Delhi District Court
State vs . on 24 December, 2014
1
IN THE COURT OF SHRI VIVEK KUMAR GULIA
CHIEF METROPOLITAN MAGISTRATE (SOUTH)
SAKET DISTRICT COURTS, DELHI
In the matter of :
State
Vs.
Subhash Chand Narang
FIR No. 396/94
P. S.: Malviya Nagar(EOW)
JUDGMENT
1 Sr. No. of case : 02406R0007631995 2 Date of institution : 02.03.1995 3. Name of the complainant : Sh. R.S. Negi, Income Tax officer. 4. Date of commission of offence : In or around 1994 5. Name of accused : Subhash Chander Narang son of late Sh. Roshan Lal Narang R/o J3/47, First Floor, Khirki Extension, Malviya Nagar, New Delhi. 6. Offence complained of : Sec. 419/420/467/468/471 IPC. 7. Plea of guilt : Accused pleaded not guilty 8. Date of reserving the judgment : 18.12.2014 9. Final order : Acquitted 10. Date of such judgment : 24.12.2014 Page 1 of 17 State Vs. Subhash Chander Narang; FIR No. 396/94 2 FACTUAL BACKGROUND:
1. The important facts of the case are as follows. In this case, FIR was registered on the complaint of PW3 Sh. R.S. Negi, Income Tax Officer, who mentioned that during Income Tax assessment proceedings, it came to their notice that someone is filing forged TDS certificates to claim refunds. Thereafter, on 31.08.1994, one Sh. Subhash Chand Narang filed two returns and on scrutiny and inquiry it was found that TDS certificates enclosed in with these returns were issued by a nonexistent LIC branch unit. He was also in possession of 19 other Income Tax returns having forged TDS certificates. Thereafter, a search was conducted at his residence u/s 132 of Income Tax Act and some incriminating documents such as bogus Income Tax returns prepared in the name of nonexistent persons, bogus TDS certificates, bogus rubber stamps for preparing TDS certificates and fake bank account details were found. Further, it was found that in order to encash the refund vouchers (cheques) issued by Income Tax Department, he had opened bogus bank accounts in the name of nonexistent persons. Further, it was estimated that Rs. 15 lacs approximately was fraudulently received by him as refunds and he had used the money to acquire the properties and to Page 2 of 17 State Vs. Subhash Chander Narang; FIR No. 396/94 3 purchase the vehicle. During investigation, documents were collected from Income Tax department and different banks. Further, it was verified that TDS certificate filed alongwith Income Tax returns were issued by a nonexisting LIC unit. After culmination of investigation, accused was chargesheeted and summoned to face trial.
TRIAL PROCEEDINGS:
2. In light of the above stated facts and proceedings and after making compliance of provisions of section 207 Cr.P.C., vide order dated 07.02.2005, the then Ld. MM, New Delhi, framed charges under section 419/420/467/468/471 IPC against accused , to which he pleaded not guilty and claimed trial.
3. For proving its case, prosecution has produced 34 witnesses. 3.1 PW1, ASI Anand Swarop, deposed that on the basis of complaint, he recorded FIR Ex. PW1/A and made endorsement Ex.PW1/B on said complaint.
3.2 PW3, Sh. Rajendra Singh Negi, testified on the lines of his complaint Ex. PW3/A, on the basis of which FIR was registered. Further, he mentioned that he handed over documents seized by Income Tax Page 3 of 17 State Vs. Subhash Chander Narang; FIR No. 396/94 4 Department during inspection to IO and same were seized vide memo Ex.PW3/B and further he handed over photocopy of Income Tax returns alongwith other documents to IO and same were seized vide memo Ex.PW3/C. Further, he referred to panchnama Ex.PW3/D, statement of accused Subhash Chander recorded at the time of inspection Ex.PW3/E1, copy of refund voucher Ex.PW3/G handed over to police and copy of Income Tax Returns of accused Ex.PW3/G1 to Ex.PW3/G11. 3.3 PW6, Retired SI Sant Lal, mentioned that on 24.10.1994, disclosure statement of accused Ex.PW6/A was recorded and he was personally searched vide memo Ex.PW6/B. 3.4 PW7, Sh. J.P.Sharma, testified that during inquiry he informed IO that the persons namely Anil Kumar, Chander Prakash, Ashok Kumar and Prem Prakash Sachdeva had never resided at his place. 3.5 PW8, Sh. A.J. Narang, mentioned that he had written a letter dated 12.01.1995 Ex.PW8/A to Deputy Commissioner but denied that he was interrogated during investigation in respect of refund vouchers no.
558999 dt. 08.03.1998, 538523 dt. 31.03.1993 and 425050 dt. 06.03.1992. 3.6 PW9, ACP O.P. Sagar, testified that he forwarded challan in this case.
Page 4 of 17 State Vs. Subhash Chander Narang; FIR No. 396/94 5 3.7 PW10, Smt. Mayavanti, testified that she had sold first floor of her house situated at E4/11, Malviya Nagar, New Delhi, to accused but since he had not made full payment, the deal was subsequently cancelled and money was refunded back to accused.
3.8 PW13, Sh. Kuldeep Raj Sharma, deposed that accused was working in his firm and he introduced him for opening an account in Indian Overseas Bank.
3.9 PW14, Sh. Gopal Singh, Manager Customer Service, DLF Universal Ltd, testified that as per record plot no. B3/13, DLF, Ankur Vihar, Ghaziabad, U.P. was purchased by Sh. Subhash Chander Narang on 14.04.1986 and a sum of Rs. 78,274/ was paid by him on different dates.
3.10 PW17, HC Suresh Kumar, testified that on 15.02.1995, ASI Dhan Singh obtained specimen handwriting of accused Ex.PW17/A. 3.11 PW18, Sh. U.P. Airi, testified that he had furnished certain information vide letter dated 04.01.1995 Ex.PW18/A mentioning that LIC branch unit no. 323 does not exist in Delhi.
3.12 PW19, Sh. S.D. Yadav, mentioned that he issued refund voucher no. 572778 dated 21.03.1994 Ex.PW19/A and further proved order u/s 143(1)(a) of The Income Tax Act, 1961 Ex.PW19/B. Page 5 of 17 State Vs. Subhash Chander Narang; FIR No. 396/94 6 3.13 PW20, Mrs. R.K. Shahani, deposed that she sent a letter Ex.PW20/A to Deputy Commissioner, Income Tax, enclosing attested photocopy of assessment order u/s 143(1)(a) of The Income Tax Act. Further, she proved the record of assessment of Income Tax in the name of Subhash Chand Taneja for the year 199192, 199293, 199394 Ex.PW20/D, Ex.PW20/C and Ex.PW20/B respectively. 3.14 PW22, Mrs. Pramila Shrivastav, testified that she handed over the documents to police vide seizure memo Ex.PW22/A. 3.15 PW23, Mr. Nirmal Jeet Singh, testified that he sent the attested copy of refund vouchers bearing no. 519121 dated 02.11.1992 and no. 380066 dated 11.03.1994 Ex.PW23/B issued in the name of Sh. Prem Prakash Sachdeva to Deputy Commissioner, Income Tax Range20, vide letter dated 12.01.1995 Ex.PW23/A. 3.16 PW24, Sh. G.K. Ardhawa, testified that he had supplied certified copies of three refund vouchers no. 329719 dated 22.11.1991 and 537099 dated 04.11.1993 in the name of Sh. Kripal Mohan and no. 572374 dated 22.02.1994 in the name of Sh. Prem Prakash Sachdeva Ex.PW24/B to Ex.PW24/D, to Deputy Commissioner of Income Tax, Range20, vide letter dated 13.01.1995 Ex.PW24/A. Page 6 of 17 State Vs. Subhash Chander Narang; FIR No. 396/94 7 3.17 PW26, HC Anil Kumar, testified that on 24.10.1994, disclosure statement of accused Ex.PW6/A was recorded by Inspector Vinod Kapoor.
3.18 PW28, Sh. Basant Kumar Jain, testified that he handed over Income Tax record pertaining to Sh. Ashok Kumar to senior officers. 3.19 PW31, Retired SI Mahender Singh, testified that on the basis of complaint received from Revenue Department, he prepared rukka Ex.PW1/B and got the case registered. Further, he prepared site plan Ex.PW31/A. 3.20 PW33, Sh. O.P. Kathuria, testified that he produced copy of refund voucher no. 680367 and refund return file from page no. 1 to 14 of assessment year 199394 of Sh. Subhash Chander and same was seized vide seizure memo Ex.PW33/A. 3.21 PW34, SI Dhan Singh, testified that the investigation was handed over to him on 22.12.1994 and thereafter he collected the documents from Income Tax Department, different banks, DLF office, LIC office and recorded the statement of different witnesses. 3.22 Prosecution has produced number of bank witnesses. PW2 Sh. K.G. Gopala Krishna, Manager, Canara Bank, produced the documents related to account no. 10549 in the name of Sh. Chander Page 7 of 17 State Vs. Subhash Chander Narang; FIR No. 396/94 8 Prakash. PW4 Mr. N. Srinivasan (retired DGM Canara Bank) proved the documents handed over to police during investigation vide letter Ex.PW4/A. PW5 Sh. Bhagwan Sharma (ExChief Manager, Indian Overseas Bank) produced the documents related to account no. 6262 in the name of Subhash Chand and account no. 10536 in the name of Kripal Mohan. PW11 Ram Phal (Punjab National Bank) proved the documents handed over to police vide memo Ex.PW11/A. PW12 Sh. R.K. Chaudhary (Allahabad Bank) proved his letter no. 348 dated 31.10.1994 Ex.PW12/A, statement of account no. 120116 Ex.PW12/B, statement of account no. 121797 Ex.PW12/C and statement of account no. 105586 Ex.PW12/D. PW15 Sh. Sudhir Kapoor (Canara Bank) identified the signature of Bank Manager Sh. Y.P. Sharma and referred to bank statement of account no. 24588 in the name of Naveen Kumar Bhatia Ex.PW15/B. PW16 Sh. N.K. Kandhari (Punjab National Bank) identified the signature of Bank Manager Sh. D.K. Duggal on document Ex.PW16/A. PW21 Sh. C.S. Negi (Punjab National Bank) identified the signature of Sh. A.K. Tuli, the then Senior Manager on document Ex.PW21/A but failed to identify the initials on photocopies of ledger sheets Mark PW21/B1 to PW21/B6. PW25 Mrs. B.B. Marwah (Allahabad Bank) testified that she was not sure due to lapse of time about her signature on the cheque no. 170650 dated Page 8 of 17 State Vs. Subhash Chander Narang; FIR No. 396/94 9 23.10.1993 Mark X as clearing officer. PW27, Sh. Ram Charan (Canara Bank) produced the certified copy of account opening form of account no. 10318 in the name of Subhash Chander Ex.PW27/B and certified copy of statement of account and account opening form of account no. 1387101010549 (old no. 10549) in the name of Chander Prakash Chawla Ex.PW27/D and Ex.PW27/E. PW29, Sh. Y.P. Sharma (Canara Bank) proved the documents pertaining to account no. 24588 in the name of Naveen Kumar Bhatia handed over to police vide memo Ex.PW15/A and Ex.PW29/A. PW30, Sh. Jagdish Chander (Indian Overseas Bank) identified his signature on the withdrawal slips dated 05.12.1991 and dated 24.08.1991 of account no. 10536 Mark 30/A. PW32, Sh. Sultan Singh, proved the bank statement and account opening form of Sh. Ashok Kumar handed to the IO who seized it vide memo Ex.PW32/A.
4. Statement of accused was recorded under Section 313 Criminal Procedure Code, 1973. When the accused was briefed on all the incriminating evidence and documents, he denied the allegations and mentioned that no search of his house was conducted by Income Tax Department and he never went to Income Tax office for filing returns. Further, he mentioned that he had not filed any Income Tax returns in Page 9 of 17 State Vs. Subhash Chander Narang; FIR No. 396/94 10 the name of Sh. Subhash Chander or Subhash Chander Narang. However, accused opted not to lead defence evidence. APPRECIATION OF EVIDENCE:
5. I have heard the State through Shri Anil Kumar Paswan, Ld. Assistant Public Prosecutor and Sh. S.K. Dayal, Ld. Defence Counsel. Record is also gone through.
6. It is summed up by Ld. APP that the complainant (PW3) has supported the case of prosecution that during raid conducted by Income Tax Department, number of incriminating documents including forged Income Tax returns, TDS certificate, stamps etc. were recovered and that accused had filed Income Tax returns with supporting forged TDS certificates issued by nonexistent LIC Unit to claim the refund. Further, it is mentioned that number of bank officers have been examined to show that accused opened different bank accounts in the name of non existent persons and got encashed refund vouchers issued by the department. It is also stated that handwriting expert's report is against the accused and thus charges of cheating and forgery stand established. Per contra, Ld. defence counsel argued that there is no evidence on Page 10 of 17 State Vs. Subhash Chander Narang; FIR No. 396/94 11 record to show that accused ever filed Income Tax returns in the name of Subhash Chander or Subhash Chander Narang and moreover, there is no material on record to suggest that accused opened bank account in the name of nonexistent persons to encash the refund vouchers.
7. In view of this Court, for establishing the charges against accused, prosecution is required to prove following important facts:
(a) accused forged the TDS certificates;
(b) accused filed Income Tax returns in the name of non existent persons alongwith forged TDS certificates;
(c) accused opened different bank accounts in the name of non existent persons;
(d) accused received refund vouchers issued by Income Tax Department in the name of nonexistent persons;
(e) accused deposited the said refund vouchers in the aforesaid different bank accounts in the name of nonexistent persons and encashed them;
8. As far as the allegations of forgery is concerned, it is noteworthy that prosecution has not led any evidence to show that TDS certificates were prepared or bank accounts were opened by accused. Though, the specimen handwriting and signatures of accused were sent for handwriting expert analysis and a report has also been placed on record but the prosecution opted not to produce the handwriting expert in the witness box. Otherwise also, this Court is in agreement with Ld. Page 11 of 17 State Vs. Subhash Chander Narang; FIR No. 396/94 12 defence counsel that even if the prosecution would have produced the handwriting expert for proving his report, it could not have been considered against the accused in view of decision of division bench of High Court of Delhi pronounced in Sapan Haldar & Anr. vs. State reported as 2012 LawSuit (Del) 1348. In this decision, High Court opined that an investigating officer, during investigation, cannot obtain a handwriting sample or a signature sample from a person accused of having committed an offence and prior to June 23, 2006, when section 311A Cr.P.C was inserted, even a Magistrate could not direct a person accused to give specimen signatures or handwriting samples and in cases where Magistrates have directed so, the evidence was held to be inadmissible as per the decision of the Supreme Court in State of U.P. vs. Ram Babu Mishra, reported as 1980 AIR (SC) 791.
9. Further, it is found that though prosecution has examined 13 bank officials as prosecution witnesses but it is seen that none of them stated that accused ever came to their branch for operating alleged bank account in the name of different nonexistent persons. Reference can be have to cross examination of PW5 and PW30 in this regard. Admittedly, the account opening forms placed on record do not bear the photograph Page 12 of 17 State Vs. Subhash Chander Narang; FIR No. 396/94 13 of account holder and the signatures of the account holder on these account opening forms are not proved to be of accused, as discussed above. Thus, it is concluded that there is no material on record to show that accused opened or operated the different bank accounts in the name of nonexistent persons.
10. It is the prosecution case that accused filed forged TDS certificates alongwith Income Tax returns. Prosecution has produced Sh. U.P. Airi (PW18) to prove that LIC Unit no. 323 does not exist in Delhi and thus all the TDS certificates filed by accused purportedly issued by said nonexistent branch are forged. Though it appears that TDS certificates, which are shown to be issued by LIC Unit no. 323 are forged but there is no evidence on record to indicate that accused filed Income Tax returns alongwith said forged TDS certificates in the Income Tax office. The complainant Sh. Rajendra Singh Negi (PW3) has testified that accused had filed two Income Tax returns alongwith forged TDS certificates on 31.08.1994 and at that time he was having 19 other Income Tax returns alongwith forged TDS certificates but during cross examination he replied that he came to know about filing of Income Tax returns by accused through staff members and he has no personal knowledge of it. Page 13 of 17 State Vs. Subhash Chander Narang; FIR No. 396/94 14 Thus, the testimony of PW3 qua filing of Income Tax returns by accused is of hearsay nature and in absence of testimony of staff members who saw accused persons filing Income Tax returns, the fact of filing of Income Tax returns by accused cannot be said to be proved. Moreover, the prosecution has also examined number of Income Tax Officers during trial but their testimony is found to be not material to prove that it was the accused who used the forged TDS certificates for claiming refund of tax.
11. It is observed that though the complainant (PW3) testified that search u/s 132 of The Income Tax Act, 1961 was conducted at the house of accused and blank TDS forms, fake stamps/seals etc. were recovered but during trial, the fake stamps were never produced. In view of this Court, mere recovery of blank TDS forms cannot be said to be incriminating.
12. Prosecution has alleged that accused cheated the Income Tax Department for about Rs. 15 lacs during number of years by claiming refund of tax and he used the cheated amount in purchasing the properties and vehicle. Further, prosecution side produced two witnesses Page 14 of 17 State Vs. Subhash Chander Narang; FIR No. 396/94 15 in support of this allegation. However, it is found that PW10 Smt. Mayavanti stated that though she finalized the deal with accused for selling her first floor but it was cancelled since accused failed to make full payment. Further, PW14 Sh. Gopal Singh testified that the plot no. B3/13, DLF, Ankur Vihar, Ghaziabad, UP, was purchased by accused on 14.04.1986 and the consideration amount was paid on different dates. In view of testimony of both these witnesses, it is clear that one property was purchased by accused in 1986 i.e. 8 years prior to registration of this FIR and in that case accused was made payment in installments and in second case accused could not purchase the property because consideration amount could not be arranged. Thus, the prosecution has failed to establish that accused used the cheated amount in purchasing different properties. Further, there is no evidence on record that accused purchased the vehicle through cheated money.
13. Further, Ld. defence counsel has rightly pointed out that prosecution has not been able to establish that the refund vouchers, allegedly issued on the basis of forged TDS certificates, were sent to accused. It is pointed out that number of prosecution witnesses, for example, PW3 Sh. Rajendra Singh Negi and PW19 Sh. S.D. Yadav stated Page 15 of 17 State Vs. Subhash Chander Narang; FIR No. 396/94 16 that refund vouchers above Rs.2500/ were used to be sent through registered post and it is prosecution case that refund vouchers of Rs. 5000/ approx. were sent to nonexistent persons but prosecution has not produced any material to show that any refund voucher was sent to accused or in the name of nonexistent persons through registered post. Even the complainant PW3 Sh. Rajendra Singh Negi replied in his cross examination that DCR register was maintained in Income Tax Department to show demands and refunds payable by the assesses or to the assesses but this register was not handed over to IO. Furthermore, there is no evidence on record to prove that accused deposited the refund vouchers in different banks to encash them.
14. In view of above, it emerges that prosecution has not been able to lead direct evidence to prove any of the charges against accused. Though some circumstantial evidence has been but that is found to be scattered. There is no doubt that conviction can be based solely on circumstantial evidence but the conditions precedent before conviction based on circumstantial evidence, must be fully established. They are:
(1) the circumstances from which the conclusion of guilt is to be drawn should be fully established. The circumstances concerned 'must' or 'should' and not 'may' be established; Page 16 of 17 State Vs. Subhash Chander Narang; FIR No. 396/94 17 (2) the facts so 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;
(3) the circumstances should be of a conclusive nature and tendency;
(4) they should exclude every possible hypothesis except the one to be proved; and (5) there must be a chain of evidence so complete as not to leave any reasonable ground for the conclusion consistent with the innocence of the accused and must show that in all human probability the act must have been done by the accused. {Bodh Raj vs. State of J&K, AIR 2002 SC 3164 (316971)}.
However, these conditions remained unfulfilled in this case. CONCLUSION :
15. For the aforesaid reasons, it is concluded that prosecution has failed to prove any of the charges against accused Subhash Chander Narang. Accordingly, the accused is pronounced not guilty in respect of all the offences involved in this case.
Announced in the open court (Vivek Kumar Gulia)
on 24th day of December 2014 Chief Metropolitan Magistrate (S)
(total 17 pages) Saket Courts, New Delhi
Page 17 of 17 State Vs. Subhash Chander Narang; FIR No. 396/94