Delhi District Court
Certified Copy Of The Judgment In Case ... vs . Om Prakash Dated on 30 January, 2018
State through CBI v. Raj Kumar etc.
IN THE COURT OF SH. VIRENDER BHAT
SPECIAL JUDGE, CBI-01, NORTH-WEST DISTRICT
ROHINI COURTS COMPLEX, DELHI.
IN THE MATTER OF:
CBI No. : 143/2016 (Old No. 14/12)
CNR No. : DLNW01-000289-2010
FIR No. : RC 72/2009/EOU-III/CBI/N. Delhi
Under Section: 120B IPC r/w
Section 419/420/467/468/471 IPC
and Section 13 (2) r/w Section 13 (1) (d) of PC Act, 1988
and substantive offences and
Under Section 12 of PP Act.
Police Station: CBI/EOW-II/New Delhi
STATE
THROUGH
CENTRAL BUREAU OF INVESTIGATION
NEW DELHI
VERSUS
CBI Case No. 143/16 (Old No. 14/12) Page No. 1 of 117
State through CBI v. Raj Kumar etc.
1. Raj Kumar
S/o Sh. Sunder Pal
R/o G-29, 5th Floor,
Trehan Home Developers,
Bhiwadi.
Also at
Village-Hasanpur, Tehsil-Tauru,
Distt. Gurgaon
.........Accused No. 1
2. Neel Kamal
W/o Late Sh. Ombir Singh
R/o C-9/1, DLF Phase-I
Gurgaon, Haryana
..........Accused No. 2
3. Satish Sikri
S/o Late Sh. Q.R. Sikri
R/o 31, A-Block, Chander Nagar
Janak Puri,
New Delhi.
..........Accused No. 3
4. Ravi Sethi
S/o Late Sh. Roshan Lal Sethi
R/o 270, Double Storey,
New Rajendra Nagar,
New Delhi.
(proceedings abated due to his death vide order dated 04.05.2016)
..........Accused No. 4
CBI Case No. 143/16 (Old No. 14/12) Page No. 2 of 117
State through CBI v. Raj Kumar etc.
5. D.C. Narnolia
S/o Late Sh. C.R. Narnolia
R/o G-141, Choma Village,
New Palam Vihar, Phase-I
Gurgaon, Haryana.
..........Accused No. 5
6. DRP Sunderam
S/o
R/o 13-16 Bajanai Koil, 3rd Street
Flat B-4, 1st Floor, AR Flats
Anu Homes, Choolaimedu,
Chennai-600094.
..........Accused No. 6
7. KV Prabhakar Rao
S/o Late KV Surya Rao
R/o Flat No. 203, Sri Sai Heights,
SS Nagar, Street No. 8,
Habisguda,
Hyderabad-500007.
..........Accused No. 7
8. Sugam Sharma
S/o Sh. Dharam Pal Sharma
R/o H. No. 49/12, Lal Quarter,
Lohia Nagar
Ghaziabad, UP.
..........Accused No. 8
CBI Case No. 143/16 (Old No. 14/12) Page No. 3 of 117
State through CBI v. Raj Kumar etc.
9. M/s Moskos Steel Pvt. Ltd.
Through its Director
Raj Kumar
S/o Sh. Sunder Pal
R/o G-29, 5th Floor,
Trehan Home Developers,
Bhiwadi.
Also at
Village-Hasanpur, Tehsil-Tauru,
Distt. Gurgaon
..........Accused No. 9
Date of Institution : 27.04.2012
Date of judgement reserved on : 23.01.2018
Date of pronouncement of judgement : 30.01.2018
Appearance : Sh. Neetu Singh, Learned Public
Prosecutor for CBI
Sh. P.K. Sharma, Ld. Counsel for accused
Raj Kumar (A1) and M/s Moskos Steel
Pvt. Ltd. (A9) through its Director Raj
Kumar
Sh. Harinder Rana, Ld. Counsel for
accused Neel Kamal (A2).
Sh. Sunil Ahuja, Ld. Counsel for accused
Satish Sikri (A3).
Accused D.C. Narnolia (A5) in person.
Sh. Vijay Kaundal, Ld. Counsel for
accused DRP Sunderam (A6) and K.V.
Prabhakar (A7).
Sh. Abhishek Prasad, Ld. Counsel for
accused Sugam Sharma (A8).
CBI Case No. 143/16 (Old No. 14/12) Page No. 4 of 117
State through CBI v. Raj Kumar etc.
J U D G E M E N T :-
1. The above named accused had been charge-sheeted by the Central Bureau of Investigation (CBI in short) having committed offences under Section 120B/420/468/471 IPC and Section 13 (2) r/w Section 13 (1) (d) of Prevention of Corruption Act, 1988 as well as substantive offences thereof.
2. The gist of the allegations against the accused is that the company M/s Moskos Steel Pvt. Ltd. having A1 Raj Kumar and A2 Neel Kamal as its directors had availed open cash credit limit in Canara Bank, which was enhanced to Rs. 80 lacs in the year 2002 on the basis of prime security as stock in trade and collateral security in the form of mortgage of the following properties:-
(a) Plot No. 6, Khasra No. 116/9, Block B-2, Mahavir Enclave, Uttam Nagar, New Delhi.
(b) Plot No. 46 and 47 in Block-B of Bharat Vihar, Rajapuri, Uttam Nagar, Delhi.
3. Once, the account became NPA, the property mentioned at (a) Plot No. 6, Khasra No. 116/9, Block B-2, Mahavir Enclave, Uttam Nagar, New Delhi could not be auctioned as it was found not existent, which implied that the loans were availed and sanctioned on the basis of forged and fake documents with respect to the said property.
CBI Case No. 143/16 (Old No. 14/12) Page No. 5 of 117 State through CBI v. Raj Kumar etc.
4. A3 Satish Sikri was the Branch Manager, Uttam Nagar Branch, Canara Bank at the relevant time, A4 Ravi Sethi was the Chief Manager/Branch Manager of the said branch at the relevant time, A5 D.C. Narnolia was the Credit Manager of the said branch at the relevant time, A6 DRP Sunderam was the Deputy General Manager, Canara Bank, Circle Office, New Delhi at the relevant time and A7 K.V. Prabhakar was the Assistant General Manager, Canara Bank, Circle Office, New Delhi at the relevant time, A8 Sugam Sharma is proprietor of M/s Karan Steel and A10 Ombir Singh (since expired) was the director of M/s Kumbh Steel Pvt. Ltd.
5. It needs note here that A10 Ombir Singh died before the filing of charge-sheet and A4 Ravi Sethi died during the trial of the case.
6. The case of CBI in detail is as under:
Prosecution Case:
(i) "The company M/s Moskos Steel Pvt. Ltd. (A9) was formed by A1 Raj Kumar, A2 Neel Kamal and one Mrs. Geeta Sharma, its promoter directors on 28.01.2002. It was duly registered with Registrar of the Companies. It took over the business of the firm M/s Maha Saraswati Steel Company for which Mrs. Geeta Sharma was the proprietor. The current account No. 7221 was opened in the name of the company in Canara Bank, Uttam Nagar Branch, New Delhi 09.02.2002. The said account was introduced by Sh.
CBI Case No. 143/16 (Old No. 14/12) Page No. 6 of 117 State through CBI v. Raj Kumar etc. Ombir Singh. The account opening form bears the photographs of both the accused i.e. A1 Raj Kumar and A2 Neel Kamal, but bears the signature of only A2 Neel Kamal as the director of the company. As per resolution of the board of directors of the company passed on 08.02.2002, both these directors were jointly as well as severally to operate the bank account. Mrs. Geeta Sharma is stated to have resigned from the directorship of the company w.e.f. 28.02.2002.
(ii) Upon a request from A1 Raj Kumar on behalf of the company (A9), OCC limit of Rs. 40 lacs was sanctioned to the company by the circle office of the bank on 26.06.2002 as conveyed to the Uttam Nagar Branch on 28.06.2002. In this regard, collateral security in the form of Plot No. 46 and 47 in Block-B of Bharat Vihar, Rajapuri, Uttam Nagar, Delhi measuring 300 sq. yards Khasra No. 109/11, Block-B, Rajapuri, Bharat Village Palam, New Delhi in the name of A1 Raj Kumar was furnished to the bank. The necessary loan documents were signed by A1 Raj Kumar and A2 Neel Kamal on behalf of the company and the account of the company was converted into ODCC account No. 360 on 20.07.2002. From the said limit of Rs. 40 lacs, a sum of Rs. 28 lacs approximately was transferred in the account of M/s Karan Steel with Standard Chartered Bank through four cheques even though A8 Sugam Sharma, the authorized signatory of the said CBI Case No. 143/16 (Old No. 14/12) Page No. 7 of 117 State through CBI v. Raj Kumar etc. account, was not having any business dealing with the company. The said amount was immediately withdrawn in cash by Sugam Sharma.
(iii) Thereafter, A1 Raj Kumar and A2 Neel Kamal again made a request on behalf of the company to the bank for enhancement of the CC limit to Rs. 100 lacs by submitting original balance-sheet of the company showing sales of Rs. 2.90 crores, self certified copy of audited balance-sheet of the company for 31.03.2002 showing sales of Rs. 54 lacs, LSR dated 23.10.2002 of Sh. R. Vasudev, Advocate in respect of the property bearing No. Plot No. 6 measuring 250 sq. yards Khasra No. 116/9 situated in Revenue Estate of Village Palam, Mahavir Enclave, Block B-2, New Delhi and valuation report dated 19.10.2002 of Sh. S.L. Dhir showing worth of Rs. 70.32 lacs. A3 Satish Sikri processed the case for enhancement of the CC limit and submitted the proposal to the circle office vide letter dated 25.10.2002 on the strength of additional security in the form of the mortgaged of the aforesaid Plot No. 6 measuring 250 sq. yards Khasra No. 116/9 situated in Revenue Estate of Village Palam, Mahavir Enclave, Block B-2, New Delhi of Rs. 70.32 lacs. The circle office, vide its letter dated 30.10.2002 directed the branch to conduct physical inspection of the property proposed to be mortgaged as additional security as well as to make independent queries in this CBI Case No. 143/16 (Old No. 14/12) Page No. 8 of 117 State through CBI v. Raj Kumar etc. regard and to confirm as to whether it was mortgageable. A3 Satish Sikri sent a reply to the circle office vide letter dated 06.11.2002 stating therein that the property was inspected. Some queries again raised by the circle office in respect of which A3 Satish Sikri informed the circle office that as per local queries, it was found that the value of the property given by the valuer was reasonable. Check list of the LSR (Legal Scrutiny Report) was also submitted by A2 Neel Kamal to the circle office on 13.11.2002. Vide letter dated 07.02.2003, A3 Satish Sikri falsely informed the circle office that all the properties sought to be mortgaged to the bank for the credit limit of M/s Moskos Steel Pvt. Ltd., Kumbh Steel and Maharaja Ispat Pvt. Ltd were physically verified by him and Sh. Mahesh Prakash, another office of the bank. Accordingly, circle office permitted to enhance of the CC limit of the company M/s Moskos Steel Pvt. Ltd to Rs. 80 lacs on 26.11.2002 on the basis of already mortgaged property as well as additional security as Plot No. 6 measuring 250 sq. yards Khasra No. 116/9 situated in Revenue Estate of Village Palam, Mahavir Enclave, Block B-2, New Delhi mentioned herein above. The necessary documents in this regard were executed by A1 Raj Kumar in the bank on 11.12.2002 and the mortgage of property bearing No. Plot No. 6 measuring 250 sq. yards Khasra No. 116/9 situated in Revenue Estate of Village Palam, Mahavir Enclave, Block B-2, New Delhi CBI Case No. 143/16 (Old No. 14/12) Page No. 9 of 117 State through CBI v. Raj Kumar etc. was created on 02.12.2002.
(iv) However, the account of the company showed a debit balance of Rs. 78.82 lacs on 11.12.2002, which implies that the enhanced limit was released to the company much before the execution of the necessary documents in this regard. Out of the amount released to the company, Rs. 30 lacs approximately were transferred to the account of Karan Steel with Standard Chartered Bank through six cheques in December, 2002, which was immediately withdrawn by A8 Sugam Sharma, the authorized signatory of the account.
(v) Plot No. 6 as mentioned herein above, was offered as additional security for enhancement of CC limit of M/s Kumbh Steel Pvt. Ltd from Rs. 80 lacs to Rs. 95 lacs on 27.11.2002.
(vi) It was found during the course of investigation that one Lakhmi Narain s/o Sh. Chunni Lal was the owner of the one acre of land situated in Khasra No. 116/9 of Village Palam. The land was inherited by his two sons namely Sh. Jai Bhagwan and Sh. Ranbir after his death on 12.01.2003. As per revenue record, the said khasra is an agricultural land, but at site an unauthorized colony namey Mahavir Enclave, Part-III exists on the land at present. Accused Ombir Singh, director of the M/s Kumbh Steel Pvt. Ltd represented CBI Case No. 143/16 (Old No. 14/12) Page No. 10 of 117 State through CBI v. Raj Kumar etc. himself to be owner of the said plot of land on the strength of fake/forged documents with GPA, agreement to sell, affidavit, receipt etc., all dated 24.01.1984 purportedly executed by Laxmi Narain in his favour. He then transferred the ownership of the said plot in the name of A1 Raj Kumar vide sale deed dated 02.02.2000, which has been duly registered with Sub-Registrar, Kapashera. A1 Raj Kumar is the real brother-in-law of Ombir Singh. Even Raj Kumar was not aware about the existence of the said plot of land as his ownership to the same was only on the strength of aforementioned bogus sale deed. The plot shown to S.K. Wadhwa (valuer), brother of accused Ombir Singh was in fact Plot No. 8 of 267 sq. yards. Smt. Surjeet Kaur and Sh. Gulshan Kumar are the owners of different portions of the said plot of land bearing No. 8. Had A3 Satish Sikri inspected the property and conducted discreet inquiry with regards thereto the fraud would have come to his notice at the initial stage.
(vii) Later on A1 Raj Kumar against made a request to the bank for enhancement of the limit from Rs. 80 lacs to Rs. 150 lacs by submitting audited balance- sheet for the period ending 31.03.2003 wherein sales were shown to the tune of Rs. 6.06 crores. However, no sales tax returns were submitted. The sales achieved till 31.10.2003 were shown Rs. 3.31 crores and sales to the tune of Rs. 7.50 crores were projected CBI Case No. 143/16 (Old No. 14/12) Page No. 11 of 117 State through CBI v. Raj Kumar etc. for the period ending 31.03.2004.
(viii) The proposal for the enhancement limit to Rs. 150 lacs forwarded by the Chief Manager Sh. L. Raju and A5 D.C. Narnolia (Credit Manager) to circle office vide letter dated 29.11.2003. In the said proposal, in addition to the already mortgage of two properties, additional security in terms of the mortgage of property situated at Village Rathiwas measuring 204 sq. yards was shown by Sh. S.L. Dhir, who declared a worth of Rs. 100.95 lacs. The valuation report also confirms that the property is occupied by the owner. The enhancement was denied by the AGM in the circle office on the ground that the plot of land offered as additional security valued at very high rate, the exposure of this group was on the rise in a short duration and further enhancement was sought without offering any addition collateral of matching value. It was also pointed out that the party had not passed full turnover in the account against the sales of Rs. 6.03 crores for the period ending 31.03.2003 and had passed turnover of Rs. 295 lacs only and the reasons put-forth by the parties were not acceptable. These adverse remarks were in the notice of A6 DRP Sunderam, the then DGM.
(ix) The circle office, vide letter dated 06.01.2004 conveyed to the branch that the additional collateral CBI Case No. 143/16 (Old No. 14/12) Page No. 12 of 117 State through CBI v. Raj Kumar etc. security was not considered due to highly inflated value and advised to make discrete inquiry by making personal visit to the property and get the same valued by a local valuer on banks panel. Interestingly, when the said plot of land situate at Village Rathiwas was valued by the bank's approved valuer on 28.12.2006, it was found to be "Khandar" having market value of Rs. 2.21 lacs only as against the earlier value of Rs. 100.95 lacs.
(x) In November, 2004, A1 Raj Kumar and A2 Neel Kamal again requested the branch for enhancement of the limit from Rs. 80 lacs to Rs. 200 lacs by furnishing a copy of audited balance-sheet of the company for the period upto 31.03.2004 showing sales of Rs. 6.20 crores. However, no sales tax returns were submitted. The sales of Rs. 1500 lacs were projected till 31.03.2005 and it was mentioned that the company has achieved the sales of Rs. 550.45 lacs till 31.10.2004. The proposal was sent by A4 Ravi Sethi and A5 D.C. Narnolia to circle office recommending the enhancement of the limit of Rs. 200 lacs on the basis of two properties already mortgaged without any further additional security. The case was processed in the circle office by Senior Manager, who prepared a note recommending therein that the request of the company from Rs. 80 lacs to Rs. 150 lacs was earlier refused as the additional security offered by the CBI Case No. 143/16 (Old No. 14/12) Page No. 13 of 117 State through CBI v. Raj Kumar etc. company was found to be highly over valued. It was also pointed out that the branch has been recommending substantial enhancement in the limit of the company without any additional collateral security. Some more adverse remarks were made in the note against the company. However, enhancement of the limit was sanctioned by A6 DRP Sunderam and A7 K.V. Prabhakar on 02.12.2004 in spite of these adverse remarks, which they should not have done without asking the company to furnish additional security of matching value.
(xi) Investigations revealed that as per the statement of account of the company M/s Moskos Steel Pvt. Ltd. (A9), it had received more Rs. 8 crores during this period through cheques/transfer from group companies M/s Kumbh Steel Pvt. Ltd., Maharaja Ispat Pvt. Ltd, M/s Golden Rathi Stars Steel Pvt. Ltd, M/s Surya Steel Traders, M/s Surya Steels and M/s Karan Steels. This shows that the sales of the company were only on the papers. As per record obtained from the office of the Dy. Excise & Taxation Commissioner, Sonepat where the company was registered under TIN No. 06123011739, sales of the company were only Rs. 2,47,532/- for the period 18.07.2003 to 31.07.2004 and the company had shown sales to general consumer whereas the purchases were shown from M/s Kumbh Steel Pvt. Ltd and M/s Surya Steel Traders. The CBI Case No. 143/16 (Old No. 14/12) Page No. 14 of 117 State through CBI v. Raj Kumar etc. company was found registered with sale tax department vide sale tax No. LC/61/227305/0400 in Ward No. 61, but no track of any file in the said ward was found on the computer system of the department which implies that company had not done any sales.
(xii) It was further found that the company had reported sales in the sum of Rs. 7.38 crores to the office of the Excise & Taxation Commissioner, Sonepat for the financial year 2004-05. However, it was futher found that the sales to M/s Kumbh Steel Pvt. Ltd was shown as Rs. 4.06 crores, which company was being controlled by Smt. Savita Devi W/o Ombir Singh and Late Sh. Ombir Singh himself. The company has shown sales to the tune of Rs. 12.66 crores for the financial year 01.04.2005 to 31.03.2006. Sales for the first three quarters were Rs. 5.27 crores only. Out of these sales of Rs. 5.27 crores, company had shown sales to M/s Kumbh Steel Pvt. Ltd for Rs. 1.25 crores, to M/s Karamvir Steel Pvt. Ltd. for Rs. 0.31 crores and to Golden Rathi Stars Pvt. Ltd. for 3 crores approximately. It was further found that a sum of Rs. 5.82 lacs was outstanding from the company as tax for the year 2004-05 and a sum of Rs. 71.18 lacs for the year 2005-06. This record made it evident that the sales were shown on paper only for the purpose of cheating and the bank officers did not check the same dishonestly.
CBI Case No. 143/16 (Old No. 14/12) Page No. 15 of 117 State through CBI v. Raj Kumar etc.
(xiii) As already noted herein above, the proposal to enhance the limit to Rs. 200 lacs was conveyed to the branch vide letter dated 06.12.2004. However, it was found that the account of the company was showing debit balance of Rs. 1.99 crores on 01/02.12.2004. This shows that the funds were released to the company even before the sanction of the enhancement of the limit and the overdraft was permitted against the bank norms, which was misutilized by the company. Cheques were also purchased in contravention of the bank guidelines.
(xiv) It was further revealed that during the course of investigation that the overdraft was permitted by A4 Ravi Sethi, the then Branch Manager, A5 D.C. Narnolia, the then Credit Manager beyond the power delegated to them in terms of the various circulars issued in this regard by the heads of the bank. The detail of such overdrafts is mentioned herein as under:
Date Debit Balance Sanctioned Maximum
in Lacs Limit in Lacs Permissible
in Lacs as
per
Emergency
power
29.11.2004 118.62 80 93.75
30.11.2004 159.55 80 do
01.12.2004 199.55 80 do
02.12.2004 200
24.02.2005 222.16 200 218.75
CBI Case No. 143/16 (Old No. 14/12) Page No. 16 of 117
State through CBI v. Raj Kumar etc.
28.02.2005 233.75 200 218.75
02.03.2005 232.51 200 218.75
04.03.2005 242.87 200 218.75
05.03.2005 243.4 200 218.75
07.03.2005 249.01 200 218.75
08.03.2005 247.48 to 200 218.75
to 250.07
17.03.2005 continuous
overdraft
18.03.2005 200+50 Adhoc 268.75
w.e.f.
18.03.2005 to
18.06.2005
15.06.2005 249.9 DO 268.75
18.06.2005 A cheque of Rs. 200
50 lacs was
purchased,
Debit Balance
comes to
199.90
22.06.2005 A cheque of Rs. 200 218.75
50 lacs which
was purchased
on 18.06.2005
returned unpaid
and hence
account's Debit
Balance comes
to 263.04
23.06.2005 249.90 lacs to 200 218.75
to 275.67 on
31.12.2005 27.09.2005 and
(NPA) on 31.12.2005
29.09.2006 242.53 lacs
(xv) On further request from A1 Raj Kumar, ad-hoc
limit of Rs. 50 lacs was sanctioned to the company for CBI Case No. 143/16 (Old No. 14/12) Page No. 17 of 117 State through CBI v. Raj Kumar etc. a period three months on the recommendation of A4 Ravi Sethi and A5 D.C. Narnolia. The sanction was conveyed to the branch by the circle office on 24.03.2005. However, the branch had permitted the overdrawing of Rs. 50 lacs before the said date and the account of company was showing liability of Rs. 249 lacs against the sanction of Rs. 200 lacs.
(xvi) A1 Raj Kumar and A2 Neel Kamal again requested the branch for enhancement of the credit limit of Rs. 200 lacs to Rs. 300 lacs and submitted a copy of audited balance-sheet of the company, but again no sale tax returns were submitted. The proposal was forwarded by A3 Satish Sikri to the circle office. When the case was processed at the circle office, it was pointed out vide office note dated 24.12.2005 that the ad-hoc limit of Rs. 50 lacs already permitted to the company was to be regularized on 30.06.2005, but instead of getting the same regularized, the branch permitted further withdrawing in the account due to which liabilities as on 16.12.2005 were Rs. 271.58 lacs. It was also pointed out that the party is unable to provide additional collateral security despite promise in this regard on many occasions. Thus, the enhancement of the limit was not considered.
(xvii) It was found during the course of investigation that a sum of Rs. 58,77,300.5 was transferred from the CBI Case No. 143/16 (Old No. 14/12) Page No. 18 of 117 State through CBI v. Raj Kumar etc. account of company to another group company M/s Karan Steel having its account in Standard Chartered Bank, New Friends Colony, New Delhi (A/c No. 54405007054) by way of 10 cheques, some of which were signed by A1 Raj Kumar and some were signed by A2 Neel Kamal. The proprietor of the said account in Standard Chartered Bank is Sugam Sharma, who is real brother-in-law of Mahesh, brother of accused Ombir Singh (since expired). It also came out during the investigation that Sugam Sharma was not having any business dealing with the accused company M/s Moskos Steel Pvt. Ltd and he siphoned of the funds through this account. Similarly, an amount of Rs. 6,94,00,000/- was transferred from the account of the company to another group company M/s Golden Rathi Stars Industries Ltd having its account in SBI, Najafgarh Road, New Delhi (A/c No. 01600050063) by way of 30 cheques, most of which was signed by A1 Raj Kumar. Ombir Singh, Mahesh and Smt. Krishna Devi W/o of Mahesh are the directors of the said company.
(xviii) An amount of Rs. 1,00,42,186/- has been transferred to the account of another group company M/s Maharaja Ispat Pvt. Ltd having its account in Canara Bank, Uttam Nagar Branch, New Delhi (A/c No. OCC324) by way of 10 cheques. Smt. Savita Devi W/o Sh. Ombir Singh, Smt. Krishna Devi W/o of CBI Case No. 143/16 (Old No. 14/12) Page No. 19 of 117 State through CBI v. Raj Kumar etc. Mahesh Kumar, Mahesh Kumar and Raj Kumar (A1) were the directors of this group company. An amount of Rs. 85,71,427/- has been transferred to the account of M/s Kumbh Steel Pvt. Ltd by way of 15 cheques. This company has its account in Canara Bank, Uttam Nagar Branch New Delhi bearing A/c No. 6995/OCC325. It was further found that a sum of Rs. 2,80,40,000/- was transferred to the another account of M/s Golden Rathi Stars Industries Ltd in Canara Bank, Uttam Nagar Branch, New Delhi (A/c No. 7156/OCC-382) by way of 34 cheques. Another sum of Rs. 2,09,54,311/- had been transferred to the account of another group company M/s Surya Steel Traders having its account in Canara Bank, Uttam Nagar Branch, New Delhi (A/c No. 7332/OCC-463 by way of 28 cheques. Sh. Suresh Kumar, who happened to be the driver of the Ombir Singh, was the proprietor of this account and it had opened on the introduction of Ombir Singh for fictitious transactions. The said firm was not having any business dealings at all with accused company M/s Moskos Steel Pvt. Ltd. It was also found that a sum of Rs. 4,99,91,128/- had been transferred to the account of another company M/s Karamvir Steel Pvt. Ltd having its account in Canara Bank, Uttam Nagar Branch, New Delhi (A/c No. OCC 377) by way of 15 cheques. Sh. Om Prakash Sharma and Smt. Shanti Devi are the directors of this company and Ombir Singh was the authorized signatory of the company at one stage. A CBI Case No. 143/16 (Old No. 14/12) Page No. 20 of 117 State through CBI v. Raj Kumar etc. sum of Rs. 1,47,54,461/- had been transferred to the account of M/s Karan Steel bearing A/c No. 7704 in the same bank by way of 28 cheques. Raj Kumar, brother- in-law of Ombir Singh is the proprietor of this firm/account. Certain amount had also been transferred to the account of Smt. Neel Kamal bearing A/c No. 4205 in Canara Bank, Uttam Nagar Branch, New Delhi by way of 12 cheques. This amount was later on utilized by Neel Kamal upon herself as well as for payment of premium of the various LIC policies. The said account had been introduced by Sh. Ombir Singh."
7. It was concluded that accused have committed various offences under the Indian Penal Code as well as Prevention of Corruption Act, 1988. On the basis of the material collected during the course of investigation, charge-sheet was filed before the concerned Court. Be noted here that charge-sheet mentions that no incriminating evidence has come-forth against Sh. Mahesh Prakash (the then officer, Canara Bank, Uttam Nagar Branch, New Delhi), Sh. S.K. Gupta (the then Senior Manager, Canara Bank, Circle Office, New Delhi), Sh. S.S. Bhat (the then AGM, Canara Bank, Circle Office, New Delhi) and Sh. S.K. Wadhwa (approved valuer). Hence, their names were kept in column No. 12 of the charge-sheet. It has also been stated that Sh. S.L. Dhir, panel valuer has already been charge-sheeted for his criminal acts in another case and therefore, his name is also kept in column No. 12 in the instant charge-sheet. The name of Ombir Singh also has been kept in column No. 12 as he had been since expired.
CBI Case No. 143/16 (Old No. 14/12) Page No. 21 of 117 State through CBI v. Raj Kumar etc.
8. Sanction under Section 19 of the Prevention of Corruption Act, 1988 had been obtained for the prosecution of accused Satish Sikri (A3), who is only public servant in service amongst of the accused.
9. Pursuant to the order on charge dated 10.02.2012, charges framed against each of the accused are as under:
(a) For the offence punishable under Section 13 (2) r/w Section 13 (1) (d) of PC Act r/w Section 120B IPC and Section 471 IPC r/w Section 120B IPC against the accused Satish Sikri (A3), Ravi Sethi (A4), D.C. Narnolia (A5), DRP Sunderam (A6), K.V. Prabhakar (A7);
(b) For the offence punishable under Section 468/471 IPC r/w Section 120B IPC against accused Raj Kumar (A1); and
(c) For the offence under Section 120B IPC and Section 420 IPC r/w Section 120B IPC against the accused Raj Kumar (A1), Neel Kamal (A2), Satish Sikri (A3), Ravi Sethi (A4), D.C. Narnolia (A5), DRP Sunderam (A6), K.V. Prabhakar (A7), Sugam Sharma (A8) and M/s Moskos Steel Pvt. Ltd. (A9) through its directors Raj Kumar
10. All the accused persons pleaded not guilty and claimed trial. Therefore, the prosecution i.e. CBI was called upon to lead evidence CBI Case No. 143/16 (Old No. 14/12) Page No. 22 of 117 State through CBI v. Raj Kumar etc. to substantiate the charges against the aforesaid accused.
11. The prosecution has examined total 40 witnesses to bring home the guilt of accused. It will be apposite to refer briefly at this stage to the evidence led by the prosecution.
Witnesses examined by the prosecution:-
S. No. of Name Gist of his deposition
PW
PW1 Shanti Lal He was the Sub Registrar (South West)-
IX, Kapashera, at the relevant time. The Sale Deed Ex.PW1/A dated 02.02.2000 regarding plot no.6 in Khasra No.116/9, Village Palam, New Delhi, was registered during his tenure.
PW2 Umesh Kumar He was posted as UDC in the office of Sub Registrar-ix, Kapashera, in the year 2009. He proved the letter dated 28.04.2009 sent from the said office to the CBI as Ex.PW2/A, vide which certified copy of the Sale Deed Ex.PW2/B and pages of Peshi Register Ex.PW2/C (colly) were also sent.
PW3 Ashok Kumar He is a practicing advocate. As per his Tyagi deposition, draft of the Sale Deed Ex.PW1/A was prepared by him at the asking of Raj Kumar and Ombir Singh. He also identified the signatures of Ombir Singh and Raj Kumar on the same. He identified the signature of Mahesh Kumar, brother of Ombir Singh on the said Sale Deed. The said Sale Deed was presented to the Sub Registrar for registration in his presence.
CBI Case No. 143/16 (Old No. 14/12) Page No. 23 of 117 State through CBI v. Raj Kumar etc. PW4 Dinesh Kumar He was Inspector in the office of Sharma Assessment and Collection Department, MCD, Najafgarh zone, from year 2002 to 2010. He proved the original house tax receipt in the name of Raj Kumar in respect of the property bearing plot no.6, Mahavir Enclave Part-III, New Delhi, as Ex.PW4/A and identified the signature of Sh. Sri Bhagwan Sharma (LDC) at point A on the same. The receipt is dated 14.11.2002 and mentions Self Assessment for the year 2002-03 on account. He stated that no house tax was paid in respect of the said plot no.6 prior to 14.11.2002 or subsequent thereto.
PW5 Ramesh He was posted as Cashier in Standard Gupta Chartered Bank, New Friends Colony Branch, from year 1996 to 2007. He proved the covering letter dated 12.05.2009 issued by the bank to the CBI, vide which the information regarding certain cheques was given to CBI, as Ex.PW5/A. He proved another covering letter as Ex.PW5/B, vide which certain certified copies of the statement of account alongwith original cheques were forwarded to CBI. He also proved the statement of account of M/s. Karan Steel (current account no.54405007054) for the period 06.09.2002 to 31.03.2004 as Ex.PW5/C (colly). He proved the letter dated 09.09.2009 of the bank as Ex.PW5/D, vide which certified copy of the aforesaid statement of account of M/s.
Karan Steel for the period 25.07.2002 to 02.09.2004 as Ex.PW5/E (colly) and the printout of the computer screen showing the details of authorised signatory of the said account as Ex.PW5/F. He also proved certain cheques which have been issued from the said account.
CBI Case No. 143/16 (Old No. 14/12) Page No. 24 of 117 State through CBI v. Raj Kumar etc. PW6 Chander Ram He identified the signature and thumb impression of his sister Shanti Devi on the copy of Agreement to Sell dated 24.04.2009 Ex.PW6/A, copy of General Power of Attorney dated 24.04.2009 Ex.PW6/B, copy of affidavit dated 24.04.2009 Ex.PW6/C and copy of receipt dated 24.04.2009 Ex.PW6/D. PW7 Saroj She was working as an officer in Canara Sachdeva Bank and was posted in its Circle Office, New Delhi, in the year 2004 - 05. She had verified the signature of the officers of the bank on the loan file of M/s. Mos Kos Steel Pvt. Ltd. She also identified her signatures as well as that of A7 K.V. Prabhakar, Smt. Geetika Sharma, Sh.
Gopala Krishnan on the review note dated 11.12.2004 Ex.PW7/A (colly).
PW8 Rakesh Jindal He was posted as Chief Manager in State Bank of India, Najafgarh Branch, from August, 2008 till June, 2010. He proved his letter dated 10.08.2009 as Ex.PW8/A, vide which he had handed over certain documents i.e. Certified copy of the account opening form of M/s. Golden Rathi Star Industries Ltd. (Ex.PW8/B), copy of statement of account of the said company from 14.09.2004 to 12.04.2006 (Ex.PW8/C (colly), copy of pay-in-slips of various dates regarding deposit of the cheques in the said account (Ex.PW8/C1 to Ex.PW8/C26), copy of debit voucher dated 14.09.2004 of this account for Rs.5 Crores (Ex.PW8/D), the cheques which were presented to be credited in the said account (Ex.PW8/E1 to Ex.PW8/E30), to CBI.
PW9 Tek Chand He was Manager in Canara Bank, Uttam Nagar Branch, from August, 2001 to September, 2006. He had permitted the opening of account no.14413 in the name CBI Case No. 143/16 (Old No. 14/12) Page No. 25 of 117 State through CBI v. Raj Kumar etc. of A1 Raj Kumar on 17.01.2002, which was introduced by Sh. Ombir Singh. He proved the account opening form as Ex.PW9/A, copy of specimen signature card as Ex.PW9/B, copy of Form-60 as Ex.PW9/C, statement of account pertaining to the said account for the period 17.01.2002 to 01.02.2008 Ex.PW9/D, letter dated 11.12.2002 of Raj Kumar evidencing the deposit of title deeds of the property by him in the bank Ex.PW9/E and certain documents relating to the said account. He also proved the physical verification report of A3 Satish Sikri as Ex.PW9/E4. He also proved various documents regarding account no.7332 in the name of M/s. Surya Steel Traders and current account no.7704 in the name of M/s. Karan Steel as well as account no.324 in the name of M/s.
Maharaja Ispat Pvt. Ltd. which was permitted to be opened by him. He had also permitted the opening of current account in the name of A-9 M/s. Mos Kos Steel Pvt. Ltd.
PW10 Jai Bhagwan He is the son of Laxmi Narayan, who owned agricultural land measuring about 1.5 Kilas in Khasra No.116/9 of Village Palam. He deposed that the said land was sold by his father to Sh. Mohar Singh, who developed a Colony by selling the land in plots. According to him, his father used to sign only in Urdu and the signature of the seller appearing on receipt Ex.PW10/A, GPA Ex.PW10/B, affidavit Ex.PW10/C, agreement to sell Ex.PW10/D is not that of his father. He stated that his father had not sold any land of Sh. Ombir Singh.
PW11 Gulshan He resides in Mahavir Enclave III, Palam, Kumar Makkar New Delhi and running a general store shop in fron of his house. He denied CBI Case No. 143/16 (Old No. 14/12) Page No. 26 of 117 State through CBI v. Raj Kumar etc. knowing any person by the name of Raj Kumar or Mahesh Kumar or Ombir Singh.
PW12 Anup Kundu He was Regional Manager in Standard Chartered Bank, ITO, New Delhi. He stated that the letters dated 07.08.2009 and 09.09.2009 Ex.PW5/B & Ex.PW5/D are on the bank's letter head and bear signature of M/s. Neeru Samson, the then Assistant Manager of the bank. He also deposed that the letter dated 12.05.2009 Ex.PW5/A is on the bank's letter head and bears signature of Amit Kurichh, the then Assistant Manager. He further proved various documents such as cheques etc. Evidencing the transactions made in the account of M/s. Karan Steel bearing no.
54405007054.
PW13 S.K. Wadhwa He is a Valuer by profession and on the penal of Canara Bank since year 2001.
He proved his valuation report in respect of house no.35, Village Rathiwas, Tehsil Gurgaon, Haryana as Ex.PW13/A (colly), valuation report prepared by him in respect of house no.6, 30 feet wide road, opposite DDA Flats, Mahavir Enclave III, Uttam Nagar, New Delhi, as Ex.PW13/B and the photographs of the said property as Ex.PW13/C. He stated that the aforesaid plot no.6 was pointed out and identified by him by Sunil Kumar, who was representative of the owner of the plot.
PW14 Suresh Kumar He is a driver by profession and was employed by Sh. Ombir Singh in the year 1997 and remained in his employment till the year 2008. He deposed that the Sale Deed Ex.PW1/A was got prepared by Ombir Singh in his presence and identified the photographs of Ombir Singh as well as Raj Kumar on the same. He stated that he was not the proprietor of M/s. Surya Steel Traders at any point of time and the CBI Case No. 143/16 (Old No. 14/12) Page No. 27 of 117 State through CBI v. Raj Kumar etc. account opening form Ex.PW9/F of this firm was got signed by Ombir Singh from him. He deposed that all the documents pertaining to the said account were signed by him on the asking of Ombir Singh, who also had taken his signature on certain blank cheques. He had taken Ombir Singh to the office of Registrar in his Maruti Zen car on the date, on which Sale Deed Ex.PW1/A was registered. He also proved his statement recorded u/s.164 Cr.PC as Ex.PW14/A. PW15 Ranjit Nidhi He was posted as Law Officer in Canara Bank. He proved various documents i.e. Manual, circulars etc. as Ex.PW15/A to Ex.PW15/D. He also proved the local scrutiny report (LSR) of R. Vasudev, Penal Advocate of the bank as Ex.PW15/E as well as his supplementary scrutiny report as Ex.PW15/G. He also proved the valuation report dated 19.10.2002 of Sh.
S.L. Dhir in respect of the plot of land bearing no.6, Mahavir Enclave, New Delhi, belong to Sh. Raj Kumar as Ex.PW15/H and the enclosures to the said report as Ex.PW15/J. He also proved the Nil encumbrance report issued b R. Vasudev as Ex.PW15/K and a supplementary report given by him as Ex.PW15/L. He also proved another valuation report of Sh. S.L. Dhir regarding the same plot no.6 as Ex.PW15/M and the original welfare report submitted by Sh.
S.K. Wadhwa and Associates (already Ex.PW13/C).
PW16 Sumit Prakash He was posted as Sr. Manager in Canara Bank, Uttam Nagar Branch, New Delhi, from the year 2006 to 2010. He proved the certified copy of the statement of account no.360 in the name of M/s.
Moskos Steel Pvt. Ltd. for the period CBI Case No. 143/16 (Old No. 14/12) Page No. 28 of 117 State through CBI v. Raj Kumar etc. 20.07.2002 to 27.07.2008 as Ex.PW16/A and the certificate attached thereto as Ex.PW16/B. He also proved various documents pertaining to the said account which have been seized by the CBI as Ex.PW16/E to Ex.PW16/Z3 evidencing the transactions made out of this account. PW17 Mahesh He was posted as Officer in Canara Bank, Prakash Uttam Nagar Branch, from December, 2001 to July, 2006. He proved various pages in the file Ex.PW17/A which were in the nature of documents submitted on behalf of M/s. Moskos Steel Pvt. Ltd. for enhancement of its OD limit to Rs.100 Lakhs. He identified the signatures of A1 Raj Kumar, A2 Neel Kamal and A3 Satish Sikri on the documents. He also proved the letter dated 30.10.2002 of Sh. R.K. Arora, AGM, in the Circle Office, vide which certain queries were raised with regard to enhancement of the limit of te company M/s. Moskos Steel Pvt. Ltd. as Ex.PW17/L and the reply given to which by A3 Satish Sikri as Ex.PW17/M. He deposed that again certain queries were raised by Circle Office vide letter dated 08.11.2002 Ex.PW17/N signed by Sh.
R.K. Arora, AGM and reply to the same was sent by A3 Satish Sikri vide letter dated 13.11.2002 Ex.PW17/P. He deposed that these two letters Ex.PW17/N and Ex.PW17/P were dictated by Satish Sikri to him. He deposed that even though it is mentioned in the letter dated 07.02.2003 Ex.PW9/E4 that he had visited the property in question alongwith Satish Sikri but, in fact, he did not visit the said property at all and the said letter also does not bear his initial. He identified the signature of A1 Raj Kumar and A2 Neel Kamal on the copy of specimen signature CBI Case No. 143/16 (Old No. 14/12) Page No. 29 of 117 State through CBI v. Raj Kumar etc. card Ex.PW17/R, copy of account opening form Ex.PW17/S, copy of another subsequent specimen signature card Ex.PW17/T and various other cheques shown to him.
PW18 Bharat He was posted as Taxation Inspector in Bhushan the office of Excise and Taxation Khanna Commissioner, Sonepat, since 1996. He identified the signature of Sh. Ajit Singh Ahlawat, Deputy Excise and Taxation Commissioner, Sonepat, on letter dated 26.10.2009 Ex.PW18/A, vide which certain enquiries were sent to CBI. He had brought the original of those enquiries alongwith him to the court.
PW19 Vijay Kumar He was posted as an Officder in Canara Khanna Bank, Circle Office, New Delhi. He proved the manual of the bank as Ex.PW19/A, in which the method for sanction of working capital assistance to the parties is prescribed. He also described in detail the three methods, vide which working capital is granted to the parties.
PW20 K.B. He was the Chief Vigilance Officer in Jayapprakash Canara Bank since July, 2006. He proved the complaint lodged by him in this case on 24.02.2009 as Ex.PW20/A with regard to fraud perpetrated with the bank in the account of M/s. Moskos Steel Pvt. Ltd.
PW21 G.S. Ravi He was posted as Manager in Canara Sudhkar Bank, Raisina Road Branch, New Delhi, from May, 2005 to June, 2006. As per the directions of Deputy General Manager (Operations), he had conducted investigation into four group account belonging to M/s. Punj Steel, M/s. Moskos Steel Pvt. Ltd., M/s. Maharaja Ispat and M/s. Karamvir Steel. He found that the stock position conveyed by these companies to the bank for enhancement CBI Case No. 143/16 (Old No. 14/12) Page No. 30 of 117 State through CBI v. Raj Kumar etc. of various limits sanctioned to them after November, 2004 was inflated in comparison to the stock position submitted during the period May, 2004 to October, 2004. Upon physical inspection of the godown of these companies, he found that the stock lying there were negligible.
PW22 Umesh He was the Chief Manager of Uttam Mahabal Nagar Branch of Canara Bank since 2006 Bangera to 2008. He identified his signature on the copy of seziure memo dated 13.04.2009, vide which certain documents were seized by CBI from the bank. He proved the copy of plaint and other documents filed by the bank for recovery of money against M/s.
Moskos Steel Pvt. Ltd. & others as Ex.PW22/B. He identified signatures of A1 Raj Kumar on letter Ex.PW22/D, vide which bank was informed about the new godown of M/s. Moskos Steel Pvt. Ltd. at Village Accheja, Patwari Ka Bagh, Dujana Road, Dadri, Gautam Budh Nagar, UP.
He also proved the stock audit report submitted by Mr. Sandeep Gupta, Chartered Accountant Ex.PW22/E which showed that no stock was available in the godown of the company.
PW23 Vinay Kumar He had worked as an Officer in Uttam Sehgal Nagar branch of Canara Bank from year 2004 to 2006. He proved certain cheques which had been issued from the account no.360 of M/s. Moskos Steel Pvt. Ltd. in favour of A1 Raj Kumar and A2 Neel Kamal as Ex.PW23/E to Ex.PW23/K. PW24 R.S. Prasad He was posted as Value Added Tax Officer,. Department of Trade and Taxes, Govt. of NCT of Delhi, till the year 2012 and was the Link Officer for Ward no.61.
He identified his signature on the letter Ex.PW24/A, vide which certain CBI Case No. 143/16 (Old No. 14/12) Page No. 31 of 117 State through CBI v. Raj Kumar etc. information was supplied by him to CBI.
PW25 Arindam He was Manager in the Circle Office of Chatterji Canara Bank, New Delhi. He proved seizure memo Ex.PW25/A, vide which certain documents were seized by the CBI from the bank. He is a witness to the seizure of a large number of documents by CBI from the Circle Office of the bank.
PW26 A.S. Kataria He was Excise and Taxation Officer in the office of Excise and Taxation Commissioner, Sonepat. He has merely corroborated the deposition of PW18.
PW27 T. Joshi He is the Assistant General Examiner of questioned documents, CFSL, Chandigarh and has proved his report as Ex.PW27/A. He also proved the detailed reasons for the said report as Ex.PW27/B and the copy of letter dated 26.10.2009 as Ex.PW27/C, vide which report alongwith reasons as well as questioned /specimen writing/signature were sent back to CBI.
PW28 R.K. Arora He was posted as Assistant General Manager in the Circle Office of Canara Bank, New Delhi, since year 2001 to 2004. He identified the signatures of Sh.
R.L. Jarwal, Sr. Manager of Uttam Nagar Branch, on the Appraisal Note Ex.PW28/C which have been prepared by the Branch upon receipt of request for sanction of OD limit of Rs.50 Lakhs. He also identified the signature of Sh. S.S. Dhir (Penal Valuer of the bank) on his valuation report Ex.PW28/D. He also identified the signature of Sh. N.G. Sharma, the then Sr. Manager in Circle Office on the Appraisal Note Ex.PW33/B and the handwriting of Sh. Gopal Ganija, the then Regional Manager on the same. He proved the letter dated 30.10.2002 as Ex.PW28/E which he had sent in the capacity of CBI Case No. 143/16 (Old No. 14/12) Page No. 32 of 117 State through CBI v. Raj Kumar etc. Assistant General Manager of the bank to Uttam Nagar Branch in response to the proposal for enhancement of limit of M/s.
Moskos Steel Pvt. Ltd. from Rs.40 Lakhs to Rs.100 Lakhs. He had declined the proposal for enhancement of the limit from Rs.80 Lakhs to Rs.150/- Lakhs and proved his observation in this regard at point D to D on Ex.PW29/A (colly).
PW29 Prakash P. He was posted as General Manager, Mallya Canara Bank, Delhi Circle, during the period from December, 2002 to July, 2005.
He proved the note Ex.PW29/A (colly) which was put up by Sh. S.K. Gupta, the then Sr. Manager, Advance Section, Circle Office, Delhi, and was submitted to AGM (Operations). He identified the signature of Sh. S.K. Gupta, Sh. R.K. Arora and A6 DRP Sunderam on the said note. This note pertains to request for enhancement of the limit of the company M/s. Moskos Pvt. Ltd. from Rs.80 Lakhs to Rs.150 Lakhs. He also identified the signature of Sh. S.K. Gupta on Annexure No.1 to this note, which is Ex.PW29/B. He also identified the signature of Sh. S.K. Gupta of another note Ex.PW29/C recommending the enhancement of CC limit of the company from Rs.80 Lakhs to Rs.100 Lakhs.
PW30 Inderjeet He is into the business of flight forwarding Singh and courier under the name and style of M/s. Metro Express having office at 7/8, Rama Market, Munirka, New Delhi. He deposed that his mother Smt. Surjeet Kaur had purchased plot no.8 situated in Khasra No.116/9, Mahavir Enclave Block No.3, New Delhi, from Smt. Krishnawati in the year 1992 vide Agreement to Sell, GPA, Will, Receipt, Affidavit etc. He had sent all these documents to CBI vide letter CBI Case No. 143/16 (Old No. 14/12) Page No. 33 of 117 State through CBI v. Raj Kumar etc. dated 23.04.2009 Ex.PW30/A. He stated that the said property is still in their possession and his mother never mortgaged the same with any bank.
PW31 Sunil Kumar He was posted as Patwari in Tehsil Najafgarh from year 2004 to 2007 and then in Tehsil Palam from 20.10.2007 to 31.12.2009. He deposed that Khasra No.116/9 falls in Village Palam and is an agricultural land, on which unauthorised Colony has come up known as Part-II & Part-III Mahavir Enclave, New Delhi. He proved copy of order dated 22.04.2009 under the signature of Mr. Surinder Singh, Tehsildar as Ex.PW31/A, vide which information and documents pertaining to said Khasra number were forwarded to CBI. He stated that the record of rights (Khatauni Form -P6) enclosed with this letter was prepared by him and as per the said record, Jai Bhagwan and Ranvir, both sons of Sh. Laxmi Narain, were recorded owners of the said land. He proved the said Khatauni as Ex.PW31/B. He also proved the previous record pertaining to the said land since 1954-55 as Ex.PW31/C to Ex.PW31/D. PW32 Neeru She was posted as Unit Manager in Samson Standard Chartered Bank, ITO, New Delhi. She has merely reitereated and corroborated the deposition of PW5.
PW33 Narain Dutt He was posted as Senior Manager Sharma (Advances), Circle Office Canara Bank, New Delhi, during the period August, 1999 to August, 2003. He proved letter Ex.PW33/A vide wich sanction of OCC limit in the sum of Rs.40 Lakhs to M/s.
Moskos Steel Pvt. Ltd. Was conveyed to the branch. He also proved the office note dated 21.06.2002 as Ex.PW33/B (colly) CBI Case No. 143/16 (Old No. 14/12) Page No. 34 of 117 State through CBI v. Raj Kumar etc. and identified the signatures of the bank officials upon the same. He proved the letter dated 30.10.2002 alongwith analysis of the balance sheet of the company as Ex.PW33/E (colly), vide which certain queries were raised regarding proposal of the branch for enhancement of limit of the company M/s. Moskos Steel Pvt. Ltd. from Rs.40 Lakhs to Rs.100 Lakhs. He further proved various communications exchanged between Uttam Nagar Branch of the bank and Circle Office and also various office notes prepared with regard to enhancement of the OD limit to the company M/s. Moskos Steel Pvt. Ltd.
Including the letter dated 30.01.2003 Ex.PW33/L denying the enhancement from Rs.80 Lakhs to Rs.100 Lakhs and the Risk Assessment Report dated 15.02.2005 prepared by Circle Office as Ex.PW33/W. PW34 Ashok Kumar He was posted as Senior Manager in Aggarwal Khan Market Branch of Bank of India in the month of March, 2009. The specimen signature/ handwriting of Sh. S.N. Dhir and Sh. Ravinder Vasudev had been taken by the CBI in his presence and he proved the sheets containing the signatures/handwriting as Ex.PW34/A (colly) & Ex.PW34/B (colly).
PW35 S.K. Gupta He was posted as Manager (Insurance) in Khan Market Branch of Syndicate Bank in the year 2009. The specimen signature/ handwriting of Raj Kumar had been taken by CBI in his presence and he proved the same as Ex.PW35/A (colly).
PW36 Arun Kumar He was posted as General Manager in the Nahar. Head Office opf Canara Bank at Banglore in March, 2010. He had accorded sanction for prosecution of A3 Satish Sikri on 25.03.2010 and proved the sanction order CBI Case No. 143/16 (Old No. 14/12) Page No. 35 of 117 State through CBI v. Raj Kumar etc. as Ex.PW36/A. PW37 Mohinder He was posted as Senior Manager in a Kumar Gupta Legal Section in Circle Office of Canara Bank from the year 2006 to year 2009. He had conducted an enquiry regarding the two properties mortgaged on behalf of M/s. Moskos Steel Pvt. Ltd. and M/s.
Kumbh Steel by Raj Kumar and Ombir Singh and had submitted his interim report dated 10.11.2008 Ex.PW37/A and the final report dated 18.12.2008 Ex.PW37/B. He stated that these reports were sent by CBI vide forwarding letter Ex.PW37/C. He also deposed that during enquiry, it was found that the property bearing Plot no.6, Khasra No.116/9, Mahavir Enclave, Uttam Nagar, New Delhi, was not in existence.
PW38 Mukesh Goel He was posted as Chief Manager, Canara Bank, Uttam Nagar Branch, in the year 2008-09. He proved the statement of account of M/s. Maharaja Ispat Pvt. Ltd.
for the period 30.07.2002 to 02.09.2005 as Ex.PW38/A which he had sent to CBI vide his letter dated 10.07.2009 Ex.PW16/S. He also proved the photocopies of the documents relating to account opening of M/s. Kumbh Steel Pvt.
Ltd. as Ex.PW38/C, which he had sent alongwith computer generated statement of account of said company to CBI vide letter dated 10.07.2009 Ex.PW16/T. He had sent various other documents to the CBI during the course of investigation of this case and proved his letters in this regard.
PW39 Bhupender He was functioning as SP, CBI, EO-III, Kumar New Delhi, in the month of March, 2009.
He proved the complaint Ex.PW20/A (colly) which have been received from the Chief Regional Office, Canara Bank, regarding the fraud that had taken place in CBI Case No. 143/16 (Old No. 14/12) Page No. 36 of 117 State through CBI v. Raj Kumar etc. Uttam Nagar Branch of the bank in the account of M/s. Moskos Steel Pvt. Ltd.
He deposed that upon receipt of the complaint, FIR bearing no. RC-
072/2009(E)/0002 dated 16.03.2009 was registered and proved the same as Ex.PW39/A. He further stated that the investigation of this case was assigned to Sh. S.L. Garg, Inspector, CBI.
PW40 S.L. Garg He was posted as Inspector in CBI Office, Khan Market, New Delhi, in the year 2009 and was entrusted with the investigation of this case. He has mentioned in detail the steps taken by him during the course of the investigation of this case. He had recommended filing of the Chargesheet against the accused in this case.
Statement of accused under Section 313 Cr. P.C :-
12. All the incriminating evidence was put to the accused in their statements u/s.313 Cr.PC, which was denied by them. A1 Raj Kumar denied that he is the Director of the company M/s. Moskos Steel Pvt.
Ltd. According to him, he was merely an employee of his brother in law Ombir Singh and used to receive petty salary. He stated that he is only 10th pass and being an innocent villager his signatures were procured by his brother in law Ombir Singh on certain documents by misrepresentation and upon good faith, which have been later on misused by Ombir Singh. He also stated that he was not aware that he had been shown as Director of M/s. Moskos Steel Pvt. Ltd. He denied having appeared in any bank for opening of the account in the name of the company M/s. Moskos Steel Pvt. Ltd. and further added that he has never applied for OD limits for the company or CBI Case No. 143/16 (Old No. 14/12) Page No. 37 of 117 State through CBI v. Raj Kumar etc. enhancement of the OD limit. He further stated tht the some cheque leaves were got signed from him in blank by Ombir Singh in good faith and upon some cheque leaves his signatures have been forged by Ombir Singh.
13. Similarly, A2 Neel Kamal has also deied that she is the Director of M/s. Moskos Steel Pvt. Ltd. According to her, she is a housewife, totally innocent and having no concern with the instant case. She stated that all the companies were being managed by late husband Ombir Singh. She stated that the current account no.7221 in the name of M/s. Moskos Steel Pvt. Ltd. in Uttam Nagar branch of Canara Bank was opened by her husband in her name and she never operated the said account. She also stated that she had never applied for any OD limit of the said company and that her husband used to take her signatures on various papers in good faith which he may have misused without her consent.
14. A-3 Satish Sikri has stated that established procedure was duly followed in the instant case. He further eloborated that whenver a new property is offered as security, Legal Scrutiny Report (LSR) has to be obtained from the penal advocate of the bank and valuation is to be obtained from the penal advocate of the bank. According to him, in the instant case, LSR in respect of property bearing Plot No.6, falling in Khasara No.116/9, Mahavir Enclave, Uttam Nagar, New Delhi, was obtained from penal advocate Sh. R. Vasudev and then valuation was got done by Sh. S.L. Dhir, Penal Valuer of the bank. He further stated that the physical verification of the said plot of land was also conducted and cofirmed to the Circle Office, which was done CBI Case No. 143/16 (Old No. 14/12) Page No. 38 of 117 State through CBI v. Raj Kumar etc. alongwith the Officer of Advances Section Sh. Mahesh Prakash. He denied the assertion that the aforesaid plot no.6 was not in existence saying that no sincere efforts to trace the same were made. He claimed false implication in this case.
15. A5 D.C. Narnolia stated that he has no information of the transactions between A1, A2 & A9 with the bank as he had joined Uttam Nagar branch of the bank on 04.08.2003. He further added that he was a low grade Officer in the bank and had no power either to take any credit decision in respect of the proposal which was beyond the power of the branch or to permit the temporary overdraft facility in the credit account. He too claimed innocence.
16. According to A6 DRP Sundram, he joined the Circle Office of the bank in the month of December, 2003 and therefore, is not aware about the dealings between A1, A2 & A9 on one hand and the bank on the other hand. He admitted that it is the responsibility of the branch office to check and physically verify the status of immovable property offered as security to the bank and the Circle Office relied on the Status Report filed in this regard by the branch office. He asserted that the Circle Office acted as per the guidelines promulated by the bank from time to time. He further stated that he permitted enhancement of limit in the year 2003 after duly following all the norms of the bank within his power and did not transgress guidelines of the bank and acted in good faith basing his decision on the recommendations of the Branch Credit Manager, Chief Manager, circle office Section Officer, Sr. Manager and Assistant General Manager. He further stated that before permitting the enhancement, he discussed the matter with the CBI Case No. 143/16 (Old No. 14/12) Page No. 39 of 117 State through CBI v. Raj Kumar etc. G.M. also and after according permission the again placed the file before G.M. for review who did not pass any adverse remarks. He further pointed out that as per the guidelines of the bank, collateral security is not mandatory and the advance was fully secured by stocks in trade. He stated that he has been implicated falsely in this case.
17. A7 K.V. Prabhakar stated that he joined Circle Office in the month of May, 2004 and therefore, was unaware about the dealings between the bank, A1, A2 & A9 which took place till that time. He further stated that whatever he had done in this case, was as per the guidelines promulated by the bank from time to time and he neither abused his official position nor received any pecuniary gain/valuable things from any of the accused persons. He claimed false implication.
18. A8 Sugam Sharma also claimed innocence and stated that he has been falsely implicated in this case.
Defence Evidence :-
19. A1 Raj Kumar, A3 Satish Sikri, A6 DRP Sundaram and A7 KV Prabhakar Rao stated that they want to lead evidence in defence, whereas A2 Mrs. Neel Kamal, A5 D.C. Narnolia and A8 Sugam Sharma stated that they do not want to lead any evidence in defence.
20. A3 Satish Sikri appeared himself as defence witness on his behalf and has been examined as DW1. He tendered in evidence the certified copy of the judgment in case titled CBI vs. Om Prakash dated 24.08.2013 which is Ex.DW1/A. CBI Case No. 143/16 (Old No. 14/12) Page No. 40 of 117 State through CBI v. Raj Kumar etc.
21. On behalf of A1 Raj Kumar, one Manjit Malhotra entered the witness box as DW2 and proved the appointment letter of Raj Kumar as Ex.DW2/A to show that he was employed as Supervisor in M/s. Golden Rati Star Industries Pvt. Ltd.
22. Ld. Counsel appearing for A6 and A7 made a statement on 09.08.2016 to the effect that these two accused do not want to lead any evidence in their defence.
23. Final arguments were heard in detail from both the sides on several dates of hearing. Ld. Public Prosecutor as well as Ld. Defence Counsels took me through the entire voluminous oral as well as documentary evidence on record painstakingly.
Submissions of Ld. Public Prosecutor :-
24. Ld. Public Prosecutor submitted that the prosecution has been successful in proving the guilt of the accused beyond reasonable doubt. He argued that the deposition of PW10 & PW30 manifests that no parcel of land falling in Khasra No.116/9, Palam Village, had been sold to Ombir and therefore, he had no right or title to execute any Sale Deed in respect of the said Plot No.6 measuring 250 sq. yds. out of Khasra No.116/9, Mahavir Enclave, New Delhi, in favour of A1 Raj Kumar. According to Ld. Public Prosecutor, the evidence on record is sufficient to conclude that the documents relating to aforesaid plot of land stated to have been executed by its original owner Laxmi Narain in favour of Ombir Singh are forged and fabricated documents, about which A1 Raj Kumar was completely aware and the Sale Deed CBI Case No. 143/16 (Old No. 14/12) Page No. 41 of 117 State through CBI v. Raj Kumar etc. executed later on by Ombir Singh in favour of Raj Kumar was a collusive one just in order to cheat and defraud the bank. He argued that it is evident from the material on record that Raj Kumar had knowledge that the said plot no.6 was not in existence at all and he furnished the aforesaid Sale Deed in respect of the same plot of land as security to the bank pursuant to a well hatched conspiracy to defraud the bank by obtaining enhancement of the OD limit to Rs.100 Lakhs. He further stated that the testimony of various bank officials i.e. PW17, PW19, PW20, PW21, PW22, PW29 and PW37 shows that the accused bank officials i.e. A4, A5, A6 & A7 did not stick to the guidelines issued by the bank from time to time and went out of the way to permit enhancement of OD limit to A9 M/s. Moskos Steel Pvt. Ltd. Represented by A1 & A2 and their conduct clearly shows that they would not have done so unless they had been bribed. His submissions qua each of the accused can be summarized as under :
S. No. Role of accused Charges Oral Documentar persons Evidence y Evidence 1 Raj Kumar (A-1): He U/s.120-B PW-11/1- D-39, D-40 was the Director of r/w 420, (Jai (forge/false the company. He had 468, 471 Bhagwan) sale deed), opened the account IPC and PW-12/6 D-100 of M/s. Moskos Steel Section (Chanderbh (GEQD Pvt. Ltd. in the 13(2) r/w an), PW- report), D-
capacity of Director 13(1)(d) of 17/13 (S.K. 46 (False and M/s. Karan Steel PC Act, Wadhwa), affidavit Pvt. Ltd. as proprietor 1988 and PW-21/37 regarding in Canara Bank, substantive (M.K. ownership Uttam Nagar branch, offences Gupta), of the New Delhi. He was 420, 468 PW-22/15 property) active Director, and 471 (Rajat besides submitted various IPC. Nidhi), PW- different loan application for 24/17 loan CBI Case No. 143/16 (Old No. 14/12) Page No. 42 of 117 State through CBI v. Raj Kumar etc. sanction of (Mahesh request and loan/enhancement of Prakash), different loan and signed PW-28/23, cheques by various cheques. He PW-29/21. which submitted original defrauded sale deed of plot amount was no.6, measuring 250 withdrawn sq.yds. Khasra No.116/9, Mahavir Enclave, New Delhi, showing himself as owner of the said property but this property was found to be non-existent.
GEQD has confirmed that he submitted the documents related to said property.
2 Smt. Neel Kamal (A- 120-B r/w PW-3/28 2) She was the active 420, 468, (R.K. director of this 471 IPC Arora), PW- company and opened and Section 9/30 current account 13(2) r/w (Inderjeet), no.7221 dated 13(1)(d) of PW-13/7 09.02.02 in the name PC Act, (Smt. Saroj of M/s. Moskos Pvt. 1988 and Sachdeva), Ltd. and also signed substantive PW-20/9 OCC A/c No.360 offences (Tek dated 20.07.02 of 420 and Chand), M/s. Moskos Pvt. Ltd. 471 IPC. PW-22/15 who had signed (Ranjeet various loan Nidhi), PW- documents various 23/16 cheques. (Suneet Prakash), PW-24/17 (Mahesh Prakash), PW-28/23, PW-29/21. CBI Case No. 143/16 (Old No. 14/12) Page No. 43 of 117 State through CBI v. Raj Kumar etc. 3 Satish Sikri (A-3) : 120-B r/w PW-2/33 D-7, He was concerned 420, 468, (ND D-8, Branch Manager 471 IPC Sharma), D-52, (28.08.02 to and Section PW-3/28 D-53, 13.09.03) and to the 13(2) r/w (R.K. D-54, query of Circle Office 13(1)(d) of Arora), PW- D-67 he confirmed vide PC Act, 21/37 (M.K. letter dated 06.11.02 1988 and Gupta), and 13.11.02 that substantive PW-24/17 property has been offences (Mahesh inspected, letter 13(2) r/w Prakash), dated 07.0.203 in 13(1)(d) of PW28/23. which he has PC Act, confirmed that 1988 and property was 420 IPC. inspected by him alongwith Sh. Mahesh Prakash. As per the Circular dated 15.03.01 (D-67) physical verification of the security offered as security is mandatory and suitable record in this regard containing the name of the official who have conducted such verification and the date of physical verification should be maintained. He recommended enhancement of OCC limit from Rs.40 Lakhs to Rs.100 Lakhs on the basis of non existent additional property i.e. plot no.6 and released the amount before execution of CBI Case No. 143/16 (Old No. 14/12) Page No. 44 of 117 State through CBI v. Raj Kumar etc. documents 4 Ravi Sethi (A-4) - 120-B r/w PW-1/20, D-10 He recommended 420, 468, PW-2/33, (enhancem enhancement of limit 471 IPC PW-3/28, ent of OCC from Rs.80 Lakhs to and Section PW-4/29, limit from 80 200 Lakhs and then 13(2) r/w PW-20 to to 200) D- adhoc limit of Rs.50 13(1)(d) of 26, PW- 11 (adhoc Lakhs without any PC Act, 28/23, PW- sanction of additional collateral 1988 and 29/21 Rs.50 security when substantive (details of Lakhs enhancement of limit offences TOD has D-14 to D- had already been 13(2) r/w been given 22 denied. Documentary 13(1)(d) of in the D-83 to 94 evidence is available PC Act, statement that he permitted 1988 and of PW-23 continuous 420 IPC. Suimit Temporary Overdraft Prakash/ (TOD). Documentary PW-16) evidence is available that he released the limit in anticipation of sanction. 5 D.C. Narnolia (A-5): 120-B r/w PW-1/20, D-10, D-11 He was also Branch 420, 468, PW-2/33, (Letter Manager during the 471 IPC PW-3/28, dated period 04.08.03 to and Section PW-4/29, 09.11.04 21.09.06 and it was 13(2) r/w PW-20 to forwarded in his knowledge that 13(1)(d) of 26 above, the enhancement in limit PC Act, PW-28/23, proposal was already denied 1988 and PW-29/21 vide this but still he substantive letter to recommended the offences Circle enhancement to 13(2) r/w Office) Branch Manager 13(1)(d) of even without PC Act, additional security. 1988, 420 IPC 6 DRP Sundaram (A- 13(2) r/w PW-20 to 6): He was the then 13(1)(d) of 26 above DGM working at RO, PC Act, PW-28/23 Circle Office, Canara 1988 and PW-29/21 CBI Case No. 143/16 (Old No. 14/12) Page No. 45 of 117 State through CBI v. Raj Kumar etc. Bank and it was in his substantive knowledge that offences enhancement of limit 13(2) r/w from Rs.80 Lakhs to 13(1)(d) of Rs.150 Lakhs was PC Act, already denied due to 1988, inflated value of 420 IPC. additional property of Rathiwas yet he sanctioned the enhancement from Rs.80 Lakhs to Rs.200 Lakhs and then adhoc limit of Rs.50 Lakhs without any additional property. He failed to check the steep rise in sales and even did not bother to ask about Sales Tax return. He has not protected the interest of the bank. Lot of adverse remarks were there on the office note and enhancement of limit is purely unjustified. 7 KV Prabhakar Rao 120-B r/w PW-1/20 D-10 (A-7): He was the 420, 468, PW-2/33 D-11 then DGM working at 471 IPC PW-3/28 RO, Circle Office, and Section PW-4/29 Canara Bank and it 13(2) r/w PW-20 to was in his knowledge 13(1)(d) of 26 above that enhancement of PC Act, PW-28/23 limit from Rs.80 1988 and PW-29/21 Lakhs to Rs.150 substantive Lakhs was already offences denied due to inflated 13(2) r/w of value of additional PC Act, CBI Case No. 143/16 (Old No. 14/12) Page No. 46 of 117 State through CBI v. Raj Kumar etc. property of Rathiwas 1988, yet he recommended 420 IPC the enhancement from Rs.80 Lakhs to Rs.200 Lakhs without any additional security. He failed to check the steep rise in sales and even did not bother to ask about Sales tax returns. He has not protected the interest of the Bank. Lot of adverse remarks were there on the office note and enhancement of limit is purely unjustified. 8 Sugam Sharma (A- 120-B r/w PW-14/12 D-6 8): He was the 420, 468, (Anoop D-7 proprietor of M/s. 471 IPC Kundu) D-23 Karan Steel having and Section PW-15/5 D-100 its account in 13(2) r/w (Ramesh (GEQD Standard Chartered 13(1)(d) of Gupta) report) Bank, New Friends PC Act, PW-23/16 Colony, New Delhi. 1988 (Sumit The amount Prakash) transferred in his account is classified as money siphoned off from the limit of Rs.40 Lakhs sanctioned to the company in July 2002 and limit of Rs.80 Lakhs sanctioned to the company in Nov. 2002. GEQD has also confirmed his signatures on the CBI Case No. 143/16 (Old No. 14/12) Page No. 47 of 117 State through CBI v. Raj Kumar etc. cheques issued from the account of M/s. Karan Steels maintained with Standard Chartered Bank, on the front of the cheques as well as on the back of the cheques. He was not having any business dealing with M/s. Moskos Steel Pvt. Ltd. 9 M/s. Moskos Steel 120-B r/w Pvt. Ltd. 420, 468, 471 IPC and Section 13(2) r/w 13(1)(d) of PC Act, 1988
Submissions of the counsel for A1 Raj Kumar and A9 M/s Moskos Steel Pvt. Ltd.:-
25. He submitted that the documents Ex.PW10/A to Ex.PW10/D, vide which Laxmi Narayan sold the plot No. 6 in Khasra No. 116/9, Village Palam, New Delhi to Ombir Singh, have been executed in the year 1984 and as per the case of prosecution itself, sale deed regarding the said plot of land executed by Ombir Singh in favour of A1 Raj Kumar is dated 02.02.2000. He also pointed out that the first application for sanction of credit limit to the company A9 Moskos Steel Pvt. Ltd was made in the month of May, 2002 and the aforesaid sale deed in respect of the Plot No. 6 was furnished as collateral security for enhancement of the credit limit from Rs. 40 lacs to Rs. 80 lacs on CBI Case No. 143/16 (Old No. 14/12) Page No. 48 of 117 State through CBI v. Raj Kumar etc. 26.11.2002. His argument is that even if it is assumed that the documents Ex.PW10/A to Ex.PW10/D are forged documents, A1 Raj Kumar cannot be stated to be a party to the said forgery for the reason that he was a minor in the year 1984 i.e. the year in which these documents stated to have been executed in favour of Ombir Singh and even otherwise also there is no evidence on record to suggest that A1 Raj Kumar has played any role in the alleged forgery of these documents. He further submitted that the prosecution has also failed to prove that the documents Ex.PW10/A to Ex.PW10/D do not bear the signature of Laxmi Narayan and the signature of the vendor appearing thereon have been forged by Ombir Singh and Raj Kumar.
According to the Ld. Counsel, deposition of PW10, in this regard, is not sufficient to conclude that these are forged documents for the reason that the prosecution did not take any steps for comparing the signature of the seller on these documents with the admitted signatures of Laxmi Narayan.
26. Ld. Counsel further argued that the evidence led by the prosecution does not show that the said Plot No. 6 in Khasra No. 116/9, Village Palam, New Delhi is not in existence at all and the evidence on record merely suggests that the said plot could not be traced when the bank officials had reached the spot to locate it. He argued that the plot was in existence prior to the year 2002, which is evident from the Legal Scrutiny Report of the bank advocate and the valuation report of the bank valuer, but later on it could not be traced as an unauthorized colony had come up in the area with no regular pattern of plot numbers or house numbers. It is his further argument that even if it is assumed that the Plot No. 6 was not in existence, still CBI Case No. 143/16 (Old No. 14/12) Page No. 49 of 117 State through CBI v. Raj Kumar etc. it is evident that the enhancement of the credit limit sanction to the company A9 Moskos Steel Pvt. Ltd was not on the basis of the security of the said plot as taking of collateral security was not mandatory requirement as per the bank manual and the requirement was only to see the sufficiency of stock in trade. He submitted that furnishing of collateral security in the form of the title documents relating to non existent plot of land, where the same was not required at all, cannot be termed as criminal act on the part of A1 and A9.
27. Ld. Counsel placed heavy reliance upon the deposition of PW13 and valuation report Ex.PW13/B submitted by this witness in respect of the said Plot No. 6, to canvass that the said plot was very much in existence at the time of visit of this witness as otherwise he would not have been in a position to prepare the valuation report. He also laid emphasis on the testimony of PW31 (Halka Patwari of the area in question), who has deposed that it is not possible as per the record maintained in their office to point out the said Plot No. 6 in Khasra No. 116/9 as new numbers have been given by the private coloniser, who has developed a colony on the agricultural land unauthorizedly.
28. According to the Ld. Counsel, there is no irregularity or illegality in enhancing the credit limits of the company M/s Moskos Steel Pvt. Ltd and it was done as per the guidelines issued by the bank from time to time.
29. In order to buttress his submissions, the Ld. Counsel relied upon two judgments of the Supreme Court reported as 2012 (9) SCC 512 Central Bureau of Investigation, Hyderabad Vs. K. Narayana CBI Case No. 143/16 (Old No. 14/12) Page No. 50 of 117 State through CBI v. Raj Kumar etc. Rao and 2009 (6) SCC 77 S.V.L. Murthy Vs. State.
Submissions on behalf of A2 Neel Kamal :-
30. Ld. Counsel appearing for accused No. 2 submitted that even though she had been made director of the company A9 M/s Moskos Steel Pvt. Ltd by her husband and the account opening form of the company with regards to the account in Canara Bank, Uttam Nagar Branch bears her signatures, yet she was only a household lady and was not involved in any transactions between the company and the bank at all. He further submitted that she had not signed any application/request for enhancement of credit limits to the company and therefore, cannot be held liable for any illegality/irregularity in the same, if any. He also argued that she had not signed any cheques stated to be issued from the bank account of the company, which fact could have been ascertained easily by the IO, if he had sent those cheques alongwith admitted signatures of this account to GEQD for comparison.
31. It was vehemently agitated by the Ld. Counsel that this accused Neel Kamal is totally innocent and has been falsely arraigned in this case only for the reason that she was a director of the company M/s Moskos Steel Pvt. Ltd and that too on paper only having no active role in the business of the company. He pleaded for acquittal of the accused.
CBI Case No. 143/16 (Old No. 14/12) Page No. 51 of 117 State through CBI v. Raj Kumar etc. Submissions on behalf of A3 Satish Sikri :-
32. On behalf of A3, it has been argued by his counsel that the account of the company M/s Moskos Steel Pvt. Ltd was opened in Uttam Nagar Branch, New Delhi on 09.02.2002 i.e. much before A3 joined the said branch on 28.08.2002. He pointed out that the initial proposal for sanction of credit limit of Rs. 40 lacs to the company was considered by the then Senior Manager Mr. R.L. Jarwal on 20.05.2002 and was affirmed by the circle office. He further submitted that the enhancement of the credit limit of Rs. 40 lacs to Rs. 100 lacs was done during the tenure of A3. In order to convince this Court that A3 had acted as per the guidelines and the procedure for enhancement of the credit limit, he referred to following portion of the cross-
examination of PW28 Sh.R.K. Arora, who has retired as General Manager from Canara Bank, Uttam Nagar Branch, New Delhi:
"It is correct that the enhancement proposal i.e. from Rs. 80 lac to Rs. 150 lac was within the jurisdiction of Circle Office. Yes, it was a working capital loan. It is correct that the prime security was stock in trade. It is correct that as per the banking guideline, maximum permissible bank finance is calculated on the basis of turnover method i.e. 20% of the accepted projected sale of the party. It is correct that Circle officer is within a jurisdiction to call for any data or information or document from the branch before accepting or rejecting the proposal. It is correct that branch has to forward complete credit report to the CBI Case No. 143/16 (Old No. 14/12) Page No. 52 of 117 State through CBI v. Raj Kumar etc. circle officer along with audited financial documents. It is correct that thereafter circle office after considering the report / documents submitted by the branch either can sanction or reject or reduce the limit.
It is correct that in the branch the proposal is assessed by the credit officer and thereafter he places the same before the manager. It is correct that credit officer as well as manager are required to sign or put his initial the said proposal. I have seen appraisal (Ex.PW17/K (colly.) (running into three pages). I have seen the initial of the bank officials at point A and B already marked but I am unable to identify the signature. It is correct that in such type of matter, branch manager is also required to obtain legal scrutiny report from the panel advocate as well as report of valuer from panel valuer. It is correct that in the present case, both the reports were called for by the branch. It is correct that on the basis of said reports, branch manager recommended to the circle officer for consideration of the proposal."
33. Ld. Counsel also placed reliance upon the instructions manual of the bank Ex.PW15/B, particularly Clause 2.1.10 and 2.4.6, which are reproduced as under:
Clause 2.1.10 : If the LSR and security by the branch discloses a clear and marketable title and mortgageability and if the borrower is able to produce CBI Case No. 143/16 (Old No. 14/12) Page No. 53 of 117 State through CBI v. Raj Kumar etc. all the documents referred to in the LSR, the proposal should be processed further and placed before the appropriate authority for sanction."
Clause 2.4.6 : The branch can approve the LSR only if the LSR conveys a clear and marketable title.........."
34. Ld. Counsel submitted that when the titled deed in respect of the Plot No. 6 in question was submitted on behalf of the company M/s Moskos Steel Pvt. Ltd to the bank as additional collateral security, these were got verified from the panel advocate Sh. R. Vasudev, which is evident from the Legal Scrutiny Report Ex.PW15/E and it was also got verified from the panel valuer Sh. S.L. Dhir, which is evident from the valuation report Ex.PW17/H. He further submitted upon receipt of the Legal Scrutiny Report and valuation report, A3 alongwith Mahesh Prakash (PW17), who was working as an officer in advance section of the branch and was handling the proposal for the enhancement of the limit to the company, conducted physical verification and then forwarded the full credit limit to the circle office.
35. According to the Ld. Counsel, the only incriminating evidence against A3 is the deposition of PW17 wherein he has denied that he had accompanied A3 for the physical verification of the plot in question and also has denied having signed the letter dated 07.02.2003 in this regard Ex.PW9/E-4. Ld. Counsel argued that PW17 had also been under suspension in this very case from 07.04.2009 to 20.01.2010 and it is after his reinstatement on 20.01.2010 that he has taken stand against A3 and has deposed against A3. He argued that the testimony CBI Case No. 143/16 (Old No. 14/12) Page No. 54 of 117 State through CBI v. Raj Kumar etc. of PW17 is patently false and untrustworthy. He also pointed out that if the CBI would have sent the aforesaid letter to CFSL for comparison of the signature thereof with the admitted signatures of the PW17, the truth would have come out. According to the Ld. Counsel, investigation in this case has been totally unfair to A3 and he has been framed in this case. Ld. Counsel also referred to the deposition of PW33, who has deposed that there were no irregularities in the enhancement of the limit of the company from Rs. 40 lacs to Rs. 80 lacs and there were no adverse remarks against the company during the tenure of A3. He submitted that deposition of other bank officials also reveal that A3 had acted as per the guidelines of the bank. He also referred to the deposition of the IO PW40, who has deposed that no evidence has come-forth to show that there was involvement of any bank officers/officials prompting Mr. Dhir to submit the report in respect of Plot No. 6.
36. Ld. Counsel pleaded for acquittal for A3:
37. The Ld. Counsel relied upon the judgment of the Hon'ble Supreme Court reported as K.R. Purushothaman vs. State of Kerala, 2006(1) C.C. Cases (SC) 131, to canvass that principles of agency cannot be applied in order to find the conspirator guilty of a substantive offence not committed by them; the judgment of Andhra Pradesh High Court reported as J. Sri Ram Surya Prakash Sharma vs. State of Andhra Pradesh and others, 2011 Cri.L.J. 2027, to canvass that the bank officers cannot be held guilty of a criminal offence merely for certain procedural lapse committed by them in discharge of their official function; another judgment of Hon'ble CBI Case No. 143/16 (Old No. 14/12) Page No. 55 of 117 State through CBI v. Raj Kumar etc. Supreme Court reported as C. Chenga Reddy and others vs. State of Andhra Pradesh, AIR 1996 Supreme Court 3390, to canvass that mere disregard of relevant provisions of financial code as well as ordinary norms of procedural behaviour by a government officer cannot be made basis to establish the guilt of the officer; the judgment of the Hon'ble Supreme Court reported as State of M.P. vs. Sheetla Sahai & Ors., 2009(4) C.C. Cases (SC) 220, to canvass that the prosecution cannot be permitted to proceed against the officers in a pick and choose manner and the "doctrine in parity" has to be kept in mind by the court always and lastly, another judgment of Hon'ble Supreme Court reported as S.V.L. Murthy vs. State Rep. by CBI Hyderabad, 2009 (3) C.C. Cases (SC) 411, to canvass that the charges framed against the accused must fail for the reason that the prosecution has failed to lead any legally admissible evidence of conspiracy between the accused and to prove dishonest intention on the part of the accused bank officers.
Submissions made by A5 D.C. Narnolia :-
38. This accused has argued himself and had not engaged any Counsel. He has also filed written submissions. It is contended by him that he was never posted as Branch Manager of Uttam Nagar branch of the bank but was only posted as Credit Manager in the said branch from 04.08.2003 tio 02.09.2006. He states that being a low level officer in the bank, he was neither recommending nor sanctioning authority for the loans to be disbursed to bank's customers including the company A9 M/s. Moskos Steel Pvt. Ltd. He further submits that he was duty bound to sign the loan proposals or overdraft proposals CBI Case No. 143/16 (Old No. 14/12) Page No. 56 of 117 State through CBI v. Raj Kumar etc. as an obedient junior officer working under the direction, supervision and control of his immediate superior i.e. Chief Manager of the branch. He placed reliance upon the resolution no.323 of Canara Bank Officers Employees Conduct Regulations, 1976 which provides as under :
"No officer/employee shall, in the performance of his official duty or in the exercise of powers conferred upon him, act otherwise, than in his best judgment except when he is acting under the direction of his officer superior."
39. It is his submission that since he was acting under the supervision and direction of his immediate superior i.e. Chief Manager of the Branch, he was not required and expected to use his own judgment. He further states that the proposal for enhancement of limit of the company A9 M/s. Moskos Steel Pvt. Ltd. from Rs.80 Lakhs to Rs.1.5 Crores on 29.11.2003 was prepared by Chief Manager Sh. L. Raju of the Branch and he only countersigned the same, being duty bound to do so in obedience of his superior. He further pointed out that the subsequent proposal also was forwarded by the Branch Incharge Sh. Ramesh Sethi on 09.11.2004 and he only countersigned the said proposal also. According to him, the decisions in the branch were not taken at a lower level at which he was working. He also referred to the deposition of various prosecution witnesses i.e. PW17, PW19, PW28 & PW29 to canvass that the guidelines of the bank were duly followed in forwarding and sanctioning proposal for enhancement of OD limit to the company M/s. Moskos Steel Pvt. Ltd. He also CBI Case No. 143/16 (Old No. 14/12) Page No. 57 of 117 State through CBI v. Raj Kumar etc. referred to the testimony of the IO (PW40) wherein he has deposed that nothing was revealed during the course of investigation to show that A5 D.C. Narnolia has taken ay pecuniary benefit or valuable things either from the co-accused or from any other persons for the acts performed by him and that the investigation revealed that this accused had no interaction or intimacy with the borrower.
40. It is submitted by this accused that no criminality can be attached to any of his acts while working as Credit Manager and therefore, he is liable to be acquitted.
Submissions on behalf of A6 & A7 :-
41. Ld. Counsel appearing for these two accused submitted that both of them were posted in the Circle Office of the bank and had nothing to do with the acts performed at the Branch level. He pointed that A6 joined Circle Office as Deputy General Manager (DGM) on 23.12.2003 and remained there till 15.07.2006, whereas A7 joined the Circle Office as Assistant General Manager on 24.05.2004 and remained there till 27.12.2004. He argued that note Ex.PW29/A dated 06.01.2004 with regard to proposal for enhancement of the credit limit of the company M/s. Moskos Steel Pvt. Ltd. from Rs.80 Lakhs to Rs.150 Lakhs was prepared by Sh. S.K. Gupta, Senior Manager and approved by AGM R.K. Arora. Accused A6 only countersigned the same lastly. He also pointed out that similarly the subsequent note dated 06.01.2004 in this regard Ex.PW33/B (colly.) on the basis of the proposal of the branch dated 09.11.2004 (Ex.PW20/D) also was prepared by Sh. S.K. Gupta, Senior Manager and these two accused CBI Case No. 143/16 (Old No. 14/12) Page No. 58 of 117 State through CBI v. Raj Kumar etc. approved the same which was followed by the approval by the General Manager of the bank. It is his submission that in case any irregularity or illegality is found in enhancement of credit limit of the company from Rs.80 Lakhs to Rs.2 Crores vide aforementioned note Ex.PW33/B, the author of the Note Sh. S.K. Gupta (Senior Manager) should have been the first accused in this regard but interestingly, he has been left out without assigning any reason. Referring to the banking manual Ex.PW19/A, the Ld. Counsel submitted that no rule or guideline was flouted in enhancing the credit limit of the company M/s. Moskos Steel Pvt. Ltd. vide Note Ex.PW33/B as the same was done after taking into account various banking parameters of the company such as Net Working Capital (NWC), projected balance sheet (PBS) and the same was according to the Maximum Permissible Banking Finance (MPBF).
42. Ld. Counsel further pointed out that Note dated 15.03.2005 Ex.PW19/DB with regard to sanction of adhoc limit of Rs.50 Lakhs to the company M/s. Moskos Steel Pvt. Ltd. was also prepared by Sh. S.K. Gupta, Senior Manager and was approved by AGM Sh. S.S. Bhat. The Note was finally approved by A7 K.V. Prabhakar. He referred to the general guidelines issued by the bank Ex.PW19/C to canvass that the sanction of said adhoc limit was as per banking guidelines and no irregularities can be found in the same. He took the court through the deposition of various prosecution witnesses particularly PW19 and the IO (PW40) to argue that no criminality can be attached to the acts of these two accused and they have been framed falsely.
CBI Case No. 143/16 (Old No. 14/12) Page No. 59 of 117 State through CBI v. Raj Kumar etc.
43. Ld. Counsel for the accused pleaded for acquittal of both these two accused.
Submissions on behalf of A-8 :-
44. On behalf of A8 Sugam Sharma, it was submitted by his Counsel that the prosecution has not led any evidence to prove that A8 was the proprietor of M/s. Karan Steel and was operating its bank account. His argument is that the identity of A8 as the proprietor of M/s. Karan Steel has not been established at all. He also pointed out that cheques Ex.PW5/G to Ex.PW5/J, which are alleged to have been issued by A8 from the bank account of M/s. Karan Steel, do not bear the signature of A8. He argued that if the cheques would have been sent to GEQD alongwith specimen signature of A8, the truth would have come out. He further submits that the IO has not sent the specimen signature of the authorised signatory of the bank account of M/s. Karan Steel seized from the bank also for comparison to GEQD. According to the Ld. Counsel, there is no evidence on record to connect A8 with the firm M/s. Karan Steel or its bank account.
45. The Ld. Counsel also argued that even if it is assumed that A8 has been operating the bank account of M/s. Karan Steel as its proprietor, then also mere transfer of funds from M/s. Moskos Steel Pvt. Ltd. to the bank account of the said firm alone does not tantamount to a criminal offence. He submits that the tainted mortgage of plot no.6 is stated to have been offered on behalf of M/s. Moskos Steel Pvt. Ltd in the year 2004 for enhancement of its credit limit from Rs.40 Lakhs to Rs.100 Lakhs whereas the money is stated to have CBI Case No. 143/16 (Old No. 14/12) Page No. 60 of 117 State through CBI v. Raj Kumar etc. been transferred from the bank account of M/s. Moskos Steel Pvt. Ltd. to the bank account of M/s. Karan Steel in the year 2003 which implies that the transfer of money, as such, has no connection with the tainted mortgage.
46. It is the submission of the Ld. Counsel that A8 has been falsely arraigned in this case by the CBI and is liable to be acquitted.
47. Written submissions filed on behalf of A1, A3 and A5 have been perused as well as considered. The judgments relied upon by the Ld. Defence Counsels, as noted herein above, have also been considered.
Charges framed against the accused :-
48. Having noted the gist of the evidence led by the prosecution and the submissions made on behalf of both the parties, it is found that the major portion of the evidence as well as the submissions relate to the contentions regarding which no charges have been framed against the accused. Hence, I find it apposite to reproduce herein below the content of the charges framed against the accused:
(a) Combined charge framed against accused A3 Satish Sikri, A4 Ravi Sethi, A5 D.C. Narnolia, A6 DRP Sunderam and A7 K.V. Prabhakar Rao is;
"That you all, during the year 2002-2003 at Delhi, in furtherance of criminal conspiracy, dishonestly CBI Case No. 143/16 (Old No. 14/12) Page No. 61 of 117 State through CBI v. Raj Kumar etc. and fraudulently, by abusing your official position as public servants, recommended the enhancement of OCC limit, in favour of M/s Moskos Steel Pvt. Ltd on the basis of fake, forged and fabricated documents viz. Sale deed of property, bearing No. Plot No. 6, measuring 250 sq. yards, Khasra No. 116/9, Mahavir Enclave, New Delhi, thereby procured pecuniary advantage to the said company and caused huge loss to the Canara Bank, Uttam Nagar Branch, New Delhi. You all thereby committed an offence punishable under Section 13 (2) r/w Section 13 (1) (d) of PC Act, 1988 r/w Section 120B IPC and within the cognizance of my Ld. predecessor.
Secondly, you all dishonestly and fraudulently, in furtherance of criminal conspiracy, prepared and or got prepared false verification reports and used and got to be used the same and also the forged and fabricated title deeds in respect of non existent property bearing No. Plot No. 6, measuring 250 sq. yards, Khasra No. 116/9, Mahavir Enclave, New Delhi to facilitate M/s Moskos Steel Pvt. Ltd obtain enhanced credit facilities from the above mentioned public bank. You all thereby committed an offence punishable under Section 471 IPC r/w Section 120B IPC and within the cognizance of my Ld. Predecessor".
(b) Additional charge framed against A1 Raj Kumar is;
CBI Case No. 143/16 (Old No. 14/12) Page No. 62 of 117 State through CBI v. Raj Kumar etc. "That you during the year 2002-2003 at Delhi dishonestly and fraudulently, in furtherance of criminal conspiracy, cheated the Canara Bank, Uttam Nagar Branch, New Delhi by forging and using forged, false and fabricated documents viz. GPA, affidavit, agreement to sell, money receipt and sale deed of the property described as Plot No. 6, measuring 250 sq. yards, Khasra No. 116/9, Mahavir Enclave, New Delhi in order to get OCC limit enhanced in favour of the M/s Moskos Steel Pvt. Ltd. You thereby committed offence punishable under Section 468 IPC and 471 IPC r/w Section 120B IPC within the cognizance of my Ld. Predecessor."
(c) Further combined charge framed against all the nine accused persons i.e. A1 Raj Kumar, A2 Neel Kamal, A3 Satish Sikri, A4 Ravi Sethi, A5 D.C. Narnolia, A6 DRP Sunderam, A7, K.V. Prabhakar, A8 Sugam Sharma and A9 M/s Moskos Steel Pvt. Ltd through its Director Raj Kumar is;
"That you all, during the year 2002-2003, at Delhi entered into a criminal conspiracy, to cheat Canara Bank, Uttam Nagar Branch, New Delhi by fraudulently inducing the said bank to recommend and grant enhancement of OCC limit in favour of M/s Moskos Steel Pvt. Ltd on the basis of fake, forged and fabricated documents of the non existent property CBI Case No. 143/16 (Old No. 14/12) Page No. 63 of 117 State through CBI v. Raj Kumar etc. described as Plot No. 6 measuring area 250 sq. yards of Khasra No. 116/9 situated in the Revenue Estate of Village Palam, Delhi State, Delhi area Abadi known as Mahavir Enclave, Block-B-2. You are thereby committed an offence punishable under Section 120B and within the cognizance of my Ld. Predecessor.
Secondly, you all in pursuance of the above said criminal conspiracy, during the aforesaid period and at the said place, dishonestly and fraudulently, induced the Canara Bank, Uttam Nagar Branch, New Delhi and got sanctioned enhancement of OCC limit in favour of M/s Moskos Steel Pvt. Ltd on the basis of fake, forged and fabricated documents of the non existent property described as Plot No. 6 measuring area 250 sq. yards of Khasra No. 116/9 situated in the Revenue Estate of Village Palam, Delhi State, Delhi area Abadi known as Mahavir Enclave, Block-B-2, You all thereby committed an offence punishable under Section 420 IPC r/w Section 120B IPC and within the cognizance of my Ld. Predecessor.
49. So a common thread running through the aforesaid charges framed against the accused is conspiracy to forge / fabricate the title deeds in respect of non existent property bearing Plot No. 6 measuring 250 Sq. yards in Khara No. 116/9, Mahavir Enclave, New Delhi and their use in obtaining enhancement of over draft limit for the company M/s Moskos Steel Pvt. Ltd.
CBI Case No. 143/16 (Old No. 14/12) Page No. 64 of 117 State through CBI v. Raj Kumar etc.
50. Keeping view the nature and extent of charges framed against the accused, only that portion of evidence and the submissions of the parties as relate directly or indirectly to these charges, would be scrutinized and considered. This is necessary to avoid burdening this judgment with a discussion on the evidence or the submissions which are totally alien and irrelevant to the charges framed against the accused.
Court's discussion on the evidence led by the parties and submissions made on their behalf :-
(i) Whether the creation of equitable mortgage of Plot No. 6 measuring 250 sq. yards by the company (A9) in favour of the bank was a requirement for enhancement of the credit limit of the company (A9):-
51. It is not in dispute that a current account in the name of A9 company M/s. Moskos Steel Pvt. Ltd. was opened in Canara Bank, Uttam Nagar, on 09.02.2002 bearing current account no.360. PW9 was the Manager of the branch at that time and he had permitted opening of the said account. As per his deposition, Sh. Ombir Singh (since expired) was introducer for the said account as he was already an account holder in the branch. It is also not in dispute that a credit limit of Rs.40 Lakhs was sanctioned to the company in the month of June, 2002 vide letter dated 28.06.2002 of the Circle Office of the bank. The company had furnished a collateral security in the form of plot nos.46 & 47 in Block-B of Bharat Vihar, Raja Puri, Uttam Nagar, New Delhi, in the name of A1 Raj Kumar for the said credit limit.
CBI Case No. 143/16 (Old No. 14/12) Page No. 65 of 117 State through CBI v. Raj Kumar etc.
52. It is also not disputed that the company had made a request for enhancement of the OD limit to Rs.100 Lakhs vide a letter, copy of which is on record as Mark-PW17/B. It appears that this document was not exhibited for the reason that it is only a photocopy. However, I may note that no dispute has been raised with regard to this document or with regard to request for enhancement of the OD limit for the company to Rs. 100 lacs, by any of the accused. The only question put to PW17 in relation to this document is in his cross examination conducted on behalf of A1 & A9 to the effect that the said letter as well as copy of the resolution of the Board of Directors of the company (Ex.PW17/C) annexed with it were not signed by A1 in his presence, which he admitted as correct. In fact, entire file containing the document relating to the aforesaid request on behalf of the company and the sanction of such enhancement has been proved by PW17 as Ex.PW17/A, to which no serious dispute has been raised on behalf of any of the accused.
53. A perusal of the letter Ex.PW17/K vide which Uttam Nagar branch forwarded the proposal for enhancement of OD limit of the company to Rs.100 Lakhs to the Circle Office, reveals that the existing securities were not found sufficient to cover the additional finance and hence the company offered additional security in the form of property bearing plot no.6 measuring 250 sq. yds. out of Khasra No.116/9, situated in the revenue estate of Village Palam, also known as Mahavir Enclave Block-B2, New Delhi, in the name of A1 Raj Kumar. Accused A1, A2 & A9 too have not disputed that the additional security in the form of aforesaid plot of land bearing no.6, admeasuring 250 sq. yard was furnished at the time of securing enhancement of the OD CBI Case No. 143/16 (Old No. 14/12) Page No. 66 of 117 State through CBI v. Raj Kumar etc. limit of the company from Rs.40 Lakhs to Rs.100 Lakhs.
54. It was vehemently argued on behalf of the A1 and A9 that furnishing additional collateral security in the form of said Plot No. 6, was not mandatory requirement for seeking enhancement of the credit limit from the bank and the enhancement of the limit was considered on the basis of prime security i.e. stocks in trade of the company coupled with its past performance and projected profits. Reliance has been placed upon the testimony of PW7, PW15, PW17, PW19, PW20, PW21, PW22, PW28 and PW33 (all bank officials) who have deposed that there was no irregularity or illegality in enhancement of the credit limits to the company.
55. The entire correspondence between the Uttam Nagar Branch of the Bank and its circle office in relation to the A9 Company's request for enhancement of OD limit from Rs. 40 lacs to Rs. 100 lacs is in the file Ex.PW17/A. Perusal of the file reveals that the request of the company alongwith the supporting documents were sent by the branch to circle office vide letter dated 25.10.2002 (Ex.PW17/K) thereby recommending the enhancement. It is mentioned at page No. 2 of the letter:
"As the existing security are not sufficient to cover our finance, party has offered following additional property:-EMT of property at Plot No. 6 admeasuring 250
sq. yards out of Khasra No. 116/9 situated in Revenue CBI Case No. 143/16 (Old No. 14/12) Page No. 67 of 117 State through CBI v. Raj Kumar etc. Estate of Village Palam, Abadi known as Mahavir Enclave Block No. B-2, New Delhi standing in the name of Sh. Raj Kumar, M.V. is Rs. 70.32 lacs as per valuation report dated 19.10.2002."
56. The circle office, vide its communication dated 30.10.2002 (Ex.PW33/E) in response to above noted proposal Ex.PW17/K of the branch, asked the branch to:-
(A) submit check list for approval of LSR and confirm that the property is mortgageable by EMT, and (B) Physically inspect the proposed property and make independent enquiries and ensure that market value given by the valuer is reasonable.
57. Vide letter dated 06.11.2002 (Ex.PW17/M), the branch enclosed the requisite check list in respect of the proposed mortgage of Plot No. 6 and also informed the circle office that the property was inspected. The circle office, vide its letter dated 08.11.2002 (Ex.PW33/G) informed the branch that it has not received the LSR in respect of additional property to be mortgaged I.e Plot No. 6 and again asked branch to confirm whether independent enquiry has been made to ensure that its market value given by valuer is reasonable.
58. Thereafter, the branch enclosed check list vide its letter dated 13.11.2002 (Ex.Pw17/P) and also stated that as per local enquiries made it is found that the value given by the valuer is reasonable. It CBI Case No. 143/16 (Old No. 14/12) Page No. 68 of 117 State through CBI v. Raj Kumar etc. appears that acting upon these representations of the branch, PW28 (Senior Manager in Circle Office) prepared a detailed note Ex.PW33/H recommending enhancement of OCC limit of the company (A9) from Rs. 40 lacs to Rs. 80 lacs instead of Rs. 100 lacs as sought by the company. The note was approved by the AGM as well as DGM in the circle office and the sanction for enhancement of limit was communicated to the Uttam Nagar Branch vide letter dated 27.11.2002 (Ex.PW33/D).
59. The above noted correspondence between Uttam Nagar Branch and the circle office nowhere indicates that the additional collateral security in the form of Plot No. 6 offered by the company (A9) was not a requirement. A bare look at the contents of the letter Ex.PW17/K shows that the Branch did not find the existing securities i.e. stock in trade and residential house at 46 & 47, Bharat Vihar, Raja Puri, New Delhi sufficient to cover the additional finance to the company and thus asked it to furnish additional security which the company did in the form of Plot No. 6. During that period, the company seems to have not raised any objection at all for demanding additional security.
60. It is very simple. In case no additional security was required for enhance of OCC limit of company to Rs. 100 lacs, why would the Bank ask for it and why would the company furnish it without any demur? Why would the circle office insist upon the legal scrutiny report, valuation and physical inspection of the Plot No. 6 offered as additional collateral security. The note Ex.PW33/H prepared by PW28 manifests that the additional collateral security was taken into consideration in recommending the enhancement of the limit. The CBI Case No. 143/16 (Old No. 14/12) Page No. 69 of 117 State through CBI v. Raj Kumar etc. sanction letter Ex.PW33/D also mentions the Additional Collateral Security in the form of Plot No. 6 in point No. 4 on page No. 2 and specifically states at page No. 1 that the OCC limit is enhanced to Rs. 80 lacs on the earlier terms and conditions contained in the previous sanction dated 28.06.2002 and against the additional collateral security.
61. So, there is nothing on record to show that the bank did not need additional collateral security and intended to enhance the OCC limit of the company on the basis of existing securities. Even nothing has been put to PW28 and PW33 in this regard in their cross- examination.
62. It is, thus, established from the evidence on record that the Bank found it necessary to have an additional collateral security for the enhancement of the credit limit of the company which was furnished by the company accordingly as equitable mortgage of the Plot No. 6. Hence, it does not lies in the mouth of the accused to say now that the additional collateral security was not mandatory requirement for the enhancement of the credit limit of the company. In order to safeguard its advances i.e. money given on credit, a bank is not only within its rights but duty bound to require the borrower to furnish adequate collateral security.
63. I think it pertinent to add here that even if it is assumed that no additional collateral security was required for the enhancement of the credit limit but when any such additional collateral security is offered by the customer and accepted by the Bank, same has to be necessary CBI Case No. 143/16 (Old No. 14/12) Page No. 70 of 117 State through CBI v. Raj Kumar etc. of a genuine and existing property.
(ii). As to the genuineness or otherwise of the title documents related to aforementioned plot no. 6 measuring 250 sq. yards and its physical existence or otherwise.
64. The dispute concerning the said plot no.6 is two fold. Firstly, it is contended by CBI that the title documents relating to the same are forged and secondly, the plot of land is only an imaginary one which was not found to be in existence at all.
65. Ex.PW1/A is the copy of registered sale deed by which A1 Raj Kumar had purportedly purchased the aforementioned Plot No. 6 from his brother-in-law i.e. accused Ombir Singh (since expired). The sale deed has been executed on 02.02.2000 and is duly registered in the office of the Registrar, which fact has been confirmed by PW1 who was posted in the office of Sub-Registrar-IX, South-West, Kapashera during the relevant period. It is an admitted fact and also proved on record in the testimony of PW10 that the entire land falling in Khasra No. 116/9, Village Palam (of which the Plot No. 6 is stated to be a parcel) belonged to one Sh. Laxmi Narayan. As per the deposition of PW31, two sons of Laxmi Narayan namely Jai Bhagwan (PW10) and Ranbir were recorded owners of the said piece of land vide khatoni Ex.PW31/B and previous record pertaining to the said land since 1954-55 Ex.PW31/C and Ex.PW31/D,
66. The stand of A1 Raj Kumar, which is evident from his statement under Section 313 Cr. P.C and the oral as well as written submission CBI Case No. 143/16 (Old No. 14/12) Page No. 71 of 117 State through CBI v. Raj Kumar etc. made by his counsel is that the aforementioned Plot No. 6 situated in Khasra No. 116/9 was purchased by Ombir Singh from the original owner Sh. Laxmi Narayan vide General Power of Attorney Ex.PW10/B, Affidavit (Ex.PW10/C), Agreement to Sell (Ex.PW10/D) and Receipt (Ex.PW10/A) on 24.01.1984. These documents bear the signature of the vendor as 'Laxmi Narayan' written in Hindi and do indicate that the Vendor has sold Plot No. 6 to Ombir Singh for total sale consideration of Rs. 18,500/- which stood paid to him. However, it is interesting to note that these documents do not bear the signature of the vendee i.e. Ombir Singh at any place and also there is no witness to the execution of the GPA as well as Agreement to Sell. When these documents were to put to PW10, who is son of Laxmi Narayan, he stated that the signature of the vendor bearing on the same is not that of his father. He further deposed that his father used to sign only in Urdu and had sold the land admeasuring 1 to 1.5 Kilas situated in Khasra No. 116/9 in Village Palam to one Mohar Singh, who developed the residential colony on the same. He specifically stated that his father never used to sign in Hindi and had not sold any land to Ombir Singh.
67. Relying on the testimony of this witness PW10, it has been argued by the Ld. PP that the documents Ex.PW10/A to Ex.PW10/D are forged documents and Ombir Singh did not have any title to the Plot No. 6 in question.
68. It is evident from the cross-examination of PW10 that no other documents bearing the signature of his father had been sought or seized from him by the CBI during the course of investigation of this CBI Case No. 143/16 (Old No. 14/12) Page No. 72 of 117 State through CBI v. Raj Kumar etc. case. He has deposed that he had shown driving licence of his father bearing his signature to the investigating officer but had not given its copy to him. He also deposed that his father was illiterate but could sign and used to sign even the cheques related to his bank account also in Urdu. Much emphasis was laid by the Ld. Counsel appearing for A1 and A9 on the aforenoted deposition of PW10 in his cross- examination to argue that since no document bearing the admitted signature of the Laxmi Narayan was seized by the IO, it cannot be believed merely on the basis of deposition of PW10 that Laxmi Narayan never used to sign in Hindi.
69. It cannot be gain said that there are certain lapses committed by the IO. It was required of the IO to seize the documents bearing the signatures of Laxmi Narayan to ascertain as to whether he used to sign in Urdu or Hindi. It only shows the careless and cursory attitude of the IO in conducting the investigation. However, apart from inefficiency in the investigation of the IO in this regard, there is nothing in the cross-examination of PW10 to show that he is not a truthful witness or that he has testified falsely at the behest of the CBI. He has very fairly and candidly deposed that his father sold the entire land situated in Khasra No. 116/9 to one Mohar Singh. He himself does not claim any title or right over the plot No. 6 in question or any other portion of land falling in Khasra No. 116/9. It has been the contention of the accused also during the course of trial and also during the arguments presented by their counsels that the private colonizer has developed the residential colony of land situated in Khasra No. 116/9. It is nobody's case that Sh. Laxmi Narayan himself had developed any such colony on the said land. It is thus clear that Sh. Laxmi Narayan CBI Case No. 143/16 (Old No. 14/12) Page No. 73 of 117 State through CBI v. Raj Kumar etc. had sold the land in Khasra No. 116/9 to some person who later on developed residential colony upon the same. The said person, according to PW10, was Mohar Singh. Hence, there was no reason of occasion for Laxmi Narayan to sell the single unidentified and un- demarkated plot of land measuring 250 sq. yards to Ombir Singh. It is also important to bear in mind that the land in Khasra No. 116/9 was only agricultural land in the year 1984 and the residential plots had not been carved out in the same till that time. In fact, the contention of the accuseds A1 & A9 is that the colony was developed on the land after plot No. 6 had been mortgaged to the Bank (i.e. after the year 2002) on account of which, the plot could not be traced out later on. Therefore, there was no question of any Plot No. 6 existing in the said land in the year 1984.
70. All these facts coupled with the fact that the General Power of Attorney Ex.PW10/B and Agreement to Sell Ex.PW10/D neither bear the signature of Attorney and Vendee respectively nor have been signed by anybody as witness thereof, raise a well founded doubt about the genuineness of this set of documents Ex.PW10/A to Ex.PW10/D vide which Ombir is stated to have purchased the Plot No. 6 in question. The doubt gets strengthened upon perusal of further evidence in this regard which is discussed hereinafter. Material on record clearly establishes that, in fact, no such Plot No. 6 existed on the land falling in Khasra No. 116/9, Village Palam, Mahavir Enclave, New Delhi.
71. The contention put forward on behalf of A1 Raj Kumar is that the said Plot No. 6 existed when he purchased the same from Ombir CBI Case No. 143/16 (Old No. 14/12) Page No. 74 of 117 State through CBI v. Raj Kumar etc. Singh vide registered sale deed Ex.PW1/A and the plot could not be traced out later on when the bank officials reached the spot to locate it, for the reason that unauthorized residential colony had come up on the land and the plots carved out in the colony were given haphazard numbers by the colonizer. It is submitted that the physical inspection report of the A3 Satish Sikri (who was Branch Manager at the relevant period of time) and the valuation reports (Ex.PW15/M and Ex.PW13/B) of the panel valuers of the bank Sh. S.L. Dhir and Sh. S.K. Wadhwa as well as the Legal Scrutiny Report Ex.PW37/DA of the bank panel advocate Sh. S.K. Jha clearly establish the fact the said plot No. 6 was existing at least till the year 2007, which implies that it must not have been traceable thereafter on account of haphazard plot numbers given by the private colonizer.
72. The perusal of the sale deed Ex.PW1/A, which is a registered document, shows that the said plot of land was sold by Ombir Singh to Raj Kumar for a sale consideration of Rs. 50,000/- and vacant physical possession of the plot was delivered to Raj Kumar. Intriguingly accused Raj Kumar has maintained an eerie silence as to what happened to the plot of land after he had taken its possession from Ombir Singh and pursuant to creation of its equitable mortgage in favour of the bank while seeking enhancement of the OD limit for company M/s Moskos Steel Pvt. Ltd. Why wasn't the said plot of land traceable when the bank officials had gone to locate it to effect its attachment and sale for realization of the dues of the company A9, is not understandable. It was not such thing as could evaporate in air. At the most it may have been usurped or trespassed by any other person, who may have raised some construction thereupon. In that CBI Case No. 143/16 (Old No. 14/12) Page No. 75 of 117 State through CBI v. Raj Kumar etc. event, the accused Raj Kumar would not have been silent and would have initiated appropriate legal action against the trespassers. The evidence on record does not suggest that any such action was taken by the accused.
73. It was argued that since sale deed Ex.PW1/A is a registered document, it shows that the Plot No. 6, which is the subject matter of the sale deed, existed or otherwise the Sub-Registrar would not have allowed its registration. The argument has been noted only to be rejected. The job of the Sub-Registrar is only to satisfy himself about the identity of the Vendor & Vendee and the genuineness of the transaction. It is not his job to conduct physical verification of the property sought to be sold. Mere registration of a Sale Deed is no proof that the property mentioned therein was in existence.
74. Much reliance was placed by the Ld. Counsel for A1 and A9 on the Legal Scrutiny Report Ex.PW15/F of the bank's panel advocate Sh. K. Vasudev and the two valuation reports dated 19.10.2002 (Ex.PW15/H and 30.05.2005 (Ex.PW15/M) of the banks panel valuer Sh. S.L. Dhir in respect of the Plot No. 6 in question to argue that in case plot was not in existence at all, there would have been a positive Legal Scrutiny Report and the valuer Sh. S.L. Dhir would not have been in a position to value the same. He also referred to another valuation report dated 02.01.2007 Ex.PW13/B by a different panel valuer of the bank Sh. S.K. Wadhwa to argue that Plot No. 6 was in existence in the year 2007 also when the said valuer visited the same and valued the same. He pointed out the three photographs which have been annexed by Sh. S.K. Wadhwa alongwith his report CBI Case No. 143/16 (Old No. 14/12) Page No. 76 of 117 State through CBI v. Raj Kumar etc. Ex.PW13/B saying that these are of the maingate fixed in the boundary wall of the plot in question.
75. I have perused minutely the above referred Legal Scrutiny Report (LSR) as well as valuation reports.
76. So far as Legal Scrutiny Report Ex.PW15/A is concerned, it is of no help to the accused. The job of the panel advocate who gives Legal Scrutiny Report in respect of the property to be mortgaged with the bank is only to verify the title of the mortgagor/owner of the property by perusing the title documents and the record pertaining to the same in the office of the Sub-Registrar. He is not required to visit the property and to confirm its physical existence. It is for this reason that Sh. K. Vasudev, Advocate has mentioned in his report Ex.PW15/F only that he has seen original documents with regards to the Plot No. 6 and also has inspected record in the office of Sub-Registrar and did not find any registered charges for the said property.
77. Coming to the valuation report Ex.PW15/H dated 19.10.2002 of Sh. S.L. Dhir (Bank's Panel Valuer). A bare perusal of the same reveals that it does not pertain to the Plot No. 6 which was sought to be mortgaged with the bank and details of which are mentioned in the sale deed Ex.PW1/A executed in favour of A1 Raj Kumar. As per the sale deed Ex.PW1/A, the said Plot No. 6 has roads on its Eastern and Western side and other's property on Northern as well as Southern side. Similar are the details of the property mentioned in documents Ex.PW10/B to Ex.PW10/D, which are in favour of the Ombir Singh. However, para-11 of the report Ex.PW15/H shows boundaries of the CBI Case No. 143/16 (Old No. 14/12) Page No. 77 of 117 State through CBI v. Raj Kumar etc. plot as roads on three sides i.e. Northern, Eastern and Western and other's property only on one side i.e. Southern side. The valuer Sh. S.L. Dhir has also mentioned in para-5 of his report that there is one room constructed in the same, the technical details of which have been mentioned in para-19 as under:
(a) No. of floors and height of each floor : 9' 6"
(b) Plinth area floor-wise : 120 sq.
(c) Year of construction : 1990
(d) Estimated future life : 40 years
(e) Type of construction-load bearing/
R.C.C. Frame/Steel Structure : Load Bearing
(f) Type of Foundation : Conventional
(g) Walls : B/w in C. Mortor
(h) Partition
(i) Doors and windows : NIL
(j) Flooring : Angle iron frame with
M.S. Sheet shutter.
(k) Finishing : Cement plaster inside &
outside
(l) Roofing : Stone slab with Tee iron
78. In part-II of the report, where he has calculated the overall value of the property, he mentions boundary wall with the gates also, which he has valued at Rs. 10,000/-. Thus, as per this report, the construction of the room as well as boundary wall had been raised on the said plot in the year 1990. However, the sale deed Ex.PW1/A in CBI Case No. 143/16 (Old No. 14/12) Page No. 78 of 117 State through CBI v. Raj Kumar etc. favour of A1 Raj Kumar which is of the year 2000 does not mention about any room or any boundary wall on the plot in question. The description of the property has been given in the said sale deed on page No. 2 in following words:-
"whereas the Vendor is owner and in possession of Plot No. 6 measuring area 250 sq. yards, out of Khasra No. 116/9 situated in Revenue Estate of Village Palam, Delhi State, Delhi area Abadi known as Mahavir Enclave, Block-B-2, New Delhi and which is point out as under:
East : Road West : Road."
North : others property South : others property
79. It is, therefore, evident that there is no mention of any construction of any kind on the Plot No. 6 in the sale deed Ex.PW1/A. It was for the accuseds particularly A1 and A9 to show to the Court that the room and the boundary wall existed on the said plot in the year 2000 when A1 Raj Kumar is stated to have been purchased the same by virtue of the sale deed Ex.PW1/A even though same is not mentioned in the sale deed. It was also required of them to clarify the reasons as to why there is not mention of any such construction in the sale deed. Further, it is the contention of the accuseds themselves that a residential colony had been developed on the land falling in Khasra No. 116/9, Mahavir Enclave, New Delhi, of which Plot No. 6 in question was a parcel. Intriguingly, Sh. S.K. Dhir has described the Plot No. 6 as commercial in para-6 of his report.
CBI Case No. 143/16 (Old No. 14/12) Page No. 79 of 117 State through CBI v. Raj Kumar etc.
80. Same features can be pointed out in the another report of valuer Sh. S.L. Dhir dated 30.05.2005 (Ex.PW15/M).
81. In view of the above noted comparative analysis of the details of the property in question as well as its location/boundaries mentioned in the reports Ex.PW15/H and Ex.PW15/M of valuer Sh. S.L. Dhir as well as in the sale deed Ex.PW1/A makes it limpid that either Sh. S.L. Dhir was shown some other plot of land (not plot no. 6 in question) or he has given patently false report at the behest of A1 and A9 to assist them in obtaining the enhancement of credit limit for the company. Considering these facts and circumstances of the case, Sh. S.L. Dhir should have been made either a witness or an accused in this case. The wisdom of the IO neither arraigning Sh. S.L. Dhir as an accused in this case for submitting false valuation report nor mentioning him as a witness for CBI, is not discernible at all.
82. So far as the valuation report Ex.PW13/A dated 28.12.2006 is concerned, its author Sh. S.K. Wadhwa has been examined as PW13. He has deposed that he noted the details of the plot of land to be valued from the Sale Deed Ex.PW1/A which was shown to him in the bank. His further deposition is that after noting the details of the property, he tried to locate the same by visiting the area but could not succeed. He then contacted the Branch Manager of Uttam Nagar Branch of Canara Bank, who told him to contact owner's representative Sunil Kumar and also gave Sunil Kumar's phone number to him. He contacted Sunil Kumar on phone who reached the place and pointed out one property to him saying that it is the property in question to be valued. As there were no plot numbers depicted on CBI Case No. 143/16 (Old No. 14/12) Page No. 80 of 117 State through CBI v. Raj Kumar etc. the property shown to him or the adjoining properties and there were only boundary walls without any number, he questioned Sunil Kumar about the authenticity of the property who confirmed to him again that it is the same plot no.6 which is to be valued. Thereafter, he carried out the valuation of the plot. In his cross examination, he admitted that he has not reflected in the report Ex.PW13/B that he had to take help of Sunil Kumar in locating the property.
83. It cannot be said with certainty that PW13 had inspected the actual plot no.6 as mentioned in the Sale Deed Ex.PW1/A. Neither any official of the bank who was familiar to the location of the plot nor the owner i.e. A1 Raj Kumar had accompanied him to point out the plot of land to him. He appears to have taken help of one Sunil Kumar stated to be representative of the owner of the plot of land who has pointed out a property to him saying that it is plot no.6. It is not discernible from record as to how Sunil Kumar could identify the said plot of land. It is evident that PW13 too has not shown due diligence in carrying out his job. He should not have proceeded to inspect and value a plot which was neither identifiable itself nor was pointed out to him either by any Bank officer or the owner of the plot. It appears from his deposition that he himself was not satisfied with the identification to the plot in question by Sunil but nevertheless proceeded to conduct valuation of the plot shown by Sunil. So, it will be folly to hold that his report Ex.PW13/B relates to the Plot No. 6 as mentioned in the Sale Deed Ex.PW1/A. His report also, thus, does not advance the contention of the accused that Plot No. 6 as mentioned in the Sale Deed Ex.PW1/A existed.
CBI Case No. 143/16 (Old No. 14/12) Page No. 81 of 117 State through CBI v. Raj Kumar etc.
84. Further, perusal of the report Ex.PW13/B reveals that the plot of land shown to PW13 was an open plot with a small room upon it having roof made on AC sheet. This description does not match with the description of the plot given by previous valuer Sh. S.L. Dhir in his two reports Ex.PW15/H and Ex.PW15/M wherein he has mentioned that the roof of the room was made of stone slab with T-iron. Also, PW13 has mentioned character and classification of the locality as residential whereas Sh. S.L. Dhir has depicted the area as commercial in his report. Therefore, it is manifest that S.L. Dhir and PW13 have inspected and valued two different plots of land, none of which was actual Plot No. 6 as described in Sale Deed Ex.PW1/A
85. Thus, the valuation report Ex.PW15/H, Ex.PW15/M and Ex.PW13/B do not in any way convey or establish that any plot of land bearing plot no.6 existed in Khasra no.116/9, Village Palam, Block-B2, Mahavir Enclave, New Delhi, at any point of time. Even if it is assumed, as sought to be conveyed on behalf of the accused, that such of plot of land existed till the year2007 in view of these valuation reports Ex.PW15/H, Ex.PW15/M and Ex.PW13/B, one fails to understand as to how such a big plot of land measuring 250 sq.yds. having construction over about one half portion of the plot would disappear in thin air.
86. It appears that when the bank realised that a fraud has been perpetrated on it by the group companies namely M/s. Moskos Steel Pvt. Ltd., M/s. Maharaja Steel Pvt. Ltd., M/s. Karamvir Steel Pvt. Ltd. and M/s. Kumbh Steel Pvt. Ltd., it directed its Senior Manager Sh. M.K. Gupta to conduct an enquiry regarding two properties mortgaged CBI Case No. 143/16 (Old No. 14/12) Page No. 82 of 117 State through CBI v. Raj Kumar etc. with the bank i.e. plot no.G-1 to G-5, Ground Floor, Halavada, Sharan Apartments, Moti Vihar, Gurgaon and plot no.6, Khasra no.116/9, Mahavir Enclave, Uttam Nagar, New Delhi. He submitted his report dated 18.12.2008 Ex.PW37/B wherein he mentions as under:
"Thus the two properties in the same Khasra No. with identity no.6 & 8B should have existted. The property at 8B (measuring 116 sq.yds. as per branch records) has been taken possession by the branch under SARFAESI and the same was still found locked by the Bank during our visit.
Though the identity No.8B was not displayed at the property and new number have since been allotted, we enquired from the neighbourhood about the ownership of the property and it was gathered that the property belongs to Sri Om Bir Singh and a steel business was being operated from there.
On enquiring about the property with identity no.6 i.e. property in dispute, it was informed that no other property was ever own by Sri Om Bir Singh in that area except the one locked by the Bank. We contacted the father and brothers of Sri Om Bir Singh who are resident in the same area to ascertain the availability of the said property. Brother of Sri Om Bir Singh only discussed the matter. He also confirmed that Sri Om Bir Singh was holding only one property which was locked by the Bank in that area i.e. Mahavir Enclave and no other property was ever held by him in CBI Case No. 143/16 (Old No. 14/12) Page No. 83 of 117 State through CBI v. Raj Kumar etc. that area.
With the above efforts and information gathered, I have come to conclusion that the property as such is not traceable and mortgage has been created for a non existing property."
87. Appearing as PW37, he reiterated in his deposition that during enquiry conducted by him, it was revealed that Plot No. 6 (which was mortgaged with the Bank) was not in existence. The testimony as well as the report this witness clearly shows that the Plot No. 6 was found to be not existing at all.
88. Ld. Counsel for the accuseds A1 & A9 argued that the deposition of PW37 or his report is not worth any reliance at all as he did not make any sincere efforts to trace the plot. He drew attention of the Court to the following portions in the cross- examination of this witness:-
"I called Mr. Satish Sikri for the purpose of the identification of the property. But he did not accompany me. However, I had not mentioned this fact in my report. I also did not call Mr. Mahesh Kumar, who physically inspected the property at the time of mortgage, for the purpose of identification of the said property.
I made a request to the branch manager to call mortgagor Raj Kumar for the purpose of identification of property. To my recollection, branch manager had CBI Case No. 143/16 (Old No. 14/12) Page No. 84 of 117 State through CBI v. Raj Kumar etc. made a call to Raj Kumar. Again said, I do not recollect whether he had made a call to Raj Kumar or not, but he could not succeed to contact him. I did not collect the address / contact number of Raj Kumar from the branch manager; nor I tried to contact him on phone; nor I tried to send any notice to him."
89. It was argued by the Ld. Counsel that PW37 was unable to trace the plot as he did not take the assistance of either the Branch Manager or the owner of the plot, who could have pointed out the plot to him. According to the Ld. Counsel, the testimony of this witness shows at the most that the plot was not traceable and not that it was not in existence at all.
90. I feel unable to agree with the Ld. Counsel. Firstly, for the reason that PW37 has deposed in the cross-examination that he requested the branch manager to call mortgagor Raj Kumar for the purpose of identification of property but the branch manager was unable to contact him. He has further stated that he called Satish Sikri also for the said purpose but he did not accompany him. In this regard, only one suggestion has been put to him in the cross- examination conducted on behalf of A3 Satish Sikri to the effect that Satish Sikri did not refuse to accompany him which he denied. Thus it is not denied on behalf of Satish Sikri (A3) that PW37 has called him for identification of the plot. There is no further explanation from the side of Satish Sirki as to whether he had accompanied PW37 for the said purpose and if not, why? Even otherwise also, since A3 Satish Sikri is stated to have conducted physical verification of the plot in CBI Case No. 143/16 (Old No. 14/12) Page No. 85 of 117 State through CBI v. Raj Kumar etc. question on the asking of circle office in the year 2002 and he must have been aware about eqnuiry being conducted by PW37, he should have volunteered himself to accompany PW37 to point out the land to him. Similarly, A1 Raj Kumar also should have volunteered himself to show the land to PW37. He can safely be taken to be aware about the fact that Bank officials are looking for the Plot No. 6 as the other mortgaged properties including Plot No. 8B (located in same are of Village Palam) had been already seized and locked by the Bank before the submission of report by PW37.
91. Secondly, the theory propounded on behalf of the accused that Plot No. 6 was not non existing but merely untraceable is not believable at all. When the Bank officials could locate the another mortgaged property situated in the same area i.e. No. 8B, I find no reason for them to be unable to locate Plot No. 6, if it actually existed. It may be difficult but is not impossible to trace a pot of land which is so clearly described in the registered Sale Deed Ex.PW1/A, if it really existed. The fact that Plot No. 6 could not be traced despite strenuous efforts of the Bank officials including PW37 makes it limpid that it did not exist at all. If the contention of the accused that the plot became untraceable only because of development of a residential colony upon the entire chunk of land by a coloniser with haphazard numbers, is to be believed, then Plot No. 8B too should have be untraceable. This plot was traced as it existed and Plot No. 6 could not be traced as it did not exist.
92. The deposition of PW14 also is very material in this regard and needs to be discussed. He was the driver of Ombir Singh. During the CBI Case No. 143/16 (Old No. 14/12) Page No. 86 of 117 State through CBI v. Raj Kumar etc. course of investigation of this case, his statement was got recorded under Section 164 Cr. P.C. In his testimony before the Court he proved the said statement as Ex.PW14/A. He has stated in this statement that Ombir Singh had told him that Plot No. 6 does not exist. He reiterated the same line in his deposition before the Court. In his cross-examination on this point on behalf of A1 & A9, he stated that CBI officials did not tell him what he has to state to the Ld. Magistrate and denied that CBI had suggested him about what to say to the Ld. Magistrate. Thus, uncontroverted testimony of this witness confirms the conclusion so reached that Plot No. 6 did not exist at all.
93. Here I feel that reference to Section 103 and 106 of the Indian Evidence Act is necessary, which are reproduced hereunder:
103. Burden of proof as to particular fact.- The burden of proof as to any particular fact lies on that person who wishes the Court to believe in its existence, unless it is provided by any law that the proof of that fact shall lie on any particular.
106. Burden of proving fact especially within knowledge.- When any fact is especially within the knowledge of any person, the burden of proving that fact is upon him.
94. The particular fact i.e. exact location of the Plot No. 6 in question was within the special knowledge of both A1 Raj Kumar (its owner as per Sale Deed Ex.PW1/A) as well as A3 Satish Sikri (who CBI Case No. 143/16 (Old No. 14/12) Page No. 87 of 117 State through CBI v. Raj Kumar etc. claims to have physically verified its existence). Therefore, burden of proving the existence of the said plot was upon them. Since non existence of the land is a negative fact, the duty of the prosecution was only to establish facts & circumstances which render the existence of the land highly improbable. The prosecution has succeeded in establishing such facts & circumstances in this case. Thus the onus shifted to the accused to prove that the plot of land in question actually existed. They have miserably failed to discharge such onus. They should have come forward to identify the plot of land or at least its probable location either to the Bank officers or to the investigating officer or even to the Court during the trial of case. This Court is conscious of the right of an accused to remain silent and also the legal principle that prosecution can't rely upon the weakness of defence but has to stand on its own legs. However, Section 103 and 106 of the Indian Evidence Act place onus upon the accused in certain cases like the instant one to prove the facts which are especially within his knowledge. Illustration (b) appended to Section 106 applies squarely to the facts of present case. Hence, the burden was upon the accused to prove that Plot No. 6 actually existed or exists which they have failed to discharge.
95. Hence, the evidence on record establishes beyond any doubt that Plot No. 6 never existed in Khasra No. 116/9, Village Palam now known as Mahavir Enclave, New Delhi. It leads to further conclusion that Sale Deed Ex.PW1/A pertains to a non existant property and the documents Ex.PW10/A to Ex.PW10/D are forged documents.
CBI Case No. 143/16 (Old No. 14/12) Page No. 88 of 117 State through CBI v. Raj Kumar etc. As to the conspiracy related to forgery/fabrication of the documents :-
96. It has been held in the foregoing discussion that the documents Ex.PW10/A to Ex.PW10/D are forged documents and the Sale Deed Ex.PW1/A relates to a non existent property which implies that it is a fabricated documents. Therefore, it is highly unlikely that the documents Ex.PW10/A to Ex.PW10/D came into existence in the year 1984 as mentioned thereupon. Evidence on record suggests that these documents Ex.PW10/A to Ex.PW10/D have been forged and brought into existence in the year 2000 to lay the foundation for execution of Sale Deed Ex.PW1/A. Since A1 Raj Kumar is the Vendee in the said Sale Deed Ex.PW1/A which relates to a non existent property and Ombir Singh is the Vendor, the logical inference is that both conspired with each other in forging the documents Ex.PW10/A to Ex.PW10/D. Had A1 Raj Kumar not been a party to the forgery or had he not known the these documents Ex.PW10/A to Ex.PW10/D are forged, he would not have signed Sale Deed Ex.PW1/A as Vendee which related to a property not existing at all. Thus the argument that these documents appear to have been forged in the year 1984 when A1 Raj Kumar was a minor and that he can't be held liable as a conspirator, deserves rejection in toto.
97. As regards the charge of conspiracy framed against the accused is concerned, reference to Sections 120 A and 120 B of the Indian Penal Code as well as Section 10 of the Indian Evidence Act is necessary. The definition of the offence of criminal conspiracy is found in section 120 A which provides that when two or more persons CBI Case No. 143/16 (Old No. 14/12) Page No. 89 of 117 State through CBI v. Raj Kumar etc. agree to do, or cause to be done an act which is an illegal act, such an agreement amounts to criminal conspiracy. Section 120-B provides punishment for the offence of criminal conspiracy. The very nature of the offence of conspiracy i.e. an agreement to do or cause to be done an illegal act, indicate that it would never be entered into at a public place or on a high pedestal. Such agreements are always formed in privacy and away from the gaze of any other person. Therefore, it has always been found difficult to gather direct evidence to prove a conspiracy. Considering the said about the proof of conspiracy, Section 10 of the Indian Evidence Act has been enacted which reads as under :
"10. Things said or done by conspirator in reference to common design - Where there is reasonable ground to believe that two or more persons have conspired together to commit an offence or an actionable wrong, anything said, done or written by any one of such persons in reference to their common intention, after the time when such intention was first entertained by any one of them, is a relevant fact as against each of the persons believed to be so conspiring, as well as for the purpose of proving the existence of the conspiracy as for the purpose of showing that any such person was a party to it."
98. The implications and ramifications of the Section 10 of the Indian Evidence Act have been discussed in detail by the Supreme Court in Kehar Singh & Ors. Vs State (Delhi Administration) 1988 (3) CBI Case No. 143/16 (Old No. 14/12) Page No. 90 of 117 State through CBI v. Raj Kumar etc. SCC 609. It has been held that the section can be analyzed as follows :
(i) There shall be a prima facie evidence affording a reasonable ground for a court to believe that two or more persons are members of the conspiracy ;
(ii) If the said condition is fulfilled, anything said to be done or written by any one of them with regards to their common intention will be evidence against the other ;
(iii) Anything said, done or written by him should have been said, done or written by him after the intention was formed by any one of them ;
(iv) It would also be relevant for the said purpose against another who entered the conspiracy whether it was said, done or written before he entered the conspiracy or after he left it ;
(v) It can only be used against co-conspiractor and not in his favour.
99. It has also been held by the Supreme Court in Nazir Khan Vs. State of Delhi (2003) 8 SCC 461 that the essence of criminal conspiracy is an agreement to do an illegal act and such an agreement can be proved either by direct evidence or circumstantial CBI Case No. 143/16 (Old No. 14/12) Page No. 91 of 117 State through CBI v. Raj Kumar etc. evidence or by both and it is a matter of common experience that direct evidence to prove conspiracy is rarely available. It has been further held that the circumstances proved before, during and after the occurrence have to be considered to decide about the complicity of the accused. Reiterating that it is not always possible to give affirmative evidence about the date of formation of criminal conspiracy, about the persons who took part in the formation of the conspiracy, about the object, which 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, the Supreme Court observed that all this is necessarily a matter of inference. The Hon'ble Judges also referred to the observations of British Judge Coleridge J. in R.V. Murphy (1837) 173 ER 502 which I find pertinent to reproduce herein :
"........ I am bound to tell you, that although the common design is the root of the charge, it is not necessary to prove that these two parties came together and actually agreed in terms to have this common design and to pursue it by common means, and so to carry it into execution. This is not necessary, because in many cases of the most clearly established conspiracies there are no means of proving any such thing, and neither law nor common sense requires that it should be proved. If you find that these two persons pursued by their acts the same object, often by the same means, one performing one part of an act, and the other another part of the same act, so as to complete it, with a view to the attainment of the object CBI Case No. 143/16 (Old No. 14/12) Page No. 92 of 117 State through CBI v. Raj Kumar etc. which they were pursuing, you will be at liberty to draw the conclusion that they have been engaged in a conspiracy to effect that object. The question you have to ask yourselves is, 'had they this common design, and did they pursue it by these common means - the design being unlawful."
100. In the instant case also, though there is no direct evidence to show that there had been any agreement between Ombir Singh and Raj Kumar to forge/fabricate the sale documents in respect of a non existing Plot No. 6, yet evidence on record clearly shows that they had been acting in collusion and in league with each other. It is difficult to believe that A1 Raj Kumar was not aware about the forgery of the documents Ex.PW10/A to Ex.PW10/B and that the said criminal act was not the result of an agreement between the two. Therefore, the evidence discussed herein above provides a prima-facie reasonable ground to believe that Ombir Singh and Raj Kumar had conspired with each other and the object of the conspiracy was to forge/fabricate title documents with regards to non existent property bearing Plot No. 6. Therefore, whatever has been done by Ombir Singh is evidence against Raj Kumar and whatever has been done by Raj Kumar is evidence against Ombir Singh.
101. The prosecution has been successfully in establishing the charge of conspiracy under Section 120B/468 IPC as well as charge for substantive offence under Section 468 IPC against accused Raj Kumar.
CBI Case No. 143/16 (Old No. 14/12) Page No. 93 of 117 State through CBI v. Raj Kumar etc.
102. However, evidence on record nowhere suggests even remotely that A2, A3, A4, A5, A6, A7 and A8 had played any role in the forgery/fabrication of these documents.
As to the use of forged documents by the accused :-
103. Ld. Counsel for A1 Raj Kumar submitted that this accused was neither involved in opening of the current account in the name of A9 company M/s. Moskos Steel Pvt. Ltd. nor in applying for enhancement of the credit limit to the company. He referred to the account opening form Ex.PW9/K to point out that it does not contain the signatures of Raj Kumar at all. It is argued that there was no cause or occasion for Raj Kumar to submit the Sale Deed Ex.PW1/A or documents Ex.PW10/A to Ex.PW10/D to the bank as collateral security for enhancement of the credit limit of the company. It is submitted that the prosecution has not led any evidence to show that the forged documents had been used by Raj Kumar.
104. On behalf of A2 Neel Kamal, it is submitted by the counsel that even though she had been made Director of the company A9 M/s Moskos Steel Pvt. Ltd. by her husband and the account opening form Ex.PW9/K bears her signature yet she was only a household lady and was not involved in any day to day transactions between the company of the bank at all. He submitted that she had not signed any application/request for enhancement of the credit limit to the company and thus, she was not involved at all in submission of any forged documents to the bank for the said purpose.
CBI Case No. 143/16 (Old No. 14/12) Page No. 94 of 117 State through CBI v. Raj Kumar etc.
105. Ld. Counsel for A3 Satish Sikri submitted that since the Sale Deed Ex.PW1/A was the registered Sale Deed, there was no cause or occasion for this accused to doubt the genuineness of the transaction evidenced by the Sale Deed and the fact that its previous chain of documents Ex.PW10/A to Ex.PW10/D was forged. According to the Ld. Counsel, there is no evidence on record to suggest that A3 Satish Sikri knew about the forgery or that he was a party to the use of forged documents.
106. Ld. Counsel appearing for accused A5, A6, A7 & A8 also submitted that there is no evidence on record to show that these accused were aware about the forgery of the documents or were a party to the use of those forged documents for seeking enhancement of the credit limits of the company.
107. The current account of the company M/s Moskos Steel Pvt. Ltd. had been opened in Uttam Nagar branch of Canara Bank in the month of July, 2002 during the tenure of PW9. He proved the account opening form as Ex.PW9/K bearing his signature at point A, vide which he permitted the opening of the said account. This form bears the signature of only A2 Neel Kamal as the Director of the company at three places, which fact is not denied on her behalf. Similarly, the certified true copy of the resolution of the Board of Directors of the company Ex.PW40/A, which had been submitted to the bank alongwith account opening form, also bears the signature of only A2 Neel Kamal. However, as per the resolution, both A1 Raj Kumar and A2 Neel Kamal have been authorized jointly as well as severally to operate the said bank account. Ex.PW9/K bears the photographs of CBI Case No. 143/16 (Old No. 14/12) Page No. 95 of 117 State through CBI v. Raj Kumar etc. both Raj Kumar as well as Neel Kamal.
108. In the cross examination conducted on behalf of A1 & A9, PW9 has admitted that account has been opened on the basis of an incomplete form as it does not bear the signature of Raj Kumar. He added voluntarily that it happened so because the Chief Manager had asked him to open the account saying that Raj Kumar would sign later on.
109. Ex.PW17/C is the resolution of the Board of Directors of the company M/s Moskos Steel Pvt. Ltd. dated 07.10.2002 authorizing its two Directors Raj Kumar and Neel Kamal to borrow money from Canara Bank upto a total amount of Rs.1 Crore by way of loan, overdraft, cash credit etc. with or without security/mortgage. It bears the signature of both Raj Kumar as well as Neel Kamal at points A & B respectively. Mark-PW17/B is the letter sent on behalf of the company to the Uttam Nagar branch of the bank requesting for enhancement of OD limit to Rs.100 Lacs. It bears the signature of only Raj Kumar. All these documents have been proved by PW17 in his deposition, who was posted as an Officer in Uttam Nagar branch of the bank from December, 2001 to July, 2006. He has deposed that he identified the signature of Raj Kumar and Neel Kamal as he had seen them writing and signing on various documents during his posting in Uttam Nagar branch and he used to see their specimen signature cards available with the bank while passing the cheques of the company for payment. The only question put to him in the cross examination with regard to these documents is that they were not signed by Raj Kumar in his presence and Mark-PW17/C is undated which he admitted. Nothing CBI Case No. 143/16 (Old No. 14/12) Page No. 96 of 117 State through CBI v. Raj Kumar etc. was put to this witness in this regard on behalf of A2 Neel Kamal.
110. I may note here that even though Raj Kumar and Neel Kamal denied in their statements u/s 313 Cr. PC that they were the Directors of A9 company M/s. Moskos Steel Pvt. Ltd. yet such denial was not agitated by their respective counsels during the course of arguments. It was probably for the reason that they found it futile to say so in view of enormous evidence on record showing that these two accused Raj Kumar and Neel Kamal were the Directors of the company.
111. Perusal of the Board resolutions of the company Ex.PW40/A and Ex.PW17/C reveals that the two Directors of the company Raj Kumar and Neel Kamal has been authorized to open current account in the name of the company in Uttam Nagar branch and had been authorized to operate the said account jointly as well as severally and also to borrow money from the bank by way of loan, overdraft, cash credit limits etc. It is true that the account opening form Ex.PW9/K does not bear the signature of A1 Raj Kumar. However, his name is mentioned everywhere alongside Neel Kamal on the said form and also bears his photograph. It appears that his signatures remained to be taken on the said document, which fact is evident from the deposition of PW9. Therefore, it cannot be said that A1 Raj Kumar was not involved in the opening of current account in the name of the company.
112. It is not disputed that the additional security in the nature of Sale Deed Ex.PW1/A and previous chain of documents Ex.PW10/A to Ex.PW10/D relating to plot no.6 in Khasra No.116/9, Village Palam, CBI Case No. 143/16 (Old No. 14/12) Page No. 97 of 117 State through CBI v. Raj Kumar etc. also known as Mahavir Enclave, New Delhi, was furnished on behalf of the company M/s. Moskos Steel Pvt. Ltd. to the bank for enhancement of the credit limit of the company from Rs.40 Lacs to Rs.100 Lacs. Since the company is a juristic person only, it cannot act on its own. A juristic person like a company always acts through its Board of Directors, which is the controlling authority as well as the decision making body of the company. In the instant case, it is manifest from the evidence on record that its two Directors Raj Kumar and Neel Kamal had been authorized to act on behalf of the company in its transactions with the bank including obtaining loan etc. Nothing has been brought on record during the entire trial on behalf of these two accused to suggest that they were the Directors only for name sake and were not actually involved in day to day affairs of the company. Ld. Defence Counsels have failed to point out anything in the cross examination of PW9 or PW17 or any other prosecution witness which may lead to conclusion that the signature of Raj Kumar and Neel Kamal had been obtained forcibly or by inducement as well as threats on the account opening form of the company and the request letters for enhancement of the credit limit for the company. These two accused have also chosen not to lead evidence on their behalf in this regard. Therefore, the only conclusion which can be drawn from the evidence on record is that accused Raj Kumar and Neel Kamal had been acting on behalf of the company in its transactions with the bank pursuant to the resolutions passed by the Board of Directors in their favour in this regard.
113. Since it has already been held that the document Ex.PW10/A to Ex.PW10/D as well as Ex.PW1/A related to a non existent property CBI Case No. 143/16 (Old No. 14/12) Page No. 98 of 117 State through CBI v. Raj Kumar etc. and these are forged/fabricated documents, it stands established that accused Raj Kumar and Neel Kamal had used these forged documents by submitting them to the bank as an equitable mortgage of the property mentioned therein for seeking enhancement of the credit limit of the company.
114. As already noted herein-above, the evidence led by the prosecution does not show that accused A5 to A8 were either aware about forgery of these documents or were involved in their use for obtaining any facility from the bank or the company.
115. However, the role of accused A3 Satish Sikri needs some discussion.
116. It is the case of the prosecution that A3 was involved in conspiracy alongwith A1 and A2 in use of the forged/fabricated title documents with regards to Plot No. 6 by submitting those to the bank as collateral security for enhancement of credit limit of the company M/s Moskos Steel Pvt. Ltd (A9). It is contended by CBI that he knew that no such Plot No. 6 was in existence and prepared a false physical verification report regarding the same which he forwarded to the circle office in order to ensure that credit limit of the company is enhanced on the basis of a fake collateral security.
117. It has nowhere denied by A3 that he did not prepare and forward the physical verification report in respect of Plot No. 6 in question to the circle office. His contention throughout has been that he physically inspected the Plot No. 6 in question, which had been CBI Case No. 143/16 (Old No. 14/12) Page No. 99 of 117 State through CBI v. Raj Kumar etc. mortgaged with the bank on behalf of A9 company, and only then he submitted a report in this regard to the circle office.
118. The physical verification report prepared by A3 is Ex.PW9/E-4. It is not disputed on behalf of A3 that this report bears his signature at point A. However, his further contention is that another officer of the bank Sh. Mahesh Prakash had also accompanied him for the physical inspection of the properties mortgaged to the bank including Plot No.
6. According to A3, the initials at point A-1 on the aforesaid report Ex.PW9/E-4 is that of Mahesh Prakash.
119. Sh. Mahesh Prakash has been examined by prosecution as PW17. He has denied having ever visited the Plot No. 6 at any point of time. He also denied that initials at point A-1 on the report Ex.PW9/E-4 are his initials. Ld. Counsel for A3 vehemently argued that this witness PW17 has deposed falsely against A3 at the behest of his senior officers as well as CBI. He pointed out that PW17 had remained suspended from services in connection with this case from 07.04.2009 to 20.01.2010 and his suspension was revoked only on the condition that he would become a star witness of CBI. Ld. Counsel drew attention of the Court to the cross-examination of this witness where he had admitted about his suspension from services and about the penalty of downgrading his pay by two increments imposed upon him pursuant to the departmental inquiry. It is argued that no reliance can be placed upon the testimony of such a tainted witness.
120. These arguments of the Ld. Counsel for A3 do not carry any force. Merely because PW17 had remained suspended from services for some time in connection with this case does not indicate that he is CBI Case No. 143/16 (Old No. 14/12) Page No. 100 of 117 State through CBI v. Raj Kumar etc. not a truthful witness. In case it is to be believed that his suspension was revoked only on the condition that he would become a star witness for CBI, then no penalty should have been imposed upon him. He should have been exonerated in the departmental enquiry. To the contrary, he has been held guilty and penalized.
121. Moreover, even it is assumed that the report Ex.PW9/E-4 bears the initials of PW17 at point A-1, that does not advance the case of A3 at all. It is for the reason that this Court has already held on the basis of evidence on record that the Plot No. 6 did not exist at all at any point of time which implies that the report Ex.PW9/E-4 is a patently false report. It hardly matters whether the said report bears the signature of only A3 or the initials of PW17 also. The fact remains that A3 represented falsely to the circle office about the physical existence of Plot No. 6 by way of his report Ex.PW9/E-4.
122. I may also refer here to the circular bearing No. 67/2001 dated 15.03.2001 issued by Head Office of Canara Bank Ex.PW15/C which clearly envisages that physical verification of property offered as security is mandatory. I find it pertinent here to reproduce the clause 2 (III) of the circular as under:
"Wherever property is offered as security for our advance (belonging either a third party or the borrower/s), physical verification of the property by the branch officials, to ascertain its existence must be carried out before putting through EMT. A suitable record in this regard containing the name of the CBI Case No. 143/16 (Old No. 14/12) Page No. 101 of 117 State through CBI v. Raj Kumar etc. official/s who have conducted such verification and the date of physical verification should be maintained.
123. Since A3 was the Manager of Uttam Nagar Branch at the relevant time, it was his duty to physically inspect the property sought to be mortgaged and to forward the proposal for enhancement of credit limit only after getting the satisfaction that the property actually exists. The conduct of A3 in preparing and submitting a patently false physical verification report in respect of Plot No. 6 sought to be mortgaged on behalf of A9 company clearly manifests that he was a part of conspiracy hatched by A1 Raj Kumar and A2 Neel Kamal in order to cheat the bank by getting credit on the basis of a false and fictitious collateral security.
124. The act of A3 does not appear to be a mere negligent act but his conduct shows that he had prepared and forwarded the false physical verification report deliberately in order to aid and assist A1, A2 and A9 in their illegal design.
125. As already noted herein above that it is not expected of the prosecution to lead a direct evidence regarding the meeting of minds or an agreement between the conspirators. What is expected of the prosecution in the cases involving conspiracy is that to lead such an evidence as would afford a reasonable ground for the Court to believe that the accused are the members of the conspiracy. In the instant case, it is evident that the accused A1, A2 and A9 as well as A3 performed one or other part of the act, the object of which was to cheat the bank by furnishing fake/fabricated documents as collateral security. The conduct of all these accused leads to only irresistible CBI Case No. 143/16 (Old No. 14/12) Page No. 102 of 117 State through CBI v. Raj Kumar etc. conclusion that they had been engaged in such a conspiracy.
126. Therefore, the prosecution has been successful in proving the charge of conspiracy under Section 120B/471 IPC against A1, A2, A3 and A9 as well the substantive offence under Section 471 IPC against accused A1 and A2.
127. The judgments cited by the Ld. Counsel for A3, are not relevant to the facts and circumstances of the instant case. K. Narayana Rao's judgment (supra) related to the role of lawyer who had furnished Legal Scrutiny Report and has been delivered at the stage of charge, not at the time of final judgement after trial. Therefore, it is of no help to the accused. Similarly in S.V.L. Murthy's case (supra), the Court did not find collateral security furnished by the borrower fictitious but only observed certain procedural irregularities and abuse of prevalent banking practice on the part of bank officials, which is not the case herein.
Sanction for prosecution of A3 :-
128. No arguments have been advanced on behalf of A3 on this aspect. The sanction for prosecution of this accused was accorded by PW36 who was posted as General Manager in the Head Office of Canara Bank. He proved the same as Ex.PW36/A. No flaw can be found in the same.
CBI Case No. 143/16 (Old No. 14/12) Page No. 103 of 117 State through CBI v. Raj Kumar etc. As regards to the charge of conspiracy for the offence of cheating:-
129. The definition of cheating is provided in section 415 of Indian Penal Code. One of the essential ingredients of the offence of cheating is that the alleged act must have been committed either dishonestly or fraudulently. Section 24 of the Indian Penal Code defines dishonestly as under :
"Dishonestly : Whoever does anything with the intention of causing a wrongful gain to one person or wrongful loss to another person, is said to do that thing dishonestly.
130. Section 25 of the Indian Penal Code defines Fraudulently as under :
"Fraudulently - A person is said to do a thing fraudulently if he does that thing with intent to defraud but not otherwise."
131. It is evident from the discussion herein above and the evidence led by the prosecution that the accused A1, A2 and A9 duly assisted by A3 fraudulently furnished fake/fabricated title documents regarding non existent Plot No. 6 to the bank with an intent to defraud the bank and thereby caused a wrongful gain to the company A9 by way of money paid to it on credit, to which it had not been entitled otherwise, and which caused wrongful loss to the bank as the loan turned to be an NPA. Furnishing of a collateral security in the form of a non existent CBI Case No. 143/16 (Old No. 14/12) Page No. 104 of 117 State through CBI v. Raj Kumar etc. plot of land shows that A1, A2 and A9 had no intention to pay the dues to the bank right from the beginning.
132. Therefore, these four accused have also committed an offence conspiracy to cheat under Section 120B/420 IPC as well as the substantive offence of cheating under Section 420 IPC.
As regards charge under Section 13 (1) (d) of PC Act, 1988 :-
133. Ld. Public Prosecutor argued that the conduct of A3 Satish Sikri, Branch Manager at the relevant time, manifests the dishonest intention on his part very clearly and therefore, he cannot escape liability under the Prevention of Corruption Act, 1988 for his criminal misconduct. He submitted that any prudent person, who holds the responsibility as a Manager of Branch of the Bank, would not submit false physical verification report in respect of any property sought to be offered by the borrower as collateral security unless he has been bribed. He reiterated that it is the case of mere breach of procedure or irregularity in doing official work on the part of A3 but he has been acting in such as manner deliberately, being involved with A1 and A2, in order to ensure that the credit limit of the A9 is enhanced on the basis of false/fictitious collateral security.
134. Ld. Counsel for accused A3 submitted that even if any deficiency or irregularity is found in the manner in which A3 has acted or functioned while handling the request of the company for enhancement of the credit limit that alone does not tantamount criminal misconduct on his part in order to attract the provisions of CBI Case No. 143/16 (Old No. 14/12) Page No. 105 of 117 State through CBI v. Raj Kumar etc. Section 13 of PC Act. He would argue that the accused did not have any dishonest intention and there is no evidence on record to show that he had received any pecuniary gain from anybody. It is his submission mere breach of procedure or not following proper procedure and mere irregularity in doing official work does not make a public servant liable under criminal law including PC Act.
135. The manner in which accused A3 prepared the physical verification report in respect of the Plot No. 6, which was sought to be mortgaged with the bank in lieu of enhancement of the credit limit of the company, without visiting the spot and without actually verifying as to whether or not any such plot of land exists. Coupled with the fact that he did not ask the accuseds A1 and A2 at any point of time to show him the plot of land in question does not create any slightest impression in one's mind that he was acting bonafidely and without any criminal intent. It is to be borne in mind that A3 was dealing with the request of the company for enhancement of the credit limit of Rs. 1 crores meaning thereby that public money to the tune of Rs. 1 crores would be given and credited to the company and the requisite circulars casts duty upon him to physically verified existence of property sought to be offered as collateral security. In such as special forwarding a proposal for enhancement of credit limit alongwith the patently false physical verification report of the property sought to be mortgaged, cannot be termed as a mere irregularity in doing official work or mere a breach of procedure. It is evident that he did not step out of his office and prepared false report at the behest of A1 and A2 to facilitate. The conduct of A3, as mentioned herein above, leaves no doubt in one's mind that he had been doing so for obtaining the CBI Case No. 143/16 (Old No. 14/12) Page No. 106 of 117 State through CBI v. Raj Kumar etc. pecuniary advantage for himself or for some other person.
136. Here, I find it appropriate to reproduce Section 7 and 13 (1) (d) of the PC Act, 1988:-
Section 7. Public servant taking gratification other than legal remuneration in respect of an official act. - Whoever, being or expecting to be a public servant, accepts or obtains or agrees to accept or attempts to obtain from any person, for himself or for any other person, any gratification whatever, other than legal remuneration, as a motive or reward for doing or forbearing to do any official act or for showing or forbearing to show, in the exercise of his official functions, favour or disfavour to any person or for rendering or attempting to render any service or disservice to any person, with the Central Government or any State Government or Parliament or the Legislature of ay State or with any local authority, corporation or Government company referred to in clause (c) of section 2, or with any public servant, whether named or otherwise, shall be punishable with imprisonment which shall be not less than six months but which may extend to five years and shall also be liable to fine.
Section 13. Criminal misconduct by a public servant. -
CBI Case No. 143/16 (Old No. 14/12) Page No. 107 of 117 State through CBI v. Raj Kumar etc. (1) A public servant is said to commit the offence of criminal misconduct, -
(d) if he, -
...................................................
...................................................
(i) by corrupt or illegal means, obtains for himself or for any other person any valuable thing or pecuniary advantage;
(ii) by abusing his position as a public servant, obtains for himself or for any other person any valuable thing or pecuniary advantage;
(iii) while holding office as a public servant, obtains for any person any valuable thing or pecuniary advantage without any public interest.
137. Perusal of the Section 13 (1) (d), reproduced herein above shows that the essential ingredients of the offence of criminal misconduct relating to the government officials are :-
(i) that the accused is a public servant;
(ii) he has obtained any valuable thing or pecuniary advantage for himself or for any other person by CBI Case No. 143/16 (Old No. 14/12) Page No. 108 of 117 State through CBI v. Raj Kumar etc. corrupt or illegal means or by abusing his position as public servants (sub-section (1) (d) (i) (ii) of Section
13);
(iii) he has obtained such valuable thing or pecuniary advantage for any other person without any public interest, while holding office as a public servant (sub-section (1) (d) (i) (iii) of Section 13);
138. Thus, in order to attract Section 13 (1) (d) (ii), the prosecution has to establish that the public officer has indulged in corrupt or illegal means or has abused his position as such officer to obtain any valuable thing or pecuniary benefit for himself or any other person. However, for attracting Section 13 (1) (d) (iii), the prosecution has to prove merely that the public officer obtained a valuable thing or pecuniary benefit to any person without any public interest. Use of corrupt or illegal means or abuse of official position or obtaining pecuniary advantage for himself is immaterial for applicability of sub clause (iii).
139. Analyzing the aforesaid sub clause (iii), the Hon'ble High Court in case of Runu Ghosh Vs. CBI, Criminal Appeal No. 482/2002 decided on 21.12.2011 has observed:-
"A new offence (or sub-species, of the existing offence) has been carved out, in Section 13 (1) (d) (iii) which criminalizes, as "criminal misconduct" the act of a public servant, holding office, which results in CBI Case No. 143/16 (Old No. 14/12) Page No. 109 of 117 State through CBI v. Raj Kumar etc. someone else (any person) benefitting by getting a valuable thing or pecuniary advantage, without any public interest. There is no doubt that Parliament created this new offence of criminal misconduct, where abuse of office, or use of corrupt or illegal means by a public officer, is inessential to prove the crime. What the prosecution has to establish, in accordance with law, is that the public officer, obtained for someone else - not necessarily by abusing his office, or using corrupt or illegal means - pecuniary advance or a valuable thing - without public interest."
140. Upon the detailed analysis of the said provision of law, Hon'ble High Court, in the aforesaid judgment, came to the conclusion that mens rea is inessential to convict the accsued for the offence punishable under Section 13 (1) (d) (iii) of PC Act, 1988. In this regard, it has been observed in Para No. 73 of the judgment is as under :-
Para No. 73. "Having regard to the previous history of the statute, the amendments to the 1947 Act, its avowed objects and the distinctive structure which Parliament adopted consciously, under the 1988 Act, despite being aware of the pre-existing law, as well as the decisions of the Court-the conclusion which this Court draws is that mens rea is inessential to convict an accused for the offence under Section 13 (1) (d)
(iii). It would be sufficient if the prosecution proves that the public servant "obtains" by his act, pecuniary CBI Case No. 143/16 (Old No. 14/12) Page No. 110 of 117 State through CBI v. Raj Kumar etc. advantage or valuable thing, to another, without public interest. The inclusion of public interest, in the opinion of the Court, tips the scale in favour of a construction which does not require proof of mens rea. There can be many acts of a public servant, which result in pecuniary advantage, or obtaining of a valuable thing to someone else; typically these may relate to payment of royalty, grant of license or concessions, issuance of permits, authorizations, etc. Yet, such grants, concessions, or other forms of advantages to third parties would not criminalize the public servants actions, so long as they have an element of public interest. They (acts of the public servant) are outlawed, and become punishable, if they are "without public interest".
141. Explaining the concept of "public interest", there Lordship referred to the judgment of Supreme Court in LIC of India Vs. Consumer Education & Research Centre, (1995) 5 SCC 482 and reproduced following paragraph of the said judgment:-
"Public authorities or those whose acts bear insignia of public element, action to public duty or obligation are enjoined toe act in a manner i.e. fair, just and equitable, after taking objectively all the relevant options into consideration and in a manner that is reasonable, relevant and germane to effectuate the purpose for public good an in general public interest CBI Case No. 143/16 (Old No. 14/12) Page No. 111 of 117 State through CBI v. Raj Kumar etc. and it must not take any irrelevant or irrational factors into consideration or appear arbitrary in its decision. A recent judgment, has examined the concept, in NOIDA Entrepreneurs Associate."
142. There Lordships also referred to another judgment of the Supreme Court reported as NOIDA Entrepreneurs Association Vs. NOIDA (2011) 6 SCC 508 wherein it has been held in this regard as under : -
The State or the public authority which holds the property for the public or which has been assigned the duty of grant largesse, etc. acts as a trustee and, therefore, has to act fairly and reasonably. Every holder of a public office by Crl. A. Nos. 482/2002, 509/2002 and 536/2002 Page 54 virtue of which he acts on behalf of the State or public body is ultimately accountable to the people in whom the sovereignty vests. As such, all powers so vested in him are meant to be exercised for public good and promoting the public interest. Every holder of a public office is a trustee.
xxxxxxxxx xxxxxxxxx Power vested by the State in a public authority should be viewed as a trust coupled with duty to be exercised CBI Case No. 143/16 (Old No. 14/12) Page No. 112 of 117 State through CBI v. Raj Kumar etc. in larger public and social interest. Power is to be exercised strictly adhering to the statutory provisions and fact situation of a case. Public authorities cannot play fast and loose with the powers vested in them. A decision taken in an arbitrary manner contradicts the principle of legitimate expectation. An authority is under a legal obligation to exercise the power reasonably and in good faith to effectuate the purpose for which power stood conferred.
143. Hence, even if the prosecution is unable to prove mens rea on the part of the accused public servants or the fact that they had received any pecuniary gain for themselves for their acts, the fate of the accused would be sealed if the prosecution succeeds in establishing that the public servant has obtained any pecuniary advantage or valuable thing to another without public interest. In other words, if the evidence on record shows that the acts of the concerned public servant are absolutely unfair, unreasonable, unjust, inequitable and not for the purpose of public good, he shall be considered to have acted without public interest.
144. It is true that the CBI, in this case, has not produced any evidence to show that accused A3 had received valuable thing or pecuniary advantage for himself. However, it is manifest beyond doubt that he had been acting in collusion with A1 and A2 to ensure that their company A9 obtains pecuniary advantage i.e. credit limit on the basis of fake/forged security. Evidence on record shows beyond doubt that A3 was dancing to the tune of A1 and A2 and assisted them in CBI Case No. 143/16 (Old No. 14/12) Page No. 113 of 117 State through CBI v. Raj Kumar etc. furnishing the forged documents relating to a non existent plot of land as collateral security. It is evident that he has acted contrary to public interest. It cannot be gain said that no public interest is involved in assisting a borrower for obtaining loan/credit from bank by furnishing fake and forged security documents. A3 has abused his position as public servant in order to ensure pecuniary advantage to A1 and A2 as well as their company A9.
145. Hence, A3 Satish Sikri is liable to be convicted under Section 13 (2) r/w Section 13 (1) (d) (ii) & (iii) of PC Act.
As regards the accused A5, A6, A7 and A8:-
146. A5 D.C. Narnolia was the credit manager in the Uttam Nagar of the Canara Bank at the relevant time. His job was to go through the request of the company for enhancement of the credit limit as well as the documents annexed with the same and to make a proposal accordingly to be laid before the Manager of the Bank. He was not the decision making authority. It was not within his duty or domain to conduct the physical verification of the existence of the property sought to be mortgaged. Therefore, it does not appear from the evidence on record that he had any role in forwarding the credit proposal of the company A9 to the circle office. It is also not the case of CBI that A5 had been given the job of verifying the physical existence of the property sought to be mortgaged i.e. Plot No. 6 or he had accompanied A3 for the inspection of the plot. No such contention was raised on behalf of A3 even.
CBI Case No. 143/16 (Old No. 14/12) Page No. 114 of 117 State through CBI v. Raj Kumar etc.
147. Evidence on record does not show or suggest any guilty yet on the part of this accused. Therefore, he is to be given benefit of doubt and is liable to be acquitted.
148. So far as A6 DRP Sunderam and A7 K.V. Prabhakar are concerned, they were posted at the circle office during the relevant period. There is no evidence on record that they had at any point of time come in contact with the borrower i.e. A1 and A2. Their job was to check and verify the proposal and the annexed documents received from the concerned branch of the bank and to give their remarks accordingly. In recommending the proposal for enhancement of credit limit of the company A9 from Rs. 40 lacs to Rs. 80 lacs, they had merely acted upon the proposal received from the branch including the physical verification report of A3. There was no reason or occasion for them to disbelieve the report of A3 or to doubt the authenticity of the title documents of the plot of land offered as collateral security.
149. Therefore, these two accuseds also deserve to be given benefit of doubt and liable to be acquitted.
150. Same can be said with regards to A8 Sugam Sharma also. Ld. PP has failed to point out any evidence on record to show that this accused was involved in conspiracy alongwith A1 Raj Kumar and A2 Neel Kamal in forging/fabrication of the title documents related to non existent Plot No. 6 and submission of those to the bank as collateral security. Therefore, charges framed against him have remained to be proved and he is liable to be acquitted.
CBI Case No. 143/16 (Old No. 14/12) Page No. 115 of 117 State through CBI v. Raj Kumar etc. Conclusion:-
151. In view of the above discussion, accused A5 D.C. Narnolia, A6 DRP Sunderam, A7 K.V. Prabhakar and A8 Sugam Sharma are hereby acquitted. However, accused A1 Raj Kumar, A2 Neel Kamal, A3 Satish Sikri and A9 company M/s Moskos Steel Pvt. Ltd are convicted as under:-
(i) Accused Raj Kumar is convicted under Section 120B/468 IPC. He is also convicted for the substantive offence under Section 468 IPC.
(ii) Accused Raj Kumar, Neel Kamal, Satish Sikri and the company M/s Moskos Steel Pvt.
Ltd are convicted under Section 120B/471 IPC as well as for the substantive offence under Section 471 IPC.
(iii) Accused Raj Kumar, Neel Kamal and the company M/s Moskos Steel Pvt. Ltd are convicted under Section 120B/420 IPC as well as for the substantive offence under Section 420 IPC.
(iv) Accused Satish Sikri is also convicted for the offence punishable under Section 13 CBI Case No. 143/16 (Old No. 14/12) Page No. 116 of 117 State through CBI v. Raj Kumar etc. (2) r/w Section 13 (1) (d) (ii) & (iii) of the Prevention of Corruption Act, 1988.
Announced in the open Court on 30.01.2018 (Virender Bhat) Special Judge, CBI-01, North West Rohini Courts, Delhi CBI Case No. 143/16 (Old No. 14/12) Page No. 117 of 117