Delhi District Court
Cbi..... vs .....Saroj Kushwaha & Ors. on 24 February, 2007
1
IN THE COURT OF SHRI GP MITTAL : SPECIAL JUDGE:
DELHI.
CBI.....VS.....SAROJ KUSHWAHA & ORS.
R C No. 1E/98COU-II
CC No. 58/99
.
Order on charge.
Accused Saroj Kushwaha, Surender Pal Singh, Juneed Khan, P P Arora and R B Gupta, (herein after referred to as A1 to A5 Respectively), have been sent up this court to face trial for the offence punishable U/s 120 B r/w Section 420, 467, 468, 471 and 511 IPC and 13 (2) r/w Section 13 (1) (d) of the Prevention of Corruption Act, 1988 2 Facts of the case as are necessary for deciding whether a prima facie case is made out against the accused persons or not is that Smt. Saroj Kushwaha on 15.2.1996 presented an application (D-12) to Central Bank of India, Sukhdev Vihar Branch for grant of packing credit limit cum bill purchase facility to the extent of Rs. 50 lacs for completing an Export Order ie leather jackets, skirts, leather purses etc. It was stated in the application by A1 that she was having a long experience in the line of business. Though, in fact A1 had no experience 2 whatsoever in the export of leather garments or any other articles. As per the loan application A2 was supposed to supervise and manage the entire activity of the unit. But there was nothing on record which could suggest that A2 was capable of undertaking the work as stated in the application. A1 was not a previous client of the bank but inspite of all this, the application dt. 15.2.96 for grant of loan facility was accepted by A4 on the day a Current account was opened by A1 in the name of Kiran Leather International. It is further the case of the prosecution that in the application it had been represented that A1 had a very long experience in this line though she was only a house wife with no experience of working. A4 and A5 while processing the application observed that she had a long experience in the line . It is also the case of the prosecution that there was nothing on record to prove the credentials and bonafide of A2 who as per the application form and process note was supposed to manage the entire activity of the Loni Unit. Accused P P Arora (A 4) accepted collateral security in the shape of equitable mortgage of property No.519, Krishna Gali, Katra Neel, Chandni Chowk, Delhi without proper legal scrutiny. He accepted a valuation report two years old without attaching any importance to the fact that the owner of the property was late Sh. Kayam Singh and not Smt. Saroj Kushwaha. A4 and A5 signed the financial report on 23.3.96 and obtained the legal report after five days ie only on 28.2.96.
3A4 accepted Zerox copy of the title deed written on the stamp paper of Rs. 2 and did not obtain the original title deed alongwith the chain of previous title deeds in original though suggested by Sh. Sudesh Yadav Advocate of the bank. A4 disbursed packing credit amount of Rs. 43.35 lacs without obtaining 25% margin money as stipulated in the sanction advice dt. 27.2.96. He handed over four DDs for a sum of Rs. 38.75 lacs in favour of M/s Concord Leather Chennai to accused S P Singh (A2) on 25.3.96 instead of sending the same to the supplier through registered post or through banking channel to Chennai.
3 A 2 accompanied A 3 to Oriental Bank of Commerce Mount Road, Chennai and got opened current account No. 2811 in the name of Concord Leather on 26.3.96 and deposited four DDs therein. A3 withdrew cash amounting to Rs. 17.50 lacs on 29.3.96, 30.3.97, 3.4.96, 4.4.96 and 6.4.96 and this amount was deposited in account No. 518075-7009 of A2 in Citi Bank, Chennai. A Cheque for Rs. 20 lacs dt. 9.4.96 was issued by A 3 in the name of A2 which A2 deposited in the aforesaid account in Citi Bank and withdrew the same in cash.
4 It is alleged that R B Gupta (A5) processed the proposal for the sanction of the aforesaid limit on the basis of unrealistic projection without any past financial data. He also prepared the 4 financial report dt. 23.3.96 showing A1 as owner of the property though she was not the owner and failed to obtain the original title deed. He also stated in the report that the property was free from any encumbrance though A1 had no clean title in the property.
5 It is further the case of the prosecution that A1 withdrew an amount of Rs. 60,000/- and Rs. 3 lacs She attempted to cheat the Oriental Insurance Co. by getting a cover note No. 128613 dt. 26.7.96 in favour of M/s Kiran Leather International for an amount of Rs. 86 lacs and in trying to obtain a false insurance claim on the basis of forged documents like goods receipts and revalidated Export Order of M/s Design Action Group I N C, New York. It was revealed during investigation that current account No. 2811 in OBC, Chennai was opened by A3 in the name of a non existing firm M/s Concord Leather, Chennai. The address 67/4 Watthu Cattan Street, Periament, Madras -3 was never the address of A3 or of Concord Leather, rather it was the office address of A-3.
6 I have heard Sh. Amrit Pal Singh, Public Prosecutor for the CBI, Sh. Amar Lal Dua advocate on behalf of A1 and A2, Sh. K N Sharma advocate on behalf of A4 and Sh. S C Sharma Advocate on behalf of A5. A3 could not be arrested and was declared a Proclaimed Offender.
57 It has been urged by the Learned PP for CBI that at the stage of framing of the charge the court is not to meticulously examine and appraise the evidence collected by the prosecution to find out if a prima facie case is made out against the accused, rather, the evidence collected by the prosecution has to be accepted as true, at this stage, to find out if the ingredients of the offence are made out on the basis of the evidence collected which could be converted into a legal evidence during trial. It has been urged that the sanction of loan without A1 being the legal owner of the property offered as collateral security without submission of the original title deed by A1 coupled with the fact that A1 had no experience in the line of export, rather it was represented in the application for grant of packing credit limit that the firm has started working only in February, 1996, the fact that A4 and A 5 had accepted the property to be an unencumbered, handing over of the four DDs for huge amount of Rs. 38.75 lacs to A2 by A4 and A5 instead of sending it to Concord Leather, Chennai by registered post would show that all the accused were in conspiracy and A 1 and A2 attempted to cheat the Insurance Company also by falsely getting an insurance cover issued in respect of non existent goods. It has been submitted that on the basis of material collected there are sufficient grounds for presuming that the accused persons have 6 committed the offence in respect of which the charge sheet has been filed.
8 It has been urged by the Ld. Counsel for A1 and A2 that there are no allegations that A1 and A2 had forged any documents or had misrepresented any facts. There are no allegations of payment of any illegal gratification by A1 and A2 to the public servants. A 1 had a confirmed export order; it had an export code issued by the Dy. Controller, Exchange Control Department, Reserve Bank of India; the goods were got fabricated at Chennai; brought to Delhi and then were transported to Mumbai. Shipping space was booked by A1; pre- shipment survey was arranged and goods were physically inspected.. Unfortunately, on way the truck met with an accident but the insurer refused to honour the liability and therefore, A1 could not pay the loan amount to the bank resulting into registration of the case. It has been urged by the Ld. Defence Counsel that intention to cheat has to be in the beginning ie at the time of entering into the transaction. The allegations did not constitute an offence or act of criminal nature rather it is a civil liability of A1which A1 is ready to discharge.
9 Ld. Counsel for A4 has urged that there cannot be any conspiracy simply on the ground that A 5 had received the 7 proposal for grant of loan on the same day a party had opened the account with the bank and put up the same before A 4. He has urged that A1 was an exporter having an export code. She had submitted a loan proposal alongwith the project report, had a confirmed export order, an immovable property in the shape of property No. 516 Krishna Gali, Katra Neel valued at Rs. 77.12 lacs was offered for mortgage. The pre inspection report dt. 23.2.96 was submitted by R B Gupta; visit of the unit was done by A4, credit appraisal note and recommendations dt. 26.2.96 was submitted by A5.It has been submitted that assuming that A1 was later on was found to be not having any experience in the area of business or that A1 or for that matter A2 had any intention to cheat would not make A4 a part of the conspiracy. It has been submitted that the allegation of handing over of four DDs to A2 for a sum of Rs. 33.75 lacs is not correct, rather the four DDs were handed over to A1 after obtaining an undertaking that payment to the supplier shall be made by installments within 2/3 days after receipt of the goods. It has been submitted that the bank officials had been cheated by A1 and A2 and they cannot be said to be the part of conspiracy. A similar contention has been raised by Sh. S C Sharma advocate on behalf of A5.
810 I have given my thoughtful consideration to the respective contentions raised on behalf of the parties and have perused the record.
11 Order framing charge does substantially affect a person's liberty. Therefore, the court should not frame the charges simply because the prosecution has filed a report under section 173 Cr PC. The court is not to act like a post office and has to apply its mind whether the prosecution has collected some material which may be converted into legal evidence during the course of trial.
12 It is settled law that the court is not expected to write a detailed order at the stage such as framing of charge, issuing process, remanding the accused to custody or passing over to the next stages in the trial. (See Kanti Bhadra shah Vs. State of West Bengal (2000) 1 SCC 722).
13 It has also to be remembered that at the time of intial stage of framing of the charges the truth, veracity and effect of the evidence which the prosecution proposes to adduce are not to be meticulously judged, the standard of test, proof and judgment which is to be applied finally before finding an accused guilty or otherwise, is not exactly to be applied at the stage of framing the charge. Even on the basis of strong suspicion founded on material before it, the court can form a 9 presumptive opinion regarding the existence of factual ingredients constituting the offence alleged and in that event be justified in framing the charges against the accused in respect of commission of the offence alleged to have been committed by them. (See Superintendent and Remembrancer of legal affairs State of West Bengal Vs. Anil Kumar Bhunja (1979) 4 SCC 274, State Vs. S Bangarappa (2001) 1 SCC 369). It is also very well settled law that at the stage of framing of the charge probative value of the material on record cannot be gone into; the material brought on record by the prosecution has to be accepted as true at that stage.
14 It is borne out from the record that A1 had offered collateral security of property No.519 Krishna Gali, Katra Neel, Chandni Chowk, Delhi. The said property was in the name of late Sh. Kayam Singh. According to the accused persons said Sh. Kayam Singh had left A 1 his widowed daughter in law and a grand daughter Kiran (minor) as his only legal heirs. Assuming that A1 and said Kiran were the legal heirs of said Sh. Kayam Singh even then the original title deed in favour of Kayam Singh had not been produced. Even if the valuation report which was more than 2 years old valuing property No.519 Krishna Gali, is accepted as a genuine valuation A1 at the most could have offered half share of the property for mortgage. ( Though A1 could not have offered nor A4 and A5 10 could have accepted the said property as a collateral security if 50% thereof belonged to the minor without the order of the court). The value of the half share as per the said valuation report would be less than Rs. 39 lacs and therefore, there was a criminal misconduct on the part of A4 and A5 in accepting the said property as a collateral security. This fact by itself coupled with various other circumstances including the one that A4 and A5 had mentioned in the financial report that A1 had a long experience in the line, (though she had none and as per the application itself the unit had been started in February, 1996) handing over of the four DDs for Rs. 38.75 lacs in the name of Concord Leather to A2 or for that matter to A1 as is claimed by A4, not satisfying about the deposit of 25% margin money would lead to an inference that A4 and A5 were part of the conspiracy to cheat Central Bank of India. Of course, there is absolutely no evidence that A4 and A5 were part of the conspiracy to get the goods insured which had not been transported to Bombay but it is not necessary that each and every member of the conspiracy should participate in each and every act. It is well settled that all the members of a conspiracy may not be even aware of the act to be done by each of the conspirator or they may not meet each other. As far as A1 and A2 are concerned apart from the above stated evidence the evidence of getting the four DDs deposited in the account of Concord Leather, Chennai, a fictitious firm having its address at 11 the address of A 2, transfer of huge amount of Rs. 18 lacs to the account of A 2 in Citi Bank, Chennai, withdrawal of huge amount of Rs. 20 lacs from this account and again deposit of this amount in the account of A 2, getting insurance cover for the goods transported in a truck which was alleged to have met with an accident on the basis of forged GRs, would go to show that A1 and A2 had intention to cheat the bank since the very beginning they conspired with A4 and A5 and ultimately attempted to cheat Oriental Insurance Company It has come in the statement of witness No.10 Sh. Anoop Aggarwal who was the Surveyor in respect of the claim lodged by A1 that the leather garments which were reportedly burnt in the alleged accident for which the claim has been preferred had infact never arrived at Delhi and that vehicle no. MH-31A-7915 which was reportedly carrying leather garments from Delhi to Bombay did not belong to Sumit Road Carriers and had infact been purchased by Sh. S P Singh(A2) from his saving bank account and the claim was based on forged documents such as transporters GR, copy of buyers letters of extension and manipulation of the facts of occurrence and ownership of the vehicle.
15 In view of the foregoing discussion I am of the view that there are grounds for presuming that the accused A1, A2, A4, and A5 have committed an offence punishable U/s 120 B IPC 12 r/w Section 420, 471, and 511 IPC and Section 13 (2) r/w Section 13 (1) (d) of the P C Act. 1988. A prima facie case for the offence punishable U/s 420, 471 and 420 r/w Section 511 IPC is made out against A1 and A2. Further, a prima facie case for the offence punishable U/s 13 (2) r/w Section 13 (1) (d) of the PC Act, 1988 is made out against A4 and A5. The charges be framed accordingly.
Announced in open court (G P MITTAL) Today on 24th February, 2007 SPECIAL JUDGE; DELHI