Delhi District Court
Cbi vs . 1 Tara Chand Aggarwal, on 20 May, 2013
IN THE COURT OF MANOJ JAIN: SPECIAL JUDGE (PC ACT) (CBI)
SOUTH DISTRICT: SAKET DISTRICT COURTS
NEW DELHI
CC No. 07/2011
RC EOU-I-2009 E 0006
U/s 120B r/w 420, 468, 471 IPC & 13 (2) r/w 13 (1) (d) PC Act
CBI Vs. 1 Tara Chand Aggarwal,
Son of late Sh. Ganga Ram,
Resident of H. No. 257, Gali No. 7,
Padam Nagar, Delhi.
2 Satbir Sharma,
Son of Sh. Banwari Lal,
Resident of H. No. 1273, Sector-23,
Sonepat, Haryana.
3 Hari Shankar Sharma,
Son of late Sh. M.L. Sharma,
H. No. C-1/24-A, Yamuna Vihar,
Delhi.
4 Ravi Kumar Bharti,
Son of Sh. Gopi Chand,
H. No. 634, Parmanand Colony,
Kingsway Camp, Delhi-9.
i) Date of Institution :10.12.2010
ii) Date on which case was received on
Transfer by this Court :24.09.2011
iii) Date of framing of charge :29.09.2011
iv) Date of conclusion of arguments :14.05.2013
v) Date of Judgment :20.05.2013
Memo of Appearance
Sh. Jagbir Singh, learned Special Public Prosecutor for CBI.
Sh. S.P.M. Tripathi, learned counsel for accused Tara Chand Aggarwal.
Sh. Rajiv Khosla, learned counsel for accused Satbir Sharma.
Sh. R.M. Jha, learned Counsel for accused Hari Shankar Sharma &
accused Ravi Kumar Bharti.
CC No. 07/2011 CBI Vs. Tara Chand Aggarwal etc. Page 1 of 91
JUDGMENT
STORY OF PROSECUTION 1.0 All the four accused persons have been sent up to face trial for commission of offences under Sections 120B IPC read with Section 420/468/471 IPC & Section 13 (2)/13 (1) (d) of Prevention of Corruption Act 1988 and substantive offences thereof.
1.1 Prosecution story, in short, is to the effect that M/s Krishna & Krishna Enterprises was having its office at 3944, Lahori Gate Chowk, Naya Bazar, Delhi. It was a partnership firm and accused Tara Chand Aggarwal (A-1), accused Satbir Sharma (A-2) and accused Hari Shankar Sharma (A-3) were its partners. Said firm submitted one loan application before Punjab National Bank, Shalimar Bagh Branch, New Delhi requesting for sanction of cash credit facility of Rs. 300 lacs for trading in sugar.
1.2 Accused Ravi Kumar Bharti (A-4) was posted as Deputy Manager (Loans) in said Branch of PNB. He processed said application.
1.3 Borrower firm, along with loan application, submitted some false/fabricated documents such as monthly VAT Returns and corresponding acknowledgment as well as Audited Balance-Sheets purportedly containing signatures of Sh. Ashok Kumar of M/s Ashok Om & Company, Chartered Accountant and also of Sh. Vikas Gupta, Chartered Accountant. All these documents were bearing signatures of all three said partners in token of their genuineness.
1.4 Accused Ravi Bharti conspired with aforesaid three partners of M/s Krishna & Krishna Enterprises and did not make any enquiry with respect CC No. 07/2011 CBI Vs. Tara Chand Aggarwal etc. Page 2 of 91 to financial status of said firm, its partners and mortgagor and gave false reports about the creditworthiness and financial viability of the firm, its partners and guarantor.
1.5 It will be imperative to mention that Ravi Kumar Bharti (A-4) was earlier posted in Mall Road Branch, New Delhi of PNB and had dealt with loan application of one firm M/s Guruji Trading Company which was a sole proprietary concern of accused Satbir Sharma (A-2) and accused Ravi Bharti had sanctioned cash credit facility of Rs. 300 lacs to M/s Guruji Trading Company on 14.09.2007 while posted in Mall Road Branch. Said account had, later on, turned NPA.
1.6 A-4 deliberately suppressed such antecedents of Satbir Sharma with a dishonest intention so that M/s Krishna & Krishna Enterprises could obtain the facilities from Shalimar Bagh Branch of PNB without any hassle. It was also obligatory on the part of A-4 Ravi Bharti to generate proper report from Credit Information Bureau of India Limited (CIBIL) from the system but he did not create any CIBIL report before the actual sanctioning of the loan. Cash credit facility was sanctioned on 18.03.2008 but A-4 Ravi Bharti generated CIBIL report only on 26.03.2008 which, too, was incomplete and half-baked and A-4 Ravi Bharti did not deliberately refine the search as he knew that in such eventuality, system would have shown that accused Satbir Sharma (A-2) had already availed CC facility from PNB Mall Road Branch.
1.7 On the basis of recommendation of A-4 Ravi Bharti and consequent sanction of Sh. D.C. Sharma, the then Chief Manager, PNB Shalimar Bagh Branch, cash credit facility of Rs. 300 lacs was sanctioned on 18.03.2008.
CC No. 07/2011 CBI Vs. Tara Chand Aggarwal etc. Page 3 of 911.8 M/s Krishna & Krishna Enterprises did not submit quarterly stock statements and A-4 Ravi Bharti also did not ensure compliance thereof. He also did not ensure the end use and proper utilization of the CC facility. Funds were fraudulently and dishonestly siphoned off and diverted by the borrower firm.
1.9 So much so, accused Ravi Bharti (A-4) even pocketed cash amount of Rs. 1 lac on 25.04.2008 which signified his malafide intention. Such amount had been withdrawn from the CC account of M/s Krishna & Krishna Enterprises by way of self-cheque and such amount was deposited by A-4 Ravi Bharti in his own bank accounts on 26.04.2008.
1.10 Accused Ravi Bharti (A-4) also unauthorizedly and dishonestly exceeded his financial delegated powers of Rs. 5 lacs. He also permitted diversion of funds by enabling the firm to purchase a mortgaged property in auction.
1.11 Further investigation revealed that audit reports were containing forged signatures and seal of Sh. Ashok Kumar, Chartered Accountant/Proprietor of M/s Ashok Om & Company and also of Sh. Vikas Gupta, Chartered Accountant. It was also found that firm had submitted false and fabricated monthly VAT Returns/ Acknowledgments for the period 01.04.2007 to 29.02.2008. Actually, since the firm was having turnover below Rs. 5 crores during said period, the firm had, in fact, filed quarterly VAT Returns with the Trade & Tax Department, New Delhi. There was no question of their filing any monthly return of VAT for the same period. Thus, monthly VAT Returns were never ever actually submitted by the firm with the VAT Department and these were fabricated with malafide intention so as to ensure that the proposal for availing cash credit facility was accepted without any CC No. 07/2011 CBI Vs. Tara Chand Aggarwal etc. Page 4 of 91 glitch and the loan was sanctioned by the bank.
1.12 Needless to say that CC account of M/s Krishna & Krishna Enterprises turned Non-performing Asset (NPA) with outstanding of Rs. 219.92 lacs as on 30.09.2009.
1.13 Sh. V.K. Gupta, Senior Manager, Punjab National Bank, Shalimar Bagh, New Delhi sent a written complaint dated 01.10.2009 to CBI stating therein that said three partners of M/s Krishna & Krishna Enterprises had entered into a criminal conspiracy and had submitted false and fabricated documents including audited balance-sheets and other financial statements and used them as genuine and even sold the hypothecated stock unauthorizedly and thereafter misappropriated the proceeds thereof and thus defrauded and cheated the bank and it was prayed that case may be registered and investigation be taken up.
1.14 On the basis of such complaint, FIR was registered by CBI on 23.11.2009. After comprehensive and thorough investigation and after obtaining sanction for prosecution of accused Ravi Bharti (A-4), charge-sheet was prepared against all the four accused.
COGNIZANCE AND CHARGES 2.0 Sh. R.A. Yadav, Inspector, CBI filed such charge-sheet in the Court on 10.12.2010 and cognizance was taken on 24.01.2011.
2.1 Arguments, on the point of charge, were heard by Sh. V.K. Maheshwari, the then learned Special Judge and vide his detailed order dated 27.08.2011, charges were directed to be framed.
CC No. 07/2011 CBI Vs. Tara Chand Aggarwal etc. Page 5 of 912.2 However, before charges could be framed, case was transferred to the Court of undersigned and charges were accordingly framed by this court on 29.09.2011.
2.3 All the four accused persons were charged under Section 120B IPC and Section 420/468/471 IPC & Section 13(2) (13 (1) (d) PC Act read with Section 120B IPC. All the three partners were also separately charged for u/s 420/468/471 IPC and A-4 Ravi Bharti was also separately charged under Section 420 IPC r/w Section 13(2) /13 (1) (d) PC Act. All the accused pleaded not guilty and claimed trial.
2.4 It will be also significant to mention here that accused were also asked to apprise the Court whether they admitted any of the documents relied upon by the prosecution or not. A-4 Ravi Bharti accordingly made a statement before the Court on 14.10.2011 admitting various documents and A-3 Hari Shankar Sharma also admitted some documents in terms of his statement dated 17.10.2011. However, other two accused did not admit any document.
WITNESSES FOR PROSECUTION 3.0 Prosecution was directed to adduce evidence and has examined thirty one witnesses.
3.1 Witnesses can be classified as under:-
(i) Officials of Shalimar Bagh Branch, PNB.
PW8 Neha Ailwadhi (Cashier)
CC No. 07/2011 CBI Vs. Tara Chand Aggarwal etc. Page 6 of 91
PW11 Dewan Chand Sharma (Chief Manager who sanctioned loan) PW16 Pawan Goyal (Computer Terminal Operator) PW17 Dinesh Kumar Chawla (Successor of Ravi Bharti) PW20 Sanjiv Sharda (Subsequent Chief Manager) PW21 Vijay Kumar Gupta (Sr. Manager/complainant) PW25 Baldev Raj Dewan ( Head Cashier)
(ii) Other bank officials of PNB PW1 V.K.Venaik (Official from Circle Office) PW10 Basant Lal (Vijay Nagar Branch) PW13 Tika Ram Gupta (PNB Punjabi Bagh Branch) PW22 Govind Swaroop Bhatt (Chief Internal Auditor) PW26 Kirpal Singh Buddhraja PW29 Pyare Lal (PNB Mall Road Branch)
(iii) Private persons PW3 Kapil Gupta PW5 Ramphal Gupta PW6 Raj Kumar Gupta PW12 Sanjay Kumar Goyal PW14 Subhash Bhatia PW15 Gopal Mittal PW19 Shradha Nand Bansal PW23 Dilip Kumar Aggarwal PW27 Gauri Shankar Goyal (Chartered Accountant)
(iv) Other bank officials PW18 Surinder Kumar Sabharwal (Union Bank of India, Khari Baoli Branch) PW24 S.K.Ahluwalia (State Bank of India Naya Bazar Branch) CC No. 07/2011 CBI Vs. Tara Chand Aggarwal etc. Page 7 of 91 PW28 Sudeer Wanchoo (State Bank of India , Karnal)
(v) Witnesses for proving alleged forgery PW2 Ashok Gupta (Chartered Accountant) PW4 Vikas Gupta (Chartered Accountant) PW7 Nagesh Kumar (Official from VAT Department).
(vi) Other witnesses PW9 S.D.Sharma (Sanctioning Authority) PW30 R.A.Yadav (Investigating Officer) PW31 Narender Kumar(GEQD) STATEMENTS OF ACCUSED AND DEFENCE WITNESSES 4.0 Statements of all accused persons were recorded u/s 313 Cr.P.C. in which they all pleaded innocence.
4.1 Accused Tara Chand Aggarwal admitted that M/s Krishna & Krishna Enterprises had applied for grant of cash credit facility but according to him, he had no knowledge about the documents furnished by the firm. According to him, he had no knowledge about the audited documents and his partners could answer that as it was their responsibility. He claimed that he was 7th class pass and had signed on the asking of his partners. His stance is that it was Mr. Satbir Sharma who was dealing with the bank. He did not desire to lead any evidence in defence.
4.2 Accused Satbir Sharma also did admit that their firm had applied for cash credit facility of Rs. 3 crores from PNB Shalimar Bagh. He also did acknowledge that documents had been submitted before the bank as per the CC No. 07/2011 CBI Vs. Tara Chand Aggarwal etc. Page 8 of 91 requirement of the bank. He, however, at the same time also claimed that some of the documents had been prepared by the bank officials themselves. According to him, none of the documents was forged. He supplemented that all such documents was rather obtained by his co-accused Tara Chand Aggarwal thereby contradicting him. He also asserted that all documents were even otherwise genuine and Sh. Ashok Kumar, Chartered Accountant has given a false statement before the Court under the pressure of CBI. According to him, there was no reason to cheat or defraud the bank as even otherwise the worth of the property, which had been mortgaged with the bank, was much more than the loan facility. According to him, one major sugar deal did not materialize and, therefore, they were left with no option but to trade in rice business. According to him, bank officials are also responsible for the mess in the account as the account was abruptly declared NPA. According to him, investigating officer of the case was annoyed with accused Hari Shankar Sharma who had filed a contempt application against IO and, therefore, a false case has been made on the basis of fabricated evidence. He also did not desire to lead any evidence in defence.
4.3 Accused Hari Shankar Sharma admitted that he was partner of M/s Krishna & Krishna Enterprises but according to him, he was kept in dark about the previous partnership firm being run under the same name and style in which accused Tara Chand Aggarwal and Satbir Sharma were already partners. He also claimed that he entered into partnership business as his previous business was in doldrums due to sealing of his factory premises. He asserted that he was not given any sort of financial or administrative control over the business of the firm. He also claimed that due to the fact that sugar deal with NCSCI did not materialize and due to the abrupt reduction of CC limit by the bank, he had to face proceedings before DRT and had to pay off the entire amount order to save his property. According to him, he had no CC No. 07/2011 CBI Vs. Tara Chand Aggarwal etc. Page 9 of 91 criminal intention and if at all his intention was malafide then he would not have put his property at stake and also would have retained financial control over the business. He got himself examined as defence witness by moving application u/s 315 Cr.P.C.
4.4 Accused Ravi Bharti claimed that he had accepted the documents submitted by the borrower firm on the basis of their face value as these were even otherwise found authenticated by CA and that he had followed all the guidelines of the bank and did not deviate from the standard procedure and thus did not commit anything wrong. It has been claimed by him that he was posted as Deputy Manager and he was working under the supervision and control of Chief Manager Sh. D.C. Sharma and prepared the appraisal report but the loan was sanctioned by Chief Manager. He also claimed that he had furnished necessary available information to the Chief Manager and it was the Chief Manager who had compiled the confidential reports. According to him, he had taken all the necessary precautions before recommending the loan. He denied gaining any gratification or pecuniary advantage. He also examined himself as DW1 in support of his such version.
RIVAL CONTENTIONS 5.0 Sh. Jagbir Singh, Ld Special PP has asserted that CBI has been able to prove its case to the hilt and all the witnesses have fully supported the case of CBI and all the important documents have been proved in accordance with the law. According to him, all the partners had knowingly and deliberately furnished bogus documents in order to obtain loan. Accused Ravi Bharti was mixed up with them and he also withheld material information related to accused Satbir Sharma and prepared false reports. He also obtained graft of Rs. one lac and permitted diversion of funds. He also CC No. 07/2011 CBI Vs. Tara Chand Aggarwal etc. Page 10 of 91 exceeded his limits and his acts and omissions clearly reveal his mal- intention.
5.1 Sh. R. M. Jha, Learned defence counsel for A3 Hari Shankar Sharma has asserted that there is nothing to infer involvement or complicity of accused Hari Shankar.
5.2 According to him, Hari Shankar was, admittedly, made partner in M/s Krishna & Krishna Enterprises but only because the other two partners wanted his financial assistance. It was only on the basis of the assurance given by his partners that accused Hari Shankar put his property at stake by keeping the same as collateral with the bank while praying for loan. According to Sh. Jha, it is very much perceptible from the record that no cheque of any nature whatsoever was ever signed by accused Hari Shankar and he never operated the loan account. If, at all, he was having any ill intention or was sharing any conspiracy with his partners or for that matter with bank officials, he would have rather kept financial control with him and would have taken charge of signing the cheques as well but nothing of that sort was done by him.
5.3 According to Sh. Jha, accused Hari Shankar Sharma seems to be a victim of circumstances as he has been misled by his partners and therefore, he is entitled to general defence as envisaged u/s 90 of IPC.
5.4 Sh. Jha has also claimed that there is nothing on record which may disclose that he was involved with any forgery. He never knew that anything mischievous was going to happen or that there was any sort of fabrication and conspiracy. Merely because he was made partner for providing financial support, he cannot be held criminally liable automatically.
CC No. 07/2011 CBI Vs. Tara Chand Aggarwal etc. Page 11 of 915.5 It has also been claimed that since his property was hypothecated, he had no option but to reclaim the same from the bank and therefore, he had to shell out a sum of Rs.2.93 crores and while such payment was made by him, no other partner made contribution of even a single penny.
5.6 Sh. Jha has also contended that accused Ravi Bharti too has been falsely implicated in the present matter. His role was limited to preparation of appraisal note. As per the banking system, the control was completely mechanized and it was the sole prerogative of the branch incumbent to sanction the loan or to deny the loan. Sh. D. C. Sharma was the branch incumbent who ultimately sanctioned the loan in question but for the reasons best known to CBI, he was not made accused in the present case. Rather, he has been cited as a prosecution witness.
5.7 It has also been argued that during the tenure of accused Ravi Bharti at Shalimar Bagh branch, there was no divergence of funds and even the stocks were duly verified.
5.8 Sh. Jha has contended that Ravi Bharti did not violate any rule or regulation of the bank and all the documents which had been furnished by M/s Krishna & Krishna Enterprises were self-attested and apparently there was no reason to disbelieve those documents.
5.9 As regards the allegation of his taking a sum of Rs. One lac, Sh. Jha has vehemently asserted that Ravi Bharti never ever derived any sort of pecuniary advantage. He had merely directed the withdrawal of Rs. one lac CC No. 07/2011 CBI Vs. Tara Chand Aggarwal etc. Page 12 of 91 and such amount was, same day, handed over to accused Satbir Sharma. It has also been argued that Satbir Sharma has himself also admitted such fact in his statement u/s 313 Cr. PC. Merely because accused Ravi Bharti had deposited a sum of Rs.1 lac in his own personal saving accounts next day, it cannot be automatically inferred that it was the same sum of Rs.1 lac more so when Satbir Sharma has himself admitted that he received that very sum of Rs.1 lac same day. It has also been argued that CIBIL report was generated properly and no witness has claimed to the contrary.
5.10 Accused Ravi Bharti, admittedly, knew Satbir Sharma as Satbir Sharma was having an account under the name and style of M/s Guruji Trading Company with Mall Road Branch of PNB and at that relevant time, Ravi Bharti was posted at Mall Road branch and Ravi Bharti had then recommended loan facility of Rs.300 lacs. According to Sh. Jha, such account of M/s Guruji Trading Company was running satisfactorily during the tenure of Ravi Bharti and when Ravi Bharti got transferred from Mall Road and loan application was moved by M/s Krishna & Krishna Enterprises, accused Ravi Bharti himself disclosed all such facts related to account of M/s Guruji Trading Company to Sh. D. C. Sharma. It has also been argued that as per the instructions of D. C. Sharma, he had earlier, on one occasion, requested Satbir Sharma to participate in auction and therefore, Sh. D. C. Sharma also knew accused Satbir Sharma. Sh. Jha has contended that even if such fact of availing facility of Rs.300 lacs from PNB Mall Road branch by M/s Guruji Trading Company was not mentioned in confidential report, it did not make any difference as D.C. Sharma very well knew about such fact and despite that he had sanctioned the loan and therefore, no criminality can be found on the part of Ravi Bharti or in his appraisal report.
CC No. 07/2011 CBI Vs. Tara Chand Aggarwal etc. Page 13 of 915.11 Sh. S. P. M. Tripathi has defended A1 Tara Chand Aggarwal. According to Sh. Tripathi, Tara Chand Aggarwal was earlier proprietor of one firm M/s Shyam Lal Pawan Kumar which came into existence way back in 1975 in Naya Bazar. It was dealing in sugar and A2 Satbir Sharma was working as accountant in said firm. Business of said firm, later on in the year 1998, came to a standstill due to internal family dispute in the family of A1 Tara Chand Aggarwal and, therefore, Tara Chand Aggarwal was virtually on the roads having no business. A2 Satbir Sharma then came up with a proposal and requested him that a firm be floated on the basis of the experience which Tara Chand Aggarwal was possessing and accordingly in the year 2003, a partnership firm with the name of M/s Krishna & Krishna Enterprises came into existence in which they both became partners.
5.12 It is also not in dispute that loan application was moved by M/s Krishna & Krishna Enterprises in which even Hari Shankar Sharma was a partner. However, according to Sh. Tripathi accused Tara Chand Aggarwal was never ever having any control over the business of firm M/s Krishna & Krishna Enterprises. He was having no financial and administrative control and was not involved in day-to-day affairs of the business of the firm and rather it was Satbir Sharma who was controlling the firm right from the inception i. e. since 2003.
5.13 It has also been argued that most of the documents which were submitted before the bank were not even signed by Tara Chand Aggarwal and rather those were bearing signatures of accused Satbir Sharma which fact also indicates that Satbir Sharma was at the helm of the affairs. Reference has also been made to the testimony of Sh. G. S. Goyal in order to bring home the fact that it was Satbir Sharma only who was meeting the auditors CC No. 07/2011 CBI Vs. Tara Chand Aggarwal etc. Page 14 of 91 and chartered accountants in connection with the business of the firm. It has also been argued that there was never any intention, knowledge or mens rea at any point of time to cheat the bank in any manner whatsoever and there was no element of conspiracy either.
5.14 Sh. Tripathi has further contended that Tara Chand Aggarwal never signed any cheque and was not beneficiary in any sense as he had no connection with any of the firm which had been dealing with M/s Krishna & Krishna Enterprises.
5.15 It has also been argued that cash credit limit was arbitrarily and illegally reduced later on whereas even during the relevant inspection, the stock worth more than Rs.70 lacs was found lying in the godown and even as per the sanction order, the borrower was only required to keep the stock worth 25% of the total CC limit. According to Sh. Tripathi, due to such arbitrary reduction of CC limit, the business hampered as various cheques were not accepted by the bank and, therefore, the borrower firm was not in a position to honour the trading commitments.
5.16 Sh. Tripathi has contended that accused Tara Chand Aggarwal cannot be hauled up merely due to the fact that he was partner in the firm. According to him, there is nothing on record which may suggest his criminality and merely because as partner he had signed the loan application, he cannot be held liable more so when there is nothing on record to show that he had obtained any advantage-pecuniary or otherwise. It has been rather argued that he is victim of circumstances and merely relied upon the skills of Satbir Sharma. It has also been argued that even the report of CFSL does not indict him in any manner whatsoever and he is not liable or responsible for preparing any of the alleged forged documents. Moreover, there is no CC No. 07/2011 CBI Vs. Tara Chand Aggarwal etc. Page 15 of 91 justification coming from the side of prosecution or investigating agency as to why the seal of M/s Ashok Om Company was not seized during the investigation and if seized, why the same was not sent to forensic laboratory for scientific comparison.
5.17 Sh. Rajiv Khosla, Learned defence counsel for accused Satbir Sharma has asserted that Satbir Sharma is completely innocent and due to the arbitrary action of bank official, the business of the firm came to naught. According to him, there was never any intention to cheat the bank. According to him, when property worth three crores had been kept as collateral, the interest of the bank stood fully secured automatically. It was open to bank to realize the amount by selling the same if at all, it was felt that there was any element of loss. According to him, bank had illegally reduced the limit which caused serious losses to the firm and firm was unable to fulfill its commercial commitments. Even otherwise, such limit could not have been reduced without giving prior notice to firm. He has claimed that minor irregularities and deviations cannot make it to be a case of cheating and misconduct more so when the entire money was paid back much before the filing of challan.
5.18 Reliance has also been placed on various judgments which I would advert to in the last.
EVALUATION OF EVIDENCE 6.0 I have considered the aforesaid contentions very anxiously and minutely scrutinized the documents proved on record. I have also been taken through the testimony of witnesses. I have also to keep in mind the facts already admitted by accused in their statements.
CC No. 07/2011 CBI Vs. Tara Chand Aggarwal etc. Page 16 of 916.1 Let me weigh up the evidence in the backdrop of rival contentions and evaluate the role of each accused.
ROLE AND INVOLVEMENT OF ACCUSED RAVI BHARTI 7.0 Sh. Jha has contended that accused Ravi Bharti has been made a scapegoat and the most important bank official who had, in fact, sanctioned the loan has been illegally and arbitrarily let off and has rather been cited as a material prosecution witness 7.1 It is not in dispute that accused Ravi Bharti was posted as Deputy Manager (Scale-I Officer) in Shalimar Bagh Branch. There were three officers above him i.e. Sh. Y.R. Sharma (Manager), PW21 Sh. V.K. Gupta (Senior Manager) and PW11 Sh. D.C. Sharma (Chief Manager). In connection with the present loan application, accused Ravi Bharti was, however, under the direct control of Branch Incumbent i.e. PW11 Sh. D.C. Sharma, Chief Manager.
7.2 Sh. Jha has contended that as per the Punjab National Bank Officers Employee's (Conduct) Regulations 1977, no bank official could have acted other than in his best judgment except when he was acting under the direction of his superior official. Sh. Jha has vehemently stressed that accused Ravi Bharti did not deviate from any rule, regulation, guideline or circular of the Bank and prepared the appraisal note with utmost sincerity and honesty and placed the same before the Chief Manager.
7.3 It has already been noticed above that at the time of admission/ denial of documents, accused Ravi Bharti admitted various documents. Most of the documents related to loan facility are contained in D-5 and most of CC No. 07/2011 CBI Vs. Tara Chand Aggarwal etc. Page 17 of 91 these have been admitted by him.
7.4 As per the crux of the allegations appearing in charge-sheet, lapses on the part of accused Ravi Bharti can be classified as under:-
A) Pre-sanction lapses:
(i) Accepting forged documents.
(ii) Preparing false confidential reports.
(iii) Improper generation of CIBIL reports.
(iv) Improper Credit Risk Rating done on the basis of
balance-sheet pertaining to a proprietorship firm.
B) Post-sanction and post distribution lapses:
(i) Permitting diversion of funds and self-withdrawals.
(ii) Exceeding passing limit.
(iii) Non-verification of stock.
(iv) Accepting gratification.
7.5 Loan application is Ex. A-20 which bears the signatures of all the
three partners. Partnership business was trading in sugar and wanted loan for expansion of business. Property no. C-1/24A, Yamuna Vihar, Delhi was offered as collateral security. There is no doubt that such property was free from all encumbrances. There was no fraud or cheating in connection with property documents. I have seen all the material documents contained in D-5 which were submitted by the borrower firm while seeking CC facility. These are as under:
S. No. Description of Documents Exhibit Number D & Page Number 1 Valuation report of property of Yamuna Vihar. PW11/A D-5 (321) 2 Telephone bill of accused Satbir Sharma. PW11/D D-5 (322) CC No. 07/2011 CBI Vs. Tara Chand Aggarwal etc. Page 18 of 91 3 Property tax receipt of Satbir Sharma. PW11/E D-5 (323) 4 Acknowledgment from Income Tax Department A-21 D-5 (337) regarding ITR of Satbir Sharma.
5 Copy of PAN card of Satbir Sharma. A-22 D-5 (339) 6 Form 3CB of said firm having forged stamp of Ashok PW2/A D-5 (345-357) Om & Company, Chartered Accountant and forged signatures of PW2 Ashok Kumar.
7 Form 3CB having forged stamp of Ashok Om & PW2/B D-5 (358-375) Company and forged signatures of PW2 Ashok Kumar.
8 Projected balance-sheet as on 31.03.2008 of M/s PW2/C D-5 (372) Krishna & Krishna Enterprises having forged stamp of Ashok & Om Company and forged signatures of PW2 Ashok Gupta.
9 Projected trading, profit & loss account for the year PW2/D D-5 (373) ending 31.03.2008 of said firm having forged stamp of Ashok & Om Company and forged signatures of PW2 Ashok Gupta.
10 Provisional balance-sheet of M/s Krishna & Krishna PW2/E D-5 (374) Enterprises having forged stamp of Ashok & Om Company and forged signatures of PW2 Ashok Gupta.
11 Provisional trading, profit & loss account from PW2/F D-5 (375) 01.045.2007 to 31.12.2007.
12 Assessment working capital requirement form-II PW2/G D-5 (425-427) having forged stamp of Ashok & Om Company and forged signatures of PW2 Ashok Gupta.
13 Assessment working capital requirement form-III PW2/H D-5 (428-431) having forged stamp of Ashok & Om Company and forged signatures of PW2 Ashok Gupta.
14 Assessment working capital requirement form-IV PW2/I D-5 (432) having forged stamp of Ashok & Om Company and forged signatures of PW2 Ashok Gupta.
15 Assessment working capital requirement form-V PW2/J D-5 (433) having forged stamp of Ashok & Om Company and forged signatures of PW2 Ashok Gupta.
16 Form 3CB dated 31.05.2008 having forged stamp of PW2/K D-5 (395) Ashok & Om Company and forged signatures of PW2 Ashok Gupta.
17 Form 3CB dated 20.06.2007 having forged stamp of PW2/L D-5 (396) Ashok & Om Company and forged signatures of PW2 Ashok Gupta.
18 Form 3CB dated 20.06.2007 having forged stamp of PW2/M D-5 (397) Ashok & Om Company and forged signatures of PW2 Ashok Gupta.
19 Telephone bill of Satbir Sharma. PW11/H D-5 (378) 20 Electricity bill of Satbir Sharma. PW11/I D-5 (379) CC No. 07/2011 CBI Vs. Tara Chand Aggarwal etc. Page 19 of 91 21 Income Tax Return verification form of said firm. PW11/J D-5 (380) 22 Form 3CB having forged signatures of PW4 Vikas PW4/A D-5 (383) Gupta, Chartered Accountant.
23 Form 3CB having forged signature of PW4 Vikas PW4/B D-5 (383-390) Gupta running in 8 pages.
24 Balance-sheet of said firm for assessment year PW4/C D-5 (391) 2008-09 having forged signatures of PW4 Vikas Gupta and his forged stamp.
25 Trading, profit & loss account of said firm for the year PW4/D D-5 (392) ending 31.03.2008 having forged signatures of Vikas Gupta and his forged stamp.
26 List of sundry creditors having forged signatures of PW4/E D-5 (393) PW4 Vikas Gupta.
27 List of unsecured loans of M/s Krishna & Krishna PW4/F D-5 (394) Enterprises as on 31.03.2008 having forged signatures and stamp of Vikas Gupta.
28 Income Tax Return verification form of Satbir Sharma PW11/G D-5 (376) for assessment year 2008-09.
29 Income Tax Department provided Return of Hari PW11/K D-5 (434-437) Shankar Sharma.
30 Income Tax Return verification form of Satbir Sharma PW11/L D-5 (438) for the period 2008-09.
31 Copy of PAN Card of Sushila Devi with ITR of Sushila PW11/M D-5 (440-447) Devi.
32 Acknowledgment of IT Returns/PAN Card / electricity PW11/N D-5 (448-453) bill of accused Tara Chand Aggarwal.
33 Rent receipt in favour of tenant M/s Krishna & Krishna PW11/O D-5 (454) Enterprises.
34 BSES Bill in the name of Tara Chand Aggarwal. PW11/P D-5 (455) 35 Hypothecation agreement dated 19.03.08 by firm in PW11/Q D-4 (166-181) favour of bank.
36 Agreement of guarantee dated 19.03.08 of Sushila A-3 D-4 (182) Devi.
37 Transfer vouchers dated 31.03.08. A-1 & A-2 D-4 (162-165) 38 Hypothecation goods & book debts dated 19.03.2008 PW11/S D-4 (189-201) of firm in favour of PNB Shalimar Bagh Branch. 39 Agreement regarding purchase of cheques dated PW11/T D-4 (202) 19.03.08 signed by all three partners, namely, accused Tara Chand Aggarwal, Satbir Sharma and Hari Shankar Sharma.
40 Monthly VAT Return of M/s Krishna & Krishna PW7/F to F13 D-5 (458-470) Enterprises in form DVAT-16 with related acknowledgments. These were found to be forged. 41 Copy of PAN Card of your co-accused Tara Chand A-11 D-5 (265-266) Aggarwal.
42 Confidential Report of Tara Chand Aggarwal. A-12 D-5 (267-268) CC No. 07/2011 CBI Vs. Tara Chand Aggarwal etc. Page 20 of 91 43 Statement of assets and liability of Tara Chand A-13 D-5 (269) Aggarwal which bears his photograph and signature also.
44 Confidential Report of Satbir Sharma. A-14 D-5 (270-271) 45 Statement of assets and liability of Satbir Sharma A-15 D-5 (272) which contains his photograph and signature also. 46 Confidential Report of Sushila Devi. A-16 D-5 (273-274) 47 Statement of assets and liability of Sushila Devi which A-17 D-5 (275) contains her photograph and signature.
7.6 Let me now come to the aforesaid alleged lapses on the part of accused Ravi Bharti.
ACCEPTING FORGED DOCUMENTS 7.7 According to Sh. Jagbir Singh, learned SPP for CBI, accused Ravi Bharti was hand in glove with all the three accused persons. He did not pore over the documents in any manner whatsoever. He was very injudicious and incautious in his approach and his such casual attitude rather clearly signifies that he was acting in connivance with his co-accused and they all were sharing common intention to cheat the bank. Sh. Singh has argued that when the documents were furnished, various documents bearing seal of M/s Ashok Om & Company were submitted and it was attempted to show that M/s Ashok Om & Company, Chartered Accountants had prepared balance-sheet and statement of account for M/s Krishna & Krishna Enterprises and had been their auditors. However, all such documents were found to be forged. Accused Ravi Bharti did not try to ascertain the genuineness of these documents and accepted these documents without any murmur. Sh. Singh has claimed that there are similarly other documents which also bear forged stamp and signatures of another chartered accountant i.e. Sh. Vikas Gupta.
CC No. 07/2011 CBI Vs. Tara Chand Aggarwal etc. Page 21 of 917.8 Besides aforesaid documents, Sh. Jagbir Singh has contended that even monthly VAT Returns submitted by the borrower in the branch, while applying for cash credit facility, were found to be forged. For any firm having turnover beyond Rs.5 crores, monthly returns were required to be filed. It has been argued by Sh. Singh that said firm had turnover of less than Rs. 5 crores and, therefore, as per the prescribed norms, said firm had actually filed quarterly returns which fact has been corroborated by Sh. Goyal, CA as well as by Mr. Nagesh of VAT office. In order to unjustifiably portray that its turnover was more than Rs. 5 crores, bogus monthly returns were prepared and even bogus acknowledgments issued by governmental agency were created. According to Sh. Singh, Ravi Bharti should have made a comprehensive inquiry with respect to all such documents and should not have accepted the same blindly.
7.9 Sh. Jha has, on the other hand, refuted aforesaid contentions. His assertion is two-fold. Firstly, there was no rule, regulation or circular of the bank which prohibited accused Bharti from accepting these documents on the basis of their face value. Secondly, even otherwise, it was not possible to detect any sort of forgery from the bare perusal of these documents as these were having stamp/seal and signatures of CA and were also self-attested by the partners of the borrowing firm. Sh. Jha has also supplemented that even the report of CFSL does not indict any partner for the alleged forgery and, therefore, also it cannot be, even otherwise, held that all such documents were forged documents.
7.10 Let me now refer to the testimony of relevant witnesses on this score.
CC No. 07/2011 CBI Vs. Tara Chand Aggarwal etc. Page 22 of 917.11 PW2 Sh. Ashok Kumar happens to be proprietor of M/s Ashok Om & Company. He out-rightly claimed that he did not know any firm with the name of M/s Krishna & Krishna Enterprises. He also claimed that he did not know anything about its composition/ partners and never met them and dealt with them. He also claimed that he had never done any auditing pertaining to said firm M/s Krishna & Krishna Enterprises. He was shown all the relevant documents i.e. Ex. PW2/A to Ex. PW2/M and he claimed that these were neither bearing his initials nor his stamp. It was suggested to him that these documents were bearing his stamp/seal and his initials. He, however, brushed aside such suggestion claiming same to be incorrect. As per the request made by the defence, PW2 Ashok Kumar was asked to bring his stamp/seal which he had been using. He did bring that which was found to be different than the one appearing on forged documents. It was then suggested to him that he had never been using such different seal and got the same prepared subsequently. Such suggestion was also labelled by him as incorrect. He also brought one balance-sheet of M/s Kamal Enterprises in order to show that he used to use seal of that type only during the relevant period. He also deposed that he did not remember whether during investigation his seal was seized by CBI or not.
7.12 PW4 Sh. Vikas Gupta has also supported the case of prosecution on this score and has denied his seal and signatures on Ex. PW4/A to Ex. PW4/F. He claimed that he had never signed any document related to M/s Krishna & Krishna Enterprises. I have seen his cross- examination. Defence has attempted to show that he himself had prepared and fabricated these documents at the instance of his brother-in-law Sh. Ram Niwas Gupta who wanted to help Sh. Tara Chand Aggarwal and Sh. Satbir Sharma. Thus, according to the suggestion put to this witness by Tara Chand Aggarwal, these documents were prepared by none other than Sh. Vikas CC No. 07/2011 CBI Vs. Tara Chand Aggarwal etc. Page 23 of 91 Gupta and were, therefore, genuine and not forged.
7.13 I have scrutinized all these allegedly forged documents i.e. Ex. PW2/A to Ex. PW2/M and Ex. PW4/A to Ex. PW4/F and, in connection with the role of accused Ravi Bharti, I would only comment that it was not feasible and possible for any Loan Processing Officer to have raised his eyebrows with respect to their authenticity merely on the basis of a cursory look upon those. These documents bear seal/stamp and also initial of chartered accountants and merely because the complete address and membership number of such chartered accountant does not stand mentioned therein, such fact by itself will not be said to be sufficient to raise doubt with respect to the accuracy of such documents. Moreover, it is not the case of prosecution that address of M/s Ashok Om & Company is not mentioned anywhere. In fact Ex. PW2/B happens to be on the letter-head of M/s Ashok Om & Company on which the complete address of the chartered accountant has been found mentioned. Interestingly, Sh. G.S.Goyal, Chartered Accountant, a prosecution witness has himself admitted in his deposition that it was not mandatory for any Chartered Accountant to mention his Membership number on audited documents. So much so, he supplemented that he himself had also not mentioned his such number on the documents which he had audited for M/s Krishna & Krishna Enterprises.
7.14 It will be handy to make a mention about the testimony of PW11 Sh. Dewan Chand Sharma. In his examination-in-chief, he did not utter even a single word with respect to there being any lapse on the part of accused Ravi Bharti. In his cross-examination, he categorically admitted that there were no guidelines for getting balance-sheets further authenticated from any chartered accountant and he also admitted that during that period, the documents/information submitted by the borrower, as attested by chartered CC No. 07/2011 CBI Vs. Tara Chand Aggarwal etc. Page 24 of 91 accountant, used to be accepted on their face value in good faith. He, however, claimed that in case of doubt, Branch Manager/Loan Manager could go for verification of the documents. He, however, claimed that in the present case, Loan Manager had verified all the documents. It means that according to PW11 Dewan Chand Sharma, there was no illegality or irregularity in accepting those documents on the basis of their face value.
7.15 PW21 V.K. Gupta was posted as Senior Manager during that period and he has also not been able to substantiate the case of prosecution as he came up with evasive answer and claimed that he could not answer whether report of chartered accountants used to be accepted those days on its face value. On the other hand, according to him, it was correct that documents submitted by the borrower firm were duly scrutinized by accused Ravi Bharti and were found correct.
7.16 Sh. Jha has strongly relied upon one letter/circular dated 20.03.2009 issued by PNB (Risk Management Division) whereby it was ordered that the confirmation about the genuineness of the signatures on the documents related to chartered accountant be sought from the concerned CA/firm. All the bank officials were accordingly advised to cross-check such details from the website of the institute also i.e. www.icai.org. to ensure the authenticity of such documents. Naturally, since this circular was issued on 20.03.2009, it has to be automatically inferred that prior to 20.03.2009, bank officials could have accepted such documents on the basis of their face value and there was no requirement of seeking any further authentication from anywhere. CBI has also not placed on record any circular of prior period to show to the contrary.
CC No. 07/2011 CBI Vs. Tara Chand Aggarwal etc. Page 25 of 917.17 PW22 Sh. G.S. Bhatt had investigated the matter as he was posted as Chief Internal Auditor during the relevant time and even he admitted in his cross-examination that it was correct that generally loan application and the documents attached therewith and authenticated by CA used to be accepted on their face value prior to 20.03.2009 and it was a normal and standard practice in the bank prior to 20.03.2009.
7.18 I, therefore, find much force in the contention raised by Sh. Jha in this regard.
7.19 It would be appropriate to deal with the report of GEQD also.
7.20 PW31 Sh. Narender Kumar had examined the documents in question and has proved his report as Ex. PW31/A1 and Ex. PW31/B1. It was very important to scientifically ascertain as to who had signed the audit report, balance-sheet etc. purportedly signed by M/s Ashok Om & Company. These questioned signatures are at Q10 to Q37, Q85, Q88 and Q173 to Q181. Similarly, with respect to the documents purportedly audited by Sh. Vikas Gupta, questioned signatures are Q89 to Q101, Q219 & Q231. It will be imperative to mention here that investigating agency had also taken the specimen handwriting and signatures of Sh. Ashok Kumar (S70 to S79) and of Sh. Vikas Gupta (S104 to S123). This was ostensibly to rule out the fact that they had signed those alleged forged documents.
7.21 Unfortunately, GEQD could not give any opinion with respect to aforesaid questioned signatures even in comparison with genuine signatures of these two persons i.e. Sh. Ashok Kumar and Sh. Vikas Gupta. This indicates that there is a remote possibility that these alleged forged documents might have been signed by them as well. Thus, the report of CC No. 07/2011 CBI Vs. Tara Chand Aggarwal etc. Page 26 of 91 GEQD does not give any sort of boost to the case of prosecution though fact remains that Sh. Ashok Kumar and Sh. Vikas Gupta disowned their respective signatures on such documents.
7.22 Be that as it may, fact remains that it becomes very much apparent that there was no embargo in accepting such documents on the basis of their face value.
7.23 Sh. Jha has contended that alleged forged VAT Returns had been furnished by the borrower firm and since all the three partners had also countersigned these Returns, it cannot be said that accused Ravi Bharti was at fault while accepting such monthly VAT Returns as correct. This aspect will be dealt in the latter part of the judgment.
GENERATION OF CIBIL REPORTS 7.24 Sh. Jagbir Singh, learned SPP for CBI has contended that accused Ravi Bharti did not, deviously, generate CIBIL report in the desired manner. According to him, if report had been generated properly by feeding all the requisite details, system would have immediately displayed that accused Satbir Sharma had earlier also availed loan facility from Mall Road Branch of PNB. Moreover, according to Sh. Jagbir Singh, accused Ravi Bharti already knew accused Satbir Sharma as Satbir Sharma, as proprietor of M/s Guruji Trading Company, had availed loan facility from Mall Road Branch, New Delhi of PNB and at the relevant time, Ravi Bharti himself was posted in Mall Road Branch and had dealt with such account of M/s Guruji Trading Company.
CC No. 07/2011 CBI Vs. Tara Chand Aggarwal etc. Page 27 of 917.25 Sh. Jha has admitted that Ravi Bharti knew Satbir Sharma. There is no dispute that Ravi Bharti was earlier posted at Mall Road Branch and he himself had recommended loan facility of Rs. 300 lacs to M/s Guruji Trading Company. However, according to him, during the tenure of Ravi Bharti, such account was running satisfactorily and when Ravi Bharti got transferred to Shalimar Bagh Branch, he himself revealed all these facts to Sh. D.C. Sharma, Chief Manager. So much so, on one previous occasion, he had brought Satbir Sharma to Shalimar Bagh Branch as in connection with one auction, since the purchasers were not coming forward to buy the property, Sh. D.C. Sharma himself had asked Ravi Bharti to call all the parties of Shalimar Bagh Branch as well as of his previous Branch of Mall Road who were having business in Naya Bazar, Chandni Chowk and Sadar Bazar areas. Accused Ravi Bharti accordingly prepared a list of such customers and handed over such list to Sh. D.C. Sharma which list also included the name of Satbir Sharma. Thereafter, Sh. D.C. Sharma discussed with all such parties and advised them to participate in the auction and accordingly accused Satbir Sharma agreed to participate in the auction. Thus, according to Sh. Jha, Ravi Bharti had not hidden anything and rather had taken Sh. D.C. Sharma in confidence and CIBIL Reports were also generated properly as per bank's prescribed guidelines and even the prosecution witnesses have claimed that there was no illegality in generation of CIBIL report.
7.26 I have given my thoughtful consideration to aforesaid contention.
7.27 CIBIL stands for Credit Information Bureau (India) Limited. It is a credit information company which was founded in August 2000 and plays a very dominant role in India's finance system. It primarily collects and maintains the records of loans etc. CIBIL receive such details from the banks and other lenders and accordingly a data base is created. When such data CC No. 07/2011 CBI Vs. Tara Chand Aggarwal etc. Page 28 of 91 base is accessed by any bank, it helps such bank to know whether any intending borrower had earlier also availed any loan facility or not.
7.28 It is not in dispute that as per the circular issued by PNB, it is mandatory for any Branch of PNB to draw Credit Information Report (CIR) from CIBIL. For any partnership account, CIR is required to be drawn for each individual partner also. Every Branch is also required to maintain record of CIR drawn from CIBIL data base and such CIR is deemed to be part of the proposal. Naturally, in case no adverse feature is noticed in CIR, it helps the borrower only. Bank official is required to feed the requisite information into the system so as to fetch and retrieve any information related to past loans, if any by such intending borrowers. Such CIR acts as supporting tool at the time of taking decision with respect to grant of sanction. As per circular placed on record by the defence as mentioned in list Ex. PW1/C, it is required and mandatory to feed information in at least six fields i.e. consumer name, gender, date of birth, current address, State/UT/Pin Code.
7.29 CIBIL reports, generated in the present case, have been collectively exhibited as Ex. PW11/B. 7.30 As regards Satbir Sharma, search was made with the name of "Satbir Sharma" City "Delhi".
7.31 No further details were fed by Ravi Bharti.
7.32 I would again lay stress that Ravi Bharti already knew Satbir Sharma. He also knew that he, as proprietor of M/s Guruji Trading Company, had availed CC limit of Rs. 300 lacs from Mall Road Branch of PNB, New Delhi. So much so, he himself had recommended grant of such CC limit for CC No. 07/2011 CBI Vs. Tara Chand Aggarwal etc. Page 29 of 91 M/s Guruji Trading Company. Ex. PW29/A (D-66) is appraisal note prepared by Ravi Bharti. Such appraisal note is dated 25.05.2007. Earlier CC limit of Rs. 220 lacs was sanctioned. However, such facility was further enhanced to Rs. 300/- lacs as per the recommendation of Ravi Bharti as contained in Ex. PW29/C (D-57) dated 14.09.2007.
7.33 Thus, unmistakably, Sh. Ravi Bharti knew accused Satbir Sharma very well. He still did not bother to mention such fact either in the confidential report or did not attempt to refine search while drawing CIR from CIBIL. He has baldly asserted that he had taken Sh. D.C. Sharma in confidence and told him about such fact well in advance. Fact, however, remains that suggestions put to PW11 Sh. D.C. Sharma do not demonstrate so at all. Mr. Sharma has also not come to the rescue of Ravi Bharti on this score.
7.34 Quite shockingly, PW11 Sh. D.C. Sharma has not expressed any doubt or suspicion with respect to generation of CIBIL report. PW21 Sh. Vijay Kumar Gupta, Senior Manager has also deposed that he did not find any defect about the manner of generation of CIBIL report but that would not mean that Ravi Bharti had generated the report properly and was liable to be exonerated. I cannot be oblivious of the fact that Sh. Ravi Bharti, deliberately, held back the vital information related to Satbir Sharma. He should have fed the complete information in the system. Moreover, he should have also himself mentioned in his appraisal note and in confidential reports that Satbir Sharma had already availed cash credit facility of Rs. 300 lacs from another branch of PNB. His holding back such facts shows his malafide intention.
7.35 PW8 Neha has also confirmed that CIBIL reports used to be generated by accused Ravi Bharti. PW22 Sh. Govind Sarup Bhatt, who was CC No. 07/2011 CBI Vs. Tara Chand Aggarwal etc. Page 30 of 91 posted as Chief Internal Auditor, PNB, Nehru Place, New Delhi, has categorically deposed that CIBIL reports drawn from system were not taken out properly by the Processing Manager and the previous track record of the borrowers was not scrutinized. There is no suggestion to the contrary to PW22 Sh. Govind Bhatt.
7.36 I have seen the testimony of PW20 Sanjeev Sharda. He has also deposed that accused Ravi Bharti did not refine the search. He has also claimed in his cross-examination that further particulars like PAN card, voter ID, driving licence, ration card, passports etc. can also be fed for generating CIBIL report. He also claimed that generation of CIBIL report was the responsibility of Processing Officer and even password used to be usually with Loan Processing Officer. It was suggested by Sh. Jha that in Shalimar Bagh Branch, such CIBIL report used to be generated by clerks and not by Processing Officer. It means that, as per Ravi Bharti, even clerks knew the password. Be that as it may, I am convinced that it was the prime duty of Loan Officer to generate CIBIL report. In the present case, CIR was not generated prior to sanction and made part of proposal. Moreover, subsequent generation of report was half-baked which apparently smacks of malafide.
PREPARATION OF FALSE CONFIDENTIAL REPORTS 7.37 According to Sh. Jagbir Singh, accused Ravi Bharti was under
obligation to prepare authentic and factually correct confidential reports. Sh. Singh has claimed that these confidential reports play a very important role at the time of sanctioning of loan but apparently for some ulterior motive, Sh. Ravi Bharti gave a damn to such all important task and prepared false reports at the asking of his co accused.CC No. 07/2011 CBI Vs. Tara Chand Aggarwal etc. Page 31 of 91
7.38 I have seen all these confidential reports very carefully and in column no.7 names of those persons have been mentioned who gave positive feedback with respect to the means and capabilities of the accused firm, its partners and also of Sushila Devi.
7.39 Confidential reports are as per following details:-
Sl. No. Name Ex. No. Report sought from 1 M/s Krishna & Krishna Enterprises A9 Kapil Gupta & Ramphal Gupta 2 Hari Shankar Sharma A10 Ramphal Gupta 3 Tara Chand Aggarwal A12 Ramphal Gupta 4 Satbir Sharma A14 Ramphal Gupta 5 Sushila Devi A16 Ramphal Gupta 7.40 Sh. Jha has contended that Ravi Bharti had only prepared a
rough appraisal note on the basis of documents made available to him and as per the instructions of Sh. D. C. Sharma, the Chief Manager. According to him, even the confidential reports had been prepared and compiled by none other than Sh. D. C. Sharma. In this regard, it would be important to mention that when these confidential reports were put to Ravi Bharti in his statement u/s 294 Cr. PC, he admitted the correctness of these confidential reports and did not, at all, attempt to clarify, at that time, that these confidential reports had been prepared and compiled by D. C. Sharma. His statement dated 14.10.2011 u/s 294 Cr. PC is conspicuously silent about any such assertion and rather he admitted before the court that these reports be read in evidence without formal proof. Needless to say that these reports bear his signatures as 'credit investigator' and also of Sh. D. C. Sharma as 'officer incharge'. As 'credit investigator', it was the primary duty of accused Ravi CC No. 07/2011 CBI Vs. Tara Chand Aggarwal etc. Page 32 of 91 Bharti to prepare the confidential reports as per the factual matrix and he was not supposed to succumb to the pressure of anyone. Moreover, it has nowhere been suggested to PW11 D. C. Sharma that such confidential reports had been prepared and compiled by him and not by Ravi Bharti.
PW11 D. C. Sharma, in his cross examination, rather claimed that these CRs had been prepared by Ravi Bharti and he (D. C. Sharma) only countersigned such reports.
7.41 Sh. Jha has strongly relied upon the guidelines mentioned in Book of Instructions on Loans of Punjab National Bank. I have seen such guidelines as contained in Ex.DW1/C (collectively) and even in such guidelines, it has been mentioned that the compilation of confidential reports (CRs) entails due diligence exercise as it helps the bank to verify antecedents of borrowers besides acting as a post sanction follow up detail.
7.42 If these confidential reports are prepared in a casual manner then it may certainly expose the bank to a potential risk. I can understand that in such a situation any credit investigator is not required to enter into in-depth and comprehensive enquiry but as a bare minimum, it is must for any such credit investigator to at least make personal enquiries from such persons to re-assure about the credit worthiness of the borrower. These reports are required to be made by the credit investigator independently and completely uninfluenced by the borrower. These reports should be compiled with utmost possible accuracy. Sh. Jha has contended that as per said guidelines, the incumbent incharge can depute a member of the staff to assist him as credit reporter but the responsibility for the compilation and the authenticity of the details given in the reports is to be that of the incumbent incharge and, therefore, even if the information was gathered by Sh. Ravi Bharti, it is branch incumbent Sh. D. C. Sharma who can be held exclusively CC No. 07/2011 CBI Vs. Tara Chand Aggarwal etc. Page 33 of 91 responsible for the compilation and the authenticity of details contained in such reports.
7.43 I, however, do not agree with such contention. Sh. Ravi Bharti was posted as Dy. Manager. He was holding the rank of officer and was not a clerk. His duty was to prepare appraisal note and as credit investigator he was to seek verification independently with respect to the credit worthiness and the means and sufficiency of borrower and its partners. Undoubtedly, the branch incumbent cannot be permitted to run away from his responsibility but it would be too fanciful to say that it is branch incumbent alone who is responsible and not the credit investigator. Credit investigator is largely responsible for the preparation and compilation of such credit reports. Moreover, it was nowhere suggested by Ravi Bharti to D.C.Sharma that he had been told about the factum of previous loan taken by Satbir Sharma from Mall Road Branch.
7.44 Names of Kapil Gupta and Ramphal Gupta figure in such confidential reports. They both have also graced the witness box.
7.45 Let me see their testimony.
7.46 PW3 Sh. Kapil Gupta has deposed that he knew Ravi Bharti. He also knew Satbir Sharma. He claimed that CBI officers had contacted and asked him whether he had recommended the account of M/s Krishna & Krishna Enterprises upon which he told CBI that he had never recommended any account for the purpose of grant of any credit facilities. He has also claimed that neither Satbir Sharma nor Ravi Bharti ever talked to him with respect to said account of M/s Krishna & Krishna Enterprises. As far as accused Satbir Sharma is concerned, he has not chosen to ask any question CC No. 07/2011 CBI Vs. Tara Chand Aggarwal etc. Page 34 of 91 to PW3 Kapil Gupta meaning thereby that he does not challenge the deposition of Kapil Gupta. Sh. Kapil Gupta was also cross examined by accused Ravi Bharti and he admitted that he had been dealing with M/s Krishna & Krishna Enterprises with respect to supply of rice. He denied that M/s Krishna & Krishna Enterprises had referred him and that the bank had contacted him and he had confirmed about the credit worthiness of the firm. Interestingly, none of the partners of the firm M/s Krishna & Krishna Enterprises has attempted to confront Sh. Kapil Gupta. It was not suggested by these partners that the firm or they themselves knew Kapil Gupta or that he had confirmed about the credit worthiness of the firm to the bank.
7.47 Similarly, PW5 Ramphal Gupta has also claimed that he did not know about M/s Krishna & Krishna Enterprises though he knew accused Tara Chand Aggarwal and Satbir Sharma. He also deposed affirmatively that no bank official ever enquired from him with respect to firm M/s Krishna & Krishna Enterprises or its credibility. He also claimed that he did not know any lady with the name of Sushila Devi and also did not know accused Hari Shankar Sharma. No suggestion to the contrary was put to him by Hari Shankar Sharma. However, accused Tara Chand Aggarwal suggested him that he knew all the three partners and that he had given the verification report to the bank and was deposing falsely out of fear and under the pressure of CBI. He labelled such suggestion as incorrect.
7.48 I am not able to decipher from the testimony of Sh. Kapil Gupta and Sh. Ramphal Gupta that they have deposed out of fear or under the influence or pressure of CBI. No animosity has either been suggested and it has not been made clear as to why they would depose against these partners particularly when they knew them. Their testimony clearly indicates that the confidential reports were prepared by Ravi Bharti without any real verification.
CC No. 07/2011 CBI Vs. Tara Chand Aggarwal etc. Page 35 of 91It seems that these names were revealed to Ravi Bharti by the borrowers and their names were accordingly inserted in column No.7 of the confidential reports and it was attempted to show by Ravi Bharti that he had sought confirmation from these persons namely Sh. Ramphal Gupta and Kapil Gupta.
7.49 Thus it becomes very much evident that accused Ravi Bharti had prepared fallacious confidential reports.
IMPROPER CREDIT RISK RATING 7.50 Credit Risk Rating for any borrower is normally done on the ba- sis of balance-sheets submitted by the borrower firm for the previous period.
7.51 PW22 Sh. Govind Sarup Bhatt was the Chief Internal Auditor and he had carried out the investigation. As per him also, borrower is re- quired to submit balance-sheet and other financial documents for the preced- ing period. It is not in dispute and even as per partnership deed Ex. A-23, M/s Krishna & Krishna Enterprises came into existence on 01.10.2007 in which all the aforesaid three persons, namely, Tara Chand Aggarwal, Satbir Sharma and Hari Shankar Sharma were partners. The borrower firm had submitted balance-sheets of last three years but the Credit Risk Rating was done on the basis of balance-sheet dated 31.03.2007. Credit Risk Rating, as prepared by accused Ravi Bharti, is contained in D-5 and has been proved as Ex. A-28 and rating of (BB) was given to firm M/s Krishna & Krishna Enterprises. As per PW11 Sh. Sharma, rating of "BB" is considered to be good rating. With re- spect to the constitution/establishment of M/s Krishna & Krishna Enterprises, one point had been given. However, Ravi Bharti should have, at least, taken CC No. 07/2011 CBI Vs. Tara Chand Aggarwal etc. Page 36 of 91 note of the fact that borrower M/s Krishna & Krishna Enterprises was a part- nership firm and balance-sheet and financial statement should have been of such partnership firm only or of old partnership concern. There was no rea- son to have accepted any financial statement related to proprietorship con- cern. In its appraisal report, Sh. Ravi Bharti had himself commented that the firm had been established in the year 2004 and was engaged in the whole- sale trading of sugar. He also claimed that the firm had been established as proprietorship concern and was transformed into the partnership firm only w.e.f. 01.10.2007. He did not point out anywhere about old partnership deed dated 10.02.2006 between Tara Chand and Satbir Sharma.
7.52 Cash Credit facility had been sought by a partnership concern and not by a sole proprietary concern and any document related to sole proprietary concern should not have been considered as such. Fact, however, remains that Ravi Bharti had considered the financial statements of M/s Krishna & Krishna Enterprises, a proprietary concern. This would become apparent from Ex. PW2/A (page 345 of D-5). It is form no. 3CD for the assessment year 2006-07 in which firm has been shown as proprietary concern of Tara Chand Aggarwal. Same stands true for another financial statement and form no. 3CD for assessment year 2005-06.
7.53 PW11 Sh. D.C. Sharma has also deposed that in the present case, Credit Risk Rating was done by Ravi Bharti as there was no other trained person for doing Risk Rating. According to him, he had approved the same by countersigning such rating report. As per PW22 Sh. G.S. Bhatt also, Credit Risk Rating was done on the basis of balance-sheet dated 31.03.2007 whereas loan was sanctioned on 18.03.2008 and it was not as per the banking guidelines because no financial statement beyond the period of six months could have been considered for Credit Risk Rating.
CC No. 07/2011 CBI Vs. Tara Chand Aggarwal etc. Page 37 of 91DIVERSION OF FUNDS 7.54 Sh. Singh has contended that since Ravi Bharti was acting in connivance with his co-accused, he permitted diversion of funds. Such diversion of funds was in various shapes. These are as under:-
(i) Withdrawal by self-cheques.
(ii) Purchasing immovable property by diverting the funds
to sundry account.
(iii) Trading in rice instead of sugar.
(iv) Bogus/sham/paper transactions.
7.55 I have carefully seen the statement of account of M/s Krishna &
Krishna Enterprises. Statement of account of M/s Krishna & Krishna
Enterprises has been proved as Ex. PW11/Z (D-9).
7.56 Withdrawal by self-cheques is not permitted in such type of loan
account unless it is for the purpose of making some sundry/emergency payments. There is no explanation from the side of accused as to why three self-cheques were issued in no time i.e. on 26.03.2008. Such three self- cheques are Ex. A-24 (D-27) for Rs. 8 lacs, Ex. A-25 (D-28) for Rs. 8 lacs and Ex. A-26 (D-28) for Rs. 9,07,000/-. All these three cheques were signed by Satbir Sharma alone. Surprisingly, in the first cheque itself, on the reverse, the purpose is mentioned as 'purchase of sugar/rice'. It is not explained as to why within virtually a week, firm thought of diversifying in rice. Firm was in the business of sugar and wanted to expand its business of trading in sugar. Even the proposal prepared by Ravi Bharti says so. That being so, it is not explained as to why in the first self-cheque, the purpose was shown as 'purchase of sugar and rice'. Sh. Ravi Bharti should have seen such crucial aspect but he passed the cheque in a very casual manner.
CC No. 07/2011 CBI Vs. Tara Chand Aggarwal etc. Page 38 of 917.57 There is one more important self-cheque of Rs 1 lac dated 24.04.2008 which I would advert to later on.
7.58 It is not in dispute that the total amount of Rs. 17,07,000/- as covered under cheques Ex. A-25 & A-26 was utilized for purchasing immovable property in benami. There is no dispute that said amount was withdrawn in cash but such cash amount was not actually received by anyone and such money was immediately transferred to sundry account. Reference in this regard be made to deposit slip D-35 which has been proved as Ex. A-28. Ravi Bharti also has given evasive answer with respect to such deposit/ transfer in sundry account.
7.59 According to Sh. Jha, sundry account was under the exclusive control of Chief Manager. I am, however, not inclined to believe such assertion. It seems to be a case of passing the buck. PW11 Sh. Dewan Chand Sharma, Chief Manager has also claimed in his cross-examination that it was wrong to suggest that sundry account used to be exclusively maintained by Chief Manager or the incumbent incharge. Undoubtedly, as Branch Incumbent, he is required to check all the transactions on daily basis and he is also required to countersign the register in which concurrent auditor records his observations. Admittedly, such register was not seized during the investigation but that does not mean that accused Ravi Bharti can be permitted to go scot free. As Loan Processing Officer, he was the one who had processed the loan and loan was sanctioned on the basis of his appraisal note. He was required to monitor the loan account as well. He should not have entertained such self-cheques of high value without at least ascertaining the purpose for which such self-cheques had been drawn by the borrower firm. He should have also not diverted the aforesaid sum of Rs. 17,07,000/- to sundry account. Sh. Ravi Bharti cannot escape his liability on this score.
CC No. 07/2011 CBI Vs. Tara Chand Aggarwal etc. Page 39 of 917.60 Branch incumbent Sh. D.C. Sharma was also expected to be very careful and should have taken note of the aforesaid peculiar aspect but omission on his part would itself not mean and indicate that Sh. Ravi Bharti stands absolved automatically. In his statement u/s 313 Cr.P.C., he claimed that such deposit/ transfer slip Ex. A-28 was a matter of record. He admitted such deposit slip when his statement u/s 294 Cr.P.C. was recorded. PW8 Ms. Neha Ailwadi has categorically claimed in her deposition that such deposit voucher Ex. A-28 was in the hand of accused Ravi Bharti and it was accused Ravi Bharti who had deposited said amount of Rs. 17,07,000/-through cash deposit voucher in the sundry account.
7.61 It would be important to mention that M/s Grahlaxmi Enterprises was the proprietorship concern and was recommended CC limit by PNB Shalimar Bagh Branch in the year 2006. According to the case of prosecution, said account became irregular and its properties had to be auctioned and one such property was purchased on papers by PW15 Sh. Gopal Mittal. However, Sh. Mittal was shown purchaser on papers only as he himself had not contributed anything while purchasing said property in auction and entire amount had come from CC account of M/s Krishna & Krishna Enterprises. It is very much apparent from the various documents placed on record and from the testimony of bank officials that said property had been purchased through auction by one Gopal Mittal and though PW15 Gopal Mittal has not supported the case of prosecution wholeheartedly but there is no qualm that money, with the help of which property was purchased in auction, had come from the loan account of M/s Krishna & Krishna Enterprises. Following question put by accused Ravi Bharti to PW11 Sh. Dewan Chand Sharma would also establish the same:
CC No. 07/2011 CBI Vs. Tara Chand Aggarwal etc. Page 40 of 91"I put it to you that reserve price realized from auction was Rs. 39 lacs and 25 per cent of the bid amount was paid out of sundry account maintained by the PNB Shalimar Bagh Branch and such amount of 25 per cent had come to sundry account from the loan account of M/s Krishna & Krishna Enterprises and thereafter the balance amount was also paid in the similar manner"
7.62 Sh. Dewan Chand Sharma also admitted in his further cross- examination that cheque amount of Rs. 8 lacs and Rs. 9.07 lacs went to sundry account. Though he has tried to dilute the action of Ravi Bharti by claiming that there was no irregularity in it yet I am convinced that the transfer of such big amount to sundry account was nothing but diversion of funds. Borrower firm was given loan with specific purpose i.e. expansion in the trading of sugar. Part of the amount, drawn under CC facility, was diverted to sundry account for purchasing immovable property which, obviously, is misutilization of funds and diversion of funds.
7.63 I have seen the statement of account of M/s Krishna & Krishna Enterprises very carefully. Following firms are the main beneficiaries in the sense that cheques issued by M/s Krishna & Krishna Enterprises landed in their bank accounts:-
Sr. No. Name of Beneficiary Firm Amount Document Detail Proprietor/ relevant Witness i M/s Balaji Agro Corporation 40,00,000 Ex PW 30/H1to H4 Not made clear by CBI at all.
Not examined even
during investigation
ii M/s Guruji Trading Company 15,00,000 Ex PW24/B and 24/I Accused Satbir Sharma
CC No. 07/2011 CBI Vs. Tara Chand Aggarwal etc. Page 41 of 91
iii M/s Maa Shakumbari 42,00,000 ExPW24/H1&H2, Ex PW Ram Mehar
Trading Co PW24/E,J&K (Not examined)
iv M/s Future Enterprises 5,00,000 Ex PW6/A to 6/E PW6 Raj Kumar Gupta
v M/s Bharat Trading 5,00,000 Ex PW6/A to 6/E PW6 Raj Kumar Gupta
Company
vi Ms. Raghunandan Food 11,70,000 ExPW 24/C &N, Not made clear by CBI
Ex PW 30/H-27 at all.
Not examined even
during investigation
vii M/s Dipanshu Traders 90,05,000 D-12 and D-13 Not examined even
during investigation.
Not examined even
during investigation
viii M/s Shree Hari Timber 40,06,000 Ex PW 12/ A PW12 Sanjay Kumar
Goel
ix M/s Komal Exports 13,00,000 ExPW23/A to /E & PW23 Sh. Dilip Kumar
Ex PW 30/H8 Aggarwal
x M/s Ashok Kumar Aman 21,86,000 Ex PW 24/D,L&M Not made clear by CBI
Kumar Ex PW 30/H26 at all.
Not examined even
during investigation
7.64 As per the prosecution, PW6 Raj Kumar Gupta was the propri-
etor of M/s Bharat Trading Company. His daughter-in-law was proprietor of M/s Future Enterprises. He deposed that two cheques of Rs. 5 lacs each were issued by M/s Krishna & Krishna Enterprises for said two firms. These cheques are dated 26.04.2008 and, therefore, are of duration of Ravi Bharti only. According to PW6 Raj Kumar Gupta, cheques were in connection with some deal in rice but since deal did not materialize, the amount was returned by issuing two separate cheques. Thus, it becomes apparent that no genuine trading transaction materialized between said two firms and M/s Krishna & Krishna Enterprises. It is also worthwhile to mention here that as per state-CC No. 07/2011 CBI Vs. Tara Chand Aggarwal etc. Page 42 of 91
ments of account, there was no other transaction of those two firms with M/s Krishna & Krishna Enterprises in the entire financial year ending 31.03.09.
7.65 PW12 Sanjay Kumar Goel is the proprietor of M/s Shree Hari Timber. His deposition also clearly indicates that there were no trading transactions which tantamount to denote that there was diversion of funds.
His firm M/s Shree Hari Timber had received amount of Rs. 19,80,000/- and Rs. 20,26,000/- from M/s Krishna & Krishna Enterprises. Such amount was given by M/s Krishna & Krishna Enterprises to said firm as loan without interest and such loan amount was repaid as well. Sh. Sanjay Kr. Goel also deposed that there was never any dealing regarding sale of sugar as his firm was not dealing in sugar at all though he claimed that there was one transaction regarding purchase of rice. However, with respect to aforesaid two big transactions, this witness has, in no uncertain terms, deposed that such amount came to his concern by way of loan and that there was never any trading transaction regarding sugar with M/s Krishna & Krishna Enterprises. However, CBI has failed to take note of the fact that said transactions are of Jan 2009. Ravi Bharti was no longer in Shalimar Branch during that period as he was transferred from there w.e.f. 05.08.2008. Thus, he cannot be made accountable though borrower firm is at fault in transferring amount and lending money. Though the borrower firm is, unquestionably, accountable for diversion of funds.
7.66 PW23 Sh. Dilip Kumar Aggarwal has, however, deposed that there was transaction of rice between his concern M/s Komal Exports and M/s Krishna & Krishna Enterprises and has made reference to three cheques worth Rs. 4.40 lacs, Rs. 4.60 lacs and Rs. 4 lacs which have been proved as Ex. PW23/C, Ex. PW23/D and Ex. PW23/E. These transactions are of March'09 when Ravi Bharti was not there in said branch and moreover, these CC No. 07/2011 CBI Vs. Tara Chand Aggarwal etc. Page 43 of 91 are labelled as genuine transactions by PW23 Sh. Dilip Kumar Aggarwal.
7.67 As far as M/s Guruji Trading Company is concerned, it is not in dispute that such firm is owned by none other than accused Satbir Sharma and there is no material on record which may suggest that there was any actual transaction of sugar or rice between M/s Krishna & Krishna Enterprises and M/s Guruji Trading Company. Accused Satbir Sharma has not chosen to examine himself or any witness on this score. After all, he was the proprietor of M/s Guruji Trading Company and if at all there was any genuine transaction, he could have come up with relevant bills/invoices/ledger, statement etc. to substantiate such fact. Fact remains that a sum of Rs. 15 lacs was transferred to the account of M/s Guruji Trading Company on 25.03.2008 i.e. within a week of sanction of loan and Ravi Bharti did not try to ascertain as to why the amount was going to group concern. Such transfer was not in consonance with the terms and conditions of loan.
7.68 One Sh. Ram Mehar was material prosecution witness as during investigation, he divulged that M/s Maa Shakumbari & M/s Dipanshu Traders have never done any trading with M/s Krishna & Krishna Enterprises. Unfortunately, Sh. Ram Mehar has not been examined by the prosecution. However, if at all, stand of the borrower firm was to the effect that there were genuine trading transactions, there was no one to preclude the firm to call Sh. Ram Mehar as well as the proprietor of M/s Dipanshu Traders in their defence but nothing of that sort has been done at all.
7.69 I have not been able to ascertain as to who is the proprietor of M/s Balaji Trading Company, Ashok Kumar Aman Kumar and M/s Raghunandan Foods. Investigating agency should have examined said aspect and should have come up with specific material but for reason best CC No. 07/2011 CBI Vs. Tara Chand Aggarwal etc. Page 44 of 91 known to the investigating agency, neither it has been apprised as to who is the owner of M/s Balaji Trading Company, Ashok Kumar Aman Kumar and M/s Raghunandan Foods and M/s Dipanshu Traders nor their proprietors have been cited as witnesses. I would also like to observe that as per Ex PW 30/H16 Sh. Rakesh s/o accused Satbir Sharma seems to be its proprietor but such fact has not been proved in accordance with law.
7.70 Be that as it may, fact remains that testimony of PW6 Raj Kumar Gupta and PW12 Sh. Sanjay Kr. Goel clearly reveals that there was never any genuine trading transaction. Thus, the borrower firm has come up with paper transactions only and naturally the amount was accordingly diverted/ transferred by the borrower firm in the other bank accounts with dishonest and fraudulent intention.
7.71 Sh. Ravi Bharti had unauthorizedly and illegally permitted diversion of funds on some occasions even during his tenure.
EXCEEDING PASSING LIMIT 7.72 As per PW11 Sh. Dewan Chand Sharma, Ravi Bharti had exceeded his passing limit. His passing limit was Rs. 5 lacs only but he cleared cheques of much more value. Though according to Sh. Jha, such powers could have been exceeded only when Sh. Ravi Bharti was possessing DBA password and since DBA password was never with Ravi Bharti, he cannot be held liable on this score yet I do not find any substance in such contention.
7.73 According to PW11 Sh. Dewan Chand Sharma, normally, no cash payment or self withdrawal is allowed and it is only in the case of CC No. 07/2011 CBI Vs. Tara Chand Aggarwal etc. Page 45 of 91 exigency, any such cheque is passed after ensuring end use of funds and the purpose of such payment is required to be mentioned on the back of the cheque. He deposed that DBA (database) password had been provided to individual branch to run the affairs of the branch smoothly and such password was within the knowledge of he himself, Ravi Bharti and three/four other persons. He out rightly denied that such DBA password was within his exclusive knowledge and no one else.PW8 Neha has also deposed that such DBA password was with accused Ravi Bharti.
NON-VERIFICATION OF STOCK 7.74 I have carefully scrutinized the testimony on record. It becomes very much apparent that borrower firm was to submit quarterly statement of stock as per terms and conditions of loan. Loan in question was sanctioned on 18.03.2008 and one quarter consists of three months only. Accused Ravi Bharti remained in Shalimar Bagh branch upto 05.08.2008 and It is apparent from the record that during his tenure, there was not any irregularity in stock verification.
7.75 In this regard, it will be useful to make reference to testimony of PW21 Sh. Vijay Kumar Gupta, Senior Manager. In his cross-examination, he has categorically admitted that he himself verified the stock before transfer of Ravi Bharti and such stocks were found to be in order.
7.76 Even PW22 Sh. Govind Swaroop Bhatt, Chief Internal Auditor has admitted in his cross-examination that there was no shortage of stock so long Ravi Bharti was posted in Shalimar Bagh Branch i.e. upto 05.08.2008. In case there is any shortage of stock after the transfer of Ravi Bharti from Shalimar Bagh Branch, by no stretch of imagination, Ravi Bharti can be CC No. 07/2011 CBI Vs. Tara Chand Aggarwal etc. Page 46 of 91 hauled up for such subsequent shortfall in stock.
ACCEPTING GRATIFICATION 8.0 This happens to be the one of the most crucial and challenging aspect of the case.
8.1 Admittedly, when the matter was initially investigated by the bank and complaint was forwarded to CBI, name of Ravi Bharti did not figure as accused or beneficiary. However, during investigation, investigating agency collected material which suggested that accused Ravi Bharti had accepted illegal gratification of Rs. 1 lac.
8.2 Let me come to cheque D-29 which is dated 24.04.2008. It has been proved as Ex. A-27. It is signed by accused Satbir Sharma for M/s Krishna & Krishna Enterprises. It is of Rs. 1 lac and is self-cheque.
8.3 Ravi Bharti does not dispute that said cheque was received for encashment.
8.4 According to him, he had collected the cash under said cheque at the request of accused Satbir Sharma and same day, when Satbir Sharma came to the bank, such amount was handed over to Satbir Sharma.
8.5 Sh. Jha has claimed that it is not uncommon that whenever any Branch handles any important account, on the basis of personal verbal request, amount can be collected and can be handed over to party later on and there cannot be said to be any illegality in such fact by itself. It has also been argued that even Satbir Sharma has admitted in his statement u/s 313 CC No. 07/2011 CBI Vs. Tara Chand Aggarwal etc. Page 47 of 91 CR.P.C. that he got said amount same day and part thereof was deposited by him in another bank account.
8.6 However, things are not that simple and straight.
8.7 According to CBI, this amount of Rs. 1 lac was pocketed by accused Ravi Bharti and he had never handed over the same to accused Satbir Sharma at any point of time.
8.8 On this score, it would be advantageous to refer to the testimony of PW8 Ms. Neha Ailawadi and PW25 Baldev Raj Dewan.
8.9 PW8 Ms. Neha Ailawadi has categorically deposed before the Court that cheque Ex. A-27 was entered into system by her on 25.04.2008 and Ravi Bharti asked her to collect the payment under such cheque from cashier and also told her that he had already instructed the cashier through intercom. PW8 Neha accordingly received payment of Rs. 1 lac and even signed on the reverse of the cheque and returned to her seat after handing over such amount to accused Ravi Bharti. Such cheque was passed by accused Ravi Bharti.
8.10 PW25 Baldev Raj Dewan was posted as Head Cashier and he has also deposed that cheque Ex. A-27 was a bearer cheque and Ms. Neha had come to him for collecting payment under said cheque and told him that party had left the cheque with her in the morning and would come late in the evening and, therefore, payment under such cheque be given to her. He told her that there were no signatures of the party on the reverse of the cheque on which she went to Loan Department and then Sh. Baldev Raj received call from Ravi Bharti and Ravi Bharti reiterated the same version and asked him CC No. 07/2011 CBI Vs. Tara Chand Aggarwal etc. Page 48 of 91 to release the payment. Upon this, PW25 Baldev Raj Dewan told accused Ravi Bharti that there were no signatures of the party on the reverse on which Ravi Bharti asked him to obtain signatures of Ms. Neha on the reverse and then again she came with cheque and she also signed on the reverse of the cheque. Her signatures are at point Z. 8.11 Sh. Jha has contended that there are signatures of accused Satbir Sharma also on the reverse which itself is suggestive and indicative of the fact that payment was received by accused Satbir Sharma.
8.12 However, I am not impressed with such argument.
8.13 If at all Sh. Satbir Sharma had himself come to the Branch to collect the payment, there was no occasion or reason for Ms. Neha to have signed on reverse in token of receiving Rs. 1 lac. It is very much apparent that when Ms. Neha Ailawadi had received payment of Rs. 1 lac, Satbir Sharma was not in the Branch at all. She signed in token of receiving such money and then handed over to such amount to accused Ravi Bharti.
8.14 Accused Ravi Bharti had two accounts with PNB, Mall Road Branch. These are having saving account numbers as 0991009400032825 and 0991000200438040. Immediately next day i.e. 26.04.2008, accused Ravi Bharti deposited Rs. 50,000/- in each of his said accounts by way of cash. Deposit slips in this regard have been proved as Ex. PW8/A (D-72) & Ex. PW8/B (D-73). Accused Ravi Bharti does not dispute that amount of Rs. 1 lac was deposited by him but his explanation is that he had already returned the amount of Rs. 1 lac, under said cheque, to accused Satbir Sharma same day i.e. 25.08.2008 and amount of Rs. 1 lac which was deposited by him in his said two accounts had come to him by way of sale of CC No. 07/2011 CBI Vs. Tara Chand Aggarwal etc. Page 49 of 91 one plot of Jaipur and also through his private collection system i.e. committee within his circle.
8.15 These were special facts which were within his exclusive knowledge. Mere verbal assertion can be said to be to sufficient to discharge onus in this regard. Undoubtedly, the standard of proof is not as rigorous for defence but defence has to show that its such version is probable one. Mere verbal denial is not sufficient per se.
8.16 Accused Ravi Bharti could have produced some documents in order to show that he owned such plot in Jaipur which he had sold during that period. He could have produced the sale deed. Moreover, acquisition of immovable property and sale are required to be intimated to the Department and such transaction are done with prior approval. There is nothing on record showing that accused Ravi Bharti had either given any intimation regarding such transaction to his department or sought any approval for making any such transaction. He has not examined anyone in order to show that there was some sort of committee within his circle. He has also not examined any of his friends on this score.
8.17 Sh. Jha has contended that it is only an assumption and such fact by itself cannot conclusively establish that the amount which accused had deposited in his two saving accounts next day, was the same which he had received on 25.04.2008. He has also contended that the amount deposited by accused Ravi Bharti in his bank accounts on 26.04.2008 was evidently different from the one withdrawn under cheque of Rs. 1 lac on 25.04.2008 as the denomination of withdrawn amount and denomination of deposited amount do not match. Sh. Jha has relied upon the deposition of Head Cashier PW25 Sh. Baldev Raj Dewan who claimed in his cross-
CC No. 07/2011 CBI Vs. Tara Chand Aggarwal etc. Page 50 of 91examination that he disbursed a sum of Rs. 1 lac which comprised 500 notes of rupee 100 denomination and 100 notes of rupee 500 denomination. Though PW25 Baldev Raj Sharma has said so yet there is no documentary proof on this score. Admittedly, as per the deposit slips Ex. PW8/A & Ex. PW8/B, accused Ravi Bharti had deposited Rs. 1 lac in his two bank accounts and such amount was in the denomination of Rs. 1000/-. I, however, feel that such fact, by itself, does not imply that deposited amount had been obtained from some other source. Ravi Bharti was a bank official and for any such bank official it was very easy to obtain or exchange currency in a different denomination. No mileage on this score can be dug out by accused Ravi Bharti.
8.18 Undoubtedly, Court is not supposed to give judicial verdict on the basis of assumptions and inferences. In a criminal trial, case is required to be proved beyond shadow of doubt. However, at the same time, there may not be direct evidence for each and every fact. When the factum of unusual cash withdrawal on 25.04.2008 is read in conjunction with unexplained deposit of Rs. 1 lac by accused Ravi Bharti very next date in his bank accounts, the only inescapable conclusion would be that it was the same money.
8.19 Accused Ravi Bharti should not have shown any personal interest in such type of withdrawal. He should not have permitted withdrawal when the party was not present in the bank. In the absence of party, he should not have directed his subordinate to give acknowledgement of the payment on the reverse of the cheque. By asking his clerk to accept the payment, he has rather taken undue advantage of his superiority. PW8 Neha should have also not succumbed to his pressure.
CC No. 07/2011 CBI Vs. Tara Chand Aggarwal etc. Page 51 of 91SANCTION FOR PROSECUTION 8.20 Sh. Jha has also challenged the sanction for prosecution on the ground that sanctioning authority had not applied its mind as it was provided with a draft of sanction.
8.21 Sanction to prosecute public servant has been proved.
8.22 Needless to mention that sanction for prosecution of an accused under the Prevention of Corruption Act is not a mere formality and it has to be accorded after complete satisfaction. Sanction order must be demonstrative of the fact that there had been proper application of mind on the part of the sanctioning authority. Simultaneously, it has also to be kept in mind that this provision does not intend that a public servant who is alleged to be guilty should escape the consequences of his criminal act by raising technical plea about invalidity of the sanction. This section safeguards the innocent but does not shield the guilty. Merely, because, a draft sanction was sent to such sanctioning authority, it cannot be automatically inferred that there was no application of mind.
8.23 In the case of DARSHAN LAL VS STATE, CRIMINAL APPEAL NO.73/2001 (DECIDED ON 31.07.2009) our own Hon'ble High Court has observed that it would be incorrect to conclude that simply because the sanctioning order was a virtual reproduction of the draft sanction, the same would be deemed to have been passed without any application of mind and that there was no necessary concomitant corollary between the two.
CC No. 07/2011 CBI Vs. Tara Chand Aggarwal etc. Page 52 of 91ROLE OF CHIEF MANAGER 8.24 Indubitably, Ravi Bharti was reporting to PW11 D.C. Sharma for the purpose of loan in question. Sh. D.C. Sharma was posted as Chief Manager and he had sanctioned the loan in question. Irrefutably, any appraisal note prepared by any Loan Officer may or may not be accepted by the sanctioning authority. Discretion lies with sanctioning authority and, therefore, it is required to be extra vigilant while giving approval to the appraisal report prepared by its subordinate.
8.25 When the matter was being investigated at the departmental level, the bank was of the firm opinion that there were lapses on the part of Sh. D.C. Sharma as well as on the part of Ravi Bharti.
8.26 PW1 Sh. V.K. Vinayak has categorically admitted in his cross- examination that he found lapses on the part of both the said officials and even recommended disciplinary action against Sh. D.C. Sharma.
8.27 It really does not matter whether any borrower first approaches the Chief Manager or the Loan Officer. Fact remains that it is the duty of the Loan Officer to prepare the appraisal report and finally it is for the sanctioning authority to evaluate the appraisal report and to pass appropriate orders.
8.28 Sh. D.C. Sharma was, as Branch Incumbent, required to have complete supervision over the Branch and was required to monitor the transactions including the cash transactions. The lapses, as pointed out in the present case, were not mere irregularities and were rather beyond the realm of negligence. It has been so deposed by PW1 Sh. V.K. Vinayak.
CC No. 07/2011 CBI Vs. Tara Chand Aggarwal etc. Page 53 of 918.29 Unfortunately, court has not been apprised as to what was the outcome of the departmental action taken against Sh. D.C. Sharma though Sh. Jha has stated that as per the information available with him, he was perhaps demoted. Needless to say that in such type of cases, it is significant to see the report of the departmental inquiry.
8.30 I would also like to mention that Ravi Bharti remained in the Branch only till 05.08.2008. There are various instances of diversion of funds even thereafter. For the reason best known to the investigating agency, no effort was made to ascertain as to who was that particular bank official who permitted diversion of funds. It has also not been made clear as to whether any departmental action was proposed against any such successor of Ravi Bharti or not. I am also mindful of the fact that tenure of Sh. D.C. Sharma, Chief Manager in Shalimar Bagh Branch was only upto June 2008. Be that as it may, he is also required to absorb some of the blame though he was, largely, dependent upon the appraisal report prepared by his subordinate. In such type of matters, on most of the occasions, sanctioning authority has no other mechanism to cross-check or verify the facts and normally depends upon the appraisal report prepared by their subordinates.
8.31 Undoubtedly, earlier when the FIR was registered, name of Ravi Bharti did not figure anywhere. It was, however, during investigation that it was found that there were numerous acts and omissions on his part including pocketing a sum of Rs. 1 lac. Defence cannot dig out any advantage from the fact that in the initial complaint, name of Ravi Bharti did not figure anywhere. Fact remains that such initial complaint or for that matter FIR is not encyclopedia of facts. It is only the comprehensive investigation which makes everything crystal-clear.
CC No. 07/2011 CBI Vs. Tara Chand Aggarwal etc. Page 54 of 918.32 Thus, accused Ravi Bharti cannot be permitted to agitate that since sanctioning authority has been spared, he too should be absolved. He was the one who had prepared appraisal report. He was the one who acted as credit investigator. He cannot, therefore, be permitted to take shelter behind the factum of no-prosecution of Sh. D.C. Sharma.
ROLE AND INVOLVEMENT OF PARTNERS 9.0 There is no dispute that accused Hari Shankar Sharma was a partner of M/s Krishna & Krishna Enterprises, a firm which came into existence on 01.10.2007. It will be also important to mention that when statement of accused no.3 Hari Shankar Sharma was recorded for the purposes of admission/denial of documents u/s 294 Cr. P C., he admitted such partnership deed as Ex.A23.
9.1 D5 contains all the relevant documents submitted by M/s Krishna & Krishna Enterprises for the purposes of availing loan facility. Loan application is Ex.A20. Name of the applicant has been shown as M/s Krishna & Krishna Enterprises. It bears photographs of all the three partners as well as their respective signatures. Said firm has been shown as a partnership firm trading in sugar. Purpose of loan has been shown as expansion of business and the amount of loan sought is Rs.300 lacs. Immovable property C1/24 A, Yamuna Vihar, Delhi 53 having market value of more than Rs.3 crores has been offered as collateral. Such application bears signatures of all the three partners and as far as accused Hari Shankar Sharma is concerned, he does not dispute moving such application and his signing such application either.
9.2 I would, on the basis of the experience accumulated while dealing with various cases of Bank-Fraud pending before me, hasten to add CC No. 07/2011 CBI Vs. Tara Chand Aggarwal etc. Page 55 of 91 that very rarely, loan application bears any date. In application in question also, there is no mention as to when such application was actually moved. There is no bank record to such effect either. Such practice needs to be deprecated. It is the paramount duty of any Bank to always ensure that date is always mentioned in any such application. This can help the court, at least in calculating the time taken by the bank/branch in assessing, evaluating and sanctioning the proposal. If any application is moved and loan is also simultaneously sanctioned same day, it might, perhaps, be indicative of the fact that the loan was processed with undue haste.
9.3 Be that as it may, accused Hari Shankar Sharma does not dispute that he was inducted as partner of M/s Krishna & Krishna Enterprises by virtue of partnership deed dated 01.10.2007 and their such firm had prayed for loan of Rs.3 crores.
9.4 It would now be important to understand the stand of A3 Hari Shankar Sharma. He has entered into witness box as defence witness and from his examination-in-chief also, his stand can be easily deciphered. He was earlier in the business of manufacturing boxes for music sound system. His previous business came to an end due to sealing of his factory premises and he was on look out for some other business. He then came into contact of his co-accused Tara Chand Aggarwal and Satbir Sharma through one Mr. Sharwan Garg. He learnt that they both were in the business of trade of sugar and they were searching for partner. He talked to them. They both revealed that they had already negotiated with National Commodities Supply Corporation of India, Nagpur (NCSCI) which was ready to supply sugar at the rate of Rs.13,500/- per metric tonne. They also represented him that were lacking requisite funds for meeting such bulk supply and if adequate security could be offered, a loan could be raised from the bank which could be repaid CC No. 07/2011 CBI Vs. Tara Chand Aggarwal etc. Page 56 of 91 effortlessly and in no time as the deal was very profitable. Accused Hari Shankar Sharma decided to join them and accordingly a partnership deed was executed under the name and style of M/s Krishna & Krishna Enterprises on 01.10.2007.
9.5 So far so good.
9.6 Grouse of Hari Shankar Sharma starts from here.
9.7 According to him, since his other two said co-accused wanted financial assistance and since he was assured that there was a very lucrative order from NCSCI, he agreed to join them and partnership firm came into existence vide deed Ex.A23. But, it was never divulged by his partners that there was already a partnership firm operating under the same name and style in which Tara Chand Aggarwal and Satbir Sharma were already partners. I have seen partnership deed Ex.A23 very carefully and admittedly such deed is conspicuously silent about any previous partnership business under the same name and style.
9.8 Interestingly, Tara Chand Aggarwal and Satbir Sharma do admit that they were already partners in a firm which was in existence even prior to 01.10.2007. Let me come to such partnership firm in which Tara Chand Aggarwal and Satbir Sharma were already partners.
9.9 In this regard, I would be referring to the testimony of PW27 Sh. G. S. Goyal. Sh. G. S. Goyal had done auditing for said firm for years 2005-06, 2006-07, 2007-08. According to him, such partnership business was between two partners i. e. Tara Chand Aggarwal and Satbir Sharma. Such partnership deed has been proved as Ex.PW27/B (D25, page 667). Such CC No. 07/2011 CBI Vs. Tara Chand Aggarwal etc. Page 57 of 91 partnership deed also indicates that it came into existence on 10.02.2006 and the place of business was property No.3944, Ground Floor, Naya Bazar, Delhi-6. Coincidentally, the place of business has been shown to be exactly the same even in the new partnership deed. As per the previous partnership deed, the profit and loss was to be shared equally by Tara Chand Aggarwal and Satbir Sharma and PW27 G. S. Goyal had filed Income Tax Returns and VAT returns and prepared balance sheets and computation of income with respect to partnership firm M/s Krishna & Krishna Enterprises comprising of Tara Chand Aggarwal and Satbir Sharma only.
9.10 I have seen the cross examination of PW27 G. S. Goyal very carefully and in his cross examination he admitted that he did not know Hari Shankar Sharma at all and he never interacted with him personally or professionally. He also admitted that whatever services he had rendered for M/s Krishna & Krishna Enterprises was with respect to the partnership firm concern constituting of Tara Chand Aggarwal and Satbir Sharma which came into existence in year 2006. He also admitted that he learnt about new partnership firm (constituted on 01.10.2007) only when he went to CBI office and before that he never knew about any such partnership deed dated 01.10.2007.
9.11 Sh. Jha has contended that Hari Shankar Sharma was never informed that there was already a partnership firm under the same name and style and such fact was hidden and when the loan facility was applied, all the documents were submitted by the firm through his other two partners and he did not have any knowledge with respect to the documents furnished by such firm and did not forge any document for any purpose whatsoever.
CC No. 07/2011 CBI Vs. Tara Chand Aggarwal etc. Page 58 of 919.12 Sh. Jha has also contended that accused Hari Shankar Sharma was not even given any right to sign any cheque and did not have any sort of control, administrative or financial, over the business of the firm. It has been argued that though the immovable property was offered as collateral by Hari Shankar Sharma yet Hari Shankar Sharma was never given any control over the business of the firm and the reason was evident. Hari Shankar Sharma did not know anything about the business of sugar and he was banking upon the experience and knowledge of his other two partners who had assured him that they were already in the business of sugar and that there was a bulk order with the help of which they would be able to repay the loan in no time.
9.13 Sh. Jha has contended that if the intention of Hari Shankar Sharma had been other than bonafide then he would have retained financial control over the business of the firm more so when he had put his immovable property of more than Rs.3 crores at stake.
9.14 PW11 Dewan Chand Sharma, the then Chief Manager had sanctioned the loan on the basis of appraisal note prepared by accused Ravi Bharti. When he was cross examined by accused Hari Shankar Sharma, he categorically deposed that Hari Shankar Sharma never participated actively in the banking transactions pertaining to the account of M/s Krishna & Krishna Enterprises. According to him, Hari Shankar Sharma was not involved in day- to-day business and as per the record available, there was no cheque signed by him. He admitted that there was no transaction showing Hari Shankar Sharma to be beneficiary. When it was asked from him, whether Hari Shankar Sharma had any intention to cheat the bank, he volunteered that Hari Shankar Sharma had come to bank merely for signing the documents along with his wife and thereafter he never came to the bank during his tenure.
CC No. 07/2011 CBI Vs. Tara Chand Aggarwal etc. Page 59 of 919.15 PW30 DSP R. A. Yadav happens to be investigating officer. It would be significant to see as to what he has to offer with respect to the role of accused Hari Shankar Sharma. He admitted that the firm which had opened account with PNB, Shalimar Bagh branch was having three partners. He admitted that the name of such borrower firm was M/s Krishna & Krishna Enterprises. He tried to give evasive reply when he was questioned with respect to the previously constituted firm having same name. He deposed that he did not remember whether he learnt during the investigation that there was a firm with same name having two partners though he admitted that he must have seen the record of constitution of firm auditing of which had been done by G. S. Goyal. Albeit, when he was confronted with the record audited by G. S. Goyal, he pleaded ignorance by claiming that he did not recollect. He was, however, sure that he did not see any record audited by G. S. Goyal with respect to any such firm having three partners. He also admitted that the VAT returns filed through G. S. Goyal was with respect to the firm of two partners. He admitted that he had called Hari Shankar Sharma for investigation and then took his specimen signatures. He claimed that it was correct that Hari Shankar Sharma was not found involved with respect to any forgery.
9.16 IO Mr. Yadav was also confronted with the transaction related to NCSCI. He admitted that there was some correspondence showing agreement with NCSCI, Nagpur. However, when he was shown copy of agreement i. e. Mark PW30/DA, he again came up with elusive answer pleading ignorance. In his further cross examination, he also admitted that the outstanding loan amount of Rs.2.19 crores and the repayment amount was Rs.2.93 crores.
CC No. 07/2011 CBI Vs. Tara Chand Aggarwal etc. Page 60 of 919.17 I have carefully gone through the testimony of all the prosecution witnesses including the bank officials. Sh. Jha has contended that there is nothing on record which may suggest that accused Hari Shankar Sharma was having control of business of M/s Krishna & Krishna Enterprises. According to him, he is rather a victim of circumstances as he merely relied upon information given to him by his two other partners and moved and signed the loan application. He put his own property at peril without any interest and, therefore, he cannot be made liable merely because he happens to be the partner of such firm.
9.18 Let me now assess and evaluate the involvement of accused Tara Chand Aggarwal who has also, more or less, claimed that he had no control over the business and has shifted entire burden onto Satbir Sharma.
9.19 According to Sh. Tripathi, Tara Chand Aggarwal was earlier proprietor of M/s Shyam Lal Pawan Kumar and accused Satbir Sharma was working as accountant in such firm. Due to internal family dispute, said business came to an end and thereafter firm M/s Krishna & Krishna Enterprises came into existence in which Tara Chand Aggarwal and Satbir Sharma became partners in the year 2003. Sh. Tripathi has also claimed that it was Satbir Sharma who was controlling day-to-day affairs of M/s Krishna & Krishna Enterprises and all the important documents had been signed by Satbir Sharma and accused Tara Chand Aggarwal had never ever participated in the business of M/s Krishna & Krishna Enterprises. According to him, all the documents had been arranged by Satbir Sharma. He has also claimed that no forged document was ever submitted and the investigating agency did not seize the seal/stamp of the concerned chartered accountant during the investigation and had these seals been seized during investigation and were also sent to CFSL, things would have been different.
CC No. 07/2011 CBI Vs. Tara Chand Aggarwal etc. Page 61 of 919.20 I have seen Ex. PW2/A which is form 3CD for assessment year 2006-07. In such form 3CD, Tara Chand Aggarwal has been shown proprietor of M/s Krishna & Krishna Enterprises. Sh. Tripathi has, however, claimed that there are no signatures of Tara Chand Aggarwal on initial pages of said form 3CD. His signatures are appearing on subsequent pages. Fact, however, remains that Tara Chand Aggarwal cannot be permitted to own part of the document (on which his signatures are appearing) and disown other part without any substantial reason. It seems that he has tried to take some undue advantage of the fact that his signatures are not there on the initial pages. Moreover, no one else would be interested in placing such documents on record. These had been submitted by the partners of the firm only.
9.21 PW27 Sh. Gauri Shankar Goyal has also deposed that he knew Tara Chand Aggarwal. He also admitted that he had been auditor for M/s Shyam Lal Pawan Kumar. He also admitted that Satbir Sharma was accountant of M/s Shyam Lal Pawan Kumar. He though claimed that it was Satbir Sharma who used to give him information regarding M/s Krishna & Krishna Enterprises and used to come to his office for said purpose yet it cannot be believed that Tara Chand Aggarwal had no connection with the business of the firm as even otherwise Sh. Goyal has also claimed in his cross-examination that even Tara Chand Aggarwal used to ask him on telephone regarding his share in the profit of the business.
9.22 Sh. Tripathi has argued that accused Tara Chand Aggarwal had no intention to cheat anyone. He had no knowledge with respect to the documents submitted before the bank and there was no mens rea involved either. It has also been stressed that he had no connection with the parties who were dealing with M/s Krishna & Krishna Enterprises and he had not CC No. 07/2011 CBI Vs. Tara Chand Aggarwal etc. Page 62 of 91 signed any cheque and was not a beneficiary in any sense whatsoever. According to him, his only mistake was that he relied on the experience and skills of Satbir Sharma and became his partner and merely because he happens to be a partner of M/s Krishna & Krishna Enterprises, he cannot be held liable. Thus for all practical purposes, his argument is virtually the same as that of accused Hari Shankar Sharma.
9.23 Let me now switch over to Satbir Sharma.
9.24 Sh. Rajiv Khosla has vehemently contended that prosecution has not been able to prove its case in any manner whatsoever. It has been argued by him that there was never any dishonest intention to cheat and deceit the bank. Accused Satbir Sharma was admittedly partner of M/s Krishna & Krishna Enterprises and the firm had sought loan for expansion of business. It has been argued that even if the borrower firm was simultaneously dealing in rice, it would not mean and indicate that there was any mis-utilization of funds or diversion of funds.
9.25 According to Sh. Khosla, "sugar" and "rice" are food grains and there was not any embargo in carrying simultaneous trading activities in rice. Moreover, when one cheque was submitted before the bank, the purpose was specifically mentioned as purchase of sugar/rice. Sh. Khosla is referring to cheque Ex. A-24 dated 26.03.2008 which was of Rs. 8 lacs and admittedly the purpose on the reverse is mentioned as purchase of sugar/rice.
9.26 However, that by itself, to me, would not mean and indicate that bank had authorized borrower firm to trade in rice as well.
CC No. 07/2011 CBI Vs. Tara Chand Aggarwal etc. Page 63 of 919.27 It would be useful to make reference to the appraisal note and the sanction in question.
9.28 Appraisal note has been proved as Ex. A-18. Terms & conditions are incorporated in Ex. A-19 and accused Tara Chand Aggarwal, on behalf of borrower firm, had accepted all such terms & conditions. He clearly undertook therein that the borrower firm had accepted all terms & conditions of the sanction and would not undertake expansion and diversion without prior permission of the bank.
9.29 Thus one of the important terms of the loan was that borrower firm would not go for any diversion without obtaining prior permission of the bank. Business activity, as per proposal Ex. A-18, was wholesale trading of sugar. In such a situation, it was rather obligatory on the part of borrower firm to intimate the bank that they wanted to diversify in trading of rice. Merely by mentioning words "for the purpose sugar and rice" on reverse of one cheque that too within first week of sanction would not mean that they had appropriately intimated the bank that they were diversifying into the trading of rice as well.
9.30 Moreover, as I have already noticed above, self cheques are only for the purpose of making emergent payments. It has not been apprised by any of the partners as to why such self cheques were issued. Importantly, no purpose is found mentioned on the other self-cheques. Heavy withdrawal of cash by self-cheques is itself an indicator of mis-utilization of funds.
9.31 Sh. Khosla has contended that these are very small and insignificant deviations which cannot invite any penal action. According to him, PW15 Sh. Gopal Mittal, who had allegedly purchased property in CC No. 07/2011 CBI Vs. Tara Chand Aggarwal etc. Page 64 of 91 auction, has not supported the case of prosecution. He has nowhere claimed that he had purchased the property "benami" for and on behalf of accused Satbir Sharma and thus the alleged diversion of funds does not stand proved. I have already made reference to the aforesaid peculiar aspect while dealing with lapse on the part of accused Ravi Bharti. Undoubtedly, PW15 Sh. Gopal Mittal has not fully supported the case of prosecution. He nowhere deposed that he had purchased the property with the help of money given to him by accused Satbir Sharma. It is, however, apparent that property was purchased by Gopal Mittal for a sum of Rs. 22.76 lacs. It is apparent from the sale certificate Ex. PW15/B. Even if a sum of Rs. 50,000/- vide voucher dated 10.03.2008 and Rs. 5.19 lacs vide voucher dated 10.03.2008 (Ex. A-29) (D-42) had been paid by Gopal Mittal towards part sale consideration before the sanction of the present loan, it is loud and clear that balance amount of Rs. 17.07 lacs did come through sundry account as diverted from CC account of M/s Krishna & Krishna Enterprises. It is, therefore, apparently diversion of funds. Borrower firm had no business to utilize the funds for purchasing immovable property. Funds were required to be utilized for expansion of trade business in sugar and defence cannot take out any real advantage even from the hostile testimony of PW15 Sh. Gopal Mittal.
9.32 Sh. Khosla has contended that prosecution is duty bound to prove its case and is required to stand on its own legs and cannot prove its case from the mere suggestions put by the defence to the prosecution witnesses. Undoubtedly, he is justified in saying so. In every criminal trial, it is the primary duty of prosecution to prove its case through its witnesses and prosecution cannot be permitted to take any advantage from the weaknesses of the defence. However, at the same time, any fact, which is within the special knowledge of accused, can only be proved by such accused. Prosecution has come up with specific case of diversion of funds. Partners of CC No. 07/2011 CBI Vs. Tara Chand Aggarwal etc. Page 65 of 91 M/s Krishna & Krishna Enterprises have claimed that there was no diversion of funds. It automatically means that all the activities reflected in the statement of account of M/s Krishna & Krishna Enterprises were related to trading business in sugar or at best in rice. I have already made reference to the testimony of PW12 Sh. Sanjay Goel who has also claimed that there was no trading activity and the amount of more than Rs. 40 lacs was received by him as loan without interest. Though prosecution did not examine Sh. Ram Mehar who could have proved diversion of funds related to M/s Maa Shakumbari yet if accused were very sure and convinced that there was no diversion of funds and all the trading activities were genuine, they could have very well called Sh. Ram Mehar in defence. They could have also called proprietors/partners/owners of M/s Dipanshu Traders, M/s Balaji Agro Company and other beneficiary firms. Defence did not take any step to examine them. Thus, it is the defence which is holding back the material available with them. No ledger record or other documents have been placed by the defence in order to show that there were genuine trade activities.
9.33 Testimony of PW6 Raj Kumar Gupta and of PW12 Sanjay Goel does signify that there were no trading transactions. There are unexplained self-cheques. Thus, apparently and evidently, there is diversion of funds and mis-utilization of funds.
9.34 I have seen the deposition of PW24 Sh. S.K. Ahluwalia who had handed over the statement of account of M/s Guruji Trading Company, M/s Raghunandan Food, M/s Ashok Kumar Aman Kumar and M/s Maa Shakumbari Trading Company. All these accounts were being maintained by said firms with State Bank of Mysore, Naya Bazar Branch, Delhi.
CC No. 07/2011 CBI Vs. Tara Chand Aggarwal etc. Page 66 of 919.35 Cheque dated 25.03.2008 for Rs. 15 lacs was issued by M/s Krishna & Krishna Enterprises. Such cheque has been proved as Ex. PW24/I (D-15) and such cheque was duly credited in the account of M/s Guruji Trading Company. Entry is duly reflected in statement Ex. PW24/B (D-93). Deposit slip of said cheque, inter alia, is contained in Ex. PW24/G (part of D-101). Accused Satbir Sharma has not divulged as to on what account such sum of Rs. 15 lacs stood transferred to the account of M/s Guruji Trading Company and it is, naturally, a case of diversion of funds. As regards M/s Maa Shakumbari Trading Company, following cheques were issued by M/s Krishna & Krishna Enterprises:
(i) Cheque dated 04.04.08 Rs. 15 lacs Ex. PW24/K (Part of D-17).
(ii) Cheque dated 28.04.08 Rs. 3 lacs Ex. PW24/H1 (Part of D-15).
(iii) Cheque dated 24.05.09 Rs. 15 lacs Ex. PW24/J (Part of D-17).
(iv) Cheque dated 04.06.08 Rs. 9 lacs Ex. PW24/H2 (D-15).
9.36 Such cheques were duly credited in the account of M/s Maa Shakumbari Trading Company as per statement Ex. PW24/E (D-96) and there were corresponding substantial withdrawal of cash by self-cheques. As per PW24 S.K. Ahluwalia, a sum of Rs. 8.95 lacs on 04.04.2008, Rs. 9 lacs on 04.04.2008, Rs. 9 lacs on 04.04.2008, Rs. 7 lacs, Rs. 8 lacs and Rs. 3 lacs, Rs. 1.90 lacs on 02.06.2008, Rs. 5.80 lacs on 04.06.2008 and Rs. 5 lacs on 05.06.2008 were withdrawn.
9.37 Similarly, reference be made to various cheques issued by M/s Krishna & Krishna Enterprises which landed in the account of M/s Ashok Kumar & Aman Kumar. Cheque Ex. PW24/L (D-17) of Rs. 10 lacs dated 25.03.2008 and another cheque Ex. PW24/M (part of D-17) for Rs. 11,86,062/- were deposited in the account of M/s Ashok Kumar & Aman Kumar and as per statement Ex. PW24/D (D-95), there are debit entries CC No. 07/2011 CBI Vs. Tara Chand Aggarwal etc. Page 67 of 91 regarding withdrawal and these debit entries are of 28.03.2008. There are various entries showing withdrawal of cash by self-cheques.
9.38 Various questions with respect to these entries were put to accused Satbir Sharma. These figure in question number 168 to question number 177 as recorded u/s 313 Cr.P.C. and surprisingly accused Satbir Sharma did not come up with any substantial answer and merely pleaded that these were matter of record and payment must have been made for trading in sugar and rice. This is despite the fact that he himself is the proprietor of M/s Guruji Trading Company and all such cheques, which were drawn by M/s Krishna & Krishna Enterprises, were signed by none other than Satbir Sharma. His co-accused Tara Chand Aggarwal pleaded his ignorance about these entries and statement of accounts and he only claimed that his co- accused Satbir Sharma had signed on such cheques. Accused Hari Shankar Sharma pleaded his ignorance about any such entry or statement of account claiming that he did not know anything about any such business activity.
9.39 Sh. Khosla has also argued that the loan documents were rather got prepared by the bank officials and the partners are not the author of such alleged forged documents. Accused Satbir Sharma wants to claim that he and his partners had approached the bank for grant of cash credit facility and they were not aware about the nature of documents which were required to be submitted and these documents were rather got prepared by the bank officials. Such contention seems too fanciful to be believed. Accused Satbir Sharma was not a novice. He had already availed cash credit facility from Mall Road Branch of PNB. He knew the procedure and the formalities. No one can be permitted to have the cake and eat it too. When it comes to enjoying the facility, borrower firm did start using CC limit of Rs. 3 crores immediately but when it comes to the documents submitted to the bank for CC No. 07/2011 CBI Vs. Tara Chand Aggarwal etc. Page 68 of 91 said purpose, it cannot be heard from them that these documents had been prepared by bank officials. I am not ready to buy such contention of Sh. Khosla. These documents had been submitted by the borrower firm and were not prepared or manufactured by bank officials.
9.40 Sh. Khosla has asserted that there is no material on record which may show that alleged forged documents had been prepared by the accused persons. All these documents were submitted by the borrower firm to the bank and it is for the partners of the firm to explain as to how these documents, which were found to be forged, came into their possession.
9.41 Both the relevant chartered accountants i.e. Sh. Vikas Gupta and Sh. Ashok Kumar have categorically disowned their signatures on audited balance-sheets and financial statements. They have also out rightly denied that they had done any auditing ever for M/s Krishna & Krishna Enterprises. These financial statements and balance-sheets purportedly bearing their stamp and signatures were submitted by the borrower firm. Therefore, it is all the more important for the partners only to answer as to from where they procured these allegedly forged financial statements/balance-sheets. I am mindful of the fact that report of CFSL does not give any boost to the case of prosecution on this score but I cannot completely wipe out the deposition made by said two chartered accountants more so when defence has not bothered to explain as to why these independent chartered accountants would depose against them. No animosity has been suggested either.
9.42 It has been asserted that there was no mens rea to cheat anyone. Further that, the bank, at no point of time, stopped cash credit facility. Bank did not send any notice of any nature whatsoever to the borrower CC No. 07/2011 CBI Vs. Tara Chand Aggarwal etc. Page 69 of 91 pointing out any irregularity or deviation from any of the terms & conditions and rather kept on honouring the cheques issued by the borrower firm. Undoubtedly, the bank officials should also have been extra vigilant and careful and perhaps Mr. Khosla has forgotten that since bank official Ravi Bharti was not found judicious and upright in supervising and maintaining the loan account, he is also in the dock and facing trial along with partners of the borrower firm. Thus the borrower firm cannot be permitted to take shelter behind inaction on the part of bank.
9.43 Sh. Khosla has expressed his surprise as to how, if the audited balance-sheets were forged, investigating officer had been able to contact the chartered accountants. In fact, IO PW-30 R.A. Yadav has been cross- examined at length on this score. In cross-examination, Mr. Yadav claimed that he had verified the address of PW2 Ashok Kumar from Institute of Chartered Accountants of India (ICAI). As far as PW Vikas Gupta is concerned, I.O. could not give any answer claiming that he did not remember as to how he contacted him. He desired to consult the case diary and on seeing the case diary he claimed that letter dated 23.03.2010 had been written to ICAI which was in CD No. 34 of said date. To me, it really does not matter much as to how IO was able to contact these two chartered accountants, namely, Vikas Gupta and Ashok Kumar. Fact remains that they both had joined the investigation and they also deposed before the Court and disowned their signatures and stamp on any such financial statements and balance-sheets.
9.44 Sh. Khosla wonders as to why the signatures of various other persons were taken if CBI was sure that accused were the author of forgery. It has also been claimed that such other persons have not been sent up to face trial and they have not been cited as witnesses either. However, I am of CC No. 07/2011 CBI Vs. Tara Chand Aggarwal etc. Page 70 of 91 the opinion that it really does not make any difference because during investigation, any investigating officer is required to investigate the matter thoroughly and thus can obtain specimen handwriting and signatures of various persons to reach to the root of the matter. Merely because their signatures were taken, it cannot be deduced that they were involved with the forgery in one way or the other. Such fact has virtually no impact over the case particularly when the Court has the benefit of seeing the report of GEQD.
9.45 Sh. Khosla has also claimed that cash credit facility was of Rs. 3 crores and at no point of time, such entire facility was ever availed. According to him, if the intention of accused(s) was other than bonafide, they would have exhausted the entire facility in no time. This contention does not cut any ice as in July 2008, the debit balance had touched Rs. 2.97 crores.
FORGED VAT RETURNS 10.0 Let me now also see the alleged forged VAT Returns. It is not in dispute that when the loan application was submitted by the borrower, it had also furnished various VAT Returns. These VAT Returns are monthly VAT Returns. M/s Krishna & Krishna Enterprises was having registration number as 07680306900. Such registration number is in fact under TIN (Trade Information Network). It was allocated to M/s Krishna & Krishna Enterprises when it was a proprietary concern. Here we are concerned with M/s Krishna & Krishna Enterprises, a partnership concern. I am not really able to understand as to how TIN number used by a proprietary concern can be said to be the one meant for a different entity i.e. partnership firm. It was the primary duty of borrower firm to have provided requisite information regarding the change in the constitution with the concerned department if at all, it CC No. 07/2011 CBI Vs. Tara Chand Aggarwal etc. Page 71 of 91 wanted to continue with same TIN. It seems that nothing of that was ever done.
10.1 Following copies of form DVAT-16 and acknowledgments were submitted by the borrower firm while seeking loan facility:-
S. Description Period Exhibit No. Date of
No. acknowledgment
allegedly given by
DVAT
1 DVAT-16 January 2008 PW7/F13 28.02.2008
2 DVAT-16 February 2008 PW7/F12 19.03.2008
3 Acknowledgment April 2007 PW7/F11 15.05.2007
4 Acknowledgment May 2007 PW7/F10 17.06.2007
5 Acknowledgment June 2007 PW7/F9 13.07.2007
6 Acknowledgment July 2007 PW7/F8 13.08.2007
7 Acknowledgment August 2007 PW7/F7 13.09.2007
8 Acknowledgment September 2007 PW7/F6 24.10.2007
9 Acknowledgment October 2007 PW7/F5 25.11.2007
10 Acknowledgment November 2007 PW7/F4 26.12.2007
11 Acknowledgment October 2007 PW7/F3 15.11.2007
12 Acknowledgment November 2007 PW7/F2 16.12.2007
13 Acknowledgment December 2007 PW7/F1 07.01.2008
10.2 Sh. Jagbir Singh, learned SPP has stated that all these VAT
documents are bogus as these were never ever filed by M/s Krishna & Krishna Enterprises with the Department of Trade & Taxes. According to him, it is a very serious and alarming act on the part of borrower firm and its partners. My attention has been drawn towards the testimony of PW7 Sh. Nagesh Kumar who has, in no uncertain terms, deposed that no monthly return was ever received from said firm for the period 2007-08. He was even shown all such returns/acknowledgments contained in Ex. PW7/F1 to Ex. PW7/F13 and he claimed that these were never received in their office and CC No. 07/2011 CBI Vs. Tara Chand Aggarwal etc. Page 72 of 91 were not bearing even stamp of their office. When he was examined during investigation, he had produced the actual returns which the borrower firm had, in fact, filed with the department. Such returns were seized vide memo Ex. PW7/A and such returns have been proved as Ex. PW7/B to Ex. PW7/E. 10.3 Ex. PW7/B pertains to first quarter of 2007-08 and was received in the office on 27.07.2007. Ex. PW7/C is the quarterly return for the second quarter which was received in the office of Trade & Taxes on 29.10.2007. Return for third quarter is Ex. PW7/D and return of last quarter ending 31.03.2008 is Ex. PW7/E which were received on 27.01.2008 and 25.04.2008 respectively.
10.4 It is also important to mention that monthly return is filed when the turnover is beyond Rs. 5 crores. If the turnover is between Rs. 50 lacs to Rs. 5 crores then any such firm is required to file return on quarterly basis. This rather indicates that idea behind filing copies of monthly return was to demonstrate that firm was having decent turnover exceeding Rs. 5 crores.
10.5 I have seen and compared both the returns i.e. alleged forged monthly returns and genuine quarterly returns. It would be interesting to mention that TIN number remains the same in both types of returns. Naturally, there is no reason or occasion for any firm to file returns for the same period on quarterly basis as well as on monthly basis. The period is evidently overlapping. For the same duration and period, there is found to be a monthly return as well as a quarterly return. So much so that there happens to be two different acknowledgments for the month of October 2007 and also for the month of November 2007.
CC No. 07/2011 CBI Vs. Tara Chand Aggarwal etc. Page 73 of 9110.6 Testimony of Sh. Nagesh Kumar clearly indicates that the monthly returns are fabricated documents as no such return was ever filed by the borrower firm with Trade & Taxes Department. If at all, these monthly returns were genuine, there would have been corresponding record with the Department of Trade & Taxes and accused firm and accused-partners must be also possessing the original acknowledgments. IO has also deposed before the Court that these were found to be forged and their originals never surfaced during the investigation.
10.7 Here, I would also like to comment upon the role of accused Ravi Bharti. He had given endorsement on all such forged monthly returns claiming that he had verified these copies from the original documents. Such verification given by him is manifestly false as there were never any original of such monthly returns/acknowledgments.
10.8 I have seen the cross-examination of PW7 Sh. Nagesh Kumar very carefully and it was suggested to him by accused Satbir Sharma that documents Ex. PW7/F1 to F13 (monthly returns/acknowledgments) were genuine returns and that record thereof was not available in the office of Trade & Taxes and, therefore, he (Nagesh Kumar) was denying about its authenticity. I do not feel convinced at all by such stand taken by accused Satbir Sharma. Moreover, as discussed above, there is never any occasion for any firm to submit monthly return and quarterly return for the same period. Copies of all such monthly returns bear signatures of all the three accused and I am of the considered opinion that accused cannot run away from these forged documents. They submitted these documents and, therefore, they are to explain as to from where they got such bogus returns and acknowledgment. Merely by claiming that these were genuine documents, they cannot be absolved of their liability particularly in view of the convincing CC No. 07/2011 CBI Vs. Tara Chand Aggarwal etc. Page 74 of 91 and categoric deposition of PW7 Sh. Nagesh Kumar. Submitting documents forged acknowledgments purportedly given by a government department is not condonable act.
REDUCTION IN LIMIT 11.0 Sh. Khosla has also contended that account of M/s Krishna & Krishna Enterprises was running properly and regularly and business came to standstill as the DP was reduced abruptly without any notice. According to him, borrower firm should have been informed about reduction but the limit was reduced arbitrarily and illogically and due to such reduction, borrower firm was not able to meet the trading-commitments and, therefore, their busi- ness got a hammering.
11.1 Undoubtedly, bank can go for surprise inspection of the stock. After all such stocks are hypothecated with the bank. Such stock, in the store situated at Naya Bans, was inspected and it was found that worth of the same was Rs. 70-75 lacs, Delhi. No books for verification of debtors were produced and it was vaguely informed that such some stocks were lying at border. No proof of stocks at any other premises was provided either.
11.2 I am not persuaded to hold that there was abrupt reduction. Stock was inspected in January 2009 but DP was reduced only vide order dated 07.03.2009. Admittedly, it would have been better had the party been informed in writing about such intended act of reduction in DP. It seems to me that no written notice was sent to borrower firm. However, when such DP was reduced vide order dated 07.03.2009, even the borrower firm did not agitate as it did not send any letter to bank challenging the reduction. If at all, borrower firm felt that there was no ground or reason for reduction in DP and CC No. 07/2011 CBI Vs. Tara Chand Aggarwal etc. Page 75 of 91 the stocks were sufficient, it could have immediately sent a letter to the bank for restoration of previous DP. No such communication was sent. So much so, no partner even attempted to meet the Branch Incumbent in this regard. It rather clearly indicates that borrower firm had no qualm with the surprise inspection which took place in January 2009 and with the worth of stock.
11.3 I have also seen the testimony of both the concerned bank officials on this score. PW17 Sh. Dinesh Kr. Chawla, the then Manager (Loans) of Shalimar Bagh Branch had inspected the stocks along with PW20 Sh. Sanjeev Sharda, the then Chief Manager and found the shortfall in the stock. According to PW17 Sh. Dinesh Kr. Chawla, worth of the stock was Rs. 70-75 lacs and it was revealed by the borrower firm that some stocks were lying at border. No proof or bill in this regard was submitted by the borrower firm. Undoubtedly, he could not answer as to how many bags (boris) of sugar were there. No spot report was prepared at the time of such inspection and, therefore, he has not been able to give number of boris and the rate per kg of the sugar at that time. However, these facts do not make much difference as PW20 Sh. Sanjeev Sharda had ordered for reduction in DP but no question was asked by any of the partners to him in cross-examination challenging reduction in DP. Therefore, borrower firm cannot be permitted to say that DP was reduced arbitrarily, unjustifiably or abruptly.
CIVIL LIABILITY VIS-À-VIS CRIMINAL LIABILITY 12.0 Sh. Khosla has contended that it is established on record that there was compromise between borrower firm and bank and the entire amount was paid even before filing of charge-sheet. Undoubtedly, there is no denying to the aforesaid fact. Even IO-Insp. R.A. Yadav has deposed so. Outstanding loan amount was of Rs. 2.19 crores and in the bargain, bank CC No. 07/2011 CBI Vs. Tara Chand Aggarwal etc. Page 76 of 91 received a sum of Rs. 2.93 crores. Thus, bank has received all its dues but that does not mean that criminal angle stands evaporated altogether.
12.1 There is no embargo in taking simultaneous remedial action. Civil action and criminal action can go together. Merely because some compromise had taken place in any civil action, it cannot be automatically said that criminal action is also liable to come to an end in view of such compromise.
12.2 I would also like to make reference to Ex. PW30/H29 (D-100). It happens to be a letter written to IO PW30 R.A. Yadav by AGM, PNB, New Delhi. By said letter, it was informed that account had been adjusted as per DRT order and the copy of DRT order was also annexed along with the brief history of the account and simultaneously Sh. Yadav was also informed that such compromise had no bearing over the criminal case filed against party by CBI and the adjustment of the account would not absolve the party from the criminal liability.
12.3 I have also seen order of DRT dated 14.12.2009 and even such order does not say that criminal liability would also come an end on any such payment by the borrower. Interestingly, Sh. Rajiv Khosla had appeared before DRT on behalf of guarantor Smt. Sushila Devi.( wife of accused Hari Shankar Sharma).
12.4 Sh. Khosla has strongly relied upon the order dated 29.03.2010 passed by DRT-III whereby guarantor Sushila Devi was directed to deposit the amount. Copy of said order was shown during final arguments. Relevant paragraphs of said order are as under:
CC No. 07/2011 CBI Vs. Tara Chand Aggarwal etc. Page 77 of 91"The approach as exhibited, adopted by the petitioner and the other borrowers, who are at present under the scanner of CBI which has been aptly described by the apex court in the case of Vineet Narain Vs. Union of India as the impartial, independent investigating agency, through their learned Advocate has been wholeheartedly welcomed by this tribunal; the liquidating approach of the petitioner and the other borrower should also be accepted by the bank, the complainant to the CBI.
It the petitioner and the other borrower are serious, sincere to their commitment made this day, Wednesday, April 28, 2010 would certainly be the day when the petitioner and the other borrower cannot be the subject of any drastic enforcement measure by the bank; moreover, there shall be no ground for the above investigating agency which has not yet submitted the charge sheet under Section 173 of the Code of Criminal Procedure, 1973 (Act No. II of 1974). True to say, there is at present an apprehension as to the commission of an offence; the offence has not been cognized by any court set up under Section 3 of the said Code. Since the time of Holland, offence once cognized cannot be destroyed or altered under pardoned or computed. The bank is the complainant; CBI is also a special police; the statement made before itself is also not admissible under Section 25 of the Indian Evidence Act, 1872 (Act No. I of 1872).
The petitioner and the other borrower intend seriously to "buy peace" at the cost of paying to the exchequer of the bank the above huge amount within a very short period which is absolutely less than the period granted to the petitioner and the other borrower. The bank should be solely concerned with the recovery; its aim should be to reduce the existing stock of NPAs, one of which has been maintained by the partnership firm. Legally speaking the bank cannot refuse to accept the above amount if tendered by the petitioner and the other borrower within the above time limit; if is factually refused, it shall certainly carry out the risk of such refusal in the form of the abandonment of its CC No. 07/2011 CBI Vs. Tara Chand Aggarwal etc. Page 78 of 91 claim which is distinct from waiver.
Smt. Sushila Devi is, therefore, being directed to deposit with the bank a sum of Rs. Rupees one crore seventy lacs and the awarded interest for the period, aforementioned and afore-described within the said period; failing which the bank shall be at liberty to resort in reality the actual and real enforcement measures. No request would be entertained by this tribunal except in the proven interferable one.
12.5 Sh. Khosla has thus contended that since the aforesaid order was passed on 29.03.2010 and since there was specific direction that CBI could not go for any further action, CBI was completely unjustified in filing the charge-sheet on 10.12.2010. I would, however, only comment that there are various pronouncement of Supreme Court which clearly go on to show that civil liability and criminal liability can be pursued independently and merely because such civil matter stands compromised and the entire payment is also made, it cannot be inferred that the criminal action is liable to fail robotically. Court is required to be alive to the fact that money in question is public money. It also cannot be lost sight of the fact that the borrower had shown the audacity of forging acknowledgments of a government department. Be that as it may, aforesaid observations given by learned Tribunal cannot be said to be having any binding over a criminal court particularly keeping in mind the peculiar facts of the case. Moreover, reference in this regard be also made to one recent judgment of our own High Court reported as KRANTA AAKASH @ PRAKASH KUMAR VS. STATE & ANOTHER 2013 II AD (DELHI) 46. Said case also related to offences u/s 420, 468 and 471 IPC and accused had, for the purposes of cheating, used a forged document as genuine. In that case also, compromise was arrived at and payment was made and the parties chose to seek quashing of FIR. Such request was, however, disallowed holding that merely because the payment had been CC No. 07/2011 CBI Vs. Tara Chand Aggarwal etc. Page 79 of 91 made did not form ground for quashing of FIR because the dispute in question, by any stretch of imagination, could not be said to be either a civil dispute arising out of some commercial transaction or a dispute, personal in nature. It was also echoed that if FIR in such type of matter was quashed, it would not be for securing ends of justice and rather it would be giving impetus not only to the accused therein but to other such like-minded person that they could get away by committing serious offence merely by making payment later on.
AUTHORITIES CITED AT THE BAR 13.0 Sh. Tripathi, learned counsel for accused Tara Chand Aggarwal has relied upon following judgments:-
(i) Raj Rani Dhanda Vs Commissioner of Police & Anr 2006 (1) JCC 133
(ii) Joseph Salvaraj A. Vs State of Gujrat (2011) 7 SCC 59
(iii) S. V. L. Murthi Vs State AIR 2009 Supreme Court 2717
(iv) Yogesh Vs State of Maharashtra (2008) 10 SCC 394
(v) P. Vijayan Vs State of Kerala 1 (2010) SLT 66
(vi) K. Ramakrishna Vs State of Bihar AIR 2000 SC 3330
(vii) Chitresh Kumar Chopra Vs State VI (2009)SLT 584
(viii) Rukmini Narvekar Vs Vijaya Satardekar VIII (2008) SLT 582
(ix) State of M. P. Vs Sheetla Sahai 2009 Cri. L. J. 4436 SC
(x) Bhupinder Singh Patel Vs CBI 2008 (4) RCR (Criminal) 605 and
(xi) Shreya Jha Vs CBI (judgment of High Court of Delhi delivered on 28.5.2007) 13.1 I have perused all the aforesaid judgments and the propositions laid down in said authorities are not disputed at all. Though at the same time, I would like to add that every case has its unique peculiarity and any precedent cannot be applied without verifying that factual matrix was exactly the same. As per Lord Denning, each case depends on its own facts and a close similarity between one case and another is not enough because even a single significant detail can alter the entire CC No. 07/2011 CBI Vs. Tara Chand Aggarwal etc. Page 80 of 91 aspect.
13.2 In Raj Rani Dhanda (supra), it has been held that guilty intention is an essential ingredient of offence of cheating. There is also no dispute with respect to the proposition laid in case of Bhupinder Singh Patel (supra) that mens-rea is an essential ingredient of a criminal offence. In the instant case, such guilty intention is indeed present as forged documents were submitted and funds were diverted and mis-utilized. In Joseph (supra), situation was different as in that case a pure civil dispute was sought to be given colour of criminal offence to wrack vengeance. Said authority is not applicable in the present context at all. In S. V. L. Murthy (supra) also, it was observed that cheating was not made out as the action of the bank officers was in consonance with long standing banking practice and there was nothing to infer any conspiracy. In Yogesh (supra), it has rather been observed that meeting of minds of two or more conspirators is sine-qua-non in a criminal conspiracy and there may not be a direct proof to prove such agreement but the existence of conspiracy and its objectives can be inferred from surroundings circumstances and conduct of the accused. P. Vijayan (supra), K. Ramakrishna (supra), Chitresh Kumar Chopra (supra), Sheetla Sahai (supra) and Rukmini Navrekar relate with the stage of charge. .
13.3 Sh. Khosla, on behalf of accused Satbir Sharma, has relied upon following judgments:-
(i) Dr. Vimla Vs Delhi Administration AIR1963 SC 1572,
(ii) Abinash Chandra Bose Vs Bimla Chandra Bose 564 SCR (1963) page 564,
(iii) V. Dilip Kumar Vs State 2012 Law Suit (Madras) page 223, &
(iv) Nikhil Merchant Vs CBI (2008) 9 SCC 677.CC No. 07/2011 CBI Vs. Tara Chand Aggarwal etc. Page 81 of 91
13.4 There is no dispute with respect to proposition of law. Defraud, indeed, involves two elements i.e. deceit and the injury to the person so deceived and these both are required to be established. In the present case, it cannot be said that any of the aforesaid two ingredients is meeting.
13.5 Sh. Khosla has, on the strength of judgment given in case of V. Dilip Kumar (supra), argued that if offence of forgery is not proved the allied offence u/s 471 IPC is also liable to fail automatically. However, I do not agree with his such contention. Section 468 IPC deals with preparation of forged documents. It is directed against the person who commits the forgery by preparing a false document. Section 471 IPC is rather on a different footing. It prohibits fraudulent or dishonest user of any such forged document.
13.6 Undoubtedly, it is not comprehensible as to who had actually forged the VAT Returns but fact remains that there is no dispute that these documents were submitted before the bank by borrower firm through its partners. Tendering such documents before the bank amounts to using such documents. Even if there is no sufficient evidence on record to pinpoint and nail the author of the forgery, it amply stands proved that these were used by the borrower firm for seeking CC facility.
13.7 Sh. Khosla has contended that in terms of judgment given in the case of Nikhil Merchant (supra) cases related to even non-compoundable offence can be quashed. I would like to straightway point out two things. Firstly, this court does not enjoy any power to quash the proceedings and, therefore, defence cannot dig out any advantage. Secondly, in one later judgment of Supreme Court i. e. GIAN SINGH VS STATE OF PUNJAB (2010) 12 SCALE 461, it has been observed by Apex Court that said decision given in Nikhil Merchant's case does not appear to be a correct one.
CC No. 07/2011 CBI Vs. Tara Chand Aggarwal etc. Page 82 of 91It was also held therein that any compromise between the victim and offender in relation to the offences under special statutes like Prevention of Corruption Act or the offences committed by public servants while working in that capacity etc; could not provide for any basis for quashing criminal proceedings involving such offences.
13.8 Sh. Jha has placed his reliance upon following judgments:
(i) Rakesh Kapoor Vs. State of HP IX (2012) SLT 33.
(ii) K.R. Purushothaman Vs. State of Kerala AIR 2006 SC 35
(iii) State Vs. Siddarth Vashisth @ Manu Sharma & Ors. 90 (2201) DLT 548
(iv) State of Maharashtra Vs. Som Nath Thapa 1996 (2) Recent CR 480
(v) Shashi Lata Khanna Vs. State of Delhi & Ors. 121 (2005) DLT 522
(vi) Rakesh Kumar Vs. State 2004 (1) CC Cases (HC) 84
(vii) Subash Parbat Sonvane Vs. State of Gujarat 2002 Cri.L.J. 2787 13.9 As far as judgments in the cases of Rakesh Kapoor (supra) and Subash Parbat Sonvane (supra) are concerned, these relate to catching hold of the accused red-handed while accepting bribe. Appreciation of evidence in trap cases is altogether on a different footing as in such type of matters, Section 7 as well as Section 13 (1) (a) PC Act come into play together. In the case of Rakesh Kapoor (supra), it was held that since the conviction of accused u/s 7 PC Act had been set aside by the High Court, which order had attained finality, it was not possible to sustain his conviction u/s 13 (2) PC Act. Such proposition of law is not attracted in the present case.
13.10 On the strength of judgment of K.R. Purushothaman (supra), it has been argued that knowledge of illegal act prior to any such agreement is necessary. Such proposition is not disputed but then it is also to be kept in CC No. 07/2011 CBI Vs. Tara Chand Aggarwal etc. Page 83 of 91 mind that agreement of conspiracy is, most of the times, inferred by way of necessary implication and from the attendant circumstances. There is also no dispute with respect to proposition of law laid down in Manu Sharma's case (supra) that for establishing criminal conspiracy, prosecution must place on record some connecting link or evidence of meeting of minds of conspirators for achieving particular object. According to Sh. Jha, there is nothing to infer any conspiracy at all. Both Hari Shankar Sharma and Ravi Bharti were never ever any part of conspiracy. However, as far as accused Ravi Bharti is concerned, I am convinced that he was part of conspiracy which can be deciphered from his various acts and omissions. Lapses on his part clearly indicate that he was mixed up with the partners of M/s Krishna & Krishna Enterprises and wanted to oblige them. His obtaining pecuniary advantage is also indicative of the fact that he was in conspiracy with his co- accused.
13.11 In the case of Som Nath Thapa (supra), it has been observed that to establish conspiracy, knowledge about the indulgence either in illegal act or a legal act by illegal means was necessary. Sh. Jha has contended that accused Ravi Bharti was never part of any conspiracy and he did not do any illegal act and he did not have any knowledge about the act and motive of his co-accused. I would only reiterate that there is no dispute about the legal proposition but in the present case, it is very much apparent that accused Ravi Bharti was acting in connivance with his co-accused right from the inception.
13.12 Keeping in mind the peculiar facts of the present case, Sh. Jha cannot dig out any advantage from the other judgments either.
CC No. 07/2011 CBI Vs. Tara Chand Aggarwal etc. Page 84 of 9113.13 Sh Singh. Ld. SPP has claimed that there is sufficient material to infer conspiracy. He has also argued that all accused were acting in league and their collective efforts resulted in loss to the bank. According to him, there is no legal requirement to have a tangible evidence to infer conspiracy and it can be deduced from various circumstances. He has also relied upon Mohd. Khalid vs State Of West Bengal 2002 (2) ALD Cri 610, wherein it has been observed as under:-
"Privacy and secrecy are more characteristics of a conspiracy, than of a loud discussion in an elevated place open to public view. Direct evidence in proof of a conspiracy is seldom available, offence of conspiracy can be proved by either direct or circumstantial evidence. It is not always possible to give affirmative evidence about the date of the formation of the criminal conspiracy, about the persons who took part in the formation of the conspiracy, about the object, with the objectors set before themselves as the object of conspiracy, and about the manner in which the object of conspiracy is to be carried out, all this is necessarily a matter of inference."
13.14 There cannot be any dispute with respect to said proposition.
FINAL ANALYSIS 14.0 I am unable to draw any parallel between Hari Shankar Sharma and his other two partners.
14.1 As far as accused Hari Shankar Sharma is concerned, he was nowhere in the picture before the partnership deed Ex. A-23 dated 01.10.2007. PW27 G.S. Goyal also never met him. He cannot be held liable for any of the previous financial statements/balance-sheets etc. of M/s CC No. 07/2011 CBI Vs. Tara Chand Aggarwal etc. Page 85 of 91 Krishna & Krishna Enterprises. He was roped in because he had a property which could be offered as security. Such property was in the name of his wife Sushila Devi who stood guarantor. He admittedly did not sign any cheque. He is, admittedly, not a beneficiary as no cheque issued by the borrower firm landed in his account or in any account in which he was beneficiary-direct or indirect. It is rather accused Satbir Sharma who had signed all the cheques.
14.2 Naturally, any partner can be given authorization to sign cheques and such act of partner can also bind the others but when it comes to criminal liability, it is the prime duty of the prosecution to show the positive act on behalf of any such partner. Merely because accused Hari Shankar was a partner, it cannot be assumed that he had intention to cheat anyone. I have already discussed above that he had no knowledge or connection with the previously constituted partnership firm M/s Krishna & Krishna Enterprises or with proprietary concern also known as M/s Krishna & Krishna Enterprises. Undoubtedly, when the documents were submitted before the bank, he was also asked to sign which he did. However, he only signed as partner for M/s Krishna & Krishna Enterprises. His merely signing would not mean that he was also responsible for the preparation of forged documents or that he had submitted the forged documents knowingly and deliberately with intention to cheat the bank.
14.3 I cannot be oblivious of the fact that he has even dared to enter into the witness box. I have carefully gone through his deposition. I rather feel that he is a victim of circumstances. He was told by his other two partners that there was a good profitable deal and since his two partners were looking for requisite funds for bulk buying, he offered his property as security and accordingly partnership deed was executed in which he was made a partner. He was not given any authority to sign any cheque. He did not know CC No. 07/2011 CBI Vs. Tara Chand Aggarwal etc. Page 86 of 91 even a bit about the business and trade of sugar and when the discrepancies were noticed in the loan account by the bank, CC limit was reduced and criminal complaint was also lodged and action was taken to attach the mortgaged property. He deposed that he single-handedly defended such proceedings and paid off entire amount and no one shared a penny. He had to take loan of Rs. 1 crore from Citi Bank in order to repay the loan liability and such fact was also proved by him. He has deposed that he never indulged in any criminal act and he had only consented to join the business of purchase and sale of sugar on account of misconception of facts resulted out of misrepresentation made to him. He has also deposed that he did not forge any document and never authorized anyone, expressly or impliedly, to act beyond the purview of deed of partnership.
14.4 In Bhikalal Ramjibhai Zavsri vs State Of Maharashtra AIR 1981 SC 476, there was no evidence at all to show that the one such partner had practised any fraud on the complainant and thereby induced him and it was held that he could not be convicted u/s 420/34 IPC merely because he was partner of his co-accused who had caused inducement.
14.5 Though the essential characteristics of a firm is that each partner is a representative of other partners and each is an agent as well as a principal, there is no vicarious liability in criminal law unless the statute takes that also within its fold. It is not uncommon that some of the partners of a firm may not even be knowing of what is going on day to day basis in the firm. There may be partners, better known as sleeping partners who are not required to take part in the business of the firm. There may be ladies and minors who are sometimes admitted for the benefit of partnership. They may not know anything about the business of the firm. It would be a travesty of justice to prosecute all such persons. Prosecuting agency has to show that CC No. 07/2011 CBI Vs. Tara Chand Aggarwal etc. Page 87 of 91 any such partner was responsible for carrying on the business and was during the relevant time in charge of the business and in the absence of any such proof, no partner can be convicted on the principle of vicarious liability merely due to his being a partner. Thus a person cannot be hauled up merely because he happens to be a partner in the firm. Prosecution is required to show some positive and overt act on the part of such partner.
14.6 In the present case, there is no positive or overt act assigned to Hari Shankar Sharma. I am, therefore, in view of my foregoing discussion, inclined to grant benefit of doubt to accused Hari Shankar Sharma.
14.7 However, as far as other two partners are concerned, they cannot be permitted to claim any immunity and they cannot turn their back at all. They both were already running partnership business under the same name and style. Accused Tara Chand Aggarwal is also not justified in claiming that it was Satbir Sharma who was controlling the business. As already noticed above, as per PW27 G.S. Goyal, even Tara Chand Aggarwal used to enquire from him about his share in the business. It shows that he was very much indulged in the business and was concerned about his share. He was the one who had accepted and acknowledged the terms and conditions when the loan was sanctioned. He also cannot be permitted to run away from the forged documents though admittedly, he never signed any cheque. Both these partners, namely, Satbir Sharma and Tara Chand Aggarwal had submitted balance-sheets which were purportedly audited by Sh. Ashok Kumar and Sh. Vikas Gupta, Chartered Accountants but both these accountants have refused to acknowledge their signatures. VAT returns placed on record have also been found to be forged. Accused Satbir Sharma also never himself divulged about previous loan facility which he had availed from Mall Road Branch of PNB, New Delhi. There was diversion of funds.
CC No. 07/2011 CBI Vs. Tara Chand Aggarwal etc. Page 88 of 91There were self-withdrawals. Funds were diverted to other companies whereas there was no trading transaction. Funds were also misutilized for purchasing immovable property. They both also misrepresented accused Hari Shankar Sharma and kept him in dark about previous business being run under the same name and style. They used him and inducted him in partnership business on papers to utilize his immovable property.
14.8 Accused Ravi Bharti was also acting in connivance. He knew that accused Satbir Sharma had already availed CC facility of Rs. 300 lacs from Mall Road Branch of PNB, New Delhi but he deliberately did not highlight such fact and rather concealed the same. He did not mention said fact either in the confidential report or in his appraisal note. He did not scrutinize the documents properly and accepted the bogus VAT returns and he even verified these monthly VAT returns claiming that these had been compared with the originals whereas fact remains that these were forged returns and there was not any original monthly VAT return. He did not, deliberately, generate CIBIL report properly. He also permitted the diversion of funds and his all such acts and omissions, including pocketing a sum of Rs. 1 lac, clearly indicate that he was acting in league with his said two accused, namely, Satbir Sharma and Tara Chand Aggarwal. His conduct is one which evidently falls within the realm of criminal misconduct. It cannot be said to be case of 'dereliction of duty' or 'error of judgment' or mere 'inadvertent lapse'.
14.9 Since report of GEQD does not give requisite boost to the case of prosecution, I am inclined to grant benefit of doubt with respect to alleged forged CA reports of Ashok Om & Company and Vikas Gupta, Chartered Accountants.
CC No. 07/2011 CBI Vs. Tara Chand Aggarwal etc. Page 89 of 91CONCLUSION 15.0 It stands proved that accused Ravi Bharti, Tara Chand Aggarwal and Satbir Sharma entered into a criminal conspiracy to cheat Shalimar Bagh Branch of Punjab National Bank and cheated the bank to the tune of Rs. 219.92 lacs (as on 30.09.2009). It also stands established that forged monthly VAT returns were fraudulently and dishonestly submitted before the bank and these were accepted by accused Ravi Bharti knowingly fully well that these were forged documents. Accused Ravi Bharti also abused his official position as public servant by conducting various acts of commissions and omissions as discussed above.
15.1 Accused Hari Shankar Sharma is granted benefit of doubt and is acquitted of all charges leveled against him. His bail-bonds are cancelled and his surety is discharged. He would, however submit personal bond in a sum of Rs. 25,000/ u/s 437A Cr.P.C with one surety in the like amount.
15.2 Remaining three accused, namely, Ravi Bharti, Tara Chand Aggarwal and Satbir Sharma are convicted for commission of offences u/s 120B IPC, sec 420 IPC r/w 120-B IPC, sec 471 IPC r/w 120-B IPC and sec 13(1) (d) r/w 13(2) of PC Act r/w Section 120-B IPC.
15.3 Accused Ravi Bharti is also convicted for commission of substantive offence u/s 420 IPC and u/s 13(1) (d) r/w 13(2) of PC Act.
CC No. 07/2011 CBI Vs. Tara Chand Aggarwal etc. Page 90 of 9115.4 Accused Satbir Sharma and Tara Chand Aggarwal are also convicted for commission of substantive offences u/s 420/471 IPC.
Announced in the open Court On this 20th day of May 2013.
(MANOJ JAIN)
Special Judge (PC Act) (CBI)
South Distt: Saket Courts: New Delhi
CC No. 07/2011 CBI Vs. Tara Chand Aggarwal etc. Page 91 of 91
CC No. 07/2011
CBI Vs. Tara Chand Aggarwal etc.
Present: Sh. Jagbir Singh, learned SPP for CBI.
Convict Tara Chand Aggarwal with counsel Sh. SPM Tripathi. Convict Ravi Bharti with counsel Sh.R.M. Jha.
Convict Satbir Shama with counsel Sh. Rajiv Khosla.
Acquitted-accused Hari Shankar Sharma with counsel.
1 Acquitted-accused Hari Shankar Sharma has furnished personal bond and surety bond in a sum of Rs. 25,000/- each u/s 437A Cr.P.C. Accepted.
2 Heard arguments on sentence.
3 Sh. Jagbir Singh, learned SPP has prayed for maximum sentence for all the three convicts. It has been claimed by him that the subsequent repayment of the amount in question cannot be considered as a mitigating circumstance as all the convicts had dared to forge documents and cheated the bank of huge amount. Sh. Singh has also claimed that convict Ravi Bharti also does not deserve any leniency.
4 From the side of defence, it has been claimed, in one voice, that its a fit case where benefit of probation should be granted. Sh. Khosla has contended that there was never any intention to cheat the bank and loan was raised to expand the business and even the repayment has been made well before the filing of charge-sheet which fact itself is sufficient to shower benefit of probation. Sh. Jha has contended that convict Ravi Bharti is under suspension and is the sole bread earner of the family and moreover his ailing wife, who is suffering from blood cancer, and his two children are totally dependent upon him. Sh. Tripathi has also claimed that convict Tara Chand CC No. 07/2011 CBI Vs. Tara Chand Aggarwal etc. Page 92 of 91 should be shown mercy keeping in mind his age and previous clean antecedents.
5 Raising a red flag over derisory monitoring of end-use of funds, the Reserve Bank of India lamented that the expected level of diligence was not exercised by some banks, facilitating diversion of funds by the borrowers. Taking stock of the grim situation, RBI issued advisory that that the efficacy of the existing machinery in banks for post-sanction supervision and follow-up of advances be evaluated and it also stressed for meaningful scrutiny of the books of accounts of borrowers, regular visits and inspection of securities charged/hypothecated to banks, , obtaining of certificates from borrowers that the funds had been utilised for the purposes approved and in case of incorrect certification, initiation of prompt action against them.
6 Indian Banking has seen phenomenal growth in the recent years. India's is, unquestionably, one of the fastest growing economy but if banking sector does not pull its socks and adopt hard measures to arrest such unwarranted pilferage, India is ,for sure, going to lose its such valued tag. Indian banks do not have any mechanism, what to say a robust one, to monitor the end use of funds. There is no cross-check mechanism or fraud- control-management-system. There is no system of accountability either. Usually, it's a game of passing the buck. Loan Manager says he is not the final authority and the one who sanctions the loan should be held. Sanctioning authority cries hoarse that it is over burdened with work and had merely relied upon the wisdom of its subordinate.
7 I am mindful that, at times, there is huge pressure on the officials of the bank to meet tough targets but in their zeal and over- enthusiasm, bank officials cannot afford to throw the rules to the drain thereby CC No. 07/2011 CBI Vs. Tara Chand Aggarwal etc. Page 93 of 91 making the coffers poorer. If strong anti-fraud and accountability measures are not implemented sooner than later, there would be a serious setback to Indian economy. Thus, it's high time that all banks evolve a near fool-proof mechanism to minimize such bank-frauds.
8 Coming to sentence, court is always required to assess the aggravating and mitigating circumstances. One biggest plus is that bank got back its dues even before filing of charge-sheet. So, there is no monitory loss to anyone, as of now.
9 Convict Satbir Sharma was the Master-mind. Convict Ravi Bharti assisted him very ably. He accepted a sum of Rs. 1 lac as undue pecuniary advantage through convict Satbir Sharma only. And convict Tara Chand Aggarwal also played his part though not as grave as of his co- convicts. I feel that sentence should also be in the same proportion. At the same time, it is certainly not a case of grant of probation.
10 Admittedly, all the convicts have clean antecedents and are first-timers. Keeping in mind all the factors, convicts are sentenced are as under:-
Convict Tara Chand Aggarwal
(i) For offence u/s 120-B IPC, SI for six months, for offence u/s 420 IPC r/w Section 120-B IPC, SI for one year and to pay fine of Rs.
10,000/- in default thereof further SI for three months, u/s 471 IPC r/w Section 120-B IPC, SI for one year and to pay fine of Rs. 10,000/- in default thereof further SI for three months, u/s 13 (1) (d) r/w 13 (2) PC Act r/w Section 120-B IPC, SI for one year and to pay fine of Rs. 10,000/- in default of thereof further SI for three months, u/s 420 IPC, SI for one year and to pay fine of Rs. 10,000/- in default thereof further SI for three months and u/s 471 IPC, SI for one year and to pay fine of Rs. 10,000/- in CC No. 07/2011 CBI Vs. Tara Chand Aggarwal etc. Page 94 of 91 default thereof further SI for three months.
Convict Satbir Sharma
(ii) For offence u/s 120-B IPC, SI for six months, for offence u/s 420 IPC r/w Section 120-B IPC, SI for one year and to pay fine of Rs. 20,000/- in default thereof further SI for four months, u/s 471 IPC r/w Section 120-B IPC SI for one year and to pay fine of Rs. 10,000/- in default thereof further SI for three months, u/s 13 (1) (d) r/w 13(2) PC Act r/w Section 120-B IPC SI for one year and to pay fine of Rs. 10,000/- in default thereof further SI for six months, u/s 420 IPC, SI for three years and to pay fine of Rs. 50,000/- in default thereof further SI for three months and u/s 471 IPC SI for one year and to pay fine of Rs. 10,000/- in default thereof further SI for three months.
Convict Ravi Bharti
(iii) For offence u/s 120-B IPC SI for six months, for offence u/s 420 IPC r/w Section 120-B IPC SI for one year and to pay fine of Rs. 10,000/- in default thereof further SI for three months, u/s 471 IPC r/w Section 120-B IPC, SI for one year and to pay fine Rs. 10,000/- in default thereof further SI for three months, u/s 13 (1) (d)/13 (2) PC Act r/w Section 120-B IPC, SI for two years and to pay fine of Rs. 10,000/- in default thereof further SI for four months, u/s 420 IPC SI for one year and to pay fine of Rs. 20,000/- in default thereof further SI for four months and u/s u/s 13 (1) (d) PC Act SI for two years and to pay fine of Rs. 50,000/- in default thereof further SI for six months.
11 All the sentences would, however, run concurrently.
CC No. 07/2011 CBI Vs. Tara Chand Aggarwal etc. Page 95 of 9112 Needless to say that convicts would be entitled to benefit of Section 428 Cr.P.C.
13 They be sent to jail under appropriate warrants to serve the sentence.
14 A copy of judgment and order on sentence be supplied to convicts free of cost.
15 Ahlmad is directed to paginate and book-mark for digitization purpose.
16 File be consigned to Record Room.
Announced in the open Court on this 21st day of May, 2013.
(MANOJ JAIN) Special Judge (PC Act) (CBI) South Distt: Saket Courts: New Delhi CC No. 07/2011 CBI Vs. Tara Chand Aggarwal etc. Page 96 of 91