Delhi District Court
State vs . Habib Ur Rehman & Ors. on 31 August, 2019
IN THE COURT OF SH. PAWAN SINGH RAJAWAT:
ACMM (SPL. ACTS): CENTRAL DISTRICT: THC: DELHI
CC No. 291138/16
FIR No.: 245/04
U/s: 420/406/409
PS: Lahori Gate
State Vs. Habib Ur Rehman & Ors.
1. Name of accused persons : 1. Habib-Ur-Rehman
S/o. Late Khalil-ur-Rehman,
R/o. Khajisaray Nagina,
Bijnor, U.P.
2. Mujeeb-Ur-Rehman
S/o. Sh. Abdul Rehman
R/o. 181, C-24, Turna Road,
Dehradun, Uttarakhand.
3. Shaista Nusrat
W/o. Mujeeb Ur Rehman
R/o. 181, C-24, Turna Road,
Dehradun, Uttarakhand.
2. Offence complained of : U/s 420/409/120-B IPC
3. Plea of the accused : Pleaded not guilty.
4. Final order : Convicted U/s 420/120B IPC
Date of Institution : 24.04.2005
Date of Argument : 08.08.2019
Date of judgment : 31.08.2019
State Vs. Habib Ur Rehman CC No. 291138/16 1 of 54
JUDGMENT
Brief statement of the reasons for the decision:-
1 Briefly stated facts of the case are that M/s Habib Mercantile Ltd. which was incorporated under the Companies Act with the main object to carry on business as financers and lend, advance money to such person or persons with the aim to encourage habit of thrift, saving and investment by receiving deposits, saving fixed and recurring exclusively from the members of the company. Another object is to carry on business of investment in properties and estates, accumulate capital fund by borrowing money from members or other persons and also to invest in share market. It is alleged in the charge sheet that the company and its directors/promoters i.e. accused namely Dr. Habib Ur Rehman, Dr. Mujeeb Ur Rehman, Rahat Afzal (since PO) and Mst. Shaista Nusrat have cheated the common public by receiving huge sums of money in various schemes of daily deposit and FDRs with no intention to return the money on the stipulated date and when complainants/investors went for collecting their return on investment, the office of the accused persons was found locked and they came to know that accused persons have absconded with the invested money by cheating public at large. It is further mentioned in the charge sheet that several complaints were received which were investigated and documents from the office of ROC and various banks where accounts of the State Vs. Habib Ur Rehman CC No. 291138/16 2 of 54 company were maintained, were seized which shows that accused persons have committed offences U/s 420/406/409/120-B IPC. The chargesheet was filed on 24.04.2005.
2 After hearing arguments, charge for offence U/s 420/120-B r/w 34 IPC was framed against the accused persons to which they pleaded not guilty and claimed trial. Subsequently, in compliance of orders of Ld. Sessions Court dt. 04.12.2006, alternate charge U/s 409 r/w 120-B IPC was framed against the accused persons on 15.12.2006 to which all accused pleaded not guilty and claimed trial.
3 In support of their case prosecution has examined PW- 1 Rashida Begum, PW-2 Kishwar Begum, PW-3 Santosh Kumar, PW-4 ASI Kishan Singh , PW-5 Zaka Ul Hasan, PW-6 Moinuddin, PW-7 Husana Bano, PW-8 Ami Lal Dkash, PW-9 Nazir Ahmed, PW-10 Mohd. Mustaq, PW-11 Amiruddin, PW-12 Ismile, PW-13 Mohd. Mushtaqe, PW-14 Mohd. Latif, PW-15 Avnish Kumar Srivastava, PW-16 Masroor Khan, PW-17 Mohd. Adil, PW-18 Mohd. Imran, PW-19 Mohd. Arfeen, PW-20 Tariq Anwar, ASI Bal Hussain and Insp. Ved Prakash (both PW-21), PW-22 SI Retired Surender Malik, PW-24 R.K. Saini, PW-25 Retired Insp. Raj Kumar, PW-26 Retired SI Yogender Singh, PW-27 Retired SI Mohan Lal, PW-28 Raj Kumar and PW-29 Insp. Subhash Meena.
State Vs. Habib Ur Rehman CC No. 291138/16 3 of 54 Prosecution Evidence 4 PW-1 stated that in the year 1998 she had seen some pamphlets of deposit schemes of Habib Mercantile Bank wherein it is mentioned that Habib Mercantile Ltd. Is authorized and valid by government and if Rs. 5000/- are deposited for five years, on maturity, the depositor will get Rs. 12,500/- and in the office she met accused Habib Ur Rehman who introduced her to accused Mujeeb Ur Rehman, Rahat Afzal (PO) and accused Shaista Musrat as directors of the said bank. She further stated that on assurance of the accused persons that she will get Rs. 12,500/- on deposit of Rs. 5,000/-. She handed over Rs. 5,000/- each in her name as well as in the name of her daughter Siama Arshi to accused Habib Ur Rehman for deposit and next day she got two receipts of the said deposit schemes. She further stated that in the year 2003 on the date of maturity, when she visited the bank, she found the office locked and came to know that accused have absconded after cheating public at large and therefore, moved written complaint to SHO PS Lahori Gate Ex. PW-1/A and also handed over certificate of fixed deposit which are Ex. PW-1/B and PW- 1/C which were seized by I.O. vide seizure memo Ex. PW-1/D. She stated that in the year 2005 at her identification accused Dr. Habib Ur Rehman, Dr. Mujeeb Ur Rehman and Mst. Shaista Nusrat were arrested from ISBT vide their arrest memo Ex. PW- 1/E , PW-1/F & PW-1/G. During cross-examination she stated that she do not remember the date and time of arrest, but State Vs. Habib Ur Rehman CC No. 291138/16 4 of 54 stated that accused were arrested from hall of ISBT. She stated that no writing work was done in her presence at ISBT, but denied the suggestion that accused were not arrested from ISBT at her instance. She also denied that on 25.02.2005 while accused were present in Tis Hazari Court for appearing in the Court of Ld. District & Sessions Judge, they were apprehended by the police. She stated that she got the pamphlet from her younger son as the same was being distributed in the market. She also stated that pamphlets for having schemes Rs. 10 per day, weekly, some FDR for five years. She stated that she visited the office for the first time with her husband and accused Mujeeb Ur Rehman and Rahat Afzal were present and Shaista Nursrat came there with key. She denied suggestion that whatever she has deposed against accused Habib UR Rehman is false at the instance of Nasir . She denied that Habib Ur Rehman was not present in the office and had not met him for any scheme and he was present in his clinic at Nagina, U.P. on that day. She stated that the complaint is type written at the PS by the SHO who read over the same to her. She denied that her complaint is not proved. She stated that in the year 2003 she found the premises locked and sealed. She denied that she has not made any demand to recover her money from the accused persons or the company.
5 PW-2 stated that in the year 1996 she received pamphlet of Habib Mercantile Ltd. and met an accused Habib Ur Rehman and the other accused persons and on assurance of State Vs. Habib Ur Rehman CC No. 291138/16 5 of 54 accused persons she agreed to Rs. 10 per day deposit scheme. She further stated that she was issued one passbook in which entries were made by employees of the accused persons and she will continue to deposit the money for about 2 ½ years till 1998-1999. After sometime she visited the office and found the same locked and one Rashida Begum told her that accused persons have run away with the entrusted money . She stated that she had invested about Rs. 9,500/-/10,000/- and had not received any money from the accused persons. She proved her complaint as Ex. PW-2/A and seizure of her passbook as Ex. PW- 2/B. During cross-examination she stated that pamphlet was given to her by her child which was in Hindu and Urdu. She identified accused Habib Ur Reham and Mujeeb Ur Rehman and stated that she met these two persons in the office. She stated that her statement was recorded by the police and same was read over and explained by the police. She denied that she has improved upon her statement Ex. PW-2/A. She also denied that accused persons have never met her in the office. She denied the suggestion that accused have been falsely implicated. She stated that sometimes she used to deposit money by visiting the office of the company and sometimes money was collected from her residence. She stated that she lastly deposited the money to the office of the accused Habib Ur Rehman and Mujeeb Ur Rehman. She denied that the money was deposited by her through Dr. Razul Hassan.
6 PW-3 stated that in 1997 one employee of Habib State Vs. Habib Ur Rehman CC No. 291138/16 6 of 54 Mercantile Company came to his shop and told him about fixed deposit and daily deposit scheme. He further stated tht he was told if he deposits Rs. 20 per day for 1000 days, he will get Rs. 28,200/- after the maturity and accordingly, he opened account vide passbook no. 241 Ex. P-3 from 21.02.1997 and deposited for about 725 days, but after that the said employee did not came to him to collect the subscription. He further stated that he went to the office of the company and found locked and also came to know that all accused persons have fled away. He stated that accused persons through their employee had induced him in depositing the money. He proved his complaint as Ex. PW-3/A. In his cross-examination by Ld. APP for State he denied that after receiving information from public he reached the office of the company and met the accused persons who informed him about the various schemes as mentioned in his statement U/s 161 Cr.P.C. Ex. PW-3/3X. He denied the suggestion that he is deposing falsely on the said aspect as he has been won over by the accused persons. This witness was not cross-examination by accused persons.
7 PW-4 proved the registration of FIR on the basis of complaint Ex. PW-1/A. He proved the FIR as Ex. PW-4/A. This witness was not cross examined.
8 PW-5 also stated in the year 1996 he came to know about the schemes of the company and on introduction of the schemes by the accused persons, he agreed to open the State Vs. Habib Ur Rehman CC No. 291138/16 7 of 54 account for Rs. 10 per day for 800 days. He stated that he was given account no. 077A with passbook Ex. P-5 and another account no. 136 with passbook Ex. P-6 for day for 400 days @ Rs. 10 per day. He stated that when his first account no. 077A was matured in 1998, he went to the office and met accused Habib Rehman to collect his maturity money, but he was told by accused Habib Rehman to come after 2-3 days. He further stated that when he again visited, he came to know that accused have run away by closing the said company. He further stated that in the year 2005 he came to know police case has been registered against the said persons and had handed over his passport to the I.O. vide Ex. PW-2/B and had made verbal complaint. He further stated that he had deposited the money Rs. 10 per day upto 800 days in the first scheme and also deposited Rs. 10 per day in the second account no. 136 and till today the accused persons have not returned his money till date. During cross-examination, he admitted that in the month of January 1999, when he reached the office of the company to collect the money, the same was sealed with the seal of government. He stated that he had gone to PS situated at Ring Road alongwith other 2/3 account holders. He further stated that Mujeeb is the CMD of the company and sometimes accused Mujeeb used to collect the money from him and sometimes he used to deposit in the office of the company. He further stated that entries in the passbook were made sometimes by Rahat Afzal and sometimes by accused Nusrat. The witness could not identify the signatures on the passbook State Vs. Habib Ur Rehman CC No. 291138/16 8 of 54 and denied the suggestion that he never visited the office of the company to deposit the money and accused Mujeeb never came to him to collect the money and that agent used to collect the money. He further stated that he used to give money to accused persons who used to make entry and sometimes issue receipts. It admitted that Ex. PW-2/B was prepared in the PS situated at Ring Road in front of Gurudwara and his name was written in his presence in Ex. PW-2/B. He did not give any complaint in writing to the police. He further stated that he became the complainant in the year 2005 after he came to know that case has been registered against the accused persons.
9 PW-6 stated that accused Habib and Mujeeb had bank in the name of Habib Bank at Ballimaran at 1388, Ballimaran, Delhi and pamphlets of the said bank were distributed among the public and he also collected one pamphlet and reached at the office of the said bank where he met accused Habib and Mujeeb who told him that the said bank is a government bank and then he opened account no. 330 in the said bank in the year 1997 of depositing Rs. 10/- per day upto 1000 days. He further stated that in the year 2000, about 10/15 days earlier when his account was to be matured, he came to know that the said accused persons had run away by closing the office. He further stated that his khala Rashida Begum lodged a complaint Ex. PW-6/A and produced the same to SHO alongwith his passbook Ex. PW-6/B. He further stated that IO took his State Vs. Habib Ur Rehman CC No. 291138/16 9 of 54 passbook vide seizure memo Ex. PW-2/B. He further stated that when he reached the office to get his account opened, accused Nusrat and Rahat Afzal were present there who had introduced themselves as Directors of the company and accused Habib had introduced himself as promoter of the company. He further stated that he had deposited Rs. 6680/- in his account, entries of which were made in the passbook of the company. He further stated that when he came to know about the accused fleeing away, he visited the office and found the same sealed and the accused persons have not returned the money to him till today. During cross-examination he stated that he had opened the account in the year 1997 or in 1998 and in the year 1999 he found the office locked. He stated that people of the office told him that accused Habib is the promoter of the said company and one employee used to collect money. He admitted that he had given his complaint in the year 2005 and his passbook Ex. P-7 was taken at Majnu Ka Tila at the time of giving the complaint. He denied the suggestion that other account holders of the area have received the money on maturity of their schemes from the company. He denied the suggestion that he never visited the office of the company and that deposing at the instance of other persons.
10 PW-7 is another complainant. He stated that he do not remember the exact date, month and year as he is illiterate but about 10 years back pamphlets of Habib Mercantile Ltd. Company were distributed and persons of the company State Vs. Habib Ur Rehman CC No. 291138/16 10 of 54 induced the public at large to deposit money on various schemes. She further stated that she alongwith her husband reached the office of the company at Katra Bijwani and accused Habib Ur Rehman, Mujeeb Ur Rehman and Shahista Nusrat were present. She opened the account for Rs. 10 per day. She stated that after sometime she found the office locked and public persons told that accused persons have misappropriated the money. She proved seizure of her passbook vide Ex. PW- 2/A. During cross examination she stated that she made verbal complaint and handed over her passbook to the I.O who did not record her statement. She denied the suggestion that she did not know Habib and falsely implicated him at instance of other persons. She stated that Habib told that he is uncle of Mujeeb Ur Rehman. She denied the suggestion that her husband is illiterate and had not read over the pamphlet to her. She stated that she had seen all the accused persons in the office of the company and the filled form was deposited with accused Habib Ur Rehman. She denied the suggestion that at the time of opening her account, accused Habib Ur Rehman was running a clinic at Nagina, U.P. She denied the suggestion that she had not visited the office. She further stated that when she visited the office to demand her money, the same was found locked. She also stated that she used to handed over the money to the agents but do not know whether the same was deposited with the company account or not. She denied the suggestion that no money was deposited on her behalf and agents have prepared passbook themselves which has not been issued by the State Vs. Habib Ur Rehman CC No. 291138/16 11 of 54 company. She denied the suggestion that she never went with her husband to the office of the company and agent lodged the complaint on her behalf.
11 PW-8 is the forensic expert. He stated that he had received documents forwarded by SHO Civil Lines of the present FIR which are Ex. PA to PI, P3 and P5. He stated that questioned signatures mark Q1, Q1/1, Q2 to Q6, Q6/1 purported to be of Mujeeb Rehman; Q7 to Q12, Q12/1 purposed to be of Rahat Afzal; Q3 purported to be of Shaista Nusrat, on the receipts of M/s Habib Mercantile Ltd, two passbooks and one account opening form. He further stated that he examined the said documents and found that red enclosed admitted signatures and mark A1, A4, A5 and questioned signatures stamped and marked Q1 to Q6, Q6/1 were all written by one and the same person. He further stated that the red enclosed admitted signatures stamped and marked A3, A7 and questioned signatures marked Q12/1 were all written by one and the same person. He further stated that the red enclosed admitted signatures stamped and marked A2 to A6 and red enclosed signatures stamped and marked Q12 were all written by the same person. He proved his detailed report Ex. PW-8/A. During cross examination he stated that he received documents alongwith forwarding letter sent by the I.O who had given the questioned signatures as well as the admitted signatures. He further stated that he has given the report on the basis of material supplied by the I.O. He admitted that he State Vs. Habib Ur Rehman CC No. 291138/16 12 of 54 had not summoned the concerned persons and had not obtained their signatures. He denied the suggestion that it is his duty to obtain the signature of concerned person. He categorically stated that he himself examined all the documents and I.O. was not called at the time of said examination. He stated that his examination report is Ex. PW- 8/A. He also admitted that some variation in the signatures may arise in the long period but stated that the same is not possible in the short period cases. He denied the suggestion that he has prepared a false report.
12 PW-9 stated that in the year 1993 , he came to know about Habib Mercantile Company Pvt. Ltd. through pamphlet distributed in the public at large and on the basis of said pamphlet he met accused persons who introduced themselves as directors of the company and after he was explained different schemes, he agreed to open the account for Rs. 25/- and Rs. 50/- per day for 400 days. He categorically stated that accused persons told him that on maturity after 400 days, he will get double of the deposit amount and he deposited Rs. 50/- per day for about 190 days. He also stated that he opened another account in his mother's name at Rs. 10 per day for 190 days. He further stated that he came to know that company has been closed and accused had taken away money of the investors and he got case registered against the accused company and handed over his passbook and documents to I.O. vide Ex. PW-10/1 and PW-10/2. This witness was not cross State Vs. Habib Ur Rehman CC No. 291138/16 13 of 54 examined as he was not summoned again after his cross- examination on 22.05.2007.
13 PW-10 is another complainant. He also stated that about deposit of money with accused and seizure of documents by the I.O. His further examination was deferred on 28.05.15 but never concluded by prosecution.
14 PW-11 is another complainant. He also stated about deposit of money. He stated that he had chosen scheme of Rs. 20/- per day for 400 days with the promise that he will get benefit of the amount. He proved his complaint Ex. PW-11/A and passbook Ex. PW-11/B. During cross-examination he admitted that he had not gone through the terms and conditions mentioned in the passbook. He admitted that he had not given legal notice regarding non payment by the accused persons. He denied the suggestion that the company was open and he intentionally stopped to pay the agreed installments. He denied the suggestion that he was neither induced or cheated by the accused persons nor filed a false and concocted complaint to the police. He denied the suggestion that he never met accused persons. He denied the suggestion that Habib Ur Rehman had not explained about schemes to him. He denied the suggestion that he never met accused Habib Ur Rehman.
15 PW-12 is another complainant who stated about the deposit of money with the accused company. He stated that he State Vs. Habib Ur Rehman CC No. 291138/16 14 of 54 had chosen scheme of Rs. 10/- per day and deposited Rs. 3850/- in the company run by all the three accused persons. During cross-examination he admitted that he had not given notice to accused persons. He denied the suggestion that the company was open and he intentionally stopped to pay the agreed installments. He denied the suggestion that he neither induced or cheated by the accused persons and filed a false and concocted complaint to the police. He denied the suggestion that he never met accused persons. He denied the suggestion that Habib Ur Rehman had not explained about schemes to him. He denied the suggestion that he never met accused Habib Ur Rehman.
16 PW-13 is also one of the complainants. He proved his complaint as Ex. PW-13/A. He stated that on maturity he was to receive Rs. 25,000/- against the deposit amount for 1000 days. He was cross examined by Ld. APP where he stated that he is an illiterate person and denied the suggestion that he had not given any statement to the police. He admitted that due to long passage of time, he does not remember the exact facts. During cross-examination by Ld. Counsel for accused he stated that the complaint was never handed over by him. He admitted that documents marked Ex. PW-13/1 is of only two pages and the same is not complete. He denied the suggestion that the company had not run away with his money. He denied the suggestion that Habib Ur Rehman was one of the investor of the company and he is deposing falsely at instance of the State Vs. Habib Ur Rehman CC No. 291138/16 15 of 54 company agent namely Nasir.
17 PW-14 stated that he opened account of Rs. 20 per day for 1000 day. He proved complaint Ex. PW-14/A During cross-examination he denied the suggestion that he had filed false complaint at instance of one Nasir.
18 PW-15 is the bank official and produced original account opening form of Habib Mercantile ltd., Resolution of Habib Investment, Certificate of Incorporation , Certificate of Commencement of Business, Memorandum and Articles of Association of Habib Mercantile Ltd. which are Ex. PW-15/A. During cross-examination, he admitted that the said record are only available with bank qua Habib Mercantile ltd. He admitted that bank on its own does not close the account except for violation of conditions. He failed to state that if Habib Mercantile Ltd. had violated any terms of the account.
19 PW-16 stated that he was working in embroidery business and one doctor namely Mujeebur Rehman whom he used to visit as he was operating from Kucha Rehman for treatment and in the year 1997, Mujeeb Ur Rehman informed him that he is in the process of operating one company in the name of Habib Mercantile Ltd. at 1388, Katra Bajwardiyan, Ballimaran, Chandni Chowk, Delhi and he invited PW-16 to the abovesaid address of the company. He further stated that he also informed him that if he invests in the abovesaid company, State Vs. Habib Ur Rehman CC No. 291138/16 16 of 54 his investment will grow @ 20% and there were posters of the abovesaid company in the clinic of Dr. Mujeebur Rehman. He also stated that thereafter, he decided to open an account in the abovesaid company and went to the office of the company on 26.05.1997 to deposit Rs. 50/- per day in scheme for 800 days and also deposited Rs. 50/- per day for 614 days. He also stated that in the year 1999 he went to the office of the company and found that many people were gathered outside the office of the company which was locked and came to know that the Director and owner of the company had ran away with the money of depositors. He stated that IO recorded his statement and handed over passbook bearing No. 345 issued by the accused company vide Ex. PW-16/1 and he signed the seizure memo at Point A on Ex. PW-16/2. During cross- examination he stated that he had studied upto 5 th standard and can understand and read the passbook . He admitted that he not told the police that he was also having the receipts but stated that he can produce the receipts. He failed to state whether statement of Rashida Begum was also recorded in his presence. He admitted that there was 10-15 staff working in office. He admitted that he has not given notice to the accused persons or filed any case against the accused persons. He admitted that he had directly communicated with Mujeebur Rehman about the investment. He also admitted that till the time he was depositing the money, he had not heard anything bad against the accused persons. He denied the suggestion that accused persons were having clean antecedents and had State Vs. Habib Ur Rehman CC No. 291138/16 17 of 54 no intention to cheat the public and him and they have not committed any fraudulent act. He denied having knowledge of accused sold any of their properties and same are under the custody and control of the committee.
20 PW-17 stated that he had brought attested copy of bank account opening form of account no. 15700 in the name of Dr. Mujeebur Rehman along with attested copy of seizure memo dated 20.04.2005 by which the same account was seized by the PS Civil Lines. He also brought letter addressed to the bank by PS Civil Lines. He further proved original bank account opening form of accused Mujeeb Ur Rehman in Bombay Mercantile Cooperative Bank Ltd. as Ex. PW-17/A He proved the resolution deposited along with account opening form by accused in the bank Ex. PW-17/B. He further proved letter written by bank officials to IO regarding present case Ex. PW-17/C. He further stated that as per record, documents were handed over to HC Jogender Singh vide seizure memo Mark 17A. During cross-examination he stated that he had no personal knowledge of this case and he is not aware whether original of Mark 17A is in bank or not. He admitted that no date of attestation is mentioned on Mark 17A and the name of attesting officer is Sh. Aarif Hussain, Deputy Chief Officer, presently posted at Daryaganj Branch and stated that the attestation was done in my presence.
21 PW-18 stated that he was running a business of selling clothes and stated that in the year 1998, he came to know State Vs. Habib Ur Rehman CC No. 291138/16 18 of 54 about Habib Mercantile Ltd. through pamphlets and opened the account on 01.07.1998 and invested Rs. 50/- per day in his name and his wife's name on 03.07.1999 for Rs. 25/- per day for a tenure of 400 days and he had been issued passbook no. 524 Ex. PW-18/A and passbook no. 527 in his wife's name Ex. PW-18/B. He further stated that he had not received the promised returns, and when he visited the office of the accused at Ballimaran, the same was found locked. Thereafter, he went to PS Majnu Ka Tila for filing complaint where their passbooks were seized vide memo Ex. PW-2/B. 22 He was cross examined by Ld. APP wherein he admitted the correct period of scheme i.e. from 01.07.1998 to 04.08.1999. He admitted that he had deposited amount for 45 days in one scheme and in another scheme in his sister's name Nazia Begum he had deposited the amount for 110 days. During cross-examination by Ld. Counsel for accused he stated that he had lodged a written statement recorded by police at Majnu Ka Tila and he was referring to the same as complaint. He has stated that he do not remember the name of the persons who told that accused persons have absconded. He also admitted that Habib Mercantile has full fledged office and accounts department and officials used to make entry in the passbook but failed to produce any receipts. However, he stated that he had submitted his passbook to the police. He denied the suggestion that accused persons had no malafide intention to cheat him and they had not run away. He also denied the suggestion that he had made false complaint.
State Vs. Habib Ur Rehman CC No. 291138/16 19 of 54 23 PW-19 stated that Rashida Begum has taken him tio Manju Ka Tila PS to become witness of arrest. He then identified various documents produced in the Court. Upon putting the leading question by Ld. APP, he stated that all the three accused were arrested on 25.02.2005 in his presence During cross-examination he stated that this was the first time he became a witness of arrest. He further stated that the arrest was conducted at the bus stand at Manju Ka Tila and all the three accused were arrested at the same time. This witness was not cross examined .
24 PW-20 stated that he has been told about various schemes of investment by accused Habib Ur Rehman, Mujeeb Ur Rehman and Shahista and taken a scheme for 800 days . He further stated that he do not remember the amount which he had deposited. He further stated that pass no. 864 Ex. PW-20/4 was issued by accused and he had also taken FD No. 170- 1998-1602 Ex. PW-20/B in his name and deposited Rs. 20,000/-. Upon asking of leading question of Ld. APP , he stated that the scheme which he was taken in the name of his mother was from 03.01.1998 to 12.03.2000 and deposited Rs. 16,000/- and he will receive Rs. 20,600/- on maturity and on FD accused had to give his Rs. 23,600/- on maturity. He further stated that accused persons have not given him money as promised. He further stated that he fond that company was closed and accused persons have run away. During cross-examination he State Vs. Habib Ur Rehman CC No. 291138/16 20 of 54 admitted that Dr. Mujeeb Ur Rehman enjoying good reputation having clinic in the locality. He stated that he had deposited the amount about 300 days and stopped thereafter due to news of accused absconding. He stated that accuse d Habib Ur Rehman and Mujeeb Ur Rehman used to be present in the office and receipts used to be issued against the deposit. He denied the suggestion that accused persons have not absconded and they have no intention to cheat. He also denied the suggestion that accused person have not involved and cheating and had no malafide intention and company still has the sources to return the money. In his further cross-examination he stated that Habib UR Rehman was the owner of the company . He denied the suggestion that accused Habib UR rehman has no relation with the company.
25 PW-21 stated that on 25.02.2005 he was posted as Ct at PS- Civil Lines, PP- Majni Ka Tila and joined investigation of the present case alongwith SI Subhash and lady Ct Madhu Kumari. He further stated that on that day, accused Habibur Rehman was arrested vide arrest memo Ex. PW1/E and his personal search was conducted vide memo already Ex. PW1/J and accused Mujeeb ur Rehman was arrested vide arrest memo Ex. PW1/F and his personal search was conducted vide memo Ex. PW1/H and accused Shaista Nusrat was also arrested on that day. He further stated that all the accused persons got medically examined and thereafter sent to lockup. IO recorded his statement. He further stated that on State Vs. Habib Ur Rehman CC No. 291138/16 21 of 54 28.02.2005 one lady namely Rashida Begum and one male whose name he does not remember came to PP- Majnu Ka Tila and handed over some documents to the IO which were seized vide seizure memo Ex. PW1/D and Ex. PW21/A. On leading question put by Ld. APP he admitted that the name of the other person who accompanied Rashida Begum was Latif. On his further examination, he correctly identified one FD bearing serial no. 90 Ex. PW-1/B and FD bearing no. 91 Ex. PW-1/C and one passbook of account no. 1291 Ex. PW-21/B in the name of Mohd. Latif. During cross examination he stated that the accused Mujeeb Ur Rehman and Shahista Nusrat were arrested from Bus stand ISBT. He volunteered that IO had recorded the statement of Rashida Begum and Latif and when they handed over certain documents to him and denied the suggestion that accused were arrested from ISBT bus stand. During his re- examination by Ld. APP, he stated that the accused persons have been apprehended from ISBT Bus stand but due to crowd they had been brought at PP Majnu Ka Tilla and formaly arrested at PP Majnu Ka Tilla. During further cross examination he stated that he had carefully gone through the contents of arrest memo Ex. PW-1/E. 26 PW-21 Insp. Ved Prakash stated that on 23.03.05 while he was posted as SI at PP Majnu Ka Tila (PS: Civil Lines, Delhi) investigation of the present case was marked to him. He stated that on 01.04.05, he called investors of this case at PP Majnu Ka Tila and accordingly, they came and handed over me State Vs. Habib Ur Rehman CC No. 291138/16 22 of 54 passbooks and FD certificate. He took its possession vide seizure memo Ex. PW-2/B. The witnesses correctly identified the passbooks and further stated that he had recorded the statement of investors and other witnesses and on 03.04.05, he also recorded the statement of four other witnesses and seized documents vide seizure memo Ex. PW-16/2. He further deposed about the documents seized by him during investigation on different dates. He further stated that he prepared the charge sheet and submitted the same in the Court and further investigated the case and sent the exhibited documents of the case to FSL, Rohini for expert opinion. During cross examination he stated that he is the second IO to investigate the present case. He admitted that he did not make any attempt to obtain order from the court or break open the lock put by the company and stated that he recorded all the statements at police post Majnu Ka Tila. He further admitted that during investigation he came to know that the company of the accused persons is duly registered as per law.
27 PW-22 also deposed about the seizure of passbook and other documents. He further proved passbooks Ex. PW-22/A to PW-22/D statement of Ct. Prem Pal Ex. PW22/E, statement of Sh. Izhar Ahmed Ex. PW22/F and statement of Rashid Ex. PW22/G. During cross examination he stated that he went to Bijnore for the purpose of arresting accused and verified their addresses. He further stated that he did not take any instruction or direction from the IO or SHO regarding sealing of State Vs. Habib Ur Rehman CC No. 291138/16 23 of 54 the property or any further action nor he took any identification of the document of witnesses whose statement was recorded by him. He further stated that he do not remember exact period of registration of FIR and his visit to Bijnore and denied the suggestion that I had not visited Bijnore and all the witnesses are fake and that he had prepared the fake documents with intention to help the prosecution.
28 PW-24 is the official from the office of ROC and proved original annual return of company in the name of Habib Mercantile Limited Ex.PW24/A, Copy of Form 32 Ex.PW24/B, Copy of certificate of incorporation Ex.PW24/C, Copy of form no.1 Ex.PW24/D, copy of Memorandum of association in the name of Habib Mercantile Limited Ex.PW24/E, copy of articles of association in the name of Habib Mercantile Limited Ex.PW24/F, copy of certificate for commencement of business Ex.PW24/G, copy of form 20 Ex.PW24/H and copy of form no. 18 Ex.PW24/I. During cross-examination he stated that the documents produced by him were neither prepared in his presence nor I had signed the same.
29 PW-25 Retd. Insp. Raj Kumar stated that on 19.05.06, he was posted as Chowki In-charge Majnu Ka Tilla as SI the above case file was handed over to him by SI Mohan Lal. He further stated that charge sheet had already been filed against accused namely Habibul Rehman, Mujeebur Rehman and Smt. Shaista Nusrat, charge sheet had already been filed in the concerned court. He further stated that he sent HC Sunil Kumar State Vs. Habib Ur Rehman CC No. 291138/16 24 of 54 for completing the 82/83 Cr.P.C. proceedings on 05.06.2006 against accused Rahat Afzal and HC Sunil Kumar came to me after getting declared accused Rahat Afzal as PO from the court concerned. He recorded his statement u/s 161 Cr.P.C. and filed the supplementary charge sheet. This witness was not cross examined.
30 PW-26 stated that on 11.04.05 while he was posted at PP Majnu Ka Tila, PS Civil Lines, he went to CGO Complex, Registrar office of Company, Lodhi Colony after receiving letter no. 73 dt. 07.04.05 Mark Y and I had handed over the said letter in the Registrar Office of Company. He further stated that officer of the above said office had handed over 15 copies of registration details of Habib Mercantile Ltd. and 3 copies of Form-20 Mark X to him. He further state dthat he handed over the above said documents to I.O. SI Ved Prakash at PS Manju Ka Tila who had seized the same vide seizure memo PW-21/A He further stated that the documents were remained intact till it remained in his possession and IO SI Ved Prakash had recorded my statement.
31 PW-27 stated that on 07.04.2006, while he was posted at PP, Majnu Ka Tila, PS Civil Lines, he collected the case file from MHC (M) and SI Vijay Dahiya briefed him and came to know that some documents were already in the FSL, Rohini and the results of that documents are awaited and one accused person namely, Rahat Afjal is not arrested yet. He further State Vs. Habib Ur Rehman CC No. 291138/16 25 of 54 stated that on 17.04.2006 he directed HC Rajender to collect the results of the documents from the FSL who handed over the same to him and he then deposited the same in the court on 18.04.2006. He further stated that on 27.04.2006 he initiated the proceedings of proclamation against accused Rahat Afjal and thereafter, he was transferred to Civil Lines and handed over the case file to MHC (R), PS Civil Lines. This witness was not cross examined.
32 PW-28 stated that on 07.09.2005 whle he was posted at PS Civil Lines, Majnu Ka Tila as a Constable, SI Ved Prakash gave him a pulanda with a seal of VP and a forwarding letter along with documents of case property to submit the same at FSL, Rohini and also the road certificate of the same bearing No 204/21/05 dated 07.09.2005. He further stated that he went to the FSL, Rohini and submitted the case property and received the acknowledgment slip of the same and and handed over the acknowledgment slip and other documents to SI Ved Prakash. He further stated that no tempering and alteration has been made with the case property while in his possession. This witness was also not cross examined.
33 PW-29 stated that 26.07.2004, while he was posted at PS-Lahori Gate as SI, the investigation of the present case was handed over to me vide directions of the then SHO PS-Lahori Gate and during investigation of the case, on 25.02.2005, he arrested accused Habib-ur-Rehman from Bus Stand near Majnu State Vs. Habib Ur Rehman CC No. 291138/16 26 of 54 Ka tila vide arrested memo Ex PW1/E bearing He further stated that accused Mujeeb-ur-Rehman and Shaista Nushrat were arrested vide arrest memo Ex PW1/F and Ex PW1/G and thereafter personal search of all the three accused persons were conducted vide memos Ex PW1/H, Ex PW1/I and Ex PW1/J respectively. He further stated that disclosure statement of all the three accused were recorded vide Ex PW29/A, Ex PW29/B and Ex PW29/C respectively, and on the next day, all the three accused were produced before court concerned and they were remanded to judicial custody. He further stated that on 28.02.05, he collected certain documents from complainant and one Latif vide seizure memo Ex PW1/D, Ex PW21/ and recorded statement u/s 161 Cr.P.C of witnesses. He further stated that he was transferred out of PS-Lahori Gate, but at the directions of DCP, the investigation of the present case continued with him and thereafter on 22.03.2005, he was transferred out from PP, Majnu ka tila and handed over the case file back to MHCR. During cross-examination he denied the suggestion that accused persons did not give any disclosure statement like and that the disclosure statement Ex PW29/A, Ex PW29/B and Ex PW29/C were recorded at the instance of complainant. He further denied the suggestion that accused have been picked up from their houses and falsely arrested in the present case at the bus stand Majnu ka tila and accused have been falsely implicated in the present case.
34 After closing of prosecution witness, statement of State Vs. Habib Ur Rehman CC No. 291138/16 27 of 54 accused persons U/s 313 Cr.P.C. recorded separately. Accused Habib Ur Rehman denied all the evidences and stated that he has been falsely implicated and he is a doctor by profession at Nagina, Distt. Bijnoure Distt. U.P. and has no concern with Habib Mercantile Ltd. Similarly, accused Mujeeb Ur Rehman stated that interested persons who want to finish his business for malafide designs have falsely implicated him. He also submits that the company has immovable properties which are sufficient to pay the amount and company was transacting legally and proper accounts by experience staffs were made. He also stated that due to false propaganda against the company and directors, they were left with no choice but to run away to save their lives. He also claimed that he and other directors have no fraudulent intention to cheat or commit breach of trust. Same were the submissions of the accused Shaista Nusrat.
35 Accused Mujeeb Ur Rehman and Habib Ur Rehman examined themselves as DW-1 and DW-2 respectfully in terms of Section 315 Cr.P.C.
36 DW-1 stated that the companies namely Habib Mercantile Limited, Habib Investment Limited and Habib Agro Private Limited were incorporated as per law and registered with ROC with the purpose to take the deposits from the general public and to invest the same in real estate, short term FDRs, agro plantation etc. He further stated that our companies State Vs. Habib Ur Rehman CC No. 291138/16 28 of 54 opened five offices for taking accommodation for office on rent basis and on properties of companies also and personal properties. He further stated that the company also used to maintain proper accounts with expert staff and also had number of agents for the purpose of collection of day to day deposit from the customer/ clients of the company and they used to issue proper receipts for each and every payment received in the company from the customers and also used to keep the accounts of the expenses of the company. He further stated that their company has never given any advertisement to the general public by any mode i.e. by publication in the newspapers or by distributing pamphlets and all the deposits were routed through the agents appointed by them on commission basis to be paid on monthly basis. He further stated that the company was running successfully and was returning the investment with profits to the investors / depositors and there was no bad intention to commit fraud with the investors. He further stated that in December 1998 he alongwith with his wife Shaista Nusrat, father Abdul Rehman and mother Aziz Fatima were forced to resign from the company from Mohd. Nasir, one of the agents and in March, 1999 Mohd. Nasir and many of the depositors attacked him at my residence as payments to depositors were not made on time by new Directors and due to constant pressure created by agents, he went away to Dehradun in order to save his family. He further deposed that while he was appearing before the Court in FIR No. 318/99 at Tis Hazari, he was arrested outside State Vs. Habib Ur Rehman CC No. 291138/16 29 of 54 the court at the instance of the agents Mohd. Nasir and new management. He further deposed that with the deposits made by the investors, five properties were purchased in the name of the company with the aim to earn profit with the increase in the property prices. He further stated that three of the properties have been sold by the committee instituted at the instance of the Hon'ble Court. He further stated that he had not earned any wrongful gain from the funds of the company and even invested money in the company in the name of his family and Commission to the agents were paid on time while he was the Director and some payments were made prematurely. He further stated that all the transactions of the company were recorded in the books of accounts in the office which was open to the general public as well as agents. During cross-examination by Ld. APP he stated that he is higher secondary passed and also a qualified Bachelor of Unani Medicine and Surgery (BUMS) from Rajasthan Unani Medical College in year 1986 and started his practice since 11.03.1986 at 1316 Kucha Rehman, Chandni Chowk, Delhi-06. He further stated that in the year 1986 he was earning Rs. 35,000/- per month and was filing ITR. He again said, in 1986 since he started the practice and was earning about 400-500/- per month and started earning again Rs. 35,000/- by year 1996. He failed to state when the companies were incorporated and stated that in Habib mercantile Limited, there were three Directors, his wife Shaista Nusrat, his brother in law Rahat Afzal and himself and in Habib Investment, there were seven State Vs. Habib Ur Rehman CC No. 291138/16 30 of 54 Directors, including Abdul Rehman (his father), Aziz Fatima (his mother), Sayyed Sikander Javed, Shaista Nusrat (his wife), Rahat Afzal. He further stated that in Habib Agro, there were three Directors Shaista Nusrat, Rahat Afzal and himself. He further stated that initially, he had invested Rs. 2,000/- starting the company. He further stated that he had appointed 40-45 agents and had maintained a register in this respect and all agents were on commission basis which was between 5%-10% of collection amount. He further stated that he had purchased five properties in the name of company, two situated in Shahdara and two in Jafrabad and one in Chikamberpur, Delhi- U.P. border. He failed to state that how much money was invested in purchasing the said five properties due to lapse of time. He denied the suggestion that he had deliberately not deposing the cost of the said properties. He further stated that the properties were purchased before 1998 from the investment of the company and the investors were not informed about the purchase of mentioned properties by public notice or personally. He further state that he was authorized signatory of the Bombay Mercantile Co-operative Bank and he admitted that Ex PW 24/D and the initial capital of Habib Mercantile Limited was Rs. 10 lacs and he resigned from the said companies from the post of CMD in December, 1998. He denied the suggestion that he deliberately not disclosing the invested amount in the said companies by the investors. He further stated that he came to know about the registration of first FIR in 1999 and about the registration of second FIR in State Vs. Habib Ur Rehman CC No. 291138/16 31 of 54 2004 when he was arrested. He further stated that had filed his personal ITR from 1992-97. In his further cross-examination he stated that the head office of the company was situated at 1388, Katra Vijaraiyan and the clinic was situated at 5316, Kucha Rehman, Chandni Chowk. The witness was confronted with documents Ex. PW-17/A, PW-17/B and identified the signatures of himself, his wife and Rahat Afzal. He failed to state as to how many investors the money was return back after the maturity. He failed to state how much money was deposited till he was the Director. He further stated that separate ITRs were being filed for each company and there were about 6 branches of the companies. He was forced to resign as they were diversifying our business and the agents were under the fear that there work will be suffered. He admitted that some of the investors have not got their money and some investors and agents had gone to 1388, Katra Bijwarian to demand their money.
37 DW-2 proved his election I Card Ex. DW2/A and the ID card of National Integrated Medical Association, unit Nagina Bijnor, UP Ex. DW2/B(OSR) and stated that he is practicing as a Doctor, BIMS since 1972 in Nagina, Bijnor, UP. He further stated that he was neither the director nor the agent nor promoter and has any concern for the Habib Investment Ltd. He also proved a letter Ex. DW2/C sent by the accused Mujeeb-Ur- Rehman in which accused Mujeeb Ur Rehman denied to use his name, in respect of the Habib Investment Ltd. and stated that State Vs. Habib Ur Rehman CC No. 291138/16 32 of 54 accused Mujeeb Ur Rehman insisted him to open an account in the bank Nagina and proved the translated copy of the said letter Ex.DW2/D. During cross-examination he admitted that there is no certificate of the translator regarding the translation done by him with regard to Ex. DW2/C and denied the suggestion that the translation was done at his instance and that is why no such certificate was even sought from the translator. He also admitted that he had not made any written communication expressing his unwillingness for being added as the applicant. He also admitted that he had deposited a sum of Rs. 60,000/- in the bank account at the instance of Majib-Ur- Rehman. He further stated that the bank account in Nagina was in the name of Habib Investment limited and the resolution dated 11.06.1996 passed by Habib Investment reflects that Dr. Habib-Ur-Rehman was authorized to sign and bind the said company in all transactions between bank and company. He further stated that he had never made any written complaint to any authority regarding the use of the bank account in his name.
38 I have heard Ld. APP for the State and Ld. Counsels for accused very extensively. I have also gone through the file.
39 Ld. APP for the state submits that the accused persons with a view to grab the hard earned money of the public devised a scheme in which they offered investment schemes with very high returns on daily basis, monthly basis and fixed State Vs. Habib Ur Rehman CC No. 291138/16 33 of 54 deposits plans etc. He further argued that 29 witnesses had correctly identified the accused persons and all the witnesses have stated the role of every accused in their evidence and stated in detail that accused Habib Ur Rehman introduced himself as promoter of the said company namely Habib Mercantile Ltd. and accused Mujeeb Ur Rehman introduced himself as Chief Managing Director and accused Shaista Nusrat and her brother Rahat Afzal as director of the said company.
40 He further argued that PW-8 Sh. Ami Lal Daksh, senior scientific officer clearly shows that all the signatures were genuine and no signatures were found forged.
41 He further argued that the accused Mujeeb-Ur-Rehman during his SA u/s 313 Cr.P.C. said that "our company has never given any advertisement to the general public by any mode i.e. by publication in the newspaper or by distributing pamphlets"
however the above said pamphlets of the company were distributed by them at that relevant time which were duly exhibited as PW-4/A1 Sh. Mohd. Waseem Rao in case no. 318/99 pending before this Court and brochure of the said company is Ex. PW-22/D2 Sh. Mohd. Nasir in case no. 318/99. He further argued that the said brochure, the profile of the company was written and they have mentioned their all attractive investment schemes etc. and in the company profile at para 3 at page 1 it is specifically written that HABIB MERCANTILE LIMITED was incorporated as Non Banking State Vs. Habib Ur Rehman CC No. 291138/16 34 of 54 Financial Company approved as residuary Non Banking Financial Company by Reserve Bank of India. It is wroth mention here that "the companies engaged in the business of non-banking financial institution (NBFI) are required to obtain a Certificate of Registration (CoR) from Reserve Bank of India to commence/carry on business of NBFI in terms of Section 45-1A of the RBI Act, 1934" and the General Manager (Retd) Sh. R.C.P. Singh PW-48 deposed in case no. 318/99" The Habib Mercantile Ltd. company had applied to RBI for issuance for certificate of registration u/s 45 1A of RBI act 1934, but its application was kept pending with RBI since its Net Owned Fund (NOF) was below the minimum prescribed limit of Rs. 25 lakh on that date". It is further deposed that another company namely Habib Investment Ltd. has not applied to RBI for registration. This letter of RBI is exhibit as PW-48/A dt. 07.02.2000 in case no. 318/99. Ld. APP also argued that accused persons were not authorized by the RBI to continue the business of investment but they were having dishonest intention so that kept on running the said business. He further argued that accused Mujeeb-Ur-Rehman had accepted that his wife namely Shaista Nusrat is house wife however she was the active director and used to operate from the office and she was handling all day to day affairs of the company and at no point of time she was housewife. The investors who had gone to the office of the company they met with accused Shaista Nusrat and she introduced herself as director of the company. It is stated that accused Mujeeb Ur Rehman was forced by exerting State Vs. Habib Ur Rehman CC No. 291138/16 35 of 54 pressure endangering his life to resign but it is surprising that accused had not made any police complaint regarding this and in the last accused has accepted very innocently that some of the investors has not got their money.
42 All the investors/witnesses have clearly identified the accused Habib Ur Rehman as promoter of the company because he was the one who was always present at the office of the company. In his cross-examination when he was confronted with the resolution dt. 11.06.1996 passed by Habib Investment Ltd. Co., accused Habibur Rehman accepted his signature and affirms that he was authorized by Habib Investment ltd. Co. to transact with the bank on behalf of the Habib Investment Ltd. Co. and further he admitted that he had not made any complaint regarding use of the bank account in his name. It is further submitted that in case 318/99 PW-19 senior manager Sh. S.L. Verma Canara Bank Nagina Bijnor, U.P. has brought summoned record Ex. PW-19/A, PW19/B1 to B4 and PW-19/B5 which clearly shows that account was operated by accused Habib Ur Rehman.
43 The accused had not denied the claim of the investors nor they have denied the signatures of the passbooks or the FDR's further they also have not denied that they have taken the money from the investors and they have not disputed the sum deposited in their schemes by the investors. So it is crystal clear that the accused persons have misused the hard State Vs. Habib Ur Rehman CC No. 291138/16 36 of 54 earned money of the investors.
44 The accused persons had deliberately and intentionally misappropriated the hard earned money of the investors and cheated the investors by not giving the assured amount or the amount deposited.
45 On the other hand, Ld. Counsel for accused Habib Ur Rehman argued that he was not the director of the company and prosecution has not brought any evidence to prove the allegations of him being promoter of any of the companies. He also pointed out that since Habib Ur Rehman is related to accused Mujeeb Ur Rehman, his presence in the premises of Mujeeb Ur Rehman was natural. Ld. Counsel also argued that the bank account in Nagina was opened in the name of accused Habib Ur Rehman at the instance of accused Mujeeb Ur Rehman who was nephew to accused Habib Ur Rehman.
46 Similarly, Ld. Counsel for accused Mujeeb Ur Rehman and Shaista Nusrat argued that prosecution has not brought any evidence to prove the ingredients of cheating as none of the witnesses stated that they have been wrongfully induced on misrepresentation to invest the money. He also pointed out that all the complainants admitted that accused persons were honest and have good reputation. Ld. Counsel also argued that the company in question was duly registered with Registrar of Companies and even application was pending before Reserve State Vs. Habib Ur Rehman CC No. 291138/16 37 of 54 Bank of India for approval. He also argued that all investors were voluntarily invested without any component of cheating on the part of accused persons. He also argued that due to losses in the business which could have occurred to anyone, there were some defaults in return of the money and there was no fraudulent intention on the part of accused persons. He also pointed out the companies were being run for many years and prays for acquittal of accused persons.
47 In the present case the initial charge sheet was filed for offences U/s 420/405/406/409/120-B IPC. Section 406 which is an extension of section 406 deals with criminal breach of trust which is defined in section 405 IPC. In every criminal breach of trust there has to be a voluntarily entrustment on the part of complainant and unless money has been entrusted, there cannot be any criminal breach of trust.
48 Section 405 IPC defines-
Criminal Breach of Trust-Whoever, being in any manner entrusted with property, or with any dominion over property, dishonestly misappropriates or converts to his own use that property , or dishonestly uses or disposes of that property in violation of any direction of law prescribing the mode in which such trust is to be discharged, or of any legal contract, express or implied, which he has made touching the discharge of such trust, or willfully suffers any other person so to do, commits "criminal breach of trust".
State Vs. Habib Ur Rehman CC No. 291138/16 38 of 54 49 Section 409 IPC defines-
Criminal breach of trust by public servant, or by banker, merchant or agent- Whoever, being in any manner entrusted with property, or with any dominion over property in his capacity of a public servant or in the way of his business as a banker, merchant, factor, broker, attorney or agent, commits criminal breach of trust in respect of that property, shall be punished with {imprisonment for life} or with imprisonment of either description for a term which may extend to ten years, and shall also be liable to fine.
50 In case of cheating which is defined in 415 IPC, money is not parted with voluntarily but is because of some inducement or misrepresentation by or on behalf of the person who has cheated the complainant.
51 Section 415 IPC defines-
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 person shall retain any property, or intentionally induces the person so deceived to do or omit 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".
State Vs. Habib Ur Rehman CC No. 291138/16 39 of 54 52 Section 420 IPC defines-
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 term which may extend to seven years, and shall also be liable to fine.
53 It is also alleged that all accused persons acted in such a manner which is covered under the definition of criminal conspiracy to cause cheating with the complainants.
54 Section 120-B defines -
Punishment of criminal conspiracy-(1) Whoever is a party to a criminal conspiracy to commit an offence punishable with death, [imprisonment for life] or rigorous imprisonment for a term of two years or upwards, shall, where no express provision is made in this Code for the punishment of such a conspiracy, be punished in the same manner as if he had abetted such offence. (2) Whoever is a party to a criminal conspiracy other than a criminal conspiracy to commit an offence punishable as aforesaid shall be punished with imprisonment of either description for a term not exceeding six months , or with fine or with both.
55 The ingredients of the offence U/s 405 of the IPC are (1) State Vs. Habib Ur Rehman CC No. 291138/16 40 of 54 there should be an entrustment by one person to another, of the property or with any dominion over property; (2) such entrustment must be in trust; (3) there must have been a misappropriation or conversion to his own use by the person who received the property in trust; and (4) such conversion or retention of the property must be against or in violation of any direction of law prescribing the mode in which such trust is to be discharged, or of any legal contract made, touching the discharge of such trust. But for cheating, the following three ingredients must be present: (1) practice of deception by the offender; (2) on account of deception, there must be fraudulent or dishonest inducement so as to make the person deceived to deliver any property or to do something or omit to do something etc.; (3) by reason of the delivery of the property or the doing of a thing or the omission to do a thing, there must be causing or likelihood of causing of damage or harm to the person deceived in body, mind, reputation or property.
56 When there are money dealings between a bank and its customer, the question generally arises whether the transaction amounts to a deposit or to a bailment for a specific purpose. In the former case, there arises a relationship of a debtor and a creditor between the bank and the customer and the money becomes the bank's money only to be repaid when demanded. In the latter case, proprietary rights of the money remain with the customer and there comes into being, a trust in the hands of the bank with regard to the disposal of the State Vs. Habib Ur Rehman CC No. 291138/16 41 of 54 money in accordance with the terms of the contract between the parties. No question, however, of the commission of the offence of criminal breach of trust arises in the former case in as much as the money in the question becomes the bank's money and no trust in regard to it arises. Whether in a particular case, the transaction falls within one category or the other, depends on the facts and circumstances of that case. Thus, money deposited by a customer with a banker is not held by the latter on trust for him. It becomes a part of the banker's fund. The banker cannot be charged U/s 409 of the IPC for making use of the money (1950 ALL LJ 808). So, no exception can be taken if money deposited in the current account of a customer is utilised for other business, such sum cannot be said to be deposited for entrustment. The deposit creates a simple relationship of a debtor and a creditor. It is enough if the bank refunds the amount on demand (AIR 1952 Cal 193). The relationship between a banker and a customer is one of a debtor and a creditor not a case of trust (Gopesh Chandra v. Nirmal Kumar, AIR 1950 Cal 57). Fixed deposit receipt issued to the complainant on the instruction from a partner of a firm, when on maturity is appropriated towards the loan amount of the firm, no criminal breach of trust is committed by the bank who is not a trustee (R.P. Sablock v. Kaushalya 1982 CrLJ 1342(Del).
57 In the offence of cheating there are two elements--
deception and dishonest inducement to do or omit to do State Vs. Habib Ur Rehman CC No. 291138/16 42 of 54 something. Mere dishonestly is not a criminal offence. Moreover, to establish the offence of cheating, the complainant would have to show, not only that he was induced to do or omit to do a certain act but that this induced omission on his part caused or was likely to cause him some harm or damage in body, mind, reputation or property--which are presumed to be the four cardinal assets of humanity (Chidambaram Chettiar v. Shanmugam AIR 1938 Mad 129).
58 As laid down by the Supreme Court, the ingredients required to constitute cheating are : (1) there should be fraudulent or dishonest inducement of a person; (2)(a) the person so deceived, should be induced to deliver any property to any person or to consent that any person shall retain the property, or (b) the person so deceived, should be intentionally induced to do or omit to do anything which he would not do or omit to do if he were not to deceived; and (3) in case covered by 2(b) the act or omission should be one which causes or is likely to cause damage or h arm to the person induced in body, mind, reputation or property.
59 Deceiving means causing to believe what is false, or misleading as to a matter of fact, or leading into error. Whenever a person fraudulently represents, as an existing fact, that, which is not an existing fact, he commits cheating. Deceit means, as stated in Halsbury, a false and fraudulent representation as to a matter of fact, made in order to induce a State Vs. Habib Ur Rehman CC No. 291138/16 43 of 54 person to act thereon. Deceit is a false statement of a fact made by a person knowingly or recklessly with the intent that it shall be acted upon by another who dose act upon it and thereby suffers damage.
60 There is no denial by the accused persons that they are not the promoters/directors of Habib Group of Companies. Their only defence is that the business of the company was legal and proper accounts were maintained but due to some interested persons who have created false rumors against the company and the accused persons, the accused persons left with no choice but to run for their lives. Accused Mujeeb Ur Rehman who examined himself as DW-1 has claimed that the purpose of company is to take deposit from general public and interest the same in Real Estates, Agro Plantation etc. and for that purpose experience staff was appointed but at the same time stated that the company has never given any advertisement informing the general public about the various scheme of the companies and deposits were routed through agents appointed by them. However, it has not been stated by any of the accused persons that in the absence of any advertisement/pamphlets how the agents as well as the general public came to know about the various schemes floated by them as there were multiple schemes from daily deposit of Rs. 10/- to daily deposit of 100s of Rupees apart from FDR schemes. The non production of the stated pamphlet distributed by the accused persons or by their companies is State Vs. Habib Ur Rehman CC No. 291138/16 44 of 54 not fatal to the case of prosecution as the investors are not expected to keep said pamphlets with them with the expectations that in the future accused persons would abscond with their money and they will be required to prove the said pamphlets in the Court of law to prove their investments. Moreover, in case no. 318/99 pending before this Court, PW-4 had categorically stated that pamphlets of the company were distributed by them at that relevant time which were duly exhibited as PW-4/A1 by Sh. Mohd. Waseem Rao and brochure of the said company as Ex. PW-22/D2 by Sh. Mohd. Nasir in said case. In the brochure, the profile of the company was written and all attractive investment schemes etc. of the company are mentioned and in the company profile at para 3 at page 1 it is specifically written that HABIB MERCANTILE LIMITED was incorporated as Non Banking Financial Company approved as residuary Non Banking Financial Company by Reserve Bank of India.
61 PW-1, PW-2, PW-3, PW-5, PW-6, PW-7, PW-9, PW-10, PW-11, PW-12, PW-13, PW-14, PW-16, PW-18 and PW-20 are the victims of the complainants who have been examined in the present case. All these witnesses have categorically stated that they had invested their hard earned money in the various schemes of floated by the accused persons through their companies. It has been stated by these witnesses that they have been assured by the accused persons of handsome returns in the amount invested, but without giving back the State Vs. Habib Ur Rehman CC No. 291138/16 45 of 54 returns on the invested money, accused persons have absconded. These witnesses have stated that when they visited the office, it was found locked. All these witnesses have identified the accused persons as the one who have explained and assured the returns/schemes. Despite detailed cross- examination, no material contradictions absolving the accused persons have come on record. There are some variations with respect to dates of visit to the office of accused persons which are not material as otherwise, these witnesses have taken a categorical stand that they had invested different sums of money with the accused persons who have not returned the same. These witnesses have denied the suggestion put forth by the defence. All these witnesses have stated that at times they had deposited the money through the agents of the company which is the stand of the accused persons also. All these witnesses have identified their complaints and seizure of documents by the police.
62 PW-8 has proved the handwriting expert report to establish that the signatures and handwriting on documents Ex. P-A to P-I, P-3 and P-5 belongs to the accused Mujeeb Ur Rehman and Saishta Nusrat after comparing the questioned signatures available on receipts of Habib Mercantile Ltd., two passbooks and one account opening form with the specimen signatures of accused persons. He proved his report as Ex. PW- 8/A. State Vs. Habib Ur Rehman CC No. 291138/16 46 of 54 63 PW-15 proved the documents submitted by the accused persons with State Bank of Hyderabad for opening an account which includes the form, resolution signed by accused Mujeeb Ur Rehman, shaista Nusrat and other directors, Certificate of Incorporation and other documents of the company Habib Mercantile Ltd. The submissions of these documents is not disputed by the accused persons which shows that accused persons are looking after the affairs of Habib Mercantile Ltd. PW-17 similarly proved opening of account by accused Mujeeb Ur Rehman with Bombay Mercantile Cooperative Bank Ltd. vide documents Ex. PW-17/A and PW-17/B. 64 PW-21 and PW-29 proved the arrest of accused persons. PW-22 deposed about the seizure of documents. PW- 25 stated about the proceedings U/s 82 Cr.P.C. initiated against accused Rahat Afzal. PW-26 stated about receiving documents from the office of ROC. PW-27 stated about the collection of FSL result . Similarly, PW-28 stated about sending the document to FSL. PW-29 further stated about seizure of documents, recording of disclosure statement of accused and statement of witnesses.
65 DW-1 himself stated that the companies M/s Habib Mercantile Ltd., M/s Habib Investment Ltd. And M/s Habib Agro Pvt. Ltd. were incorporated with the purpose of seeking deposits from the general public and investing the same in Real State Vs. Habib Ur Rehman CC No. 291138/16 47 of 54 Estate, STFDR, Agro plantation etc. He also claimed that the companies are registered with ROC and incorporated as per law. However, he had not stated whether he was having any permission from the Reserve Bank of India for accepting the deposit from general public as accepting of deposits from the general public can only be undertaken with the prior permission/sanction from the Reserve Bank of India which is the Nodal agency to grant such permission. Admittedly, none of the companies incorporated by the accused persons have any sanction/permission from the Reserve Bank of India to either act as Bank or as Non Banking Financial Companies (NBFC). The accused persons have not stated that under which provision of law they were accepting the deposits after promising handsome returns on the amounts invested.
66 In terms of Section 45-IA of RBI Act, 1934 no company can carry on business of a Non Banking Financial Institution without obtaining a Certificate of Registration from Reserve Bank of India and without having Net Owned Funds (NOF) of Rs. 25,00,000/- limit which was raised to Rs. 2 crores since April, 1999. The companies of the accused persons are not covered under the venture capital fund/merchant banking companies/stock broking companies registered with SEBI, Insurance Companies, registered with IRDA, Nidhi companies notified U/s 620A of Companies Act 1956, Chit companies as defined u/s 2(b) of Chit Fund Act 1982, National Housing Bank, Stock Exchange or mutual benefit company.
State Vs. Habib Ur Rehman CC No. 291138/16 48 of 54 67 In CC No. 292366/16, FIR No. 318/99, PS: Lahori Gate titled as State Vs. Mujeeb Ur Rehman & Ors., the witness from RBI examined as PW-48 Sh. R.C.P. Singh Retired GM (PP), RBI have categorically stated that the application of M/s Habib Mercantile Ltd. for registration as Non Banking Financial Company was pending with the Reserve Bank of India. This implies that the said company was not having any permission/sanction to accept deposits from the general public. He had further stated that the company M/s Habib Investment Ltd. has not applied with registration with RBI. His testimony has not been challenged by any other accused in the said case some of whom are also accused in the present case. I have no hesitation in taking judicial notice of the said testimony. Hence, the claim of accused persons that they have required permission to take deposits is aimed at misleading the general public. Admittedly, the companies of the accused have not filed any quarterly or annual returns with the Reserve Bank of India to qualify as a Non Banking Financial Company. All the investors/complainants who have deposed before the Court are members of general public who are earning their livelihood by doing petty jobs of carpenter, embroidery worker etc. and they are not expected to make prior verification of the legality of deposits taken. All the witnesses have stated that on assurances given by accused persons, particularly by accused Mujeeb Ur Rehman who was also operating as doctor in the area, they have no reason to suspect that they have been State Vs. Habib Ur Rehman CC No. 291138/16 49 of 54 illegally induced to open their deposit accounts with the companies of accused persons. The incorporation of the company with ROC ipso facto does not allow the said incorporated company to accept deposit from general public unless it is registered with RBI as NBFC.
68 The argument of Ld. Counsel that no criminality is involved and at the most a civil liability of refund of the amount invested will be made out is humbly rejected as a distinction must be made between a civil wrong and a criminal wrong. When a dispute between the parties constitute only a civil wrong and not a criminal wrong, the Courts would not permit a person to be harassed, although no case for taking cognizance of the offence has been made out (Devender v. State of U.P. : 2009(7) SCC 495). The case of breach of trust or cheating are both, a civil wrong and a criminal offence, but under certain situations, where the act alleged would predominantly be a civil wrong, such an act does not constitute a criminal offence (GHCL Employees Stock Option Trust v. India Infoline Ltd. : (2013) 4 SCC 505. However, in the present case there was an inducement by the accused persons by dishonest concealment of facts of companies having no locus standi to receive deposits. Had the complainants/victims known the fact of companies not having any authority to accept deposits, they would have not invested their money with the accused persons.
69 As per Ex. PW-24/A which is the copy of annual return State Vs. Habib Ur Rehman CC No. 291138/16 50 of 54 of Habib Mercantile Ltd. for the year 1996-97 accused Mujeeb Ur Rehman and accused shaista Nusrat are shown as Directors apart from other Directors. Similarly, Ex. PW-24/B which is form No. 32 also shows their name as Directors since incorporation of the company M/s Habib Mercantile Ltd. As per Ex. PW-24/E which is the Memorandum of Association of Ms. Habib Mercantile Ltd., accused Mujeeb Ur Rehman and shaista Nusrat are having 10 shares of each. Ex. PW-24/F Article of Association also shows name of Mujeeb Ur Rehman and shaista Nusrat as subscribers of shares of M/s Habib Mercantile Ltd. Moreover, Ex. PW-24/H which is form 20 signed by accused Mujeeb Ur Rehman as Director of Habib Mercantile Ltd. has categorically mentioned that company has not issued a prospectus inviting public to subscribe shares and every director of the company has paid to the company for the shares alloted. This also shows that Habib Mercantile Ltd. And its directors have no authority to accept deposits from the general public.
70 The arguments of counsel for accused Shaista Nusrat that she was a housewife having no active role in the affairs of Habib Mercantile Ltd. is belied by form no. 29 filed by accused Shaista Nusrat for change of registered office of the company, on behalf of the company having her signatures which is forming part of Ex. PW-24/I as filing of documents on behalf of company shows her active participation in the affairs of the company. Ex. PW-17/A which is the account opening form, State Vs. Habib Ur Rehman CC No. 291138/16 51 of 54 Resolution Ex. PW-17/B, having photographs of Mujeeb Ur Rehman and shaista Nusrat and their signatures also proves the active involvement of accused shaista Nusrat in the affairs of Habib Mercantile Ltd.
71 All the public witnesses who are investors have identified the accused Habib Ur Rehman as the person who has also explained the schemes of the company and was found present at the office of the company by almost all the complainants. While being examined as DW-2 he relied upon document Ex. DW-2/C as the letters written by him advising accused Mujeeb Ur Rehman not to use his name in respect of M/s Habib Investment Ltd. who had informed that bank account at Nagina had been opened in his name. During cross- examination by Ld. APP he had admitted that he had not made any complaint or communication for showing his unwillingness in adding him as applicant. He also admitted that he himself had deposited Rs. 60,000/- at instance of Mujeeb Ur Rehman. In document Ex. DW-2/D which is available in judicial file of FIR No. 318/99 PS Lahori Gate wherein Habib UR Rehman identified his signatures at point X and affirm that he was authorized by Habib Investment to transact with bank, He also admitted that he had not made any written complaint to any authority or bank or police regarding use of bank account in his name. Moreover, in case FIR No. 318/99 PS Lahori Gate PW-19 senior manager Sh. S.L. Verma Canara Bank Nagina Bijnor, U.P. has proved that account was operated by accused Habib Ur State Vs. Habib Ur Rehman CC No. 291138/16 52 of 54 Rehman on behalf of Habib Investment Ltd. Hence, the argument that accused Habib Ur Rehman has no concern with the deposit of complainants is fallacious.
72 Accused Mujeeb Ur Rehman and shaista Nusrat are directors of Habib Mercantile Ltd. and accused Habib Ur Rehman was operating the account of Habib Investment Ltd. The complainants/ investors have clearly mentioned that Habib Mercantile Ltd. and Habib Investment Ltd. Have cheated them through their directors Mujeeb Ur Rehman, shaista Nusrat and accused Habib Ur Rehman who claimed himself as promoter of the company. The offence committed by the accused persons by entering into a conspiracy to induce the general public in making deposits with the false promise of handsome returns by making investments in Real Estate, Agro Plantation etc. the conspirators have committed the offences by indulging in various overt acts by presenting themselves as having due sanction/permission in receiving the deposits.
73 In view of the evidence on record and above discussion, I am satisfied that accused Mujeeb Ur Rehman, shaista Nusrat and Habib Ur Rehman have entered into criminal conspiracy with the aim to cheat the general public by dishonestly inducing complainants in making deposits with accused persons with the false promise of giving handsome returns, even though, accused persons were aware that they have no authority to accept deposits from general public and State Vs. Habib Ur Rehman CC No. 291138/16 53 of 54 thereby committed criminal conspiracy and cheating with the complainants.
74 Accordingly, accused Mujeeb-Ur-Rehman, shaista Begum and Habib-Ur-Rehman are convicted for offence U/s 120-B/420 IPC. Copy of the judgment be uploaded on the server with digital signature. PAWAN Digitally signed by PAWAN SINGH SINGH RAJAWAT Date: 2019.08.31 RAJAWAT 16:06:11 +0530 (PAWAN SINGH RAJAWAT) ACMM(Special Acts) CENTRAL TIS HAZARI COURTS DELHI Announced in open Court on 31st August, 2019.
State Vs. Habib Ur Rehman CC No. 291138/16 54 of 54