Delhi District Court
Central Bureau Of Investigation vs Sukana Chandra Rout on 24 September, 2025
IN THE COURT OF SHRI HASAN ANZAR, SPECIAL
JUDGE (PC ACT) CBI-03,
ROUSE AVENUE DISTRICT COURTS,
NEW DELHI.
CNR NO. DLCT11-001391-2019
Registration/CBI No. 342/2019
RC. No. 12(E)/2016
PS: CBI/EOU-V/EO-II/New Delhi
U/s :120-B IPC r/w Sections 420/419/467/468/471 IPC and Section 13(2) read with
Section 13(1)(d) of Prevention of Corruption Act,1988.
In re:
Central Bureau of Investigation (CBI)
Versus
(1) Sukanta Chandra Rout ( referred as A-2 in the charge-sheet)
S/o Late Sh. Bidhyadhar Rout
R/o B-2, Sriram Complex-II, Nyay Khand-III, Indira Puram, Ghaziabad,UP.
(2) Vipan Kumar Luthra (referred as A-3 in the charge-sheet)
S/o Late Sh. Mulk Raj
R/o (i) C-201, Raghubir Nagar, Tagore Garden, West Delhi-110027
(ii) R/o 44/6, Gali No. 12, Krishnapuri, Tilak Nagar, New Delhi-110018 (Last
Known Address) (Vipan Kumar Luthra was declared as "Proclaimed Person" vide
Order dated 08.04.2025)
(3) Vinay Mittal (referred as A-1 in the charge-sheet)
S/o Sh. Vipin Mittal (Not Tried)
(The accused was discharged/released from the custody vide Order dated
03.09.2020 )
Date of Institution : 23.12.2016
Date on which judgment was reserved : 12.09.2025
Date of Judgment : 24.09.2025
CBI Vs. S.C. Rout & Ors. CBI. No. 342/2019 1 of 143
Memo of Appearance
Shri Mandeep Singh Mann, Ld. PP for CBI.
Shri Siddharth Satija alongwith Shri Abhinandan Gautam, ld. Counsels for
Accused SC Rout (A-2).
Shri. Deepak Kumar, ld. LAC for Accused Vipan Kumar Luthra (A-3).
JUDGMENT
1. The present case vide FIR RC No. 2016 E 0012 was registered on the written complaint dated 05.08.2016 of Shri Rathnakar, Dy. General Manager of Corporation Bank, South Zone in the office of Superintendent of Police, EOU-V, EO-II, New Delhi against Vinay Mittal, proprietor of M/s Delhi Trading Company, Shri Vivek Jain, (A-2), Panel Advocate of Corporation Bank, New Delhi and others for the commission of offence punishable u/s 120-B r/w 419, 420, 467, 468 & 471 IPC and substantive offences thereof.
2. Relevantly, Sh. Vivek Jain, Panel Lawyer was cited as Prosecution Witness since during investigating, the Investigating Agency had come to the conclusion that no offence was disclosed against him.
3. As per charge-sheet, Vinay Mittal (A-1), Proprietor of M/s Delhi Trading Company, S.C. Rout (A-2), the then Chief Manager-cum-Branch Manager and Vipan Kumar Luthra (A-3) (private person) entered into a criminal conspiracy to cheat Corporation Bank, Vasant Vihar Branch, New Delhi (hereinafter be referred as "Bank"). In pursuance of the criminal conspiracy, A-1 i.e. Vinay Mittal and A-3 i.e. Vipan Kumar Luthra furnished CBI Vs. S.C. Rout & Ors. CBI. No. 342/2019 2 of 143 forged documents such as title deeds in the name of V.K. Gupta, identity documents in the name of V.K. Gupta, balance sheets and net worth certificates to A-2 Accused SC Rout with the knowledge that the documents furnished were forged and fabricated with an intention to cheat the Corporation Bank. In furtherance of the criminal conspiracy, A-3 Vipan Kumar Luthra had impersonated himself as V.K. Gupta and furnished title deed as collateral security which was found to be forged and fabricated.
4. It was further alleged that a Current Account No. CBCA-299 in the name of M/s Delhi Trading Company was opened on 28.01.2012 and accused Vinay Mittal submitted a loan application alongwith the forged documents on 13.02.2012 seeking sanction of working cash credit facilities of Rs.300 lakhs for expansion of his rice trading business. It was further alleged that the accused/borrower had furnished false information in the loan application with respect to his address at E-46, Preet Vihar, First Floor, Delhi and a warehouse at No. 380/2 Alipur, Delhi since 2007 on rent. It was also represented by the borrower Vinay Mittal (A-1) that the limit would be secured by creation of equitable mortgage of residential property belonging to Shri V.K. Gupta. It was also represented in the application for loan that company/firm is having turnover of Rs.1,326.05 lakhs for the financial year 2008-2009 and turnover of Rs.1,597.65 and Rs.1997.07 Lakhs for Financial Years 2009-2010 and 2010-2011 respectively and the turnover was increased to Rs.2,200 lakhs for the Financial Year 2011-2012. Turnover of Rs.2,400 Lakhs was projected for the Financial Year 2012-2013.
CBI Vs. S.C. Rout & Ors. CBI. No. 342/2019 3 of 143
5. It is further alleged that S.C.Rout (A-2) in the capacity of Chief Manager-cum-sanctioning authority of Bank had accepted forged documents from the borrower/accused Vinay Mittal. It is further alleged that accused S.C. Rout sanctioned and recommended the loan proposal to Zonal Office for process of the loan application and thereafter, in pursuance of the criminal conspiracy with other accused persons sanctioned the term loan on 06.03.2012 to the accused/borrower Vinay Mittal without adhering to terms and conditions prescribed by the Grid Committee Members of Zonal Office of the Bank.
6. It is further alleged that various documents such as Hypothecation Agreement, Personal Guarantee Papers and other necessary documents were signed by Vinay Mittal (A-1) and Vipan Kumar Luthra (A-3). It is also alleged that accused S.C. Rout despite being aware of the fact that Vipan Kumar Luthra (A-3) is not the owner of the collateral security and was impersonating himself as V.K. Gupta had sanctioned the loan without conducting the due verification of the collateral security furnished by Vinay Mittal (A-1).
7. It is also alleged that accused S.C. Rout did not verify the genuineness of the collateral security by collecting certified copy of the title deeds of the collateral property from the Office of Sub-Registrar concerned through panel advocate and it is also alleged that A-2 S.C. Rout also did not follow the prescribed guidelines issued by the Bank with respect to collection and verification of third party document as collateral security.
CBI Vs. S.C. Rout & Ors. CBI. No. 342/2019 4 of 143
8. It is further alleged that during investigation, it was found that the collateral security with respect to property situated at No. R-13/5, Raj Nagar, Ghazibad, U.P. which was furnished by A-1 and A-3 actually belongs to one Shri Vijender Kumar Gupta S/o Ram Kumar Gupta, R/o 46-A, Friends Colony, New Delhi since 1968. It was also found that the original title deed with respect to property situated at R-13/5, Raj Nagar, Ghazibad, U.P. remained with Vijender Kumar Gupta meaning thereby that the documents pertaining to the collateral security to bank were forged and fabricated with an intention to cheat the bank.
9. During the course of investigation, CFSL report was obtained which affirmed that the original owner of the property Shri Vijender Kumar Gupta has not signed any documents either in bank or had also not furnished the collateral security with the bank.
10. It is further alleged that A-2 S.C. Rout being the Bank Manager had not conducted the verification in terms of various circulars and guidelines for conducting verification on the financial, business cycle of the borrower and guarantor, due diligence of borrower and guarantor and safeguards to be taken while collecting third party collateral securities.
11. A supplementary charge-sheet was filed on 25.10.2017 in which it was alleged that accused Vinay Mittal had diverted the loan amount to different entities and he never had any rice related business and the loan was not utilized for the purposes for which it was availed.
CBI Vs. S.C. Rout & Ors. CBI. No. 342/2019 5 of 143
12. Prosecution sanction u/s 19 of Prevention of Corruption Act was not obtained against S.C. Rout as he was already dismissed by the Bank as on the date of the filing of the charge-sheet.
13. It is also relevant to mention that Vinay Mittal who has been cited as Accused No. 1 was absconding at the time of filing of the charge-sheet and thereafter, it was brought to the notice of the Court that accused Vinay Mittal was detained by Immigration Authorities at Bali, Indonesia and extradition proceedings are pending before the appropriate Court. Thereafter, accused Vinay Mittal was extradited and brought to India on 22.09.2018 and was produced before the Spl. Judicial Magistrate at Ghaziabad on 22.09.2018.
14. Accused Vinay Mittal filed W.P (Crl) 562/2019 titled as Vinay Mittal Vs. Union of India before the Hon'ble High Court of Delhi and the Hon'ble High Court of Delhi vide order dated 18.08.2020 was pleased to set aside the orders of arrest of the accused Vinay Mittal in Paragraph Nos. 20 & 21, it was held that:-
20. In view of the above, the present petition is allowed. The flowing arrest orders are set aside: (i) order dated 02/11/2018 passed in RC NO.220/2014/E/0010; (i) order dated 20/11/2018 passed in RC NO. -220/2014/E/005; (ili) order dated 02/11/2018 passed in RC NO. - 220/2014/E/006-CBI/EOU-V/EO-II; (iv) order dated 14/11/2018 passed in RC NO. - 220/2014/E/0009-
CBI/EO-II/EOU-V/NEW DELHI; (v) order dated 20/11/2018 passedinRCNO. - 220/2014/E/0013/EOU-V/EO-II/NEWDELHI; and (vi) order dated 22/01/2019passed in RC NO. -
220/2016/E/0012/CBI/ EOU-V/EO-II/NEW DELHI.
21. It is, however, clarified that there would be no impediment in the CBI prosecuting the petitioner in other cases ones the CBI Vs. S.C. Rout & Ors. CBI. No. 342/2019 6 of 143 extradition requests in respect of those cases are acceded to by the Republic of Indonesia.
15. After the receipt of order dated 18.08.2020 as passed by Hon'ble High Court, the Predecessor of the Court was pleased to pass the derivative order and the relevant paragraph is being extracted below:-
Having regard to order dated 18.08.2020, any further detention of the applicant/accused is to be termed contrary to the settled propositions of law as it is not denied that the instant case i.e. RC No. 220 2016 E 0012 is also mentioned as (vi) in para 9. Accordingly, it is directed that the production warrants in the present case be withdrawn and the applicant/accused be released from JC, if he is not required in any other case. He may be prosecuted after receipt of extradition order from the competent authority. Application is disposed off accordingly.
16. On the basis of material submitted through charge-sheet, cognizance was taken. Accused persons were summoned and copy of charge sheet alongwith documents were supplied to them and arguments were heard on the charge.
17. Vide detailed order dated 10.07.2018, the charges were directed to be framed against the accused persons named in the charge sheet.
18. A common charge was framed against A-2 S.C Rout for committing offence u/s 13 (1) (d) r/w 13 (2) of Prevention of Corruption Act and U/s 420, 467, 468, 471r/w 120-B IPC and against A-3 Vipan Kumar Lthra U/s 419, 420, 467, 468, 471 r/w 120 B of IPC.
CBI Vs. S.C. Rout & Ors. CBI. No. 342/2019 7 of 143
19. Vide order dated 20.05.2024, an amended charge was also framed against A-3 Vipan Kumar Luthra (private Person) for committing an offence u/s 419 and 420 IPC in addition to the charge already framed 10.07.2018.
20. The prosecution in order to substantiate and prove the charges against the accused persons, examined 44 witnesses in support of its case.
21. PW-1 Shri Rajeev Sharma proved the statement of account of PW 15 Sh. Vivek Jain, Panel Lawyer, Corporation Bank vide Ex. PW1/3 (Colly) alongwith certificate u/s 2-A of Bankers Book of Evidence Act through letter Ex.PW1/1.
22. PW-2 Shri Manish Kumar Inspecting Officer, Labour Department deposed to the effect that vide letter Ex.PW2/1, he gave report in respect of verification of registration certificate of establishment.
23. PW-3 Shri Rajendra Yadav, Asst. Manager, Corporation Bank, Preet Vihar, Delhi deposed that vide seizure memo Ex. PW3/1, he had provided the documents mentioned in letter vide Ex. PW3/2 bearing the signature of his then Manager. He had proved and brought the original cheques and original RTGS slips vide Ex. PW3/3 to Ex. PW3/16. PW3 also brought on record statement of account of M/s Delhi Trading Company from 01.03.02012 to 31.03.2012 and 01.04.2012 to 30.04.2012 alongwith certificate u/s 2-A of Bankers Book of Evidence Act vide Ex.PW3/17. The witness was basically examined to indicate that different amounts were transferred to different entities by way of RTGS/cheques.
CBI Vs. S.C. Rout & Ors. CBI. No. 342/2019 8 of 143
24. PW-4 Shri Vijay Verma, Senior Scientific Officer, CFSL deposed that he had 18 years of experience and examined more than one thousand cases containing about 1 Lakh exhibits. Apart from stating his achievements and qualification, PW4 gave his opinion with respect to the questioned and standard specimen/admitted documents vide report Ex.PW4/3.
25. PW5 Shri Mahendra Kumar Sharma gave a verification report vide Ex.PW5/A as per which no data could be found in the computer with respect to voter ID Card No. NGQ0589624 in the name of V.K. Gupta S/o R.K. Gupta, R/o 8/49, First Floor, Chander Vihar, I.P. Extension, Patparganj, Delhi.
26. PW6 Shri Anup Agrawal, Asstt. Vice President, NSDL deposed that pursuant to the request of the CBI in respect of PAN BCNPGH859Q alongwith the Colly documents and the application, he provided the information vide letter Ex.PW6/A alongwith covering letter vide Ex.PW6/B (Colly) to CBI. {PW6/B contains the original application form of V.K. Gupta vide Ex.PW9/C).
27. PW7 Shri Neeraj Tyagi proved the statement of account of Delhi Trading Company for the period w.e.f. 12.06.2010 to 15.09.2016 and certificate u/s 2A of Bankers Book of Evidence Act vide Ex.PW7/B and Ex. PW7/C respectively which were seized vide seizure memo Ex.PW7/A. PW7 also witnessed the taking/obtainment of specimen signature of A-3 Vipan Kumar Luthra from Mark S-1 to S-25 on Ex.PW7/D (Colly) and signatures CBI Vs. S.C. Rout & Ors. CBI. No. 342/2019 9 of 143 of Shri Ramesh Sharma from Mark S-26 to S-47 on Ex.PW7/E (Colly) in the office of CBI on 31.08.2016.
28. PW 8 Shri Rakesh Prasad deposed that pursuant to the receipt of letter from CBI, he gave a letter vide Ex.PW8/A in which he furnished system generated acknowledgment and income tax return for the Assessment Year 2011-12 of Vinay Mittal. He proved the acknowledgment and income tax return for the Assessment Year 2011-12 vide Ex.PW8/B (D-86). He further deposed that the income tax returns for the Assessment Years 2009-2010 & 2010-2011 could not be verified as the same were filed manually. He further deposed that demand of Rs.60,42,070/- u/s 144/143 (3) of Income Tax Act for the Assessment Year 2012-13 was raised on the assessee and after imposition of the penalty, the demand was raised to Rs.1,04,20,719/- without interest.
29. PW9 Shri Ramesh Sharma deposed that he was working with Shri Bharat Rana who was engaged in the business of trading of rice and identified his vide Ex.PW9/A on the memorandum of deposit of title deed and expressed his inability as to how it was affixed on it and further deposed that photograph might had been obtained from the company of Bharat Rana by accused Vinay Mittal and denied his signatures on Marks Q-8 to Q-20 as well as writing on Q-49 to Q-51 (appearing on Ex. PW31/E as well as both the title deeds vide Ex. PW19/A). He further stated that he was not associated with any loan obtained by Vinay Mittal. PW9 identified the colour photograph vide Ex.PW9/B on the application for non-priority trade advances other than vehicle loans (vide Ex. PW11/A) and stated that CBI Vs. S.C. Rout & Ors. CBI. No. 342/2019 10 of 143 photographs were of Vipan Kumar Luthra. PW9 identified his photograph at Point-X vide Ex.PW9/C on the application for allotment of Permanent Account Number (PAN), but denied his signature on the application for allotment of PAN. PW9 after perusing the photocopy of Voter Identity Card, stated that impressed photos were his and denied other details such as Electoral Number, Father's name and address. He also denied the signature appearing at Point-Y and Point-Z as well as other details. PW9 identified the photograph of Vipan Kumar Luthra at Point-D on Ex.PW9/D, but denied the signatures encircled from Mark 36 to 46 as his. PW9 identified his specimen signature at Point-B on Ex.PW7/E. He categorically denied any visit to Corporation Bank, Vasant Vihar Branch for any purposes.
30. PW10 Shri Sanjeev Kapoor deposed that he was working as Asst. Manager, Matrix Credit Control Pvt. Ltd from 2005 to 2015 and used to report Shri Arpan Sen and Shri Dhananjay Kumar. He further deposed that the company conducts verification of loans, due diligence and verification of residential as well as official address for the Banks. He also deposed that due diligence report vide Ex. PW10/A was prepared by him after taking due inputs from the Field Officers and identified his signature at Point A. He further deposed that the report was furnished pursuant to the application given by Vinay Mittal who had met the Field Officer and provided the necessary inputs. He further deposed that on the request of Vinay Mittal, the Field Officer visited a place described as Godown and met Vinay Mittal.
31. PW11 Shri Rajiv Bansal deposed that he took a Godown at Premises No. 380/2 Alipur Garhi, Village Alipur, Delhi for a period of seven years CBI Vs. S.C. Rout & Ors. CBI. No. 342/2019 11 of 143 from Satbir Singh Rana through a registered lease deed vide Ex.PW11/B. PW11 upon perusing the loan application form vide Ex.PW11/A at Point-X stated that address mentioned was his godown which was taken on rent. PW11 further deposed that his shop bearing no. 1727/3 Retco Rice Palace, Naya Bazar was taken on rent by Bharat Rana through a broker and a dummy office was being run on it.
32. PW12 Shri Satyavir Singh deposed that he was an agriculturist and let out a godown bearing no. 380/2 Alipur Garhi, Alipur Village on rent agreement vide Ex.PW11/B which was seized through seizure memo vide Ex.PW12/A. PW12 further deposed that premises was vacated on 01.07.2013 as tenant Shri Rajiv Bansal was irregular in payment of rent. PW12 further expressed his inability as to why the address of his godown was mentioned in the loan application form and other documents. PW12 further deposed that he is not aware about the transaction of M/s Delhi Trading Company or the photos affixed on the application form.
33. PW-13 Shri Bal Kishan Sharma was witness to the execution of title deed vide Ex.PW13/A of property bearing No. 3/5, Raj Nagar, Ghaziabad, UP in favour of Sh. VK. Gupta and he identified the signature of Shri V.K. Gupta at Point-B. PW13 was shown memorandum of the title deed vide Ex.PW9/A and was asked whether document Ex.PW13/A pertains to the title deed Ex.PW9/A in the name of V.K. Gupta ( as deposited with bank as collateral security by borrower and guarantor ). PW13 stated that the purported documents Ex.PW9/A being claimed as original documents are not the same since it did not bear the photograph of V.K. Gupta and he also CBI Vs. S.C. Rout & Ors. CBI. No. 342/2019 12 of 143 stated that Ex.PW9/A neither bears his signature as well as the signatures of MZ Choudhary, Advocate.
34. PW14 Ms. Neeti Saini had scrutinized the legal opinion vide letter Ex.PW14/A. She deposed that in her legal opinion, it was observed by her that the Advocate who conducted the title verification had furnished no encumbrance report as well as the verification of chain of title documents upto 30 years. She further deposed that original documents were to be collected and verified and an affidavit is required to be obtained by certifying the entire property is free from encumbrance. PW14 further deposed that if there is a building on the plot then the possession of the title holder must be checked and building portion must be free from encumbrance and litigation. PW14 further deposed that she did not conduct the legal audit of the documents as she was not instructed by Zonal Head or Deputy Head. PW14 referred to following circulars :
Sl. Exhibit Circular No. Remarks
No.
1. Ex. PW14/B1 Circular No. Job description of the
110/2003 dated Legal Officer posted at
11.03.2003 (D- Zonal Office are
72) mentioned.
2. Ex. PW14/B2 Circular No. Procedures are laid
64/2010 dated down for the purposes
CBI Vs. S.C. Rout & Ors. CBI. No. 342/2019 13 of 143
22.01.2010 (D- of legal audit.
73)
3. Ex.PW14/B3 HO circular Procedures are laid
No. 886/2010 down for the purposes
dated of legal audit.
23.11.2010.
35. PW14 stated that precautions suggested in her opinion was not adhered as disbursal was made prior to the scrutiny of the legal opinion. She further stated that Grid Note is usually forwarded by the Credit Department to the Branch and original documents are retained by the branch for the verification at their end by the Panel Advocate and she also stated that original documents and Grid notes were not forwarded to her. PW14 after referring to Circular No. 86/2003 vide Ex.PW14/C dated 26.02.2003 stated that the said circular provides for the safeguards i.e. the proposed mortgager is the title holder of the property and title deed produced for scrutiny as security is genuine. PW 14 after referring to Paragraph 5.07 of Ex.PW14/C stated that when the third party is the title holder and offers immovable property as security then such person should be properly introduced and identified to the branch unless he is a customer and well known to the branch and the relationship between borrower and such third person be ascertained and recorded and which was not adhered by SC Rout.
36. PW15 Shri Vivek Jain, Advocate is Panel Lawyer with Corporation Bank deposed that after receiving the photocopy of the title deed of Plot No. CBI Vs. S.C. Rout & Ors. CBI. No. 342/2019 14 of 143 13/5 Raj Nagar, Ghaziabad, he conducted the physical inspection by visiting the office of Sub-Registrar wherein he deposited the fees and a receipt dated 14.02.2012 vide Ex. PW15/B was issued by the office of Sub-Registrar and found that Sh. V.K. Gupta was the title holder as per the document. He furnished legal opinion vide Ex.PW15/A dated 15.02.2012 alongwith an affidavit in prescribed format of the bank vide Ex. PW15/C. PW 15 further deposed that he conducted legal audit with respect to the documents in the account of M/s Delhi Trading Corporation and furnished legal audit report dated dated 20.03.2012 vide Ex. PW15/D. PW 15 also furnished no encumbrance certificate dated 22.03.2013 vide Ex.PW15/E stated that there was no pre-existing loan on the property on the basis of oral communication made by the staff at the Office of Sub Registrar. PW 15 further conducted the title verification with regard to residential plot No. 13/5, areas measuring 1283.33 sq. yards, situated in Raj Nagar Ghaziabad in the ownership of Sh. V.K. Gupta S/o Sh. Ram Kumar and furnished the report vide Ex. PW15/F dated 23.07.2013. PW15 also identified his signature on second no encumbrance certificate vide Ex. PW15/G dated 25.05.2012 alongwith receipt of payment qua certificate Ex.PW15/H. PW15 was unable to tell the date of the second request for conducting the verification.
37. PW16 Shri Mukesh Goel deposed that a rent agreement vide Ex.PW16/A (D-53) was executed between his mother and Vinay Mittal in respect of property bearing no. 172, New Rajdhani Enclave, New Delhi-92 (It should have been Delhi-92) and identified the signatures of his mother. PW16 further deposed that he had handed over the copy of Police verification Report and copy of passport vide Ex.PW16/B (Colly) and all CBI Vs. S.C. Rout & Ors. CBI. No. 342/2019 15 of 143 these documents were handed over vide Ex.PW16/C to the CBI. PW16 further deposed that he used to receive the rent and the premises was vacated on time and he also identified the photograph of Vinay Mittal on Account Opening Form (D-5) and the photograph was exhibited as Ex.PW16/D.
38. PW17 Shri Vivek Kumar was the Chartered Accountant by profession. PW 17 was shown a loan application form of Delhi Trading Company alongwith net worth statement of Vinay Mittal and V.K. Gupta, confidential report from PNB and upon perusing the same, PW 17 denied having received the same and also denied his signature on Point X3 on Ex. PW17 /A. PW 17 further deposed after perusing the documents put to him that he had never worked with Vivek Kumar Garg & Company although, the same bears the registration number as well as the seal of his company. PW 17 categorically denied his signatures at Point X1, X2 and X3 on the Tax Audit Reports for the Assessment years i.e. 2009-10, 2010-11 and 2011-12 vide Ex. PW17/B1, Ex.PW17/B2 and Ex. PW17/B3 respectively. After perusing the documents, PW 17 stated that the seal of Vivek Kumar Garg & Company does not pertain to him as he practice under the name of V.K. Verma & Company and he further stated that address mentioned in the documents resembles with his address and denied the mobile number as well as E-mail belonging to him and he also stated that no enquiry/clarification was sought by bank officials from him.
39. PW18 Shri Mahendra Pratap Mishra was posted as Sub-Registrar at Ghaziabad w.e.f. 2015 to 2017. PW18 after going through the certified copy of title deed bearing no. 7824/823 book No. 1, Zild No. 2543 dated CBI Vs. S.C. Rout & Ors. CBI. No. 342/2019 16 of 143 02.07.1980 vide Ex.PW18/A deposed that he had provided the certified copy of the title deed Ex.PW18/A vide production memo Ex.PW18/B. PW18 also perused the title deed vide Ex.PW13/A and stated that the certified copy of the free hold title deed was provided by him. Meaning thereby, that Ex. PW18/A is the certified copy of Ex. PW13/A with respect to property bearing No. 13/5, Raj Nagar, Ghaziabad, UP.
The attention of PW18 was also drawn to the memorandum the title deeds (D-97) which contains the title deed i.e. Ex.PW19/A in respect of Property bearing no. 13/5, Raj Nagar, Ghaziabad and he pointed out the following discrepancies;
(i) The handwriting of the clerk differs.
(ii) The stamp is unclear, and there is no vendor's endorsement on the reverse side of the stamp paper.
(iii) The endorsement of Sub-Registrar is on the plain paper, whereas the official record shows the endorsement on stamp paper.
(iv) The photographs appear to be of different individuals.
(v) The handwriting signatures endorsing u/s 52 of Registration Act are different.
(vi) There are no signatures of V.K. Gupta on the original and there are no finger prints of the executants.
(vii) There are no signatures of anyone authorized by Ghaziabad Development Authority on pages 1 to 3, CBI Vs. S.C. Rout & Ors. CBI. No. 342/2019 17 of 143 whereas the signatures of Shri Anil Rana, Under Secretary are available on the original certified copy.
40. PW18 further deposed that the document (i.e. title deed deposited with the bank as collateral was not registered at the office of Sub Registrar).
41. PW19 Shri M.Z. Choudhary identified his signature on the free hold deed vide Ex.PW13/A. PW19 denied his signature at Point Y on Ex. PW19/A and also denied that his photograph is affixed at Point X (Ex. PW9/A) and he further stated that second photograph at Point A (Ex. PW19/B) was not of Sh. V.K. Gupta (the title deed submitted by guarantor in the bank as collateral security which is stated to be forged and fabricated document).
42. PW20 Shri Bhupendra Pratap Singh furnished the valuation report vide Ex.PW20/A with respect to Property bearing no. 13/5 Raj Nagar Extension, Ghaziabad, UP in the name of V.K. Gupta. PW20 further deposed that he had given valuation report with respect to the value of property and not qua the ownership. PW20 further deposed that the property was shown by Vinay Mittal ( typed as Vinay Gupta) and got identified the property for the purposes of valuation and after conducting the survey, he valued the property to Rs.535 Lakhs and distress value as Rs.428 Lakhs.
43. PW21 Shri Biswaranjan Sahoo had joined Central Credit Processing Centre, Zonal Office, New Delhi of Corporation Bank as Chartered Accountant in November, 2011 and he used to process pre-sanction of a loan CBI Vs. S.C. Rout & Ors. CBI. No. 342/2019 18 of 143 by pointing out shortcomings and to furnish observation. He also stated that a loan proposal should be accompanied with the recommendation of branch, request letter, copies of financial statement of borrower, net worth statement of borrower and guarantor and brief profile of the borrower as well as the recommendation from the branch. He further stated that he prepared a note dated 01.03.2012 bearing his signature at Point X on Ex.PW21/A in Credit Approval Grid Meeting No. 62-A dated 01.03.2012. PW 21 further deposed that notes prepared by him were based on the financial documents submitted by the branch and the value of the collateral security which was exceeding the loan amount.
44. PW22 Shri Arpan Sengupta, Director (Operations), Matrix Credit Risk Controls Pvt. Ltd. deposed that the company is engaged in due diligence and pre-sanction verification on behalf of various banks including Corporation Bank. PW22 after perusing the due diligence report vide Ex.PW10/A identified the signature of Shri Sanjiv Kumar who was one of the Supervisor for conducting due diligence report. PW22 further deposed that report is based on the physical visit to the address of borrower by the bank and as per report, the visit was made at E-46, First Floor, Preet Vihar, New Delhi-92 (It should have been Delhi-92) and a godown at 380/2, Alipur Village and the report was prepared against the payment. PW22 further deposed that " The above is one of the small part of whole decision, and there are other parameters to suggest the credentials and financial strengths such as the documents submitted by the customer while applying for the loan, the valuation of the mortgage property, legal status of the mortgage property and other parameters suggested by the bank.
CBI Vs. S.C. Rout & Ors. CBI. No. 342/2019 19 of 143
45. PW23 Shri Pravin Sahni was step brother-in-law of accused Vinay Mittal. PW23 deposed that his step sister Namrita was married to Vinay Mittal and he is not aware about the whereabouts of his sister and her husband i.e. Vinay Mittal. PW23 on being shown the documents pertaining to Corporation Bank and saving Account No. SB/01/1905 alongwith KYC documents and he identified the photographs of Vinay Mittal on Ex. PW23/A.
46. PW-24 Shri Amit Kumar, Manager Credit, Centralized Credit Processing Centre, South Zonal Office, Delhi used to process the credit proposal received from the branch for observation and comment. He explained that members of Credit Approval Grid Committee would give their observation and suggestions on the proposal(s). He also explained that duty of the Grid Committee is to consider proposal on the parameters prescribed by the banks and financial credentials, security of collateral, profile of borrower, eligibility limit and necessary information obtained by the branch during pre-sanction visit and due diligence. PW 24 further stated that process/sanction sheet vide Ex. PW21/A was prepared at Centralized Processing Centre which was signed by him alongwith his comments and observations at Point Z on Ex. PW21/A. He also stated that financial data supplied alongwith the proposal was in compliance of the banking norms and he made suggestions with regard to the collateral property by making authentication visit of property and guarantor prior to the disbursal as third party was the guarantor and there was overdue in the CIBIL report of Vinay Mittal. He also stated that Grid Committee has no power to accept or reject CBI Vs. S.C. Rout & Ors. CBI. No. 342/2019 20 of 143 the proposal which is only available with the sanctioning authority. He also stated that it is the duty of branch to verify the documents submitted by the borrower during the due diligence process. He also stated that in reference of the present case the branch head must have conducted the due diligence pertaining to the profile of the borrower, guarantor and the property kept as collateral specially in view of the specific observation that had been made by him as Grid Member.
47. PW-25 Shri Mohd. Khalique was posted as Manager, Credit Risk Management Division in 2012 and after receiving the note of a Processing Officer, the observation on the point of risk is made. He identified his signature on Ex. PW21/A at Y1 as a member of Grid Committee and further stated that he did not make any observation on Ex. PW21/A.
48. PW-26 Sh. Jagmohan Dhall was working as a Stamp Vendor since 2003 after the license was allotted in his name. PW26 was shown the self attested copy of title deed of property No. 13/5 Raj Nagar, Ghaziabad, UP vide Ex.PW26/A and he identified his signature as well as his stamp on the back of the sheet at Page No. 15, 16 & 17. PW26 further deposed that stamp paper was sold by him to Shri V.K. Gupta S/o Shri Ram Kumar Gupta, bearing his handwriting at the time of sale on 02.07.2002. PW26 was shown another document purported to be the Title Deed of property No. 13/5 Raj Nagar, Ghaziabad and upon perusing the back sheet of 3, 4 and 5 of document Ex.PW19/A (part of D-97), he stated that he had neither written the name of V.K. Gupta nor signed on its back page and even denied the seal impression on it and also denied that he sold any such stamp papers.
CBI Vs. S.C. Rout & Ors. CBI. No. 342/2019 21 of 143
49. PW-27 Shri Raveendran, Chief Manager, Corporation Bank, Vasant Vihar deposed that the account of M/s Delhi Trading Company was normal and later on, when it became irregular, he had spoken to Vinay Mittal, Proprietor of M/s Delhi Trading Company for regularization of Account and was assured that the account would soon be regularized but later on the account turned NPA and pursuant to which he issued a notice vide under SARFAESI Act Ex. PW27/A (D-36) with respect to property bearing No. R- 13/25 Raj Nagar, Ghaziabad which was kept as collateral security and the symbolic possession of the property was being taken by pasting the Notice on the outer wall of the property, a representative of VK Gupta visited the branch and showed his title documents and he also threatened that if Notice under SARFAESI Act is not withdrawn then, he would file a case of defamation. The verification of the title deed was made by Panel Advocate who informed that title deed which was being held by Sh. Vijendra Kumar Gupta was genuine and the title deed deposited with the bank was a forged document, the notice was withdrawn after consultation with higher Ups. He further deposed that since advance (loan) was more than Rs. 3 Crore, it was reported to the Fraud Monitoring Cell for declaration the Account as "fraud" and for further suitable action. PW27 further identified the signature of Sh. Ratnakar, DGM on complaint vide Ex. PW27/B to CBI and identified the signature of Shri Ratnakar, DGM and he also provided documents vide Ex. PW27/C and Ex. PW27/D respectively and he proved the report vide Ex. PW27/E (D-34) of the Panel Advocate Sh. Ajant Kumar by identifying his signature.
CBI Vs. S.C. Rout & Ors. CBI. No. 342/2019 22 of 143
50. PW-28 Shri Parimal Kumar Singh was Manager (Credit) in Corporation Bank and was a member of Grid Committee and notes are processed after receipt of proposal from the branches. He further stated that the proposal was received alongwith documents and annexures and which was taken up for hearing on 01.03.2012 and after studying the note, he had scrutinized the notes and made observation from Y4 to Y5 and also gave his findings at Point Y6 to Y7 on Ex. PW21/A. He also stated that he had also made suggestion to the branch to get the due diligence prior to the sanction of loan and while considering the proposal only note is received and the documents are not received and therefore, he did not have any occasion to make observation w.r.t authenticity of financial documents. He also stated that he had made observations that visit to the property shall be made by the bank official.
51. PW29 Shri Yogesh Mhaske was Chief Manager at Zonal Office. He stated that he was holding the profile of CCPC (Centralized Credit Processing Centre) and proposal received from the branches are scrutinized with respect to their viability and thereafter is placed before respective sanctioning authority. PW29 explained that cash credit facility is a running facility and the loan is given on the basis of past cycle of working capital and future estimate and a borrower is permitted to withdraw within the prescribed limit as and when required by him and such drawing power is decided on the basis of stock possession, debit possession, past record of earning and the business transaction as indicated in statement as well as hypothecation and pledge of goods. He also stated that the documents are required to be collected as per the check list prior to consideration of the CBI Vs. S.C. Rout & Ors. CBI. No. 342/2019 23 of 143 credit facility. PW29 brought on record circular no. 590/2007 dated 14.08.2007 vide Ex.PW29/A as well as circular No. 640 dated 30.08.2007 vide Ex.PW29/B. PW29 upon perusing the head office circular No. 664/2007 dated 05.09.2007 vide Ex.PW29/C, stated that the loan amount sought by the borrower/applicant falls within the delegated lending power of Branch Head. He also stated that branch head is required to scrutinize the proposal by considering the financial health of the borrower with the help of financial statement and businesses. PW29 also deposed that a branch head has to make physical visit to the office and unit of borrower and to engage in interaction for understanding the nature of business, manufacturing process and business cycle. PW29 further deposed that Branch officer after collecting balance sheet, profit and loss account, auditor report and bank statement and undertake due diligence of the applicant through an empanelled agency and valuation of the property from the valuer and the legal opinion of collateral securities from empanelled advocates are to be forwarded to CCPC. A Branch Manager is required to make independent inquiries about the promoter and guarantor through empanelled valuers and advocates for which information and data may be collected from customers engaged in similar business. PW29 also deposed that properties of a third party offered as collateral should be verified through a legal expert and the verification of both properties and its owner i.e. Guarantor should be conducted by the independent agency and through other sources for the purpose of recording the satisfaction. PW29 upon perusing circular No. 86/2003 dated 20.06.2003 vide Ex.PW14/C (D-82) stated that the circular is in respect of the steps taken for accepting third party document as a collateral security as mentioned in paragraph no. 5.07.
CBI Vs. S.C. Rout & Ors. CBI. No. 342/2019 24 of 143
52. PW-30 Smt. Kavita Sahni identified the photograph of Vinay Mittal at page no. 3 of Ex.PW16/A. She also stated that Vinay Mittal was her son- in-law and husband of her step daughter. PW30 also identified the impression of photograph of Vinay Mittal on PAN Card at Point-X and she also identified the photograph of Vinay Mittal on account opening form Ex.PW23/A. She also identified the photo impression of Vinay Mittal on other documents appended with Ex.PW23/A.
53. PW-31 Shri S. Venkatanarayanan deposed that he was posted as an Advance Officer in Corporation Bank, Vasant Vihar Branch, New Delhi. A- 2 S.C. Rout was his Branch Manager-cum-Chief Manager. He deposed that as an Advance Officer, he used to look after the documentation, opening of the account of customers as well as the work in Credit Section on the instruction of S.C. Rout. PW31 further deposed that loan proposal from an applicant was firstly scrutinized by Branch Manager followed by an interview and collection of the documents which were sent to him and thereafter the documents were forwarded to Zonal Office for process and after the proposal is scrutinized by the Zonal Office, the process note is further forwarded to Grid Committee. The process note contains observation and suggestion made by the Grid Committee Member is received by the Branch Manager. The shortcomings/suggestions (in the process note) made by the Grid Committee Members are required to be looked into by the Branch Manager and thereafter the branch manager is required to contact the applicant for fulfilment of the conditions imposed by the Grid Committee Member. He further deposed that when an applicant appears before the CBI Vs. S.C. Rout & Ors. CBI. No. 342/2019 25 of 143 branch manager alongwith necessary documents in terms of the observations made by the Grid Committee Member, the branch manager would verify the facts and would check whether documentation is complete in all respect. PW31 further stated as an Advance Officer, the documents come to him for further process/documentation on the direction of the branch manager and Advance Officer shall fill necessary forms and details required for procedural formalities. PW31 was shown Ex.PW31/A (Colly - 11 pages) i.e. Account Opening Form of M/s Delhi Trading Corporation and he identified his signatures and stated that the account was opened by him on the directions of S.C. Rout. PW31 also identified the signatures of Vinay Mittal as it was signed before him in his immediate presence. PW31 identified photograph of Vinay Mittal vide Ex.PW16/A and signature of Vinay Mittal as well as signature of S.C. Rout on documents vide Ex.PW31/A. PW-31 upon being shown the account opening form of Vinay Mittal, identified his signature as well as the signature of Vinay Mittal and his photograph at Point-X vide Ex.PW23/A. PW31 stated that the account bearing No. SB/01/9204 was opened by him on the directions of S.C. Rout. PW31 upon perusing the net worth statement vide Ex.PW17/A (D-95) annexed alongwith loan application form vide Ex.PW11/A, identified the signatures of S.C. Rout. PW31 also identified the letter dated 13.02.2012 of M/s Delhi Trading Company for sanction of fund alongwith copies of the documents vide Ex.PW31/B.PW31 also identified KYC documents of Varam Kumar Gupta vide Ex.PW31/C. PW31 upon being shown income tax returns vide Ex.PW17/B1 to Ex. PW17/B3, stated that it was submitted by Vinay Mittal to the bank. PW31 also identified Form ST-1 and ST-2 of Central Board of Excise and Custom, Registration certificate of CBI Vs. S.C. Rout & Ors. CBI. No. 342/2019 26 of 143 Establishment of Dept. of Labour, Statement of Account of Punjab National Bank submitted by Vinay Mittal vide Ex.PW31/D (Colly) at the time of submission of the loan application to the Bank. PW31 identified his handwriting on the Memorandum of Deposit of Title Deed vide Ex.PW31/E (D-97) which was filled by him and vide Ex. PW31/E the title documents vide Ex. PW19/A were submitted. PW31 also identified the signatures of S.C. Rout on Ex.PW31/F and credit sanction intimation dated 06.03.2012 vide Ex. PW31/F. PW 31 also identified the signature of SC Rout on Common Deed of Hypothecation at Point-A1 and at Point-A-2 on the Guarantee Agreement. PW31 further deposed that legal opinion and audit reports vide Ex.PW15/A and Ex. PW15/D respectively were obtained from V.K. Jain. PW 31 also deposed that verification of the title deed and no encumbrance certificate from Sh. VK Jain were obtained vide Ex. PW15/F and Ex. PW15/G respectively. PW 31 further deposed that mortgage valuation report (Ex. PW20/A), Due Diligence Report (Ex. PW10/A) and Report for Securitization Assets Reconstruction and Security Interest (Ex.PW31/G) were obtained by the bank. PW 31 also identified the signature of accused SC Rout on pre sanction report vide Ex. PW31/I (D-24) and also identified the photograph of office of M/s Delhi Trading Company vide Ex. PW31/J. PW31 further deposed that Site Inspection Report vide Ex.PW31/H (D-23) of residential plot No. 13/5, Raj Nagar, Ghaziabad in the ownership of V.K. Gupta was prepared by S.C. Rout being the Branch Manager. PW31 identified the signature of S.C. Rout on the post sanction report which was prepared by S.C. Rout vide Ex.PW31/K (D-28). PW31 further deposed that General Power of Attorney of Book Debt and supply bills vide Ex. PW31/L were submitted by Vinay Mittal for M/s Delhi Trading Company. PW31 also CBI Vs. S.C. Rout & Ors. CBI. No. 342/2019 27 of 143 identified the affidavit of V.K. Gupta for residential plot No. 13/5 vide Ex. PW31/M. PW31 identified the signatures of S.C. Rout on stock inspection report/post sanction supervision of M/s Delhi Trading Company vide Ex.PW31/N (D-30) and on letter dated 12.10.2012 vide Ex.PW31/O (D-
100). PW31 also identified the signature of S.C. Rout as well as official stamp at Point-A on Renewal Credit Sanction Intimation letter vide Ex.PW31/P (D-31 - 14 pages). PW31 on being shown Account Opening Form of Account No. SB/01/9203 alongwith KYC documents vide Ex.PW31/R (Colly - 13 pages) (D-101), identified his signature alongwith official stamp at Point-A on Ex.PW31/R.
54. PW32 Shri Rathnakar, Deputy General Manager-cum-Head of Corporation Bank, South Zone. PW32 deposed that whenever an account becomes NPA then a follow-up procedure for recovery is initiated by approaching the borrower and then steps are taken for encashment of security. He also deposed that in the event of forgery, impersonation, internal bank inquiry are conducted and if any criminal angle is detected then the complaint is lodged with CBI. With respect to the present case, he stated that pursuant to the inquiry, he was instructed by the bank to file the complaint vide Ex.PW27/B under his signature and official seal. He further deposed that vide seizure memo dated 09.11.2016 vide Ex. PW27/C, the documents were handed over to the CBI. PW 27 further perusing Ex. PW32/B, identified the attested photocopy of letter dated 10.03.2014 bearing his signature and stamp and vide this letter, S.C. Rout was placed in suspension and disciplinary proceedings were initiated against him. PW 27 upon perusing the letter dated 08.08.2016 identifies his signatures and states CBI Vs. S.C. Rout & Ors. CBI. No. 342/2019 28 of 143 that vide this letter, the General Manager i.e. competent authority initiated the minor penalty proceedings against S.C. Rout. PW32 upon perusing the different circulars gave his remarks as under: -
Sl. No. Details of Circular Remarks by PW 32.
1. Circular No. 731/2014 Witness states that said circular bears his
dated 06.11.2014 vide signature and the circular was regarding
Ex. PW32/D "Periodical legal audit of the title deeds and other
documents in respect of large value loan
accounts (Rs. 5 Crores & above)-as per RBI
Guidelines.
2. Circular No. 86/2003 Witness states that said circular bears his
dated 26.02.2003 vide signature and the circular was regarding
Ex. PW14/C "Safeguards/methods to be adopted to ensure that
the proposed mortgagor is really the holder of
title to the property proposed to be mortgaged
and the title deeds produced for scrutiny/offered
to be deposited as security are genuine".
3. HO Circular No. Witness states that said circular bears his
730/2008 dated signature and the said circular is regarding
19.08.2008 vide Ex. "Due Diligence-SME Borrowers"
PW32/E
4. HO Circular No. Witness states that said circular bears his
387/2003 dated signature and the said circular is regarding
07.10.2003 vide Ex. "Scrutiny of legal opinion"
PW32/F
5. HO Circular No. Witness states that said circular bears his
575/2013 dated signature and the said circular is regarding
25.09.2013 vide Ex. " verification of the title deeds taken as security
PW32/G for loans extended under Corp Scheme"
55. PW 32 further deposed that in pursuance of the recovery proceedings under SARFAESI Act, a notice on 29.04.2015 was pasted on the property CBI Vs. S.C. Rout & Ors. CBI. No. 342/2019 29 of 143 bearing No. 13/5, Raj Nagar, Ghaziabad of Guarantor V.K. Gupta of M/s Delhi Trading Company. PW32 further explained the Cash Credit Facility is granted against hypothecation and pledge of goods and produce, book debts , bill receipt etc. He further deposed that a borrower can draw within a prescribed limit/power as per his requirement for the purposes of the business. PW32 further deposed that necessary data in the prescribed format are required to be collected by the bank prior to considering the proposal for cash credit and necessary documents are required to be collected by the Branch Head and risk rating of the borrower is required to be ensured by the Branch Head as per rules and the credit limit must be secured through Collateral Security in the form of mortgage and charge on the movable assets and debts along with personal guarantee. PW32 further explained that after receipt of loan application, the branch is to look into the nature of industry, proposed activity, and status of parties with respect to production capacity, location of units, the demand and supply of the goods to be produced. PW32 further deposed that the nature of the concerned i.e. proprietorship, partnership firm or company of the applicant is required to be considered and if the new venture is to be undertaken then the past experience, conduct of the borrower and irregularity in the account is looked into and noted in the sanction note. PW32 further stated that the financial status of the promoter in arranging the margin money, availability of regularity permission, KYC documents such as Sales, Tax, Excise Trade Tax/PAN Number and income tax return of the borrower are required to be verified. PW32 further deposed that the primary and the collateral security are also required to be secured and valuation report from the approved valuer with respect to immovable property should be obtained. PW32 also stated that a Branch Manager is CBI Vs. S.C. Rout & Ors. CBI. No. 342/2019 30 of 143 required to visit the property and verify the authenticity of the property from neighbors and evaluate the Valuation Report in accordance with the guidelines/circulars of the bank. PW32 further deposed that credit report on the guarantor who happened to be Director and third party after obtaining the evidence with respect to their assets and liabilities and KYC documents of the Guarantor are required to be obtained and due diligence report as per bank guidelines are also to be obtained and assets and liability with respect to the immovable property is to be verified by making personal visits. PW32 further stated that Branch Manager is also required to ensure that the property offered as collateral security falls in the approved colony having sanction plan and completion certificate and a verification with respect to the authority of ownership from the available resources and the original title deeds are to be obtained. PW32 further stated that legal opinion and encumbrance certificate must be obtained from the Panel Advocate and Financial Audit Report of the borrower for the last three years are to be obtained and for the new concern, the financial alongwith estimates for current Financial Years and projection for the next year are required to be obtained in the prescribed format (CMA Data) and latest provisional balance sheets duly signed by the borrower should be obtained. The antecedents should be verified by Statutory Auditor to scrutinize the financial so that sale projections are realistic and achievable by observing the past performance of the borrower. He also deposed that Branch Manager is required to ensure the profitability projection should be realistic and the borrower must have enough capital and internal approval to provide the requisite margin. He also stated that the quantum of the cash credit limit is based on the estimated expected sales and operating cycle of the working capital.
CBI Vs. S.C. Rout & Ors. CBI. No. 342/2019 31 of 143
56. PW33 Shri Arvind Kumar Pandey, Clerk-cum-Cashier, Oriental Bank of Commerce stated that vide Notice Ex.PW33/A, he provided the statement of account vide Ex.PW33/D (Colly - 35 pages) alongwith the certificate of Bankers Book of Evidence vide Ex.PW33/C through letter vide Ex.PW33/B. He also identified the certified copy of the Account Opening Form of M/s Mangalam Trading Company vide Ex.PW33/E, bearing his signature at Point-A. PW33 upon being shown the Customer Account Ledger pointed out that Page No. 7 an entry of Rs.45,50,000/-, 40,50,000/- and 45,56,000/- dated 07.03.2012, 14.03.2012 and 15.03.2012 respectively were made from Account of M/s Delhi Trading Company to M/s Mangalam Trading Company.
57. PW34 Ms. Anshul Mehta was posted as Branch Head of HDFC and she deposed that pursuant to the notice dated 14.06.2017 of the CBI, his assistant Shri Arvind Yadav provided the documents as mentioned in production-cum-seizure memo dated 18.07.2017 vide Ex.PW34/A to the CBI and the original documents were provided alongwith notice vide Ex.PW 34/B running in 23 pages.
58. PW35 Shri Vivek Gupta is the son of Vijender Kumar Gupta. He stated that his father had purchased a residential property from Ghaziabad Development Authority in the year 1980. He also stated that vide Notice under SARFAESI Act vide Ex.PW27/A, an information was received that his father had defaulted in paying the loan and pursuant to which, his father filed a reply dated 12.05.2015 vide Ex. PW32/A and also visited the bank CBI Vs. S.C. Rout & Ors. CBI. No. 342/2019 32 of 143 with his father and informed the bank that no loan was taken and the copy of the original title deed was shown to the bank and the same was compared with the title deed available with the bank and it was found by the bank that the title deed available with the bank is forged. He also stated that vide seizure memo Ex.PW35/B, the copy of the letter vide Ex.PW35/C dated 22.08.2016 was seized and he also stated that the copy of Aadhaar card and passport duly attested by his father under his signatures at Point A-1 and A-2 was also provided vide Ex.PW35/D (D-104) which also bears the colour photograph of his father at Point X. PW35 also identified the copy of his Aadhaar card and passport bearing his signature on Point-A1 and A-2 vide Ex.PW35/E (Colly). PW35 identified the signature of his father at Point-A1 (marked in blue pencil A-29) and A-2 (marked in blue pencil A-30) on the letter dated 19.11.2016 vide Ex.PW35/F which was submitted to Manager, Canara Bank. PW35 also identified the specimen signatures marked S-48 to S-57 of his father on ten sheets vide Ex.PW35/G (Colly). PW35 on being shown the title deed Ex.PW19/A (part of D-97) stated that same does not bear the photograph and signature of his father and Ex. PW19/A is a forged document w.r.t to property No. R-13/5, Raj Nagar, Ghaziabad. He further stated that his father did not take any loan from any bank with respect to above property in question and the notice under SARFAESI Act was withdrawn by the bank and PW 35 do not know any person by the name of Vinay Mittal.
59. PW-36 Shri Hari Singh Negi, Senior Branch Manager, Vijaya Bank (now Bank of Baroda) stated that vide letter vide Ex.PW36/B, he provided the Account Opening Forms of M/s J.K Sales Corporation having Current CBI Vs. S.C. Rout & Ors. CBI. No. 342/2019 33 of 143 Account No. 604100301000258, M/s Pramouk Enterprises having A/c No. 604100301000704 and M/s Shovana Enterprises having A/C No. 6041003010000706 alongwith certificate of Bankers Book of Evidence bearing his signature at Point-A in response to Notice vide Ex.PW36/A. PW36 also brought on record the statement of account of M/s J.K. Sales from the period 01.03.2012 to 01.12.2014 vide Ex.PW-36/D alongwith certificate u/s 2-A of Bankers Book of Evidence Act, 1891, bearing his signature at Point-A and the signature of Asstt. Branch Manager at Point-B vide Ex.PW36/C. PW36 upon perusing the statement of account stated that vide Entry X1 to X3 on Ex.PW36/D an amounts of Rs.20,00,000/-, Rs.41,76,000/- and Rs.41,76,000/- were credited in the above-said account through RTGS from M/s Delhi Trading Company. PW36 further perusing the statement of Account of M/s Pramouk Enterprises w.e.f. 01.03.2012 to 01.12.2014 stated that vide credit Entry at Point-X1 on Ex.PW36/E (part of D-107), an amount of Rs.10,52,800/- dated 27.03.2012 was transferred through RTGS from the account of M/s Delhi Trading Company. PW36 further identified signature of Shri Amit Kumar, Asst. Branch Manager at Point-A on Ex.PW36/E as well as on cetificate u/s 2 A of Bankers Book of Evidence Act Ex. PW36/G.PW36 further perusing the statement of Account of M/s Shovana Enterprises w.e.f. 01.03.2012 to 01.12.2014 stated that vide debit Entry at Point-X1 on Ex.PW36/F (part of D-107), an amount of Rs.33,00,000/- dated 14.03.2012 regarding transfer of the said amount through RTGS to the account of M/s Delhi Trading Company. PW36 further identified the signature of Shri Amit Kumar, Asst. Branch Manager at Point A on Ex.PW36/F.PW36 after perusing the certificates u/s 2-A of Bankers Book of Evidence Act vide Ex.PW36/G and Ex. PW36/H identified his CBI Vs. S.C. Rout & Ors. CBI. No. 342/2019 34 of 143 signatures at Point-A on it. PW36 upon perusing the attested copy of Account Opening Form of M/s J.K. Sales Corporation alongwith relevant documents vide Ex.PW36/I Colly, part of D-107, and attested coy of Account Opening Form of M/s Pramouk Enterprises alongwith relevant documents vide Ex.PW36/J Colly, part of D-107 identified signature of Shri Amit Kumar at Point-A on Ex.PW36/I and Ex.PW36/J. PW36 upon perusing the attested copy of Account Opening Form of M/s Shovna Enterprises alongwith relevant documents vide Ex.PW36/K Colly, part of D-107, identified signature of Shri Amit Kumar at Point-A and PW36 deposed that Account Opening form of this account was handed over to the CBI in another RC No. 6/2014.
60. PW-37 Shri Prabhat Ranjan Kumar, Branch Head, Axis Bank brought on record the Account Opening Form of M/s Neha Enterprises of Account No. 912020010782990 vide Mark PW37/A and the Statement of Account indicating the relevant debit entries by which an amount of Rs.50,00,000/- was debited from the account of M/s Neha Enterprises to the account of M/s Delhi Trading Company through RTGS vide Mark PW37/B.
61. PW38 Shri Madhur Nandwani deposed that he was posted as Chief Manager, Kotak, Vasant Vihar from 01.05.207 to April, 2019. He identified the signature of Ms. Yukti Pant, the then Operation Manager through which some documents were provided to CBI vide Ex.PW38/A. PW38 further deposed that Account Opening Form in respect of Account No. 631011020568 alongwith relevant documents were provided to the CBI vide Ex.PW38/B (Colly). PW38 upon perusing the statement of Account of CBI Vs. S.C. Rout & Ors. CBI. No. 342/2019 35 of 143 Account No. 631011020568 from 01.03.2012 to 22.07.2013 vide Ex.PW38/C stated that vide credit entry at Point-X1, Rs.38,50,000/- was credited in the said account from the account of M/s Delhi Trading Company through RTGS. PW38 upon perusing the certificate u/s 2 (A) of Bankers Book of Evidence Act in support of Account No. 631011020568 identified the signature of Shri Kulin Thaker, Executive Vice President and Shri Sanjay Gupta, Senior Executive Vice President.
62. PW-39 Shri Ankur Goel was owner of property bearing no. D-9, 306, Laxmi Nagar. He deposed that he used to rent out the portion of the premises by executing rent deed. PW39 further deposed that he is unable to recall whether he had let out the portion Office No. 306, Third Floor, Plot No. D9, Laxmi Nagar, Delhi to a tenant named as Gaurav Arora.The attention of the witness was drawn to the photocopy of the rent agreement for the purposes of the identification of signature of Gaurav Arora as well as his signature and PW39 upon perusing the rent agreement vide Mark PW39/A denied his signature at Point-A on it. PW39 further deposed that as far as he can recall he did not have any paper related to the rent agreement related to Gaurav Arora.
63. PW-40 Shri Sunil Mahatma deposed that his father Shri Pradeep Kumar Mahatma had met with an accident in the year 2015 and was undergoing treatment and he used to manage the accounts regarding tax at Madhu Vihar Patparganj and during investigation, he had provided the medical documents pertaining to his father vide Mark PW40/1 (colly) and the same was seized through seizure memo vide Ex. PW40/A. CBI Vs. S.C. Rout & Ors. CBI. No. 342/2019 36 of 143
64. PW-41 Shri Vipin Rathi deposed that he had worked as a peon in the office of Shri Pradeep Kumar Mahatma for about two-three months. He further deposed that Shri Pradeep Kumar Mahatma had taken his documents i.e. Voter Identity Card and PAN Card for the purposes of opening a bank account. PW41 was shown Vijaya Bank Account Opening Form of M/s Shovana Enterprises alongwith other documents vide Ex.PW36/K (colly). PW 41 identified his photograph but denied his signature appearing on the account opening form. PW41 denied his signature appearing on the VAT certificate at Point A (Part of Ex. PW36/K). PW41 identified the photocopy of the Voter Identity Card bearing his signature at Point-A. PW41 denied the signature appearing on the letter (change of correspondence address) as relatable to him and he also denied the signature on the photocopy of Rent Agreement made as part and parcel of Ex.PW36/K (colly) and further stated that he is unable to tell as to who had submitted the documents with the bank. PW41 further deposed that he had neither worked nor, carried out any transaction on behalf of M/s Showna Enterprises and that he had never operated the bank account. PW41 further deposed that a blank cheque book of the said account was obtained by Pradeep Kumar Mahatma in which his signatures were obtained and it was told to him that whenever any money was required, the same would be handed over to him. PW41 further deposed that he was promised to give Rs.7,000/- to Rs.8,000/- per month if the business is conducted in the said firm. PW41 further deposed that cheque of the said account was kept by Shri Pradeep Kumar Mahatma. PW41 deposed that he would not able to identify Pradeep Kumar Mahatma due to lapse of considerable amount of time.
CBI Vs. S.C. Rout & Ors. CBI. No. 342/2019 37 of 143
65. PW-42 Shri Chandra Sekaran who was posted as Chief Manager at Zonal Office, Delhi from July 2014 to June, 2017 handed over the the attested copies of the documents to the CBI vide seizure memo vide Ex.PW42/A:-
i. Attested Copy of Manual of Working Capital Finance (total 181 pages) vide Ex.PW42/B (D-67) under his attestation at Point-A. ii.Attested copy of Group credit Policy (52 pages) vide Ex.PW42/C (D-68) under his attestation at Point-A. iii.Attested copy of Circulars No. 640/2007 dated 3.08.2007 (4 pages) vide Ex.PW29/B (D-69), Circular No. 590/2007 dated 14.08.2007 vide Ex.PW29/A (D-70), Circular No. 664/2007 dated 05.09.2007 vide Ex.PW29/C (D-71), Circular No. 110/2003 dated 11.03.2003 vide Ex.PW14/B-1 (D-
72), Circular No. 64/2010 dated 22.01.2010 vide Ex.PW14/B-2 (D-73), Circular No. 886/2010 dated 23.11.2010 vide Ex.PW14/B-3 (D-74) and Circular No. 738/2011 dated 28.10.2011 vide Ex.PW42/D (D-75).
66. PW43 Shri R. Ganesan, Investigating Officer deposed that FIR vide Ex.PW43/A was entrusted to him for investigation by then SP Shri Sanjay Dubey. He further deposed that he collected various documents and recorded CBI Vs. S.C. Rout & Ors. CBI. No. 342/2019 38 of 143 the statements of the witnesses as per their version and the FIR was based on the complaint dated 05.08.2016 from the then DGN Corporation Bank vide Ex.PW27/B. PW43 further deposed that vide seizure memo Ex.PW27/C, he collected the documents from Shri G. Ravindran, Chief Manager, Corporation Bank. PW43 further deposed that the details of the documents as furnished through seizure memo are mentioned in Ex.PW43/B which was furnished by Shri Ravindran. PW43 further deposed that KYC proforma for opening current account in the name of M/s Delhi Trading Corporation in the proprietorship of Vinay Mittal was obtained vide Mark PW43/1. PW43 on further investigation stated that photograph of the account holder in Current Account No. CBCA/1/299 (D-5) vide Ex.PW31/A (colly) and Saving Bank Account No. SB/01/9204 vide Ex.PW23/A (D-6) maintained at Corporation Bank are of Vinay Mittal at encircled Point C and X respectively. PW43 after referring to account opening form bearing Account No. SB/01/10456 (part of D6) alongwith KYC documents vide Ex.PW43/C stated that Vinay Mittal had opened an account in which he introduced himself as the proprietor of Delhi Trading Company in the name of Vinay Mittal. PW43 identified the signature and photograph of Vinay Mittal on Ex.PW43/C. PW43 further deposed that vide seizure memo Ex.PW27/D, some documents were collected vide Ex.PW43/D (Colly). PW43 identified the signature of Vinay Mittal on financial statements vide Ex.PW43/D (Colly) since it came across during his investigation.
67. PW43 brought on record the statement of account of M/s Delhi Trading Company alongwith certificate u/s 2 (A) of Bankers Book of Evidence Act, bearing the signature of Shri Ravindran vide Ex.PW43/E. CBI Vs. S.C. Rout & Ors. CBI. No. 342/2019 39 of 143 PW43 brought on record the photocopy of schedule of notes to the account, Form 3 CB, CD and annexures of these alongwith computation of income, profit and loss, balance sheet alongwith annexures, estimated balance sheets and schedule of fixed assets of account of M/s Delhi Trading Company vide Mark PW43/2.PW43 deposed that vide seizure memo dated 20.09.2016 vide Ex.PW43/F (D-42), he had collected certain documents from Shri Rajender Yadav, Asst. Manager, Corporation Bank, Vasant Vihar, Delhi-92 under his signatures. PW-43 deposed that vide memo Ex.PW43/F, he collected two self payee cheques bearing nos. 270604 and 270610 of Rs.3,50,000/- and Rs.4,00,000/- of Corporation Bank vide Ex.PW43/G (Colly) bearing the signatures of Vinay Mittal at Point-A, Point-B & Point- C.
68. PW43 upon perusing the seizure memo dated 27.09.2016 (D-43) vide Ex.PW18/B stated that vide this seizure memo, he collected certain documents as mentioned in the said seizure memo from Shri Mahender Pratap Mishra, Tehsil Gandhi Nagar, Sub-Registrar, Ghaziabad, UP under his signature at Point-A. PW 43 also identified his signature at Point-B on Ex.PW18/B. PW43 upon perusing the seizure memo dated 23.08.2016 (D-
46) vide Ex.PW35/B stated that vide this seizure memo, he collected certain documents as mentioned in the said seizure memo from Shri V.K. Gupta, 4801, Bharatram Road under his signature at Point-A. PW43 also identified his signature at Point-B on Ex.PW35/B. PW43 further deposed that Vivek Gupta S/o Shri Vijender Kumar Gupta had appeared before him through Authorization letter vide Ex.PW35/C. PW43 also brought into record the monthly calculation sheet of drawing power which was based on the CBI Vs. S.C. Rout & Ors. CBI. No. 342/2019 40 of 143 monthly stock statement bearing the signature of Vinay Mittal vide Ex.PW43/H (Colly). PW43 upon perusing the seizure memo dated 23.08.2016 vide Ex.PW16/C stated that vide this seizure memo, he had collected certain documents as mentioned in the seizure memo from Shri Mukesh Goyal under his signature at Point-A. PW43 also identified his signature at Point-B and vide the seizure memo Ex.PW16/C, lease deed executed between Bimla Devi and Vinay Mittal vide Ex.PW43/I was seized.PW43 upon perusing the seizure memo dated 16.09.2016 vide Ex.PW7/A stated that vide this seizure memo, he had collected copy of statement of account of M/s Delhi Trading Company (Ex.PW7/B (Colly) alongwith certificate U/s 2-A of Bankers Book of Evidence Act (Ex.PW7/C) from Shri Neeraj Tyagi. PW43 upon perusing the seizure memo dated 07.10.2016 vide Ex.PW43/J stated that vide this seizure memo, he had collected certain documents as mentioned in the seizure memo from Shri Sachin Mehrotra under his signature at Point-A. PW43 also identified his signature at Point-B. PW43 further stated that vide letter Ex.PW43/K (D-62) dated 19.08.2016, he had sent a letter to the Electoral Registration Officer for the verification of the Voter Identity Card in the name of V.K. Gupta S/o Shri R.K. Gupta alongwith the photocopy of the Voter Indentity card Mark PW43/3 and he further deposed that vide letter Ex.PW5/A, it was informed by Shri M.K. Sharma, AERO that no data could be found with respect to Voter ID No. NGQ0589624 in the name of V.K. Gupta S/o Shri RK Gupta. PW43 further deposed that vide letter/Notice dated 19.08.2016, an information with respect to the genuineness of the Driving License No. DL- 07200500662 was sought alongwith the copy of the driving license vide Ex.PW43/L (colly) and in response of the same, MLO Mayur Vihar CBI Vs. S.C. Rout & Ors. CBI. No. 342/2019 41 of 143 confirmed the genuineness of the driving license vide letter Ex.PW43/M.PW43 upon perusing the seizure memo dated 06.10.2016 vide Ex.PW42/A stated that vide this seizure memo, he had collected certain documents as mentioned in the seizure memo from Shri Chandrasekaran, the then Chief Manager, Corporation Bank under his signature at Point-A. PW43 also identified his signature at Point-B on Ex.PW42/A. PW43 deposed that letter vide Ex.PW8/8 dated 09.11.2016, the information was received in the office of CBI (the information was from the Income Tax Department with respect to Income Tax Returns of M/s Delhi Trading Company).
69. PW43 further deposed he had collected statement of account of M/s Bhumika Plaster's alongwith certificate u/s 2 (A) of Bankers Book of Evidence Act vide Mark PW43/4. PW43 also brought on record the statement of account of Vivek Jain vide Ex.PW1/3 alongwith the certificate u/s 2 (A) of Bankers Book of Evience Act vide Ex. PW1/2 vide forwarding letter Ex. PW1/1. PW43 also brought on record certified copy of account statement of Varam Kumar Gupta bearing Account No. SB01-009203 alongwith u/s 2 (A) of Bankers Book of Evidence Act vide Mark PW43/5.PW43 further deposed that vide letter Mark PW43/6 dated 05.12.2016, a communication from Vigilance Department, Corporation Bank wherein the decision of imposing major penalty of dismissal was enforced upon the accused SC Rout. PW43 also brought on record letters vide Ex.PW44/A and Ex.PW44/B vide which the questioned writings, specimen writing and admitted writings were sent to CFSL for expert analysis through SP, CBI. PW43 also brought on record letter CBI Vs. S.C. Rout & Ors. CBI. No. 342/2019 42 of 143 Ex.PW44/DX1 through which SP, CBI deputed Constable Jagveer Singh to collect the exhibits from CFSL. PW43 further deposed that he collected loan application vide Ex.PW11/A alongwith statement (Ex.PW17/A) showing assets and liability of Vinay Mittal and Guarantor Varam Kumar Gupta from Corporation Bank and it was further revealed to him that Vipan Kumar Luthra (Vipan Kumar Luthra) was impersonating himself as Varam Kumar Gupta and introduced himself as Guarantor. PW43 further deposed that the photograph of Vipan Kumar Luthra (Vipan Kumar Luthra) was also affixed on the loan application as guarantor. PW43 further brought on record letter dated 02.02.2012 issued by Punjab National Bank, Preet Vihar Branch reflecting the status of accounts of Vinay Mittal, proprietor of M/s Delhi Trading Company in the bank. PW43 further deposed that Varam Kumar Gupta (Guarantor) and Vinay Mittal (Proprietor) have signed such statements of assets and liability which were obtained from Corporation Bank. PW43 further deposed that the KYC documents vide Ex.PW31/C (Colly) of Varam Kumar Gupta bearing his attestation at Q-6 and Q-7 were also sent to CFSL for expert opinion. PW43 further deposed that the signatures appearing on memorandum of title deed vide Ex.PW31/E from Q- 8 to Q-20 were also sent to CFSL for expert opinion and the documents and the photograh of Vipan Kumar Luthra (Vipan Kumar Luthra) are Ex.PW19/A1 and Ex.PW19/A. PW43 after perusing the sanction intimation letter vide Ex.PW31/F dated 06.03.2012 identified the signatures of Vinay Mittal being proprietor of M/s Delhi Trading Company and Guarantor on Ex.PW31/F and deposed that are at Point Q-21. PW43 further identified signature of Vinay Mittal on the letter dated 06.03.2012 written by Vinay Mittal to the Branch Manager, Corporation Bank, Vasant Vihar for overdraft CBI Vs. S.C. Rout & Ors. CBI. No. 342/2019 43 of 143 facilities/cash credit limit of Rs.3 crores bearing the signature of Vinay Mittal at Point-A vide Ex.PW43/N. PW43 further deposed that the documents i.e. Demand Promissory Note, Take Delivery Letter to DPN, Common Deed of Hypothecation of movable assets/book debts, guarantee agreement and Letter of Agreement were submitted by Vinay Mittal, bearing his signature at Point-A, after the sanction of loan. PW43 further deposed that the signatures of guarantor on the Guarantee Agreement and Affidavit are appearing at Point Q-22 to Q-34 vide Ex.PW31/M. PW43 identified the signature of Vinay Mittal on D-7 and D-8 part of Ex.PW31/B (Colly) since he had taken the specimen signatures of Vinay Mittal during the investigation. PW43 also identified the signature of Vinay Mittal at Point-A on the certified copy of the registration of M/s Delhi Trading Company vide Ex.PW43/O since he had taken the specimen signatures of Vinay Mittal during investigation.
70. PW43 further deposed that certified copy of the lease deed vide Ex.PW43/P (Colly) alongwith certified copies of filled up form of Police verification of tenant, passport of Vinay Mittal, copy of rent agreement (all part of D-57) were provided by Shri Sachin Mehrotra vide seizure memo vide Ex.PW43/J bearing the signature of Shri Sachin Mehrotra at Point-A. PW43 deposed that letter Ex.PW2/1 (D-76) with respect to verification of registration certificate was collected during the investigation. PW43 also brought letter vide Mark PW43/7 confirming that Aadhaar Card No. XXXX0702 was in the name of Vipan Kumar Luthra (Vipan Kumar Luthra) and he also received letter vide Ex.PW6/A containing the documents Ex.PW6/B (Colly). PW43 also identified the signature of Vinay Mittal on CBI Vs. S.C. Rout & Ors. CBI. No. 342/2019 44 of 143 the letter dated 12.10.2012 addressed to Corporation Bank vide Ex.PW31/A. PW43 identified the signature of Vinay Mittal on every point and that of the guarantor at Point Q-35 on the application form for non priority trade advances other than for vehicle loans vide Ex.PW43/Q. PW43 further deposed that through seizure memo vide PW43/R, he collected documents from Shri G. Ravindran vide Ex.PW31/R (Colly). PW43 further deposed that he received a letter dated 22.09.2016 (D-102) and upon perusing the same, witness stated that vide this letter, the details of PAN Card issued in the name of Vinay Mittal and Varam Kumar Gupta were provided by NSDL and alongwith this letter, photocopies of PAN application forms of Vinay Mittal and Varam Kumar Gupta and other documents were also received and the copy of PAN of Varam Kumar Gupta was submitted in the bank. PW43 further deposed that upon receiving the said application for allotment of PAN of Varam Kumar Gupta from NSDL vide Ex.PW43/S (Colly), the photograph affixed on the application form was not of Varam Kumar Gupta but was of some other person namely Shri Ramesh Sharma who was later examined by PW43 as a witness and mentioned at Srl. No. 18 in the list of witnesses in the charge-sheet. PW43 further deposed that the photograph affixed on the Voter Identify Card does not contain the photograph of Varam Kumar Gupta but of Ramesh Sharma and PW43 identified the photograph of Ramesh Sharma affixed at Point-A on PAN Card and Voter Identity card. PW43 further deposed that he issued a Notice u/s 91 Cr.PC vide Ex.PW43/T to AXIS Bank and in response of the same, he received certified copies of Account Opening Forms of Current Account Nos. 912020010782990 and 912020017403052 and the respective statement of accounts of above- mentioned accounts from AXIS Bank vide Mark PW37/A and Mark CBI Vs. S.C. Rout & Ors. CBI. No. 342/2019 45 of 143 PW37/B (Colly). PW43 further deposed that vide letter dated 16.01.2017 of Corporation Bank, the certified copy of the account opening form pertaining to Account No. CBCA-290 and its related documents, statement of account and certificate under section 2A of Bankers Book of Evidence Act were collected vide Mark PW43/8 (Colly). PW43 further deposed that letters vide D-112 to D-122 were issued by the concerned SP, CBI requiring that accounts of various parties be freezed, the copies of the letters were collectively marked as Mark PW43/9. PW43 further deposed that after analyzing the documents collected during investigation, statement of witnesses recorded and expert opinion, he filed the charge sheet against the accused persons.
71. PW-44 Shri Sanjay Dubey was In-Charge, EO-V, Unit of EO-II Branch. He deposed that FIR vide Ex.PW43/A was based on the complaint vide Ex.PW27/B and the investigation of the said case was handed over to Shri R. Ganesan. PW44 further deposed that he forwarded questioned documents along with specimen handwriting/signatures and admitted writings vide letter dated 13.10.2016 and also furnished the details of questioned documents and specimen handwriting/signatures and questionnaires for the expert in Annexure A to C. The letter as well as annexures were exhibited as Ex.PW44/A (colly). PW44 further deposed that during the investigation, additional specimen signatures as well as admitted writings and questionnaires vide Annexure A and B were sent through letter alongwith annexures vide Ex.PW44/B. PW44 further deposed that CFSL report dated 19.12.2016 was received in his office on 19.12.2016 which was endorsed by him to IO vide Ex.PW4/4. He further stated that charge-sheet CBI Vs. S.C. Rout & Ors. CBI. No. 342/2019 46 of 143 and the supplementary charge-sheet were forwarded under his signatures on 23.12.2016 and 24.10.2017.
72. After recording the statements of prosecution witnesses, the prosecution evidence was closed vide order dated 08.01.2024 and the matter is listed for Statement of Accused U/s 313 CrPC.
STATEMENT UNDER SECTION 313 CR.P.C.
73. Accused SC Rout in his statement recorded u/s 313 CrPC answered most of the questions as relating to the record or that he did not have any knowledge about the same. The specific plea which was taken by A-2 S.C. Rout in his statement u/s 313 Cr.P.C. that V.K. Luthra had shown himself to be V.K. Gupta @ Varun Kumar Gupta and provided forged and fabricated collateral security by acting as a Guarantor, however, the grant and disbursal of loan was not made in contravention of any banking guidelines and he also took the plea that the relevant guidelines were followed by him and he had performed his duties in accordance with the applicable circular(s) and guidelines of Bank and he was cheated by the borrower and the guarantor.
74. Accused Vipan Kumar Luthra in answers to the most of the questions denied either for want of knowledge or lack of awareness. He denied that he had acted or appeared as a guarantor. He further stated that he was innocent and falsely implicated in the present case and did not have any interaction with any of the accused. With respect to the fact about appearance of his photograph and signatures on various documents, accused Vipan Kumar CBI Vs. S.C. Rout & Ors. CBI. No. 342/2019 47 of 143 Luthra denied his photograph appearing vide Ex. PW9/B as guarantor alongwith statements showing assets and liabilities of account holder and guarantor vide Ex.PW11/A and Ex.PW17/A. He further stated that neither KYC documents as guarantor at Q-6 and Q-7 belong to him nor they bear his attestation and the documents appear to be manipulated. Accused Vipan Kumar Luthra deposed that the photographs affixed on the documents do not belong to him and the so called photograph appears to be manipulated. He also stated that he never visited or executed any document. He also stated that he was falsely implicated in the present case and he never had any interaction with any of the accused persons prior to the registrartion of the present case.
75. Both the accused A-2 S.C. Rout and A-3 Vipan Kumar Luthra did not lead any Defence Evidence.
76. After recording the Statement u/s 313 CR.P.C., accused Vipan Kumar Luthra has stopped appearing before the Court since 02.09.2024 and thereafter and bailable warrants were issued on 02.09.2024, 05.10.2024 and 26.10.2024 which were received back un-executed and thereafter, Non Bailable Warrants was issued on 22.11.2024 which remained unexecuted and thereafter, vide order dated 23.12.2024 and 15.02.2025, the proclamation u/s 84 BNSS (Corresponding to Section 82 CrPC) was issued against Accused Vipan Kumar Luthra and the proclamation was published on 21.02.2025 in Times of India and Amar Ujala (Newspapers) and vide order dated 08.04.2025, Accused Vipan Kumar Luthra was declared as "Proclaimed Person".
CBI Vs. S.C. Rout & Ors. CBI. No. 342/2019 48 of 143 SUBMISSIONS OF THE LD. PP FOR THE CBI.
77. It is contended by the Ld. PP for the CBI that prosecution is successful in proving its case against the accused persons. It is contended that A-2 S.C. Rout had acted in flagrant violation of mandatory guidelines and circulars while discharging his duties as Bank Manager. It is also contended that A-2 S.C. Rout in conspiracy with other accused persons had sanctioned the loan and disbursed the same to the borrower Vinay Mittal. It is contended that A-2 had failed to conduct due diligence and also did not verify the documents furnished by the borrower/accused Vinay Mittal. It is also contended that no verification was conducted by A-2 S.C. Rout/Bank Manager with respect to the godown being under the control of Vinay Mittal and no inquiries were made from the nearby shopkeepers with respect to the connection of accused Vinay Mittal to the godown. It is also contended that it is the duty of the Branch Manager to verify the collateral security offered by the borrower. It is also contended that godown was taken on rent by Sanjay Bansal from its owner and thereafter, the said godown was handed back to its owner since Sanjay Bansal had failed to pay the rent. It is also contended that malafide intention of A-2 S.C. Rout could be adjudged from the very fact that loan was disbursed on 06.03.2012, whereas the legal opinion was obtained/received on 10.03.2012 and the same clearly indicates the haste and the manner in which the loan was granted to the borrower/accused Vinay Mittal. It is also contended that no proper verification was conducted with respect to the office address as well as Godown and the residential premises was shown as an office. It is also CBI Vs. S.C. Rout & Ors. CBI. No. 342/2019 49 of 143 contended that the documents on the basis of which the financial capacity of the accused Vinay Mittal was assessed would reveal that the statement of accounts as well as the attestation by the Chartered Accountant were found to be forged and fabricated and during the course of the investigation, Shri Vivek Garg, Chartered Accountant was examined and he denied conducting audit of Delhi Trading Corporation. It is also contended that Branch Manager had failed to prove the authenticity of various financial documents by not making inquiry from the concerned Chartered Accountant. It is also contended that property bearing no. R-13/5, Raj Nagar, Ghazibad, U.P was offered as a collateral security, however, the Bank Manager S.C. Rout did not verify the true and actual position with respect to the property which is being proposed to be mortgaged by not conducting proper enquiries. It is also contended that A-2 S.C. Rout had failed to properly examine the relevant documents which were furnished by A-1 Vinay Mittal while sanctioning and disbursing the loan.
78. It is also contended by the Ld. PP for the CBI that A-2 S.C. Rout had failed to verify the identity of the guarantor and allowed forged and fabricated collateral security for the purposes of mortgaging a property. It is also contended that A-2 S.C. Rout had failed to follow the instructions of CCPC while granting and disbursing the loan to the borrower/A-1 Vinay Mittal.
SUBMISSIONS ON BEHALF OF ACCUSED SC ROUT.
CBI Vs. S.C. Rout & Ors. CBI. No. 342/2019 50 of 143
79. It is contended on behalf of A-2 S.C. Rout that prosecution has miserably failed to prove its case beyond doubt and utterly failed to disclose as to which circular or guidelines were violated by A-2 S.C. Rout to merit invocation of Section 13 of PC Act. It is also contended by the Ld. Counsel for the A-2 S.C. Rout that as per prosecution documents such as title deeds etc. were required to be verified and in the instant case, the title deeds were got verified by A-2 S.C. Rout through the Bank Empanelled Lawyer and if subsequently it was found forged and fabricated, the Branch Manager cannot be held responsible and it is also contended that prosecution has also failed to disclose as to what steps should have been taken by A-2 S.C. Rout for verification of the title deed. It is also contended that bare perusal of Ex.PW31/I would reveals that inspection of both godowns and the office was conducted by A-2 S.C. Rout alongwith PW31 Sh. Venkatanarayan. The Prosecution has utterly failed to explain as to what methodology should have been adopted by SC Rout for verification of the title deeds or the address of the borrower. It is also contended that visit was also made to the address bearing No. 13/5 Raj Nagar, Ghaziabad, UP which was mentioned in title deeds vide Ex. PW19/A by accused SC Rout. It is also contended that in so far as applicability of Clause 5.05 of Circular No. 86/2003 vide Ex. PW14/C only become applicable when previous lawyer had made some observations with respect to the documents, however, the Panel Lawyer did not make any recommendation or observation in this regard. It is contended that Prosecution has failed to establish that accused had committed any misconduct or that he had connived with the accused persons and there is no direct evidence that accused SC Rout was part of any alleged conspiracy to defraud the Bank at the behest of the borrower. It is also contended that there CBI Vs. S.C. Rout & Ors. CBI. No. 342/2019 51 of 143 is no legally admissible proof that accused SC Rout had obtained for himself or for any other person, any valuable thing or peculiar advantage by abusing his position or by acting against the public interest. It is also contended that prosecution had failed to establish the foundational fact showing the commission of offence under Prevention of Corruption Act. It is also contended that prosecution had only examined bankers to affirm that money was transferred from one account to other and no investigation was done either with vendors/companies with whom the borrower had conducted the business. It is also contended that both PW 31 and Accused SC Rout had conducted the inspection whereas, accused SC Rout was implicated in the present case whereas, PW 31 was made as Prosecution Witness. It is also contended that none of the bank officials from Corporation Bank had imputed any fault or wrongdoing on the part of accused SC Rout. Ld. Counsel submits that since prosecution has failed to prove its case and therefore, accused SC Rout is entitled for the acquittal.
80. Ld. Defence Counsel for Accused SC Rout has relied upon; Radha Pisarassair Amma Vs. State of Kerala (2007) 13 SCC 410, R Balakrishna Pillai Vs. State of Kerala (2003) 9 SCC 410, C.K. Jaffer Shareif Vs. State (2013) 1 SCC 205, M. Narayana Nambiar (1963) 2 Cri LJ 186, C. Chenga Reddy Vs. State of Andhra Pradesh (1996) 10 SCC 193, SVL Murhty Vs. State of Andhra Pradesh (2009) 6 SCC 77, Kanwarjit Singh Kakkar Vs. State of Punjab (2011) 13 SCC 158, R Sai Barathy Vs. Jayalalitha (2004) 2 SCC 9, Sharad Birdhichand Sarda Vs. State of Maharashtra (1984) 4 SCC 114, Ashish Batham Vs. State of MP (2002) 7 SCC 317, State of UP Vs. MK Anthony (1985) 1 SCC 505, Om Prakash Berlia Vs. UTI AIR (1983) Bom 1, CBI Vs. S.C. Rout & Ors. CBI. No. 342/2019 52 of 143 AC Agrawal Vs. UOI (1962) All LJ 2, Major S.K. Kale Sarda Vs. State of Maharashtra (1977) 2 SCC 394, Jayantibhai Bhenkarbhai Vs. State of Gujarat (2002) 8 SCC 165, Chandiram Vs. Emperor AIR (1926) Sind 174, Saju Vs. State of Kerala (2001) 1 SCC 378 and State of MP Vs. Sheetla Sahai (2009) 8 SCC 617.
SUBMISSIONS ON BEHALF OF ACCUSED VIPAN KUMAR LUTHRA.
81. It is contended by the ld. LAC for accused Vipan Kumar Luthra that accused was falsely implicated in the present case and has noting to do with any of the loan transactions and no document was submitted by him in the bank. It is also contended that none of prosecution witness had identified the accused Vipan Kumar Luthra during the trial and the CFSL Report vide Ex. PW4/3 was not against him and the signatures appearing on various documents were not imputed to accused Vipan Kumar Luthra. It is also contended that no material was produced by the Prosecution that he had received any benefit from the transactions. It is also contended that no circumstantial evidence either direct or indirect was brought on record to show accused had any connection with accused Vinay Mittal (A-1). It is also contended that mere availability of photograph of accused Vipan Kumar Luthra would not be a ground to establish or belief that photograph was indeed provided by accused Vipan Kumar Luthra.
82. I have considered the submissions made by the ld. PP for CBI as well as ld. Counsel for accused SC Rout and Deepak Kumar, ld.LAC for the CBI Vs. S.C. Rout & Ors. CBI. No. 342/2019 53 of 143 accused Vipan Kumar Luthra and also perused the record of the case and the written submissions filed on behalf of accused SC Rout .
ANALYSIS & FINDINGS
83. The charge framed against accused SC Rout reads as under:-
10.07.2018 CHARGE 1, Naresh Kumar Malhotra, Special Judge, ( PC-Act) CBI-02 do hereby charge you accused S.C. Rout son of late Sh. Bidyadar Rout as under:-
That you accused S.C. Rout the then Chief Manager/sanctioning authority of Corporation Bank, Vasant Vihar, New Delhi conspired criminally with accused borrower Vinay Mittal (A1) (since PO) proprietor of M/s Delhi Trading company and Vipin Kumar Luthra (A3), a private person and accepted forged documents ie forged title deed of collateral security ie R 13/5 Raj Nagar, Ghazaibad in the name of V. K. Gupta, identity document in the name of V. K. Gupta, balance sheet and net worth certificate of M/s Delhi Trading Company, knowing it well that these documents were forged, recommended and forwarded the loan proposal of accused borrower Vinay Mittal (A1 ) (since PO) to Zonal Office for further consideration and thereafter sanctioned the loan of Rs. 300 lacs to Vinay Mittal (Al) without following the terms and conditions prescribed by Grid Committee Members of Zonal Office of the bank in the processing note, without due verification of collateral security ie R13/5 Raj Nagar, Ghaziabad offered by accused borrower Vinay Mittal (A1) and without proper verification of the office and CBI Vs. S.C. Rout & Ors. CBI. No. 342/2019 54 of 143 godown of Vinay Mittal (AI) and in violation of the official guidelines/circulars of Corporation Bank and you unduly favoured accused Vinay Mittal (AI) and Vipin Kumar Luthra (A3) who impersonated as V. K. Gupta, the owner of collateral security ie R 13/5 Raj Nagar, Ghaziabad in sanctioning loan thereby cause wrongful loss of Rs. 412.48 lac to the Corporation Bank and Thereby committed an offence punishable U/s 13(1)(d) read with 13(2) of POC Act and 420 IPC, 467 IPC, 468 IPC and 471 IPC read with 120 B of IPC and within my cognizance.
And, I hereby direct you to be tried for the aforesaid offence.
(N. K.MALHOTRA ) Spl. Judge ( PC Act), CBI-02 NDD:PHC
84. The charge framed against accused Vipan Kumar Luthra reads as under:-
10.07.2018 CHARGE I, Naresh Kumar Malhotra, Special Judge, ( PC-Act) CBI- 02 do hereby charge you accused Vipin Kumar Luthra son of late Mulk Raj as under:-
That you accused Vipin Kumar Luthra, a private person entered into a criminal conspiracy with Vinay Mittal (Al) ( Since PO) and S. C. Rout (A2) to cheat the Commercial Bank, Vasant Vihar by impersonating as V. K. Gupta owner of property bearing No. R-13/5 Raj Nagar, Ghaziabad, Delhi which was offered as collateral security by accused Vipin Mittal (Al) for loan of Rs.
300 lac from Corporation Bank, Vasant Vihar, N.Delhi and you became a guarantor of the loan by furnishing the above mentioned property as collateral security knowingly well that CBI Vs. S.C. Rout & Ors. CBI. No. 342/2019 55 of 143 above mentioned property belonged to one Mr. Vijender Kumar Gupta son of Sh. Ram Kumar Gupta r/o 46-A, Friends Colony, New Delhi and thereby caused wrongful loss of Rs. 412.48 lac to the Corporation Bank and thereby committed an offence U/s 419 IPC, 420 IPC, 467ГРС, 468 РС, 471 I г/w section 120 B IPC and within my cognizance. And I hereby direct you to be tried for the aforesaid offence.
(N. K.MALHOTRA ) Spl. Judge ( PC Act), CBI-02 NDD:PHC
85. The Amended Charge framed against accused Vipan Kumar Luthra reads as under:-
20.05.2024 AMENDED CHARGE IN ADDITON TO THE CHARGE DATED 10.07.2018 I, Hasan Anzar, Special Judge, ( PC-Act) CBI-03 do hereby charge you accused Vipan Kumar Luthra(Private Person) son of late Mulk Raj as under:-
That you accused Vipan Kumar Luthra (Private Person) by impersonating as Vijendra Kumar Gupta @ V.K. Gupta S/o Sh. Ram Kumar Gupta owner of Property bearing No. R-13/5, Raj Nagar, Ghaziabad which was offered as collateral security by accused Vinay Mittal (A1) for loan of Rs. 300 Lakhs from Corporation Bank, Vasant Vihar, New Delhi and you became a guarantor of the loan by furnishing the above mentioned property as collateral security knowingly well that above mentioned property belonged to one Sh. Vijendra Kumar Gupta @ V.K. Gupta S/o Ram Kumar Gupta, R/o 46-A, Friends Colony, New Delhi and thereby caused wrongful loss of Rs. 412.48 Lakhs to CBI Vs. S.C. Rout & Ors. CBI. No. 342/2019 56 of 143 the Corporation Bank and thus, you cheated Corporation Bank, Vasant Vihar, New Delhi by impersonation and therby committed an offence u/s 419 a& 420 IPC and within my cognizance.
And I hereby direct that you be tried for the aforesaid charged by this Court.
(Hasan Anzar) Special Judge ( PC Act), CBI-03 RADC, New Delhi/20.05.2024
86. Sections 416 and 419 IPC reads as under :
"416. A person is said to "cheat by personation" if he cheats by pretending to be some other person, or by knowingly substituting one person for another, or representing that he or any other person is a person other than he or such other person really is. Explanation.-- The offence is committed whether the individual personated is a real or imaginary person. Illustration (a) A cheats by pretending to be a certain rich banker of the same name. A cheats by personation, (b) A cheats by pretending to be B, a person who is deceased. A cheats by personation.
Section 419 IPC reads as under :-
"419. Whoever cheats by personation shall be punished with imprisonment of either de-scription for a term which may extend to three years, or with fine, or with both.
87. It would be appropriate to consider the provisions of Section 415 and 420 IPC before appreciating the contentions of the parties with regard to commission of offences under Indian Penal Code. Section 415 IPC reads as under :
415. Cheating - Whoever, by deceiving any person, fraudulently or dishonestly induces the person so deceived to deliver any property to any person, or to consent that any person shall retrain any CBI Vs. S.C. Rout & Ors. CBI. No. 342/2019 57 of 143 property, or intentionally induces the person so deceived to do or omit to do anything which he would not do or omit if he were not so deceived, and which act or omission causes or is likely to cause damage or harm to that person in body, mind, reputation or property, is said to "cheat".
Section 420 IPC reads as under :-
"420. Cheating and dishonestly inducing delivery of property - Whoever cheats and thereby dishonestly induces, the person deceived to deliver any property to any person, or to make, alter or destroy the whole or any part of a valuable security, or anything which is signed or sealed, and which is capable of being converted into a valuable security, shall be punished with imprisonment of either description for a term which may extent to seven years, and shall also be liable to fine."
88. The necessary ingredients of offence of cheating under section 420 IPC are, when any person fraudulently or dishonestly induces a person by deceiving him to deliver any property to any person or to consent that any person shall retain any property, or intentionally induces the person so deceived to do or to omit anything which he would not do or omit if he were not so deceived, and which act or commission causes or is likely to cause damage or harm to that person in body, mind, reputation or property is said to cheat.
89. If both Sections 415 IPC and 420 IPC are read together, then in order to attract the applicability of Section 420 IPC, the ingredients of Section 415 IPC are also required to be satisfied. Secondly, the person cheated must be dishonestly induced to deliver a property to any person. Thirdly, when a person destroys or alters either wholly or part of the valuable security or CBI Vs. S.C. Rout & Ors. CBI. No. 342/2019 58 of 143 anything signed or sealed and capable of being converted into valuable security is said to have committed the offence of cheating.
90. Sections 463, 464, 467, 468, 471 IPC read as under :-
Section 463 Indian Penal Code [Whoever makes any false document or false electronic record or part of a document or electronic record, with intent to cause damage or injury], to the public or to any person, or to support any claim or title, or to cause any person to part with property, or to enter into any express or implied contract, or with intent to commit fraud or that fraud may be committed, commits forgery.
Section 464 IPC in The Indian Penal Code 464 Making a false document. -- [A person is said to make a false document or false electronic record-- First --Who dishonestly or fraudulently -
(a) makes, signs, seals or executes a document or part of a document;
(b) makes or transmits any electronic record or part of any electronic record;
(c) affixes any [electronic signature] on any electronic record;
(d) makes any mark denoting the execution of a document or the authenticity of the [electronic signature], with the intention of causing it to be believed that such document or part of document, electronic record or [electronic signature] was made, signed, sealed, executed, transmitted or affixed by or by the authority of a person by whom or by whose authority he knows that it was not made, signed, sealed, executed or affixed; or Secondly --Who, without lawful authority, dishonestly or fraudulently, by cancellation or otherwise, alters a document or an electronic record in any material part thereof, after it has been made, executed or affixed with [electronic signature] either by himself or by any other person, whether such person be living or dead at the time of such alteration; or Thirdly --Who dishonestly or fraudulently causes any person to sign, seal, execute or alter a document or an electronic record or to affix hi [electronic signature] on any electronic record knowing that such person by reason of unsoundness of mind or intoxication cannot, or that by reason of deception practised upon him, he does not know the CBI Vs. S.C. Rout & Ors. CBI. No. 342/2019 59 of 143 contents of the document or electronic record or the nature of the alteration.] Section 467 IPC
467. Forgery of valuable security, will, etc.--Whoever forges a document which purports to be a valuable security or a will, or an authority to adopt a son, or which purports to give authority to any person to make or transfer any valuable security, or to receive the principal, interest or dividends thereon, or to receive or deliver any money, movable property, or valuable security, or any document purporting to be an acquittance or receipt acknowledging the payment of money, or an acquittance or receipt for the delivery of any movable property or valuable security, shall be punished with 1[imprisonment for life], or with imprisonment of either description for a term which may extend to ten years, and shall also be liable to fine.
Section 468 IPC
468. Forgery for purpose of cheating.--Whoever commits forgery, intending that the 1[document or electronic record forged] shall be used for the purpose of cheating, shall be punished with imprisonment of either description for a term which may extend to seven years, and shall also be liable to fine.
Section 471 IPC Whoever fraudulently or dishonestly uses as genuine any document or electronic record which he knows or has reason to believe to be a forged document or electronic record, shall be punished in the same manner as if he had forged such document or electronic record.
91. In Dr. Vimla Vs. Delhi Administration, AIR 1963 SC 1572, it was held that:
The definition of "false document" is a part of the definition of "forgery". Both must be read together. If so read, the ingredients of the offence of forgery relevant to the present enquiry are as follows, (1) fraudulently signing a document or a part of a document with an intention of causing it to be believed that such document or part of a document was signed by another or under his authority; (2) making of such a document with an intention to commit fraud or that fraud CBI Vs. S.C. Rout & Ors. CBI. No. 342/2019 60 of 143 may be committed. In the two definitions, both mens rea described in s.464 i.e., "fraudulently" and the intention to commit fraud in s. 463 have the same meaning. This redundancy has perhaps become necessary as the element of fraud is not the ingredient of other intentions mentioned in s. 463. The idea of deceit is a necessary ingredient of fraud, but it does not exhaust it;an additional element is implicit in the expression. The scope of that something more is the subject of many decisions. We shall consider that question at a later stage in the light of the decisions bearing on the subject. The second thing to be noticed is that in s. 464 two adverbs,"dishonestly" and "fraudulently" are used alternatively indicating thereby that one excludes the other. That means they are not tautological and must be given different meanings.
Section 24 of the Penal Code defines"dishonestly" thus :"Whoever does anything with the intention of causing wrongful gain to one person or wrongful loss to another person, is said to do that thing dishonestly"."Fraudulently" is defined in s. 25 thus:" A person is said to do a thing fraudulently if he does that thing with intent to 591defrand but not otherwise".The word "defraud" includes an element of deceit. Deceit is not an ingredient of the definition of the word "dishonestly" while it is an important ingredient of the definition of the word "fraudulently". The former involves a pecuniary or economic gain or loss while the latter by construction excludes that element. Further the juxtaposition of the two expressions "'dishonestly" and"fraudulently" used in the various sections of the Code indicates their close affinity and therefore the definition of one may give colour to the other. To illustrate, in the definition of "dishonestly", wrongful gain or wrongful loss is the necessary enough. So too, if the expression "fraudulently' were to be held to involve the element of injury to the person or persons deceived, it would be reasonable to assume that the injury should be something other than pecuniary or economic loss. Though almost always an advantage to one causes loss to another and vice versa, it need not necessarily be so. Should we hold that the concept of fraud"
would include not only deceit but also some injury to the person deceived, it would be appropriate to hold by analogy drawn from the definition of"dishonestly" that to satisfy the definition of"'fraudulently" it would be enough if there was a non-economic advantage to the deceiver or a non-economic loss to the deceived. Both need not co-exist.
6. Let us now consider some of the leading text book writers and, decisions to ascertain the meaning of the word "fraudulently".
7. The classic definition of the word "fraudulently" is found in Steplien's History of the Criminal law of England, Vol.2, at p. 121 CBI Vs. S.C. Rout & Ors. CBI. No. 342/2019 61 of 143 and it reads "I shall not attempt to construct a definition which will meet every case which might be suggested, but there is little danger in saving that whenever the words "fraud" or intent to defraud" or "fraudulently" occur in the definition of a crime two elements at least are essential to the commission of the crime : namely, first, deceit or an intention to deceive or in some cases mere secrecy ; and secondly, either actual injury or possible injury or to a risk of possible 'injury by means of that deceit or secrecy............. This intent is very seldom the only, or the principal, intention entertained by the fraudulent person, whose principal object in nearly every case is his own advantage................. A practically conclusive test of the fraudulent character of a deception for criminal purposes is this : Did the author of the deceit derive any advantage from it which could not have been had if the truth had been known ? If so it is hardly possible that the advantage should not have had an equivalent in loss or risk of loss to someone else, and if so, there was fraud."It would be seen from this passage that "'fraud" is made up of two ingredients, deceit and injury. The learned author also realizes that the principal object of every fraudulent person in nearly every case is to derive some advantage though such advantage has a corresponding loss or risk of loss to another. Though the author has not visualized the extremely rare situation of an advantage secured by one without a corresponding loss to another, this idea is perused in later decisions.
15. To summarize : the expression "'defraud" involves two elements, namely, deceit and injury to the person deceived. injury is something other than (1) economic loss that is', deprivation of property, whether movable or immovable, or of money, and it will include any harm whatever caused to any person in body, mind, reputation or such others. In short, it is a non economic or non-pecuniary loss. A benefit or advantage to the deceiver will almost always cause loss or detriment to the deceived. Even in those rare cases where there is a benefit or advantage to the deceiver, but no corresponding loss to the deceived, the second condition is satisfied.
92. Section 13(1)(d) of Prevention of Corruption Act, 1988 Act reads as under :-
"If any -
(i) by corrupt or illegal means, obtains for himself or for any other person any valuable thing or pecuniary advantage; or CBI Vs. S.C. Rout & Ors. CBI. No. 342/2019 62 of 143
(ii) by abusing his position as a public servant, obtains for himself or for any other person any valuable thing o r p e c u n i a r y advantage; or
(iii) while holding office as a public servant, obtains for any person any valuable thing or pecuniary advantage without any public interest; or"
93. Section 13(2) of Prevention of Corruption Act, 1988 Act reads as under :-
(2) Any public servant who commits criminal misconduct shall be punishable with imprisonment for a term which shall be not less than [four years] but which may extend to [ten years] and shall also liable to fine. (The word "four years" and "ten years" were substituted by Act 1 of 2014 for "one year" and "four years"
respectively)
94. Section 13(2) of PC Act is a punishable section when ingredients of offence under section 13(1)(d) of the PC Act are made out against the public servant. Section 13 (1) (d) of PC Act provides that, if a public servant obtains for himself or for any other person valuable thing or pecuniary advantage by corrupt or illegal means. Secondly, if a public servant abuses his position as a public servant obtains either for himself or for any other person any valuable thing or pecuniary advantage. Thirdly, when a public servant obtains for any person any valuable thing or pecuniary advantage without any public interest.
95. The Division Bench of Hon'ble Delhi High Court in Runu Ghosh Vs. CBI in Crl. Appeal No. 482/2002 (DoD : 21.12.2011) was pleased to observe that :
CBI Vs. S.C. Rout & Ors. CBI. No. 342/2019 63 of 143 "74. Having now settled the true interpretation of whether the offence under Section 13(1) (d) (iii) requires proof of mens rea, it would now be vital to settle what really the prosecution would have to establish to say that the public servant‟s actions or decisions, which result in a third party obtaining a pecuniary advantage or valuable thing, without public interest. The expression "public interest" is known to law; at the same time its meaning is not rigid, and takes colour from the particular statute".
IIn a later decision, LIC of India vs Consumer Education & Research Centre (1995) 5 SCC 482, it was held that:
- public authorities or those whose acts bear insignia of public element, action to public duty or obligation are enjoined to act in a manner i.e. fair, just and equitable, after taking objectively all the relevant options--
Further in Noida Entrepreneurs Association v. Noida & Ors ., (2011) 6 SCC 508, in the light of provisions of Section 13 (1) (d), The court held that:
The State or the public authority which holds the property for the public or which has been assigned the duty of grant of largesse, etc. acts as a trustee--
75. It would be profitable to emphasize that public servants are an entirely different class, and the level of trust reposed in them by the society is reflected in the high standards of behaviour and rectitude expected of them, both in the discharge of their duties, and otherwise.
* * * *
78. Therefore, when a public servant‟s decision exhibits complete and manifest disregard to public interest with the corresponding result of a third party obtaining pecuniary advantage or valuable thing, he is fastened with responsibility for "criminal misconduct" under Section 13(1) (d) (iii). There is nothing reprehensible in this interpretation, because the "act" being "without public interest" is the key, the controlling expression, to this offence. If one contrasts this with "abuse" of office resulting in someone "obtaining"
"pecuniary advantage or valuable thing", it is evident thatSection 13(1)(d) (ii) may or may not entail the act being without public interest. This offence- under Section 13(1) (d) (iii) advisedly does not require proof of intent, or mens rea, because what Parliament intended was to punish public servants for acts which were without public interest. This kind of offence is similar to those intended to deal with other social evils, such as food and drug adulteration, CBI Vs. S.C. Rout & Ors. CBI. No. 342/2019 64 of 143 (offences under Prevention of Food Adlteration Act, Section 13(1), Drugs & Cosmetics Act; Section 7(1) Essential Commodities Act, 1955, Section 25 Arms Act (1959), possession of explosives, air and water pollution, etc.
96. The Hon'ble Supreme Court in Neera Yadav Vs. CBI in Crl. Appeal No. 253 of 2017 was pleased to observed that :
"15. Section 13 of the P.C. Act in general lays down that if a public servant, by corrupt or illegal means or otherwise abusing his position as a public servant obtains for himself or for any other person any valuable thing or pecuniary advantage, he would be guilty of 'criminal misconduct'. Sub-section (2) of Section 13 speaks of the punishment for such misconduct. Section 13(1)(d) read with Section 13(2) of the P.C. Act lays down the essentials and punishment respectively for the offence of 'criminal misconduct' by a public servant. Section 13(1)(d) reads as under: "13. Criminal misconduct by a public servant.-- (1) A public servant is said to commit the offence of criminal misconduct,
(d) if he,--
(i) by by corrupt or illegal means, obtains for himself or for any other person any valuable thing or pecuniary advantage; or
(ii) by abusing his position as a public servant, obtains for himself or for any other person any valuable thing o r p e c u n i a r y advantage; or
(iii) while holding office as a public servant, obtains for any person any valuable thing or pecuniary advantage without any public interest; or"
A perusal of the above provision makes it clear that if the elements of any of the three sub-clauses are met, the same would be sufficient to constitute an offence of 'criminal misconduct' under Section 13(1)(d).
Undoubtedly, all the three wings of clause (d) of Section 13(1) are independent, alternative and disjunctive. Thus, under Section 13(1)
(d)(i) obtaining any valuable thing or pecuniary advantage by corrupt or illegal means by a public servant in itself would amount to criminal misconduct. On the same reasoning "obtaining a CBI Vs. S.C. Rout & Ors. CBI. No. 342/2019 65 of 143 valuable thing or pecuniary advantage" by abusing his official position as a public servant, either for himself or for any other person would amount to criminal misconduct.
97. The word 'Misconduct' was considered in the case titled as State of Madhya Pradesh Vs. Sheetla Sahai and Ors., (2009) 8 SCC 617, in paragraph 46 it was observed as under :
"In State of Punjab v. Ram Singh it was stated:
Misconduct has been defined in Black's Law Dictionary, 6th Edn., at p. 999, thus:
''Misconduct. A transgression of some established and definite rule of action, a forbidden act, a dereliction from duty, unlawful behavior, willful in character improper or wrong behavior; its synonyms are misdemeanor, misdeed, misbehavior, delinquency, impropriety, mismanagement, offence, but not negligence or carelessness.'' Misconduct in office has been defined as:
''Misconduct in office Any unlawful behavior by a public officer in relation to the duties of his office, willful in character. Term embraces acts which the office holder had no right to perform, acts performed improperly, and failure to act in the fact of an affirmative duty to act.'' In P. Ramanatha Aiyar's Law Lexicon, 3rd Edn., at p. 3027, the term 'misconduct' has been defined as under:
'Misconduct. The term ''misconduct'' implies a wrongful intention, and not a mere error of judgment.
MISCONDUCT is not necessarily the same thing as conduct involving moral turpitude.
The word ''misconduct'' is a relative term, and has to be construed with reference to the subject matter and the context wherein the term occurs, having regard to the scope of the Act or statute which is being, construed. ''Misconduct'' literally means wrong conduct or improper conduct."
337. As to when conduct of a public servant becomes criminal misconduct within the meaning of PC Act, it was observed in paragraphs 35 and 47 as under:
CBI Vs. S.C. Rout & Ors. CBI. No. 342/2019 66 of 143 ''35. Section 13 of the Act provides for criminal misconduct by a public servant. Such an offence of criminal misconduct by a public servant can be said to have been committed if in terms of Sections 13(1) (d)(ii)(iii) a public servant abuses its position and obtains for himself or for any other person any valuable thing or pecuniary advantage; or while holding office as a public servant, obtains for any person any valuable thing or pecuniary advantage without any public interest. Subsection (2) of Section 13 provides that any public servant who commits criminal misconduct shall be punishable with imprisonment for a term which shall be not less than one year but which may extend to seven years and shall also be liable to fine.
47. Even under the Act, an offence cannot be said to have been committed only because the public servant has obtained either for himself or for any other person any pecuniary advantage. He must do so by abusing his position as a public servant or holding office as a public servant. In the latter category of cases, absence of any public interest is a sine qua non. The materials brought on record do not suggest in any manner whatsoever that Respondents 1 to 7 either had abused position or had obtained pecuniary advantage for Respondents 8, 9, and 10, which was without any public interest."
98. Perusal of the charges invoked in the charge-sheet as well as the substantive charges framed against the Accused S.C. Rout would indicate that it was not explained which specific clause u/s 13(1)( d) PC Act was invoked by the prosecution against Accused S.C.Rout. A charge under section 13(1)(d) r/w Section 13(2) of PC Act was framed against the Accused S.C.Rout. In order to invoke Clause (i) and Clause (ii) of Section 13(d) of the PC Act, the prosecution is bound to establish the dishonest intention on the part of the public servant. The word "Dishonestly" is defined under section 24 of the Indian Penal Code. Section 24 of Indian Penal Code stresses on the intention i.e. if a person with an intention to cause wrongful gain to one person or wrongful loss to other person then the said person is doing such an act with dishonesty. Section 23 of the IPC defines wrongful gain and wrongful loss. In assessing the conduct of any public servant, the CBI Vs. S.C. Rout & Ors. CBI. No. 342/2019 67 of 143 action/conduct is scrutinized and whether action is shaped by the dishonest intention or not. The dishonest intention could be perceived directly or by way of different circumstances as put together by the prosecution in form of documentary or ocular evidence. The third part of Section 13(d) of the PC Act shall be dealt after the entire material is examined to consider whether acts of Accused SC Rout had assumed the trapping of criminal character by abusing his official position contrary to the public interest. This court shall deliberate each and every clause of Section 13 (1) (d) of the PC Act in reference to facts of the present case.
99. In "C.K. Jaffer Sharief Vs. State", 2013 (1) SCC 205, it was observed that "dishonest intention is the gist of the offence under section 13(1)(d) is implicit in the words used i.e. corrupt or illegal means and abuse of position as a public servant. A similar view was also expressed by Apex court in M. Narayanan Nambiar Vs. State of Kerala, AIR 1963 SC 1116 while considering the provisions of Section 5 of the 1947 Act.
100. The applicability of Section 13(2) of the PC Act does not depends on the fact that the public servant should have obtained a valuable thing or a pecuniary advantage for himself. An offence under section 13 of the PC Act can be said to have been committed in terms of Sections 13(1)(d), when a public servant abuses his position and obtains for himself or for any other person any valuable thing or pecuniary advantage; or while holding office as a public servant, obtains for any person any valuable thing or pecuniary CBI Vs. S.C. Rout & Ors. CBI. No. 342/2019 68 of 143 advantage without any public interest. Hence, it is not necessary that pecuniary advantage or a valuable thing has been procured by public servant for himself, it could be a third party. The word 'illegal' has not been defined under the PC Act but the same is defined in Indian Penal Code. Section 43 of Indian Penal Code defines illegal, legally bound to do when any action is an offence or is prohibited by law or which furnishes grounds for a civil action, the person is said to be legally bound to do whatever it is illegal in him to omit. The ratio of the judgments of "Runu Ghosh" and "Sahai" (Supra) would reveal that while considering the conduct of a public servant, the element of a public interest is also required to be considered.
101. In order to bring home the charge under clause (iii) of 13(1)(d) of the PC Act, the prosecution is required to establish that public servant had acted without any public interest on the basis of evidence available on record, admittedly, accused S.C. Rout had sanctioned the credit facility. It is also evident from the undisputed case of prosecution that the loan granted to the M/s Delhi Trading Company through its proprietor had turned NPA. Mere fact that an account had turned NPA would not be criminal offence unless, it is established that because of the criminal act of the accused SC Rout, the account had turned NPA. The term "Public Interest" and "Public Duty" have different connotation for different public servants. The term "Public Interest" have different meanings for a Minister or for a Head of an Institution or for a Middle Level Public Servant. In assessing the conduct of a public servant, one of the test in judging the impugned action of a Public Servant is to see whether he had acted in total disregard to the public interest, CBI Vs. S.C. Rout & Ors. CBI. No. 342/2019 69 of 143 the reference can be had to be the work/industry of a public servant. When a court is seized of impugned action (s) of a public servant by exalting it to the status of a criminality, the nature and job of such a public servant is required to be understood. Banking Sector is a core service area sector servicing myriad group of persons from different sections of the society by making the requisite finance available to public at large and banker makes money by providing services such as loan/credit facility to the needy persons and also acting as a custodian of large amount of money infused in the banking system by persons from varied background. When a Public Servant such as Bank Manager grants credit facility to a borrower and the borrower fails to make the payments, can it be said that grant of credit facility was without public interest. The answer has to be in negative since grant of credit facility is in the interest of public as well as in the interest of the bank as the same not only generates the income to the bank, but also plays a vital role in strengthening the economy of a country. To say that the credit facility grant and sanction of a credit facility to a borrower without public interest or there were elements of criminality, it would be incumbent upon the prosecution to bare to narrate the sequence of events, facts in the form of evidence both oral as well as documentary that credit facility was granted in utter negligent and careless manner and in total disregard to the accepting banking norms and the act of the public servant was so reckless that no prudent public servant could have performed the official act. The banking norms could be the settled banking practice or a code which suggest a particular task is to be performed and the variation in performance of such a task against the accepted norms would be one of the indices by which the conduct of a public servant is required to be adjudged. It is also noteworthy to mention that CBI Vs. S.C. Rout & Ors. CBI. No. 342/2019 70 of 143 different guidelines are framed or had been reduced into a writing but still decision making has human imprint. The human imprint could be inspired by number of factors such as the perception of a public servant to different guidelines, different practices performed over a period of time, the target given to a bank officer/public servant to bring business to the bank by facilitating the grant of loan etc. and to ensure that his acts do not result in depriving the bank of loss etc. and various instructions of the superior and a last minute decision taken by the public servant on hunch. Section 13(d)(iii) of the PC Act does not require a mens rea as an essential ingredient to determine the culpability of a public servant. (Vide Runu Ghosh vs CBI, Hon'ble Delhi High Court).
102. In brief, the case of prosecution is that Vinay Mittal (A-1) approached Corporation Bank, Vasant Vihar Branch, Delhi for obtaining the cash credit loan facility for expanding his rice trading business in the name of M/s Delhi Trading Company. The documents submitted with the application are required to be scrutinized and verified by the bank, report from the due diligence agency and panel lawyer for verification of the title deed and legal audit of the document are also to be obtained. The visits are also undertaken to the business premises/godown for the physical verification of borrower and his business etc by the bank officials/Manager as well as by Due Diligence Agency. The application form alongwith relevant documents are forwarded to Central Credit Processing Centre (CCPC) which evaluates the proposal and send back to the Bank alongwith its comments/suggestion/recommendation to the sanctioning authority for its CBI Vs. S.C. Rout & Ors. CBI. No. 342/2019 71 of 143 decision. The case of prosecution as unfolded to the effect that a borrower i.e Vinay Mittal and Vipan Kumar Luthra ( also referred as Vipin Kumar Luthra in some documents) impersonated as Varam Kumar Gupta @ VK Gupta (Guarantor) managed to obtain the cash and credit facility on the strength of forged and fabricated title deeds as collateral security in conspiracy and connivance with Accused SC Rout and accused Vinay Mittal in blatant disregard to various circular/guidelines and thereafter, sanctioned and disbursed the cash credit in the Loan Account of M/s Delhi Trading Company.
103. The steps involved in the processing of an application for grant credit facility, sanction and disbursal for easy understanding are as follows;
i. Submission of the loan application form by a borrower along with the requisite documents.
ii. Verification and due diligence of the credentials of borrowers and guarantor by the concerned bank official/Due Diligence agencies. iii. Applicability of the relevant circulars and guidelines, providing instructions on the procedure/steps involved in the process of loan application form and due diligence.
iv. Recommendation/ suggestion/ observation of CCPC to be placed before the Bank Manager for consideration prior to sanction and disbursal of the loan.
v. Compliance to the extant guidelines and circulars by the Sanctioning Authority/Bank Manager before grant and disbursal of the loan.
104. PW 29 Sh. Yogesh Mhaske, Sr. Manager, Credit, Head Office at CBI Vs. S.C. Rout & Ors. CBI. No. 342/2019 72 of 143 Mangalore deposed that the grant of cash credit facility by the bank to the borrower was on the basis of stock, debit position, past record and the bank statements as well as hypothecation and pledge of goods. The requisite documents as per the check list are collected by the Bank Manager while considering an application for grant of credit facility. PW 29 Sh. Yogesh Mhaske further elaborated that Branch Head/Manager had to undertake the due diligence with respect to financial health by taking into consideration the account/financial statements as well as the business activity of a borrower. He further stated a Branch Head is required to undertake/make a physical visit to the office and unit of the borrower. He further elaborated that a Bank Manager should develop an understanding to know about the nature of the business, manufacturing process, business cycle and to obtain the documents such as Balance Sheets, profit and loss statements and auditor's report while considering the proposal for the grant or cash credit loan. PW 29 further elaborated that a Branch Manager is also required to initiate due diligence of applicant/borrower through due diligence agencies for understanding the business activities of promoters and guarantors. The Branch Manager is also required to collect the valuation of the property and legal opinion of collateral securities from empanelled advocates and empanelled valuers. The Branch Manager is also required to carry out independent inquiry about the promoter and guarantor apart from empanelled advocates. A proposal for the cash credit facility up to an amount of Rs. 25 Lakhs are within the delegated lending power of the Branch Head and for an amount exceeding Rs. 25 lakhs, the credit proposal are subject to the vetting/scrutiny by the Grid Committee at the Zonal Office in pursuance to Head Office circular No. 664/2007 vide Ex. PW29/C (D-71).
CBI Vs. S.C. Rout & Ors. CBI. No. 342/2019 73 of 143 The required information is sent to CCPC which is basically constituted to overview the proposal for Cash Credit Facility. The Grid Committee studies the proposal in the form of process notes and make it observation on the proposal which is then forwarded to the Branch Manager/ Head for consideration.
105. PW 29 has further explained that the property offered as a collateral security i.e. the title deeds are required to be verified through a legal person and the verification of the property and its owner is required to be done by independent agency as well as through his own sources and officers in Branch to its satisfaction. PW 29 also stated that precautions in terms of Circular No 86/2003 vide Ex PW-14/C are required to be followed and reference was made to paragraph No. 5.07 of the said circular. As per PW 29, a proposal could be forwarded/sent to CCPC even though the documents are yet to be obtained.
106. PW 21 Sh Biswaranjan Sahoo, Chartered Accountant with Corporation Bank had prepared the process note vide Ex. PW21/A and then referred it to Credit Approval Grid Committee. PW 21 also state that loan proposal alongwith recommendation, documents and the relevant details are then entered into credit monitoring arrangement on the basis of which risk assessment note is prepared.
107. PW 32 Sh. Ratnakara, Deputy General Manager cum Zonal Head of CBI Vs. S.C. Rout & Ors. CBI. No. 342/2019 74 of 143 Corporation Bank, South Zone, Delhi brought on record various circulars vide Ex.PW32/D, Ex. PW32/E, Ex. PW32/F, Ex. PW32/G as well as Ex. PW14/C which are basically in the form of instructions to bank officials with respect to the due diligence and precautions to be undertaken when a loan is given by the bank. PW32 in his deposition has detailed that when an application for credit facility is moved by the borrower in the prescribed format, the necessary documents are to be collected and the risk rating of such a borrower is to be ensured as per prescribed rule and the credit limit must be secured through collateral security. He also explained that a Branch Manager has to look into the nature of industry, proposed activity, its status with respect to the production capacity, location of the unit, demand and supply of the goods to be produced and other process to assess the financial status of the promoter. The testimony of PW 32 in so far as about the detailed process relating to consideration of loan application is in consonance with the testimony of PW 29.
108. The testimony of PW 32 Sh. Ratnakara would indicate as to how the position of advances and non-performing assets were monitored at Head Office, Mangalore and Zonal Office at Delhi and when an account becomes NPA, The Branch & Zonal Office follow it up with the borrower and if there is no response from the borrower the next step would be to take legal recourse and encashment of available security, and in cases of criminality such as forgery, impersonation, an internal bank inquiry is conducted and the matter is reported to the CBI for legal action.
CBI Vs. S.C. Rout & Ors. CBI. No. 342/2019 75 of 143
109. PW-32 brought into record circular No. 798 dated 06.11.2014 vide Ex. PW32/D which provides for periodical legal audit of title deeds in respect to large value account amounting Rs. 5 Crores or above (NOTE: The circular vide Ex. PW32/D was issued post grant of Cash Credit Facility and after accused SC Rout was no longer working in the Bank as Branch Head). PW 32 also brought on record the Circular No. 86 dated 26.02.2003 vide Ex. PW14/C provides for the safeguards needed to be adopted to ensure that the proposed mortgager is really the holder of the property proposed to be mortgaged and the title deeds proposed for scrutiny/offered to be deposited as security are genuine. PW 32 also referred to Circular No. No. 387 of 2003 dated 07.10.2003 vide Ex. PW32/F provides that the legal opinion must be scrutinized. PW 32 further stated that vide Circular No 575 of 2013 dated 25.09.2013 vide Ex.PW32/G provides for the verification of the title deeds taken a security for loan extended under Corp Schemes.
110. A composite reading of the testimonies of PW-21, PW-29 and PW-32 would indicate that while granting Cash Credit Facility, various checks are undertaken at the Bank level as well as by the third parties such as Due Diligence Agency and Panel Lawyers who are required to verify the credentials of borrower and guarantor as well as the documents and when proposal for the grant of Cash Credit Facility is more than Rs. 25 Lakhs then, it is required to be vetted by CCPC. It is evident that an application for credit facility vide Ex. PW31/A (Colly) alongwith relevant documents are submitted to bank for consideration which after going through various checks, the credit facility is granted and when a borrower fails to make the CBI Vs. S.C. Rout & Ors. CBI. No. 342/2019 76 of 143 payment to the bank or when some criminality is observed in the grant of loan at the pere-sanction stage and at the post sanction stage, an inquiry is conducted and legal action is taken by the Bank.
111. The testimonies of PW29 and PW 32 would indicate that the Branch Manager is required to evaluate the proposal for a Cash Credit Facility by taking into consideration the profile as well as the nature of the business and the documents submitted for consideration are required to be dealt in accordance with circular and guidelines which provides the framework on the basis of which both the documents as well as the profile of borrower and guarantor are tested and therefore, the role of accused SC Rout is to be taken into consideration in the present case in light of the well settled practice as well as the various circulars and guidelines. Any proposal submitted to the CCPC is preceded by the preparation of process note and the said process note is further analyzed by a Grid Committee at Zonal Office.
112. PW 24 Sh Amit Kumar, PW25 Mohd. Khalique and PW28 Sh Parimal Singh were the members of Grid Committee who considered and dealt the process note dated 01.03.2012 vide Ex. PW21/A D-26). These witnesses had deposed that they had considered the proposal as submitted by the Branch and made necessary recommendations in Paragraph No. 22.
"The proposal contained in this memorandum has been cleared by the Credit Approval Grid Meeting No. 62 A dated 01.03.2012 with the resolution that the proposal be submitted to the Chief Manager for consideration and CBI Vs. S.C. Rout & Ors. CBI. No. 342/2019 77 of 143 approval/sanction". PW 24 Sh. Amit Kumar also made the following observation ;- (i) Before Sanctioning the limit, the Branch shall obtain the (No Dues) Certificate from the books regarding overdue in CIBIL Report. 2. Before sanctioning the limit, the branch shall visit the property offered as collateral and verify the genuineness of the same".
113. PW 28 Parimal Kumar Sinngh also made the following observation in Ex PW-21/A; -
(i) Office of the firm is at Preet Vihar and warehouse at Alipur. How the account shall be monitored by him. (ii) Due diligence report and Br. Visit report should be obtained. (iii) Legal clearance of legal opinion from Delhi shall be obtained. (iv) How the Branch got the connection.
114. The testimonies of PW 24 Sh. Amit Kumar & PW 28 Sh. Parimal Kumar Singh would reveal that the Grid Committee assists the Branch Manager in processing/considering the proposal given by a borrower by factoring the observation and the comments made by Members of the Grid Committee vide Ex. PW21/A and it was upto the Branch Manager to act on those recommendations. In the opinion of the Court when any specialized body is created in an institution to enable the Executive/Sanctioning Authority/Authority to aid in the decision making, it would be prudent on the part of such sanctioning Authority to give due regard to such report. Non-consideration or non-acceptance of recommendations be treated as a criminal act or an irregularity depend on the facts of the each case. Neither CBI Vs. S.C. Rout & Ors. CBI. No. 342/2019 78 of 143 any circular nor any direction/guidelines were brought into record that any recommendation made by CCPC was binding on the Branch Manager/Sanctioning Authority and no departure/variation could be made. It is evident from Ex. PW21/A (D-6) that certain recommendations were made i.e. No Dues Certificates regarding overdue as per CIBIL Report. The property is required to be verified by making visits, legal clearance and legal opinion From Delhi Circle Office and the Branch/officials are required to take appropriate remedial measures in light of the observation made by the members of the Grid Committee.
115. It is alleged that forged and fabricated title deeds vide Ex. PW19/A i.e. original freehold deed dated 15.07.2002 of V.K. Gupta and original lease deed dated 06.06.1980 of Sh. V.K. Gupta by Ghaziabad Development Authority pertaining to Property No. 13/5 Raj Nagar, Ghaziabad were deposited through memorandum of deposit of title deeds vide Ex. PW31/E.
116. In order to establish that both the deeds vide Ex PW-19/A submitted to the Bank were forged and fabricated, number of witnesses were examined by the prosecution that title deeds vide Ex.PW19/A neither bears the signature of the persons cited as witnesses in Ex.PW19/A nor it bears the signature of Sh. Vijender Kumar Gupta (V.K.Gutpa) and the free hold deed did not bear the photograph of V.K. Gupta. It is submitted that the title deeds vide Ex.PW19/A were never registered at the office of Sub- Registrar, Ghaziabad.
CBI Vs. S.C. Rout & Ors. CBI. No. 342/2019 79 of 143
117. PW 13 Sh. Bal Kishan Sharma, one of the witness to the execution of the original title deed (conversion from lease hold to free hold) vide Ex. PW19/A and upon perusing the same, he denied that Ex. PW19/A bears his signature as well as the signatures of other witness Sh. M Z Choudhary. PW 13 had also deposed that Ex. PW19/A does not bear the photograph of Sh. V.K. Gupta (original title holder) and also stated that photograph appearing at Point A vide Ex. PW19/B on Ex. PW19/A is not of Sh. V.K. Gupta. PW 19 Sh. M.Z. Chaudhary identified his signature on Ex. PW13/A i.e. the certified copy of the title deed of property bearing No. 13/5 Raj Nagar, Ghaziabad and after perusing the title deed vide Ex. PW19/A ( i.e. original freehold deed dated 15.07.2002 of V.K. Gupta and original lease deed dated 06.06.1980 of Sh. V.K. Gupta by Ghaziabad Development Authority pertaining to Property No. 13/5 Raj Nagar, Ghaziabad ) denied his signature at Point Y and also denied that photograph of Sh. V.K. Gupta at Point A on Ex. PW19/A on the free hold deed dated 24.07.2002.
118. PW35 Sh. Vivek Gupta (the son of Sh.Vijender Kumar Gupta) denied that the title deed (after conversion from Lease deed to free hold) deposited as collateral security with the Bank vide Ex. PW19/A neither bears the signature of his father nor, his photograph. PW 35 also denied that his father had taken any loan from the bank. PW-35 upon perusing the copy of the title deed (Lease deed to Free Hold) of property bearing No. 13/5, Raj Nagar, Ghaziabad vide Ex.PW26/A, identified his signature at Point A and further deposed that same was furnished/handed over to the IO during the course of CBI Vs. S.C. Rout & Ors. CBI. No. 342/2019 80 of 143 investigation. PW35 upon perusing the specimen signatures from Mark S-48 to S-57 on Ex. PW35/G as well as the letter dated 19.11.2016 vide Ex. PW35/F, identifies the signature of his father. (The letter dated 19.11.2016 vide Ex. PW35/F was obtained during investigation to have signatures of Shri Vijender Kumar Gupta (V.K.Gupta) the contemporary period for the purposes of comparing with the questioned signatures).
119. PW-18 Sh. Mahendra Pratap was the Sub Registrar at Ghaziabad during 2015-2017 had provided the certified copy of the title deed vide Ex. PW18/A vide seizure memo Ex. PW18/B. He/PW-18 after going through Memorandum of Title Deed containing title deeds made a broad comparison of the same and clearly stated that title deeds (i.e. Ex. PW19/A) could not have been registered at the Office of the Sub Registrar. The witness has also detailed in his testimony w.r.t various shortcomings in the title deeds vide Ex. PW19/A deposited with the bank such as handwriting of clerk is not clear, difference in photographs, no signature of party presenting the documents, no fingerprints of the executants, etc.
120. PW 27 Sh. Raveendran, Chief General Manager, Corporation Bank had brought on record the report vide Ex. PW27/E and as per the said report the title deed which was being held by Sh. Vijender Kumar Gupta was found to be genuine and the title deed vide Ex. PW19/A deposited with the bank was forged and fabricated. Perusal of Ex. PW27/E records various shortcomings in both the deeds filed in the bank vide Ex. PW19/A and opined that the CBI Vs. S.C. Rout & Ors. CBI. No. 342/2019 81 of 143 original documents held by the bank in respect of the subject property is forged and fabricated.
121. The CFSL Report vide ExPW4/3 containing the questioned signatures on Ex. PW19/A and other documents were opined not to be of Sh. Vijender Kumar Gupta(V.K.Gupta), the real owner of Property No. 13/5 Raj Nagar, Ghaziabad.
122. It can be safely said that prosecution was successful in establishing that collateral security in the form of title deeds i.e. (original freehold deed dated 15.07.2002 of V.K. Gupta and original lease deed dated 06.06.1980 of Sh. V.K. Gupta by Ghaziabad Development Authority pertaining to Property No. 13/5 Raj Nagar, Ghaziabad) vide Ex PW-19/A are forged and fabricated documents.
123. The substantive charge against SC Rout is to the effect that he had knowingly accepted the forged and fabricated collateral security i.e. title deeds vide Ex PW-19/A of Property bearing No. 13/5, Raj Nagar, Ghaziabad in flagrant violation of guidelines of Bank and connived with the borrower in disbursing the loan.
124. It is contended on behalf of Accused SC Rout that he performed all codal and necessary formalities as per the guidelines and also ensured that CBI Vs. S.C. Rout & Ors. CBI. No. 342/2019 82 of 143 the collateral security furnished by the borrower/guarantor is verified by the Panel Lawyer and therefore, he performed his duties as per applicable guidelines and circulars and cannot be blamed if the collateral security was found to be forged and fabricated at a subsequent stage whereas, ld. PP for CBI contended that accused SC Rout is fully responsible for the correctness of the collateral security deposited with the bank.
125. In order to appreciate the contentions of the parties, it is observed that when a title deed is offered as collateral security to secure the Cash Credit Facility, the title deed/document is required to be examined thoroughly and vetted before acting on it. The genuineness and authenticity of the original title deed presented as collateral security invariably requires verification from the concerned Registering Authority or the visual examination by the public servant. The visual examination may or may not be necessarily very successful in arriving at the conclusion that the document/collateral security was forged or not, in view of the sophisticated techniques employed by the cheater/criminals to make the forged and fabricated documents as close to original and at times the forgery on the document is so perfect that original document will look like a forged document. Moreover, the ability of a particular reader to detect a forged and fabricated document through visual examination varies from person to person and perhaps, one of the test would be to consider whether a person in similar rank or position to the public servant in a normal situation would be able to detect the forgery or apparent imperfection of a document with the plain naked eye examination (reasonable man test). No witness from the Bank holding similar rank to CBI Vs. S.C. Rout & Ors. CBI. No. 342/2019 83 of 143 accused SC Rout or his superior had deposed that they would have not accepted the title deeds as forgery was palpable from naked eye. PW 31 who dealt with the title deeds Ex. PW 19/A while preparing memorandum of deposit of title deeds vide Ex. PW31/E had also not testified that title deeds vide Ex. PW19/A were so blatantly forged and fabricated that no prudent person would have accepted them.
126. Another time-tested methodology would be to get the title deed verified from the office of Sub Registrar. No circular/guideline was brought on fore or any witness from the bank had prescribed that a Branch Manager was required to undertake a personal visit to the Office of Sub Registrar for the purposes of verifying the authenticity of the title property offered as collateral security and even members from the Grid committee i.e PW-24 Amit Kumar, 25 Mohd. Khalique and PW 28 Sh. Parimal Singh had also not instructed that Branch Head is required to make visit to the office of Sub Registrar.
127. As already observed the title deeds vide Ex.PW19/A deposited alongwith memorandum of title deed vide Ex.PW31/E were forged and fabricated, the issue for consideration as to what could have been done by accused SC Rout to check the veracity of Ex. PW19/A. Admittedly in the present case, accused SC Rout had provided the copy of the title deed relating to property bearing No. 13/5, Raj Nagar, Ghaziabad to PW 15 Vivek Jain, Advocate, empanelled Lawyer for the purposes of verification. In his CBI Vs. S.C. Rout & Ors. CBI. No. 342/2019 84 of 143 examination in chief dated 30.4.2022, PW-15 stated that "I was told by the Branch Head Vasant Vihar Corporation Bank to conduct the verification and give legal opinion. I had received the photocopies of the title deeds of plot No.13/5, Raj Nagar, Ghaziabad based on which I conducted the verification. I was expected to check from the office of Sub Registrar and give my report. I did a verification from the office of Sub Registrar, Ghaziabad and made my report". PW-15 in his report vide Ex.PW15/A also stated that after execution of free hold deed dated 15.07.2002, the deed was registered on 24.07.2002, Sh.V.K. Gupta had become actual and absolute owner of the aforesaid property and has got clear, valid and marketable title over the said property. He had also mentioned in his report that he had conducted the inspection at the office of Sub Registrar-II, Ghaziabad.
128. Furthermore vide Paragraph No. 4 of report Ex.PW 15/A dated 15.02.2012, it was mentioned that the relevant record for the period of thirty years after depositing usual search fees and no registered encumbrance was found and PW 15 had also placed on record the receipt vide Ex. PW15/B that he had carried out the requisite inspection. PW 15 in his examination in chief stated about the inspection carried out at the Office of Sub Registrar by him that "I did a verification from the office of Sub Registrar, Ghaziabad and made over my report. During the verification at the office of Sub Registrar as per procedure one inspection receipt is made against payment of fees. I had got the receipt dated 14.02.2012 after depositing the due payment which at this is stage is identified by the witness and is Ex. PW15/B. I conducted the verification myself by visiting the office of SUB Registrar physically CBI Vs. S.C. Rout & Ors. CBI. No. 342/2019 85 of 143 and after receiving the verification made my report authenticating that the property stands in the name of V.K. Gupta who was shown the holder of the title in the documents".
129. PW 15 had also stated that during the inspection he had seen the specific registered number as well as book No. 1, Jild No. 419, on pages 95 to 101, dated 24.07.2002 in respect of property bearing No. R-13/5, area measuring 1283.33 sq yards, situated in Raj Nagar, Ghaziabad and visit was made in the office of Sub Registrar on 14.02.2012.
130. The report vide Ex. PW15/A was submitted to Vasant Vihar Branch either on 15.02.2012 or within a few days to SC Rout, Branch Manager, Corporation Bank, Vasant Vihar, Delhi. The aforesaid report clearly indicates that PW 15 had given his positive opinion w.r.t the property offered as Collateral Security and it was one of the report which aided in the decision making whether to grant credit facility to M/s Delhi Trading Company through its proprietor Vinay Mittal or not.
131. The certified copy of the title deed vide Ex. PW13/A in respect of the property bearing Number 13/5, Raj Nagar, Ghaziabad was provided by PW 18 Sh. Mahendra Pratap was the Sub Registrar at Ghaziabad during the investigation. A perusal of Ex. PW13/A would reveal that at the backside the free hold title deed was mentioned as Document No. 4229 in book No. 1 Zild No. 919 Page No. 95 to 101 dated 24.07.2002 in favour of V.K. Gupta. As CBI Vs. S.C. Rout & Ors. CBI. No. 342/2019 86 of 143 already observed PW 15 Vivek Jain had categorically stated that he had inspected the record at the Office of Sub Registrar and the same is also mentioned in Paragraph No. 4 of the report vide Ex. PW15/A. The genuine title deed gives the reference of the document specifically as Zild No. 719 an d if Zild No. 719 was inspected by PW 15 then such a report with respect to the registration of property would not have been given to the Bank or there are some suspicious circumstances surrounding the particulars of title deed or would have promptly advised Accused S C Rout to procure in the certified copy of the title deeds which could have exposed that free hold deed dated 24.7.2002 vide Ex PW-19/A furnished to the bank was forged and fabricated document as it mentions Zild Number as 419 whereas actual Zild Number was 719 and revelation of this discrepancy at an initial stage probably would have alerted about the potential fraud perpetrated on the bank. PW-15 Vivek Jain tried to become half clever by simply stating that he had conducted the inspection of the Index and if he had properly conducted the inspection of the index then, it would have revealed the true facts that Zild number as mentioned in the Ex. PW19/A was false. PW 15 not only gave report Ex. PW15/A but also gave another report w.r.to verification of the title deed on 22.07.2013 vide Ex. PW15/F and once again categorically confirmed the genuineness of the title deed. Neither PW 31 nor PW 32 i.e. complainant of the case had commented or stated that after receipt of the positive report from the Panel Lawyer, any other exercise is required to be conducted and moreover, the FIR Ex. PW43/A blames the panel lawyer for the lapse rather than accused SC Rout. The investigating Officer chose to turn Nelson's eye on this conduct of PW-15 and simply filed both the report i.e. initial report Ex PW-15/A and Ex PW-15/F tracing CBI Vs. S.C. Rout & Ors. CBI. No. 342/2019 87 of 143 the title of the property as well as genuineness of the documents and absolved him of any wrong doing and relied his report for the purposes of the present case and even did not bother to ask a question from PW-15 why did he give report Ex PW-15/F verifying the genuineness of the title deed if the title deed furnished in the bank was not genuine. It appears that Panel lawyers like PW-15 are frequently dealing with property related documents from the office of Sub- Registrar and during his regular job by making visit to the office of Sub Registrar, he could have also elaborated the deficiencies in the deeds which were pointed out by PW-18 Mahindra Singh, unfortunately, the same yardstick was not applied by the prosecution while assessing the role of the Accused S C Rout to this effect.
132. The prosecution asserts that no proper verification of the title deed was made by the accused SC Rout since he did not instruct the empanelled advocate to collect the certified copy of the title deed which could have shown that the original title deed offered as collateral security was forged and fabricated and placed reliance on Circular No. 86 of 2003 vide Ex. PW14/C. The Prosecution has no answer to the question as to why PW 15 Vivek Jain has furnished a report with regard to the genuineness of the title deed as reflected from the perusal of Ex. PW15/F which was submitted by him on 23.07.2013 and the circular vide Ex. PW32/G was regarding verification of the title deeds which were taken as collateral security by the banks for the loans extended under CORP Schemes whereas, the loan is Cash Credit Loan and is thus, circular Ex.PW32/G is not applicable in the present case, although prosecution has examined witnesses from the bank by CBI Vs. S.C. Rout & Ors. CBI. No. 342/2019 88 of 143 bringing into record various circulars hardly any witness was examined with respect to the applicability of this circular in reference to the present case and moreover, violation of any circular per se not ground to infer criminality on the part of the public servant.
133. In so far as the contention with respect to Ex PW 14/C which provides for the various safeguards to be observed when a title deed is deposited with the bank and obtainment of certified copy of from the office of Registrar for the purposes of checking the genuineness of the title deed as provided in paragraph 5.05 " Certified copy of the latest original title deed also may be obtained from the Office of Registration through the empanelled advocate to ensure by cross-checking that what is produced by the party as original title deed is really the genuine original title deed, in case Encumbrance Certificate/search report obtained/made or got obtained/made by the empanelled advocate does not disclose the transaction evidenced by latest title deed produced or wherever it is felt necessary by the empanelled advocate/branch head/legal opinion scrutinizing authority, as the case may be, to verify and cross-check under the facts and circumstances of a given case" The word "may" used in Clause 5.05 for obtaining the copy of the title deed meaning thereby that sufficient room of discretion is vested in the Manager to seek or call upon the certified copy of the title deed. The condition as stipulated in Clause 5.05 is conditional that the need to obtain/examine the certified copy of the title deed or the person who had scrutinized the legal opinion had suggested to obtain certificate in view of the discrepancy in the search report/encumbrance report. Apparently, the CBI Vs. S.C. Rout & Ors. CBI. No. 342/2019 89 of 143 report of Panel Lawyer vide Ex.PW15/A did not provide any inkling that there was any discrepancy in the title of the document and the report Ex. PW15/A is very assertive about the factum of the title of VK Gupta and therefore, it would be quite reasonable and just to expect that any public servant/Bank Manager to have acted or believed upon the said report and no reasons to doubt on the genuineness of the title deeds furnished vide Ex.PW19/A. Moreover, the report Ex. PW15/A concludes that chain of property is complete and enforceable and VK Gupta has the absolute and marketable ownership on the said property. The relevant witnesses examined by the bank except for placing the circulars and guidelines did not speak a word about that condition for obtaining the certified copy of a title deed is mandatory and even no such suggestion made by Grid Committee in its report Vide Ex PW-21/A for obtaining the certified copy of the title deed by the Bank Manager and it had only advised for the legal clearance of legal opinion from Delhi ZO to be obtained. At the cost of the reiteration, Prosecution has relied upon Ex PW-15/A i.e. the Legal opinion Report dated 15.02.2012, Ex PW-15/F i.e. report regarding verification of title documents of Residential Plot No. 13/5, Raj Nagar Ghaziabad covered under the loan is genuine and Ex. PW15/G i.e. Encumbrance Certificate dated 25.05.2012 of 13/5 Raj Nagar, Ghaziabad and therefore, the prosecution cannot be permitted to blow hot and cold by simply alleging A-2 S C Rout was responsible for the forged and fabricated title documents relating to property offered as collateral security by the borrower when one of the witnesses examined by him had vouched for the genuineness as well as is marketable title of the property. An administrative decision which is based on reasonable material & report cannot be tainted as criminal misconduct CBI Vs. S.C. Rout & Ors. CBI. No. 342/2019 90 of 143 merely on the ground that better course of action was available or some other steps should have been done by the Sanctioning Authority.
134. It was alleged that Accused SC Rout had not properly carried out the exercise of physical verification of office and godown of M/s Delhi Trading Company through its proprietor Vinay Mittal.
135. In order to test the allegations whether proper verification of office and godown was made by accused SC Rout or not, the testimonies of relevant witnesses and documentary evidence are being considered. The charge sheet does not indicate in the precise manner whether office address/Godown is false or incorrect or no business activity was being carried out, however statement of some witnesses with respect to verification of both office and Godown were recorded.
136. The first and third page of the Account Opening Form of Account. No. CBCA/1/299 of M/s Delhi Trading Company vide Ex.PW31/A (Colly) give the office address as E-46, Preet Vihar, First Floor, Delhi and address is also repeated on various documents and even Mobile bill at page no. 15 mentions the address as E-46, First Floor, Preet Vihar, Delhi in KYC Documents and the original documents were duly verified. Letter Pads also give the same address. The address E-46, First Floor, Vihar, Delhi is also repeated in the Savings Account No. SB/01/9204 in the name of Vinay Mittal vide Ex.PW23/A and the KYC documents submitted alongwith the CBI Vs. S.C. Rout & Ors. CBI. No. 342/2019 91 of 143 Account Opening Form and the account was opened PW-31 Sh. Venkatanarayana on 21.03.2012. The name and other details of M/s Delhi trading Corporation is also reflected in FORMs ST-1 & ST-2 for registration u/s 69 of the Finance Act, 1994 under Central Board of Excise & Customs, Ministry of Finance vide Ex. PW31/D (Colly) and also on the Registration Certificate issued by Department of Labour, Government of NCT of Delhi at Page No. 6 of Ex. PW31/A (Colly) and same was also verified by Office of the Labour Commissioner vide Ex. PW2/1 (The certificate was based on the declaration given by the Applicant).
137. The lease deed/rent agreement in respect of E-46, First Floor, Preet Vihar, Delhi vide Ex. PW43/I alongwith Police Verification Report Vide Ex. PW 16/B was seized through seizure memo vide Ex.PW16/C. The rent agreement/lease deed relied upon by the prosecution clearly establishes that Vinay Mittal had taken E-46, First Floor, Preet Vihar, Delhi on rent and the Police Verification Report (vide Ex. PW16/B) as filed with the charge-sheet in the list of the relied documents establishes the existence and identity of the office as well as of Vinay Mittal and the same demolishes the case of prosecution with regard to the office address at Preet Vihar.
138. The Prosecution did not provide sufficient clarity with respect to address bearing No. E-46, First Floor, Preet Vihar, Delhi was a false address or no business activity was being carried out at the said place. The Prosecution is basically unsure of the case put up both in the charge-sheet as CBI Vs. S.C. Rout & Ors. CBI. No. 342/2019 92 of 143 well as during the trial with respect to the office address at E-46, First Floor, Preet Vihar. The initial impression being given as if the said address does not exist whereas, at the same time, it leads positive evidence showing the existence of the above address and also contends that no business activity could be conducted as the address was given for the use of residence. The first aspect that address bearing No. E-46, First Floor, Preet Vihar, Delhi was the correct address in view of the evidence led by the Prosecution that there was a lease/rent agreement alongwith police verification and the availability of address on different documents.
139. It was also contended that no verification was done as E-46, First Floor, Preet Vihar, Delhi was to be used for residential purpose and no business activity could have been carried out from E-46, First Floor, Preet Vihar, Delhi. In the facts of the case, it is to be seen whether any commercial activity is being undertaken or not and office is being run or not. The prosecution did not examine any witness from Municipal Authority that no business activity could be carried out from the residential premises. The instances are not uncommon in a Metropolitan city like Delhi where considerable number of commercial activities were carried out from the residential premises and part of the residential purpose can always be used for the official purposes and residential nature of the property cannot be made as basis to assume that no business activity was being carried out at E- 46, First Floor, Preet Vihar, Delhi.
CBI Vs. S.C. Rout & Ors. CBI. No. 342/2019 93 of 143
140. Another aspect to be appreciated is as to whether any business activity was being carried or not at E-46, First Floor, Preet Vihar, Delhi. The address bearing No. E-46, First Floor, Preet Vihar, Delhi has sufficient connection with accused Vinay Mittal and if one goes by the case of prosecution that no business activity was being carried out the same is shattered vide report Ex. PW31/I dated 29.02.2012 which reveals that both PW 31 Sh. Venkatanarayana and accused SC Rout had carried out the site inspection at E-46, First Floor, Preet Vihar, Delhi. The Report vide Ex. PW31/I also give the relevant landmark and number of employees were found working at Preet Vihar Office of M/s Delhi Trading Company and even rice samples were found. Relevantly PW- 31 in his cross-examination had stated that he made pre-sanction visit alongwith the Bank Manager Accused SC Rout and the facts mentioned in his report Ex. PW31/I are true and correct. The availability of Report vide Ex. PW31/I at an earliest point without being questioned by any bank official reasonably establishes that business activity was being carried out at the premises and the report Ex. PW31/I is also accompanied with two photographs and a visiting card which were brought on record and exhibited as Ex. PW31/J through the evidence of PW-31 who was signatory to the report that premises at Preet Vihar was used as an office and if the premises at Preet Vihar was not used an office there could no reason for the prosecution showing the photograph of the office without disputing it.
141. The allegations for not making the proper verification at Godown 380/2, Village Alipur, Delhi was also made against the accused S C Rout.
CBI Vs. S.C. Rout & Ors. CBI. No. 342/2019 94 of 143 Relevantly, PW 31/I which was prepared jointly by both accused SC Rout and PW 31 that they had visited Godown at Alipur and the profit margin would be 5-10 %. At the cost of reiteration, PW 31 in his cross examination had stated that he made pre-sanction visit vide Ex. PW31/I alongwith the Bank Manager and although in his examination in chief he stated that he had signed the report on being asked by the Branch Manager. PW 31 in his cross examination had clearly stated he made the visit and the facts mentioned in Ex PW-31/I are correct meaning thereby that he had visited the places mentioned in Ex PW-31/I.
142. PW 10 Sh. Sanjeev Kapoor, Asst. Manager in Matrix Credit Risk Control Pvt. Ltd., proved the Due Diligence Report dated 23.02.2012 vide Ex. PW10/A (D-21) which records the visit made to the office/Godown on 22.02.2012. PW 10 deposed that his company used to conduct due diligence and verification of addresses of residences and offices provided by the bank and the report vide Ex. PW10/A is based on the inputs provided by the Field Officer. PW 22 Arpan Sen Gupta, Managing Director stated that report Ex. PW10/A was prepared on the basis of the physical visit at the address of the borrower provided by the bank. PW 10 further deposed that Vinay Mittal (borrower) had shown one place to his Field Staff as Godown. A careful perusal of the Due Diligence Report vide Ex. PW10/A would reveal that in Page Nos. 3 & 4, it was prominently mentioned that Field Staff had made visit at E-46, 1st Floor, Preet Vihar, Delhi-110092 and 380/2, Alipur Village, Alipur, Delhi-110035 and discreet checks were also conducted. The prosecution on the face of the specific report vide Ex. PW10/A contends that CBI Vs. S.C. Rout & Ors. CBI. No. 342/2019 95 of 143 SC Rout did not carry out the verification at Godown, although it is relying on Due Diligence Report vide Ex. PW10/A. One wonders what prosecution is trying to establish by examining PW-10 without questioning the report Ex. PW10/A by merely contending that it was prepared at the behest of borrower and if the prosecution disputes the contents of the Report Ex. PW10/A, then it should have specifically examined the necessary witnesses that the contents in the report were false or it was a namesake report. The report also records that discreet checks were also conducted which was also not challenged by the prosecution while recording the statement of the witnesses cited by it. The best person who could have commented or disclosed with sufficient clarity, the circumstances and the manner in which visit was made to the Godown by examining the relevant field staff or by bringing into record the rough draft sheet and inspection memo during investigation, however, the IO did not feel it necessary to examine the person who made field visit to Godown and what discreet checks were made by him to indicate the connection of Vinay Mittal to Godown and did Accused SC Rout connived with any officials from Due Diligence Agency for obtaining a tailor made report, neither any material nor any statement of any employee from diligence agency was recorded.
143. PW 11 Rajiv Bansal deposed that he took premises/Godown No. 380/2 Alipur Village, Delhi vide rent agreement Ex. PW11/B from Satbir Singh Rana for a period of seven years and he denied that he met Vinay Mittal. PW 12 Satbir Singh Rana landlord of 380/2, Alipur Garhi, Village Alipur, Delhi-85 stated that no person from the bank had ever contacted or CBI Vs. S.C. Rout & Ors. CBI. No. 342/2019 96 of 143 met him and on the basis of these statements it was sought to be argued on behalf of the prosecution that no exercise of verification was conducted by the Accused SC Rout in total disregard to the applicable circular/ guidelines. No document is placed on record or is available in the bank record with respect to Godown No.380/2, Alipur Garhi,Village Alipur, Delhi-85 whether it was rented or the premise was owned by the borrower. Accused SC Rout had taken a plea that he had placed on record lease deed/rent receipt in terms of the check list vide Ex. PW11/A and the same was deliberately concealed by the Prosecution. In this regard, not much has been elicited by the Defence during the trial and it appears that the rent deed was not collected and only physical verification of Godown was made by both the accused as well as PW-31 during pre-sanction visit. However, the existence of the Godown and its relation is well established by the due diligence report vide Ex PW-10/A and pre sanction report dated 29.02.2012 vide Ex PW-31/I to which PW-31 was one of the signatory. PW-15 who had conducted legal audit vide Ex. PW15/D had also not made any comment for obtaining any document pertaining to 380/2, Village Alipur, Delhi-85. Report vide Ex. PW10/A with respect to actual status of Godown, clearly demonstrates that Godown was being operated and report vide Ex PW-10/A also records that at the time of inspection, the invoices of the parties were also checked. Once a document is cherry-picked by the prosecution in support of its case and relevant witness is examined in support of that report, the prosecution cannot be permitted to accept only the part of the contents which support it, unless the document is questioned by the prosecution.
CBI Vs. S.C. Rout & Ors. CBI. No. 342/2019 97 of 143
144. Testimony of PW 31 has already been discussed in detail. The Prosecution in order to wriggle out from the inspection conducted by PW31, attempted to obtain the words from his mouth that he had signed report vide Ex PW-31/I at the instance of accused SC Rout, without clarifying the circumstances or manner in which he had simply appended his signatures without explaining the attending circumstances and bald assertion that he had signed the report at the behest of accused SC Rout cannot be believed. At the cost of reiteration, PW 31 in his cross-examination had vouched for the correctness of facts recorded in Ex. PW31/I. Notably, PW-31was signatory to number of the documents in which he had even verified the original documents of Accused Vinay Mittal and also dealt other documents such as account opening form, application for memorandum of deposit of title deeds, etc.
145. Not only this, on 13.3.2012, conducted the stock inspection at Godown and was signatory of the stock inspection report /post sanction supervision vide Ex. PW31/N, however, he had selectively identified the signatures of SC Rout at Point A and maintained a studied silence about his signature appearing on the Stock Inspection Report vide Ex. PW31/N (D-
30). PW 31 not only gave the post inspection report but also made other observation that Godown is at Alipur and sufficient stock is maintained. No questions were put to this witness by the prosecution as to why his signature are appearing at Ex PW-31/N if the Godown does not exist and under what circumstances he had attested to the availability of the stock at both the address and same further fortifies that borrower had some connection with CBI Vs. S.C. Rout & Ors. CBI. No. 342/2019 98 of 143 the Godown at 380/2, Alipur Garhi, Village Alipur, Delhi-85. PW 31 had conducted the inspection of Godown and signed as an Inspecting Officer, if the prosecution contends that Godown was not under the control of borrower, it failed to explain as to why one of its prosecution witness has conducted the inspection of the said Godown and why no questions were put to PW-31 whether he signed the report consciously or not.
146. The contrasting stand of PW-31 of conducting inspection of godown vide Ex. PW31/N remained unchallenged and once Ex PW31/N is admitted, there is a little doubt as to why PW-31/I should not be accepted as true and correct and once again at the cost of repetition, Ex PW31/N was not questioned by the prosecution and was exhibited during the trial by examining relevant witness is examined in support of that report, the prosecution cannot be permitted to accept only the part of the contents which support it, unless the document is questioned by the prosecution by inviting the attention of the witness.
147. It is further the case of prosecution that SC Rout had not conducted the physical inspection of the property bearing No. 13/5, Raj Nagar, Ghaziabad whose title deed was offered as collateral security and subtly questioned PW 31/H Inspection Report dated 03.03.2012 by the accused SC Rout in respect of Property bearing No. 13/5, Raj Nagar, Ghaziabad, UP. Ex. PW20/A is the Valuation Report w.r.t Property Bearing No. 13/5, Raj Nagar, Ghaziabad, UP. The report is accompanied by the photographs as well as the CBI Vs. S.C. Rout & Ors. CBI. No. 342/2019 99 of 143 geographical location of the property. The valuer has given the fair market value of the property and identified the location of the property as well as the boundary of the property. The valuer has clearly detailed that he has not verified the genuineness of the title deed, however, a perusal of his report would indicate that he had visited the property and gave his valuation report and the same additionally confirms the condition as well as the existence of the property.
148. The prosecution did not examine any witness to the effect that the property valued by the Valuer does not exist at the place as detailed in Ex. PW31/H (D-23) dated 03.03.2012 and the description of the property mentioned in title deeds vide Ex. PW13/A & Ex. PW19/A are different or the property does not exist at the said location. It would be a different scenario if the property which is inspected by accused SC Rout is different. PW-20 alongwith report had furnished the location of the property as well as the geographical marking of the property bearing No. 13/5, Raj Nagar, Ghaziabad, UP. Investigating Officer did not question the identification of the property by the valuer and therefore, it cannot be assumed that accused SC Rout did not carry out the physical verification of the property bearing Number 13/5, Raj Nagar, Ghaziabad vide Ex. PW31/H. Perusal of Paragraph No. 7 of the site inspection report vide Ex. PW31/H dated 03.03.2012 gives the complete detail about the position existing at the site and this report is in tandem with valuation report vide Ex. PW20/A with regard to the location and position of the property bearing No. 13/5, Raj Nagar, Ghaziabad which was offered as collateral security and therefore CBI Vs. S.C. Rout & Ors. CBI. No. 342/2019 100 of 143 allegations that Accused S C Rout has failed to inspect or verify the property is not established by the prosecution. Identification of the property/ inspection of the property bearing No. 13/5, Raj Nagar, Ghaziabad and that inspection of the property was conducted by S C Rout is demonstrated by simple fact that when the loan account turned NPA and notice under SARFAESI was affixed, it was the same property which was inspected by Accused S.C.Rout and Valued by PW-20.
149. The allegations against accused SC Rout was to the effect that prior to release of the credit facility, the legal opinion obtained from empanelled lawyer is required to be scrutinized by the legal officer. PW14/B1 enumerates and gives job description of a Law Officer at the Zonal Office and in relation to the present case, Paragraph No. 4.03 provides that " The legal opinions obtained by the branches from the empanelled advocates relating to the immovable properties offered to the Bank as security for the credit facilities sanctioned/to be sanctioned by the Branches and Zonal Office will have to be scrutinized and approved by the Law Officers at Zonal Office before release of facilities where the credit facilities sanctioned is/are in excess of the limit prescribed for branch heads for scrutinizing the legal opinions. However, where the credit limits are sanctioned by the Head Office, legal opinions are to be scrutinized and approved by Legal Services Division, Head Office."
150. The clause 4.03 of Exhibit PW-14/B-1 is kicked in when the credit CBI Vs. S.C. Rout & Ors. CBI. No. 342/2019 101 of 143 limit is beyond the power of branch head, no evidence was lead by the prosecution that grant of credit limit was not with in the powers of Accused S C Rout, various circulars/ guidelines only provide that when limit is beyond Rs 25 Lakhs, then it is to be scrutinized by CCPC. Be that as it may, accused SC Rout has sent legal opinion vide Ex. PW15/A rendered by PW 15 to PW 14. PW 14 recorded her observation in Ex. PW14/A that the Advocate had traced the history of the title of the property for a long time and also advised for obtaining the original documents. She also advised for obtaining affidavit from the title holder stating that the property is free from all encumbrances and no litigation is pending. She further advised that if the property is any building then, a statement from the title holder that property was free from all encumbrances and no litigation whatsoever is pending in any court. PW 14 also made suggestion for obtaining the original documents and getting it verified through an Advocate and concluded her opinion that legal opinion is in order.
151. It appears that as a matter of practice or for some other reason or direction, the legal opinion was sent to PW 14 for her analysis. The first question which is required to be considered that when PW 14 was perusing the legal opinion, did she suggest that certified copy of the documents are required to be obtained by the Branch or to be perused by her in order to verify the correctness of legal opinion. It sounds weird that a legal opinion was scrutinized by PW 14 without perusing the documents. The various suggestions given by her i.e. obtaining the necessary affidavit and for obtaining no encumbrance report was also taken by accused SC Rout while CBI Vs. S.C. Rout & Ors. CBI. No. 342/2019 102 of 143 releasing the credit facility and the action of Accused S C Rout cannot be questioned on the ground that he had released the credit facility prior to obtaining the scrutiny of legal opinion as all the requisite suggestions were already complied and available with the bank. Notably the PW 31 Sh. Venkatanarayan after perusing Ex. PW31/A and Ex. PW31/B stated that accused SC Rout had fulfilled the conditions which were mentioned in the scrutiny of the legal opinion vide Ex. PW14/A dated 10.03.2012 was performed by accused SC Rout and the same leaves no room of doubt that prosecution has failed to establish that there was any criminality on the part of accused SC Rout. The assertion of prosecution that credit limit was released prior to the receipt of legal opinion as suggestive of criminal misconduct and conspiracy between accused Vinay Mittal and Accused SC Rout, Ex. PW14/A also mentions about confirmation from E-mail, however, neither prosecution nor Defence had clarified whether any opinion was sent through E-mail. It appears that after receipt of the proper report from PW 15 Sh.Vivek Jain (Panel Lawyer), accused SC Rout was aware about the formal nature of the scrutiny of the legal opinion so much so that he had already obtained the documents as suggested by PW 14.
152. The prosecution also asserts that Ex. PW32/G was not followed by the Accused SC Rout by not getting the title deed available with the bank verified from the panel lawyer, at the cost of repetition, Sh. Vivek Jain had already furnished his report with the respect to the genuineness of the title of the property vide observed that Panel Lawyer had verified the genuineness of the title report vide report Ex. PW15/F and moreover, the cited CBI Vs. S.C. Rout & Ors. CBI. No. 342/2019 103 of 143 circular/guideline vide Ex PW-32/G was in respect of Corp Loan whereas the loan sanctioned in the present case was cash credit facility.
153. Financial due diligence is an analysis of the financial affairs of a business concern by understanding its financial health, risk, liability and sustainability and the quality of revenue, assets, profit & loss, etc of a business concern approaching the bank for credit facility. The first step involved in undertaking the exercise of Financial Due diligence is to examine the borrower and to understand the nature and the purpose for which a credit is sought and to consider and evaluate the documents submitted by the borrower. The second step would be to scrutinize the documents submitted by such a borrower and the scrutiny could be intensive or extensive depending on the credit which is proposed to be taken by the borrower. The documents which were submitted alongwith the loan application form are required to be analyzed by understanding the financial health of the borrower and whether such a venture would be profitable to the banker or not. The exercise also involves taking help of external agencies to consider an independent evaluation of the financial health of the borrower and a detailed analysis of the documents submitted by the borrower with the specialized internal committee such as CCPC or GRID Committee as in the present case. In sum and substance, the financial due diligence is a process to understand the capacity and capability of a borrower to take, utilize and repay back the credit facility granted by the bank.
CBI Vs. S.C. Rout & Ors. CBI. No. 342/2019 104 of 143
154. The application form for loan (vide Ex. PW11/A) was accompanied with net worth statement of Vinay Mittal vide Ex.PW17/A alongwith Tax Audit Assessment Reports vide Ex. PW17/B1 to Ex. PW17/B-3 (photocopies) for Assessment Years 2009-10, 2010-11 and 2011-12. Ex. PW17/A is purported to be the original net worth statement filed by Vinay Mittal alongwith his application for credit facility and the same appears to have been attested and verified by one Vivek Garg, Chartered Accountant. Sh. Vivek Garg was examined as PW 17 and he denied that he had anything to do with the documents vide Ex. PW17/A and also the stamp appearing on Ex.PW17/A. Notably Ex. PW17/A was not sent to CFSL for forensic examination and even the contemporary stamps were not collected during the investigation and it is only through the sole testimony of PW 17 that net worth statement is stated to be the forged and fabricated document.
155. Ex. PW17/B1 to Ex. PW17/B3 were the photocopies of Tax Audit Report and it is also through the testimony of PW 17, the prosecution has tried to establish that it was forged and fabricated document as same was not signed by PW 17 and Ex. PW17/B1 to Ex. PW17/B3 were also not to CFSL for forensic examination. (It is relevant to mention that Exhibit Marks vide Ex. PW17/B1 to Ex. PW17/B3 were put on Income Tax Return during evidence instead on the document itself. It appears to be an inadvertent mistake at the time of marking of Exhibits).
156. Another document purported to be the statements and liability (Net CBI Vs. S.C. Rout & Ors. CBI. No. 342/2019 105 of 143 Worth Statement dated 16.01.2012/16.10.2012) is available on record containing the questioned signature of guarantor V.K. Gupta/V.K. Luthra. This statement bears the seal and signature of Chartered Accountant Sanjeev Harinandan & Associates. No investigation has been conducted from the said CA. There is not much serious challenge to the effect that the net worth statement vide Ex. PW17/A as submitted by accused Vinay Mittal was forged and fabricated. It is urged on behalf of Accused SC Rout is only to the effect that accused SC Rout was himself is a victim of deep rooted fraud perpetrated by accused Vinay Mittal and guarantor and he had acted upon the documents by duly analyzing and even sending it to CCPC for scrutiny in such a manner which any reasonable and prudent person could have undertaken in the circumstances of the cases. It is also contended that soon after the receipt of documents from the borrower, Accused SC Rout had made all the related documents available it to the Due Diligence Agency for further verification and the Due Diligence Agency in its report did not raise any doubt on any of the document including net worth statement of accused Vinay Mittal whereas it was contended by the ld. PP for CBI that due diligence agency was not required to undertake financial due diligence and it was the sole responsibility of the accused SC Rout to verify the authenticity of net worth statement and other documents submitted by the borrower.
157. With respect to the respective contentions as advanced by both the sides, pertinently vide Ex. PW10/A report from the Due Diligence Agency records that detailed inspection i.e. physical visit both at the Office and Godown as well as the financial due diligence as reflected from the bare CBI Vs. S.C. Rout & Ors. CBI. No. 342/2019 106 of 143 reading of Report Ex. PW10/A. Ex. PW10/A was relied upon document, however, with respect to the financial due diligence, it was contended on behalf of the prosecution that it was not the mandate of Due Diligence Agency to undertake Financial Due Diligence. At the cost of reiteration, the prosecution had also taken the plea that physical inspection was not carried out both at the Office and Godown whereas, Report Ex. PW10/A contends that inspection was carried out at both the places and once again the Due Diligence Report was questioned by the prosecution without explaining as to how such a report was prepared if Due Diligence Agency was not asked to conduct the financial due diligence including verification of the documents. It appears that Prosecution is blowing hot and cold with respect to Ex. PW10/A by relying on it and also condemning it.
158. The question is whether Accused SC Rout had knowingly accepted the forged and fabricated financial documents. A careful consideration of the guidelines would indicate it does talk about the necessary due diligence of the documents submitted by the borrower. No specific guideline was brought either in the deposition of the witnesses or even in the charge-sheet that a Bank Manager is required to visit the concerned CA for confirming his signatures on the documents especially in a situation when Due Diligence Agency had already performed the said task. PW 24 had suggested for obtaining the "No Dues Certificate" from the banks with regard to overdue in CIBIL Report. A perusal of Page No. 6 of D-95, relied upon document of the Prosecution, No Objection Certificate was issued by the Punjab National Bank intimating that no credit facility is being enjoyed by the borrower and CBI Vs. S.C. Rout & Ors. CBI. No. 342/2019 107 of 143 therefore, accused SC Rout had complied with the said requirement.
159. A specialized agency such as CBI/ED faces number of practical difficulties while investigating the cases, since it examines number of documents. It also had to negotiate bottlenecks/hurdles in obtaining the material/documents. In some situation, the documents obtained during the investigation are sufficient to connect with the suspect/accused and in certain cases, the Investigating Agency zeroes on suspect/accused after collecting the material/documents. Merely, being a specialized agency and seizing number of documents and also presenting the documents in the court of law and also examining number of witnesses qua the documents without specifying the reason for examining a witness before the Court of Law elongates the trial and complicates the proceedings. It is also possible that despite best efforts, the documents/material could not be obtained or placed on record by the Investigating Agency and in such cases, the fairness demands that it should be disclosed to the Court that despite best efforts the requisite documents could not be obtained. Nonetheless, in cases when investigating agency after being informed that a particular document is not available with a department or a person but is available with some other person or department and the documents are relevant for the case, it becomes the bounden duty of the prosecuting agency to obtain those documents. PW- 8 provided information with respect to ITR for the Assessment Year 2011- 12 and with respect to ITR for Assessment Years 2009-10 and 2010-11, the witness brought to the knowledge of the Investigating Officer that information could not be given as same was filed manually with erstwhile CBI Vs. S.C. Rout & Ors. CBI. No. 342/2019 108 of 143 Ward 43(1), New Delhi (Now Ward 67(1), New Delhi) and Investigator was advised to make necessary communication with the Income Tax Officer, Ward 67(1), New Delhi (vide Ex. PW8/A ). The Tax Audit Report of the year 2011-12 or other documents from the income tax department pertaining to the assessment Year 2009-10, 2010-11 and 2011-12 could have been made available. Pertinently, the PAN CARD on behalf of the borrower which was provided was provided to bank was also not found to be forged/ fabricated. The IO did not collect such physical copy of the return from IT Department and therefore, there is much doubt w.r.t fact that as to how the Investigation agency has come to the conclusion that financial record/ document of Vinay Mittal was never submitted to the Income Tax Department. No Lacunae was pointed out by the members of the CCPC/Grid Committee in their report vide Ex. PW21/A. Even no lacunae was pointed by CCPC/members of grid committee in their process note report vide Ex.PW21/A.
160. PW 31 Sh. Venkatanarayana, Advance officer posted at Vasant Vihar stated that when a document is submitted by a borrower the, Branch Manager only had to consider and evaluate those documents and is required to hand over the documents to the Due Diligence Agency. In the present case, accused SC Rout had provided set of the financial documents to the Due Diligence Agency. If this unchallenged statement of PW 31 is accepted at its face value that Accused SC Rout is only required to consider and evaluate the documents only, then, it does not lie in the mouth of prosecution that due diligence agency was not required to conduct the financial due CBI Vs. S.C. Rout & Ors. CBI. No. 342/2019 109 of 143 diligence qua the document submitted by a borrower.
161. During cross-examination of PW 42 Chandra Sekaran he deposed that "It is correct that the Branch Manager forwards the KYC documents and financials documents submitted by the borrower and Guarantor to the due diligence agency for financial and physical due diligence. He further deposed that "It is also correct that physical due diligence involves verification of the borrower and the guarantor, business, business operations and assets owned by the business.
162. One of the contention of ld. PP for CBI is to the effect that PW 32 Sh. Rathnakara stated that financial due diligence is to be conducted by the Bank. There is no quarrel to the argument advanced by ld. PP for CBI. The question will always remain in what manner, such due diligence is required to be conducted. A careful perusal of testimony of PW 32 Sh. Rathnakara would indicate that PW 32 Sh. Ratnakara in his cross-examination stated that physical due diligence involves properly establishment of the identity of the borrower, the address of the units and to meet the supplier and the customer of the borrower to form an independent opinion regarding the integrity of the borrower. PW 32 further stated that if dealing of an applicant with the bank is fine and his tax returns are genuine and giving the true picture of his accounts and finances, whether the payments to the suppliers of the goods are proper are some of the things which a Due Diligence Agency should look into. PW-32 who is also the complainant/mover of the present case did not even point out any specific negligence on the part of CBI Vs. S.C. Rout & Ors. CBI. No. 342/2019 110 of 143 accused SC Rout in conducting the financial due diligence and it is also noteworthy to mention that complaint Ex.PW 27/B which forms the core basis for the registration of FIR Ex. PW43/A does not allege any wrongdoing on the part of accused SC Rout and rather imputes fault on the panel advocate Shri Vivek Jain who was examined as prosecution witness as well as the officials of Due Diligence Agency. PW 32/Compalianant in his evidence before the Court had stated that after receiving the Due Diligence Report, the bank is required to make visits to Godown/Offices, etc. PW-32 had also stated that the bank is also required to check the details of the borrowers to get the true pictures of his account and financials. Importantly, PW 32 in his cross-examination dated 25.09.2023 states that after receiving the report from the Due Diligence Agency on the financial aspect of the borrower the Branch did not have to do much and it has to simply forward it to the Zonal Office. PW 32 also stated in his cross-examination dated 25.09.2023 that the branch would not be in a position to verify the genuineness of the balance sheets as it did not have wherewithal and it can only check the past trend of the business. PW 32 in his cross-examination answered with respect to the specific question whether the Branch has capability to verify the genuineness of the balance sheet by a borrower and for the said reason, the services of the Due Diligence Agencies are required. PW 32 had answered in affirmative. When a senior officer from the Bank and more specifically the complainant of the Public Bank asserts that Due Diligence Agency is required to verify the genuineness of the balance sheet, in the considered opinion of the Court accused SC Rout had not much to do with respect to the genuineness of the financial documents in view of the positive report from the Due Diligence Agency vide Ex. PW10/A and the CBI Vs. S.C. Rout & Ors. CBI. No. 342/2019 111 of 143 same to a great extent mitigate the charges levelled against the accused SC Rout. [NOTE: Similar statement made by PW 31 to this effect in Paragraph No. 160]. Therefore, the case of prosecution that accused SC Rout did not conduct the proper Due Diligence and wrongly accepted the Financial Documents including Net worth Statement is not sustained in view of the testimonies of PW 31 & 32 as well as Report Ex. PW10/A.
163. In view of the above discussion, it can be said that no criminal misconduct or any serious lacunae is found on part of accused in undertaking the Financial Due Diligence in view of the report Ex. PW10/A and the statement of PW 32 Ratnakara that documents such as Balance Sheets, net worth statements are required to be verified by the Due Diligence Agency.
164. Diversion of fund is the utilization of funds for the purposes other than it was granted. It is the alleged in the supplementary charge-sheet that funds from loan account were diverted to firms namely M/s Manglam Trading Company, M/S J.K Sales Corporation, M/s Fly Tech Logistics Pvt. Ltd., M/s Dolphin International, M/s Shovana Enterprises, M/s Neha Enterprises, M/s Delhi Traders, M/s Phonic Electronic and M/s Pramouk Enterprises by accused Vinay Mittal. Notably, it is only in the last line of the supplementary charge-sheet that allegation was made against accused SC Rout that he did not monitor the end use of loan/fund and no further reasons were given. No specific charge against accused SC Rout for diversion of fund or that he didn't monitor the end use of loan in conspiracy with accused CBI Vs. S.C. Rout & Ors. CBI. No. 342/2019 112 of 143 Vinay Mittal.
165. The prosecution had examined witnesses from different banks i.e. PW 33 Arvind Kumar Pandey, PW 34 Anshul Mehta, PW 36 Harish Singh Negi, PW 37 Prabhat Ranjan Kumar and PW 38 Madhur Nandwani had brought the statements of Account as well as the Account Opening Forms to indicate that there were transactions between M/s Delhi Trading Company and other six entities although in the supplementary charge-sheet, it had made reference that there were other transactions between other entities however, no record was produced during trial with respect to other entities.
166. The document/letter vide Ex. PW3/2 gives details of the cheques from which funds were stated to have been transferred from the account of M/s Delhi Trading Company to other entities and the corresponding cheques, etc are also available on record. The prosecution has placed on record cheque No. 270603 dated 07.03.2012 of Rs. 45,50,000/- in favour of Manglam Trading Company vide Ex. PW3/3, Cheque No. 270605 dated 07.03.2012 of Rs. 20,00,000/- in favour of J.K. Sales Corporation vide Ex. PW3/5, Cheque No. 270607 dated 13.03.2012 of Rs. 41,76,000/- in favour of J.K. Sales Corporation vide Ex.PW3/6, Cheque No. 270608 dated 14.03.2012 of Rs. 40,50,000/- in favour of Manglam Trading vide Ex. PW3/8, Cheque No. 270609 dated 14.03.2012 of Rs. 35,85,000/- in favour of J.K. Sales vide Ex. PW3/10, Cheque No. 270611 dated 15.03.2012 of Rs. 45,56,000/- in favour of Manglam Trading Company vide Ex.PW3/12, CBI Vs. S.C. Rout & Ors. CBI. No. 342/2019 113 of 143 Cheque No. 270614 dated 17.03.2012 of Rs. 31,20,500/- in favour of Shovana Enterprises vide Ex. PW3/14 and Cheque No. 270615 dated 23.03.2012 of Rs. 38,50,000/- in favour of Delhi Traders vide Ex. PW3/16. The Statement of Account of M/s Delhi Trading Company vide Ex. PW3/17 alongwith certificate u/s 2 A of Bankers Books of Evidence Act for the period 01.03.2012 to 30.04.2012 would indicate the amounts as reflected in the abovementioned cheques/RTGS were debited from the loan account of M/s Delhi Trading Company indicates that there were credit entries in the loan account from different accounts through RTGS/cheques and during the abovementioned period and there are regular transactions in the account both inward and outward.
167. The Statement of Account vide Ex. PW34/B (colly) of M/s Krishna Food Corporation, proprietorship firm of Vinay Mittal was exhibited through PW 34 Anshul Mehta, however, no specific entries were indicated or marked that there were credit entries from M/s Delhi Trading Company to M/s Krishna Food Corporation or any of the cheques as referred above relate to M/s Krishna Food Corporation.
168. PW 33 had brought the statement of account vide Ex. PW33/D of M/s Manglam Trading Company whose proprietor was Shaliendra Jha in which some entries i.e. amounts of Rs. 45,50,000/-, Rs. 40,50,000/- and Rs. 45,56,000/- were credited on 07.03.2012, 14.03.2012 and 15.03.2012 from M/s Delhi Trading Company.
CBI Vs. S.C. Rout & Ors. CBI. No. 342/2019 114 of 143
169. PW 36 had brought the statement of account of M/s J.K. Sales Corporation vide Ex. PW36/D reveals that amounts of Rs. 20,00,000/-, Rs. 41,76,000/- and Rs. 41,76,000/- were credited on 07.03.2012, 13.03.2012 and 14.03.2012 vide Mark X1, X2 and X3 through RTGS from M/s Delhi Trading Company.
170. PW 36 had brought the statement of account of M/s Pramouk Enterprises vide Ex. PW36/E reveals that amount of Rs. 10,52,800/-, was transferred on 27.03.2012 vide Mark X1 through RTGS from M/s Delhi Trading Company.
171. PW 36 had brought the statement of account of M/s Shovana Enterprises vide Ex. PW36/F reveals that amount of Rs. 33,00,000/-, was transferred on 14.03.2012 vide Mark X1 through RTGS from M/s Delhi Trading Company.
172. PW 37 had also brought the statement of account of M/s Neha Enterprises vide Ex. PW37/B reveals that amount of Rs. 50,00,000/-, was debited on 22.03.2012 vide Point X1 through RTGS from M/s Neha Enterprises.
173. PW 38 had also brought the statement of account of M/s Delhi CBI Vs. S.C. Rout & Ors. CBI. No. 342/2019 115 of 143 Traders vide Ex. PW38/C reveals that amount of Rs. 38,50,000/-, was credited son 23.03.2012 vide Point X1 through RTGS from M/s Delhi Trading Company.
174. The Prosecution had examined PW 41 Vipin Kumar Rathi who denied that he had anything to do with M/s Shovana Enterprises. Evidently the prosecution did not show that there was any banking transaction with M/s Delhi Trading Company. In any event it would be difficult for the Branch Head or any official from the bank to suspect that each and every person by checking the details of person who had opened an Account in some other banks and to make inquiries whether the person who had opened the account had any close link with the borrower or that sham Transaction was being undertaken and although it was alleged that amount of Rs 31,12,500 through Cheque No. 270614 vide Ex PW-3/14 was transferred to this Account. Any Bank Official would not have wherewithal to conduct such an investigation like an Investigating Agency and the allegations of the diversion of fund might be relatable to the accused Vinay Mittal as he had special knowledge to whom he had transacted.
175. Two Cheques bearing Nos. 270604 and 270610 vide Ex. PW43/G (colly) amounting to Rs. 3,50,000/- and Rs. 4,00,000/- were self drawn cheque. After the grant of credit facility, a borrower who complies with the terms of sanctions would always be entitled to withdraw the amount. No specific circular was brought during the trial that cash amount cannot be CBI Vs. S.C. Rout & Ors. CBI. No. 342/2019 116 of 143 withdrawn and moreover, for a business requirement at times, the cash is required and therefore, not much can be read against accused SC Rout to this effect.
176. It is reflected from the testimonies of the above-mentioned witnesses as well as from the perusal of the statement of the accounts that credit entries were made from the loan account to M/s Mangalam Trading, M/s J.K. Sales, M/s Promouk Enterprises and Delhi Traders. The statement of account of M/s Shovana Enterprises and M/s Neha Enterprises that debit entries were also made in favour of the loan account of M/s Delhi Trading Company. Except for the bank statements, no material witness was examined to the effect that accused SC Rout had played any role in the diversion of fund from the loan account to the above-mentioned accounts. It is also reflected from the perusal of different witnesses from the Corporation Bank that none of them had deposed in any manner that it was the duty and responsibility of the accused SC Rout that he was solely and directly responsible to check the end use of loan on day to day basis, PW-43, R.Ganesan, Investigating Officer in his deposition had not made any specified in what manner the accused S.C. Rout was required to check the end use of loan except for collecting statement of accounts of the different entities, no proper material was brought to substantiate the allegation that there was any linkage of accused SC Rout with these firms or that the fund was diverted within his personal knowledge and even the statements of vendors/proprietors of companies with which accused Vinay Mittal were transacting were not examined. The allegation of not monitoring the loan account is not explained CBI Vs. S.C. Rout & Ors. CBI. No. 342/2019 117 of 143 with sufficient clarity in what manner the end use of loan is to be monitored by accused SC Rout. Even no allegations were made by PW-32 that accused SC Rout had failed to check the end use of loan. Even if one assumes for the moment that relevant witness from Corporation Bank were not in a position to state about the diversion of funds, it is the duty of the prosecution to explain as to how Accused SC Rout can be held to responsible for diversion of funds/end use of loan. A careful perusal of testimony of PW 43 would reveal that in his testimony, he had even not used the word "Diversion" or end use of loan in his testimony/statement.
177. Different forms of RTGS/Cheques were not shown by the prosecution to any witness to establish that accused SC Rout had approved RTGS transactions from his signature knowing fully well that the amount is to be used for some other purposes, the allegations merit deeper scrutiny since Accused SC Rout is the Head of a large Branch and it sounds little odd that he would be doing each and every job without the involvement of any of his Subordinate Officer and it was not the case of the prosecution that he alone was dealing with the loan account to the exclusion of other bank employees of Vasant Vihar Branch, no statement of any bank employee was recorded during the trial to this effect. The Prosecution has also not detailed as to how the funds, etc are being permitted to be transferred from the loan account to some other entities and how the account is being managed. In the absence of any specific material, the case of prosecution that he was party to the diversion or that transfer of funds from had diverted the funds contrary to public interest is not substantiated or proved against the accused SC. Rout.
CBI Vs. S.C. Rout & Ors. CBI. No. 342/2019 118 of 143 Even otherwise mere transfer of money from loan account to other account would not come under criminal misconduct unless it is established that accused SC Rout despite knowing the fraudulent nature of transaction had permitted the transfer of funds after the credit limit was granted. Hon'ble Delhi High Court in Ashok Kumar Gupta vs CBI in Crl Misc (C) No. 194 of 2019 dated 14.08.2025 was pleased to observe:-
64. Whilst it may be that the loan subsequently defaulted and the safeguards were not enforced adequately, criminal prosecution cannot be premised solely on hindsight of a failed decision. At best, the allegations, if assumed to be correct, may indicate a lapse or dereliction of duty, which by itself does not attract criminal liability under Section 13(1)(d) of the PC Act. [Ref: C.K. Jaffer Sharief vs. State (CBI) (supra)]
65. The legal threshold under Section 13(1)(d) of the PC Act is not met merely because there was financial loss; it must be shown that the loss was caused by corrupt or dishonest conduct. In the absence of such a link, and without any evidence of mens rea, the invocation of criminal law is wholly unwarranted.
178. It is a well settled principle of criminal jurisprudence that burden is cast on the prosecution to prove the charge against the accused persons. The positive allegation that accused has not complied with various circulars/guidelines by leading cogent and admissible evidence against the accused SC Rout, Branch Manager.
179. None of the witness examined by the prosecution either from Bank or the investigating agency had alleged that Accused SC Rout had accepted any illegal gratification or obtained any undue favour from any person including the investigating officer. In the absence of any material, it cannot be said that there was any dishonest intention on the part of part of accused SC Rout in CBI Vs. S.C. Rout & Ors. CBI. No. 342/2019 119 of 143 dealing with grant of credit facility to Accused Vinay Mittal on the basis of the statement of the witnesses or any documentary evidence during the trial and accordingly no offence under section 13(1)(d)(i)&(ii) of the PC Act is also made out against accused S.C. Rout. The prosecution has also not brought into record that accused S.C. Rout had acted in total disregard to public interest or his acts come within the fold of Section 13(1)(d)(iii) of PC Act.
180. It appears from the material produced on record that accused S.C. Rout heads a large branch. Number of official are posted in a branch who performs different sets of duties and each of them have different duties to be performed. The criminal trial is a voyage to discover the truth and the essential requirement to believe upon facts depend the on the evidence/material brought by the prosecution during the trial in order to nail the person, it becomes the bounden duty of the prosecution to as to what extent the accused committed default in not ensuring the end of use of fund in discharging his duties. The Branch Head cannot be criminally held responsible for each and every function performed by its officer, as he also performs supervisory functions and different officials manage sections such as delivery or deposit of cash, some deal with forex sections, some official look after the credit and advance sections and when different sets of official performs different function, accused S.C. Rout cannot be singularly held responsible he did not monitor end use of the loan, it is mandatory and necessary for such an agency to obtain the relevant document showing the assignment of duties of bank officials and it is not justified to simply hold the CBI Vs. S.C. Rout & Ors. CBI. No. 342/2019 120 of 143 head of branch for the default committed in the loan account without delineating the role of different bank officials who dealt the loan account of M/s Delhi Trading Company.
181. In C. Changa Reddy & Ors. Vs. State of AP, (1996) 10 SCC 193, in paragraph no. 22, it was observed by Hon'ble Supreme Court that :
"On careful consideration of the material on the record, we are of the opinion that though the prosecution has established that the appellants have committed not only codal violations but also irregularities by ignoring various circulars and departmental orders issued from time to time in the matter of allotment of work of jungle clearance on nomination basis and have committed departmental lapse yet. None of the circumstances relied upon by the prosecution are of any conclusive nature and all the circumstances put together do not lead to the irresistible conclusion that the said circumstances are compatible only with the hypothesis of the guilt of the appellant and wholly incompatible with their innocence. In Abdulla Mohammed Pagarkar v. State (Union Territory of Goa, Daman and Diu), [1980] 3 SCC 110, under somewhat similar circumstances this Court opined that mere disregard of relevant provisions of the Financial Code as well as ordinary norms of procedural behaviour of government officials and con-tractors, without conclusively establishing, beyond a reasonable doubt, the guilt of the concerned officials and contractors, may give rise to a strong suspicion but that cannot be held to establish the guilt of the accused. The established circumstances in this case also do not establish criminality of the appellants beyond the realm of suspicion and, in our opinion, the approach of the trial court and the High Court to the requirements of proof in relation to a criminal charge was not proper. That because of the actions of the appellants in breach of codal provisions, instructions and procedural safeguards, the Stale may have suffered financially, particularly by allot- ment of work on nomination basis without inviting tenders, but those acts of omission and commission by themselves do not establish the commission of criminal offences alleged against them. We may reiterate that once the report, Ext, P 11, is ruled out of consideration as inadmissible, then it is not safe to rely on the mere impressions of the witnesses to hold the appellants guilty of the offences alleged against them. The prosecution has failed to establish that in 1979-80, no work of jungle clearance in the Gandhipalem Project Division was undertaken and that false and fabricated documents were prepared with a view to misappropriate government funds. The prosecution has not even been able to establish that less work of jungle CBI Vs. S.C. Rout & Ors. CBI. No. 342/2019 121 of 143 clearance was undertaken but payment was shown to have been made for excessive work and some amount out of the payments made for the work were thus misappropriated by the appellants in connivance with the con- tractors. The conviction and sentence imposed against the appellants (which had been reduced by the High Court to a token sentence) under the circumstances cannot be sustained and we accordingly accept the appeal and set aside their conviction and sentence. Fine paid by the appellants shall be refunded to them."
182. No material was brought during the trial that accused SC Rout had forged and fabricated any document or that he had used any forged document in granting the credit facility.
183. Perusal of the statement of Account of M/s Delhi Trading Company vide Ex. PW43/E (Colly) would reveal that account was going smooth/satisfactory till October,2014 and the account was last operated on 15.10.2014. It is also reflected from the perusal of the record that Statements of Stocks were received till November, 2014 and thereafter, the Account turned NPA. PW 27 in his testimony had stated that account was having normal transaction and later on it slipped into irregular category and he had visited the Office of accused Vinay Mittal at Punjabi Bagh for regularization of the account.
184. It is relevant to mention that vide Ex. PW43/H, the prosecution has placed on record the monthly stock statement offer cash credit (Hypothecation) Account containing about 292 pages which record the calculation of the drawing power as well as the monthly statement of account. It also contains the name of various debtors. It is also relevant to CBI Vs. S.C. Rout & Ors. CBI. No. 342/2019 122 of 143 mention that monthly stock statement was being filed continuously till 30.11.2014 without any objection from the Bank and these documents further provide that there was a basis for grant of credit facility and the proper running of the loan account as same indicates that sufficient are maintained. The document vide Ex. PW43/H was not questioned by the IO and even the relevant witnesses who have accepted the monthly stock statements were also not examined by the Prosecution and no queries were made from them. The Investigating Officer had exhibited the document vide Ex. PW43/H (Colly) (D-41) without questioning the same. Once, a document has been duly exhibited by the prosecution and is brought on record, the contents of the same has to be read in favour of the accused, if it supports him and the calculation from 2012 till October 2014 is made on the basis of the stock available with M/s Delhi Trading Company.
185. In view of the above-mentioned discussion and also considering the various judgments of the Apex Court and the Hon'ble Delhi High Court in which it was held that even if the codal and irregularities were established and mere disregard to codal norms guidelines and circulars cannot be made basis to come to the conclusion that offence under Prevention of Corruption Act is made out against the accused and no offence u/s 13 (1) (d) r/w Section 13 (2) of PC Act,1988 is made out against the accused SC Rout.
186. The allegations against Vipan Kumar Luthra were that he impersonated as Vijendra Kumar Gupta @ VK Gupta (Varam Kumar Gupta) to the bank as guarantor to facilitate the grant of credit facility to M/s CBI Vs. S.C. Rout & Ors. CBI. No. 342/2019 123 of 143 Delhi Trading Company whose proprietor was Vinay Mittal. The documents in support of identity such as Voter Card and PAN Card were furnished and their copies bear the signatures of VK Gupta @ Varam Kumar Gupta. The title deeds in respect of Property bearing No. 13/5, Raj Nagar, Ghaziabad vide Ex. PW19/A was offered as a Collateral Security by the Guarantor, signature/impression made in the bank for completing the various formalities. In order to prove its case that the accused Vipan Kumar Luthra has impersonated as V.K Gupta@ Varam Kumar Gupta, the prosecution is required to establish the following facts;-
i. The statement of the persons who had seen that it was Vipan Kumar Luthra who had visited the Bank and impersonated as V.K. Gupta @ Varam Kumar Gupta.
ii. It was Vipan Kumar Luthra who had provided the documents to the bank. iii. The evidence or material indicating that Vipan Kumar Luthra had put his mark or signature on the documents submitted in the Bank and connecting it with cogent evidence that mark/signature was made by Vipan Kumar Luthra by presenting himself as VK Gupta@ Varam Kumar Gupta (Vijender Kumar Gupta).
187. The prosecution in order to connect the Accused Vipan Kumar Luthra asserts that he had impersonated as V.K. Gupta by offering the documents such as Voter ID Card and PAN Card as a proof of identity.
188. Voter Card bearing No. NGQ0589624 Vide Ex. PW31/C (at Page no. 2 of D-96) was one of the KYC documents furnished to the Bank having name of V.K. Gupta. PW-5 Sh. Mahendra Kumar Sharma stated that vide CBI Vs. S.C. Rout & Ors. CBI. No. 342/2019 124 of 143 verification report Ex.PW5/A, no data could be found in the computer with respect to voter ID Card No. NGQ0589624 in the name of V.K. Gupta S/o R.K. Gupta, R/o A-49, First Floor, Chander Vihar, I.P. Extension, Patparganj, Delhi does not exist in the record and there is not much dispute as regards the fact that Voter Card vide Ex.PW31/C (Colly) (Page No. 2 of D-96) is a forged and fabricated document.
189. PAN Card bearing No. BCNPG8599Q (vide Ex.PW31/C at Page No. 1 of D-96 was presented to the Bank as one of the KYC Document by Vipan Kumar Luthra by impersonating as Varam Kumar Gupta @ VK Gupta with respect to the abovesaid PAN Card, a verification was received from Income Tax Department vide Ex. PW6/A in which it is stated that PAN Card bearing No. BCNPG8599Q was issued in the name of Varam Kumar Gupta. PW 9 Ramesh Sharma was examined by the prosecution and who after perusing the original Application Form vide Ex. PW9/C stated that it bears his photograph at Point X but does not contain his signatures and he had also not applied for the said PAN Card and on the basis of the same it can be safely said on the basis of the forged and fabricated documents, a PAN Card bearing No. BCNPG8599Q was issued in the name of Varam Kumar Gupta.
190. A detailed finding has already been given to the effect that the so- called title deeds offered as collateral security vide Ex.PW19/A was forged and fabricated document as it did not bear the signature of Real Vijender Kumar Gupta who was impersonated.
CBI Vs. S.C. Rout & Ors. CBI. No. 342/2019 125 of 143
191. The next question is with respect to the identity of the person who had introduced and presented himself as guarantor i.e. Varam Kumar Gupta @ VK Gupta (Vijender Kumar Gupta) as owner of the property bearing No. 13/5, Raj Nagar, Ghaziabad. It is also the case of prosecution that Vipan Kumar Luthra had also submitted his title deed vide Ex. PW19/A to the bank. The signatures of VK Gupta (Varam Kumar Gupta) purported to be made by Vipan Kumar Luthra appears at Point Q-13 to Q-20 on the title deed vide Ex. PW19/A, at Point Q-8 to Q-12 on the memorandum of the title deed vide Ex. PW31/E as well as on the Point Q-2 to Q-5 on the net worth statement (part of D-5, from page 7 to 10) and at Point Q-22 to Q-34 on the guarantee agreement (part of D-98) and on affidavit (D-99) vide Ex.PW31/M. The signatures of Varam Kumar Gupta purported to be made by Vipan Kumar Luthra appears at Point Q-1 on Ex. PW11/A and other KYC documents vide Ex. PW31/C (Colly) containing PAN Card and Voter ID Card at Point Q-6 and Q-7 and Vipan Kumar Luthra had signed the above-mentioned documents in the Bank in the capacity of being a guarantor by impersonating as Varam Kumar @ VK Gupta.
192. The Prosecution imputes that signatures from Q-1 to Q-34 were not of Vijender Kumar Gupta. Some of the documents were stated to have been signed in the bank itself such as memorandum of deposit of title deed vide Ex. PW31/E and on the copies of KYC documents vide Ex. PW31/C (Colly). The documents at the bank level is possibly signed either before SC Rout or PW 31 Sh. Venkatanarayana. In the present case, CFSL Report Vide Ex. PW4/3 does not impute the questioned signature to accused Vipan CBI Vs. S.C. Rout & Ors. CBI. No. 342/2019 126 of 143 Kumar Luthra and there is no other available evidence or material to connect signatures of Varam Kumar Gupta @ VK Gupta with Vipan Kumar Luthra. The report vide Ex. PW4/3 is only confined to the effect that the questioned signatures on number of documents do not relate to Vijender Kumar Gupta and the opinion could not be furnished with respect to some of the questioned Hindi writings marked Q-49 to Q-51 on Ex. PW19/A in comparison with the specimen Hindi writings marked S-40 to S-47 (part of Ex. PW7/D (colly) D-97) as significant individual writing characteristics were not found common between them. It is noteworthy to mention that specimen signatures of accused Vipan Kumar Luthra were obtained during the course of investigation and it remained unexplained as to why the opinion with respect to his signature was not given by CFSL and why did the Investigating Officer did not pursue it with CFSL to provide opinion with respect to the handwriting/signatures of Vipan Kumar Luthra who had impersonated as V K Gupta@ Varam Kumar Gupta. It is usually said that investigation is the sole prerogative of the Investigating Agency and it should be left to the investigating agency as to how to conduct the investigation, however, it remains inexplicable as to why despite sending the specimen signature of the Accused Vipan Kumar Luthra through Forwarding Letter vide Ex.PW4/1 and Ex. PW44/A (Colly), the opinion was not obtained from CFSL as same would perhaps be a link evidence to connect accused Vipan Kumar Luthra that he had impersonated as VK Gupta @ Varam Kumar Gupta (or Vijender Kumar Gupta), however, Investigating Agency for the reasons best known to it, did not deem fit to obtain this crucial link and the supervisory officers had also failed to take note of this lapse. Therefore, it can be safely said that CFSL Report vide Ex.
CBI Vs. S.C. Rout & Ors. CBI. No. 342/2019 127 of 143 PW4/3 does not incriminate Vipan Kumar Luthra and is not of much help to the Prosecution to connect with accused Vipan Kumar Luthra.
193. PW-31 testified to the effect that he was working as an Advance Officer and used to look after the opening of accounts of customer as well as the work of credit section on the instructions of Accused S C Rout. PW-31 in generalized manner stated that if any applicant comes then he/she is required to meet the Branch Manager who would verify the documents and thereafter, it would come to the Advance Officer. This approach sounds quite weird as it is usually from lower hierarchy to the upper hierarchy, the file etc are required to be moved. Be that as it may, PW-31 stated that he had opened the account of M/s Delhi Trading Company vide Ex. PW31/A dated 28.01.2012 in which Vinay Mittal had signed as Proprietor in his immediate presence and also identified the signatures of SC Rout on the Account Opening Form. PW 31 also stated that he had also opened the bank account of Vinay Mittal dated 23.03.2012 vide Ex. PW23/A on the direction of accused SC Rout. He identified the photograph as well as the signature on the photocopies of KYC documents on different points.
194. PW31 also stated that memorandum of deposit of title deed vide Ex. PW31/E dated 06.03.2012 were filled by him on the direction of the Branch Head SC Rout. PW 31 also stated that title deed documents vide Ex. PW19/A were submitted by Vinay Mittal and VK Gupta. It is therefore apparent that he had seen and met both Vinay Mittal and VK Gupta @ Varam Kumar Gupta on 06.03.2012.
CBI Vs. S.C. Rout & Ors. CBI. No. 342/2019 128 of 143
195. PW 31 had stated that he had prepared document vide Ex. PW31/F (Colly) i.e. credit limit, intimation for sanction of credit limit and the acknowledgment (at Page No. 1) which contains the signature of V.K. Gupta (Vipan Kumar Luthra), the Guarantee Agreement from Page No. 12 to 14 containing the signature of both guarantor as well as the borrower. The Letter of Undertaking from Page Nos. 15 to 17 containing the signature of both guarantor as well as the borrower. PW 31 had also referred to the affidavit vide Ex. PW31/M containing the signature of the Guarantor. All these documents were prepared by PW 31 on the asking of the Branch Manager and relevantly number of documents bear the signature of Guarantor/Borrower. It can be safely said that it is PW 31 was the best witness who could have identified the accused Vipan Kumar Luthra who has impersonated VK Gupta @ Varam Kumar Gupta (Vijender Kumar Gupta) both at the stage of investigation as well as during trial.
196. However, this witness in order to save himself from any trouble had made somewhat ambivalent stand by concealing more rather than making proper disclosure with respect to the present case by not clearly revealing about Vipan Kumar Luthra, the Guarantor. In its zest, to absolve him from any wrongdoing he had attempted to pin blame on the accused SC Rout that he had prepared the documents vide Ex. PW31/E (Memorandum of Deposit of Title Deed) on the asking of Branch Manager. The Memorandum of Deposit of Title Deeds vide Ex. PW31/E was purported containing the signature of the impersonator who had introduced himself as VK Gupta.
CBI Vs. S.C. Rout & Ors. CBI. No. 342/2019 129 of 143 Notably attempt on the part of PW-31 to disassociate from Vipan Kumar Luthra who is stated to have impersonated V K Gupta faltered as it was PW- 31 who opened the saving bank account of VK Gupta vide Account Opening Form Ex PW-31/R of Acc. No. SB/01/9203 bearing the photograph of Vipan Kumar Luthra @ VK Gupta meaning thereby that he had meaningful interaction with the person whose account he is opening although, PW 31 stated that he had opened the account in routine manner and it appears that statement of PW 31 that he had opened the account in the routine manner was just a ruse to avoid giving explanation about the circumstances and manner in which he had prepared Ex. PW31/E i.e. Memorandum of Deposit of Title Deeds through which the title deeds Ex. PW19/A were deposited with the Bank. Opening of the bank account by a Bank official would not mean that he would not see the face of the person whose account he was opening. It was also not the case of Prosecution that PW 31 had opened the bank account vide Ex. PW31/R at the instance of accused SC Rout without the physical presence of the Account Holder of Ex. PW31/R or that the said Account Holder had not signed in his immediate presence in the bank and therefore, it can be said that PW 31 and accused SC Rout were the best persons who could have identified Vipan Kumar Luthra as the person who had impersonated as VK Gupta. Not only this Investigating Officer also did not analyse Ex PW-31/R for the reasons best known to him as to how PW 31 had opened the Bank Account of VK Gupta and even KYC related documents of VK Gupta were also taken while opening the bank account.
CBI Vs. S.C. Rout & Ors. CBI. No. 342/2019 130 of 143
197. Different approach adopted by the Investigating Agency in treating PW 31 and accused SC Rout is reflected from the fact that on the one hand it imputes that in pursuance to the conspiracy, Vipan Kumar Luthra had impersonated as VK Gupta and accused SC Rout was responsible for the same whereas, PW 31 had opened the bank account and had interaction with accused Vipan Kumar Luthra who had impersonated VK Gupta and PW 31 had also prepared memorandum of deposit of title deed vide Ex. PW31/E by taking the title deeds and it does not impute any wrong doing on the part of PW 31. During the course of investigation, the Investigating Officer did not feel it necessary to get identify Vipan Kumar Luthra who had impersonated as VK Gupta either from accused SC Rout by preparing a confrontation memo or from PW 31 Venkatanarayana and even did not get the Test Identification Parade (TIP) of accused Vipan Kumar Luthra conducted after the receipt of FSL Report vide Ex. PW4/3.
198. Accused SC Rout had contended that he was cheated by the accused Vinay Mittal and the purported Guarantor. Accused SC Rout had not examined himself in the trial and PW 31 had also not identified Vipan Kumar Luthra in the dock during the trial since prosecution did not ask for the identification of accused Vipan Kumar Luthra at any point of time and there is no other witness who could have identified Vipan Kumar Luthra and therefore, a reasonable doubt is created whether accused Vipan Kumar Luthra was indeed the person who was introduced as guarantor and there is no evidence with respect to the identification of accused Vipan Kumar Luthra.
CBI Vs. S.C. Rout & Ors. CBI. No. 342/2019 131 of 143
199. Various photographs appearing on the application for credit facility as well as on the Title Deed vide Ex. PW19/A were stated to be of Vipan Kumar Luthra who was identified by PW9 from his photograph. Mere affixation of a photograph of any person on the document may create suspicion but it would not be a grave suspicion as possibility of the misuse of photographs cannot be ruled out unless and until it is established that the said person has facilitated the usage of his photograph on such document as part of the criminal conspiracy and the positive evidence that person whose photograph was simply affixed had any role to play in providing the documents containing his photograph.
200. In the absence of the CFSL Report connecting accused Vipan Kumar Luthra to various documents, the case of prosecution that it was accused Vipan Kumar Luthra who had impersonated as VK Gupta/Varam Kumar Gupta or as Vijendra Kumar Gupta is not established from the evidence led in the Court, however, it is clear that some person has impersonated as V.K. Gupta while appearing before PW 31 and accused SC Rout. The possibility of Accused SC Rout and Bank falling into the well-organized Gang of criminals who were adept in cheating the bank cannot be ruled out.
201. There is another aspect which remained unanswered during the trial and has substantial bearing in the case projected by the prosecution. The reading of charge-sheet and the material collected during the course of investigation would indicate that accused Vinay Mittal is the king pin of the CBI Vs. S.C. Rout & Ors. CBI. No. 342/2019 132 of 143 fraud and is perhaps the beneficiary of the loan transaction. Original Identity Card i.e. Voter ID Card and PAN Card of Vipan Kumar Luthra would be available either with Vinay Mittal or Vipan Kumar Luthra. The question remained unanswered as to why during investigation the effort was not made to recover both Voter ID card and PAN card from Vipan Kumar Luthra [even if it is accepted that accused Vinay Mittal was not subjected to any proceedings since the listed case was not part of the extradition request to Indonesia] which would have gone in a long way to establish the connection of the person who had appeared as a guarantor. The Investigation has simply proceeded on the direction that since fake ID was produced so it is accused SC Rout who would be responsible to account for the same. It would altogether be a different matter if after making genuine efforts the Investigating Agency is able to come to the conclusion that fake Voter ID card and PAN card could not be recovered. In the present case, Due Diligence Agency had already given report vide Ex. PW10/A with respect to the guarantor and taking into consideration the cumulative circumstances, accused SC Rout in his administrative capacity would have no ground to disbelieve the documents furnished by a guarantor.
202. In a criminal trial as well as during the investigation, if the hypothesis is that "A" impersonated "B" before "C". If "A" is the impersonator there has to be some witness to identify "A" as an impersonator and in the absence of any positive evidence of identification, the accusation/charge against accused Vipan Kumar Luthra would not stand.
CBI Vs. S.C. Rout & Ors. CBI. No. 342/2019 133 of 143
203. Ex.PW 43/R is the seizure memo through which Account Opening Form of V.K Gupta alongwith other documents were seized by the CBI including the Account Opening Form of VK Gupta vide Ex. PW31/R. At Page No. 5, a letter dated 17.04.2014 bearing the purported questioned signatures of VK Gupta at Q-40 for the change of residence is also available and by the said time, accused SC Rout had already left Vasant Vihar Branch, New Delhi and no investigation was conducted as to how the letter for the change of residence is available on record and who had received the same.
204. One of the allegations against accused SC Rout was that he had knowingly accepted the forged documents from Accused SC Rout in pursuance to the criminal conspiracy and also facilitated Vipan Kumar Luthra (A-3) as a Guarantor.
205. Identification of any person who appears before any public authority or public servant is usually on the basis of the documents offered as a proof of identity as well as visual confirmation by matching his appearance with the photograph on the document offered for identification, however the methodology of the identifying the person on the basis of the document is susceptible to errors/mistakes, and usually fails when the document is a product of forgery. The assessor perception is eclipsed due to the forged document oblivious to the fact that he mistakenly confirms the identity of the person on the basis of superficial resemblance by believing on the forged document presented as proof of identity, a false identity was accepted as true and that explains the success story of an impersonator and vulnerability of CBI Vs. S.C. Rout & Ors. CBI. No. 342/2019 134 of 143 the person who falls into the trap and appears to be classic case where one perceives as if he is seeing but in reality it was deception.
206. Accused SC Rout and Vipan Kumar Luthra were also charged u/s 120 B IPC on the basis that pursuant to the criminal conspiracy substantive offences under Indian Penal Code as well as Prevention of Corruption Act were committed, pursuant to which Credit facility was granted to Delhi Trading Company through its proprietor Vinay Mittal on the basis of forged and fabricated documents and later on accused Vinay Mittal had diverted the funds and its end use was not monitored by the Bank.
207. In order to appreciate the charge against Section 120 B IPC invoked against both the accused persons, it would be appropriate to refer the substantive provisions u/s 120 B IPC as well as the Judgment of Apex Court in relation to Section 120 B IPC.
208. Section 120A of the Indian Penal Code defines Criminal Conspiracy as follows:
When two or more persons agree to do, or cause to be done, (1) an illegal act, (2) an act which is not illegal by illegal means, such an agreement is designated a criminal conspiracy:
Provided that no agreement except an agreement to commit an offence shall amount to a criminal conspiracy unless some act besides the agreement is done by one or more parties to such agreement in pursuance thereof.
Explanation ; It is immaterial whether the illegal act is the ultimate object of such agreement, or is merely incidental to that object.
CBI Vs. S.C. Rout & Ors. CBI. No. 342/2019 135 of 143 Section 120B, which prescribes in sub-section (1) the punishment for criminal conspiracy provides: Whoever is a party to a criminal conspiracy to commit an offence punishable with death, [imprisonment for life] or rigorous imprisonment for a term of two years or upwards, shall, where no express provision is made in the Code for the punishment of such a conspiracy, be punished in the same manner as if he had abetted such offence.
209. Hon'ble Supreme Court of India, in State v. Nalini, (1999) 5 SCC 253, after considering plethora of judgment summarised broad principles which governs the law of conspiracy in Paragraph 583 :
(1) Under Section 120-A IPC offence of criminal conspiracy is committed when two or more persons agree to do or cause to be done an illegal act or legal act by illegal means. When it is a legal act by illegal means overt act is necessary. Offence of criminal conspiracy is an exception to the general law where intent alone does not constitute crime. It is intention to commit crime and joining hands with persons having the same intention. Not only the intention but there has to be agreement to carry out the object of the intention, which is an offence.
The question for consideration in a case is did all the accused have the intention and did they agree that the crime be committed. It would not be enough for the offence of conspiracy when some of the accused merely entertained a wish, howsoever horrendous it may be, that offence be committed.
(2) Acts subsequent to the achieving of the object of conspiracy may tend to prove that a particular accused was party to the conspiracy. Once the object of conspiracy has been achieved, subsequent act, which may be unlawful, would not make the accused a part of the conspiracy like giving shelter to an absconder.
(3) Conspiracy is hatched in private or in secrecy. It is rarely possible to establish a conspiracy by direct evidence. Usually, both the existence of the conspiracy and its objects have to be inferred from the circumstances and the conduct of the accused.
(4) Conspirators may for example, be enrolled in a chain--A enrolling B, B enrolling C, and so on; and all will be members of a single conspiracy if they so intend and agree, even though each member knows only the person who enrolled him and the person whom he enrolls. There may be a kind of umbrella-spoke enrollment, where a single person at the centre does the enrolling and all the other members are CBI Vs. S.C. Rout & Ors. CBI. No. 342/2019 136 of 143 unknown to each other, though they know that there are to be other members. These are theories and in practice it may be difficult to tell which conspiracy in a particular case falls into which category. It may however, even overlap. But then there has to be present mutual interest. Persons may be members of a single conspiracy even though each is ignorant of the identity of many others who may have diverse roles to play. It is not a part of the crime of conspiracy that all the conspirators need to agree to play the same or an active role.
(5) When two or more persons agree to commit a crime of conspiracy, then regardless of making or considering any plans for its commission, and despite the fact that no step is taken by any such person to carry out their common purpose, a crime is committed by each and everyone who joins in the agreement. There have thus to be two conspirators and there may be more than that. To prove the charge of conspiracy it is not necessary that intended crime was committed or not. If committed it may further help prosecution to prove the charge of conspiracy. (6) It is not necessary that all conspirators should agree to the common purpose at the same time. They may join with other conspirators at any time before the consummation of the intended objective, and all are equally responsible. What part each conspirator is to play may not be known to everyone or the fact as to when a conspirator joined the conspiracy and when he left.
(7) A charge of conspiracy may prejudice the accused because it forces them into a joint trial and the court may consider the entire mass of evidence against every accused. Prosecution has to produce evidence not only to show that each of the accused has knowledge of the object of conspiracy but also of the agreement. In the charge of conspiracy the court has to guard itself against the danger of unfairness to the accused. Introduction of evidence against some may result in the conviction of all, which is to be avoided. By means of evidence in conspiracy, which is otherwise inadmissible in the trial of any other substantive offence prosecution tries to implicate the accused not only in the conspiracy itself but also in the substantive crime of the alleged conspirators. There is always difficulty in tracing the precise contribution of each member of the conspiracy but then there has to be cogent and convincing evidence against each one of the accused charged with the offence of conspiracy. As observed by Judge Learned Hand, this distinction is important today when many prosecutors seek to sweep within the dragnet of conspiracy all those who have been associated in any degree whatever with the main offenders‟ [United States v. Falcone, 109 F 2d 579 (2d Cir 1940)] (8) As stated above it is the unlawful agreement and not its accomplishment, which is the gist or essence of the crime of conspiracy.
CBI Vs. S.C. Rout & Ors. CBI. No. 342/2019 137 of 143 Offence of criminal conspiracy is complete even though there is no agreement as to the means by which the purpose is to be accomplished. It is the unlawful agreement which is the gravamen of the crime of conspiracy. The unlawful agreement which amounts to a conspiracy need not be formal or express, but may be inherent in and inferred from the circumstances, especially declarations, acts and conduct of the conspirators. The agreement need not be entered into by all the parties to it at the same time, but may be reached by successive actions evidencing their joining of the conspiracy.
(9) It has been said that a criminal conspiracy is a partnership in crime, and that there is in each conspiracy a joint or mutual agency for the prosecution of a common plan. Thus, if two or more persons enter into a conspiracy, any act done by any of them pursuant to the agreement is, in contemplation of law, the act of each of them and they are jointly responsible therefor. This means that everything said, written or done by any of the conspirators in execution or furtherance of the common purpose is deemed to have been said, done or written by each of them. And this joint responsibility extends not only to what is done by any of the conspirators pursuant to the original agreement but also to collateral acts incidental to and growing out of the original purpose. A conspirator is not responsible, however, for acts done by a co-conspirator after termination of the conspiracy. The joinder of a conspiracy by a new member does not create a new conspiracy nor does it change the status of the other conspirators, and the mere fact that conspirators individually or in groups perform different tasks to a common end does not split up a conspiracy into several different conspiracies.
210. In order to make a person culpable for the offence u/s 120 B IPC, the prosecution is duty bound to establish that there was an unlawful act i.e. the substantive offence are also required to be proved apart from Section 120 B IPC and like any other substantive offence, the charge of conspiracy is to be established by leading cogent evidence. The conspiracy is usually hatched in secrecy and in order to establish that there was conspiracy, the indirect circumstances are also required to be established to indicate that there was an agreement to commit an illegal act. It is evident from the discussion that both the accused persons were not found to be involved in the commission of CBI Vs. S.C. Rout & Ors. CBI. No. 342/2019 138 of 143 any substantive offence and therefore the case of prosecution that there was conspiracy between Accused SC Rout and Vipan Kumar Luthra with the main accused Vinay Mittal. Even otherwise, when substantive offences are not established against the accused persons, there is no basis to invoke Section 120 B IPC.
211. The detailed findings with respect to the role of accused Vipan Kumar Luthra has been discussed in the preceding paragraphs of the Judgment and no offence is made out against him. It is evident from the perusal of the record that after recording his statement u/s 313 CrPC the accused did not appear before the Court and pursuant to which he was declared as "Proclaimed Person" on 08.04.2025. Since, there is no material against the accused Vipan Kumar Luthra, the question for consideration would be whether the Court would be well within its jurisdiction in pronouncing the Judgment with respect to the accused Vipan Kumar Luthra who was declared as "Proclaimed Person". Effectively in the present case, accused Vipan Kumar Luthra had participated in the proceedings at each and every stage i.e. at the time of framing of charges, recording of evidence as well as recordal of statement u/s 313 CrPC in which he had not chosen to lead the Defence Evidence and the case was at the stage of Final Arguments, the accused Vipan Kumar Luthra had stopped appearing before the Court. Proviso to Section 353 (6) CrPC [Now proviso to Section 392 BNSS] provides that, "where there are more accused than one, and one or more of them do not attend the Court on the date on which the judgment is to be pronounced, the presiding officer may, in order to avoid undue delay in the CBI Vs. S.C. Rout & Ors. CBI. No. 342/2019 139 of 143 disposal of the case, pronounce the judgment notwithstanding their absence " and therefore, this Court can pronounce a Judgment against the accused who had participated at all stages of trial and his Legal Aid Counsel had even advanced arguments notwithstanding his absence.
212. It would be appropriate to refer to the Judgement of Hon'ble Supreme Court in Sukhpal Singh Khaira Vs. State of Punjab, Crl. Appeal No. 885 of 2019 dated 05.12.2022 in which it was observed that a Sessions Trial comes to an end when the Judgment or an order for the acquittal is passed. It was also observed in Paragraph No. 24 of the Sukhpal Singh Khaira (Supra.), if the pronouncement of the Judgment would result in the award of the appropriate sentence, the trial would come to an end after passing of the Order on Sentence since the finding of acquittal is being recorded and therefore, the Judgment can be pronounced against the accused Vipan Kumar Luthra.
213. The next question is what to do with the proclamation issued against the accused Vipan Kumar Luthra, since the very basis of the issuance of proclamation against the accused Vipan Kumar Luthra does not survive therefore, proclamation dated 08.04.2025 does not subsist and no longer can be enforced and accordingly, the proclamation dated 08.04.2025 stands discharged or extinguished.
214. Vide Order dated 08.04.2025, The CBI was directed to take appropriate steps by getting an FIR registered u/s 209 BNS (corresponding to Section CBI Vs. S.C. Rout & Ors. CBI. No. 342/2019 140 of 143 174 A IPC). Section 209 BNS is pari materia to Section 174 A IPC. Hon'ble Delhi High Court in Mukesh Bhatia Vs. State of NCT of Delhi in W.P. (CRL.) 1852/2021 dated 12.04.2022 and Divya Verma Vs. State In CRL. M.C. 2756/2023 dated 19.04.2023 held that Section 174 A IPC was stand alone offence and thus, Section 209 BNS is also stand alone offence. In Daljit Singh Vs. State of Haryana, 2025 SCC OnLine SC1, Hon'ble Supreme Court was pleased to hold that the prosecution can still proceed against the person who did not appear before the Court during the time when the process was in effect and had considered language of Section 174 A IPC " Whoever fails to appear at the specified place and the specified time as required by the proclamation..." comes into play when a person do not appear before the Court. In the present case, despite issuance of proclamation accused did not appear before the Court and had also not explained his reason for non appearance and therefore, if any proceeding u/s 209 BNS as directed by this Court shall continue as per law.
215. It is a well settled principle of the criminal jurisprudence that an accused is presumed to be an innocent unless proven guilty and the suspicion howsoever strong cannot take the place of proof. It is the bounden duty of the prosecution to establish its case beyond reasonable doubt. The Hon'ble Supreme court of India in "P. Sathyanarayana Murthy v. District Inspector of Police, State AP and another (2015) 10 SCC 152" after relying upon the judgment Sujit Biswas Vs. State of Assam, (2013) 12 SCC 406 was held that "suspicion, however, grave cannot take the place of proof and the prosecution cannot afford to rest its case in the realm of "may be" true but CBI Vs. S.C. Rout & Ors. CBI. No. 342/2019 141 of 143 has to upgrade it in the domain of "must be" true in order to steer clear of any possible surmise of conjecture. It was held, that the court must ensure that miscarriage of justice is avoided and if in the facts and circumstances, two views are plausible, then the benefit of doubt must be given to the accused.
216. In "Sharad Birdhichand vs State of Maharashtra", AIR 1984 SC 1622, it was observed that the circumstances from which the conclusion o f guilt is to be drawn should be fully established. The circumstances co ncerned 'must or should' and not 'may be' established. The court while laying emphasis on the above legal principle relied on a judgment of the Supreme Court in " Shiva Sahabrao Bobade and another v. State of Maharashtra", (1973) 2 SCC 793 where it was observed that "Certainly, i t is a primary principle that the accused must be and not merely may be guilty before a court can convict and the mental distance between 'may be' and 'must be' is long and divides vague conjectures from sure conclusions.
217. In view of the above-mentioned discussion and taking into consideration the oral and documentary evidence, the prosecution has failed to prove the charges against the accused persons and accordingly (i) Sukanta Chandra Rout ( referred as A-2 in the charge-sheet ) is acquitted of committing an offence u/s 13(1) (d) r/w Section 13(2) of the Prevention of Corruption Act, 1988 and Sections 420/467/468/471 IPC r/w 120-B IPC and; (ii) Vipan Kumar Luthra (referred as A-3 in the charge-sheet) is also CBI Vs. S.C. Rout & Ors. CBI. No. 342/2019 142 of 143 acquitted of committing an offence under sections 419/420/467/468/471 IPC r/w 120-B IPC and u/s 419 & 420 IPC.
218. The bail bonds and sureties stand discharged. Accused Sukanta Chandra Rout is directed to furnish personal bond in the sum of Rs.50,000/- with one surety of the like amount u/s 481 of Bharatiya Nagarik Suraksha Sanhita 2023. (Corresponding section 437A Cr. PC).
219. Accused Vipan Kumar Luthra is directed to furnish personal bond of Rs. 50,000/- with one surety of the like amount u/s 481 of Bharatiya Nagarik Suraksha Sanhita 2023. (Corresponding section 437A Cr. PC) as and when he appears before the Court.
220. Case property, if any, be destroyed as per rules. File be consigned to Record Room.
Digitally signed by HASAN (Dictated and announced in the open court today i.e. on 24.09.2025) HASAN ANZAR Date: ANZAR 2025.09.24 18:43:28 +0530 (HASAN ANZAR) SPECIAL JUDGE (PC ACT) CBI-03, ROUSE AVENUE DISTRICT COURTS, NEW DELHI/24.09.2025 CBI Vs. S.C. Rout & Ors. CBI. No. 342/2019 143 of 143