Jammu & Kashmir High Court
Hem Raj Phonsa vs U. T. Of J&K Th. P/S Cbi on 16 April, 2025
Author: Sanjay Dhar
Bench: Sanjay Dhar
HIGH COURT OF JAMMU & KASHMIR AND LADAKH
AT JAMMU
Reserved on 02.04.2025
Pronounced on 16.04.2025
Crl R No. 13/2024
c/w
Crl R No. 63/2023
Hem Raj Phonsa .....Appellant(s)/Petitioner(s)
Through: Mr. Ashok Kumar Basotra, Adv.
vs
U. T. of J&K th. P/S CBI, ACB, Jammu ..... Respondent(s)
Through: Ms. Monika Kohli, Sr. AAG Coram: HON'BLE MR. JUSTICE SANJAY DHAR, JUDGE JUDGMETNT
1. By this common judgment, the afore-titled two criminal revision petitions raising common questions of law are proposed to be disposed of.
2. Vide criminal revision petition No. 63/2023, the petitioner has challenged order dated 20.10.2023 passed by the learned Special Judge Anticorruption (CBI cases), Jammu (hereinafter to be referred to as the Special Judge), whereby in a case arising out of FIR bearing No. RC 06 of 2013 dated 18.07.2013, charges for offences under sections 120-B read with sections 419, 420, 468 and 471 RPC and section 5(1)(d) read with section 5(2) of the J&K Prevention of Corruption Act Samvat 2006 have been framed against him.
3. Vide criminal revision petition No. 13/2024, the same petitioner has challenged order dated 23.02.2024 passed by the learned Special Judge in 2 Crl R Nos. 63/2023 & 13/2024 a case arising out of FIR No. RC 03 of 2014 dated 11.04.2014, whereby charges for offences under sections 120-B read with sections 420, 467, 468 and 471 RPC and section 5(2) read with 5(1)(d) of the J&K Prevention of Corruption Act, Samvat 2006, have been framed against him.
Brief facts relating to Criminal Revision No. 63/2023
4. FIR No. RC 06 of 2023 came to be registered by the respondent Investigating Agency on the basis of a complaint dated 27.06.2013 lodged by Mr. A. K. Chug, Assistant General Manager (DRM), Bank of Baroda, Regional Office, Jalandhar(Punjab) regarding bank fraud alleged to have been committed in the Gandhi Nagar, Jammu Branch, Bank of Baroda which had led to loss to the bank to the tune of Rs. 3,24,34,023/-. The FIR pertained to 8 loan accounts of the said bank. The charge sheet relating to the present petition pertains to instance No. 7 in respect of the term loan of Rs. 18 lacs and Cash Credit Limit of Rs. 5 lacs availed by M/s Peer Panchal Honey and Bee Keeping Marketing Cooperative Ltd, Jammu for establishment of Bee Keeping Unit, sponsored by the Khadi and Village Industries Commission (KVIC) under the Prime Minister's Employment Generation Programme during the year 2009.
5. During the course of investigation, it was revealed that a loan application dated 08.06.2009 in the name of M/s Peer Panchal Honey Bee Keeping Marketing Cooperative Limited, Misriwala duly signed by its Secretary/accused-Ramesh Kumar Raina was submitted along with details of the assets and liabilities of the applicant in Bank of Baroda, Gandhi 3 Crl R Nos. 63/2023 & 13/2024 Nagar Branch, Jammu for establishment of a Bee Keeping Unit sponsored by the KVIC for a total loan requirement of Rs. 24,85,000/-. It was found that on 05.06.2009 even before the receipt of the loan application, pre-sanction inspection of the site was conducted by accused Raj Kumar Raina, Jaswant Singh and Narinder Kumar Bhardwaj, Bank officials who mentioned the details of Collateral Security as Land and Home on 10 marlas under khasra No. 1642 min situated at Village Birpur in their pre-inspection report dated 05.06.2009. It has been mentioned in the said report that the house is beautifully built, double storey on 10 marlas of land at Bari Brahamana, Jammu. The investigation revealed that the value of the land in the relevant area at that time was Rs. 31,000/- per marla but the Valuer Sh. H. R. Phonsa (the petitioner herein) had assessed the value of Rs. 42.71 lacs. This, according to the prosecution, was done by the petitioner in conspiracy with other accused including the Branch Manager, accused Narinder Kumar Bhardwaj. It was found that the petitioner undertook the valuation of the property in question by inspecting the same on 02.06.2009 even prior to the submission of the loan application and submitted a false valuation report on 04.06.2009 by putting its value at Rs. 42.70 lacs though the owner of the property accused, Mohd. Rafiq had purchased the said property only at the Rs. 50,000/- on 23.05.2008 in terms of the sale deed executed on the said date.
6. After investigation of the case, it was found that there is no double storey building on the land and the market value of the land in the area was Rs. 4
Crl R Nos. 63/2023 & 13/2024 6.27 lacs per kanal in the year, 2009 and in the year 2020 when the spot inspection was conducted during investigation of the case, its market value was found to be Rs. 40 lacs per kanal. The Investigating Agency during the investigation of the case collected the documents and recorded the statements of the witnesses, whereafter, it was found that the accused Narinder Kumar Bhardwaj, the then Branch Manager, Bank of Baroda, Branch Gandhi Nagar, Jammu, Jaswant Singh, the then Officer, Bank of Baroda, Gandhi Nagar, Jammu(now retired), Raj Kumar Raina, the then Credit Officer, Bank of Baroda, Gandhi Nagar Jammu, M/s Peer Panchal Honey Bee Marketing Cooperative Ltd. Jammu through its Secretary Romesh Kumar Raina, Mohd. Rafiq, the Guarantor, Manzoor Hussain, beneficiary, Ajay Kumar, Bansi Lal, Ramesh Kumar Raina and Hem Raj Phonsa (the petitioner herein) have entered into a criminal conspiracy and bank officials in furtherance of criminal conspiracy have abused their official position and wrongly inspected, appraised, sanctioned and disbursed Term Loan/CC Limit of Rs. 23 lacs to M/s Peer Panchal Honey Bee Keeping Marketing Cooperative Ltd to cheat the Bank of Baroda which caused a loss to the tune of Rs. 23 lacs. Thus, offences under sections 120-B RPC read with 419, 420, 468, 471 RPC and section 5(2) read with 5(1)(d) of the J&K P. C. Act Samvat, 2006 stand established against the aforesaid accused.
Brief facts relating to Criminal Revision No. 13/2024
7. This charge sheet arises out of FIR No. RC 03/2014 dated 11.04.2014.
The FIR was registered on the basis of source information and it was 5 Crl R Nos. 63/2023 & 13/2024 alleged in the FIR that the accused T. R. Dogra, the then Chief Manager, N. K. Bhardwaj, the then Branch Manager, C. L. Koul, the then Branch Head, all officers of Bank of Baroda, Gandhi Nagar, Jammu during the period 2007-2011 had sanctioned and disbursed a number of loans, fraudulently to accused Sh. Rajneesh Raina, his wife accused Meenakshi Raina and their firms, against already mortgaged properties, which were fraudulently overvalued. It was alleged that the accounts had turned Non-Performing Asset(NPA) with a total outstanding of Rs. 6.50 crores.
8. The charge sheet pertains to Cash Credit Limit of Rs. 80 lacs and Term Loan of Rs. 8 lacs granted to M/s Galaxy Hatcheries owned by accused Meenakshi Raina As per the prosecution case, M/s Galaxy Hatcheries had obtained Cash Credit Limit of Rs. 30 lacs and a Term Loan of Rs. 8 lacs in November, 2007 on the recommendations of accused Sh. T. R. Dogra, the then Chief Manager, Bank of Baroda, Gandhi Nagar Branch, Jammu. In September 2008, the CC Limit was enhanced from Rs. 30 lacs to Rs. 60 lacs on the recommendations of accused, Narinder Kumar Bhardwaj, the then Senior Bank Manager, Bank of Baroda. In June, 2010, the CC Limit of Rs. 60 lacs was further enhanced to Rs. 80 lacs with review of Term Loan of Rs. 3.31 lacs on the recommendations of accused C. L. Koul by mortgaging of (i) land and building of the Hatchery Unit, Raipur Domana, Jammu which was fraudulently over valued at 107.21 lacs and (ii) fresh security of open land measuring 2 kanals 16 marlas in the name of accused, Rajneesh Raina at Village Ghaink, Jammu (valued at Rs. 15.40 6 Crl R Nos. 63/2023 & 13/2024 lacs). No lien was marked in favour of the bank. The said account turned NPA on 30.06.2011 with a total outstanding of Rs. 98,99,931/-.
9. After investigation of the case, it was found that accused Minakshi Raina entered into criminal conspiracy with her husband accused Rajneesh Raina, guarantor and in pursuance of said criminal conspiracy, submitted a false sale deed with the bank and in pursuance to the criminal conspiracy, the Credit Officer did not appraise the loan application properly and did not ascertain the eligibility of the borrower, did not ascertain the genuineness of the documents submitted by the borrower, did not obtain any documentary evidence about work of the guarantor and submitted false inspection report to the effect that the Hatchery Unit was existing and running in good condition. In furtherance of the criminal conspiracy, accused Branch Heads T. R. Dogra, Narinder Kumar Bhardwaj and C. L. Koul falsely showed their visit to the nonexistent unit and sanctioned the loan of Rs. 38 lacs on 02.11.2007, encashed enhanced cash credit limit from Rs. 30 lacs to Rs. 60 lacs on 18.09.2008 and again recommended to enhance the cash credit limit from Rs. 60 lacs to Rs. 80 lacs on 22.06.2010. Accused guarantor Rajneesh Raina submitted the forged sale deed and Advocate Sh. V. K. Chopra, submitted a positive legal scrutiny report of the said non-existent property on 09.05.2007. The petitioner, H. R. Phonsa Valuer submitted an inflated valuation report dated 16.10.2006. Another Valuer D. C. Nanda submitted a inflated valuation report on 05.03.2008 to facilitate enhancement of loan and accused Dharam Singh, Patwari, made a false note dated 21.11.2007 to 7 Crl R Nos. 63/2023 & 13/2024 the effect that lien of the bank was marked in the concerned land revenue record. Thus, according to the prosecution case, these fraudulent and dishonest acts of the afore-named accused caused wrongful loss to the Bank of Baroda to the tune of Rs. 98,99,931/-.
10. Offences under sections 120B read with sections 420, 467, 468, 471 RPC and section 5(1)(d) read with 5(2) of the J&K PC Act, Samvat 2006 were found established against Sh. T. R. Dogra, Sh. Narinder Kumar Bhardwaj, Sh. C. L. Koul, Sh. Rajneesh Kumar Raina, Sh. D. C. Nanda, Sh. Meenashi Raina, Sh. Hem Raj Phonsa (petitioner herein), Sh. Surinder Kumar Salgotra, Sh. Narinder Kumar Sayal and Sh. Dharam Singh.
11. The learned Special Judge vide her order dated 20.10.2023 after hearing the parties and analyzing the material on record, framed charges for offences 120B read with sections 420, 468, 471 RPC and section 5(1)(d) read with 5(2) of the J&K PC Act, Samvat 2006 in the case arising out of FIR No. RC 06/2013 and vide her order dated 23.02.2024, the learned Special Judge framed charges for offences 120B read with sections 420, 468, 471 RPC and section 5(1)(d) read with 5(2) of the J&K PC Act, Samvat 2006 in the case arising out of FIR No. RC 03/2014. These orders are subject matter of challenge by way of afore-titled two petitions.
12. The petitioner, who happens to be a Valuer, has challenged the impugned orders, whereby charges have been framed against him in both the cases, on the grounds that there is no material on record of the charge sheets to show his complicity. It has been further contended that in similar cases, the petitioner has been discharged by the learned Special Judge and even 8 Crl R Nos. 63/2023 & 13/2024 the respondent-Agency has not implicated the petitioner as an accused in many other cases. It has been further contended that the role of the petitioner was only to undertake the valuation of the properties and his report was not binding upon the bank authorities. Therefore, it was not open to the learned Special Judge to frame charges against him.
13. I have heard learned counsel for the parties and perused the record including the charge sheets filed against the petitioner.
14. Before coming to the contentions of the petitioner, it would be apt to notice the legal position governing the framing of charges. Section 251-A of the J&K Cr.P.C, which is applicable to the present case, governs the procedure to be adopted in cases instituted on Police Report. As per sub section (2) of section 251-A J&K Cr.P.C, if upon consideration of all the documents annexed with the charge sheet and upon its examination and hearing of the parties, the Magistrate considers the charge against the accused to be groundless, he has to pass an order of discharge in favour of the accused. However, if upon consideration and examination of the said material, the Magistrate is of the opinion that there is ground for presuming that the accused has committed an offence, the charge has to be framed against the accused.
15. It has been time and again held by the Supreme Court and the various High Courts of the Country that while considering the question of framing charges against an accused, the Court is required to evaluate the material and the documents on record, in order to find out, whether the facts emerging therefrom, taken at their value, disclose the existence of all the 9 Crl R Nos. 63/2023 & 13/2024 ingredients, constituting the alleged offence. It is also a settled position of law that at the stage of framing of charge even a strong suspicion arising from the material assembled during investigation, which leads the Court to think that there is a ground for presuming that the accused has committed an offence, charge has to be framed against such accused, but in case, it is shown that even if, the material collected by the Investigating Agency is accepted at its face value, it does not show the involvement of the accused in the alleged crime then, there will be no sufficient ground for proceeding with the trial. In such cases, order of discharge in favour of the accused has to follow.
16. In light of the aforesaid legal position, let us now analyze the facts and the material available on record in the aforesaid two cases. The main contention of the learned counsel for the petitioner in both the cases is that duty of a Valuer is only to estimate the value of the property sought to be mortgaged and it is not the duty of a Valuer to ascertain the claim relating to the ownership of the property and it is also not the duty of the Valuer to even ascertain the identity of the property. While putting forth these contentions, the learned counsel has placed heavy reliance upon the judgments of the Madras High Court in the case of L. N. Rajagopalan vs. State, Crl R. C. No. 1063/2008, decided on 10.08.2009, judgment of the High Court of Karnataka in the case of P. V. Amarnath Prasad vs. State by CBI/ACB, 2010 CrLJ 3643 and judgment of Patna High Court in the case of Vijay Kumar Singh vs. State of Bihar, (Cr. Misc. Petition No. 27162/2011, decided on 12.12.2013).
10
Crl R Nos. 63/2023 & 13/2024
17. There can be no quarrel with the legal proposition that duty of a Valuer is not to look into the authenticity of the documents relating to the property, which he is proposed to inspect for the purpose of its valuation and it is also not his duty to ascertain the title of the property regarding which he has been asked to assess the value. The issue that falls for determination is as to what exactly the petitioner/Valuer has done in the present cases. Once the same is clear, it has to be ascertained whether or not while executing his duty the petitioner has breached the charter of duties which lead to the commission of alleged crime by the co-accused.
18. In the case pertaining to the Criminal Revision No. 63/2023, allegation against the petitioner is that he has overvalued the property of beneficiary Mohd. Rafiq, which is shown to be a double storey house situated in khasra No. 1642 min at Village Birpur, Tehsil Samba. As per the valuation report, which is on record of the charge sheet, the petitioner has shown its valuation of Rs. 32.70 lacs. The cost of the land has been shown as Rs. 1.00 lac per marla. Besides this, the petitioner has shown the area of the house built on the said land as 2938 sq. ft. with its total cost of Rs. 31.71 lacs.
19. As per the prosecution case, during the investigation when the empanelled Valuer of the bank visited the spot, he found that the value of the land in the year 2009, was Rs. 31,000/- per marla and in the year, 2020, when the inspection was conducted during investigation of the case, the value of the land was Rs. 2 lacs per marla. The Valuer PW Sh. R. C. Gupta has in his statement recorded during the investigation of the case stated that only a 11 Crl R Nos. 63/2023 & 13/2024 temporary shed with its boundary wall on the land was found and there was no double storey building existing on the said land. Thus, it is a case of overvaluation of the property sought to be taken as security for disbursement of the loan to the beneficiary and it is not a case of mere ascertainment of the authenticity of the ownership documents of the property in question.
20. Learned counsel for the petitioner has submitted that the property which the petitioner inspected was identified by the owner/beneficiary and as per the law laid down by Madras High Court in L. N. Rajagopalan's case(supra), a Valuer is not expected to make enquires about the identity of the property. Once the same has been identified by its owner and it is not established that the charter of the duties of the Valuer includes identification of the property from revenue authorities, no criminality can be attributed to the petitioner.
21. The argument of the learned counsel for the petitioner appears to be attractive at first blush, but in the facts and circumstances of the case. the same may not be of much help to the case of the petitioner, because it is not case of the prosecution that there was any mistaken identity of the property which was assessed by the petitioner/Valuer but it is a case where the petitioner in league with the beneficiary assessed the value of the same very property which was kept as security by the beneficiary with the bank, but actually on spot, no building was found constructed thereon. Besides this, even the cost of the land as per the material collected by the Investigating Agency was found to be much lower at the relevant time 12 Crl R Nos. 63/2023 & 13/2024 than what has been assessed by the petitioner vide his valuation report. Thus, there is prima facie material on record to show that the petitioner was in league with the beneficiary and the officials of the bank, which prompted him to make a false valuation report by assessing exorbitant value of the property in question.
22. It has also been contended by the learned counsel for the petitioner that the petitioner had even furnished the photographs of the property with his report which clearly showed that there was a double storey building existing on spot.
23. The question whether the double storey building was existing on the land comprised in khasra No. 1642 min or these photographs pertain to some other house, is a matter of trial and cannot be decided at this stage, but as per the material collected by the respondent-Agency, no such building was existing on the property situated in khasra No. 1642 min of Village Birpur. Thus, at this stage, it cannot be stated that the material on record does not justify framing of charge against the petitioner in this case.
24. That takes us to the charge sheet, which is subject matter of Criminal Revision No. 13/2024. In this case, the subject matter of discussion is the valuation report dated 16.10.2006 issued by the petitioner/Valuer, according to which, he has assessed the value of the property belonging to accused Rajneesh Raina situated at Raipur Ban Talab Jammu which houses a Hatchery Unit. As per this valuation report, the petitioner has assessed market value of the said land at Rs. 58.00 lacs. The evidence collected by the Investigating Agency includes the statement of PW 13 Crl R Nos. 63/2023 & 13/2024 Navneet Gupta, empanelled Valuer of various nationalized banks. He has stated that the property that was situated at Raipur Domana is the land bearing khasra No. 217 min and it is situated at hill top with thorny bushes without any approach road and as per said witness, the value of the land comes to Rs. 3.60 lacs. In this regard, he has submitted his report dated 25.10.2014.
25. While the petitioner in his report dated 16.10.2006 has shown existence of a structure on the land in question in which Hatchery Unit is housed, however, as per the report of the empanelled Valuer, who inspected the site, during investigation of the case, there was no construction of any nature whatsoever on the land. Thus, there is a great doubt about the identity of the property of which the petitioner has assessed the value in terms of his report dated 16.10.2006.
26. The learned counsel for the petitioner has submitted that the report dated 16.10.2006 was furnished by the petitioner at the instance of owner of the property accused, Rajneesh Rania and it was not for the purpose of obtaining bank loan as nothing in this regard is mentioned in the report. It has further been contended that the property in question was identified by its owner and it was not the duty of the petitioner as a Valuer to ascertain ownership or the identity of the property in question.
27. The contention raised by the learned counsel for the petitioner is without any substance for the reason that the petitioner is admittedly a Valuer empanelled by the Bank of Baroda. He has issued the certificate dated 16.10.2006 in respect of the Hatchery Unit situated at Raipur, Ban Talab, 14 Crl R Nos. 63/2023 & 13/2024 Jammu in respect of the property belonging to the Rajneesh Raina, who happens to be the guarantor in respect of the loan advanced by the bank in favour of his wife accused Meenakshi Raina. The valuation report in question has been furnished by the petitioner during the period when the loan application of the beneficiary was about to be processed. These facts supported by the material on record clearly raise a strong suspicion that the valuation report dated 16.10.2006 was issued by the petitioner in favor of the husband of the beneficiary, who happened to be the guarantor in connection with the loan, which is subject matter of the present case, with a view to facilitate the disbursement of the loan, which is subject matter of the charge sheet.
28. So far as identity of the property is concerned, as per the charter of duties of the Valuer as mentioned by PW Sh. Kamal Kumar, Chief Manager Bank of Baroda, in his statement recorded under section 161 of the Cr.P.C, it is necessary for the bank officer to accompany the Valuer for identification of the property. He has further stated that in no case borrower should be involved in this practice. Once as per the charter of duties of a Valuer, it was incumbent for him to take an officer of the bank along with him for identification of the property regarding which value is to be assessed, it does not lie in the mouth of the petitioner to state that the property was identified by the husband of the borrower and therefore, he is not responsible, if the property, which he has assessed, is not the actual property, which was mortgaged with the bank.
15
Crl R Nos. 63/2023 & 13/2024
29. It has also been contended that the report dated 16.10.2006 upon which the prosecution has placed reliance is a photocopy, as such the same is not admissible in evidence. Thus, no charge can be framed against the petitioner on the basis of the said document. The aforesaid argument is without any substance because the prosecution can during the trial of the case place on record original document or it can lead secondary evidence subject to the fulfillment of conditions for leading such type of evidence. These issues can be considered by the learned Special Judge during the trial of the case.
30. For what has been discussed hereinbefore, it is clear that there is material on record of both the charge sheets to prima facie show involvement of the petitioner in the conspiracy which led to monetary loss to the Bank of Baroda in respect of the loan accounts of the beneficiaries, who appeared to have been in league with the petitioner as well as the officials of the bank. In these circumstances, the learned Special Judge has rightly framed charges against the petitioner in both the charge sheets.
31. For the foregoing reasons, I do not find any merit in these petitions. The same are dismissed, accordingly.
(SANJAY DHAR) JUDGE Jammu:
16.04.2025 Rakesh PS Whether the order is speaking: Yes/No Whether the order is reportable: Yes/No Rakesh Kumar 2025.04.16 18:18 I attest to the accuracy and integrity of this document