Delhi, who has brought the photocopy of letter dated 23.09.2006 Mark-A written by Bachhu Singh to the AGM, Asset Recovery Management Branch, Punjab National Bank, Delhi for settlement of the account. He produced photocopy letter dated 04.11.2016 Ex. DW 1/A duly verified by Sh. A.K. Verma, Sr. Manager, ARM branch, PNB. He identified the signature of Sh. A.K. Verma, at point A. He also produced the details Ex. DW 1/B of the payment made in the account of Shri Ram LPG Carriers as per the OTS. As per OTS there is no CC No. 41/11 (532301/16) 24/88 outstanding in the account of said firm as on date. He also produced photocopy of order dated 21.09.2016 Ex. DW-1/C of DRT for sale of the property i.e. A-1562-63 Jahangir Puri, New Delhi-110033.
56. DW 1 does not know whether any amount was paid by Bachhu Singh in the account of M/s Shri Ram LPG Carriers at PNB Rajendra Place branch prior to the case received by their ARM branch. He could not say whether any property was mortgaged for the transactions in the account of M/s Shri Ram LPG Carriers at Azadpur Branch, Delhi. As per their record, there is no property mortgaged for transactions in the account of M/s Shri Ram LPG Carriers.
ARGUMENTS
57. Ld. PP for CBI inter-alia argued that accused D.K. Malhotra, has conspired with the accused Bachhu Singh to cheat the Bank to the tune of Rs. 10,55,000/- by purchasing six cheques of M/s Kamal Carriers which were not issued for any genuine trade transactions.
58. It is further argued that the accused D.K. Malhotra has clearly violated the norms under Circular No. 130 dated 31.12.2002, by purchasing cheques presented by accused Bachhu Singh. Ld. CC No. 41/11 (532301/16) 25/88 PP for CBI further argued that the prosecution has proved its case by examining all the relevant witnesses and by bringing on record all the necessary documents.
59. On the other hand, Ld. Counsel for accused D.K. Malhotra, has argued that accused has not committed any offence by purchasing six cheques presented by accused Bachhu Singh. It is further argued that by the time, accused D.K. Malhotra, took over as Incumbent Incharge, the account of M/s Shree Ram LPG Carrier was already operational and similar transactions in the said account have also taken place. Ld. Counsel further argued that even if there is any violation of guidelines under Circular No. 130 that does not amount to an offence. Ld. Counsel also argued that there is not even iota of evidence that accused D.K. Malhotra has received any pecuniary advantage for himself or for any other person for purchasing the cheques in question. Ld. Counsel specifically refers to the deposition of the IO Ajeet Singh in this regard.
60. Ld. Counsel for accused Bachhu Singh argued that accused Bachhu Singh is a businessman and whatever the transactions he did in his account pertain to only genuine trade transactions.
CC No. 41/11 (532301/16) 26/88 It is further argued that accused Bachhu Singh was not aware of any Circular issued by the Bank with regard to the guidelines to be followed for purchasing cheques by the Bank officials. It is also argued that even if there was any such circular that was only for the Bank officials and it should not affect the transactions done by ordinary customers of the Bank. It is also argued that the accused Bachhu Singh has repaid entire amount due to the Bank in course of DRT proceedings under OTS scheme and, therefore, no loss is said to have been caused by the accused. It is also argued that the prosecution has not brought on record the original cheques, credit vouchers and cheque return memos and, therefore, failed to prove its case.
61. Ld. Counsel for accused Bachhu Singh also argued that the statement of account of M/s Shree Ram LPG Carriers cannot be read in evidence in the absence of certificate as required under Section 65-B of Evidence Act.
62. Ld. Counsel for both the accused also argued inter-alia that IO Ajeet Singh collected documents from the Bank during the investigation without specific authorisation from the CC No. 41/11 (532301/16) 27/88 Superintendent of Police which is mandatory under Section 18 of the PC Act.
63. I have heard Sh. A. K. Kushwaha Ld. P.P. for the CBI, Sh. I.D. Vaid Advocate for accused D. K. Malhotra and Sh. Umesh Sinha, Advocate for accused Bachhu Singh. I have also perused the file, written submissions filed on behalf of accused Bachhu Singh and also the case law relied upon by the defence Counsel.
64. The point for determination is whether the prosecution has proved its case beyond reasonable doubt.
DISCUSSION
65. As stated above the investigating agency i.e. CBI initiated action on receipt of the written complaint Ex. PW 1/A from Zonal Manager of PNB. The complainant who is examined as PW-1 states that an internal investigation was conducted wherein certain irregularities with regard to purchasing of cheques and overdraft were made out. Based on such internal investigation report i.e. Ex. PW 1/B3, a written complaint was made to the CBI. The said internal investigation was conducted by PW-3 Chief Accounts Officer and PW-12 Sr. Concurrent Auditor. The CC No. 41/11 (532301/16) 28/88 report is duly proved in examination of the said witnesses. It is according to PW-3 and PW-12 that they were asked to conduct investigation/audit of the Azadpur Branch of PNB, Delhi by the Zonal Manager. After receiving the instructions, PW-3 and PW- 12 proceeded to conduct investigation with regard to the irregularities in Azadpur Branch of PNB. It is mentioned in the report that there was unauthorized accommodation for purchase of cheques which were not supported by genuine trade transactions and the said cheques were returned unpaid repeatedly in certain accounts and were adjusted by purchase of fresh cheques of the similar nature. It was also found as per Ex. PW-1/B3 that this phenomenon was occurring repeatedly in certain accounts.
66. Accused D. K. Malhotra A-2 was the Chief Manager at Punjab National Bank, Azadpur Branch from July 2004 to 10.11.2004. A-2 Bachhu Singh is the sole proprietor of M/s Shree Ram LPG Carrier, a proprietory concern. A current account bearing no. 12671 was opened by accused Bachhu Singh in PNB, Azadpur Branch in the name of M/s Shree Ram LPG Carrier on 21.06.2003. The account opening form of M/s Shree Ram LPG CC No. 41/11 (532301/16) 29/88 Carrier is brought on record as Ex. PW2/A1. The prosecution examined PW-5 Bhagwan Dass Gola, who introduced the account of M/s Shree Ram LPG Carrier. According to PW-5, he knows Bachhu Singh, who was also a businessman. PW-5 identified his signature as introducer on the account opening form i.e. Ex. PW-2/A1.
67. Accused Bachhu Singh is also the sole proprietor of M/s Kamal Carriers and opened an account in SBI, Jahangirpuri, Delhi Branch in the name of M/s Kamal Carriers bearing A/c. No. 63419. The account opening form of M/s Kamal Carriers is brought on record as Ex. PW4/A. PW-4 Sh. Raj Bali Yadav deposed that he has a Current Bank Account in the SBI, Jahangirpuri Branch vide No. 10666741776. PW-4 further deposed that he knows Bachhu Singh for long being a neighbourer. PW-4 identified his signature as introducer on the account opening form of M/s Kamal Carriers i.e. Ex. PW-4/A. PW-4 also deposed that Bachhu Singh was having a transport business by the name of M/s Kamal Carriers. Prosecution also examined one Raj Kumar Verma, Service Manager, SBI, Jahangirpur Branch, Delhi as PW-13 who identified the account CC No. 41/11 (532301/16) 30/88 opening form of M/s Kamal Carriers bearing current account no. 63419 which is already Ex. PW4/A.
68. The deposition of PW-5, PW-4 and perusal of account opening form of M/s Shree Ram LPG Carrier at PNB, Azadpur Branch i.e. Ex. PW2/A1 and account opening form of M/s Kamal Carriers at SBI, Jahangirpuri Branch i.e. Ex. PW4/A prove that both these accounts were opened by accused Bachhu Singh. It is the case of the CBI that accused Bachhu Singh in connivance with Chief Manager D.K. Malhotra of PNB Azadpur Branch used to get the cheques of M/s Kamal Carriers discounted. The accused D.K. Malhotra, Chief Manager used to purchase the cheques of M/s Kamal Carriers presented by Bachhu Singh and the amount used to get credited to the account of M/s Shree Ram LPG Carrier and the said amount is allowed to be withdrawn by Bachhu Singh immediately. The cheques of M/s Kamal Carriers presented by Bachhu Singh were purchased by D.K. Malhotra in utter violation of Bank norms as the said cheques were not issued for any genuine trade transactions.
69. The prosecution has examined PW-7 Sh. K.K. Gaur, Dy.
Manager, PNB, Azadpur Branch, Delhi and brought on record CC No. 41/11 (532301/16) 31/88 certain documents pertaining to the account of M/s Shree Ram LPG Carrier. PW-7 deposed about the procedure for purchasing of cheques. According to PW-7, first of all the customer approaches the incumbent Incharge of the Branch and makes a request for purchase of cheque in ODD. Thereafter, the Incumbent Incharge sanctions the ODD, and thereafter it goes to computer operator, who makes an entry into the account of the party and also gives an entry number on the credit voucher and then the ODD Incharge passes the entry in the system thereby the account of the party is credited. The credit voucher is retained by the branch and the cheque is sent for clearing for collection operator. If the ODD is realized, the entry is reversed. If the ODD is returned, party's account is invariably debited. Through this witness PW-7, the prosecution has brought on record certain cheques and credit vouchers as Ex. PW7/A1 to A21. Exhibits Ex. PW7/A16 to A21 are the 6 cheques in question, according to prosecution by which accused have committed the offences as charged. Ex. PW7/A19 to A21 are the 3 cheques of M/s Kamal Carriers dated 25.10.04. 06.11.04 and 06.11.04 respectively, presented by accused Bachhu Singh CC No. 41/11 (532301/16) 32/88 and purchased by accused D.K. Malhotra and the total amount Rs.4,95,000/- was credited to the account of M/s Shree Ram LPG Carrier and accused Bachhu Singh on the same day i.e. on 06.11.04 withdrew that amount by way of a self cheque i.e. Ex. PW7/A1.
70. Ex. PW7/A16 to A18 are the 3 cheques of M/s Kamal Carriers each dated 08.11.04, presented by accused Bachhu Singh and purchased by accused D.K. Malhotra and the total amount Rs.5,60,000/- was credited to the account of M/s Shree Ram LPG Carrier and accused Bachhu Singh on the same day i.e. on 08.11.04 withdrew that amount by way of a self cheque bearing no. 536299 dated 08.11.04.
71. It is argued by the Ld. Counsel for defence that the prosecution has not produced the original cheques and credit vouchers. The documents i.e. Ex.PW7/A16 to A21 alongwith their corresponding credit vouchers i.e. Ex. PW7/A10 to A15 are only the copies which are exhibited subject to production of originals. The Ld. Counsel pointed to the objections raised by them which were recorded in the statement of PW-7. On the other hand it is argued by the Ld. PP for CBI that the documents Ex. PW7/A10 CC No. 41/11 (532301/16) 33/88 to A15 i.e. Credit Vouchers and Ex. PW7/A16 to A21 i.e. Cheques are the certified copies, hence they are admissible as secondary evidence.
72. The originals of the cheques and the credit vouchers which form the basis of the prosecution case are not brought on record by the prosecution. The cheques dated 25.10.04, 06.11.04 and 06.11.04 i.e. Ex. PW7/A19 to A21 and their corresponding vouchers Ex. PW7/A13 to A15 are the certified copies obtained from the court of Ld. MM, Rohini Courts, Delhi. Witness PW-15 Ms. Ramanjeet Kaur, Manager, PNB, Azadpur Branch, Delhi in her deposition stated as follows :-
"13.04.2015 : I have not brought the summoned record as the same is not available in our branch. The documents i.e. cheque nos. 750542 dated 08.11.04, 750543 dated 08.11.04, 750544 dated 08.11.04 drawn on State Bank of India, Jahangir Puri Branch, Delhi, along with their pay-in slips were submitted by our Branch in the Court o Ms. Aparna Swami, Ld. CMM, Rohini, Delhi.
Presently, I am not able to explain how and by whom the above mentioned cheques were presented in the Court. I CC No. 41/11 (532301/16) 34/88 seek some time to inquire about the same and inform it to the Court.
24.04.2015 :- Today I have not brought the original of the documents, which I was told to bring as mentioned in my previous statement dated 13.04.2015. All the said documents are not available in our Branch, Azadpur, New Subzi Mandi. These documents belonged to my branch. On the information provided by Asset Recovery Management Branch I come across that the cheques mentioned in my previous deposition dated 13.04.2015 are kept in the Court Ms. Aparna Swami, Ld. CMM, Delhi along with the pay in slips of the said cheques."
73. It is according the said witness that the original cheques were filed in the court of Ld. MM in a case u/s 138 NI Act. The certified copies of the cheques obtained from the court of Ld. MM i.e. Ex. PW7/A19 to A21 and corresponding credit vouchers Ex. PW7/A13 to A15 are accompanied by the first page of complaint u/s 138/142 of NI Act filed by the complainant bank against M/s Kamal Carriers and Bachhu Singh. The prosecution examined PW-19 who has brought on record the certified copies CC No. 41/11 (532301/16) 35/88 of 3 cheques dated 08.11.04 bearing nos. 750542, 750543 and 750544 for an amount of Rs.2,20,000/-, Rs.2,40,000/- and Rs.1,00,000/- respectively which were obtained from DRT-III, Delhi. The said documents are marked as Mark C-1. It was observed by the Court during the examination of the witness that the certified copies of 3 cheques which were photocopied on single sheet i.e. on page 4 (Mark C-1) does not bear the initial or signature of any person on the stamp at point C-2. On careful perusal, it is observed that the certified copies obtained from DRT are in 5 pages and on page no. 5 there is a full stamp of DRT indicating that certified true copy of 5 pages were issued and it is also signed by the concerned Section Officer of DRT-III and other pages 1 to 4 only bear a stamp indicating the page number of total 5 pages. Therefore, there cannot be any doubt that, all the 5 pages produced by PW-19 are the certified copies obtained from DRT-III and page no. 4 shows the 3 cheques dated 08.11.04 bearing nos. 750542, 750543 and 750544 for an amount of Rs. 2,20,000/-, Rs. 2,40,000/- and Rs. 1,00,000/- respectively.
74. The Ld. Counsel for defence relied on the judgment of the CC No. 41/11 (532301/16) 36/88 Hon'ble Supreme Court in Smt. J. Yashoda vs. Smt. K. Shobha Rani in SLP (c) No. 12625 of 2005. The Hon'ble Supreme Court in the above said judgment did not allow the photocopies of the documents to be received in secondary evidence on the ground that the conditions as specified for recording secondary evidence u/s 65 of the Evidence Act are not fulfilled. The relevant para is as follows :-
"Secondary evidence, as a general rule is admissible only in the absence of primary evidence. If the original itself is found to be inadmissible through failure of the party, who files it to prove it to be valid, the same party is not entitled to introduce secondary evidence of its contents.
Essentially, secondary evidence is an evidence which may be given in the absence of that better evidence which law requires to be given first, when a proper explanation of its absence is given. The definition in Section 63 is exhaustive as the Section declares that secondary evidence "means and includes" and then follow the five kinds of secondary evidence.
CC No. 41/11 (532301/16) 37/88 The rule which is the most universal, namely that the best evidence the nature of the case will admit shall be produced, decides this objection that rule only means that, so long as the higher or superior evidence is within your possession or may be reached by you, you shall give no inferior proof in relation to it. Section 65 deals with the proof of the contents of the documents tendered in evidence. In order to enable a party to produce secondary evidence it is necessary for the party to prove existence and execution of the original document. Under Section 64, documents are to be provided by primary evidence. Section 65, however permits secondary evidence to be given of the existence, condition or contents of documents under the circumstances mentioned. The condition laid down in the said Section must be fulfilled before secondary evidence can be admitted. Secondary evidence of the contents of a document cannot be admitted without non-production of the original being first accounted for in such a manner as to bring it CC No. 41/11 (532301/16) 38/88 within one or other of the case provided for in the Section."
75. The Section 65 of the Indian Evidence Act enumerates 7 exceptional cases in which secondary evidence is admissible. As per section 65(c), the secondary evidence can be adduced relating to a document when the original has been destroyed or lost. The secondary evidence of a document which is lost or difficult to trace can be adduced in two ways one by oral evidence of person who was present when the document was executed and two by way of certified copy of original document. It is enough for the party to prove that the original is not in his possession as so far as he is concerned it is lost.
76. In the present case PW-15 clearly stated that the bank is not in possession of the original documents i.e. cheques and credit vouchers in question. Therefore, the prosecution u/s 65(c) of the Evidence Act is entitled to prove the above said documents by way of secondary evidence. It is clear from the material available on record that the bank has initially filed a complaint u/s 138/142 of NI Act against M/s Kamal Carriers before the Ld. MM, Rohini Courts, Delhi and the originals of the cheques in CC No. 41/11 (532301/16) 39/88 question were filed in that case. PW-14 from Record Room, Rohini Courts stated that the file pertaining to the complaint u/s 138/142 of NI Act filed by the complainant bank has been destroyed in terms of the orders dated 10.10.2013 by Record Room Incharge. It can be made out that the bank has not proceeded with its complaint before the Ld. MM against M/s Kamal Carriers, instead preferred to file recovery proceedings against M/s Shree Ram LPG Carrier and Bachhu Singh before the DRT. In the above circumstances certified copies brought on record by the prosecution with regard to the 6 cheques and their corresponding credit vouchers i.e. Ex. PW7/A16 to A21 and Ex. PW7/A10 to A15 are held admissible in the evidence. The argument for the Ld. Counsel for the defence that the prosecution has to move an application seeking permission to adduce secondary evidence is not tenable in view of the judgment of Hon'ble High Court of Delhi in Prem Chandra Jain (Deceased) v. Sri Ram (Deceased) in CM(M) 1764-66/2005, wherein it is clearly held that neither the Evidence Act nor the CPC nor any other rules and regulations or statute requires the filing of such application.
CC No. 41/11 (532301/16) 40/88
77. The prosecution has brought on record the statement of account of M/s Shree Ram LPG Carrier as Ex. PW8/A1 by examining Sh. Ashok Kapoor, Manager as PW-8. The prosecution has also brought on record certificate u/s 2A of the Banker's Books of Evidence Act with regard to the statement of account of current account no. 21-126717 of M/s Shree Ram LPG Carrier as Ex. PW8/A. The witness PW-8, who was the Manager at relevant time at PNB, Azadpur Branch has identified his signature on statement of account Ex. PW8/A1. He also identified his signature and the signature of Sh. V.K. Gupta, Chief Manager of the bank on the certificate u/s 2A of Banker's Books Evidence Act i.e. Ex. PW8/A. It is argued by the Ld. Counsel for the defence that the statement of account which is brought on record as Ex. PW8/A1 cannot be considered as proved in the absence of certificate u/s 65-B of the Evidence Act. On the other hand, the Ld. PP for CBI contends that a certificate u/s 2A of the Banker's Books Evidence Act is sufficient to prove the statement of account and there is no requirement of a separate certificate u/s 65-B of the Evidence Act.
78. Section 2-A of the Banker's Books Evidence Act is reproduced CC No. 41/11 (532301/16) 41/88 as below :-
"2A. Conditions in the printout - A printout of entry or a copy of printout referred to in sub-section (8) of section 2 shall be accompanied by the following, namely :-
(a) a certificate to the effect that it is a printout of such entry or a copy of such printout by the principal accountant or branch manager; and
(b) a certificate by a person in-charge of computer system containing a brief description of the computer system and the particulars of-
(A) the safeguards adopted by the system to ensure that data is entered or any other operation performed only by authorised persons;
(B) the safeguards adopted to prevent and detect unauthorised change of data;
(C) the safeguards available to retrieve data that is lost due to systemic failure or any other reasons; (D) the manner in which data is transferred from the system to removable media like floppies, discs, tapes or other electro-magnetic data storage devices;
CC No. 41/11 (532301/16) 42/88 (E) the mode of verification in order to ensure that data has been accurately transferred to such removable media; (F) the mode of identification of such data storage devices; (G) the arrangements for the storage and custody of such storage devices;
(H) the safeguards to prevent and detect any tampering and accuracy of the system.
(c) a further certificate from the person in-charge of the computer system to the effect that to the best of his knowledge and belief, such computer system operated properly at the material time, he was provided with all the relevant data and the printout in question represents correctly, or is appropriately derived from, the relevant data."
79. By way of certificate U/s 2-A of the Banker's Books Evidence Act, the concerned bank which has provided the document authenticates the genuinity of a printout of entry or a copy of the printout with regard to safeguards adopted by the system, to prevent and detect unauthorised change of data, to retrieve data in case of systemic failure or for any other reason. It also CC No. 41/11 (532301/16) 43/88 authenticates with regard to the data transfer, mode of verification, mode of identification of data storage and further vouch for integrity and accuracy of the system. This certificate has to be signed by the Branch Manager and the person Incharge of computer system. The contents of the certificate are in such a way that it meets with all the conditions and safeguards U/s 65-B of the Evidence Act. It is pertinent to mention here that both the sections i.e. Section 2-A of the Banker's Books Evidence Act and Section 65-B of the Indian Evidence Act are inserted by Act 21 of 2000 (w.e.f. 17.10.2000). Since, all the safeguards as mentioned in Section 65-B of the Evidence Act to prove the computer printouts in evidence are incorporated in Section 2-A of Banker's Books Evidence Act, there is no need of a separate certificate U/s 65-B of the Evidence Act.
80. In the present case, the prosecution has proved certificate U/s 2-A of the Banker's Books Evidence Act by examining PW-8 who signed the said certificate as System Administrator and who also identified the signature of Sh. V.K. Gupta, the then Chief Manager on the certificate. In view of the certificate i.e. Ex.
CC No. 41/11 (532301/16) 44/88 PW8/A, the statement of account pertaining to current account no. 21-126717 of M/s Shree Ram LPG Carrier at PNB Azadpur Branch is held proved. As far as the contents/entries of the statement of account i.e. Ex. PW8/A1 are concerned, the same are entered and kept in regular course of business which are relevant u/s 34 of the Indian Evidence Act and therefore, can be read in evidence to the extent permitted.
81. It is clear from the documents i.e. Cheques Ex. PW7/A19 to A21 and Credit Vouchers Ex. PW7/A13 to A15 that the accused Bachhu Singh presented 3 cheques on 06.11.04 i.e. Ex. PW7/A19 to A21 for total amount of Rs.4,95,000/- (Rs.95,000/- + Rs. 2,50,000/- + Rs. 1,50,000/-) and the same were purchased by accused D.K. Malhotra, Incumbent Incharge and the money was credited to the current account of M/s Shree Ram LPG Carrier. The said amount of Rs.4,95,000/- was withdrawn by the accused Bachhu Singh on the same day i.e. 06.11.04 by way of self cheque which is Ex. PW7/A1. All the relevant entries with regard to credit of the amount of Rs.4,95,000/- which is purchase amount of the cheques and the withdrawal of the same by way of self cheque are shown in the CC No. 41/11 (532301/16) 45/88 statement of account i.e. Ex. PW8/A1 at points X-6, X-9, X-11 and X-8.
82. It is also clear from the documents i.e. Cheques Ex. PW7/A16 to A18 and Credit Vouchers Ex. PW7/A10 to A12 that the accused Bachhu Singh presented 3 cheques on 08.11.04 i.e. Ex. PW7/A16 to A18 for total amount of Rs.5,60,000/- (Rs.2,20,000/- + Rs. 2,40,000/- + Rs. 1,00,000/-) and the same were purchased by accused D.K. Malhotra, Incumbent Incharge and the money was credited to the current account of M/s Shree Ram LPG Carrier. The amount of Rs.5,55,000/- was withdrawn by the accused Bachhu Singh on the same day i.e. 08.11.04 by way of self cheque bearing no. 536299 dated 08.11.04. All the relevant entries with regard to credit of the amount of Rs.5,60,000/- which is purchase amount of the cheques and the withdrawal of the same by way of self cheque are shown in the statement of account i.e. Ex. PW8/A1 at points X-13, X-16, X-18 and X-15.
83. It is argued by the Ld. Counsel for the defence that the documents were seized by the IO, Ajeet Singh from the bank without specific authorisation from the S.P. which is mandatory CC No. 41/11 (532301/16) 46/88 U/s 18 of the PC Act. Ld. Counsel for accused relied on judgment of the Hon'ble Apex Court in Vishnu Kondaji Jadhav v. State of Maharashtra, AIR 1994, SC 1670, wherein it is held as follows :-
"5. It is clear from the provisions of the section that for investigation into every offence under the Act, it was necessary for the Inspector of Police who was admittedly not authorised by the State Government either by general or special order, to take the prior permission of the Magistrate. The High Court has rejected this contention on the ground that the permission was taken by the Inspector or Police on earlier two occasions and the second permission taken on 20-6-1975 accrued for the benefit of the investigation into the demand for bribe made by the appellant on 6-7-1975. For the purpose, the High Court relied upon a decision of this Court in State of Uttar Pradesh v. Bhagwant Kishore Joshi. We are afraid that the High Court has misled itself by relying upon the said decision. In that case, the accused had committed CC No. 41/11 (532301/16) 47/88 a criminal breach of trust in respect of a certain sum of money and he was booked for the said breach of trust and the investigation was made in respect of the same offence although the permission to investigate under the present Act was taken at a later stage. It is on these facts that the Court held that the investigation being indivisible as it was related to the very same act of the breach of trust, the permission taken once accrued for the entire investigation, whatever the stages in the investigation."
84. The Ld. Counsel for the defence also relied on B. Ranganathan v. State & Ors. of Hon'ble Madras High Court, wherein it is held as follows :-
"20. At this juncture, it is relevant to point out from the proviso to Section 18 of the Prevention of Corruption Act, 1988 which is specific to the effect that no power under this section in relation to the accounts of any person shall be exercised by a police officer below the rank of a Superintendent of Police, unless he is specially authorised in this behalf by a police officer of CC No. 41/11 (532301/16) 48/88 or above the rank of a Superintendent of Police. No clarification is required that this proviso to Section 18 requires special authorisation by officer not less than the rank of Superintendent of Police to any police officer who is below the rank of Superintendent of Police."
85. Section 18 of the PC Act is reproduced as below :-
"Section 18. Powers to inspect bankers' books. - If from information received or otherwise, a police officer has reason to suspect the commission of an offence which he is empowered to investigate under section 17 and considers that for the purpose of investigation or inquiry into such offence, it is necessary to inspect any bankers' books, then notwithstanding anything contained in any law for the time being in force, he may inspect any bankers' books insofar as they relate to the accounts of the persons suspected to have committed that offence or of any other person suspected to have committed that offence or of any other person suspected to be holding money on behalf CC No. 41/11 (532301/16) 49/88 of such person, and the bank concerned shall be bound to assist the police officer in the exercise of his powers under this section;
Provided that no power under this section in relation to the accounts of any person shall be exercised by a police officer below the rank of a Superintendent of Police, unless he is specifically authorised in this behalf by a police officer of or above the rank of a Superintendent of Police."
86. It is seen from the record that the FIR Ex. PW 18/A in the present case is registered by the S.P., CBI. After registering the FIR, the S.P., CBI has authorised Insp. Ajeet Singh to investigate the matter. Since, the S.P., CBI himself has registered the FIR and authorised Inspector Ajeet Singh to conduct investigation, there is no need of any separate authorisation to seize the documents from the bank. In all the above cases which are cited by the Ld. Defence Counsel, the cases were registered by the officers below the rank of S.P. and therefore they required specific authorisation from the S.P. u/s 18 of the PC Act. In the present case, S.P. himself has CC No. 41/11 (532301/16) 50/88 authorised Inspector Ajeet Singh to conduct investigation and hence section 18 is held complied.
ROLE OF ACCUSED D. K. MALHOTRA
87. It is the case of the prosecution that the then Chief Manager of PNB, Azadpur Branch D.K. Malhotra and the accused Bachhu Singh, Proprietor of M/s Shree Ram LPG Carrier conspired to cheat the bank and in pursuance thereof accused D.K. Malhotra purchased the cheques presented by accused Bachhu Singh and thereby made the bank to deliver the property to the tune of Rs.10,55,000/-. Hence it is the case of the prosecution that the accused D.K. Malhotra and accused Bachhu Singh have committed the offence u/s 120-B r/w 420 of IPC r/w 13(1)(d) of PC Act and accused D.K. Malhotra committed substantive offence u/s 13(1)(d) r/w 13(2) of the PC Act and accused Bachhu Singh committed the substantive offence u/s 420 IPC.
88. Accused D.K. Malhotra was Chief Manager, Incumbent Incharge of PNB, Azadpur Branch during the period from July 2004 to 10.11.2004. As per the evidence of PW-2, Accused Bachhu Singh opened a current account of his proprietory concern M/s Shree Ram LPG Carrier at PNB, Azadpur Branch on 21.06.2003 CC No. 41/11 (532301/16) 51/88 vide account opening form Ex. PW2/A1. Since the date of opening of the current account M/s Shree Ram LPG Carrier has been transacting in its account at PNB, Azadpur. This fact can be made out from the statement of account Ex. PW8/A1, which also shows that some cheques were purchased by the predecessor prior to the tenure of D.K. Malhotra. The prosecution case is confined only to the 6 cheques purchased by D.K. Malhotra and amount credited to the account of M/s Shree Ram LPG Carrier which allowed to be withdrawn by accused Bachhu Singh. As discussed above, D.K. Malhotra purchased 3 cheques i.e. Ex.PW7/A19 to A21 presented by Bachhu Singh on 06.11.04 and further purchased 3 more cheques Ex.PW7/A16 to A18 on 08.11.04. All the 6 cheques were presented by accused Bachhu Singh, who is the sole proprietor of M/s Shree Ram LPG Carrier and these cheques were issued by accused Bachhu Singh himself as proprietor of M/s Kamal Carriers whose account was at SBI, Jahangirpuri, Delhi. It is the case of the prosecution that the accused D.K. Malhotra, in utter violation of the Banking Guidelines vide circular no. 130, purchased the cheques of sister concerns by CC No. 41/11 (532301/16) 52/88 abusing his official position and caused pecuniary loss to the bank. The prosecution has examined witness Sh. Ram Kumar Chawla as PW-10 who brought on record Circular No. 130 dated 31.12.2002 as Ex. PW10/A. It is necessary to reproduce his statement with regard to the guidelines mentioned in the said circular. The same is reproduced as below :-
"At present I am posted a Chief Manager at Yamuna Nagar (Haryana), Model Town Branch. I had joined Punjab National Bank in the year 1978. In July, 2007 I was posted at North Delhi Zonal Office at Rajendra Place, New Delhi, in the Inspection Department. Q. Are you familiar with the loan powers and its guidelines issued by the Head Office?
Ans. Yes. There are circulars issued defining the loan powers of the officers of the different levels and how they are to be sanctioned and released from time to time. At the relevant time i.e. in the year 2003-2004 was the circular No. 130 dated 31.12.2002. I can identify the same, if shown to me.
(At this stage Ld. PP for CBI has made a request for CC No. 41/11 (532301/16) 53/88 permitting him to place on record a copy of the said circular. Ld. Defence counsel submits that he has an objection for placing the same on record. He also submits that he original of the said circular is also not on the record of any other connected case. The circular which is being proposed to be placed on record is only a photocopy. Considering that it is only a circular of the Bank of which even a judicial notice can be taken by the court. I permitting the same to be taken on record subject to the decision on the objections of the Ld. Defence Counsel. (At this stage a copy of said Circular is placed on the record of this case and shown to the witness).
I can identify this circular. I had personally handled and used this Circular during the course of my official duties. The Circular is now Ex. PW 10/A (subject to the objections of the Ld. Defence Counsel). Q. Can you tell the Court after going through this Circular as to what were the powers of Senior Manager and Chief Manager with regard to purchase of the CC No. 41/11 (532301/16) 54/88 cheque ?
Ans. At page No. 7 at Sl. No. 4 (ii) it is noted in the portion X1 to X1 that the powers of a Senior Manager and Chief Manager with regard to the purchase of cheques were Rs. 3.75 lacs and Rs. 20 lacs, respectively. The same were the powers with regard to advance against clearing instruments. Q. Inform the Court if the above powers could be exercised by such an officer with regard to the purchase of cheques if the cheques to be purchased were to be of allied or sister concerns of the party presenting the cheque for purchase ?
Ans. One may find that on page No. 7 in the portion X2 to X2 it is noted that these powers were to be exercised only "in respect of cheque representing genuine trade transactions" and not to be exercised "for cheques of the allied and associate concerns".
Q. Can you also tell the Court if the power could be exercised by the Senior Manager/Chief Manager for purchasing the cheque of Co-operative Banks ?
CC No. 41/11 (532301/16) 55/88 Ans. As per the instructions on page No. 7 in the portion X3 to X3 of the said Circular "Advance is not to b e allowed in any shape against the cheques / pay orders / drafts issued by Co-operative Banks including State Co-operative Banker."
89. It can be made out from the above deposition of PW-10 and also the contents of circular Ex. PW10/A that Senior Manager and Chief Manager have the powers to purchase cheques of Rs.3.75 lacs and Rs.20 lacs respectively. Accused D.K. Malhotra at the relevant time as Chief Manager had the powers to purchase cheques of value upto Rs. 20 lacs and these powers of purchasing cheques are to be exercised only in respect of genuine trade transactions and it is further understood from the above circular that cheques of allied and associate concerns were not to be purchased. PW-10 also explained as to what is meant by an allied or sister concern of a party, as below :-
"Q. What do you mean by an allied or sister concern of a party?
Ans. One can say one concern to be sister or allied CC No. 41/11 (532301/16) 56/88 concern of the party where one or more partners are common in two concerns. If two firms have the members of the same family as partners though they may not be common in that case also the two firms can be called as sister concern."
90. In this case accused Bachhu Singh is the proprietor of M/s Shree Ram LPG Carrier and M/s Kamal Carriers and therefore, both these concerns can be called as allied or sister concerns as per the explanation given by PW-10. Since, the cheques of sister concerns are not allowed to be purchased in terms of guidelines under circular Ex.PW10/A, Ld. PP contends that by purchasing the cheques issued by M/s Kamal Carriers in the account of M/s Shree Ram LPG Carrier, accused D.K. Malhotra has violated the norms under Ex.PW10/A. It is pertinent to mention here that the account of M/s Shree Ram LPG Carrier is functioning and transactions were taking place in that account and further that some cheques of similar nature were also purchased in that account even prior to the tenure of D.K. Malhotra. There is no evidence on record to suggest that accused D.K. Malhotra knew the fact that M/s Kamal Carriers CC No. 41/11 (532301/16) 57/88 was the sister concern of M/s Shree Ram LPG Carrier. Admittedly, all the 6 cheques in question purchased by accused D.K. Malhotra are within the powers of Chief Manager as per circular Ex. PW10/A. There is no instance on record which shows that accused D.K. Malhotra has exceeded his powers to purchase the cheques in the account of M/s Shree Ram LPG Carrier.
91. It is also pertinent to mention here that first set of 3 cheques Ex.
PW7/A19 to A21 were purchased by accused D.K. Malhotra on 06.11.04 and another set of 3 cheques i.e. Ex. PW7/A16 to A18 were purchased on 08.11.04. The first set of 3 cheques were returned unpaid by SBI, Jahangirpuri Branch vide cheque returning memo Ex. PW7/DX1 on 09.11.04 and the second set of 3 cheques were returned unpaid vide cheque returning memo Ex. PW7/DX2 on 10.11.04. From the above, it is clear that at the time of purchase of second set of 3 cheques by accused D.K. Malhotra, he was not aware that the first set of 3 cheques would be returned unpaid. Therefore, it cannot be said that accused D.K. Mallhotra had purchased second set of 3 cheques on 08.11.04 knowingly. It is vehemently argued by the Ld. PP for CC No. 41/11 (532301/16) 58/88 CBI that the accused D.K. Malhotra has violated the norms under circular Ex. PW10/A by purchasing the cheques of sister concerns and thereby abused his official position to give pecuniary advantage to accused Bachhu Singh. As it is stated above, there is absolutely no evidence to suggest that accused D.K. Malhotra knew that M/s Kamal Carriers whose cheques were purchased was the sister concern of M/s Shree Ram LPG Carrier. Even for discussion sake, it is assumed that accused D.K. Malhotra knowingly purchased the cheques of sister concerns then at the most it amounts to violation of guidelines and the same cannot be said to be an offence. In this regard, it is necessary to refer to the judgment of Hon'ble Supreme Court in Abdulla Mohd. Pagarkar v. State, AIR 1980 SC 499, wherein it is held as follows :-
"15. : Learned Counsel for the State sought to buttress the evidence which we have just above discussed with the findings recorded by the Learned Special Judge and detailed as items (a) to (e) in paragraph 5 and items (i) and (iii) in paragraph 6 of this Judgment. Those findings were affirmed by the Learned Judicial CC No. 41/11 (532301/16) 59/88 Commissioner and we are clearly of the opinion for reasons which need not be re-stated here, that they were correctly arrived at. But those findings merely make out that the appellants proceeded to execute the work in the flagrant disregard of the relevant Rules of the G.F.R. and even of ordinary norms of procedural behaviour of government officials and contractors in the matter of execution of works undertaken by them Government. Such disregard however has not been shown to us to amount to any of the offences of which the appellants have been convicted. The said findings no doubt make the suspicion to which we have above adverted still stronger but that is where the matter rests and it cannot be said that any of the ingredients of the charge have been made out.
Apart from the findings and evidence referred to earlier in this paragraph, no material has been brought to our notice on behalf of the State such as would indicate that the bills or the summaries in question were false in any material particulars."
CC No. 41/11 (532301/16) 60/88
92. As per the dictum laid down by the Hon'ble Supreme Court in the above case, disregard of the relevant rules and ordinary norms of procedural behaviour does not amount to an offence.
93. It is also important to note that there is no allegation by the prosecution against accused D.K. Malhotra that he has received any pecuniary advantage from the accused Bachhu Singh for purchasing the cheques in question. In this connection the evidence of PW-18, IO Ajeet Singh is relevant. To a specific question put to him in cross-examination, IO answered that during investigation nothing was revealed to suggest that D.K. Malhotra had accepted any money in this case. The statement of PW-18 in this regard is relevant and reproduced below :-
"Q : Is it correct that Sh. D.K. Malhotra did not obtain any pecuniary advantage while purchasing the questioned cheques?
A: No such thing was revealed during the course of investigation."
94. In this context the judgment dated 10.05.2016 of Hon'ble Supreme Court in A. Sivaprakash v. State of Kerala in Crl. Appeal No. 131/07 is also relevant, wherein it is held : -
CC No. 41/11 (532301/16) 61/88 " 17: Section 13(1)(d) of the PC Act, reads as under :
13. Criminal misconduct by a public servant pecuniary advantage thereby. It was the obligation of the prosecution to satisfy the aforesaid mandatory ingredients which could implicate the appellant under the provisions of Section 13(1)(d)(ii). The attempt of the prosecution was to bring the cases within the fold of clause (ii) alleging that he misused his official position in issuing the certificate utterly falls as it is not even alleged in the chargesheet and not even iota of evidence is led as to what kind of pecuniary advantage was obtained by the appellant in issuing the said letter."
95. In the present case also let alone the evidence there is not even an allegation that accused D.K. Malhotra obtained any pecuniary advantage for purchase of cheques in question.
96. It is further argued by the Ld. PP for CBI that the conspiracy is always hatched in secrecy and therefore, there cannot be a direct evidence to prove the conspiracy. Ld. PP for CBI has relied on the judgments of Hon'ble Supreme Court in CC No. 41/11 (532301/16) 62/88 Shivanaryan Laxminarayan Joshi v. State of Maharashtra, wherein it is held as follows :-
"14 : Lastly it was urged that there is no evidence or finding that the appellant No. 1 had dominion over the properties misappropriated. On this point also the High Court has also clearly found the appellant as Managing Director had sufficient dominion and control over the property and through the conspiracy hatched by him with this conspirators he was able to misappropriate a sum of Rs. 43.95 Lakhs and thus deprived moist of the depositors of the Bank of the moneys which they had deposited with Laxmi Bank. It is manifest that a conspiracy is always hatched in secrecy and it is impossible to adduce direct evidence of the same. The offence can be only proved largely from the inferences drawn from acts or illegal omission committed by the Conspirators in pursuance of a common design which has been amply proved by the prosecution as found as a fact by the High Court."
97. Ld. PP also relied on judgment of Ajay Aggarwal v. UOI, AIR CC No. 41/11 (532301/16) 63/88 1993 SC 1637, wherein it is held as follows :-
"10:In Mahommed Usman Mohammad Hussain Maniyar v. State of Maharashtra (1981) 3 SCR 68 : (AIR 1981 SC 1062), it was held that for an offence U/s 12-B IPC, the prosecution need not necessarily prove that the conspirators expressly agreed to do or cause to be done the illegal act, the agreement may be proved by necessary implication."
98. The Ld. PP also in course of his arguments referred to catena of decisions on the point of conspiracy. All the dicta laid down by the Supreme Court in various cases including the cases referred above by the Ld. PP rule that the offence of conspiracy can be proved largely from the acts or illegal omissions committed by the conspirators. In the present case, there are no circumstances proved on record from which an inference can be drawn that the accused D.K. Malhotra has conspired with accused Bachhu Singh to cheat the bank.
99. Ld. PP for CBI has relied on a judgment of Hon'ble Apex Court in Chittaranjan Shetty v. State in Crl. Appeal No. 884/2008, wherein it is held as follows :-
CC No. 41/11 (532301/16) 64/88 "20. In the present case, it is not disputed that the appellant is a public servant. As regards the element of "obtaining a valuable thing or pecuniary advantage"
for himself or another person, the courts below have made concurrent findings that the appellant, by permitting accused No. 2 to divert the over draft facilities towards payment to DW-1, has obtained a pecuniary advantage for DW-1 and we concur with the same.
21. The crucial fact that needs to be determined is whether the appellant, with dishonest intention, abused his position in order to obtain for DW-1, the same pecuniary advantage. It is out considered opinion that, in the present case, there is sufficient evidence on record to prove that the appellant was acting with a dishonest intention. The terms and conditions of the loan granted to the appellant categorically state that the overdraft facilities could be utilized only for the purpose of meeting working capital requirements and for furnishing performance CC No. 41/11 (532301/16) 65/88 guarantee in favour of the said Corporation and the same could not have been utilized for payment of the debt owed by accused No. 2 to DW-1. The courts below have relied on the testimony of the PW-18 to conclude that the appellant knowingly and wilfully disregarded the objections of PW-18 and permitted accused No. 2 to divert funds from the overdraft facility towards payment to DW-1 and that this fact is proof of dishonest intention on the part of the appellant. We concur with the court below in this regard. The testimony of PW-18 has been corroborated by the testimony of the Sub-Manager of Karnataka Bank (PW-
9) who has stated that a cheque of Rs.3,60,000/- was deposited in the current account of DW-1 as well as that of the Senior Manager, Corporation Bank, Car Street, Mangalore(PW-10)."
100. In the above said case, the appellant Branch Manager permitted accused no. 2 to divert the overdraft facilities towards payment to DW-1 thereby obtained a pecuniary advantage for DW-1, who is a third person. In the present case, there is no allegation that CC No. 41/11 (532301/16) 66/88 accused D.K. Malhotra has obtained any pecuniary advantage to any third person or to himself.
101. The account of M/s Shree Ram LPG Carrier was not opened by the accused D.K. Malhotra and the transactions in the said account were already taking place prior to D.K. Malhotra taking over as Incumbent Incharge of PNB, Azadpur Branch, there is no evidence to suggest that he was aware of the fact that M/s Shree Ram LPG Carrier was sister concern of M/s Kamal Carriers nor that he received any pecuniary advantage for purchasing of cheques from accused Bachhu Singh. In the above facts and circumstances as available on record, it can be said that there is no material to prove that accused D.K. Malhotra has entered into any criminal conspiracy with accused Bachhu Singh or that he committed offence U/s 13(1)(d) of the P.C. Act.
ROLE OF ACCUSED BACHHU SINGH
102. As far as the role of the A-3 Bachhu Singh is concerned, it is he who presented the cheques Ex. PW7/A16 to A21 and got them purchased. It is clear from the material available on record that on 06.11.04, Bachhu Singh presented 3 cheques Ex. PW7/A19 CC No. 41/11 (532301/16) 67/88 to A21 and total amount of Rs.4,95,000/- was credited to the account of M/s Shree Ram LPG Carrier which reflects in the statement of account Ex. PW8/A1 at point X8. Accused Bachhu Singh withdrew the entire amount on very same day by way of a self cheque Ex. PW7/A1 and the same is also reflected in statement of account Ex. PW8/A1. Again on 08.11.04, accused Bachhu Singh got 3 more cheques purchased and an amount of Rs.5,60,000/- was credited to the account of M/s Shree Ram LPG Carrier. It is evident from the statement of account that accused Bachhu Singh withdrew an amount of Rs.5,55,000/- on the very same day vide self cheque bearing no. 536299. It is pertinent to mention here that all the 6 cheques which Bachhu Singh presented and got encashed belong to M/s Kamal Carriers. It is already established from Ex. PW2/A1 i.e. Account Opening Form of M/s Shree Ram LPG Carrier at PNB, Azadpur Branch and Ex. PW4/A i.e. Account Opening Form of M/s Kamal Carriers at SBI, Jahangirpuri Branch that accused Bachhu Singh is the sole proprietor of both these firms. By presenting the cheques of his own firm M/s Kamal Carriers, he got the amount in his another account which clearly shows that the CC No. 41/11 (532301/16) 68/88 alleged transactions were not fair. All the 6 cheques of M/s Kamal Carriers were returned unpaid which is proved by Ex. PW7/DX1 and DX2. It is relevant to mention here the statement of PW-10. In his cross-examination, PW-10 stated as follows : -
"Q. You have stated that the statement of account had been received by you while working in the Inspection Audit Department of Zonal Office and you had the occasion to examine the entries in question. Can you tell the Court what specifically you had checked in the said entries?
Ans. I had observed that all the cheques which had been purchased, had returned unpaid and giving an indication that the purchase of the cheques may not be related to any genuine trade transaction. By indication I mean that since the cheques had returned unpaid consistently that gave an impression that the cheques were not for genuine transactions. As far as the returning of cheques "consistently" is concerned the same is reflected in the statement of account itself."
CC No. 41/11 (532301/16) 69/88
103. Since accused Bachhu Singh himself was running the account of M/s Kamal Carriers at SBI, Jahangirpuri Branch, he must be in the knowledge that there was no sufficient balance in the account of M/s Kamal Carriers to honour the cheques. The Ld. Counsel for the accused Bachhu Singh argued that at the time of issuance of cheques, accused need not be having balance in his account. Ld. Counsel has relied on judgment of Hon'ble Orissa High Court in G. Laxminarayan Naidu b. Chitiboina Yerraiah And Anr. 1985 II OLR 119, wherein it is held that :-
"It has also been observed therein that drawing up of a cheque does not mean that the drawer has enough money in the Bank for he may have authority to overdraw or may have an honest intention of paying the necessary balance to the Bank before the cheque is presented for encashment. It has further been held that mere drawing up of a cheque for a specified amount even when the drawer knows that he does not have sufficient balance in his account to cover the amount for which the cheque is issued would not constitute cheating."
CC No. 41/11 (532301/16) 70/88
104. Ld. Counsel for the accused Bachhu Singh has also relied upon a judgment of Hon'ble Punjab-Haryana High Court dated 02.05.2007 in Rajnish Lathar vs. State of Haryana, wherein it is held that :-
"It is trite law and common sense that an honest man entering into a contract is deemed to represent that he has the present intention of carrying it out but if, having accepted that pecuniary advantage involved in the transaction, he fails to pay his debt, he does not necessarily evade the debt by deception. Moreover, the appellant has no case that the respondents obtained the article by any fraudulent inducement or by wilful mis-representation. It has been informed that the respondents, though committed default in paying some installments, have paid substantial amount towards the consideration. Having regard to the facts and circumstances, it is difficult to discern an element of deception in the whole transaction, whereas it is palpably evident that the appellant had an oblique motive of causing harassment to the respondents by CC No. 41/11 (532301/16) 71/88 seizing the entire articles through magisterial proceedings. Therefore, the Single Judge of the High Court was perfectly justified in quashing the proceedings."
105. Though there is no dispute with regard to the legal proposition laid down in both the above cases, the facts in the above said cases can be distinguished from the facts of the present case. In the present case, the cheques were issued by accused Bachhu Singh as proprietor of M/s Kamal Carriers and the same got encashed by the accused himself as proprietor of M/s Shree Ram LPG Carrier. Even it is assumed for the sake of discussion that there is no bar on the accused to utilise the facility of discounting of cheques issued by one firm in favour of the other firm and further that he had no dishonest intention to cheat the bank, it is not clear as to why he could not arrange funds in the account of M/s Kamal Carriers from whose account the cheques in question were issued. Even further it is assumed that the accused Bachhu Singh could not arrange funds due to some genuine reasons in the account of M/s Kamal Carriers for first set of 3 cheques, it is not clear as to why he got purchased 3 CC No. 41/11 (532301/16) 72/88 more cheques on 08.11.04 and got encashed them on the very same day. The Ld. Counsel for the accused relied on S.V.L. Murthy v. State, Represented by CBI Hyderabad 2009 Crl.L.J. 3930, wherein it is held that : -
"An offence of cheating cannot be said to have been made out unless the following ingredients are satisfied:-(i) deception or a person either by making a false or misleading representation or by other action or omission;
(ii) fraudulently or dishonestly inducing any person to deliver any property; or
(iii) to consent that any person shall retain any property and finally intentionally inducing that person to do or omit to do anything which he would not do or omit.
For the purpose of constituting an offence of cheating, the complainant is required to show that the accused had fraudulent or dishonest intention at the time of making promise or representation. Even in a case where allegations are made in regard to failure on the CC No. 41/11 (532301/16) 73/88 part of the accused to keep his promise, in absence of a culpable intention at the time of making initial promise being absent, no offence under Section 420 of the Indian Penal Code can be said to have been made out.
We may reiterate that one of the ingredients of cheating as defined in Section 415 of the Indian Penal Code is existence of an intention of making initial promise or existence thereof from the very beginning of formation of contract."
106. In the above case the bank allegedly sanctioned discounting facility to the extent of Rs.30 lacs on the basis of collateral securities furnished on or about 15.4.1989. However, ten cheques aggregating to Rs.29,86,219/- were discounted and sent for clearing by Bank, which were returned unpaid from clearing house. Appellants contended that they were sent for clearing without proper stamping/endorsement; they did not reach drawer bank at all. Indisputedly, however, the Regional Office issued instructions for stopping of cheque discounting facility without notice. It is stated that the appellants paid a sum CC No. 41/11 (532301/16) 74/88 of Rs.29,90,941/-, which covered the discounting amount together with interest on or about 25.4.1989. The above said facts are different from the facts of the present case.
107. The Ld. Counsel for accused Bachhu Singh argued that the bank has initially made a complaint u/s 138/142 NI Act before the Ld. MM, Rohini Courts, Delhi. It is further contended that since the bank has preferred to file a complaint under sections 138/142 of NI Act, any case against the accused for the offence u/s 420 IPC is not sustainable. To support this argument, Ld. Counsel has relied upon judgment of Hon'ble High Court of Delhi in G. K. Sawhney v. State & Anr. in Crl. M.C. No. 379/09, wherein ti is held as follows :-
"Para 11 :- Otherwise also, admittedly, prior to the filing of the complaint under Section 190/403/420 PC against M/s Rajasthan Ball Bearing Ltd. and Others, including the petitioner, the respondent complainant had already instituted a complaint under Section 138 NI Act on the same act of allegations. Respondent complainant has failed to give any explanation either in his complaint under Section 190/403/420 IPC or in his preliminary CC No. 41/11 (532301/16) 75/88 evidence as to why he did not include offence U/s 190/403/420 IPC which are subject-matters of second complaint in his earlier complaint under Section 138 N.I. Act. This circumstance leads to an inescapable conclusion that the second complaint has been filed with mala fide intention to harass the petitioner by filing multiple criminal proceedings against him on the basis of cause of action arising from same set of facts. This conduct on the part of the respondent certainly is an abuse of process of law justifying the interference U/s 482 Cr.P.C. to quash the proceedings of the second complaint. In my aforesaid view, I am supported by the Judgment of Supreme Court in the matter of G. Sagar Suri and Another Vs. State of U.P. and Others (2000) 2 SCC 636."
108. The above observation was made by the Hon'ble High Court in a case where the cheques were issued by M/s Rajasthan Ball Bearing Ltd. in favour of respondent/complainant on dishonour of the said cheques, respondent/complainant has filed a case under NI Act and later filed a second complaint u/s 190/403/420 CC No. 41/11 (532301/16) 76/88 IPC. The dictum laid down by the Hon'ble High Court in the said case cannot be applied to the present case for the simple reason that in the present case cheques were issued by accused himself from the account of M/s Kamal Carriers and the cheques were encashed by the accused himself from the account of M/s Shree Ram LPG Carrier. The bank has initially filed a complaint u/s 138/142 NI Act against the drawer of the cheques i.e. M/s Kamal Carriers and later when the fraud committed by the accused was discovered, the bank has chosen to lodge a complaint to the CBI and further chosen to initiate recovery proceedings against the accused Bachhu Singh before DRT.
109. Section 415 of the IPC defined cheating and Section 420 of IPC defined its punishment as under :-
"Section 415 : - Cheating : Whoever, by deceiving any person, fraudulently or dishonestly induces the person so deceived to deliver any property to any person, or to consent that any personal shall retain any property, or intentionally induces the person so deceived to do or omit CC No. 41/11 (532301/16) 77/88 to do anything which he would not do or omit if he were not so deceived, and which act or omission causes or is likely to cause damage or harm to that person in body, mind, reputation or property, is said to 'cheat'."
"Section 420 :-Cheating and dishonestly inducing delivery of property: Whoever cheats and thereby dishonestly induces the person deceived to deliver any property to any person, or to make, alter or destroy the whole or any part of a valuable security, or anything which is signed or sealed, and which is capable of being converted into a valuable security, shall be punished with imprisonment of either description for a terms which may extend to seven years, and shall also be liable to fine."
110. The essential ingredients to attract section 420 are :-
(i) cheating ;
(ii) dishonest inducement to deliver property or to make, alter or destroy any valuable security or anything which is sealed or signed or is capable of being converted into a valuable security and the ;
(iii) mens rea of the accused at the time of making the CC No. 41/11 (532301/16) 78/88 inducement. The making of false representation is one of the ingredient for the offence of cheating u/s 420 IPC.
111. As was observed by the Hon'ble Apex Court in Shivanarayan Kabra v. State of Madras, AIR 1967 SC 986, it is not necessary that a false pretence should be made in express words by the accused. It may be inferred from all the circumstances including the conduct of the accused in obtaining the property. In the true nature of things, it is not always possible to prove dishonest intention by any direct evidence. It can be proved by number of circumstances from which a reasonable inference can be drawn. In the present case, the accused Bachhu Singh used the cheques issued by himself from his own concern M/s Kamal Carriers and got them purchased in the account of another concern of his own. He used the 6 cheques Ex. PW7/A16 to A21 to induce the complainant bank to deliver the property i.e. the amount to the tune of Rs.10,55,000/-.
112. The Ld. Counsel for the defence argued that the complainant bank obtained security from the accused Bachhu Singh against the cheque discounting facility offered to him. It is further argued that immovable property i.e. A-1562-1563, Jahangirpur, Delhi-
CC No. 41/11 (532301/16) 79/88 110033 which is in the name of wife of the accused Bachhu Singh was mortgaged to the bank at the time of availing the cheque discounting facility and therefore, the dispute is only of civil nature for recovery of the amount by proceeding against the mortgaged property in case of default. In this regard the Ld. Counsel for the accused Bachhu Singh relied on the document Ex. DW1/C i.e. letter of proclamation of sale of property attached during the recovery proceedings. The contention of Ld. Counsel for accused is not supported by any evidence. There is no material on record to show that the facility of cheque discounting provided to M/s Shree Ram LPG Carrier was secured by way of mortgage of any property. Nothing is elicited from the examination of DW-1 and the cross-examination of various bank witnesses to prove that any immovable property was mortgaged by the accused Bachhu Singh for availing the facility of cheque discounting from the complainant bank. It cannot be presumed from Ex. DW1/C that the accused has mortgaged any immovable property to avail the facility of cheque discounting from the complainant bank.
113. Ld. Counsel for the accused also submits that the complainant CC No. 41/11 (532301/16) 80/88 bank has settled the dispute with the accused Bachhu Singh under an OTS Scheme and the entire amount as per the said settlement was paid by Bachhu Singh to the bank. The Ld. Counsel submits that as on today there is nothing due to be paid by accused Bachhu Singh to the complainant bank. In this regard, the accused has examined DW-1 Sh. Anoop Saxena from the ARMB branch of complainant bank and brought on record certain documents Ex. DW1/A to 1/C pertaining to the settlement and payments made by the accused Bachhu Singh. As per the statement of DW-1, as on date there is no outstanding in the account of the firm M/s Shree Ram LPG Carrier. To a specific question with regard to the payments made by the accused Bachhu Singh, the witness DW-1 answered that "as per OTS, entire amount of OTS has been paid along with interest for delayed period". The document Ex. DW1/A is the letter issued by the bank to accused Bachhu Singh stating that his offer to settle the dues under OTS was approved by the competent authorities. Document Ex. DW1/B shows the details of the payments made by the accused Bachhu Singh and document Ex. DW1/C is the order of proclamation of sale by CC No. 41/11 (532301/16) 81/88 Recovery Officer of DRT. The Ld. Counsel for the accused vehemently argued that since the entire payment is made by the accused no loss said to have been caused to the complainant bank. It is also argued that the settlement between the complainant bank and the accused Bachhu Singh took place under OTS Scheme, therefore, it cannot be considered as a fraudulent default or wilful default. The Ld. Counsel poiints out to the guidelines of the OTS scheme wherein it is mentioned as under : -
"The guidelines will not, however, cover cases of wilful default, fraud and malfeasance."
114. The Ld. Counsel also relied upon the judgment of Hon'ble High Court of Delhi in Sanjay Bhandari v. CBI, 2015 X AD (DELHI) 86, in which the High Court of Delhi has referred extensively to the provision of OTS scheme and quashed the criminal case against the petitioners considering the fact that the petitioners have repaid the entire dues to the complainant bank under OTS scheme.
115. The document Ex. DW1/A is a letter dated 04.11.2016 sent by Chief Manager, ARMB branch of PNB to accused Bachhu CC No. 41/11 (532301/16) 82/88 Singh. In this letter it has been stated that the competent authorities have approved the OTS offer of the accused under certain terms and conditions. The conditions 1 and 2 are with regard to the payments to be made by the accused by specific dates. In condition no. 3, it is specifically mentioned that the compromise shall not have any bearing on the ongoing criminal case. The said condition is reproduced as follows :-
1):- .......
2):-........
3):- Compromise is being considered by bank as a commercial decision and it shall not have any bearing whatsoever on the ongoing criminal case/investigation being carried out by CBI/Police/Any other agency and the same shall proceed as per law.
4):-......
5):-......
116. It is clear from the above condition no. 3 that the settlement accepted by the bank shall not have any effect on the criminal case. By this, the complainant bank has made it clear that it is CC No. 41/11 (532301/16) 83/88 not exonerating the accused nor the complainant bank is wiling to withdraw the criminal case against the accused. In the case referred by the counsel for accused i.e. Sanjay Bhandari v. CBI (supra), the complainant bank not only settled the dues with the petitioners but also have exonerated the petitioners from the criminal case. The said observation was made by Hon'ble High Court in its order as follows :-
"The facts in the present case are more similar with the Judgments in the case of Nikhil Merchant and N.L. Jain is also a three-judge bench judgment as the petitioners and the complainant have compromised and compounded the alleged offences, and that the complainant bank has exonerated the petitioners from all claims, grievance or complaint of any nature whatsoever. By consent the parties have settled all disputes in the recovery suit, the consent decree of DRT stood to be disposed off as duly satisfied. There is hence no force in the submission of respondents that the complainant bank has not exonerated the petitioners, first being the Civil Procedure Code, and CC No. 41/11 (532301/16) 84/88 the second being the OTS scheme of the Reserve Bank of India, which the petitioners have extensively referred to in the original petition. The provision of OTS Scheme prevent the complainant bank from entering into any compromise or settlement under the said OTS Scheme in the cases of willful default, fraud and malfeasance. The complainant bank in choosing to enter into such consent terms under the provisions of OTS scheme has not only exonerated the petitioners, but for all intents and purposes given up the perusal of the complaint and having no grievance against them in any other proceeding whether civil or criminal on the same set of issues."
117. Per contra, in the present case the complainant bank vide condition no. 3 in Ex. DW1/A made it clear that it is not going to exonerate the accused from criminal liability by accepting the settlement under OTS. Therefore, the payment of dues by the accused by way of settlement with the complainant bank has no bearing on this criminal case and hence same can not be considered as exoneration of accused by the complainant bank.
CC No. 41/11 (532301/16) 85/88
118. It is proved from the documents i.e. Cheques Ex. PW7/A19 to A21 and Credit Vouchers Ex. PW7/A13 to A15 that the accused Bachhu Singh got purchased 3 cheques on 06.11.04 i.e. Ex. PW7/A19 to A21 for total amount of Rs. 4,95,000/- (Rs.95,000/- + Rs. 2,50,000/- + Rs. 1,50,000/-) and the money was credited to the current account of M/s Shree Ram LPG Carrier. The said amount of Rs.4,95,000/- was withdrawn by the accused Bachhu Singh on the same day i.e. 06.11.04 by way of self cheque which is Ex. PW7/A1. All the relevant entries with regard to credit of the amount of Rs.4,95,000/- which is purchase amount of the cheques and the withdrawal of the same by way of self cheque are shown in the statement of account i.e. Ex. PW8/A1 at points X-6, X-9, X-11 and X-8.
119. It is also proved from the documents i.e. Cheques Ex. PW7/A16 to A18 and Credit Vouchers Ex. PW7/A10 to A12 that the accused Bachhu Singh got purchased 3 more cheques on 08.11.04 i.e. Ex. PW7/A16 to A18 for total amount of Rs.5,60,000/- (Rs.2,20,000/- + Rs. 2,40,000/- + Rs. 1,00,000/-) and the money was credited to the current account of M/s Shree Ram LPG Carrier. The amount of Rs.5,55,000/- was withdrawn CC No. 41/11 (532301/16) 86/88 by the accused Bachhu Singh on the same day i.e. 08.11.04 by way of self cheque bearing no. 536299 dated 08.11.04. All the relevant entries with regard to credit of the amount of Rs.5,60,000/- which is purchase amount of the cheques and the withdrawal of the same by way of self cheque are shown in the statement of account i.e. Ex. PW8/A1 at points X-13, X-16, X-18 and X-15. It is also clear from the above sequence of events and conduct of the accused that is the way he got second set of cheques encashed on 08.11.04 and further his conduct that the haste he shown in withdrawing the amount on the same day clearly prove the dishonest intention of the accused Bachhu Singh. Entire gamut of incidents, as per the evidence available on record makes it clear that the accused Bachhu Singh dishonestly induced the complainant bank i.e. PNB, Azadpur Branch by presenting the 6 cheques of M/s Kamal Carriers, his own firm and got them encashed by wrongfully using the cheque purchase facility and thereby cheated the bank to the tune of Rs.10,55,000/-. The prosecution is successful in proving its case against the accused Bachhu Singh for the offence u/s 420 of IPC. As far as the accused D.K. Malhotra is concerned, CC No. 41/11 (532301/16) 87/88 there is no sufficient material to prove his guilt.
120. In the light of above discussion, accused Bachhu Singh is convicted for the offence punishable under Section 420 IPC. He is acquitted of other charges. Accused D.K. Malhotra is acquitted of all the charges.
121. The bail bond of Sh. D.K. Malhotra is cancelled and his surety is discharged. Sh. D.K. Malhotra is directed to furnish fresh personal bond in sum of Rs. 10,000/- with one surety of the like amount as required under Section 437-A of Cr.P.C.
122. Accused Bachhu Singh shall be heard on the point of sentence.
ANNOUNCED IN THE OPEN COURT
TODAY i.e. ON 28.03.2018 Digitally signed by
KOVAI
KOVAI VENUGOPAL
VENUGOPAL Date: 2018.04.06
17:10:27 +0530
(KOVAI VENUGOPAL)
SPECIAL JUDGE (PC ACT), CBI-09,
CENTRAL,TIS HAZARI COURTS, DELHI (kg)
CC No. 41/11 (532301/16) 88/88
IN THE COURT OF KOVAI VENUGOPAL, SPECIAL JUDGE, P.C. ACT (CBI)-09, CENTRAL DISTRICT, TIS HAZARI: DELHI CC No. 41/2011 (532301/2016) R.C. No. 2(E)/06/CBI/EOW-II/ND CNR No. DLCT01-000368-2008 CENTRAL BUREAU OF INVESTIGATION VERSUS
1. SH. V.K. JOLLY (PUBLIC SERVANT) S/O LATE SH. DHARAM DEV JOLLY THE THEN SR. MANAGER PUNJAB NATIONAL BANK AZADPUR BRANCH, NEW DELHI.
R/O B-457, MAJLIS PARK
DELHI - 33 ......(DISCHARGED)
2. SH. D.K. MALHOTRA (RETD. PUBLIC SERVANT) R/O HOUSE NO. 58 SEC.-G, SANIK COLONY JAMMU ......(ACQUITTED)
3. SH. BACHHU SINGH S/O LATE MUKUNDI LAL PROP. M/S. SRIRAM LPG CARRIER R/O A-1562/1563, JAHANGIRPURI DELHI ......(CONVICTED) Date of Institution : 21.08.2008 Date of Arguments : 23.03.2018 Date of Judgment : 28.03.2018 Date of Sentence : 06.04.2018 CC No. 41/11 (532301/16) 89/88 ORDER ON SENTENCE
1. I have heard the Ld. P.P. for the CBI and Sh. Umesh Sinha, Ld. Counsel for the Convict Bachhu Singh on the point of Sentence. I have also perused the file.
2. It is submitted by the Ld. P.P. for CBI that the Convict Bachhu Singh does not deserve any leniency on the point of Sentence. It is submitted that the Convict has been held guilty of the offence of cheating which resulted huge loss to Public Institution i.e. Public Sector Bank. It is also submitted that maximum punishment should be awarded to the Convict.
3. The Ld. Counsel of the Convict Bachhu Singh has submitted that the Convict is of 57 years of age and one of his sons is suffering from mental ailment. It is also submitted that the Convict has faced trial for a long period. It is also submitted that all the dues of the Bank have been paid by the Convict under OTS scheme. Ld. Counsel for convict prays for lenient view.
4. Ld. Counsel for the convict also moved an application seeking release of the convict U/s 4 of Probation of Offenders Act.
5. The Convict is held guilty for committing an offence punishable U/s 420 of IPC against the Public Institution i.e. Punjab National Bank. Considering the nature of the offence and the circumstances under which it was committed, I do not see any justification to release the Convict Bachhu Singh on probation. Accordingly, application filed by the Convict seeking his release on probation is dismissed.
CC No. 41/11 (532301/16) 90/88
6. In R. Venkatakrishnan vs. CBI VI (2009) SLT 375, Hon'ble Apex Court has held as under :-
"190. A sentence of punishment in our opinion poses a complex problem which requires a balancing act between the competing views based on the reformative, the deterrent as well as the retributive theories of punishment. Accordingly a just and proper sentence should neither be too harsh nor too lenient. In judging the adequacy of a sentence, the nature of the offence, the circumstances of its commission, the age and character of the offender, injury to individual or the society, effect of punishment on offender, are some amongst many other facts which should be ordinarily taken into consideration by the Courts."
7. In the present case, there are certain mitigating factors which need to be considered. The Convict has paid back the entire outstanding amount due to the Bank under OTS scheme. He also has a son who is stated to be suffering from mental ailment.
8. Considering the overall facts and circumstances, the Convict is sentenced to undergo Rigorous Imprisonment for a period of one year and ordered to pay a fine of Rs. 5,000/- for the offence punishable U/s 420 I.P.C., in default of payment of fine, the Convict shall undergo Simple Imprisonment for a period of one month. The benefit U/s 428 Cr. P. C., if any, be given to him.
9. The Convict has moved application U/s 389 (3) Cr.P.C. for suspension of Sentence and for grant of bail to enable him to file appeal.
10. Heard.
11. The Sentence of Convict is suspended for 60 days for CC No. 41/11 (532301/16) 91/88 preferring appeal on furnishing personal bond of Rs. 10,000/- with one surety of the like amount.
12. Copy of Judgment already given to the Convict. Copy of the order on sentence be given immediately to the Convict, free of cost.
13. File be consigned to Record Room.
Announced in the open Court today i.e. on 06.04.2018 KOVAI Digitally signed by KOVAI VENUGOPAL VENUGOPAL Date: 2018.04.06 17:10:50 +0530 (KOVAI VENUGOPAL) SPECIAL JUDGE, PC ACT, (CBI)-09 CENTRAL, DELHI CC No. 41/11 (532301/16) 92/88