Delhi District Court
Cc No. 45/2008 Cbi vs . S.S. Wadhwa Etc. Page 1 Of 79 on 27 February, 2017
IN THE COURT OF SH. SANJAY GARG-I:
SPECIAL JUDGE-IV, (PC ACT) CBI: DELHI
CC No. 45/08
ID No. 02401R0190752001
Central Bureau of Investigation (CBI)
Versus
1. Surender Singh Wadhwa (PO),
S/o Late Sardar Jote Singh,
R/o F-122, M.B. Road, Saidullah Jaib,
New Delhi
2. Rajiv Kumar Bhatia,
S/o Sh. A.R. Bhatia,
R/o 2448, Gali No. 2,
Islamabad near Police Post,
Amritsar, Punjab
3. Ravinder Bhatia (Deceased)
S/o Late Sh. A.R. Bhatia,
R/o 448, Sector-14, Gurgaon,
Haryana
4. Shyam Sunder Kakkar
S/o Late Sh. Roop Lal Kakkar,
R/o 494, Katra Safed, Gali Chichran,
Amritsar
5. Vipin Kumar
S/o Late Sh. Inderjeet,
R/o 2293/12, Gali Teja Singh,
Islamabad, Amritsar, Punjab
6. Arvind Poddar,
S/o Sh. H.P. Poddar,
R/o 700/12, Gali Lalanwali,
CC No. 45/2008 CBI Vs. S.S. Wadhwa etc. Page 1 of 79
Katra Ahluwalia, Amritsar
7. Anurag Poddar
S/o Sh. H.P. Poddar,
R/o 700/12, Gali Lalanwali,
Katra Ahluwalia, Amritsar
8. M/s Uma Fabric Pvt. Ltd.
through Rajiv Bhatia (A-2)
9. M/s Shiva Tape Pvt. Ltd. (now known as Shiva
Sutex Ltd.)
through Director Ramesh Bhatia
10. M/s APT Yarn Pvt. Ltd.
through Anurag Poddar (A-7)
11. Arun Kumar Khanna
S/o Sh. Charanji Lal Khanna,
R/o 3918/18, Tandon Nagar,
Batala, Amritsar
Case arising out of: FIR No. RC 44(A)/97
Date of FIR : 02.06.1997
Date of Institution : 20.06.2000
Date of conclusion of Final
Arguments : 04.02.2017
Date of Judgment : 20.02.2017
(Case is more than 15 years old)
JUDGMENT
FACTS 1.0. Brief facts of the prosecution case are that complaint dated CC No. 45/2008 CBI Vs. S.S. Wadhwa etc. Page 2 of 79 30.5.1997 was made by Sh. S.S. Mehra, Chief Vigilance Officer, Oriental Bank of Commerce, Head Office, Harsha Bhawan, E- Block, Connaught Place, New Delhi to CBI. The details of the complaint are as follows:-
"Shri Wadhwa, a Scale IV Officer was posted as Chief Manager at our Saket, New Delhi branch. While working as Incumbent Incharge, Shri Wadhwa in collusion with Bhatia with intention of providing wrongful gains to the Bhatia's to the detriment of bank's interest sanctioned/allowed or caused to sanction/allow during the period 1994 to 1996 various credit facility including cash credit/clean overdrafts/unauthorised purchase of cheques drawn on other group accounts.
The accommodation was allowed to the Bhatia Group in transgression of discretionary powers vested in him without following the prescribed procedure for sanctioning of advance/approval of limits based on realistic assessment of credit needs of the borrower, obtaining proper security and without ensuring end use of funds. Due to series of unauthorised acts of the subject officer, a sum of Rs. 93.06 lakhs is struck-up in various accounts belonging to the concerns detailed with modus operandi below:-
A current a/c No 1608 was opened on 6.2.1994 on introduction of Shri S. S. Wadhwa in the name of M/s Uma Fabrics Pvt. Ltd., 45, Roz Kamiya Indus. Area, Sohna CC No. 45/2008 CBI Vs. S.S. Wadhwa etc. Page 3 of 79 (Gurgaon). The Directors of this company were (1) Shri Rajeev Kumar (2) Shri Shyam Sunder and (3) Mrs. Komal Bhatia. Shri S. S. Wadhwa sanctioned CC Limit of Rs. 7.5 lakhs and the bill discounting limit of Rs. 5.00 lakhs to this Company. He discounted five bills totalling Rs. 7.10 lakhs returned unpaid. Following are the details relating to DD No., Date of Purchase, Name of the drawee, Amount in lakhs, sent for collection to and the present position of the bill.
S. DD/BP Date of Drawee Amou Sent for Present
No. No. Purchase nt In Collection Position
Lakhs
1. 17/95 31.5.95 Surya 1.22 SBI Town Hall, Returned &
Synthetics Amritsar Debited to
a/c on
21.12.95.
2. 18/95 31.5.95 Surya 1.76 -do- -do-
Synthetics
3. 19/95 31.5.95 -do- 1.66 -do- -do-
4. 20/95 20.8.95 Sham 1.43 OBC, Returned &
Traders Hamidpur Debited to
a/c on 3.3.96
5. 21/95 20.8.95 -do- 1.58 -do- Outstanding
6. 22/95 20.8.95 -do- 1.27 -do- Outstanding
7. 23/95 20.8.95 -do- 0.98 -do- Returned &
Debited to
account on
3.3.96
8. 24/95 24.8.95 -do- 1.50 -do- Returned &
Debited to
a/c on
31.12.95.
The amount of Rs. 19.93 lakhs and Rs. 4.44 lakhs in the above account under CC Hypothecation & UBD is still CC No. 45/2008 CBI Vs. S.S. Wadhwa etc. Page 4 of 79 outstanding.
A Current a/c No. 1604 was opened on 6.2.1994 on the introduction of Shri S. S. Wadhwa in the name of M/s Shiva Fabrics, 153, First Floor, Katra Nawab, Chandni Chowk, Delhi. The proprietor of this firm was Shri Ravinder Bhatia. Shri S. S. Wadhwa sanctioned a limit of Rs. 7.5 lakhs under CC Hypothecation Rs. 5.00 lakhs under UBD. Shri S.S. Wadhwa discounted four bills as follows:-
S. DD/BP Date of Drawee Amount Sent for Present No. No. Purchase In Lakhs Collection Position
1. UF 14/95 19.8.95 Sameer 1.59 OBC Returned & Textiles Hamidpur Debited to account on 30.3.96.
2. UF 15/95 19.8.95 -do- 1.39 -do- Returned & Debited to a/c on 3.12.95.
3. UF 16/95 20.8.95 -do- 1.53 -do- Returned & debited to a/c on 14.12.95.
4. UF 17/95 20.8.95 -do- 1.38 -do- -do-
These bills returned debited to CC a/c and this account was not operated since August, 1995. This unit is not functioning and there are no stocks. An amount of Rs.12.93 lakhs is outstanding.
A Current a/c No. 1607 was opened on 6.2.1994 on the introduction of Shri S. S. Wadhwa in the name of M/s Shiva Tapes Pvt. Ltd, 44-Roz Kamya, Industrial Area, Sohana, CC No. 45/2008 CBI Vs. S.S. Wadhwa etc. Page 5 of 79 Gurgaon. The Directors of this company were (1) Sh. Ravindra Bhatia, (2) Ramesh Bhatia and (3) Mrs. Meena Bhatia, all R/o 207/14, Gurgaon. Shri S. S. Wadhwa sanctioned CC (H) Limit of Rs. 20,00 lakhs, UBD of Rs. 10.00 lakhs. He discounted 11 bills between May and August 1995 as follows: out of the 11 bills, 5 bills aggregating Rs. 8.66 lakhs returned unpaid and debited to cash credit account in December, 1995 whereas the remaining 6 bills totalling Rs. 9.08 lakhs were sent to OBC, Hamidpur for collection are still outstanding.
S. DD/ Date of Drawee Amount Sent for Present
No. BP Purcha in Lakhs Collection Position
No. se
1. 15/95 29.5.95 APT Yarn 1.77 SBI, Kirti Returned &
P. Ltd. Nagar, debited to
New Delhi a/c on
7.12.95.
2. 16/95 29.5.95 -do- 1.38 -do- Returned &
debited to
a/c on
14.12.95.
3. 17/95 29.5.95 -do- 2.31 -do- -do-
4. 18/95 3.6.95 Sameer 1.51* OBC Outstanding
Taxtiles Hamidpur
5. 19/95 14.8.95 Ashok 1.48 -do- Outstanding
Fabrics
6. 20/95 14.8.95 -do- 1.46 -do- -do-
7. 21/95 14.8.95 -do- 1.23 -do- -do-
8. 22/95 19.8.95 -do- 1.79 -do- -do-
9. 23/95 19.8.95 -do- 1.67 -do- -do-
10. 24/95 19.9.95 -do- 1.54 -do- Returned &
debited to
CC No. 45/2008 CBI Vs. S.S. Wadhwa etc. Page 6 of 79
account on
3.12.1995.
* There is no entry in the dak register.
Out of the 11 bills, 5 bills aggregating Rs. 8.66 lakhs returned unpaid and debited to cash credit account in December 1995 whereas the remaining 6 bills totalling Rs.9.08 lakhs were sent to OBC Hamindpur for collection are still outstanding.
A cheque No. 996951 for Rs. 3.75 lakhs was purchased on 14.8.1995 from M/s Shiva Tapes Pvt. Ltd. was sent to OBC, Hamidpur and this amount is outstanding.
A Current a/c No. 1699 was opened on 20.8.1994 on introduction of M/s Shiva Tapes Pvt. Ltd. in the name of M/s Sameer Taxtiles, 153, 2nd floor, Katra Nawab, Chandni Chowk, Delhi. The proprietor was Shri Rajeev Kumar R/o 1019/17, Gurgaon. The address of M/s Sameer Textiles and Shiva Fabrics is common. On 29.5.1995, Shri S. S. Wadhwa purchased a cheque No. 995956 for Rs. 2,63,525/- drawn on OBC, Hamidpur by OBC, Hamidpur on 9.6.1995 as unpaid. There is no entry in Saket Branch about the receipt of this unpaid cheque. Shri S. S. Wadhwa on 21.12.1995, allowed clean overdraft of Rs. 0.6 lakhs by debiting a cheque and crediting another account of Shri Rajiv Bhatia in the name of M/s Ganapati Textiles. This amount is also outstanding.
A Current a/c No. 1647 was opened on 21.4.1994 in the CC No. 45/2008 CBI Vs. S.S. Wadhwa etc. Page 7 of 79 name of M/s Jai Durga Textiles, 153, 2nd floor, Katra Nawab, Chandni Chowk, Delhi on introduction of M/s Shiva Tapes Private Limited. The proprietor of this firm is Shri Shyam Kakkar, R/o 207/14, Gurgaon, the address of Shri Rajiv Kumar Bhatia. Shri S. S. Wadhwa discounted bills in 1994-95 which were returned unpaid and debited to party's account. There are no operation in this account after 12.7.1995 and there is stock/security available on the amount outstanding is Rs. 11.12 lakhs.
Number of bills were drawn on M/s Ashok Fabrics,M/s Shyam Textiles and M/s Sameer Textiles. The account opening form of OBC, Hamidpur relating to the current account No. 851 of M/s Ashok Fabrics reveals that Shri Vipin Kumar, R/o 2293/15, Islamabad, near Police Post, Amritsar opened this account and this Vipin Kumar has mortgaged his property for facilities allowed to M/s Uma Fabrics Ltd.
A Current a/c No. 860 was opened at OBC, Hamidpur in the name of Shyam Textiles by Shri Shyam Kakkar, R/o 494, Khar Safed, Gali Chichrah, Amritsar on 31.1.1995 and the same Shyam Kakkar is the Director of M/s Uma Fabrics Pvt. Ltd. and proprietor of M/s Jai Durga Textiles.
A Current a/c no. 859 was opened at OBC, Hamidpur on 31.1.1995 in the name of M/s Sameer Textiles by Shri Rajeev Bhatia R/o Islamabad near Police Post, Amritsar. The same Rajeev Bhatia is Director of M/s Uma Fabrics CC No. 45/2008 CBI Vs. S.S. Wadhwa etc. Page 8 of 79 Pvt. Ltd. & Proprietor in M/s Sameer Textiles.
Hence, Shri. S. S. Wadhwa, Rajeev Kumar Bhatia, Ravinder Bhatia, Sham Kakkar, M/s Uma Fabrics, M/s Shiva Fabrics, M/s Jai Durga Textiles, M/s Sameer Textiles, M/s Shiva Tapes Pvt. Ltd. conspired to cheat Saket Branch of O. B. C. by submitting false documents and Shri S. S. Wadhwa abused his official position as a public servant and caused wrongful loss of Rs. 93.06 lakhs to saket branch of Oriental Bank of Commerce and wrongful gain themselves.
You are requested to register an FIR under appropriate section of IPC/Prevention of Corruption Act and order thorough investigation in the fraudulent/unauthorized transactions undertaken by the culprits for launching criminal proceedings against them."
1.1. The case of CBI is that S.S. Wadhwa (A-1) is Scale-IV Officer while posting as Branch Incumbent, Oriental Bank of Commerce (OBC), in collusion with other accused persons, with the intention of causing wrongful gain to Bhatia Group of Companies and detriment to interest of bank, sanctioned / allowed various credit facilities including cash credit / clean overdraft / unauthorised purchase of third party cheques. He allowed his accommodation to Bhatia Group in transgression of discretionary power vested in him without following the prescribed procedure for sanctioning of advances and without ensuring the end use of funds. Due to the series of unauthorised CC No. 45/2008 CBI Vs. S.S. Wadhwa etc. Page 9 of 79 acts of S.S. Wadhwa (A-1) a sum of Rs. 93.06 lakhs is locked up in various accounts of group concerned. A-1 sanctioned a C/C limit of Rs. 7.5 lakhs and bill discounting (UBD) limit of Rs. 5 lakhs to M/s Uma Fabrics Pvt. Ltd. (A-8) and discounted a number of bills which returned unpaid and an amount of Rs. 19.93 lakhs in C/C account and Rs. 4.44 lakhs against UBD is still outstanding. A-1 further sanctioned a C/C limit of Rs. 7.5 lakhs and UBD limit of Rs. 5.00 lakhs to M/s Shiva Fabrics owned by Ravinder Bhatia (A-3) (since expired). A-1 discounted 4 UBDs in the account which were not honoured and Rs. 12.93 lakhs is outstanding in the account.
1.2. It further alleged that A-1 sanctioned a C/C limit of Rs. 20 lakhs and UBD of Rs. 10 lakhs to M/s Shiva Tapes Pvt. Ltd. (A-9) and discounted 11 bills which returned unpaid and as a result of that sum of Rs. 17.74 lakhs is outstanding on account of these UDBS. A cheque of Rs. 3.75 lakhs was purchased in the account of A-9 which is still outstanding. A-1 purchased cheque no. 996956 for Rs. 2,63,525/- in the account of Sameer Textiles owned by Rajiv Bhatia (A-2) and also allowed to clean overdraft of Rs. 60,000/- in his account. It has been alleged that A-1 discounted different bills in the account of Jai Durga Textiles which are still outstanding and a sum of Rs. 11.12 lakhs is stuck- up in the account.
1.3. Number of bills were drawn on M/s Ashok Fabric, M/s Shyam Textiles, M/s Sameer Textiles having account at OBC, Hamidpur, Amritsar, Punjab. Rajiv Kumar Bhatia (A-2) Proprietor CC No. 45/2008 CBI Vs. S.S. Wadhwa etc. Page 10 of 79 of M/s Sameer Textiles is also Director of M/s Uma Fabrics Pvt. Ltd. (A-8) and Vipin Kumar (A-5) Proprietor of M/s Ashok Fabrics has also mortgaged his property for facilities allowed to A-8. In this manner A-1 by abusing his official position as a public servant caused a wrongful loss of Rs. 93.06 lakhs to the OBC and corresponding wrongful gain to Bhatia Group of Companies and others.
1.4. Investigation revealed that C/A-1608 in the name of A-8 was introduced by A-1 and said account was opened by A-2 as Director. On 10.02.1994 A-8 applied for C/C limit of Rs. 7.5 lakhs and bill discounting limit of Rs. 5 lakhs. The loan proposal was sanctioned by A-1 same day. Subsequently, on 14.02.1994 this account was converted into the cash credit (c/c) Account No. 59. On 11.03.1995 bill discounting limit of the firm was enhanced to Rs. 15 lakhs by A-1 unauthorisedly as according to circular of the bank he was empowered to sanction bill discounting limit only upto Rs. 5 lakhs. Even the C/C limit of Rs. 7.5 lakhs was allowed to be exceeded unauthorisedly on several occasions by A-1 and on 18.11.1995 it was allowed upto Rs. 12,38,141/-. A-1 discounted the following eight bills in its account which were not raised out of genuine trade transaction and were not realized:-
Sl. UBD No. Drawn On Amount Date of Drawee Date of Date of No. Purchase Firm Return Reversal
1. UF- SBI, Town 1,21,448/- 31.5.95 Surya 19.12.95 21.12.95 17/95 Hall, Synthetics Amritsar A-6 & A-7 CC No. 45/2008 CBI Vs. S.S. Wadhwa etc. Page 11 of 79
2. UF- -do- 1,76,120/- -do- -do- -do- -do-18/95
3. UF- -do- 1,66,268.80/- -do- -do- -do- -do-19/95
4. UF- OBC, 1,42,970.88/- 20.8.95 Shyam 21.11.95 3.3.96 20/95 Hamidpur, Traders Amritsar A-4
5. UF- -do- 1,57,812.40/- -do- -do- -do- 3.9.96 21/95
6. UF- -do- 1,27,770.80/- -do- -do- -do- -do-22/95
7. UF- -do- 97,386.50/- -do- -do- -do- 3.3.96 23/95
8. UF- -do- 1,59,734.80/- 24.8.96 -do- 11.11.95 3.12.95 24/95 1.5. Investigation revealed that UBD Nos. UF-17/95 to UF-
19/95 were discounted by A-1 on the request of A-2 and these UBDs were accompanied with hundis UF-34/95-96 to UF-36/95 favouring M/s Surya Synthetics and Transport Receipt (TR) of M/s Naresh Road Lines (P) Ltd. The drawee M/s Surya Synthetics was having two c/c account no. CC-4/1732 and CC- 4/1733 at SBI, Town Hall, Amritsar and A-6 & A-7 were Directors of the firm. The above said UBDs were received by SBI, Town Hall, Amritsar on 10.06.1995 through OBC, Katra Ahluwalia, CC No. 45/2008 CBI Vs. S.S. Wadhwa etc. Page 12 of 79 Amirtsar. As the firm did not make the payments, the reminders were issued to the firm by SBI, Town Hall on 26.08.1995, 15.09.1995, 03.10.1995 & 10.11.1995. Finally, on 06.12.1995 the bills were returned unpaid by SBI, Town Hall, Amritsar to OBC, Katra Ahluwalia, Amritsar which in turn returned these to OBC, Saket, New Delhi on 19.12.1995. Investigation is revealed that these bill were accommodation in nature and both A-2 & A-6 failed to furnished any evidence in this regard. The transporter M/s Naresh Road Lines (P) Ltd. has told that Transport Receipts does not belonging to his firm.
1.6. Investigation further revealed that UBD No. UF-20/95 to UF-24/95 were also discounted by A-1 on the request of A-2. These UBDs were dispatched by OBC, Saket, New Delhi on 23.08.1995 and 24.08.1995. Same were received by OBC, Hamidpur, Amritsar on 26.08.1995. As the drawee M/s Shyam Traders did not make the payments the bill were returned unpaid by OBC, Hamidpur on 21.11.1995 to OBC, Saket, New Delhi. The drawee M/s Shyam Traders was having C/A-860 at OBC, Hamidpur and Sh. Shyam Kakkar was Director of drawer i.e. M/s Uma Fabrics Pvt. Ltd. A-8 was also Proprietor of this firm. These UBDs were also accommodational in nature and both A-2 & A-4 failed to produce any evidence to show the genuineness of transaction. As per the transporter, the TRs in respect of UBD No. 24/95 does belong to him. Hundis and TRs in respect of other UBDs are not available with the bank.
1.7. Investigation further revealed that A-1 introduced and CC No. 45/2008 CBI Vs. S.S. Wadhwa etc. Page 13 of 79 allowed the C/A-1604 on 06.12.1994 on the name of M/s Shiva Fabrics and Ravinder Bhatia opened the account as a Proprietor of the firm. The firm was sanctioned the C/C limit of Rs. 7.5 lakhs and bill discounting limit of Rs. 5 lakhs to be exceeded (overdraft) upto Rs. 10,88,098.50/- on 20.08.1995. A-1 discounted the following bills in the account of M/s Shiva Fabrics, which are not out of genuine trade transportation and were accommodational in nature:-
Sl. UBD No. Amount Consignee Drawn On Date of Date of No. Purchas Reversal Rs.
e
1. SF-14/95 1,58,880/- Sameer OBC, 19.03.95 03.03.96 Textiles Hamidpur
2. SF-15/95 1,38,744/- -do- -do- -do- 03.12.95
3. SF-16/95 1,52,977/- -do- -do- 20.08.95 14.12.95
4. SF-17/95 1,37,737/- -do- -do- -do- -do-
1.8. Investigation further revealed that the documents including hundi, TRs and invoice are not available regarding UBD-14/95. The hundis of remaining three UBDs were accompanied with the TR's of M/s Naresh Road Lines Pvt. Ltd.
The consignee M/s Sameer Textiles was having C/A-859 at OBC, Hamidpur, Amritsar and A-2 was its Proprietor who happens to be real brother of Ravinder Bhatia i.e. Proprietor of consignor M/s Shiva Fabrics. These UBDs were received by CC No. 45/2008 CBI Vs. S.S. Wadhwa etc. Page 14 of 79 OBC, Hamidpur on 26.08.1995 and were returned unpaid. These UBDs were also accommodational in nature and both Ravinder Bhatia and A-2 failed to produce any evidence in this regard.
1.9. Investigation further revealed that C/A-1607 is in the name of M/s Shiva Tapes (P) Ltd. and was allowed and introduced by A-1 and Ravinder Bhatia was authorised signatory of this account. A-9 applied for C/C limit of Rs. 10 lakhs and bill discounting limit of Rs. 12 lakhs through its Director Ravinder Bhatia. A-9 was sanctioned the C/C limit and bill discounting limit of Rs. 7.5 lakhs each by A-1 on 31.10.1994 under the instruction of Regional Office and current account was converted to c/c-69. Subsequently the Regional Office enhanced the c/c limit to Rs. 20 lakhs and bill discounting limit of Rs. 10 lakhs vide letter dated 03.12.1994. The sanctioned bill discounting limit of Rs. 10 lakhs was allowed to be exceeded (overdraft) unauthorisedly by A-1 on 19.08.1995 upto Rs. 23,72,966.60/-.
1.10. Investigation further revealed that A-1 in conspiracy with Ravinder Bhatia, Director of A-9 purchased the following bills, which were again accommodational in nature and were out of genuine transactions:-
Sl. UBD Amount Consignee Drawn On Date of Date of Date of No. No. Purchase Return Reversal Rs.
1. ST- 1,77,400/- APT Yarn SBI, Kirti 29.05.95 06.12.95 07.12.95 (P) Ltd. Nagar, 15/95 New Delhi
2. ST- 1,38,240/- -do- -do- -do- -do- -do-CC No. 45/2008 CBI Vs. S.S. Wadhwa etc. Page 15 of 79 16/95
3. ST- 2,30,413.75/ -do- -do- -do- -do- -do-
17/95 -
4. ST- 1,51,000/- .Sameer OBC, 09.06.95 Not Dispatch 18/95 Textiles Hamidpur, ed Amritsar
5. ST- 1,48,280.8/- Ashok -do- 14.08.95 21.11.95 03.11.96 19/95 Fabric
6. ST- 1,45,722.5/- -do- -do- -do- -do- -do-
20/957. ST- 22,995.5/- -do- -do- -do- 30.10.95 -do-
21/958. ST- 1,78,870/- -do- -do- 10.08.95 -do- -do-
22/959. ST- 1,67,290.2/- -do- -do- -do- 11.11.98 03.12.95 23/95
10. ST- 1,61,340.4/- -do- -do- -do- 30.10.95 03.11.96 24/95
11. ST- 1,53,900/- -do- -do- -do- 11.11.95 03.12.95 25/95 1.11. Investigation revealed that hundis and invoices pertaining to UBD ST-15/95 to ST-17/95 are available, however, the TRs are not available. The consignee M/s APT Yarn Pvt. Ltd. was having C/A-1257/14 at SBI, Kirti Nagar, New Delhi having CC No. 45/2008 CBI Vs. S.S. Wadhwa etc. Page 16 of 79 Anurag Poddar (A-7) as one of its Directors. The party did not make the payment hence, the bills were returned unpaid by SBI, Kirti Nagar.
1.12. Investigation further revealed that UBD No. ST-18/95 was never dispatched from OBC, Saket, New Delhi and none of the documents including hundi, TRs, invoice etc. are available with the branch. None of the documents including hundi, TRs, etc. are available pertaining to UBD ST-19/95 to UBD ST-22/95, ST- 24/95 are not available. UBD ST-23/95 & ST-25/95 were accompanied with hundi ST-80/95-96 & ST-76/95-96 and TRs of M/s Naresh Road Lines Pvt. Ltd. The consignee M/s Ashok Fabrics was having a current account CA-857 at OBC, Hamidpur, Amritsar and Vipin Kumar was Proprietor of said firm. It further revealed that on 14.08.1995 A-1 unauthorisedly purchased the cheque no. 996951 for Rs. 3,75,000/- issued by M/s Ashok Fabrics in the account of M/s Shiva Fabrics (A-9). These bills and cheques were accommodational in nature and were not out of genuine trade, transaction and both consignee and consignor failed to produce any evidence in this connection. The TRs used in these UBDs have been forged and did not belong to M/s Naresh Road Lines Pvt. Ltd.
1.13. Investigation further revealed that on 29.05.1995 A-1 unauthorisedly purchased cheque no. 996956 dated 29.05.1995 in C/A-1699 of M/s Sameer Textiles on the request of its Proprietor Rajiv Kumar (A-2). The said cheque was drawn on M/s Ashok Fabrics having its account at OBC, Hamidpur, CC No. 45/2008 CBI Vs. S.S. Wadhwa etc. Page 17 of 79 Amritsar and same was returned unpaid. A-1 has unauthorisedly allowed the clean overdraft of Rs. 58,746/- in the account on 21.12.1995. A-1 was not empowered to purchase the said cheque and allow overdraft, as the sister concern of M/s Sameer Textiles i.e. M/s Uma Fabric Pvt. Ltd. (A-8) was already sanctioned an advance by A-1.
1.14. Investigation further revealed that C/A-1649 was opened at OBC, Saket, New Delhi on 21.04.1994 on the name of M/s Jai Durga Textiles by its Proprietor Shyam Kakkar (A-4). A-1 unauthorisedly sanctioned C/C limit of Rs. 5 lakhs to this firm when he was not empowered to do so. Its sister concern M/s Uma Fabric Pvt. Ltd. (A-8) was already sanctioned limit by A-1. A-1 purchased the following UBDs in the account of M/s Jai Durga Textiles, which were accommodational in nature and were not of genuine trade transactions:-
Sl. UBD Amount Consignee Drawn On Date of Reversal No. No. Purchase on (Rs.) (M/s)
1. JD-7/94 2,00,430/35 Digvijay Dena Bank, 21.10.94 13.05.95 Enterprises Chandni Chowk
2. JD-8/94 2,13,246 -do- -do- 27.10.94 25.08.95
3. JD-9/94 1,00,540 -do- -do- -do- 13.05.95 1.15. Investigation further revealed that none of the documents including hundi, invoice etc. are available. C/A 12883 was CC No. 45/2008 CBI Vs. S.S. Wadhwa etc. Page 18 of 79 opened at Dena Bank, Chandni Chowk on the name of M/s Digvijay Enterprises by one Arun Kumar Khanna (A-11).
Investigation revealed that UBD No. JD-8/94 and JD-9/94 were never received by Dena Bank, Chandni Chowk and none of these UBDs were realised as these were not raised out of genuine trade transactions. A-11 in conspiracy with A-4 accommodated the bills of M/s Jai Durga Textiles in order to facilitate the firm to misuse the funds of the bank.
1.16. A-1 the then branch incumbent of OBC, Saket, New Delhi failed to safe-guard the interest of bank and in conspiracy with private persons, discounted ussance bill beyond his discretionary power which were not raised out of genuine trade transaction. He also accepted the transporter receipts which were found to be forged and were not filled properly. He also did not obtain the proper documentation against the various advances sanctioned to different firms. It all prima facie disclose commission of offence punishable u/s 120B R/w 420/468471 IPC and u/s 13(2) R/w 13(1)(d) of P.C. Act by A-1, A-2, A-3, A-8 through A-2, A-9 through A-3, A-4, A-5, A-11, A-6 & A-7 and A-10 through A-7. The sanction for prosecution of A-1 has not been obtained as he has since dismissed by the bank.
Charge 2.0. All the accused persons were charged for commission of offence punishable u/s 120B IPC R/w 420/468/471 IPC and u/s 13(2) R/w 13(1)(d) of P.C. Act. A-1 was separately charged for commission of offence u/s 13(2) R/w 13(1)(d) of P.C. Act and u/s CC No. 45/2008 CBI Vs. S.S. Wadhwa etc. Page 19 of 79 420/471 IPC. A-2 & A-4 were separately charged for commission of offence u/s 420/468/467/471 IPC. A-5 to A-11 were separately charged u/s 420 IPC. A-1 was declared PO vide order dated 21.10.2013 and A-3 has already expired.
Prosecution Evidence 3.0. Prosecution examined 16 witnesses to support its case.
3.1. PW-1 Sh. S.K. Gauba was posted as Manager Scale-II between 1993 - 1998. He had worked with A-1 who was Sr. Manager in the said branch and has identified his signatures. He proved account opening form, specimen signature card and loan application form and Anneuxre-A i.e. credit report as Ex. PW-1/1 to Ex. PW-1/4. He has further proved the process note signed by Sh. Rakesh Puri as Ex. PW-1/5, the Memorandum of Articles of Association of M/s Uma Fabric Pvt. Ltd. as Ex. PW-1/6, pay-in- slip as Ex. PW-1/7, hundi as Ex. PW-1/8 and transporter receipt purported to be issued by M/s Naresh Road Lines Pvt. Ltd. as Ex. PW-1/9. Regarding UBD UF-19/95, he has proved pay-in- slip, hundi and transporter receipts as Ex. PW-1/10 to Ex. PW- 1/15 respectively. He has further proved pay-in-slips UBD UF- 20/95 to UF-23/95 as Ex. PW-1/16 to Ex. PW-1/19. Regarding bill no. 24/95 he has proved the corresponding debit & credit vouchers as Ex. PW-1/21 to Ex. PW-1/23.
3.2. PW-1 has further proved the account opening form, process note, loan application form of M/ Shiva Fabrics as Ex. PW-1/24 to Ex. PW-1/26. He has proved pay-in-slips in respect of bill no. 14/95 & 15/95 as Ex. PW-2/17 & Ex. PW-1/28, CC No. 45/2008 CBI Vs. S.S. Wadhwa etc. Page 20 of 79 corresponding debit & credit vouchers as Ex. PW-1/29 to Ex. PW-1/31. He has further proved the account opening form and specimen signature card of current account no. 1067 on the name of M/s Shiva Tapes Pvt. Ltd. as Ex. PW-1/32 & Ex. PW- 1/33. He has further proved a letter dated 22.11.1994 sent by DGM, OBC, Karol Bagh to Chief Manager, OBC, Saket as Ex. PW-1/34. He has further proved the orders of A-1 regarding purchase of three bills lodged by M/s Shiva Tapes Pvt. Ltd. and drawn on APT Yarn Pvt. Ltd. as Ex. PW-1/35, Ex. PW-1/36 & Ex. PW-1/37. He has further proved the order of A-1 as Ex. PW-1/38 in respect to the bill lodged by M/s Shiva Tapes Pvt. Ltd. drawn on M/s Sameer Textiles.
3.3. PW-1 has further proved the orders of A-1 as Ex. PW- 1/39 to Ex. PW-1/45 regarding purchase of seven bills lodged by M/s Shiva Tapes Pvt. Ltd. drawn in favour of M/s Ashok Fabrics. He has further proved the initials of A-1 at point Ex. PW-1/46 of the credit slip (D-71) vide which cheque no. 996857 drawn on OBC in favour of M/s Shiva Tapes Pvt. Ltd. was ordered to be discounted. He has further proved a corresponding debit & credit vouchers in that regard as Ex. PW-1/46(a) & (b) and statement of account as Ex. PW-1/47. He has further proved the debit transfer vouchers in respect of bill no. 15/95 to 17/95 bearing signature of Sh. Manoj Wal as Ex. PW-1/48, the commission receipt credit voucher and interest voucher as Ex. PW-149 & Ex. PW-1/50 respectively. Hundies and invoices in respect of these bills are Mark P-1/51 (Colly), the forwarding letter in respect of these bills sent to SBI, Kirti Nagar alongwith relevant documents CC No. 45/2008 CBI Vs. S.S. Wadhwa etc. Page 21 of 79 for realization as Mark P-1/52. He has further proved debit transfer voucher in respect of bill no. 22/95 to 25/95 as Ex. PW- 1/53, the commission receipt credit voucher as Ex. PW-1/54 and interest voucher as Ex. PW-1/55, the corresponding hundies and related documents as Mark P-1/56 (Colly) and corresponding forwarding letter from OBC, Saket to OBC, Hamidpur as Ex. PW- 1/57.
3.4. PW-1 has further proved the account opening form and ledger sheet of account of M/s Jai Durga Textiles as Ex. PW-1/58 & Ex. PW-1/59. He has further proved various seizure memos as Ex. PW-1/60 to Ex. PW-1/76 vide which various documents were handed over by him to CBI bearing his signatures. He has further proved specimen signature sheets on which signatures of A-3 Ramesh Bhatia (since deceased) and A-2 were taken by CBI Officers in his presence as Ex. PW-1/77 & Ex. PW-1/78 (Colly). He has further proved the entries in DD register of OBC, Saket in respect of bills no. 17/95 to 19/95 as Ex. PW-1/79, entry in respect of bills no. 20/95 to 23/95 as Ex. PW-1/80 and entry in respect of bill no. 24/95 as Ex. PW-1/81.
3.5. PW-2 Sh. Khazan Singh was posted in Kirti Nagar Branch of SBI from 10.10.1991 till 2001. He has identified the signature of Sh. A.K. Sareen on letter as Ex. PW-2/A. He has further proved account opening form in respect of account no. 1257/14 as Ex. PW-2/B and copy of the same account opening form as Ex. PW-2/B1. He has further proved various documents attached with this form as Ex. PW-2/B2, Ex. PW-2/B3 & Ex. PW-2/B4 and CC No. 45/2008 CBI Vs. S.S. Wadhwa etc. Page 22 of 79 statement of account as Ex. PW-2/B5. He has further proved the entry Ex. PW-2/C vide which the bills were returned unpaid to OBC, Saket due to insufficient balance in the account. He has further proved the documents Ex. PW-2/D1 & D2 vide which VPL 1528 charges were levied on M/s APT Yarn Pvt. Ltd. in respect f return of bills. He has further proved page no. 47 of registered letters dispatch register as Ex. PW-2/E and letter dated 12.03.1999 as Ex. PW-2/F. 3.6. PW-3 Sh. O.P. Sharma is Retd. Chief Manager, OBC (Head Offic). He has deposed that without seeing the originals, he cannot say anything about circular shown to him.
3.7. PW-4 Sh. V.K. Malhotra was working in Dena Bank as Sr. Manager from 1997 to 1999. He has proved letter Ex. PW-4/A bearing his signature vide which certain documents have been sentn to CBI and those documents as Ex. PW-4/A1 (Colly). He has further proved certificate Ex. PW-4/C bearing signature of Sh. S.C. Rastogi.
3.8. PW-5 Sh. Prem Prakash Jain was the Director of M/s Naresh Roadlines Pvt. Ltd. He has deposed that the concern had its registered office at 2-E, Jaddu Lal Malik Road, Kolkata and it did not have any other branch nor it had any other office anywhere else. He has deposed that bilties bearing Q-42 to 45 which are Mark P-5/A to D are not pertaining to his company. He identified the four bilties mark P-5/E being genuine bilties pertaining to his company.
3.9. PW-6 Sh. Khemraj was working with M/s Shrimal CC No. 45/2008 CBI Vs. S.S. Wadhwa etc. Page 23 of 79 Transport Services and was looking after its accounts. He has deposed that company also had branches in Delhi. He proved letter Ex. PW-6/1 bearing signature of Sh. Hari SinghShriman.
3.10. PW-7 Sh. R.C. Goel was posted as Sr. Manager in Hamidpur Branch of OBC from April, 1993 to April, 1997. He proved the account opening form of M/s Shyam Tranders as Ex. PW-7/1, statement of account as Ex. PW-7/2, the noting of return of bills as Ex. PW-7/3, copy of IBC register of OBC, Hamidpur as Ex. PW-7/4, copy of dispatch register as Ex. PW-7/5, the consolidated debit voucher as Ex. PW-7/6, documents Ex. PW- 7/7 bearing signature of Sh. N.S. Kanwar. He has further proved account opening form of M/s Sameer Textiles account no. 859 as Ex. PW-7/8, copy of statement of account as Ex. PW-7/9, the debit vouchers as Ex. PW-7/10 & Ex. PW-7/11.
3.11. PW-8 Sh. K.C.Rambani was posted as Dy. Manager (Accounts & Administration) in SBI, Town Hall Branch from July, 1996 till January, 2000. He has proved letter dated 17.05.1999 from SBI, Amritsar to Inspector, CBI as Ex. PW-8/1, copy of LBC register of their branch as Ex. PW-8/2 & Ex. PW-8/3, the debit and credit slips as Ex. PW-8/4 & Ex. PW-8/5.
3.12. PW-9 Sh. K.K. Bhan was working as Sr. Manager Scale- III, OBC Katra Ahluwalia, Amritsar during May, 1999. He has proved letter bearing his signature as Ex. PW-9/A, Ex. PW-9/A1 as certified copy of extract bill of collection register (IBC) of OBC, Katra Ahluwalia, Amritsar, Ex. PW-9/A2 as dispatch register.
3.13. PW-10 Sh. V.K. Khanna was posted as Principal Scientific CC No. 45/2008 CBI Vs. S.S. Wadhwa etc. Page 24 of 79 Officer (Document) cum Assistant Chemical Examiner in May, 2000. He has proved the forwarding letter as Ex. PW-10/1 bearing signature of Director, CFSL, CBI and CFSL report as Ex. PW-10/2. He has further proved forwarding letter dated 29.05.2000 as Ex. PW-10/3 and CFSL report as Ex. PW-10/4.
3.14. PW-11 Sh. Mangesh Kumar was working in Civil Establishments Unit-I of NDMC as Clerical Assistant. As per prosecution case specimen signatures of A-1 were taken in his presence but he has not supported the prosecution case.
3.15. PW-12 Sh. Ashwani Kumar Jha was posted as Stenographer in Vigilance Department, NDMC, New Delhi. He was also attesting witness of specimen handwriting but has not supported the prosecution case.
3.16. PW-13 Sh. Manoj Wal was posted in OBC, Saket Branch from February, 1994 to February, 1996. He looked after the Loan Department of the branch when A-1 was Branch Head. He has proved the signature on debit voucher in respect of three bills as Ex. PW-13/1. He has further proved commission received UBD voucher and interest received UBD voucher of three bills as Ex. PW-13/2 & Ex. PW-13/3. He has further proved forwarding letter as Ex. PW-13/4 bearing his signature dated 20.08.1995, corresponding vouchers qua interest and commission charged and debit voucher of UBD as Ex. PW-13/5 (Colly). He has further proved vouchers as Ex. PW-13/6 & Ex. PW-13/7 in the handwriting of Ms. Manmohan Kaur Bhatia. He has further proved forwarding letter dated 16.08.1995 as Ex. PW-13/8 CC No. 45/2008 CBI Vs. S.S. Wadhwa etc. Page 25 of 79 bearing his signature, the vouchers Ex. PW-13/9 & Ex. PW- 13/10, endorsement of A-1 on account opening form of M/s Sameer Textiles as Ex. PW-13/11, noting Ex. PW-13/12 bearing his signature on the backside of transporter receipt.
3.17. PW-14 Sh. S.S. Mehra was working as Dy. General Manager, OBC (Head Office), New Delhi. He has proved his complaint as Ex. PW-14/1.
3.18. PW-15 Sh. V.M. Mittal, Dy. SP, ACB, CBI is the IO in this case. He has proved FIR as Ex. PW-15/1, statement of Sh. S.K. Gauba as Ex. PW-15/2, statement of Sh. Manoj Val as Ex. PW- 15/3, statement of Sh. Khajan Singh as Ex. PW-15/4, statement of Sh. R.C. Goel as Ex. PW-15/5, statement of Sh. K.C. Rambani as Ex. PW-15/6, statement of Sh. K.K. Bhan as Ex. PW-15/7, statement of Sh. Tarsem Singh as Ex. PW-15/8, statement of Sh. O.P. Sharma as Ex. PW-15/9, statement of Sh. V.K. Malhtora already Ex. PW-4/C, statement of Sh. Prem Krakash Jain as Ex. PW-15/10 and statement of Sh. Khem Raj as Ex. PW-15/11. He has further proved specimen handwriting sheet of A-1 as Ex. PW-15/12. He has also proved seizure memo Ex. PW-15/13 vide which documents were from Sh. K.C. Rambani, seizure memo Ex. PW-15/14 vide which documents were seized from A-6, seizure memo Ex. PW-15/15 vide which documents were seized from Sh. Prem Prakash Jain, seizure memo Ex. PW-15/16, Ex. PW-15/17, Ex. PW-15/18 & Ex. PW- 15/19 vide which documents were seized from OBC, Hamidpur, seizure memo Ex. PW-15/20 & Ex. PW-15/21 vide which CC No. 45/2008 CBI Vs. S.S. Wadhwa etc. Page 26 of 79 documents were seized from Sh. S.K. Gauba and seizure memo Ex. PW-15/22 vide which documents were seized from Sh. Khemraj.
3.19. PW-16 Sh. Jagdish Prasad, Assistant General Manager has worked with OBC since June, 1981. He has proved Ex. PW- 16/1 i.e. attested copy of Chapter-II relating to handling of fresh loan proposals, Ex. PW-16/2 relating to Chapter-III of documentation for fresh advances and circular dated 13.11.1995 as Ex. PW-16/3.
STATEMENTS OF ACCUSED PERSONS 4.0. On the basis of incriminating evidence against the accused persons their statements u/s 313 Cr.P.C were recorded giving opportunity to them to explain it.
4.1. A-2 denied the entire evidence against him and took the defence of false implication stating that he has only followed the bank procedure and has paid the bank payment and interest to the bank. He has opted not to lead any defence evidence.
4.2. A-4 also denied the entire evidence against him and took the defence that he neither aware of any kind of transaction between M/s Shyam Traders with other co-accused nor of any bank or of alleged credit facilities. He has also opted not to lead any defence evidence.
4.3. A-5 also denied the entire evidence against him. He took the defence that he is neither aware of any kind of transaction between accused persons nor of any bank or of alleged credit CC No. 45/2008 CBI Vs. S.S. Wadhwa etc. Page 27 of 79 facility. He also opted not to lead any defence evidence.
4.4. A-6 has also denied the evidence against him. He has taken the defence that he has not done anything wrong. Neither he nor his family members ever had any account in OBC Branch at any point of time. He had also not visited OBC Saket Branch. He also opted not to lead defence evidence.
4.5. A-7 also denied the entire evidence against him. He took the defence that he has been vicitm in the hand of CBI and over jealous officers of CBI and bank. PW-1, PW-7 and PW-13 in their testimonies have highlighted the facts and he has been a victim and has not hatched any conspiracy with anyone. Neither he is a beneficiary nor a participant in this matter. It was his first transaction with Bhatia group, therefore, question of conspiracy does not arise. He also opted not to lead any defence evidence.
4.6. A-11 also denied the entire evidence against him and took the defence that he has been falsely implicated in this case and he has not conspired with anyone at any point of time.
DEFENCE EVIDENCE BY A-3 5.0. In defence evidence A-11 examined himself as DW-1 after seeking permission u/s 315 Cr.P.C. In his defence has proved his election ID Card as Ex. DW-1/1, copy of the rent agreement Mark DW-1/A, copy of the appointment letter dated 05.07.1994 as Ex. DW-1/2, copy of the receipt and bilty dated 22.07.1994 as Ex. DW-1/3, the acknowledgement letter issued by landlady regarding clearance of dues as Ex. DW-1/4, copy of CC No. 45/2008 CBI Vs. S.S. Wadhwa etc. Page 28 of 79 the letter written by Branch Manager, Dena Bank, Chandni Chowk as Ex. DW-1/5 & Ex. DW-1/6, UPS and postal receipts as Ex. DW-1/7 & Ex. DW-1/8, copy of the receipt and delivery letter vide which he sold his scooter as Ex. DW-1/9, copy of the letter dated 27.10.1994 written by him to Branch Manager, Dena Bank, Chandni Chwok requesting him to send copy of statement of account alongwith balance amount as Ex. DW-1/10, copy of his ration card of Amritsar as Ex. DW-1/11, his letter dated 15.09.1995 to Branch Manager, Dena Bank, Chandni Chowk as Ex. DW-1/12, the acknowledgement card Ex. DW-1/13, his another letter dated 28.10.1995 to Branch Manager, Dena Bank, Chandni Chowk as Ex. DW-1/14, copy of his bank statement and deposit slip with UBI, Lawrence Road, Amritsar as Ex. DW-1/15 and his letter dated 30.10.2000 as Ex. DW-1/16.
ARGUMENTS 6.0. Heard arguments of Sh. Anil Tanwar, Ld. PP for CBI, Sh. Bhishm Narain Singh, Ld. Counsel for A-2, A-4, A-5 & A-8, Ms. Vandana Kumar, Ld. Counsel for A-6, A-7 & A-10 and Sh. Deepak Arora, Ld. Counsel for A-11. Perused the written submissions and authority relied by the parties.
6.1. Ld. PP for CBI has submitted that A-1 being incumbent incharge of the branch had conspired with other co-accused persons who were running different companies/firms to give them credit on the basis of fake bills. It has been stated that these all bills were accommodational in nature and in fact no goods were supplied against these bills. It has been stated that the drawer CC No. 45/2008 CBI Vs. S.S. Wadhwa etc. Page 29 of 79 companies/firms as well as drawee companies/firms were in agreement with each other and it was due to this reason that when intimation was given by the bank of the drawee, no company/firm deposited the amount of the bills in their banks. It has been stated that A-1 in conspiracy with other co-accused persons exceeded his power in giving overdraft and crediting the bills beyond the limit for that particular account. It has been stated that from the evidence which has come on record it stands established that the bank of the drawee firm had given due intimation to the companies/firms but despite that they did not come forward to deposit the bill amount which reflects that they were in agreement with the drawer companies/firms who had submitted the bills with the OBC, Saket, Delhi. It has been stated that the prosecution has been able to prove its case beyond reasonable doubt against the accused persons.
Written Submissions on behalf of accused persons 7.0 Ld. Counsel for A-4 & A-5 has stated that prosecution has failed to lead any evidence to establish even prima facie that A-4 & A-5 were part of any conspiracy or they have forged any document to cheat the complainant. It has been stated that the said transaction between co-accused persons and complainant bank had occured in normal course of business. A-4 & A-5 have ordered goods under a verbal contract as per section 5(2) of Sales & Goods Act. It has been stated that prosecution has failed to bring any evidence on record to establish if A-4 & A-5 had got any benefit from this alleged conspiracy. It has been stated that it is the CC No. 45/2008 CBI Vs. S.S. Wadhwa etc. Page 30 of 79 admitted case of the prosecution that A-4 & A-5 are neither author of the document i.e. hundis, bills and TRs nor availed any discounting facility from the bank. It has been stated that prosecution has failed to prove if any internal inquiry or audit was done by complainant Bank before filing the complaint which is one of the necessary requirement. It has been stated that from testimony of PW-1 and PW-14 it is clear that complainant has intentionally and deliberately not filed audit report alongwith complaint which is a mandatory provision of law. It has been stated that investigation is shoddy. It has been stated that PW-9, PW-11 & PW-12 who are the attesting witnesses to the specimen handwriting of A-1 have specifically stated that handwriting of A-1 was not taken in their presence and they were made to sign subsequently. It has been stated that the prosecution witnesses have supported the defence taken by these accused persons. It has been stated that at no point of time these accused were intimated by their bank i.e. OBC, Hamidpur about any Bills and even prosecution has failed to establish this fact against these accused persons. It has been stated that even PW-1 who is the star prosecution witness has stated that all the transactions have taken place in routine course of business. It has been stated that PW-7 & PW-8 have admitted that a written intimation is sent to the consignee but prosecution has failed to establish if any written intimation was ever received by these accused persons. It has been stated that PW-8, PW-9 & PW-13 the officials of OBC, have explained the procedure of bill discounting and as per procedure these accused had no role to play in bill discounting claimed by CC No. 45/2008 CBI Vs. S.S. Wadhwa etc. Page 31 of 79 other accused persons.
7.1. Ld. Counsel for A-6, A-7 & A-10 has stated that names of these accused persons are not figuring in the FIR. It has been stated that no document has been procured showing conspiracy by these accused with the other co-accused and they were not authors of any alleged document i.e. hundis, bills and TRs stated to have been submitted by other accused while seeking bill discounting from complainant bank. It has been stated that investigation conducted by CBI is shoddy as PW-2, PW-9, PW-11 & PW-12 have not supported the case of prosecution. It has been stated that none of the documents filed by prosecution alongwith the charge sheet were seized from the possession of these accused. It has been stated that these accused were not enjoying any bill discounting facility from the complainant bank and none of them were authors of the bills, hundis and TRs of this case. It has been stated that accused have only ordered goods verbally which is a valid contract as per section 5(2) of Sales & Goods Act. It has been stated that written intimation was required to be given to consignee as per the prosecution witness but prosecution has failed to produce any document to establish this fact.
7.2. Ld. counsel in support of her contentions has also relied upon the following judgments:-
(I) American Express Bank Ltd. Vs. Calcutta Steel Co. & ors. [(1992) 2 SCC 199], (ii) Jagjivan Mavji Vithlani Vs. M/s Ranchhoddas Meghji [1954 AIR 554], (iii) Karam Chand Thapar & Brothers Vs. Central Bank of India & ors. [2005(1) MHLJ 82], (iv) K. K. Vijayachandran & anr. Vs. The Superintendent of Police & anr. [Judgment dated 29.9.2006 of Hond'ble Kerala High Court in CRL. A. No. 1102/2005 (indiankanoon.org/doc/913499], (v) Haroon Ismail Vs. State CC No. 45/2008 CBI Vs. S.S. Wadhwa etc. Page 32 of 79 [Judgment dated 7.1.2014 of Hon'ble Madras High Court in Criminal Appeal Nos. 161, 141, 171 & 312 of 2012], (vi) Kehar Singh & ors. Vs. State (Delhi Admn.) [AIR 1988 SC 1883], (vii) Sushila Devi Vs. Rajendra Rathore & anr. [ Judgment dated 26.10.2012 of Hon'ble Rajasthan High Court in Crl. Rev. No. 618/2012 (indiankanoon.org/doc/ 85658963], (viii) Esher Singh Vs. State of Andhra Pradesh [Judgment dated 15.3.2004 of Hon'ble Apex Court in Appeal (Crl.) 1363 of 2003 (indiankanoon.org/doc/ 1136663], (ix) State of Maharashtra etc. Vs. Som Nath Thapa etc. [AIR 1996 SC 1744], (x) Surajit Sarkar Vs. State of West Bengal [Judgment dated 4.12.2002 of Hon'ble Apex Court in Crl. Appeal No. 2026 of 2009 (indiankanoon.org/doc/99071641], and (xi) Ganga Singh Vs. State of Madhya Pradesh [Judgment dated 4.7.2013 of Hon'ble Apex Court in Crl. Appeal No. 1118 of 2004 (indiankanoon.org/doc/115564649].
7.3 Sh. Bishm Narayan Singh, Ld. Counsel for A-2, A-8 & A-9 has stated that no evidence has come on record that these accused have forged any document or conspired with other co-accused. It has been stated that these accused availed discounting of bill facility from complainant bank by submitting genuine bills of the goods ordered by A-4, A-5, A-6, A-7 & A-10 accompanied with TRs and hundis. It has been stated that these accused have complied with all bank norms, it was a civil liability and they have later on paid the said loan amount to complainant bank at DRT and matter was settled. It has been stated that it has come in the statement of PW-1 that a letter was sent from bank to CBI to withdraw the matter since the same has been settled in DRT. It has been stated that no internal inquiry or audit report was produced before the court which is a mandatory condition before making complaint by the bank to the CBI. It has been stated that PW- 5 & PW-6 have nowhere stated if these accused persons have forged any of the document and they have only stated that their TRs are red CC No. 45/2008 CBI Vs. S.S. Wadhwa etc. Page 33 of 79 but receipts filed in the bank are black in colour. It has been stated that as per statements of PW-1 & PW-13 who are officials of the bank it was responsibility of loan officer of the bank to check the ID number of the TR. It has been stated that loan officer of the bank might have checked these receipts and found the same to be genuine. It has been stated that investigation is shoddy as PW-2, PW-9, PW-11 & PW-12 have not supported the case of prosecution. It has been stated that for getting the goods transported, the consignor depends upon its staff and same was done in this case.
7.4. It has been submitted on behalf of A-11 that he has been falsely implicated in this case and CBI has miserably failed to prove any nexus or conspiracy in any manner amongst him and other co- accused persons. It has been stated that he has never placed any order either in writing or orally with M/s Jai Durga Textiles as promoter of this firm were not known to him. It has been stated that he was not doing any business at the relevant time when the offence has been stated to have been committed as in October, 1994, he was in Amritsar and doing doing a job. It has been stated that the procedure of UBD has been explained by PW-13, which clearly shows that A-11 has nothing to do with the facility of UBD being provided by the bank of the drawer to drawer. It has been stated that allegations against accused are regarding bills no. JD7/94 , JD 8/94 and JD 9/94 but PW-1 during his cross-examination has stated that he cannot say whether these bills were sent for collection to Dena Bank, Chandni Chowk. It has been stated that PW-4 who was Senior Manager, Dena Bank, Chandni Chowk has stated that party was sent reminder on 28.10.1995 but prosecution has failed to bring CC No. 45/2008 CBI Vs. S.S. Wadhwa etc. Page 34 of 79 any document on record to show how and in what form the reminder was sent. It has been stated that question of sending reminder would come only if any written intimation had been sent and prosecution has failed to produce any document to suggest that A-11 was ever sent any written intimation of bill no. JD 7/94. It has been stated that PW-4 has stated that bills JD 8/94 and JD 9/94 were never received in the branch. It has been stated that A-11 had been residing in Delhi in a tenanted premises in the year 1994. He got offer for a job in Amritsar in th combination e month of July, 1994 and shifted there on 23.7.1994 alongwith his family. He had written letters to Dena Bank, Chandni Chowk for closing of his account and ultimately his account was closed on 25.9.1995. It has been stated that while deposing as DW-1, A-11 has been able to establish his defence.
APPRECIATION OF EVIDENCE 8.0. It is well settled that criminal conspiracy is often hatched in secrecy and for proving the offence substantial direct evidence may not be available. An offence of criminal conspiracy can also be proved by circumstantial evidence. However, it cannot be deemed to have been established on mere suspicion and surmises or inferences which are not supported by cogent evidence. Where the prosecution case rests merely on circumstantial evidence, the fact established should be consistent only with the hypothesis of the guilt of the accused, that is to say, they should not be explainable on any other hypothesis except that the accused is guilty. However, on the basis of evidence led CC No. 45/2008 CBI Vs. S.S. Wadhwa etc. Page 35 of 79 by prosecution, if two views are possible, one pointing to the guilt of the accused and other to his innocence, the one in favour of the accused must be accepted. In this regard, reference can be made to Saju Vs. State of Kerala (2001) 1 SCC 378, Sherimon Vs. State of Kerala, (2001) SCC 678, P.K. Narayanan Vs. State of Kerala, (1995) 1 SCC 142, State of M. P. Vs. Sheetla Sahai, 2009 Cr. L. J. 4436.
8.1. The essence of conspiracy is unlawful combination and the complicity of the accused has to be decided after considering all the circumstances proved, before during and after occurrence. Agreement between the conspirators may also be proved by necessary implication. It is not necessary that each member of a conspiracy must know all the details of the conspiracy. Facts established should be consistent only with the hypothesis of guilt of the accused. It does not mean that each and every hypothesis suggested by accused must be excluded by proved facts. In this regard, reference can be made to Chaman Lal Vs. State of Punjab, AIR 2009 SC 2972, R. K. Dalmia Vs. The Delhi Administration, AIR 1962 SC 1821, Muriappan Vs. State of Tamil Nadu, AIR 2010 SC 3718 and Firozuddin Basheeruddin Vs. State of Kerala, (2001) 7 SCC 596.
8.2. The procedure/prace of bill discounting has been explained by PW-1. As deposed by him as per procedure seller of goods raises a bill on the purchaser. Then the seller brings the CC No. 45/2008 CBI Vs. S.S. Wadhwa etc. Page 36 of 79 bill to the bank for discounting purposes. If the bill is payable by the purchaser after a specified period of time, the bank would pay to the seller the bill amount after deducing its commission and interest. Then bank would redeem the bill amount from the original purchaseer within the specified period of time. The purchasing bank would secure payment of bill through the bank of original purchaser. The seller of goods provides name of the bnk of the purchaser and execute hundi at the time of producing his bill for discounting purposes. In case goods are sent out of station, a Transport Receipt (TR) is also submitted by the seller before the bank along with the hundi and the bill.
8.3. The procedure has been further explained by PW-13 Manoj Wal, officer of OBC who remained posted in OBC Saket branch from Feb. 1994 to Feb. 1996. He has deposed that loan by a bank consists of different facilities, i.e. Term Loan Facility, Cash Credit, Bill Discounting, Overdraft, Bank Guarantee (Non- fund based) etc. Regarding granting Cash Credit Facility, to a customer, he has deposed that current account has to be opened in the concerned branch by the customer. The current account must be operated satisfactorily for a minimum period of six months, then the customer apply for Cash Credit Facility (CC) by submitting loan application. Financial statements for the preceding three years along with statements of any other account, security in the form of FDR/Govt. Security/property covering requirement of the facility have to be furnished along with application form. Application along with documents is then put up before Branch In-charge. If Branch Incharge is satisfied, CC No. 45/2008 CBI Vs. S.S. Wadhwa etc. Page 37 of 79 he sends the application and the documents for processing the loan to loan department. The process note is then prepared in the loan department. Legal opinion is also taken by the loan department from the legal retainer on the panel of the bank regarding property documents put up along with the application. Legal retainer issues a non-encumbrance certificate. Valuation of the property is got done from the Government approved valuer, thereafter, process note is prepared and if everything is found in order, the application is forwarded for being sanctioned to the designated competent officer.
8.4. Regarding the concept of group company or sister concern, PW-13 has deposed that in case any partner or director of the company is also a partner or director of any other company, the companies are called as group companies or sister concern. The Branch In-charge does not have power to grant CC limit in respect of such group companies and the matter has to be dealt with the Regional Officer after recommendation of the Branch In-charge.
8.5. PW-13 has further elaborated procedure for discounting on demand (DD). He has deposed that when the matter in respect of DD is put up before the Branch Incharge, in case he is satisfied, he can directly order for DD without referring the matter to loan department. Interest/commission is charged on the discounted instrument by the bank. The balance is credited to the account of the customer. Normally cheques are discounted/purchased under DD. In case of regular customer, CC No. 45/2008 CBI Vs. S.S. Wadhwa etc. Page 38 of 79 DD limit is sanctioned by the Branch Incharge/Regional Office/Head Office. DD can be granted within the sanctioning financial limit in that regard. Due to lapse of time, he cannot tell the exact financial powers of the Branch In-charge during the period 1994 to 1997 but perhaps it was around 7.50 lakhs.
8.6. Regarding Usance Bill (UBD), this witness has deposed that in case bills are sent by A to B, A can approach his bank for UBD. A produces the bill/invoice along with transporter receipt before his bank. A's bank after charging commission/interest credit the balance bill amount to his account. The transporter should be authorised transporter of A's bank. Before UBD, confidential report regarding credit worthiness is taken from B's bank. In case Branch In-charge of A's Bank is satisfied about the credit worthiness, he can discount the bill even without verifying the credit worthiness of B. For this balance sheet, statement of account, value of properties, declared assets and liabilities of A has to be taken into account by the Branch In- charge. For UBD for a fixed period, bill discounting agreement is entered into in this regard between A and his bank. If payment is not received from B or his banker, reminder is issued by A's bank to B's bank. In case payment is still not received, A is informed by his bank about non-receipt of payment and he is directed to arrange for the payment or making the payment himself. In case A still does not make any payment, his bank would automatically debit his account and raise the liability of the bill amount in his account. A would then be called upon to deposit the amount immediately. The relevant entry in that regard is duly made in CC No. 45/2008 CBI Vs. S.S. Wadhwa etc. Page 39 of 79 bank's register.
8.7. He has further deposed that in case of CC Limit powers of Branch In-charge between 1994-97 was Rs. 7.5 lakhs, while UBD Limit was Rs. 5 lakhs. The Branch Manager could exceed these limits only after seeking sanction in this regard from the higher authorities.
8.8. This witness has further elaborated the procedure of discounting Hundi. As per him in case A has a satisfactory account with the bank and presents Hundi for discounting, the Branch Manager if found account to be satisfactory for this purpose allows discounting the Hundi. The amount, after discounting the Hundi, i.e. after deducting commission and interest, is credited in the account of A. If the Hundi is in favour of B, before discounting it, Branch Manager would call for a confidential report from the Branch Manager of B. After the amount is credited in the account of A, Hundi is sent for collection to B's bank. In case of inter state business, bill and transporter's receipt are accompanying the Hundi when sent to other bank for collection. In case B does not sign the Hundi, Hundi would return to banker of A as unpaid. On receipt of the discounting Hundi, banker of B would inform him about the Hundi. B would approach his bank for obtaining authority letter for release of goods along with Hundi and on basis thereof, he would get the goods released from the transporter and sign the Hundi in token of having received the goods. The goods would be released by the transporter only after B has put his signatures CC No. 45/2008 CBI Vs. S.S. Wadhwa etc. Page 40 of 79 on the Hundi as well as on the authority letter. In case B refuses to sign Hundi, goods would not be released to him. In such a case, Hundi would be sent back uncollected to A's bank which would then debit the amount from A's account. When Hundi is received in the bank for discounting purpose, it is duty of the loan officer to check IBC number on the transporter's receipt. In case Branch Manager himself orders for discounting of the Hundi, the IBC number is not checked by the loan officer. The transporter should be approved as per list of A's bank.
8.9. There are 4 sets of bills stated to have been submitted by M/s Uma Fabrics Pvt. Ltd. (A-8) through A-2, M/s Shiva Fabrics through its proprietor A-3 Ravinder Bhatia (deceased), Shiva Tapes (P) Ltd. (A-9) and A-4 being propreitor of M/s Jai Durga Textiles with A-1 (branch incumbent), Branch Manager of OBC Saket.
Bills submitted by A-8 for discounting 8.10. The relevant details of A-8 (drawer company) and drawee firms for better appreciation of facts are mentioned in chart as follows:-
S. Bill Drawer Amount Drawee Date of Date of Date of No. No. Company Firm/Bank Purchase return Reversal in the account drawer
1. 121448.00 31.5.95 19.12.95 21.12.95 UF- Uma Surya Fabrics P. Synthetic/ 17/95 Ltd. SBI Town Hall, Amritsar CC No. 45/2008 CBI Vs. S.S. Wadhwa etc. Page 41 of 79
2. 176120.00 -do- -do- -do-
UF- -do- -do- 18/95 3. 166268.80 -do- -do- -do- UF- -do- -do- 19/95 4. 142970.88 20.8.95 21.11.95 3.3.96 UF- -do- Shyam 20/95 Traders/O BC, Hamidpur, Amritsar 5. 157812.40 -do- -do- 3.9.96 UF- -do- -do- 21/95 6. 127770.80 -do- -do- 3.9.96 UF- -do- -do- 22/95 7. 97386.50 -do- -do- 3.3.96 UF- -do- -do- 23/95 8. 15973480 24.8.96 11.11.95 3.12.95 UF- -do- -do- 24/95
8.11. As per Ex. PW-1/5 i.e. process note, A-8 was sanctioned C/C limit of Rs. 7.5 lakhs and bill discounting facility to the tune of Rs. 5 lakhs. As per PW-1 after sanctioning the aforesaid facility to A-8, A-1 had converted its current account no. 1608 to CC Account No. 59. Ex. PW-1/1 is the account opening form which is signed by A-2 being Director of A-8.
8.12. The case of the prosecution is that drawer and drawee CC No. 45/2008 CBI Vs. S.S. Wadhwa etc. Page 42 of 79 firms were in conspiracy with each other for cheating the bank, it was due to this reason these bills, hundies and fake Transport Receipts were submitted by the drawer with the bank. It has been stated that being in agreement with A-8, A-1 gave discounting of these bills and credited requisite amount in the account of A-8. It has been stated that proprietor of M/s Sham Traders is A-4 and he is also one of the Director of A-8 which throws light on the conspiracy amongst them. It has been further stated that A-4 was also proprietor of M/s Jai Durga Textiles having its office at Chandni Chowk, Delhi and has taken discounting of three bills against drawee firm M/s Digvijay Enterprises run by A-11 as its proprietor.
8.13 On the other hand, Ld. counsel for accused have submitted that prosecution has failed to prove that proprietor of M/s Sham Traders, i.e. A-4 was the other director of A-8. It has been stated that under routine course of transaction of business, A-6 and A-7 being partners of M/s Surya Synthetics and A-4 being proprietor of M/s Sham Traders have placed verbal orders for supply of material with A-8 which is permissible under Sales of Goods Act.
It has been stated that no information was received by these firms from their bank, due to this reason, they could not get the Transport Receipt from their bank released after depositing the requisite money.
8.14 As per Ex. PW 7/1, i.e. application form for opening of current account of M/s Sham Traders, Sham Kakkar is shown as its proprietor having business address as 494, Katra Safed, Gali CC No. 45/2008 CBI Vs. S.S. Wadhwa etc. Page 43 of 79 Chicharan, Amritsar. Ex. PW 1/3 is the loan application form of A-
8. Name of one of its director is Sham Sunder son of Roop Lal. Ex. PW 1/4 is the Annexure-I submitted along with the loan application form Ex. PW 1/3, wherein address of Sham Sunder is mentioned as Katra Safed, Amritsar. The address of A-4 matches with the address of Sham Sunder who is one of the directors of A-8. In the account opening form Ex. PW 7/1 of M/s Sham Traders name of the proprietor is Sham Kakkar. The name of A-4 is mentioned in the charge sheet as Sham Sunder Kakkar. In Ex. PW 1/3 and Ex. PW 1/4 name of the director of A- 8 is mentioned as Sham Sunder. From this evidence, the obvious inference is that A-4 was also director of A-8 at the relevant time.
8.15 The first three bills are in favour of M/s Surya Synthetics having A-6 & A-7 as its partners. The first three pay-in-slips/bills no. 17/95, 18/95 & 19/95 are for outstation bills lodged by A-8 with OBC Saket, accompanying Hundies and Transport Receipts are proved by PW-1 as Ex. PW 1/7 to Ex. PW 1/15. As per the deposition of PW-1, these three bills were sent to OBC Katra Ahluwalia Branch, Amritsar from OBC Saket branch for realization of the amount from the banker of M/s Surya Synthetics, Amritsar. PW-1 has deposed that A-1 has allowed discounting of these bills under his initials. He has also identified the initials of A-1 on three bills. Ex. PW 1/15-A is the letter sent from OBC Saket to OBC Katra Ahluwalia, Amritsar. Ex. PW 1/15- B is the letter dated 6.12.1995 of State Bank of India, Katra Ahluwalia branch returning three unpaid bills on 6.12.1995 to CC No. 45/2008 CBI Vs. S.S. Wadhwa etc. Page 44 of 79 OBC Katra Ahluwalia Amritsar since payment against the bills was not received from M/s Surya Synthetics.
8.16 The five bills from serial no. 4 to 8 in the Chart above were also submitted by A-8 with OBC Saket for discounting. The drawee firm against these bills is M/s Sham Traders promoted by A-4. The bills no. 20/95 to 23/95 are proved by A-1 as Ex. PW 1/16 to Ex. PW 1/19. These four bills were sent to OBC branch, Hamidpur, Amritsar for realization along with forwarding letter dated 20.8.1995 which is mark P-1/L. The bill no. 24/95 was also sent to OBC Hamidpur, Amritsar vide forwarding letter mark P- 20/A-2. Mark 20/A is the Hundi and mark 20/A-2 is the Transport Receipt for this bill. PW-1 has further deposed that these five bills were discounted by A-1 and he has put his initials on each bill in this regard.
8.17 Ex. PW 13/3 is the ledger of CC Account No. 59 of A-8, as per PW-1 the various credit and debit entries, in regard to the amount of the discounted bills, after deducting commission and interest by the bank are shown in it. It is relevant to mention here that it is not disputed by the accused persons that these eight bills were submitted by A-8 for discounting and credit pertaining to these bills was given to it and after bills were received back as dishonored, the requisite amount was debited from their account. However, it is disputed by A-4 on behalf of M/s Sham Traders and A-6 and A-7 on behalf of M/s Surya Synthetics that any intimation was received regarding these bills from their bank due to which these bills remained unpaid. It is CC No. 45/2008 CBI Vs. S.S. Wadhwa etc. Page 45 of 79 further stated that verbal orders were placed by them with A-8 regarding the goods sent by A-8 to Amritsar.
8.18 PW-7 who remained posted as Senior Manager, Hamidpur Branch of OBC between April 1993 to April 1997, has deposed regarding account of M/s Sham Traders with the said branch and receiving of bills Ex. PW 1/16 to Ex. PW 1/19 for realization. He has further proved statement of account of M/s Sham Traders as Ex. PW 7/2 and has deposed that there is no corresponding debit entry in this account towards realization of the bills.
8.19 PW-8 K.C. Rambani was posted as Deputy Manager (Accounts & Administration) in SBI Town Hall Branch, Amritsar. This is the drawee branch regarding three bills of M/s Surya Synthetics. He has deposed that after bill is received by Deputy Manager (Cash), he sends his cashier to the party concerned for showing the party Hundi received. The party may accept or refuse the Hundi. In case party refuses to make payment in respect of the Hundi, the bill has to be sent back to the bank from where the bill has arisen and received in the branch. Town Hall branch was the main branch of SBI. He has deposed that the Hundi Ex. PW 1/8, Ex. PW 1/11 and Ex. PW 1/14 bears rubber stamp of their banks at point mark 'X'. He has exhibited LBC register of their branch as Ex. PW 8/2 and Ex. PW 8/3 containing relevant entries dated 17.7.1995. He deposed that all the three bills had returned unpaid. The entry mark-R denotes "returned unpaid".
CC No. 45/2008 CBI Vs. S.S. Wadhwa etc. Page 46 of 798.20 One of the contention raised on behalf of A-4, A-6 and A-7 is that as per the procedure written intimation of the bills received was required to be given to the drawee but no such evidence has been brought on record by the prosecution. It has been further contended that though it stands admitted by PW-7 and PW-8 that bills received from OBC Saket were accompanying Hundies and Transport Receipt but prosecution has failed to bring these documents on record. It has been reiterated on behalf of these accused that verbal order was given by them to A- 8 for supply of goods but the goods could not be received by them as they did not receive any information from the bank for getting the Transport Receipt released after depositing the money.
8.21 On the other hand the contention of the prosecution is that all these bills were accommodational in nature, in fact no goods were supplied, and PW-5 and PW-6, who are the owners and agent of M/s Naresh Road-lines Pvt. Ltd. have categorically stated that the Transport Receipts filed by A-8 are fake. It has been stated that the Hundies and Transport Receipts pertaining to bills no. 20/95 to 23/95 were not even available in the bank. It has been stated that A-1 being the Branch Manager of OBC Saket has manipulated all these documents to the benefit of accused persons and to the detriment of the bank.
8.22 To prove that various Transport Receipts filed by A-8 with the bills are fake, prosecution has examined two witnesses, i.e. PW-5 and PW-6. PW-5 Sh. Prem Prakash Jain director of M/s CC No. 45/2008 CBI Vs. S.S. Wadhwa etc. Page 47 of 79 Naresh Road-lines Pvt. Ltd. has deposed that their company had registered office at Calcutta and had branch office in Jaipur. Their company had been approved by Indian Bank Association. As per their business procedure whenever a party used to come to load its goods for transportation to some other place, a bilty (Transport Receipt) used to be issued to the party at booking office. After delivery of the consignment to the party concerned at the delivery point, the Transport Receipt used to be taken back. Their IBA Code No. is CAN 806. This code number finds mention in all their genuine Transport Receipts. After seeing the Transport Receipt Ex. PW 1/9, Ex. PW 1/12, Ex. PW 1/15 and mark P-20/A-2, he has stated that these does not pertain to their company. Their company does not use the Transport Receipt form which is used in these receipts. The code No. CAN 806 is found mentioned on their all genuine Transport Receipts but not found mentioned on the receipts seen by him in the court. He has further deposed that the Transport Receipt collectively marked P-5/E are their genuine receipts. Their agent Shri Mal Transport Services had its office at Jaipur and Delhi. They used to mutually share their business as they used to transport goods booked by the other on reciprocal basis. They used to issue their Transport Receipt in respect of goods booked by Shri Mal Transport Services but transported by them and vice versa.
8.23 PW-6 Sh. Khem Raj was working with M/s Shri Mal Transport Services in the year 1999. He deposed that the company had also branches in Delhi, Indore and Bhuranpur. The company used to work on behalf of M/s Naresh Road-lines which CC No. 45/2008 CBI Vs. S.S. Wadhwa etc. Page 48 of 79 had its head office at Jaipur. As they were working as agents of M/s Naresh Road-lines, they also used to use the Transport Receipts of M/s Naresh Road-lines in respect of goods booked on behalf of M/s Naresh Road-lines. He has further deposed that Transport Receipts Ex. PW 1/9, Ex. PW 1/12, Ex. PW 1/15 and mark P-20/A-2 are not the original receipts of M/s Naresh Road- lines. The original receipts have their name printed in black colour and also carry IBA Code number of the said company. He has also identified the receipts mark P-5/E as the original receipts of M/s Naresh Road-lines.
8.24 It has been contended on behalf of A-8 that normally goods are booked with a transport company by the employees, as a result of that the directors of the company will never come to know if the Transport Receipts are genuine or not. It has been stated that PW-13 the official of OBC Saket, at the relevant time, had signed on the back of these receipts as a token of verification. It has been stated that merely because as stated by PW-5 and PW-6 the colour of their Transport Receipts was different from the Transport Receipts filed by A-8 with the bank,it do not get established that Transport Receipts filed by A-8 are fake. It has been contended that PW-6 has admitted to be aware about booking of goods by M/s Uma Fabrics (A-8) and Shiva Tapes from Delhi office, which proves that these Transport Receipts filed by A-8 with OBC Saket were genuine and prosecution has failed to prove its case beyond reasonable doubt.
CC No. 45/2008 CBI Vs. S.S. Wadhwa etc. Page 49 of 798.25 PW-5 and PW-6 have given following reasons for observing that the Transport Receipts Ex. PW 1/9, Ex. PW 1/12, Ex. PW 1/15 and mark P-20/A-2 are fake:-
(i) the IBA Code number is not found mentioned on the Transport Receipt filed with the bank,
(ii) the consignment note number on their Transport Receipt is printed while it is handwritten on the receipt filed with the bank,
(iii) as per IBA rules there name and notice on their receipt printed in black ink and not in red as in the receipts filed with the bank.
8.26 PW-13 has identified his signatures on the back side of the Transport Receipts Ex. PW 1/9, Ex. PW 1/12, Ex. PW 1/15 and mark P 20/A-2. It has been contended on behalf of A-8 that PW-13 has admitted that it was the duty of the loan officer to check IBC number on the Transport Receipt and the signature of PW-13 on the back of these Transport Receipts proves that he had checked the genuineness of these Transport Receipts, therefore, the plea of the prosecution that these Transport Receipts are fake cannot be sustained.
8.27 Why PW-13 had signed on the back of these Transport Receipts. He himself has explained by stating that the same was done by him as the goods being sent after discounting of the bill come under lien of bank and collecting bank has to remit the payment to the Discounting Bank/Authorized Branch and in such manner the Authorized Branch becomes the consignee of the goods. Name of the said Bank Branch should be mentioned as CC No. 45/2008 CBI Vs. S.S. Wadhwa etc. Page 50 of 79 consignor in the Transport Receipt. No physical verification of the transported goods is done by the Discounting Branch. Further during his cross-examination he has stated that as and when Hundi is received in the Bank Branch for discounting purpose, it is the duty of the loan officer to check IBC number on the Transport Receipt in case it is accompanying Hundi. He has further stated that this is so only in case where the matter is recommended for consideration by the Branch Manager. In case the Branch Manager himself orders for the discounting of the Hundi, the IBC number is not checked by the loan officer.
8.28. From the statement of PW-13 it is clear that his signing on the back of the Transport Receipts does not mean that he has verified the genuineness of these receipts and has physically verified the goods stated to be transported through these receipts. He has signed on the endorsement, i.e. "Pay/deliver to the order of M/s State Bank of India Town Hall Amritsar", on the back of Transport Receipts Ex. PW 1/9, Ex. PW 1/12, Ex. PW 1/15. On receipt mark P-20/A-2 he has signed on the endorsement, i.e. "Pay/deliver to the order of Oriental Bank of Commerce, Hamidpur, Amritsar".
8.29. PW-6 has stated that he is aware about booking of goods of M/s. Uma Fabrics and M/s.ShivaTape Pvt. Ltd. from Delhi office but he is not aware if goods of M/s Sameer Textiles had also been booked from their Delhi office. This shows that A-8 used to deal with M/s Naresh Road-lines Pvt. Ltd. through their agent Shrimal Transport Services by booking the goods for CC No. 45/2008 CBI Vs. S.S. Wadhwa etc. Page 51 of 79 transportation. PW-6 has not stated specifically if any goods on the basis of these alleged take receipts Ex PW 1/9, Ex. PW 1/12, Ex. PW 1/15 and Mark P-20/A-2 were booked by A-8 with them.Therefore, prosecution is held to have proved beyond reasonable doubt that these Transport Receipts were fake.
8.30 Regarding the procedure of giving intimation by the bank of drawee firm to the drawee firm, let us see what evidence prosecution has brought on record. PW-7 was Senior Manager at Hamidpur branch of OBC during the relevant period. OBC Hamidpur, Amritsar was the bank of the drawee firm, i.e. M/s Sham Traders. During his cross-examination, PW-7 has stated that intimation to the party concerned was in writing. But prosecution has failed to file any such written intimation on record. PW-8 remained posted as Deputy Manager, SBI Town Hall Branch, Amritsar from July 1996 to Jan. 2000. This branch was the bank of the drawee firm, i.e M/s.. Surya Synthetics. Regarding the procedure, PW-8 has deposed that after bill is received by Deputy Manager, he sent his cashier to the party concerned for showing the party the Hundi received. The party may accept or refuse the Hundi. During his cross-examination he has admitted that as per the banking procedure written intimation about due date by which payment has to be made is required to be sent to the party liable to make the payment.
8.31 To support his contention that due intimations of these bills were sent to M/s Sham Traders, Ld. PP has relied upon Ex. PW 7/4, i.e. copy of the IBC register of OBC Hamidpur and Ex.
CC No. 45/2008 CBI Vs. S.S. Wadhwa etc. Page 52 of 79PW 7/5, i.e. copy of the dak dispatch register of OBC Hamidpur. As per PW-7 the bills received for collection are reflected in IBC register. Corresponding entry is also made in the register as and when the bill is returned back. Corresponding entries regarding receipt/sending back of bills mentioned in Ex. PW 7/2 and Ex. PW 7/3 are at points Y and Y-1 on page no. 124 of this register. As per PW-7, Ex. PW 7/2 is the Statement of Account of the account of M/s Sham Traders and there is no corresponding debit entry in this account towards realization of bills mentioned in mark P-1/L. Ex. PW 7/3 is the document containing entry regarding return of unrealised bills to OBC Saket from their branch. Though PW-7 has stated that the party, i.e. M/s Sham Traders was not interested to make payment of the bills despite intimation in that regard but he has failed to produce any document in support of his statements. From Ex. PW 7/2 to Ex. PW 7/4 it is not possible to infer if due intimation was given by OBC Hamidpur regarding four bills, i.e. UF 20/95 to UF 23/95.
8.32 SBI, Town Hall Branch Amritsar was the drawee bank of M/s Surya Synthetics, where three bills UF 17/95 to UF 19/95 were received. Ex. PW 8/2 and Ex. PW 8/3 are the copies of LBC register of this branch. As per PW-8 the relevant entries regarding these bills are at point mark 'A'. The Ld. PP has contended that it is mentioned on Ex. PW 8/2 "returned unpaid"
and "reminder sent on 28.8.95, 19.9.95".
8.33 These documents proved by PW-7 and PW-8, relied upon by Ld. PP CBI, at the maximum establish that three bills of M/s CC No. 45/2008 CBI Vs. S.S. Wadhwa etc. Page 53 of 79 Surya Synthetics were received by OBC Hamidpur, Amritsar and these bills received by SBI town Hall Amritsar as a drawee branch of M/s Sham Traders were returned unpaid. The material point to be seen is if due intimation was given regarding these bills to the drawee firm, i.e. M/s Surya Synthetics and M/s Sham Traders. It has come in the statements of PW-7 and Pw-8 that verbal intimation as well as written intimation used to be sent to the party concerned but prosecution has failed to bring any specific evidence on record to establish if any verbal or if any written specific intimation in this regard was given to these two drawee firms at any point of time.Therefore, it is held that prosecution has not been able to prove that M/s Surya Synthetics and M/s Shyam Trades were duly informed by their Bank about receipt of these bills, submitted by A-8 for discounting with OBC Saket but they failed to get Transport Receipts released after paying requisite amount.
8.34 As per procedure of Bill Discounting discussed in above paras, filing of Transport Receipt by A-8 with the OBC Saket means that goods were handed over to the transporter M/s Naresh Road-lines Pvt. Ltd. for transportation to Amritsar. 4 Transport Receipts produced on record by CBI are found to be fake. CBI has failed to file the other four Transport Receipts in relation to Bills No. UF 20/95 to 23/95 stating that the same were not available along with respective Hundies in OBC Saket branch. The defence taken by A-8 is that Bill Discounting claimed against these four bills was genuine. If the goods against Transport Receipts and against these eight bills were handed CC No. 45/2008 CBI Vs. S.S. Wadhwa etc. Page 54 of 79 over to transporter, and due to any reason goods were not delivered at destination then where the goods vanished. The transportation of goods is a fact which was specially within the knowledge of A-8. As per Section 106 of Indian Evidence Act, the burden of proving this fact was upon it but it has failed to discharge that. If the bill raised and Transport Receipt were genuine, in the event of bills being received back unpaid, the goods might have remained undelivered and should have been returned back to the consignor, i.e. A-8. Absence of any evidence in this regard which A-8 could have produced, belies the defence taken by him.
8.35 In view of the evidence discussed above prosecution has been able to prove that 4 bills, i.e. UF-17/95, UF-18/95, UF-19/95 and UF-24/95 were accompanying fake Transport Receipts. Regarding the remaining 4 bills, i.e. UF-20/95 to UF-23/95, since prosecution has failed to produce the Transport Receipts allegedly filed by A-8 with these bills, due to this reason, it is not possible to infer beyond reasonable doubt that these bills were also accommodational in nature and no goods were supplied against these bills. A-6 and A-7 are the two partners of M/s Surya Synthetics, the drawee firm of first three bills UF-17/95, UF-18/95 and UF-19/95. It is relevant to mention here that M/s APT Yarn Pvt. Ltd. is the company being represented by A-7 before this court. Prosecution has failed to bring any evidence on record to establish if A-6 and A-7 were in agreement with A-8 when these bills were submitted by A-8 with OBC, Saket for Bill Discounting. In the paras below it is also held that prosecution has failed to CC No. 45/2008 CBI Vs. S.S. Wadhwa etc. Page 55 of 79 prove if M/s APT Yarn Pvt. Ltd. was having any role to play or was in agreement with M/s Shiva Tapes Pvt. Ltd.(A-9) when it (M/s Shiva Tapes Pvt. Ltd.) submitted three bills, i.e. ST-15/95 o ST- 17/95 for Bill Discounting with OBC, Saket.
8.36 Similarly, A-4 has also claimed Bill Discounting of three bills being proprietor of M/ Jai Durga Textiles, i.e. JD-7/94 JD-8/94 and JD-9/94. There is absolutely no evidence if A-8 had played any role regarding discounting of those three bills. There also, as discussed in paras below, prosecution is held to have failed to prove its case against A-4 regarding three bills submitted on behalf of M/s Jai Durga Textiles.
8.37 Accordingly, it is held that prosecution has been able to prove that A-2 (being director of A-8) and A-8 being in conspiracy with A-1 submitted four fake bills accompanying fake transport receipts and cheated OBC Saket of following amount:
Sl. No. Bill No. Amount
1. UF-17/95 Rs. 1,21,428/-
2. UF-18/95 Rs. 1,76,120/-
3. UF-19/95 Rs. 1,66,268.80ps
4. UF-24/95 Rs. 1,59,734.80
Total : Rs. 6,23,551.60ps
Bills submitted by A-3 for discounting
CC No. 45/2008 CBI Vs. S.S. Wadhwa etc. Page 56 of 79
9.0. The relevant details of A-3 (Proprietor of M/s Shiva
Fabrics) and M/s Sameer Textile (drawee firm) and A-2 being its sole proprietor are as follows:-
S. Bill Drawer Amount Drawee Date of Date of Date of No No. Company Firm/Bank Purchase return Reversal in the account drawer
1. SF- Shiva 158880.00 Sameer 19.3.95 3.3.96 14/95 Fabrics Textiles/ OBC Hamidpur
2. SF- -do- 138744.00 -do- -do- 3.12.95 15/95
3. SF- -do- 152977.00 -do- 20.8.95 14.12.95 16/95
4. SF- -do- 137737.00 -do- -do- -do-17/95
9.1. The charges against accused are that A-1 has allowed opening of current account No. 1604 on 6.2.1994 in the name of A-3 (since deceased) in the name of M/s Shiva Fabrics and sanctioned CC Limit of Rs. 7.5 lakhs and Bill Discounting limit of Rs. 5 lakhs on 10.3.1994. This account was converted to Cash Credit account No. 60 on 10.3.1994. A-1 dishonestly purchased/ discounted bill nos. SF-14/95 and SF-15/95 on 19.8.1995 and bill nos. SF-16/95 and SF-17/95 on 20.8.1995, which were raised against M/s Sameer Textiles, Amritsar owned by A-2, real brother of A-3. All these four bills were submitted by A-3 to A-1 without actually making delivery of any goods. These bills were accompanying false Hundies and forged Transport Receipts of CC No. 45/2008 CBI Vs. S.S. Wadhwa etc. Page 57 of 79 M/s Naresh Road-lines Pvt. Ltd. and A-2 did not make any payment against the aforesaid bills which were sent for realization to OBC, Hamidpur and same were returned unpaid.
9.2. PW-1 has proved account opening form Ex. PW 1/24 which is introduced by A-1 and he has ordered for the opening of the account No. 1604. Ex. PW 1/25 is the process note vide which CC Limit of Rs. 7.5 lakhs and Bill Discounting Limit of Rs. 5 lakhs was sanctioned by A-1 on 10.3.1994. Upon sanctioning of the limit, current account No. 1604 got converted to CC account No. 60.
9.3. Ex. PW 1/27 is the pay-in-slip in respect of bill no. SF- 14/95. On it, A-1 has ordered "Please discount" and put his initial below it. Ex PW 1/28 is pay-in-slip in respect of bill no. SF- 15/95. It is also lying discounted by order and under the initials of A-1.
9.4. Mark P1/28A is the Hundi, Mark P1/28A-1 is the invoice of M/s Shiva Fabrics in favour of M/s Sameer Textile and mark P28/A-2 is the Transport Receipt of M/s Naresh Road-lines Pvt. Ltd. in favour of consignee M/s Sameer Textile regarding bill no. SF 15/95. The debit and credit voucher regarding these two bills are Ex. PW 1/29 to Ex. PW 1/31. As deposed by PW-1 credit entry of Rs.2,83,583/- in respect of both the bills was given in the ledger Ex. PW 1/89 of M/s Shiva Fabrics on 19.8.1995 and on that date, debit balance in this account was Rs.7,64,213.56ps. It is relevant to mention here that the credit entry was given in the account of M/s Shiva Fabrics after deducting commission and CC No. 45/2008 CBI Vs. S.S. Wadhwa etc. Page 58 of 79 interest. PW-1 has further deposed that forwarding letter in that regard sent to OBC, Hamidpur Amritsar branch for total sum of Rs. 2,97,624/- was returned back unpaid from Hamidpur Amritsar branch. The reversal entry in that regard was made in the ledger of M/s Shiva Fabrics for a sum of Rs. 1,58,880/- on 3.3.1996.
9.5. PW-7 who was working as Senior Manager in Hamidpur branch of OBC from April, 1993 to April, 1997 has proved account opening form Ex. PW 7/8 in respect of M/s Sameer Textile having account no. 859 and copy of statement of account Ex. PW 7/9. As per this record, A-2 is proprietor of M/s Sameer Textile having business address as 2418, Gali No.2 near Police Post Islamabad, Amritsar, Punjab. Ex PW 13/27 is the forwarding letter dated 19.8.1995 vide which two bills SF 14/95 and SF 15/95 were sent to Manager OBC, Hamidpur Amritsar.
9.6. As deposed by PW-13, D-36 are pay-in-slips for discounting outstation bills in respect of bills no. SF 16/95 and SF 17/95.Both these slips bear signature of A-1 allowing discounting of bills. This witness has deposed that D-38 (comprising Hundi, invoice of M/s Shiva Fabrics of Rs. 1,37,737.50/- and Transport Receipt of M/s Naresh Road-lines Pvt. Ltd. As mark P-5/C) and D-39 (comprising Hundi of M/s Shiva Fabrics and invoice for a sum of Rs. 1,52,977/- and Transport Receipt of M/s Naresh Road-lines Pvt. Ltd. as mark P- 5/D) are pertaining to bills no. SF 16/95 and SF 17/95. These CC No. 45/2008 CBI Vs. S.S. Wadhwa etc. Page 59 of 79 were sent for collection to OBC, Hamidpur branch vide forwarding letter dated 20.8.1995 which is Ex. PW 13/4 singed by him. After deducting interest and commission charges, an amount of Rs. 2,75,788.50ps was credited in CC account No. 60 of Shiva Fabrics on 20.8.1995. After bills were returned unpaid after charging over due interest, an amount of Rs. 2,94,959.50ps was debited in the account of M/s Shiva Fabrics on 14.12.1995 vide entry at point mark 'Y' on page 37 of Ex. PW 1/89 (D-41).
9.7. PW-13 has further deposed that as per ledger Ex. PW 1/89 there was an outstanding debit balance of Rs. 12,93,270.16ps in CC account No. 60 of M/s Shiva Fabrics as on 13.6.1996, whereas CC Limit in account was of Rs. 7.5 lakhs. The account appears to be highly overdrawn. As per record at the time of bill discounting of all the aforesaid bills, account of M/s Shiva Fabrics was already overdrawn from the sanctioned CC Limit.
9.8. Regarding these four bills PW-7, who was working at OBC, Hamidpur branch Amritsar has deposed that none of the four bills mentioned in forwarding letters Ex. PW 13/27 and Ex. PW 13/4 were debited in the account of M/s Sameer Textile, as per Statement of Account Ex. PW 7/9. As per him, this implies that bills were not realized as the party did not make payment by the due date. The Transport Receipt regarding bills SF 15/95 to SF 17/95, in view of the statements of PW-5 and PW-6, stand proved to be fake. However, as already discussed the defence CC No. 45/2008 CBI Vs. S.S. Wadhwa etc. Page 60 of 79 taken by A-2 is that intimation was never received by him from his bank, i.e. OBC, Hamidpur branch regarding these bills. Prosecution has failed to prove if OBC Hamidpur has given any intimation regarding these bills to A-2 being proprietor of M/s Sameer Textile.
9.9. From the evidence discussed above it stands established that A-3 (since deceased) had submitted these four bills for discounting with OBC Saket branch and three bills no. SF 15/95 to SF 17/95 were accompanying fake Transport Receipt as a result of that A-1 being in agreement with them gave credit of three bills to M/s Shiva Fabrics. It further stands established that after bills were received unpaid, the amount was debited in the account of M/s Shiva Fabrics. Regarding these bills though prosecution has failed to bring any evidence that A-2 being proprietor of M/s Sameer Textile, Amritsar was given due intimation by OBC Hamidpur Amritsar for releasing Transport Receipt after paying the requisite amount but it is relevant to mention here that A-2 was real brother of A-3 (Proprietor of M/s Shiva Fabrics and since deceased). He had also applied for Bill Discounting being director of M/s Uma Fabrics Pvt. Ltd. (A-8) From this evidence, the obvious inference is that he was in agreement with A-1 and A-3 (since deceased) for committing alleged offences of cheating and forgery.
9.10. Regarding the fourth bill SF-14/95, since prosecution has failed to produce the Transport Receipt attached by A-3 with it, CC No. 45/2008 CBI Vs. S.S. Wadhwa etc. Page 61 of 79 same cannot be held to be accommodational in nature. As already discussed it has come in the statement of PW-7 that all the documents along with bills were received at OBC Hamidpur branch, Amritsar. To establish that bill No. SF-14/95 was accommodational in nature, prosecution was required to prove that the Transport Receipt attached with this bill was fake, which it has failed to do.
9.11. In view of the aforesaid reasons prosecution is held to have proved that A-3 (since deceased), A-2 being proprietor of M/s Sameer Textiles and A-1 under conspiracy cheated the bank of the following amount:
S. No Bill No. Amount
1. SF-15/95 1,38,744/-
2. SF-16/95 1,52,977/-
SF-17/95 1,37,737/-
3.
Total : Rs. 4,29,458/-
Bill submitted by A-9 (M/s Shiva Tape Pvt. Ltd.) for discounting 10.0. The relevant details of A-9 (drawer) and drawee firms for better appreciation of facts are mentioned in chart below:-
CC No. 45/2008 CBI Vs. S.S. Wadhwa etc. Page 62 of 79S. Bill Drawer Amount Drawee Date of Date of Date of No. No. Company Firm/Bank Purchas return Reversal in e the account drawer
1. 177400.00 29.5.95 6.12.95 7.12.95 ST- Shiva APT Yarn 15/95 Tapes Pvt. Pvt.
Ltd.(STPL Ltd./SBI
Kirti
Nagar N.
Delhi
2. 138240.00 -do- -do- -do- -do-
ST- -do-
16/95
3. 230413.75 -do- -do- -do- -do-
ST-
17/95 -do-
4. 151000.00 Sammer 9.6.95 Not Dispatched
ST- -do-
Textiles/
18/95
OBC
Hamidpur,
Amritsar
5. 148280.80 14.8.95 21.11.95 3.11.96
ST- -do- Ashok
19/95 Fabrics/O
BC
Hamidpur
Amritsar
6. 145722.50 -do- -do- -do- -do-
ST- -do-
20/95
7. 22995.50 -do- -do- 30.10.95 -do-
ST- -do-
21/95
8. 178870.00 -do- 10.8.95 -do- -do-
ST- -do-
22/95
9. 167290.20 -do- -do- 11.11.98 3.12.95
ST- -do-
23/95
CC No. 45/2008 CBI Vs. S.S. Wadhwa etc. Page 63 of 79
10 161340.40 -do- -do- 30.10.95 3.11.96
ST- -do-
24/95
11. 153900.00 -do- -do- 11.11.95 3.12.95
ST- -do-
25/95
10.1 As per prosecution case, account No. 1607 opened on the name of A-9, was allowed and introduced by A-1. A-3 (since deceased) was Authorised Signatory of this account. Initially the account was sanctioned Cash Credit Limit and Bill Discounting Limit of Rs.7.5 lakhs each by A-1 subsequently, Regional Office enhanced the Cash Credit Limit to Rs. 20 lakhs and Bill Discounting Limit to Rs. 10 lakhs vide order dated 3.12.1994.
10.2 11 bills submitted by A-9 for discounting are drawn against 3 different business entities, i.e. M/s APT Yarn Pvt. Ltd., M/s Sameer Textile and M/s Ashok Fabrics.
Bills drawn against M/s APT Yarn Pvt. Ltd.
10.3 PW-1 has proved the account opening form and specimen signature card of A-9 as Ex. PW 1/32 and Ex. PW 1/33. He has also identified signature of A-1 on both these documents. As per him subsequently, Regional Office, raised Cash Credit Limit in the account to Rs. 20 lakhs and Bill Discount Limit to Rs. 10 lakhs. The current account no. 1607 got converted to Cash Credit Account No. 69. He has proved the order of A-1 i.e."please discount" on three bills ST 15/95, ST CC No. 45/2008 CBI Vs. S.S. Wadhwa etc. Page 64 of 79 16/95 and ST 17/95 as Ex. PW 1/35 to Ex. PW 1/37. These three bills lodged by A-9 were drawn on APT Yarn Pvt. Ltd. As per him total amount of 3 discounted bills Rs. 5,20,707.75ps was credited in the account of A-9 on 31.5.1995 after deducting bank charges. The relevant entries in that regard is reflected under the initials of K.K. Abbi, Manager in the Statement of Account.
10.4 PW-2 Khazan Singh remained posted as Special Assistant, Kirti Nagar branch of SBI from 10.10.1991 till 2001. Drawee bank regarding first three bills is SBI, Kirti Nagar, Delhi. PW-2 has proved the account opening form in respect of account no. 1257/14 on the name of M/s APT Yarn Pvt. Ltd. as Ex. PW 2/B. He has identified his initials on this form as he was concerned official and had put his initials at the time of opening of the account. As per record directors of company were A-6, A- 7, Avinash Poddar and Sharda Poddar. This witness has further proved the statement of account of this account as Ex. PW 2/B- 5, being signed by Sh. H.L. Fatyal, being Field Officer of the bank. He has further proved the entry no. 25 dated 7.6.1995 in the Local Short Credit Register of SBI, Kirti Nagar as Ex. PW 2/C by identifying signature of Sh. H.L. Fatyal. As per him, bills no. 15/95 to 17/95 were received in SBI Kirti Nagar from OBC, Saket along with relevant document. He has further deposed that bills were returned unpaid due to insufficient balance in the account of the company on the relevant date as the bills were due on 25th, 26th and 27th August, 1995. As per him charge of Rs. 2,000/- was levied on A-9 in respect of the return of the bills as unpaid. He has proved the relevant documents Ex. PW 2/D-1 & CC No. 45/2008 CBI Vs. S.S. Wadhwa etc. Page 65 of 79 2/D-2 in this regard signed by Sh. H.L. Fatyal.
10.5 A-7 is representing A-10 in this regard. It has been submitted on behalf of A-7 that written intimation in regard to these bills was required to be given by SBI Kirti Nagar but admittedly by PW-2 no written intimation was sent. It has been stated that no information, at any point of time, was received by A-9 regarding these bills. During his cross-examination PW-2 has stated that intimation about bills received in the bank branch had been telephoncially delivered to the account holder but no receipt in that regard was obtained and copies of bills were not sent to the account holder. After checking the record, this witness has stated that no written information had been sent in this regard. He has further stated that he personally was not having any dealing with the bills or the return of the bills as such he cannot confirm whether or not any oral information had been given to account holder regarding bills or debiting amount of Rs. 2,000/- due to return of the bills as unpaid. As per statement of account of A-9 Ex. PW 1/94 against these three bills, credit of Rs. 5,20,707.75ps was given to A-9 on 31.5.1995, after deducting all the bank charges.
10.6 PW-13 has deposed regarding the account of A-9 with OBC Saket and has stated that as per ledger sanctioned CC Limit in CC No. 69 was Rs. 7.5 lakhs while the account had debit balance of Rs. 22,48,717.61ps at the time of crediting the amount. The total amount of Rs. 5,76,574/- approximately was debited in CC No. 69 on account of non-realization of CC No. 45/2008 CBI Vs. S.S. Wadhwa etc. Page 66 of 79 Discounted Bills.
10.7. The case of the prosecution is that Hundies and Invoices pertaining to these three bills are available, however, Transport Receipts are not available. In this case the drawee firm, i.e. M/s APT Yarns Pvt. Ltd. is having local address, i.e. B-12, Tagore Market, Kirti Nagar, New Delhi and its bank is SBI Kirti Nagar, Delhi. This means goods vide these bills were sent with in Delhi. PW-1 has specifically stated that in case goods are sent out of station, seller is required to submit transport receipt with the bank along with Hundi and the Bill. Therefore, A-9 was not required to submit Transport Receipts with these bills. Therefore, prosecution has failed to prove if these three bills were accommodational in nature and no goods were supplied against these bills by A-9 to M/s APT Yarns Pvt. Ltd.
Bill drawn against M/s Sameer Textile 10.8 PW-1 has proved the bill No. ST-18/95 in favour of M/s Sameer Textile discounted under the orders of A-1 as Ex. PW 1/38. As per this bill amount of Rs. 1,43,838/- was credited in the account of A-9 on 9.6.1995. As deposed by PW-1 entry in that regard is reflected in the statement of account Ex. PW 1/94 under the initial of Sh. K.K. Abbi. He has further proved the relevant pages 176-177 of dak dispatch register mark PW1/X-3 where entry in respect of this bill No. 18/95 is made. As per CC No. 45/2008 CBI Vs. S.S. Wadhwa etc. Page 67 of 79 relevant entry, the discounted bill has been sent for collection to OBC Hamidpur.
10.9. As discussed in above paras, as per PW-7 M/s Sameer Textile having account No. 859 in OBC Hamidpur was the proprietorship concern of A-2. This bill drawn on Sameer Textile had never been received in OBC, Hamidpur.
10.10. The case of the prosecution is that this bill was never dispatched from OBC Saket and none of the documents including Hundi, Transport Receipt, Invoice etc. are available with the branch. But prosecution has failed to bring any evidence on record to establish that no material was in fact supplied against this bill or any forged documents were filed in the bank for seeking credit on the basis of this bill. Merely because it stands proved that A-2 being director of A-8 has claimed discounting of bills and was in agreement with A-3 (since deceased) of M/s Shiva Fabrics, purely on this ground, he cannot be held liable for this transaction also. No doubt conspiracy is always hatched in privacy but prosecution is required to bring at least some evidence on record to prove its allegations.
Bill drawn against Ashok Fabrics 11.0. The case of the prosecution is that none of the documents including Hundies, Invoices, Transport Receipts are available pertaining to bills No. ST 19/95 to ST 22/95. PW-1 has proved the orders passed by A-1 allowing discounting of bill No. ST 19/95, ST 20/95, ST 21/95 as Ex. PW 1/39 to Ex. PW 1/41 CC No. 45/2008 CBI Vs. S.S. Wadhwa etc. Page 68 of 79 respectively. The bills had been drawn in favour of M/s Ashok Fabrics. An amount of Rs. 3,98,156.30ps was credited in the account of M/s Shiva Tapes Pvt. Ltd. on 14.8.1995 and entry in this regard is in ledger Ex. PW 1/94 under the initial of Shri K.K. Abbi. He has further proved orders of A-1 permitting discounting of bills No. ST 22/95 to 25/95 as Ex. PW 1/42 to Ex. PW 1/45. These bills are also drawn in favour of M/s Ashok Fabrics and amount of Rs. 6,30,123.60ps was credited in the account of M/s Shiva Tapes Pvt. Ltd. on 19.8.1995 vide entry in the ledger Ex. PW 1/94 under the initials of Shri K.K. Abbi. Ex. PW 1/57 is the corresponding forwarding letter dated 19.8.1995 pertaining to bills No. ST 22/95 to 25/95 sent from OBC Saket to OBC Hamidpur, Islamabad, Amritsar.
11.1. The corresponding Hundies, Invoices and Transport Receipts in respect of bills No. ST 19/95 to 25/95 are not available on record except in respect of bills No. ST 23/95 and ST 25/95. As per PW-1 these corresponding documents in respect of bills ST 23/95 and ST 25/95 are collectively mark P 1/56. It comprises Transport Receipts mark P 5/A in respect to bill No. ST 25/95 and mark P 5/B in respect of bill No. ST 23/95. Regarding these two Transport Receipts, PW-5 has specifically stated that receipts mark P 5/A and P 5/B are not pertaining to his company. The various reasons given by PW-5 and PW-6, on the basis of which the court has concluded that these Transport Receipts are false, are already discussed in above paras.
11.2. PW-7 was Senior Manager in Hamidpur branch of OBC CC No. 45/2008 CBI Vs. S.S. Wadhwa etc. Page 69 of 79 at Amritsar from April, 1993 to April, 1997. He has proved account opening form of M/s Ashok Fabrics with Vipin Kumar (A-
5) being its proprietor as Ex. PW 7/1. He has identified signatures of A-5 on it stating that A-5 had signed in his presence. He has further deposed that as per IBC register with the bank bills returned unpaid due to non-payment of bill amount by the party on whom the bills had been raised. PW-13 has specifically stated that as per corresponding entry in the bill purchase register mark PW 1/X-3, all the seven bills having no. ST-19/95 to 25/95 were returned unpaid.
11.3. As in the case of other drawee firms, A-5 has also taken the plea that intimation regarding these bills was never received by him from his bank, i.e. OBC, Hamidpur, Amritsar. Though it stands established that all the 7 bills were received back unpaid but prosecution has failed to establish if due intimation was given regarding these bills by OBC Hamidpur to drawee A-5 being proprietor of M/s Ashok Fabrics. It has come in statement of PW- 7 that Transport Receipts of M/s Naresh Road-lines Pvt. Ltd. had also been received by their branch along with the bills. But prosecution has only been able to prove that Transport Receipts mark P 5/A and P 5/B which were accompanying the bills ST 23/95, ST 25/95 were fake. Where other Transport Receipts had gone, prosecution has failed to bring any evidence on record to this effect. There is absolutely no evidence on record to infer if the remaining Transport Receipts were also fake. In view of the aforesaid reasons, it is held that the prosecution has been able to prove that A-9 filed forged Transport Receipts mark P 5/A and CC No. 45/2008 CBI Vs. S.S. Wadhwa etc. Page 70 of 79 P 5/B with bills ST 23/95 and ST 25/95 which were amounting to Rs. 1,67,290.20ps and Rs. 1,53,900/-.
11.4. In view of the aforesaid reasons, it is held that the prosecution has failed to prove that bills No.ST-19/95 to ST- 22/95 and ST-24/95 were accommodational in nature and no goods were supplied against these bills. However, since the Transport Receipts filed along with bills ST-23/95 and ST-25/95 are proved to be fake, therefore, it stands established that these two bills were fake and no goods were supplied against these bills.Accordingly, A-9 is held to have cheated OBC Saket branch of the bank with the following amount:
Sl. No. Bill No. Amount
1 ST-23/95 Rs. 1,67,290.20ps
2 ST-25/95 Rs. 1,53,900.00ps
Total: Rs.3,21,190.20ps
Bills drawn by A-4 being proprietor of
M/s Jai Durga Textiles.
12.0. The relevant details of A-4 (drawer) and drawee firms for better appreciation of facts are mentioned in chart below:
S. Bill No. Drawer Amount Drawee Date of Date Date of No. Company Firm Purchase of Reversal return in the account CC No. 45/2008 CBI Vs. S.S. Wadhwa etc. Page 71 of 79 drawer
1. JD-7/94 Jai Durga 200430.35 M/s 21.10.94 13.5.95 Textiles Digvijay Enterprises /Dena Bank Chowk
2. JD-8/94 -do- 213246.00 -do- 27.10.94 25.8.95
3. JD-9/94 -do- 100540.00 -do- -do- 13.5.95 .
12.1. The case of the prosecution is that A-1 purchased these three bills in the account of M/s Jai Durga Textiles which were accommodational in nature and were not out of genuine trade transactions and none of the documents including Hundi, Invoice etc. are available. The bill No. JD 8/94 and JD 9/94 were never received in Dena Bank, Chandni Chowk. A-11 in conspiracy with A-4 accommodated the bills of M/s Jai Durga Textile in order to facilitate the firm to misuse funds of the bank.
12.2. PW-13 has proved signatures of A-1 on account opening form of M/s Jai Durga Textiles for account no. 1647 (CC No. 64) as Ex. PW 1/58. He has deposed that as per form Sh. Shyam Kakkar was authorized to operate the account on behalf of the firm.
12.3. These bills are drawn in favour of M/s Digvijay Enterprises owned by A-11. Bills were drawn on Dena Bank, Chandni Chowk, Delhi. PW 4 Shri V. K. Malhotra, Sr. Manager was posted in Chandni Chowk branch of Dena Bank from 1997 CC No. 45/2008 CBI Vs. S.S. Wadhwa etc. Page 72 of 79 to 1999. He has deposed that vide letter Ex. PW 4/A he had handed over certain documents in relation to account of M/s Digvijay Enterprises. During his cross-examination by Ld. PP CBI PW-4 has admitted that account no. 12883 was in existence in their branch in the name of M/s Digvijay Enterprises which was proprietorship concern of A-11.
12.4. Vide Ex. PW 4/A, PW-4 had handed over photo copy of IBC register showing bill No. JD 7/94 for Rs 2,00,440/- for payment. Ex. PW 4/B is the copy of the IBC register. Entry at serial no. 792 is regarding the bill No. JD 7/94 received from OBC Saket, showing M/s Jai Durga Textiles as drawer and M/s Digvijay Enterprises as drawee. As per PW-4 this bill was returned unpaid. He has further stated that there is no entry in respect of bills No. 8/94 and 9/94, both raised against M/s Digvijay Enterprises in IBC register Ex. PW 4/B. 12.5. PW-1 during his re-examination has stated that page no. 160 of dak dispatch register bears entries in respect of bill No. JD 7/94 to 9/94 in respect of M/s Jai Durga Textiles on page mark PW 1/X-5. As per record bill No. 8/94 was returned unpaid.
It is relevant to mention here that photo copy of dak dispatch register of OBC Saket is mark P-1/X-2 and same was compared by this court with the original called from the court of Ms. Anu Malhotra, Ld. Special Judge, CBI in respect of RC No. 40- A/1997. PW-13 has also deposed that mark PW 1/P-5 is photo copy of bill purchase register. Entries at mark point mark 'X' are in his handwriting and the same are collectively exhibited as Ex.
CC No. 45/2008 CBI Vs. S.S. Wadhwa etc. Page 73 of 79PW 13/25. Perusal of this document reveals that it is bill purchase register and no dak dispatch register. PW-1 has wrongly mentioned as dak dispatch register.
12.6. Prosecution has failed to bring any evidence on record if these three bills were dispatched through OBC, Saket to Dena Bank, Chandni Chowk branch. However, it has come in testimony of PW-4 that as per IBC register Ex. PW 4/B, there is entry regarding receipt of bill No. JD-7/94 from OBC, Saket. This proves that bill No. JG-7/94 was dispatched through OBC, Saket but there is no evidence if other two bills No. JD-8/94 and JD 9/94 were dispatched through OBC, Saket to Dena Bank, Chandni Chowk, i.e. Bank of the drawee firm M/s Digvijay Enterprises. However, PW-1 has specifically stated that as per ledger sheet Ex. PW 1/59 of M/s Jai Durga Textile, there is credit entry dated 21.10.1994 for a sum of Rs. 1,89,680/- in respect of bill No. JD-7/94, for a sum of Rs. 2,13,246/- and Rs. 1,00,540/- dated 27.10.1994 (which is the amount of bills No. JD -8/94 and JD-9/94 in the said ledger).
12.7. On behalf of A-11 it has been submitted that he had never placed any order either in writing or orally to M/s Jai Durga Textiles as A-4 was not known to him. It has been stated that he was not doing any business at the relevant time when offence is stated to have been committed. In Oct. 1994, he was in Amritsar and was doing a job. It has been stated that CBI has failed to bring any evidence on record to the effect that he had any connection or placed any order with A-4 proprietor of M/s Jai CC No. 45/2008 CBI Vs. S.S. Wadhwa etc. Page 74 of 79 Durga Textiles.
12.8. To establish his defence, A-11 has examined himself as DW-1. While deposing as DW-1 he has stated that he had come to Delhi from Amritsar in the year 1992. In the year 1993 he had taken a premises on rent and entered into rent agreement dated 1.2.1993. He got appointment letter dated 5.7.1994 from M/s Pradeep Kapoor & Associates for the post of accountant, thereafter, he left Delhi to join his job at Amritsar in July, 1994 and transferred his entire articles through Amritsar Road Carriers. He wrote letter to branch manger Dena Bank, Chandni Chowk on 18.10.1994 which is Ex. DW 1/5 for transfer of his current account to Amritsar. He wrote various letters to branch manager Dena Bank in this context. In Nov. 1995, he received a pay order dated 24.11.1995 drawn on Dena Bank, Civil Lines, Amritsar along with mail transfer receipt dated 25.9.1995 of Dena Bank, Chandni Chowk, Delhi. He deposited the said pay order in his new account in Union Bank of India, Lawrence Road, Amritsar.
12.9. The contention raised by Ld. PP is that all these documents relied upon by A-11 while deposing as DW-1 are fabricated to establish his defence. It has been stated that PW-4 Senior Manager of Dena Bank has refused to have received any of the said letters written by A-11 to bank for transfer of his account to Amritsar. PW-4 has only stated that he cannot say if A-11 had written letters dated 21.10.1994, 27.10.1994, 16.9.1995 and 28.10.1995 marked P-4/D-4 to D-7 requesting the CC No. 45/2008 CBI Vs. S.S. Wadhwa etc. Page 75 of 79 bank to transfer his account No. 12883 to Dena Bank, Amritsar branch. The bill showing M/s Digvijay Enterprises as consignee are dated 21.10.1994, 27.10.1994 and 27.10.1994. As per A-11, he has written first letter to Branch Manager, Dena Bank on 18.10.1994 and it was in November, 1995 he received copy of mail transfer receipt and he deposited the pay order with new account in Union Bank of India, Larence Road, Amritsar. The relevant point to be seen here is if these letters were received in Dena Bank, Chandni Chowk, Delhi or not. To prove that DW-1 was supposed to call the requisite record from Dena Bank, Chandni Chowk which he did not do. Similarly, the credibility of his appointment letter Ex. DW 1/2 is also under doubt. Even if for the sake of arguments, the defence taken by A-11 is accepted, from this possibility of his connivance with A-4 cannot be ruled out. But certainly, prosecution has to establish the same beyond reasonable doubt.
12.10. As discussed in above paras, it is one of the essential requirement that due intimation is required to be given by the bank to the drawee firm about the receipt of the bill but statement of PW-4 is silent if any intimation was given by their branch to A-11. He has deposed that in case bill which is to be paid by the account holder get discounted, intimation in that regard is sent to the account holder by the bank branch. He has further deposed that from the record of the judicial file, he cannot say if no such intimation was sent to A-11. There is no doubt that conspiracy is always hatched in privacy. To establish meeting of minds between A-4 and A-11, the prosecution is required to bring CC No. 45/2008 CBI Vs. S.S. Wadhwa etc. Page 76 of 79 some evidence on record which prosecution has. failed to do.
12.11. In view of the aforesaid reasons, it is held that the prosecution has failed to prove if these three bills were not raised out of genuine trade transactions and were accommodational in nature to facilitate A-4 to misuse the funds of the bank.
Cheque No. 996956 dated 29.5.1995 in favour of M/s Sameer Textile ,drawn on OBC Hamidpur, Amritsar from the account of M/s Ashok Fabrics.
13.0. Prosecution has failed to lead any evidence in this regard. Accordingly, this allegation against A-2 and A-4 remained unproved.
Conclusion 14.0. There are allegations against A-1 that he being branch incumbent incharge of OBC Saket in agreement with A-2, A-3 (since deceased as proprietor of M/s Shiva Fabrics), A-8, A-9 and A-4 (being proprietor of M/s Jai Durga Textile) allowed opening of the current accounts in his branch, subsequently converted these accounts to cash credit accounts, sanctioned Cash Credit Limit and Bill Discounting Limit and allowed these limits to be over drawn. But prosecution has failed to bring any cogent evidence on record to prove these allegations.
14.1. However, in view of the above mentioned reasons, prosecution is held to have proved beyond reasonable doubt that the OBC, Saket branch was cheated by different drawer company/firms of the following amounts:
CC No. 45/2008 CBI Vs. S.S. Wadhwa etc. Page 77 of 791. M/s Uma Fabrics Private Limited (A-8) Rs. 6,23,551.60
2. M/s Shiva Fabrics (represented by A-3 since Rs. 4,29,458.00 Deceased)
3. M/s Shiva Tapes Pvt. Ltd. (A-9) Rs. 3,21,190.20 Total Rs. 13,74,199.80 14.2. From the evidence discussed above, it stands established beyond doubt that A-1 (since PO) being branch incumbent incharge of OBC Saket, A-2 being director of M/s Uma Fabrics Private Limited (A-8) and proprietor of M/s Sameer Textiles a drawee firm regarding the bills of M/s Shiva Fabrics, M/s Uma Fabrics Private Limited (being company represented by A-2), Ravinder Bhatia (A-3 since deceased being proprietor of M/s Shiva Fabrics) and M/s Shiva Tapes Pvt. Ltd. (being company earlier represented by deceased A-3 and now represented by director Ramesh Bhatia) with some other unknown persons entered into conspiracy to cheat OBC Saket branch by submitting the fake bills and transport receipts for discounting. A-1 being incumbent incharge of Saket branch discounted these bills and after deduction of charges and interest credited the amount of these bills, discussed in above paras,in the accounts of these companies and firms. On presentation with drawee banks these bills being accomodational in nature were received unpaid. Accordingly, the OBC Saket branch was cheated for a sum of Rs. 13,74,199.80. It also stands establish that the bills and Transport Receipts were forged under this conspiracy and used as genuine to cheat the bank. Accordingly, they are held guilty and convicted for offences punishable under Section 120-B read with Sec. 420/468/471 IPC and 13(2) read with Section 13(1)(d) of P. C. Act.CC No. 45/2008 CBI Vs. S.S. Wadhwa etc. Page 78 of 79
14.3. In view of the evidence discussed above, prosecution is held to have proved beyond reasonable doubt commission of offences defined under Sections 420, 468, 467 & 471 IPC against Rajiv Bhatia (A-2).
Accordingly, he is held guilty and convicted for these offences.
14.4. In view of the evidence discussed above, prosecution is held to have proved the allegations beyond reasonable doubt of commission of offences defined under Sections 420 IPC against M/s Uma Fabrics Private Limited (A-8), a company, through Rajiv Bhatia (A-2). Accordingly, it is held guilty and convicted for this offence.
14.5 In view of the evidence discussed above, prosecution is held to have proved the allegations beyond reasonable doubt of commission of offences defined under Sections 420 IPC against M/s Shiva Tapes Pvt. Ltd. (A-9), (a company through Ramesh Bhatia). Accordingly, it is held guilty and convicted for this offence.
14.6 Prosecution is further held to have failed to prove the allegations beyond reasonable doubt against Shyam Sunder Kakkar (A-4), Vipin Kumar (A-5), Arvind Poddar (A-6) and Anurag Poddar (A-7) both being directors of M/s Surya Synthetics, M/s APT Yarns Pvt. Ltd.(A-10) a company represented by Anurag Poddar (A-7) and Arun Kumar Khanna (A-11). Accordingly, these accused are acquitted from all the charges.
14.7 A-1 being P.O, the trial against him be resumed after his apprehension.
14.8. Put up for hearing on the quantum of sentence.
Announced in the open court (SANJAY GARG-I) on 20th, February, 2017 SPECIAL JUDGE-IV, CBI (PC ACT) TIS HAZARI COURTS, DELHI CC No. 45/2008 CBI Vs. S.S. Wadhwa etc. Page 79 of 79