Delhi District Court
Cbi vs 1. Surender Singh @ S. Surender on 7 September, 2020
IN THE COURT OF ANIL KUMAR SISODIA
SPECIAL JUDGE (PC ACT)(CBI)-07: ROUSE AVENUE COURTS:
NEW DELHI
New CNR No. DLCT11-000111-2019
(Old CNR No.02401R0012392016)
New CC No. 3/2019
(Old CC No. 01/2016)
RC No. 219-2014(E)0013/CBI/EO-1/ND
CBI Versus 1. Surender Singh @ S. Surender
Singh @ Surender Singh
Chandok s/o late Daleep Singh
R/o J-5/152, 2nd & 3rd Floor,
Rajouri Garden, Delhi.
(Proclaimed Offender).
2. Angad Singh
s/o Surender Singh
J-5/152, 2nd & 3rd Floor, Rajouri
Garden, Delhi.
(Proclaimed Offender).
3. Harsahib Singh @ Gursahib
Singh @ Sahib Singh
s/o Surender Singh
J-5/152, 2nd & 3rd Floor, Rajouri
Garden, Delhi.
(Proclaimed Offender).
4. Harleen Kaur Chandok
W/o Surender Singh
J-5/152, 2nd & 3rd Floor, Rajouri
Garden, Delhi.
(Proclaimed Offender).
CC No. 3/2019 CBI Vs. Surender Singh & Ors. Page No. 1 of 178
5. Ashish Puri
s/o Late Sh. Inder Mohan Puri
R/o J-112, Main Market, Rajouri
Garden, New Delhi-110027.
6. Subodh Kumar Singh
s/o Late Sh. S. P. Singh
R/o 2314/4, Hudson Lane,
Kingsway Camp, Delhi-110009
7. Sharad Joshi
s/o Late Sh. B. P. Joshi,
R/o B-43, Kamal Pushpa
Society, Bandra Reclamation,
Bandra West, Mumbai-400050
8. Surendra Kumar Grover
Late Sh. R. L. Grover
R/o EA-25, Inderpuri,
New Delhi-110012.
Date of Institution : 05.01.2016
Judgment reserved on : 05.08.2020
Date of Judgment : 29.08.2020
Memo of Appearance:
Sh. A. K. Kushwaha, Ld. PP for CBI.
Sh. M. S. Bammi, Ld. Counsel for Accused No.5.
Sh. L. K. Singh, Ld. Counsel for Accused No.6.
Sh. Siddharth Joshi, Ld. Counsel for Accused No.7.
Sh. Ashok Kumar and Sh. Anil Mishra, Ld. Counsels for Accused No.8.
JUDGMENT
PROSECUTION VERSION
1. The FIR in the present case was registered on 24.07.2014 on the basis of written complaint made by Sh. Bharat Bhushan Gupta, CC No. 3/2019 CBI Vs. Surender Singh & Ors. Page No. 2 of 178 Assistant General Manager, Union Bank of India, Patel Nagar Branch, New Delhi (herein after referred to in short "Complainant Bank") for offences under Section 120-B IPC read with Section 420 and 467 IPC against Surender Singh(A-1) Prop. of M/s National Traders, R/o J- 5/152, Rajouri Garden, New Delhi and unknown officials of complainant Bank. M/s National Traders a proprietorship firm was engaged in the business of auto part and accessories of commercial vehicles. In December, 2010 the account of this firm was taken over by complainant bank from Bank of Baroda, Najafgarh Branch (herein after referred to in short "BOB") by sanctioning Cash Credit Limit of Rs. 4 crores, Packing Credit Limit of Rs. 0.85 crores and FDBP limit of Rs. 1 crore. In order to secure the loan sanctioned by the complainant bank, the firm mortgaged entire immovable property situated at J-7/53, Rajouri Garden, New Delhi (owned by A-1) by depositing the original title deeds of the property on 28.01.2011. On 31.12.2012 account was declared NPA and complainant bank initiated recovery action by invoking the provisions of the SARFAESI Act. At that time complainant bank learnt that part of the property no. J-7/53, Rajouri Garden, New Delhi was also mortgaged with Punjab National Bank (hereinafter referred to in short as "PNB") by creating similar mortgage and on the basis of forged and fabricated documents. Complainant bank directed its empaneled lawyer to find out the factual position, who filed his report dated 09.05.2013 mentioning that A-1 had transferred the first floor alongwith roof rights of the said property in favour of his son Angad Singh (A-2) on 31.01.2007 i.e., much prior to mortgage of the entire property with complainant bank and further that A-2 had again sold the second floor of the property to Ashish Puri (A-5) on 03.03.2009, who had mortgaged the said second floor of the property in CC No. 3/2019 CBI Vs. Surender Singh & Ors. Page No. 3 of 178 favour of PNB, Ashok Vihar Branch to secure the loan obtained in the name of his firm M/s Sai International.
2. Investigation revealed that A-1 had also obtained credit facility of Rs. 4 crores on 05.06.2009 from BOB by fraudulently giving collateral security as J-7/53, Rajouri Garden, New Delhi consisting of basement, Ground floor, First floor, Second floor and Third floor. The investigation revealed that BOB received information from PNB, Sector- 27D, Noida that A-1 had defrauded PNB by availing credit facility in the name of M/s Harleen Overseas Industries having A-1 as its Proprietor and M/s Saab Enterprises having A-2 as its Proprietor. Due to this bank became careful about its loan and started requesting borrowers to adjust Cash Credit Limits.
3. Investigation further revealed that A-7 Sharad Joshi was Branch Manager of complainant bank at the relevant time and the credit department of the branch was headed by S. K. Grover (A-8) being Sr. Manager (Credit). Investigation also revealed that A-8 was earlier posted in Rajouri Garden Branch of Union Bank of India("UBI" for short) and from there he was acquainted with A-1 where A-1 had availed credit facility from UBI Rajouri Garden Branch through his firm M/s Bombay Brake and Clutches w.e.f. 1988 to 2002. When BOB pressed A-1 to adjust his loan account with the bank, A-1 contacted A- 8 for shifting of his loan account from BOB to complainant bank.
4. Investigation further revealed that on 19.07.2010, A-1 had CC No. 3/2019 CBI Vs. Surender Singh & Ors. Page No. 4 of 178 applied for shifting of credit proposal annexing some forged documents, i.e. fake firm profile, forged audited balance sheets, false provisional and projected balance sheet, false rent agreements of warehouse, statement of account of BOB, sanction letter, copy of property papers, photocopy of address and ID proof including VAT Certificate and processing flow chart. A-1 had also submitted wrong affidavit and information that he was the owner of all four floors of the property situated at J-7/53, Rajouri Garden, New Delhi.
5. Investigation further revealed that A-8 had prepared credit report of Surender Singh A-1 and guarantor Smt. Harleen Kaur(A-4) on 31.08.2010 which was also signed by A-7 Branch Manager. A process note dated 08.09.2010 for sanctioning of Rs. 6 crores working capital was prepared and it was signed by both A-7 & A-8. Thereafter, A-7 sent the proposal to Regional Office on 9.9.2010, wherein A-7 had prepared Due Diligence report fraudulently mentioning that they had enquired about the borrower A-1 from Sh. Parmeet Singh of M/s Reliable Motors, Sh. Ashish Puri (A-5) of M/s Durga Agencies and Sh. Avinash Ahluwalia of M/s Orient Auto Parts, whereas no such person or firm as Sh. Avinash Ahluwalia of M/s Orient Auto Parts existed on the given address and Sh. Parmeet Singh did not recognize any person such as A-7 and he denied that any person from complainant bank had contacted him for verification of M/s National Traders. A-5 was working for M/s National Traders. He further denied having have met any official of complainant bank in this connection.
6. Investigation further revealed that regarding property no. J-
CC No. 3/2019 CBI Vs. Surender Singh & Ors. Page No. 5 of 178 7/53, Rajouri Garden, due diligence was done by A-7, wherein he had fraudulently mentioned that he had enquired about this property from Sh. Aman Singh of M/s Perfect Property and Sh. Negi of M/s Parl Property whereas investigation revealed that no such firms existed on the given addresses. The investigation also revealed that even A-1 had fraudulently submitted forged ITR for assessment year 2009-10 & 2010-11 with different PAN numbers and that even on one of the page of balance sheet dated 31.03.2010 of M/s National Traders, the name of the firm was mentioned as M/s Ryder Matic Bevel Gears but A-8 intentionally did not point it out or done due diligence and further that balance sheet was also found to be forged and fake.
7. Investigation further revealed that after receipt of the proposal in Regional Office, Sh. Ravi Ranjan, Sr. Manager (Credit) had prepared details of deficiency in the proposal including non-inclusion of CIBIL report of the firm on which A-7 had fraudulently replied that they had checked the CIBIL report of the firm / guarantors and the report was satisfactory although no such report was extracted from website of CIBIL and sent to the Regional Office with the recommendation. On this false reply of Branch Office, Regional Office on 23.10.2010 prepared a process note for sanctioning credit facility to M/s National Traders and same was submitted to Credit Approval Grid for their consideration. The meeting of the Credit Approval Grid was convened on 1.11.2010 in which proposal was approved with "Nil observation"
and after that proposal was submitted to sanctioning authority which was approved by the sanctioning authority Sh. Ravi Kumar Gupta DGM, on 22.11.2010.
CC No. 3/2019 CBI Vs. Surender Singh & Ors. Page No. 6 of 178
8. Investigation further revealed that there was deviation in the ratio of TOL/TNW (Total Outside Liability/Total Net Worth) in the takeover norms and next higher authority of sanctioning empowered was General Manger to approve this, so the proposal was put up before Sh. D. S. Tripathi, General Manager who approved the deviation with the conditions that branch to checkup conduct of family account maintained with Opera House Branch; the party had relationship with BOB since July, 2009; shifting of account within 18 months is not a good indication, so the branch to doubly ensure about conduct of account with BOB by verifying statement of account and carry out thorough due diligence from people in same line and further the collateral security be inspected for its value and marketability. The investigation revealed that without obtaining proper sanction letter after the approval of GM along with his observations and its compliance, the branch had released the fund on the basis of photocopy of process note signed by DGM which was the gross negligence.
9. Investigation further revealed that Subodh Kumar Singh (A-6) who was empaneled Legal Retainer had fraudulently given wrong title verification report of the property mortgaged with this loan account. He had intentionally given his legal search report to the complainant bank on 16.08.2010, two days prior to visiting the Sub-Registrar Office i.e. 18.08.2010, which showed that he never bothered to check the record prior to giving his report to the complainant bank. A-6 had certified that A-1 had a good, clear, valid, enforceable, absolute and marketable title in respect of the property and he can create equitable CC No. 3/2019 CBI Vs. Surender Singh & Ors. Page No. 7 of 178 mortgage in favour of complainant bank after taking No Dues Certificate from BOB. The investigation revealed that falsehood of this report came to light when another panel advocate Sh. Dhurender Singh Dalal submitted his report dated 10.09.2013.
10. Investigation further revealed that A-1 had purchased property J-7/53, Rajouri Garden, Delhi from Vinita Anand on 15.01.2007. Thereafter A-1 sold first floor with roof right of the property to his son A-2 on 31.01.2007. A-1 was owner of basement and ground floor of this property only but A-6 fraudulently gave the legal search report that A-1 was owner of entire building.
11. Investigation further revealed that Sh. Satish Kumar Khanna, Credit Process Audit Officer, of UBI, Rajouri Garden Branch, gave his report after credit processing audit, and thereafter, complainant bank transferred Rs. 3,75,35,979/- to the account No. 07940500000036 of M/s National Traders in BOB, Najafgarh Road Branch for full and final settlement of the loan on 23.12.2010 through RTGS and remaining amount released by complainant was transferred by A-1 to sister concern accounts from 23.12.2010 to 30.12.2010 and the funds were siphoned of.
12. Investigation further revealed that Packing Credit of Rs. 85 lacs was released on 11.01.2011 by Sh. Ashish Jain, Manager (Credit). This amount was siphoned of in different accounts controlled by borrower and his family members. During search conducted at CC No. 3/2019 CBI Vs. Surender Singh & Ors. Page No. 8 of 178 house as well as office of M/s National Traders, rubber stamps of all those firms were found which showed that all the firms were maintained and operated by A-1 and his family members and funds released such as packing credit was siphoned off by them from 11.1.2011 to 14.1.2011.
13. Investigation further revealed that on 14.05.2012, A-1 had applied for release of packing credit of Rs. 185.00 lacs, which was processed by Sh. Lalit Kumar, Officer (Credit) of the branch and it was fraudulently approved by A-7 and the 25% margin stipulated by Regional Office in its original sanction note was not adhered to. The entire amount of PC was released after unauthorized merger of FDBP into PC facility. All the amount in PC facility was siphoned off by the accused persons through the accounts controlled by borrower. Investigation also revealed that PC is pre-shipment finance and FDBP is post shipment finance. Since Pre-shipment finance is necessary to be backed up by Post-shipment finance for insurance cover, tracking of finance and getting foreign currency for the country. So stand-alone PC could not be given.
14. Investigation further revealed that PC Limit of Rs. 20.35 lacs was released on 17.05.2012 by Sh. Lalit Kumar, Officer (Credit) on the request of A-1 against the order without stipulating the required margin. Investigation revealed that Rs. 97.92 lacs was released on 22.05.2012 against order of Rs. 1,13,15,355/- without adhereing to the stipulated margin condition, out of which Rs. 95 lacs was transferred on 23.05.2012 to M/s Durga Agencies Proprietor A-5 with Yes Bank, CC No. 3/2019 CBI Vs. Surender Singh & Ors. Page No. 9 of 178 Rajouri Garden and Rs. 2.50 lacs was transferred to M/s Sai International Proprietor A-5 with same bank, without any business transaction. The account was declared NPA on 31.12.2012 and by that time total liability was Rs. 595.35 lacs (CC Rs. 410.36 lacs and PC Rs. 184.99).
15. The investigation further revealed that on the basis of various forged documents, A-1 and his family members had cheated various banks and persons. The details of which are as follows:-
i) It came to light during investigation that A-1 Proprietor of M/s Surya Enterprises had availed cash credit limit of Rs. 4.75 crores from Bank of India which was secured by equitable mortgage of basement, second floor, third floor with roof right of residential property at J-5/152 on the name of A-1, A-4 and A-1 respectively and first, second and third floor of property no. J-7/53, Rajouri Garden on the name of A-2. The limit was enhanced from 475.00 lacs to 700 lacs and the account was classified as NPA on 31.05.2013 with outstanding of Rs. 7.81 crores.
ii) The investigation further revealed that A-1 being Proprietor of M/s National Traders was availing cash credit limit of Rs. 3.90 crores, PC limit of Rs. 50 lacs and FDBP limit of Rs. 50 lacs from PNB, Ashok Vihar Branch which was categorized as NPA from 30.09.2012. The collateral in the form of basement, second and third floors at J-5/152, Rajouri Garden owned by A-1 & A-4 was offered by the firm to the PNB.
iii) The investigation further revealed that A-1 alleged Proprietor of M/s Harson Overseas was sanctioned cash credit facility of Rs. 80 lacs from Allahabad Bank South Extension Part II on 3.4.2010. This facility was secured by the equitable mortgaging the same property, i.e. J-7/53, CC No. 3/2019 CBI Vs. Surender Singh & Ors. Page No. 10 of 178 First Floor, Rajouri Garden, New Delhi. The credit facility was enhanced from Rs. 80 lacs to Rs. 3 crores vide office sanction letter dated 14.6.2010 which was further secured by collateral of second and third floor with roof rights of J-7/53 and third floor with roof rights of J-5/152, Rajouri Garden, New Delhi. The account turned NPA on May, 2013 with outstanding balance of Rs. 3.02 crores.
iv) The investigation further revealed that A-5, friend of A-2 and proprietor of M/s Sai International had availed Cash Credit facility of Rs. 2 crores from PNB Ashok Vihar, New Delhi showing regd. office of the firm as A/2122, 2nd Floor, Rajouri Garden and factory/godown at J- 5/155 Rajouri Garden, Delhi. To secure the loan, residential property IInd floor at J-7/53 in the name of A-5 and Residential property basement at J-5/152 in the name of A-1 were mortgaged with the bank on 9.4.2011. Investigation further revealed that 2nd floor without roof right of J-7/53, Rajouri Garden, Delhi was registered on 3.3.2009 in the name of A-5 from A-2 .
v) The investigation further revealed that A-3 being Proprietor of M/s Durga Agency was sanctioned cash credit facility of Rs. 4.60 crores on 17.8.2012. The firm M/s Durga Agency was having its office at A-110 and A-111, Shiv Vihar, New Delhi which was also godown address of firm M/s National Traders of A-1. This loan was guaranteed by A-2. This facility was secured by simple mortgage of first floor, second floor and third floor with roof rights of property no. J-7/53, Rajouri Garden, Delhi which was registered in the name of A-2. Simple mortgage of this property was also done on the basis of forged sale deed as A-2 had already mortgaged this sale deed to Bank of India and at that time, was not in possession of original sale deed.
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vi) The investigation further revealed that A-2, Proprietor of M/s Kumar Trading & Company was sanctioned cash credit facility of Rs. 2 crores on 30.07.2012 by Corporation Bank Vasant Vihar Branch, Delhi. The firm was having its office at A-113, Shiv Vihar, West Vikas Nagar, Uttam Nagar, New Delhi which was also godown address of M/s National Traders of A-1. This loan was guaranteed by A-3 (son of A-1). Here also the borrower had submitted forged sale deed of 2nd and 3rd floor of property no. J-5/152, Rajouri Garden which was already mortgaged to Bank of India and Allahabad Bank, so the borrower had submitted forged sale deed. Later on, security was replaced with another property situated at entire basement of residential building no. R-859, Rajendra Nagar, New Delhi owned by A-2.
vii) The investigation thus revealed that A-1 and his family members had submitted following forged documents of properties:
Bank Firm Credit facility Detail of property Owner rd Allahabad Bank, M/s Harsons Rs. 3 Crores CC 2nd & 3 floor with Angad Singh (A-2) South Ex.-I, Overseas (I), on 3.4.2010 roof right at J-7/53, Delhi. Prop. Surender Rajouri Garden, Singh (A-1). Delhi
-do- -do- -do- 2nd floor J-5/152, Harleen Kaur Rajouri Garden, Delhi (A-4) st nd rd Corporation M/s Durga Agency Rs. 4.60 Crores 1 , 2 , 3 floor, Angad Singh (A-2) Bank, Vasant Prop. Harsahib CC 17.8.2012 with roof right at J-
Vihar, Delhi. Singh (A-3) 7/53, Rajouri
Garden, Delhi
nd
PNB Ashok M/s National Rs. 3.90 Crores Basement, 2 & Surender Singh
rd
Vihar, Delhi. Traders Prop. 3 floor with roof (A-1) and Harleen
Surender Singh right at J-5/152, Kaur (A-4)
Rajouri Garden,
(A-1) Delhi
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16. During search of the premises of A-1 at J-5/152 and J-7/53, Rajouri Garden, Delhi, 73 rubber stamps of the companies were found in which proceeds of crime were transferred. Investigation further revealed that most of the debtors and creditors mentioned in the balance sheet of M/s National Traders are companies / firms whose rubber stamps were found in the search of the premises. Further it shows that list of debtors and creditors in the balance sheet are not genuine and balance sheet submitted by borrower were forged. Sh.
Sandeep Sharma, CA and partner of M/s Harish Malik & Company had stated that he had not signed the balance sheet of M/s National Traders for the period ending 31.03.2010 and further that A-1 submitted different set of balance sheet of M/s National Traders to PNB Ashok Vihar branch for availing loan from that bank and same was also found forged.
17. The Investigation further revealed that A-5 had registered a firm M/s Mapex International FZE at UAE with activity of trading in auto spare parts, components and readymade garments. The Investigation shows that Rs. 126.08 lacs out of the total Rs. 185 lacs was availed in the name of this firm, which remained unpaid at the time of NPA.
18. The Investigation revealed that A-1 had used different PAN numbers, i.e. CDQPS8178E in Complainant Bank, CJCPS9675Q in Allahabad Bank and ADEPC5439Q in Bank of India to avail credit facility. A-1 also used different driving licence number, i.e. P04022008555707 dated 5.2.2008 with Bank of India and CC No. 3/2019 CBI Vs. Surender Singh & Ors. Page No. 13 of 178 P04118003070808 dated 8.4.2008 with complainant bank and he used different IDs to deceive CIBIL report. The Investigation revealed that A- 1 to A-6 entered into criminal conspiracy with A-7 & A-8 and caused loss of Rs. 5.95 crores to complainant bank.
19. Investigation also revealed that A-7 and A-8 had already retired from service, hence, sanction for prosecution under Section 19(1)(c) of P. C. act was not required.
20. In the background of these facts and allegations CBI filed charge sheet against the accused persons on 5/1/2016 for the offences under Section 120B IPC read with section 467/468/471 IPC and section13(2) read with section 13(1)(d) of P.C. Act and substantive offences thereof against all the accused persons.
COGNIZANCE AND CHARGES
21. Cognizance was taken by the court on 26.02.2016 and the accused were directed to be summoned. Before arguments on charge could be heard, A-1 to A-4 jumped the bail and were declared proclaimed offenders vide order dated 01.06.2016.
22. Arguments on charge were heard and vide order dated 18.01.2017, charge for commission of offences punishable under Section 120-B read with Section 420/468/471 IPC and 13(2) read with Section 13(1)(d) P.C. Act, 1988 against all the accused; for substantive CC No. 3/2019 CBI Vs. Surender Singh & Ors. Page No. 14 of 178 offence punishable under Section 468/471 against A-5; offence under Section 420/468/471 IPC against A-6 and offences under Section 420/468/471 and section 13(2) read with Section 13(1)(d) of P.C. Act,1988 against A-7 and A-8 were directed to be framed. Formal charges were framed accordingly, to which accused A-5 to A-8 pleaded not guilty and claimed trial.
PROSECUTION EVIDENCE
23. In order to prove its case, prosecution has examined 60 witnesses. The witnesses can be classified as under:-
A. Bank Officials of Complainant Bank
Sr. Name Purpose
No.
1. PW-1 Sunil Yadav, Sr. Manager (Credit) To prove various documents handed
over to CBI.
2. PW-6 Kalpana Prusty, Erstwhile Chief To prove the various loan documents of
Manager M/s National Traders signed by her.
3. PW-8 Ramesh Babanrao Bidwai, To prove the various loan documents of
Erstwhile DGM, Regional office M/s National Traders and to explain the
procedure for review of the loan.
4. PW-12 Vishnu Kant Bansal, Erstwhile To prove the procedure of processing of
Chief Manager (Credit), Regional office proposal at RO level and to prove the
documents signed by him.
5. PW-15 Ravi Kumar Gupta, Erstwhile To explain the sanctioning powers of
DGM, Regional Office various officer and to prove the
documents prepared by him.
6. PW-16 Radhey Shyam Bansal, To prove the various loan documents
Erstwhile AGM, Regional Office and the report prepared by him.
7. PW-17 Arush Bawa, Sr. Manager, To explain the various terms and related
Complainant Bank to foreign exchange trade and circulars
and to prove various documents handed
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over to CBI.
8. PW-18 Vinod Kumar Narula, Erstwhile To prove the seizure memo and various
Sr. Manager, documents handed over to CBI
9. PW-21 Bharat Bhushan Gupta, To prove his complaint, seizure memo
Erstwhile Branch Head, and documents handed over to CBI
10. PW-23 Satish Kumar Khanna, Manager To prove credit process audit report
(Retd.), UBI Rajouri Garden. prepared by him
11. PW-27 Tirath Ram Singh Chawla, Retd. To prove the staff accountability report
Sr. Manager, Complainant Bank prepared by him
12. PW-35 Ravi Ranjan, Erstwhile Sr. To prove the procedure followed by
Manager, Regional Office, Complainant Regional Office and documents prepared
Bank by him
13. PW-36 Raghubir Chander Goel, To prove the staff accountability report
Erstwhile AGM, Complainant Bank. prepared by him
14. PW-40 Lokesh Kumar Gupta, Overseas To prove the bills of M/s National Traders
Branch, Complainant Bank. which were dealt by him
15. PW-42 Lalit Kumar, Erstwhile Asst. To prove the various documents relating
Manager, Complainant Bank. to M/s National Traders and dealt by him.
16. PW-44 Mahesh Pal Khurana, Erstwhile To prove the documents relating to
Sr. Manager, Mortgage Cell, equitable mortgage of J-7/53, Rajouri
Complainant Bank. Garden, Delhi
17. PW-45 Inderpal Singh, Sr. Manager, To prove the various statement of
Complainant Bank, Delhi. accounts of M/s National Traders and
other documents
18. PW-51 Akhileshwar Choudhary, AGM, To prove the posting details of A-8 S.K.
Complainant Bank, Delhi Grover and details of outcome of staff
accountability process provided to IO.
19. PW-53 Deo Shankar Tripathi, Erstwhile To prove the procedure of take over
General Manager, Delhi Zone, loan, documents and approval given by
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Complainant Bank, Delhi. him.
20. PW-54 Nageshwar Prasad, Scale-I Witness to the house search conducted
Officer, Complainant Bank by CBI of property at Rajouri Garden
21. PW-55 Atul Kumar, AGM, Complainant To prove the correspondences made by
Bank, Delhi him regarding loan of M/s National
Traders
22. PW-56 Ashish Jain, Erstwhile Scale-II To prove various documents/notes
Officer, Complainant Bank, Delhi prepared by him relating to the loan of
M/s National Traders
B. Bank Officials from other Banks
Sr. No. Name Purpose
23. PW-2 Mayank Verma, Erstwhile To prove the documents handed over by
Probationary Officer, Allahabad Bank, him to CBI in relation to account of
South Ex. Branch Harson Overseas (I), Prop. A-1.
24. PW-34 Sunil Kumar, Sr. Manager, To prove the documents and loan taken
Allahabad Bank, South Ex Branch, New by M/s Harson Overseas(I), Prop. A-1.
Delhi
25. PW-7 Ravindra Sanwal, Erstwhile Sr. To prove the loan documents of M/s Sai
Manager, PNB, Ashok Vihar, Delhi International, proprietor Ashish Puri(A-5)
26. PW-41 Rajeev Azad, Retd. AGM, PNB, To prove the letter and photocopies of
Rajendra Place, New Delhi audited balance sheets [Ex. PW29/A
(colly)] of M/s National Traders
27. PW 10 Robin Davis, Sr. Manager, To prove the loan documents of M/s
Corporation Bank Durga Agencies, proprietor Sahib Singh
28. PW-24 Deepak Kumar, Branch To prove the account opening form and
Manager, Corporation Bank, Rajouri statement of account of M/s A.P.
Garden, Delhi Enterprises (partnership firm of A-2
Angad Singh & A-5 Ashish Puri)
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29. PW-13 Sanjeev Arora, Sr. Manager, To prove the account opening form and
Bank of India, Rohini, Delhi the loan documents of M/s Surya
(Dropped by Ld. Sr.P.P. CBI vide Enterprises, proprietor Surender Singh
order dated 16/07/2019) Chandok
30. PW-47 Hira Lal Jarwal,Chief Manager, To prove the documents relating to M/s
Bank of India, Rohini, Delhi Surya Enterprises handed over to the
IO.
31. PW-19 Garima Tripathi, Sr. Manager, To prove the account opening form and
Federal Bank, Rajouri Garden, Delhi other documents of M/s Smart Lion INC
( Prop. A-2) handed over to IO.
32. PW-26 Jitender, Asst. Manager, Yes To prove the a/c opening forms and
Bank, Rajouri Garden, Delhi other documents handed over to the IO
33. PW-48 Shiv Kant Sahu, Erstwhile To prove the account opening forms of
employee of Yes Bank, Rajouri Garden, M/s Sai International, M/s Perfect
Delhi Motors, M/s AAPPICO Group India, M/s
Durga Agencies, proprietor Ashish Puri,
M/s Saab Enterprises, M/s Kumar
Trading Company, opened through him
34. PW-28 Joy Prakash Gogoi, Erstwhile To prove the account opening form and
Operational Manager, Indus Ind Bank, statement of account of M/s Saab
Rajouri Garden, Delhi Enterprises (Prop. A-2 Angad Singh)
35. PW-37 Wazir Singh Kajla, Erstwhile Sr. To prove the documents of M/s National
Manager (Credit), Bank of Baroda, Traders handed over by him to CBI
Rajouri Garden, Delhi
36. PW-60 Pritam Singh Arora, Erstwhile To prove the loan documents and
Manager, Bank of Baroda, Rajouri statement of accounts of M/s National
Garden, Delhi Traders
37. PW-38 Satish Kumar Sharma, Officer, To prove the office search of M/s
Canara Bank, Multan Nagar, Delhi National Traders conducted by CBI
C. Witnesses from other Government Departments
Sr. No. Name Purpose
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38. PW-52 Anil Kumar Jain, Erstwhile Deputy To prove the registration details of J-
General Manager, CERSAI 7/53, Rajouri Garden uploaded on
CERSAI portal.
39. PW-3 Desh Bandhu Gosain, UDC, SR-II, To prove the sale deeds Ex. PW3/A
Basai Dara Pur, Delhi (colly) (D-124 to D-132)
40. PW-46 Gajender Singh, Erstwhile UDC, To prove the record of driving
Transport Department, Janakpuri, Delhi licenses.
D. Public witnesses/CAs/Advocates
Sr. No. Name Purpose
41. PW-4 Sudhir Rana, CA, To prove the tax audit report, balance
sheet of M/s National Traders
42. PW-5 Sandeep Sharma, CA To prove the forgery in balance sheet
of M/s National Traders
43. PW-9 Amardeep Singh To prove the non existence of M/s
Orient Auto Parts in Vardan House,
Kashmere Gate, Delhi.
44. PW-11 Jasmeet Singh To prove the falsity of due diligence
report of M/s National Traders
prepared by A-7
45. PW-14 Parmeet Singh To prove the falsity of due diligence
report of M/s National Traders
prepared by A-7
46. PW-20 Dhurender Singh Dalal, Advocate To prove his legal search report dated
10.09.2013, receipt and certified
copies of title documents
47. PW-22 Karan Aggarwal To prove the rent agreements with
Ashish Puri (A-5) in respect of Noida
Godown.
48. PW-25 Ajay Kumar To prove his signature on sale deeds
49. PW-29 Manish Goel, Chartered To prove the falsity of balance sheet
Accountant of M/s National Traders
CC No. 3/2019 CBI Vs. Surender Singh & Ors. Page No. 19 of 178
50. PW-30 Rajinder Tyagi To prove the rent agreement with A-1
Surender Singh in respect of Vikas
Nagar Godown
51. PW-31 Rohit Vij To prove the copy of sale deed
between A-3 and PW-32 Rupali Vij
52. PW-32 Rupali Vij To prove the copy of sale deed
between her and A-3 Gursahib Singh
53. PW-43 Ram Avtar To prove his signature on various sale
deeds
54. PW-49 Arun Kumar Maheshwari, CA To prove the falsity of balance sheet
of M/s National Traders
55 PW-50 Shashi Kant Tiwari, To prove his signature on various sale
deeds
56. PW-59 Devender Singh To prove the sale deed Ex. PW59/B
between him and A-5
E. CBI Officials/CFSL Expert
Sr. No. Name Purpose
57. PW-33 Sushil Kumar, IO of the case To prove the investigation conducted
by him
58. PW-39 Vijay Verma, CFSL, CBI To prove his CFSL report regarding
disputed signatures and stamps/seals
on various documents
59. PW-57 Kuldeep Kumar To prove his report on the notice u/s
160 Cr.P.C to Avinash Ahluwalia
60. PW-58 Bijender Singh To prove his report on the notices u/s
160 Cr.P.C to Sh. Aman Singh and
Sh. Negi
24. Statement of accused persons were recorded under Section 313 Cr. P. C. after conclusion of Prosecution evidence.
CC No. 3/2019 CBI Vs. Surender Singh & Ors. Page No. 20 of 178
25. A-5 Ashish Puri denied the allegations against him. He pleaded that A-1 to A-3 were frequent visitors to his office and godown being in regular business terms with him and the documents mentioned may have been stolen by them from his custody as no one is supposed to check registration documents of his firm on daily basis. He further pleaded that he has been falsely implicated in the case and that A-1 to A-4 were habitual offenders which was revealed to him later on and, therefore, they had absconded. He has no previous implication in any criminal act. Initially A-5 preferred to lead evidence in his defence, but no witness was examined him.
26. A-6 Subodh Kumar Singh also denied the allegations against him. He pleaded that it is a false case against him. He pleaded that CBI has falsely implicated him despite knowing the fact that his report was confined to examining the genuineness of registration of copies of title deeds which were provided to him by the complainant bank. CBI has given wrong colour to his report merely due to inadvertent mistake in mentioning the date on the report as 16.8.2010 instead of 18.8.2010, on which date he carried out the inspection of the record and even if report would have been dated 18.8.2010 or any date thereafter, the contents of the report would have been the same and he had categorically mentioned that bank officials should visit the site and ascertain the actual position at the site before proceeding to take any steps towards providing credit facility to the borrower. He did not prefer to lead any evidence in his defence.
27. A-7 Sharad Joshi has also denied the allegations against him. He pleaded that it is a false case against him. He pleaded that CC No. 3/2019 CBI Vs. Surender Singh & Ors. Page No. 21 of 178 the Regional Office has not studied the balance sheet of 31.03.2010 and it was observed from the CIBIL report generated by RO provided to CBI that the CIBIL report of Surender Singh proprietor of National Traders was generated by complainant bank on 22.07.2010 and the said proposal was not even send to RO and the report was generated before that. He was also surprised to see in his 37 years of service that the sanctioning office DRAFT copy of the proposal along with GRID proposal are available in the branch file. It was also observed from the CIBIL report of 28.12.2012 that the firm CIBIL report was generated by the Bank on 29.05.2012 and 27.06.2012. On his enquiry with Union Bank under RTI on 09.07.2018 the bank has informed that CIBIL report of M/s National Traders Dated 29.05.2012 and 27.06.2012 was not available in the record. This indicate that the some of the papers are missing from the files. He further pleaded that during May / June 2012 the proposal was submitted for renewal at RO. He pleaded that he is innocent and falsely implicated in the present case which is causing mental agony to him and his family. A-7 also preferred to lead evidence in his defence.
28. A-8 S.K. Grover also denied the allegations against him. He pleaded that it is a false case against him. He pleaded that he was posted in Rajouri Garden Branch of the Bank from 26.05.1990 to 17.05.1993, as Accountant, and further from 28.07.1999 to 23.04.2001, again, as Accountant and was in no way related to credit/Loan. He was looking after the routine functioning of the said branch during his tenure in Rajouri Garden branch of the bank and was not dealing with Credit department/ Loan department as evident in page 1 and 2 of D-148 (EX- PW51/A) and in no way acquainted with A-1 as alleged by prosecution.
CC No. 3/2019 CBI Vs. Surender Singh & Ors. Page No. 22 of 178 He further pleaded that the allegation of not pointing out page of M/s Ryder Matic Bevel Gears as alleged, he pleaded that this discrepancy was pointed out during scrutiny in R.O. and was replied by branch. This was typographical error by the auditor of A-1 and accepted by A-1. The page was rectified and sent to R.O by the branch before vetting of proposal by Credit Approval Grid as evident in D-10 on Page no. 242 to 240 (EX PW-33/DB). This rectification letter is part of documents submitted by prosecution but prosecution has not mentioned it in the charge sheet and deliberately ignored it to falsely implicate him, thus the allegation of the prosecution is baseless and without any substance. He further pleaded that he had been exonerated by the bank from charges and penalty vide letter dated 09.12.2015 addressed to Sh. Sushil Kumar, IO of the present matter by Dy. Regional Head, Regional Office of Complainant Bank on page no. 8032 of D-149 (EX PW51/B). This document is part of the documents submitted by Prosecution and has not been disclosed/mentioned in the charge sheet for the reasons best known to the prosecution. He further pleaded that the balance sheet prepared by chartered accountant and self-attested by borrower is accepted as true and there were no rules or guidelines for verification of balance sheet before 28.11.2013 and as per para 4 and 5 of bank's circular dated 28.11.2013 as document Ex/ PW15/DA the balance sheet is required to be verified from concerned chartered accountant and the same shall be a part of PRE-SANCTION Due Diligence process. There was no system of checking other forged and fabricated documents and self-attested documents were accepted as true and correct for initiating the case for credit facility. Accordingly, he had initiated and process the loan application as per bank rules and guidelines. The proposal was scrutinize and vetted by various higher CC No. 3/2019 CBI Vs. Surender Singh & Ors. Page No. 23 of 178 level officers in regional office before submitting upto grid committee for recommendations. After recommendations, the case was approved by competent authority. He further pleaded that while takingover the loan account of M/s National Traders from BoB to complainant Bank, the Bank of Baroda had intentionally and deliberately concealed the material facts of assets classifications from complainant Bank in respect of the history and conduct of maintaining the loan account in the said bank knowingly that the said loan account was classified as NPA much prior to the issuance of letter dated 08.09.2010 as EX.PW60/Z. It is evident from the statement of PW-60 that the Bank of Baroda issued the letter PW 60/Z with the sole motive to get rid of the loan outstanding amount with the bank and the same has been corroborated in the statement of witness recorded U/s 161 Cr. P.C as exhibited PW60/D8-A.
29. He further pleaded that the prosecution has not properly gone through various stages of processing of loans, Role of Regional Office which is controlled by senior officers and their processing of the case has not been thoroughly gone through and understood and the allegations against him are false, vague, baseless and without any documentary or substantial evidence. A-8 did not prefer to lead any evidence in his defence.
Defence Evidence
30. A-7 has examined seven witnesses in order to prove his defence.
31. D7W1 G. K. Sudhakarrao, Deputy General Manager CC No. 3/2019 CBI Vs. Surender Singh & Ors. Page No. 24 of 178 Regional Head of Delhi South, complainant bank has proved RTI application of A-7 and reply as Ex. D7W1/A (colly.).
32. D7W2 Mukesh Kumar JJA Record Room proved copy of order dated 17.7.2015 in case E-106/2012 titled as Bhupender Singh Vs. Jaspal Singh as Ex. D7W2/A.
33. D7W3 Chhailendra Raut, Chief Manager complainant bank has proved the leave record of A-7 as Ex. D7W3/A and service record, statement of allegations, article of charge and final order of dismissal of Ashish Jain dated 31.7.2019 as Ex. D7W3/B.
34. D7W4 Rajesh Kumar, AGM (Law) has proved order dated 11.8.2016 passed by DRT-1 in TSA No. 210/2015 titled as Surender Singh Vs. Union Bank Of India as Mark D7W4/1, copy of order in OA 423/2013 titled as Union Bank Of India Vs. National Traders & Ors passed by DRT-III dated 27.1.2016 decreeing the OA as Mark D7W4/2, copy of order putting ground floor of property J-7/53, Rajouri Garden, Delhi and showing the property sold in auction as Mark D7W4/3.
35. D7W5 Prem Kumar Chief Manager, complainant bank has proved statement of account No. 308007220000009 for the period 31.12.2012 to 9.9.2019 of M/s National Traders as Ex. D7W5/A and statement of account No. 308005040132096 for the period 30.9.2013 to 9.9.2019 of M/s National Traders Ex. D7W5/B.
36. D7W6 Rajesh Kumar has proved copy of order Mark D7W4/2 after comparing the same with original record of OA No. CC No. 3/2019 CBI Vs. Surender Singh & Ors. Page No. 25 of 178 423/2013 brought by him as Ex. D7W6/A.
37. D7W7 Rajnish Narang, Branch Manager UBI, Vikas Puri has proved account opening form in the name of Mrs. Jasmeen Kaur Chandhok bearing no. 43602010010546 along with KYC Documents opened at Rajouri Garden Branch as Ex. D7W7/A. He also proved account opening form of Sat Guru International bearing account no. 435601010051195 along with KYC documents of its proprietor Sh. Amar Deep Singh Chandhok as Ex. D7W7/B. He further deposed that both the accounts were maintained in Rajouri Garden branch where he was posted during May, 2016 to October, 2017.
Thereafter, DE was closed by counsel for accused no. 7 vide statement recorded on 11.09.2019.
38. Counsels for A-5 to A-8 have filed written synopsis/written arguments. Before the oral arguments could be heard, the functioning of the court was suspended in the wake of Corona Pandemic. Thereafter, in pursuance of orders of Hon'ble High Court of Delhi bearing no. R-235/RG/DHC/2020 dated 16.05.2020 and 16/DHC/2020 dated 13.06.2020, matter was taken up through video conferencing on 18.06.2020 and notices were issued to Ld. PP for CBI and Ld. counsels for A-5 to A-8 by email and whatsapp seeking their consent for final disposal of the case.
39. On 23.06.2020, Ld. Counsels for the parties appeared through video conferencing and consented for conducting the CC No. 3/2019 CBI Vs. Surender Singh & Ors. Page No. 26 of 178 proceedings in the case through video conferencing. Ld. Counsels for the parties also submitted that they would like to address oral arguments in addition to the written synopsis/written arguments filed by them. Accordingly, the matter was listed for submission of oral arguments. Oral arguments were addressed by Ld. Counsels for the parties through video conferencing on 18.06.2020, 23.06.2020, 29.06.2020, 01.07.2020, 03.07.2020, 06.07.2020, 07.07.2020, 08.07.2020, 10.07.2020, 11.07.2020, 13.07.2020, 16.07.2020, 17.07.2020, 20.07.2020, 21.07.2020, 22.07.2020, 27.07.2020, 28.07.2020 & 04.08.2020. The oral arguments of the parties concluded on 05.08.2020.
40. Besides addressing oral arguments and filing their written submissions, Ld. Counsels for the accused persons and Ld. PP for CBI also place reliance on some authorities which are as under:-
A. Precedents cited by Ld. PP for CBI. S. No. Title of the case Purpose of Reliance
1. Chitranjan Shetty Vs State Crl. Appeal Criminal Misconduct and dishonest intention.
No.884 of 2008 decided on 16.09.2015 (SC)
2. Devender Kumar Singla Vs Baldev Krishan Criminal Conspiracy Singla 2004 II AD(Cr.) SC 217.
3. Ajay Aggarwal Vs Union of India Criminal Conspiracy 1993(3)SCC 641.
4. Shiv Narain laxmi Narain Joshi Vs State of Criminal Conspiracy Maharashtra AIR 1980 SC 439.
5. Ram Narain Popli Vs CBI 2003(3) SCC 641. Criminal Conspiracy
6. Kehar Singh & Ors. V The State (Delhi Criminal Conspiracy CC No. 3/2019 CBI Vs. Surender Singh & Ors. Page No. 27 of 178 Administration) 1988(3) SCC 609.
7. K.N. Mehra Vs State of Rajasthan AIR 1957 Dishonest Intention.
SC 369.
B. Precedents cited by Ld. Counsel for A-5. S. No. Title of the case Purpose of Reliance
1. Subramaniam Swami Vs A. Raja, (2012) 9 Suspicion, howsoever, grave cannot take place of SCC 257 legal proof.
2 State through Supt. Of Police, CBI/SIT Vs Criminal Conspiracy.
Nalini & Ors., (1999) 5 SCC 253
3. Gulam Sarbar Vs State of Bihar (Now Criminal Conspiracy.
Jharkhand), 2014Cri.LJ 34 (SC)
4. Aher Raja Khima VS State of Saurashtra Accused entitled to benefit of every reasonable doubt.
AIR 1956 SC 217
5. CBI Vs K. Narayana Rao, (2012) 9 SCC 512 Criminal Conspiracy.
6. Padala Veera Reddy Vs State of A.P. & Ors., Appreciation of Circumstantial evidence.
AIR 1990 SC 79
7. G. Parshavnath Vs State of Karnataka, 2010 Suspicion, howsoever, grave cannot take place of (8) SCC 593 legal proof.
8. Sattatiya @ Satish Rajanna Kartalla Vs Appreciation of Circumstantial evidence.
State of Maharashtra, AIR 2008 (3) SCC 210
9. State of Kerala Vs P. Sugahthan & Anr., AIR Criminal Conspiracy 2000 (8) SCC 203
10. Rajeev @ Monu Vs State of NCT of Delhi, Criminal conspiracy AIR 2018 SCC 11716 CC No. 3/2019 CBI Vs. Surender Singh & Ors. Page No. 28 of 178 C. Precedents cited by Ld. Counsel for A-6 S. No. Title of the case Purpose of Reliance
1. S. Ram Yadav Vs CBI & Ors. (2013)137 DRJ Criminal liability of an advocate on his legal 131 opinion/report.
2. A. Kumar Sharma Vs CBI Cr.(Misc.)Case Criminal liability of an advocate on his legal No.3302/2013 Decided on 09/02/2015(Del. opinion/report. H.C.)
3. CBI Hyderabad Vs K. Narayanarao, VII Criminal liability of an advocate on his legal (2012) SLT 260 opinion/report.
4. Rajendra Singh Vs State of Rajasthan Criminal liability of an advocate on his legal Cr.(Misc.) Petition No.2786/2017 decided on opinion/report. 29/08/2017(Raj. H.C.)
5. Mrs. Nita Deep Rastogi Vs CBI Crl. Criminal liability of an advocate on his legal Rev.Petition No.77/2008 decided on opinion/report. 21/01/2009 (Del. H. C.)
6. Manmohan Datta Vs Shikha Sen & Ors.RFA No mechanism to prevent multiple registrations of 1017/2016 Decided on 08/05/2018(Del. H. C.) sale of same property.
7. Subha Jakkanwar Vs State of Chhatishgarh Criminal liability of an advocate on his legal Crl.(Misc.)PetitionNo.1614/2017 opinion/report.
(Chhattisgarh H.C.)
D. Precedents cited by Ld. Counsel for A-7
S. No. Title of the case Purpose of Reliance
1. C. Chenga Reddy Vs State of Andhra Appreciation of circumstantial evidence.
Pradesh, MANU/SC/0928/1996.
2. Inderjeet Singh & Ors. Vs State of Punjab & Appreciation of circumstantial evidence.
CC No. 3/2019 CBI Vs. Surender Singh & Ors. Page No. 29 of 178 Ors., MANU/SC/1186/1995
3. Abdulla Mohd. Pagarkar Vs State (UT of Appreciation of circumstantial evidence.
Goa, Daman & Diu), MANU/SC/0632/1979
4. Jagbir Singh Vs CBI, MANU/DE/3081/2017 Mere Codal violations and ignorance of circulars and departmental orders do not give rise to criminal liability.
E. Precedents cited by Ld. Counsel for A-8 S. No. Title of the case Purpose of Reliance
1. Anil Kumar Bose Vs State of Bihar, AIR Ingredients of Cheating.
1974 SC 1560
41. I have heard Ld. PP for CBI and Ld. Counsels for A-5 to A- 8 at length and have carefully perused the written submissions/arguments filed by Ld. Defence counsels as well as the judgments relied upon by the Ld. Counsels for the parties. In order to avoid repetition, I shall deal with the arguments advanced by Ld. P.P. for CBI and Ld. Defence counsels in detail, when I will be dealing with the role of accused persons and the allegations leveled against them by CBI in paras herein after.
ROLE OF A-5 ASHISH PURI
42. A-5 Ashish Puri has been shown as a conspirator along with other accused persons in the charge-sheet. Admittedly, he is a close friend of A-2 Angad Singh and he had close business relations with A-1 to A-4. A-1 Surender Singh prop. of M/s National Traders used CC No. 3/2019 CBI Vs. Surender Singh & Ors. Page No. 30 of 178 the order contracts of the firm of A-5 M/s Mapex International for release of credit limits from the complainant bank and thereafter those limits were siphoned of using the bank accounts of the firms of A-5.
43. As per charge-sheet filed by CBI, following allegations have been levelled against A-5:-
(I) A-2 Angad Singh sold second floor (without roof rights) of property no. J-7/53, Rajouri Garden to A-5 vide sale deed dated 3/3/2009 Ex.PW59/B(D-107). The sale transaction was sham and a result of conspiracy between A-1 to A-5. Further,A-5 obtained a loan from PNB Ashok Vihar in the name of his firm M/s Sai International by mortgaging the aforesaid property in which A-1 stood as Guarantor and mortgaged his property no.J-5/152, Rajouri Garden, Delhi. A-5 later on fraudulently sold the aforesaid property to Devender Singh vide sale deed dated 4/2/2014Ex.PW59/C(D-108) without obtaining permission of PNB, Ashok Vihar Delhi.
(II) A-5 in conspiracy with A-1 to A-4, opened bank accounts in the names of M/s Sai International Ex.PW26/B-3(D-112) and M/s Durga Agencies Ex.PW26/B-11(D-120) with Yes Bank, Rajouri Garden and M/s A.P. Enterprises Ex.PW24/B(D-83) (a partnership firm with A-
2) with Corporation Bank, Rajouri Garden and these accounts were used to siphon of the limits released to National Traders by complainant bank.
(III) A-5 falsely verified about the credentials of M/s National Traders during the verification conducted by A-7 Sharad Joshi as revealed in the Due Diligence Report dated 10/9/2010 Ex.PW35/C(D-
20).
(IV) A-5 had taken on rent a godown at C-79, Sector 65, Noida. The said godown was shown as rented premises of A-1 Surender Singh (prop. of M/s National Traders) and forged rent agreements Mark PW22/E & Mark PW22/F were submitted by A-1 with complainant bank at the time of obtaining Credit facilities.
(V) A-5 assisted A-1 to A-4 in getting loans/ credit facilities from different banks by using false and forged documents.
CC No. 3/2019 CBI Vs. Surender Singh & Ors. Page No. 31 of 178 (VI) A-5 was Manager of M/s Mapex international FZE and he prepared false orders/invoices and Bills of Exchange for facilitating release of Credit Limits to M/s National Traders by complainant bank.
44. Vide order dated 18/1/2017 charge was framed against A- 5 for the offences under section 120-B IPC r/w Sections 420/468/471 IPC and Section 13(1)(d) of P.C. Act. Charge was also framed against A-5 for the substantive offences u/sec. 468/471 IPC.
45. Now I shall take up allegations levelled against A-5 one by one and see if the prosecution has been able to prove these allegations or not.
ALLEGATION No. 1A-2 Angad Singh sold second floor(without roof rights) of property no. J-7/53, Rajouri Garden to A-5 vide sale deed dated 3/3/2009 Ex.PW59/B(D-107). The sale transaction was sham and a result of conspiracy between A-1 to A-5. Further, A-5 obtained a loan from PNB Ashok Vihar in the name of his firm M/s Sai International by mortgaging the aforesaid property in which A-1 stood as Guarantor and mortgaged his property no. J- 5/152, Rajouri Garden, Delhi. A-5 later on fraudulently sold the aforesaid property to Devender Singh vide sale deed dated 4/2/2014Ex.PW59/C(D-108) without obtaining permission of PNB, Ashok Vihar Delhi.
46. Ld. PP for CBI has argued that A-2 Angad Singh had sold the second floor of the property no. J-7/53, Rajouri Garden, Delhi to A-5 on 03.03.2009 vide registered Sale deed no. 3241 Ex. PW59/B(D-107). A-5 mortgaged the same in favour of PNB, Ashok Vihar to secure the loan taken in the name of his proprietorship firm M/s Sai International. He argued that the fraudulent intention of A-5 in cheating the bank is apparent from the fact that A-5 sold the aforesaid property to PW59 CC No. 3/2019 CBI Vs. Surender Singh & Ors. Page No. 32 of 178 Devender Singh vide registered sale deed no.1954 dated 4/2/2014 Ex.PW59/C (D-108), without even seeking permission from PNB Ashok Vihar, to whom the property was mortgaged. He further argued that A-1 Surender Singh stood as a guarantor for A-5 but he never disclosed the fact that aforesaid property was already mortgaged by him with complainant bank. It was argued that this clearly establishes that A-1 and A-5 shared common dishonest intention to cheat complainant bank and the property transaction between A-2 and A-5 was a sham transaction and it was mere eye wash to deceive the banks.
47. Ld. PP has placed reliance on the testimonies of PW-3 Desh Bandhu Gosain, PW-20 Dhurender Singh Dalal Adv., PW-23 Sh. Satish Kumar Khanna and PW-36 Raghubir Chander Goel and PW-59 Devender Singh in support of his arguments.
48. Per Contra, Ld. Counsel for A-5 has argued that A-2 Angad Singh and A-5 Ashish Puri were childhood friends and they were in the same business of trading of auto parts and had business transactions with each other. A-5 genuinely purchased the property i.e., second floor (without roof rights) of property no. J-7/53, Rajouri Garden, Delhi from A-2 for valuable consideration. It was argued that the transaction was legal and there was no malafide and there was no conspiracy between A-2 and A-5 in the purchase of the property. It was further submitted that PW3 Sh. Desh Bandhu Gosain, UDC from the office of Sub- Registrar, II-B, Janakpuri has proved the certified copy of the sale deeds (D-124 to D-132) as Ex. PW3/A (colly). PW-3 has deposed that as per the sale deed dated 03.03.2009 (D-128), Angad Singh had sold entire second floor of property no.J-7/53, Rajouri Garden, Delhi (without CC No. 3/2019 CBI Vs. Surender Singh & Ors. Page No. 33 of 178 roof rights) to Ashish Puri (A-5). During cross examination by Ld. Counsel for A-5, the witness admitted that A-5 had become the owner of entire second floor (without roof rights) of J-7/53, Rajouri Garden by virtue of the sale deed dated 3/3/2009 Ex.PW-59/B(D-107)(also D-128).
49. Counsel for A-5 further argued that PW43 Ram Avtar and PW-50 Shashikant who were attesting witnesses to the sale deed dated 3/3/2009(D-128) have also admitted their signatures at points X and Y respectively and have further admitted its due execution. Ld. Defence counsel has argued that testimony of these witnesses clearly establish that the sale deed was got registered in the office of Sub-Registrar in favour of A-5 after following due procedure and after execution of the sale deed (D-128), A-5 became absolute owner of the second floor (without roof rights) of property no. J-7/53, Rajouri Garden, Delhi. It was argued that there is nothing on record to show that the said transaction was sham or Benami or it was done with some ulterior motives.
50. It was further argued that A-5 had mortgaged this property with PNB, Ashok Vihar Branch for obtaining business loan in the name of his firm M/s Sai International in the year 2011. He argued that there is no complaint against A-5 by the PNB that A-5 had used any forged documents in obtaining the said loan. He further argued that the loan was obtained by A-5 only when it was required in his business and not immediately upon purchase of the property which show that the purchase of property by A-5 was bonafide.
51. Ld. Counsel for A-5 has also argued that as per the case of the prosecution, A-5 had sold this property to PW59 Devender Singh CC No. 3/2019 CBI Vs. Surender Singh & Ors. Page No. 34 of 178 vide sale deed dated 04.02.2014 Ex.PW59/C(D108). It was argued that testimony of PW59 would show that he had admitted in his examination in chief that he had purchased the second floor of property no. J-7/53, Rajouri Garden from A-5 Ashish Puri for a consideration of Rs. 45 lacs and the sale deed dated 04.02.2014 Ex. PW59/C(D-108) was duly executed in the office of Sub-Registrar. Ld. Counsel for A-5 has argued that in fact the property was purchased by Ram Singh (cousin of PW59), who was working as Builder & Financer. It was argued that testimony of PW59 does not inspire confidence and statement given by him in the court is contrary to his statement recorded u/s 161 Cr.P.C before IO on 28.12.2015. It was submitted that in his statement u/s 161 Cr.P.C, PW59 had stated that A-2 had contacted him and told that A-5 was in need of money and wanted to sell the property and he purchased the property for Rs. 45 lacs. Later on, notice of possession were received from many banks and A-5 Ashish Puri had given sale deed dated 01.06.2010 which was forged and the sale deed dated 03.03.2009 given by A-5 was created by him as forged document. However, when PW59 was cross examined by counsel for A-5, he admitted that he was working with Ram Singh and was getting a salary of Rs. 20,000/- per month and was having three family members dependent on his salary. He claimed to be an income tax payee but was unable to remember the gross income or tax paid by him in his last income tax return. PW59 also deposed that his elder brother was aware of the sale consideration amount of the aforesaid property and that sale consideration was paid by Ram Singh. PW59 also admitted that Ram Singh had purchased property in his name and A-2 Angad Singh had contacted Ram Singh for the sale of aforesaid property. He further deposed that he had informed the PS Rajouri CC No. 3/2019 CBI Vs. Surender Singh & Ors. Page No. 35 of 178 Garden that aforesaid property was having loans against it from banks but no such copy was given to IO or produced in court. Ld. Counsel submitted that PW59 further deposed that he was not even aware about the deal between Angad Singh and Ram Singh regarding the aforesaid property and he could not say if the actual sale consideration of the aforesaid property was much more than mentioned in the sale deed and volunteered that only Ram Singh could tell about the same. PW-59 further volunteered that the amount was paid in cash.
52. Ld. Counsel for A-5 also argued that PW33 Inspector Sushil Kumar in para 68 of his testimony also admitted that he had heard the name of Ram Singh during the investigation as he was brother of Devender Singh and he had visited him in CBI Office along with Devender Singh. PW-33 also admitted that he had not investigated Ram Singh and had not come across the profession of Ram Singh during the investigation.
53. Ld. Counsel for A-5 argued that A-5 sold the property to Ram Singh as he was unable to repay the bank loan and he had disclosed to Ram Singh that he had taken loan from PNB and one of the conditions of the sale was that Ram Singh would clear the bank loan standing against the aforesaid property. Ld. Counsel further argued that there was no fraud or forgery in the sale of the aforesaid property by A-5 as A-5 had to sell the property to clear his outstanding bank loan which he was unable to pay due to losses in his business. It was argued that prosecution has failed to prove any forgery or cheating against A-5 in purchase and sale of the aforesaid property.
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54. I have given my thoughtful consideration to the rival submissions advanced at Bar and have perused testimonies of the witnesses and documents carefully. On perusal of the documents and testimonies of the witnesses, it becomes absolutely clear that the sale deed Ex.PW59/B(D-107) in favour of A-5 was executed by A-2 for valuable consideration and the attesting witnesses to the sale deed i.e. PW43 and PW50 have also admitted its due execution. There is absolutely no evidence on record which creates any doubt about the bonafides of the parties to the sale deed Ex.PW59/B(D-107).
55. In so far as mortgaging the aforesaid property with PNB is concerned, there can be no dispute that A-5 was entitled to create a charge on the property after he became absolute owner of the property. Merely because A-1, Surender Singh had fraudulently mortgaged the entire property no. J-7/53, Rajouri Garden, Delhi with complainant bank by concealing the fact that he was not the owner of the entire property, it would not have any impact on the rights of A-5. There is no evidence on record to show that A-5 had any knowledge of creation of mortgage of entire property by A-1 with complainant bank. Even IO of the case PW-33 Insp. Sushil Kumar has admitted in his cross examination that A-5 was neither a co-applicant ,nor a guarantor, nor a witness in the loan obtained by M/s National Traders from complainant bank which was later on declared NPA. There was no document given by A-5 in the loan file of M/s National Traders, which showed that he had affirmed that Surender Singh (A-1) was the sole and absolute owner of the entire built up property on plot no. J-7/53, Main Market, Rajouri Garden, New Delhi. PW-33 has further deposed that the forged documents submitted by Surender Singh(A-1) with complainant bank did not find any mention CC No. 3/2019 CBI Vs. Surender Singh & Ors. Page No. 37 of 178 or reference of A-5. Hence, the possibility that A-5 was not even aware about mortgage of entire property with complainant bank by A-1 cannot be ruled out.
56. The sale of aforesaid property by A-5 to Devender Singh is also not in dispute. Devender Singh has appeared as PW-59 and has admitted about the execution of sale deed by A-5 in his favour. The only issue which is relevant for the present case is, whether A-5 had sold the aforesaid property fraudulently without prior permission of PNB, Ashok Vihar, and if so, what is its effect on the present case.
57. Admittedly, A-5 has not placed any document to show that he had obtained the permission from PNB before selling the property which was mortgaged by him with the bank. Although, counsel for A-5 has argued that property was actually sold to Ram Singh as A-5 was unable to pay his outstanding loan of PNB, the sale deed dated 4/2/2014 Ex.PW59/C(D-108) does not disclose any such reason for the sale of the property. No doubt, PW-59 has admitted in the cross examination that the sale consideration was paid by Ram Singh and property was purchased by Ram Singh in his name. But even PW-59 Devender Singh denied the suggestion that the deal was struck between Ram Singh and Angad Singh on the terms that Ram Singh will repay the outstanding loan obtained from PNB Ashok Vihar Branch against the aforesaid property and volunteered that the sale amount was paid in cash. A-5 has not examined any witness to substantiate his claim that property was sold on the condition that purchaser would repay the outstanding loan of PNB against A-5. Hence, A-5 has also failed to establish that he had sold the property mortgaged with PNB for CC No. 3/2019 CBI Vs. Surender Singh & Ors. Page No. 38 of 178 repaying the outstanding loan of the bank.
58. Now this being the position and conduct of A-5, the role of Devender Singh/Ram Singh and PNB Ashok Vihar also does not appear to be above board. Although, Devender Singh has deposed in his cross examination that he had made a complaint to the police that property sold by A-5 was having loans against it, no such complaint has been handed over by him to I.O. during investigation or produced before the court. Even PNB Ashok Vihar has not lodged any complaint against A-5 in this regard. PW-33 Insp. Sushil Kumar has also admitted in his cross-examination that the sale deed Ex. PW59/B (D-107) vide which Ashish Puri (A-5) had purchased the property bearing no. J-7/53, 2nd Floor (without roof rights) Rajouri Garden, New Delhi and the sale deed Ex.PW59/C (D-108) vide which Ashish Puri had sold this property were found genuine. He has further deposed that during investigation, he did not receive any complaint that Ashish Puri (A-5) had obtained CC Limit from PNB Wazirpur Branch situated at Ashok Vihar, New Delhi by playing any fraud or placing forged documents, which shows that PNB Ashok Vihar had no complaint/grievances against the conduct of A-5 Ashish Puri.
59. Hence, in view of the aforesaid facts and evidence on record, I am of the considered opinion that prosecution has failed to prove this allegation against A-5 beyond reasonable doubts.
ALLEGATION No. 2A-5 in conspiracy with A-1 to A-4, opened bank accounts in the names of M/s Sai International Ex.PW26/B-3(D-112) and M/s Durga Agencies Ex.PW26/B-11(D-120) with Yes Bank, Rajouri CC No. 3/2019 CBI Vs. Surender Singh & Ors. Page No. 39 of 178 Garden and M/s A.P. Enterprises Ex.PW24/B(D-83) (a partnership firm with A-2) with Corporation Bank, Rajouri Garden and these accounts were used to siphon of the limits released to National Traders by complainant bank.
60. Ld. PP for CBI has argued that PW-48 Shiv Kant Sahu of Yes Bank has proved the account opening form of M/s Sai International bearing account No. 003084000001664 showing Ashish Puri as its proprietor as Ex.PW-26/B-3(D-112). He further proved another account opening form of Sai International with Yes Bank (available at page 27 of D-112) showing A-5 as its proprietor . PW-48 has also proved account opening form of M/s Durga Agencies bearing account no.003084000002046 showing A-5 as its proprietor as Ex.PW- 26/B-11(D-120). He also proved account opening forms of M/s Perfect Motors as Ex.PW-26/B-5(D-114); account opening form of M/s Kumar Trading Co. as Ex.PW-26/B-1(D-110)and account opening form Saab Enterprises as Ex.PW-26/B-7(D-116). He also deposed that A-2 Angad Singh was proprietor all these three firms. Ld. PP further argued that the aforesaid accounts of M/s Sai International and M/s Durga agencies were opened in connivance with A-1 and A-2 and money released to M/s National Traders by complainant bank were transferred to these accounts and was siphoned of. Ld. PP has pointed towards the RTGS transfers from account of M/s National Traders to account of M/s Sai International vide D-172, D-188 and D-195 and RTGS transfers from account of M/s National Traders to account of M/s Durga Agencies vide D-190, D-194 and D-199. Ld. PP also pointed out that A-2 and A-5 had also opened an account in the name of their partnership concern M/s A.P. Enterprises in Corporation Bank, Rajouri Garden. He argued that PW-24 Deepak kumar has proved the account opening form with KYC CC No. 3/2019 CBI Vs. Surender Singh & Ors. Page No. 40 of 178 documents as Ex.PW-24/B(D-83) and statement of account alongwith certificate as Ex. PW24/C(D-84). He further deposed that this account was of a partnership firm of Sh. Angad Singh(A-2) son of Sh. Surender Singh and Sh. Ashish Puri(A-5) son late of Sh. Inder Mohan Puri. After seeing the statement of account, he deposed that on 13.01.2011, an amount of Rs. 8,19,610/- was received in this account from complainant bank through RTGS and on the same day Rs.4,00,028/- and Rs.4,19,197/- were transferred from this account to the account of M/s Surya Enterprises ( a proprietorship firm of A-1) through RTGS which clearly establish that the firms of A-5 were being used for siphoning of the limits released by complainant bank as no records of business transactions between these firms were found during the course of investigation.
61. Per contra, Ld. Counsel for A-5 has argued that A-5 had no concern with M/s Durga Agencies and M/s A.P. Enterprises and he was only the proprietor of M/s Sai International which was having its account in PNB, Ashok Vihar. It was also argued that A-5 was not operating any other account in any other bank in the name of his firm M/s Sai International.
62. Ld. Defence counsel further argued that perusal of account opening form of Durga Agencies with Yes Bank, Rajouri Garden (D-
120) would show that mailing address mentioned therein was incorrect and the said address was left by A-5 in the year 2007. He further submitted that the phone number "9891989105" mentioned in the form was of A-2 Angad Singh and not of A-5. This account was opened by Shiv Kant Sahu (PW48) on 17.03.2009 and Input Rights were given to CC No. 3/2019 CBI Vs. Surender Singh & Ors. Page No. 41 of 178 A-5 whereas Authorization Rights were in the name of A-2 Angad Singh. Further the name of A-5 Ashish Puri is not mentioned in Form DVAT 06 and CST Registration Form annexed with the form. The dates of issuance of DVAT 06 Form and CST Registration Form is after the opening of account meaning that the same were attached later on. It was argued that A-2 Angad Singh had misused the name of A-5 in opening of this account and A-2 was only managing the account and doing the transactions without the knowledge of A-5. Ld. Defence counsel also referred to the account opening form of M/s Kumar Trading Company, Yes Bank, Rajouri Garden Ex.PW26/B-1(D-110) which showed that Angad Pal Singh(A-2) was the proprietor of the firm and mobile number mentioned in the said account opening form was the same as mentioned in the account opening form of Durga Agencies i.e. "9891989105". He also referred to the account opening form of M/s Aappico Group India in Yes Bank, Rajouri Garden Ex.PW26/B-9 (D-118) which was a proprietorship firm of A-1 Surender Singh but there also mobile number mentioned was the same i.e., "9891989105". It was argued that the same mobile number has been used in the account opening forms of Durga Agencies, Kumar Trading Company and Aappico Group India which clearly show that these accounts were got opened by A-2 Angad Singh with the help of PW48 Shiv Kant Sahu. He further submitted that the KYC and photographs were dispensed with in opening the accounts of Aappico Group India which shows that A-2 and A-1 were already having accounts in Yes Bank, Rajouri Garden. It was argued that PW48 Shiv Kant Sahu in his cross examination has deposed that his job with the bank was target based to open new/fresh accounts for the bank. He was introduced to A-1 and A-2 by the branch operation Manager being customer of the CC No. 3/2019 CBI Vs. Surender Singh & Ors. Page No. 42 of 178 bank in the year 2009. He also admitted that he used to visit office of Angad Singh once or twice in a month being his relationship Manager and later on he also became relationship Manager of A-1 Surender Singh and A-5 Ashish Puri. Ld. Counsel for A-5 has argued that PW48 opened the bank account in the name of M/s Durga Agencies showing A-5 as its proprietor at the instance of A-2 Angad Singh in order to complete his target. He further argued that the signatures of A-5 on the account opening form and the documents were copied by A-2 and the account was got fraudulently opened by A-2. He argued that PW48 is also liable for negligence for opening this account and all these circumstances indicate that the account of Durga Agencies in Yes Bank showing A-5 as proprietor was opened and operated by A-2 Angad Singh.
63. Ld. Counsel for A-5 also referred to the account opening form of M/s Sai International with Yes Bank, Rajouri Garden Ex.PW26/B-3 (D-112) and submitted that this account was also opened by Shiv Kant Sahu in March, 2010 showing A-5 as its proprietor. Ld. Defence counsel submitted that the mailing address mentioned in this form is incorrect as it was the property of A-1. The mobile number mentioned in the form "9891989105" is of A-2 Angad Singh. The signature on the photograph and account opening form are different. DVAT 06 Form and CST Registration Form are of April, 2010 and do not bear the name of A-5. It was also argued that the declaration filed along with the account opening form is typed except the name of A-5 and the name of the firm. Similar declarations were used by A-2 in different account opening form which clearly indicate that this account was also opened by A-2 in connivance with PW48 and without the CC No. 3/2019 CBI Vs. Surender Singh & Ors. Page No. 43 of 178 knowledge of A-5.
64. Ld. Counsel for A-5 also referred to the covering note for the loan documents of M/s Durga Agencies with Corporation Bank Ex. PW10/A (D-139). He submitted that the credit sanction intimation at page 2 of D-139 shows that M/s Durga Agencies Prop. Sahib Singh (A-
3) had availed credit facilities from Corporation Bank giving the address of the firm as 4596/1-A, Ansari Road, Darya Ganj. A-2 Angad Singh stood as guarantor and mortgaged first, second and third floor with terrace rights of property no. J-7/53, Rajouri Garden. Ld. Defence counsel has argued that the address of the firm is the same as mentioned in the account opening form of M/s Durga Agencies (D-120) where A-5 has been shown as proprietor of the firm. It was argued that this clearly shows that A-2 had fraudulently opened the account in Yes Bank in the name of Durga Agencies showing A-5 as proprietor for carrying fraudulent transactions. He also pointed out that the date of birth as shown in the personal details of Sahib Singh has been mentioned as 08.01.1987 and the firm has been shown to be established in 1992, meaning thereby A-3 started the business from the age of five years which is apparently false.
65. Ld. Counsel for A-5 has also referred to the account opening form of M/s Perfect Motors Ex.PW26/B-5(D-114) with Yes Bank, Rajouri Garden. He has pointed out that A-2 Angad Singh has been shown as proprietor of this firm. This account was also opened by Shiv Kant Sahu on 23.06.2009. Ld. Counsel also submitted that PW48 Shiv Kant Sahu in his cross examination dated 25.02.2019 has admitted that Angad Singh had got two accounts opened through him, CC No. 3/2019 CBI Vs. Surender Singh & Ors. Page No. 44 of 178 one in Yes Bank and other in IndusInd Bank. He has argued that this admission on the part of PW48 shows that A-2 used to get bank accounts opened through PW48 Shiv Kant Sahu and PW48 used to open the account at the instance of A-2 in order to meet its target. Ld. Counsel for A-5 also argued that A-5 had not transacted any business from the accounts of M/s Durga Agencies and M/s Sai International opened with Yes Bank, Rajouri Garden. He argued that IO also did not send the signature appearing on the account opening form and photograph of Yes Bank to CFSL for comparison with the specimen signature of A-5, which could have clarified the position. It was submitted that in fact A-2 had fraudulently done the transactions from the aforesaid two accounts of Yes Bank.
66. Ld. Counsel for A-5 has further argued that in para 19 of the chargesheet, it has been stated that the released amount of PC limit of M/s National Traders was siphoned of through different accounts controlled by the borrower and his family members and during the search conducted at the house as well as office of M/s National Traders, rubber stamps of the all the firms (mentioned in para 19 of chargesheet) were recovered which shows that all the firms were being maintained and operated by A-1 and his family members. In para 21 of the chargesheet, IO had stated that after unauthorized merger of PC and FDBP limit, the PC was released and was siphoned of by the accused persons through the accounts controlled by the borrower as detailed in paragraph. It has been shown that M/s A.P. Enterprises was owned by A-5. However, PW33 Inspector Sushil Kumar in para 24 of his examination in chief has mentioned that M/s A.P. Enterprises was the partnership firm of A-2 Angad Singh and A-5 Ashish Puri. It was CC No. 3/2019 CBI Vs. Surender Singh & Ors. Page No. 45 of 178 argued that perusal of the account opening form of M/s A.P. Enterprises Ex. PW24/B (D-83) would show that the residential address of both the partners is the same and the office address has been shown as J-7/53, basement, Rajouri Garden which is a same address from where office of M/s National Traders was being operated. Account opening form also shows that A-3 Har Sahib Singh has been named as nominee. The partnership deed annexed with the account opening form mentioned the name of the firm as "M/s A.P. Traders" and not "M/s A.P. Enterprises" although the partnership deed mentioned the correct address of A-5. He further pointed out that the rent agreement shows that it has been executed between A-1 and A-2 instead of A-1 and the firm. The letter dated 25.09.2012 for updation of mobile number and email ID also reveals that the mobile number mentioned therein is the same which was used by A-2 i.e., "9891989105" and email ID used is of A-1 i.e. "[email protected]" . It was argued by counsel for A-5 that these circumstances indicates that this account was also got opened fraudulently by A-2. He also argued that the signatures of A-5 on his account opening form were also not sent for comparison to CFSL.
67. As regard the siphoning of the funds, counsel for A-5 referred to para 67 of the testimony of PW33 Inspector Sushil Kumar who has admitted that A-5 was neither the co-applicant nor a guarantor in the loan obtained by M/s National Traders from complainant bank which was declared NPA. PW33 also deposed that there is no document given by A-5 in the loan file of M/s National Traders which shows that he had affirmed that A-1 was the sole and absolute owner of the entire built up property on plot no. J-7/53, Rajouri Garden, Delhi.
CC No. 3/2019 CBI Vs. Surender Singh & Ors. Page No. 46 of 178 The forged documents placed with complainant bank by A-1 do not find any mention or reference of A-5 Ashish Puri. The account opening form of Corporation Bank Ex.PW24/B containing the signature of Ashish Puri was not sent to GEQD to examine the authenticity of his signature. PW33 also admitted that the photograph of A-5 pasted on Ex. PW24/B is the same as photograph seized by him from the office of M/s National Traders except the background of the photograph.
68. I have heard the rival submissions carefully and have also gone through the documents referred by the counsels. At the outset, it may be noted that A-5 has not disputed the fact that he is a close friend of A-2 since school days and is in the same business as A-1 to A-3 i.e, trading of auto parts. He has also admitted that he is the proprietor of M/s Sai International but has taken a stand that his firm was having account only with PNB, Ashok Vihar and he was not having any other bank account. However, this defence taken by A-5 appears to be patently false as perusal of account opening form of Sai International with Yes Bank Rajouri Garden Ex.PW-26/B-3(D-112) would show that alongwith the account opening form, a cheque of Rs. 2 lakh dated 14/6/2010 bearing cheque no.054429 from a/c no.000215 drawn on Corporation Bank, Rajouri Garden has been attached. The cheque has been signed by A-5 as proprietor of Sai International. Similarly, perusal of account opening form of Durga Agencies with Yes Bank, Rajouri Garden Ex.PW-26/B-11(D-120) shows that a cheque of Rs.2 lakhs dated 22/1/2011 bearing cheque no.099328 drawn on Corporation Bank Rajouri Garden has been attached. The cheque has been signed by A-5 as proprietor of Durga Agencies. A-5 has not disputed his signatures on these cheques during the entire trial.
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69. It is also pertinent to note that A-5 had opened another current account with Yes Bank, Chandni Chowk vide account opening form dated 12/7/2013 (D-112 pg.27-33). A cheque bearing no.796351 dated 12/7/2013 from a/c no.000215 drawn on Corporation Bank Rajouri Garden for a sum of Rs.2,10,000/- has been enclosed with the account opening form. This cheque has also been signed by A-5 as proprietor of Sai International and A-5 has not disputed his signatures on this cheque also during the entire trial. A-5 has not raised any dispute about the aforesaid accounts of his firms in Corporation Bank Rajouri Garden nor he has disputed his signatures on the aforesaid cheques. Hence, the argument of Ld. Counsel that A-5 was only proprietor of M/s Sai International or that he was not proprietor of M/s Durga Agencies is falsified. Similarly the argument of Ld. Defence counsel that A-5 was only having bank account of his firm M/s Sai International in PNB Ashok Vihar stands falsified.
70. Next argument advanced by Ld. Counsel for A-5 that accounts of M/s Sai International and M/s Durga Agencies were got opened by A-2 without the knowledge of A-5 and A-2 had copied his signatures is also without any merits. PW-48 Shiv Kant Sahu has categorically deposed that A-5 had signed at point B on the photograph and on points C-1, C-2 and C-3 on account opening form of Sai International Ex.PW26/B-3(D-112) in his presence. He further identified the signatures of Ashish Puri (A-5) at points 'C', 'C-1', 'C-2' and 'C-3' on account opening form of Durga Agencies Ex. PW 26/B-11 (D-120). In his cross examination PW-48 has specifically denied the suggestion that signatures of Ashish Puri were made by Angad Singh CC No. 3/2019 CBI Vs. Surender Singh & Ors. Page No. 48 of 178 Chandhok on D-112 (account opening form and other annexures) in his presence in his office. He further denied the suggestion that all the accounts of the firms of Ashish Puri were got opened at the instance of Angad Singh to complete his target of opening new accounts by getting the account opening forms signed by Angad Singh only.
71. Ld. Defence counsel has also tried to discredit the testimony of PW-48 on the ground that this witness had opened many accounts at the instance of A-2 and he used to open the accounts at the instance of A-2 to complete his target. However, perusal of testimony of this witness would show that he has fairly admitted that his job was target based and he also became the relation manager of A-2 an later on A-5 but he has specifically denied that all the accounts of the firms of Ashish Puri were got opened at the instance of Angad Singh to complete his target of opening new accounts by getting the account opening forms signed by Angad Singh only. Hence there is no reason to disbelieve that the testimony of PW-48 about identification of signatures of A-5 on the account opening forms. No doubt, I.O. has not send the signatures of A-5 on the account opening forms D-112 and D-120 to CFSL for comparison with the specimen signatures of A-5, but in view of the categorical deposition of PW-48 that A-5 had signed the account opening forms in his presence, there was no such requirement. Not only this, perusal of statement of A-5 recorded under section 313 Cr.P.C. shows that in reply to Question nos. 167 & 170 regarding opening of accounts of M/s Sai International and M/s Durga Agencies in Yes Bank, A-5 has not disputed his signatures on the account opening forms of M/s Sai International and M/s Durga Agencies. Hence, arguments of Counsel for A-5 that signatures on account opening forms CC No. 3/2019 CBI Vs. Surender Singh & Ors. Page No. 49 of 178 D-112 and D-120 were copied by A-2 Angad Singh are rejected being devoid of merits.
72. As regards, the opening of account of partnership firm M/s A.P. Enterprises in Corporation Bank, Rajouri Garden Ex. PW-24/B(D-
83), A-5 in reply to Question No. 105 in his statement recorded under section 313 Cr.P.C., has denied his signatures on the account opening form and documents and has also denied having any partnership with A-2. He has claimed that his photograph has been misused by A-2 and signatures were forged by A-2.
73. Section 73 of Indian Evidence Act entitles the court to make comparison of disputed and admitted signatures for arriving at just conclusion. It is matter of record that Bill of Exchange dated 7/10/2011 Ex.PW39/C containing signature of A-5 at point Q-4 was sent to CFSL for comparison with specimen signatures of the A-5(S-13 to S-22) Ex.PW39/D and handwriting expert PW-39 Vijay Verma from CFSL, CBI in his report dated 08/11/2016 Ex.PW-39/B has opined the same to be the signature of A-5 . In order to satisfy myself, I have also compared the signatures of A-5 on the account opening forms D-112, D-120 and specimen signatures of the A-5(S-13 to S-22) Ex.PW39/D and signature of A-5 at point Q-4 on Bill of Exchange dated 7/10/2011 Ex.PW39/C with the signatures of A-5 appearing on the account opening form Ex.PW24/B(D-83). On a comparison of signatures of A-5 on the account opening form(D-83) with the specimen signatures of A-5 and the Questioned Signature Q-4, I find remarkable similarity in the signatures of A-5 on the account opening form with the questioned signature Q-4 and specimen signatures Ex. PW39/D of A-5. This clearly CC No. 3/2019 CBI Vs. Surender Singh & Ors. Page No. 50 of 178 establishes that the account opening forms D-83 was signed by A-5 and the defence taken by him that his signatures were forged/copied by A-2 stands falsified and it is accordingly rejected.
74. Ld. Counsel for A-5 has also referred to the wrong addresses or the telephone number of A-2 being mentioned in the account opening forms of A-5 and has argued that this shows that these accounts were got opened by A-2. He also referred to the email IDs mentioned in the account in these account opening forms D-112 and D-120 and has argued that these email IDs do not pertain to A-5. However, as noted above, A-2 and A-5 were not only close friends but also having business dealings with each other. Once it is established by cogent evidence on record that these account opening forms were signed by A-5, a presumption arises that A-5 must have signed the forms after reading the contents of the forms. This presumption is also fortified from the fact that A-5 has never raised any objections in this regard either with the bank nor he filed any complaint with the police about misuse of his name, signature and photograph or the name of his firm by A-2 Angad Singh.
75. The arguments of A-5 that address of M/s Durga Agencies on account form were left by A-5 in 2007 has remained unsubstantiated as no oral/documentary evidence has been produced by A-5 in support of his claim.
76. The arguments that loan documents of Corporation Bank Ex. PW10/A (D-139) showing A-3 Sahib Singh as proprietor is also of not much help to A-5. Rather, it substantiates the theory of criminal CC No. 3/2019 CBI Vs. Surender Singh & Ors. Page No. 51 of 178 conspiracy between A-1 to A-5 as they were indiscriminately using the name of the same firm in different banks by showing different proprietors.
77. Ld. Counsel for A-5 further submitted that Form DVAT06 and Sale Tax registration annexed with the account opening form have been issued after the opening of the account and have been annexed with the account opening form later on. He further argued that name of A-5 Ashish Puri is not mentioned in DVAT form of M/s Sai International or M/s Durga Agencies which also point out towards the manipulation made by A-2 in the account opening form. I do not find any substance in these arguments advanced by Ld. Counsel for A-5. Perusal of account opening form of M/s Kumar Trading (D-110) shows that DVAT form attached with this account opening form is also in the same format and does not mention the name of the proprietor. It is also pertinent to note that the DVAT form annexed with account opening form of Sai International (D-112) mentions the correct address of the firm as J-112, Rajouri Garden which is admittedly the address of its proprietor A-5 Ashish Puri. No doubt that this form has been issued on 12/04/2010 but the date of liability starts from 03.03.2010. Similarly DVAT form annexed with the account opening form of M/s Durga Agencies(D-120) has been issued on 22/4/2009 but the date of liability starts from 17/3/2009 which implies that application for DVAT registration must have been filed with the authorities on or before the dates of opening of these accounts. Ld. Counsel also argued that the declaration given by A-5 along with the account opening form is typed except the date and name of A-5 and it was argued that A-2 Angad Singh used to print such declaration leaving the name of the proprietor blank which was CC No. 3/2019 CBI Vs. Surender Singh & Ors. Page No. 52 of 178 later on filled by him as per the requirement. However, this argument is noted only to be rejected as perusal of these declaration would show that the names of the firms have been typed/printed and only the name of the proprietor has been filled in the handwriting. Since A-1 to A-5 were having friendly relations and were also having business relations, the possibility of A-2 uploading the performa of declaration required by the bank on the computer and thereafter taking the printouts as per the requirement cannot be ruled out. However, it is pertinent to note here that these forms bear the signatures of A-5 which are similar to the specimen signatures of A-5 Ex. PW39/D and questioned signature Q-4 of A-5 appearing on the bill of Exchange Ex.PW39/C which have been opined by the CFSL expert to be the signature of A-5. Hence, in my considered opinion, prosecution has been able to establish that these accounts have been opened by A-5 in the name of his firm M/s Sai International and M/s Durga Agencies and partnership firm with A-2 namely M/s A.P. Enterprises.
78. Now I shall deal with the issue of siphoning of funds by A-1 in conspiracy with A-5.
79. Perusal of the record shows that complainant bank opened a CC account bearing no.30800504013206 in the name of M/s National Traders on 23/12/2010. The statement of account has been proved as Ex.PW-14/A(D-6) during the cross examination of PW-14 Parmeet Singh. Another copy statement of this account along with certificate under Section 2-A of Bankers Book of Evidence Act has been proved by PW-45 Inderpal Singh as Ex.PW45/F(D-68).
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80. PW42 Lalit Kumar has deposed PC of Rs. 1.85 crore was released to M/s National Traders on 14/05/2012 vide note on request letter of A-1 dated 14/05/2012 Ex.PW18/M(D-11Pg.140) for release of PC on 4 combined orders including that of M/s Mapex International. He further deposed that PC of Rs. 20.35 lacs was released on 17/05/2012 against order of M/s Mapex International on the letter of request of A-1 Surender Singh dated 17/05/2012 Ex.PW42/A(D-11Pg.149). He also deposed that PC of Rs.97.92 lacs was released on 23/05/2012 against the order of Mapex International on the letter of request of A-1Surender Singh dated 23/05/2012 Ex.PW18/N(D-11Pg.152).
81. The aforesaid amounts were credited to the CC account of M/s National Traders and the same are reflected on page 55 in the statement of account Ex.PW14/A(D-6).
82. Thereafter, from the aforesaid PC amount credited in the CC account of M/s National Traders, money was transferred to the accounts opened by A-5 in the Yes Bank and Corporation Bank, as under :-
DATE AMOUNT NAME OF FIRM & MODE OF A/C NO. & BANK TO PAGE NO. OF TRANSFE PROPRIETOR/ TRANSFER WHICH AMOUNT CC ACCOUNT RRED PARTNERS WAS TRANSFERRED OF NATIONAL (IN RS.) TRADERS SHOWING THE RELEVANT ENTRY 14/01/2011 9,50,000/- M/S SAI INTERNATIONAL RTGS CURRENT PAGE 5 OF D-6 PROP.ASHISH PURI (A-5) EX.PW56/J ACCOUNT. NO.
EX. PW14/A
(D-172) 003084000001664 (COLLY)
YES BANK RAJOURI
GARDEN, NEW
DELHI
CC No. 3/2019 CBI Vs. Surender Singh & Ors. Page No. 54 of 178
17/10/2011 16,00,000/- M/S SAI INTERNATIONAL RTGS CURRENT PAGE 34 OF D-6
PROP.ASHISH PURI (A-5) CH. NO. ACCOUNT. NO.
EX. PW14/A
32041404 003084000001664 (COLLY)
(D-188) YES BANK RAJOURI
GARDEN, NEW
DELHI
23/05/2012 2,50,000/- M/S SAI INTERNATIONAL RTGS CURRENT PAGE 55 OF D-6
PROP.ASHISH PURI (A-5) CH. NO. ACCOUNT.
EX.PW14/A
32053130 NO.
(COLLY)
(D-195) 003084000001664
YES BANK RAJOURI
GARDEN, NEW
DELHI
18/10/2011 7,00,000/- M/S DURGA AGENCIES RTGS C.A. NO. PAGE 34 OF D-6
PROP.ASHISH PURI (A-5) CH. NO. 003084000002046
EX.PW14/A
32041407 YES BANK RAJOURI
(COLLY)
(D-199) GARDEN, NEW
DELHI
14/5/2012 40,00,000/- M/S DURGA AGENCIES RTGS C.A. NO. PAGE 55 OF D-6
PROP.ASHISH PURI (A-5) CH. NO. 003084000002046
EX.PW14/A
32053191 YES BANK RAJOURI
(COLLY)
(D-190) GARDEN, NEW
DELHI
23/05/2012 95,00,000/- M/S DURGA AGENCIES RTGS C.A. NO. PAGE 55 OF D-6
PROP.ASHISH PURI (A-5) CH. NO. 003084000002046
EX.PW14/A
32053131 YES BANK RAJOURI
(COLLY)
(D-194) GARDEN, NEW
DELHI
13/01/2011 8,19,610/- M/S A. P. ENTERPRISES RTGS C.BCA01000068 PAGE 5 OF D-6
EX. PW14/A
PARTNERS: ASHISH PURI EX.PW56/I CORPORATION
(COLLY)
(A-5) & ANGAD PAL (D-170) BANK RAJOURI
SINGH(A-2) GARDEN, NEW DELHI
83. PW26 Jitender, Assistant Manager, Yes Bank, Rajouri Garden has proved statement of account of M/s Sai International with Yes Bank, Rajouri Garden bearing account no. 003084000001664 as Ex. PW26/B-4 (D-113). Perusal of this statement of account show receipt of following amounts from M/s National Traders:-
Date Amount Mode of Transfer Page No. of Corresponding CC No. 3/2019 CBI Vs. Surender Singh & Ors. Page No. 55 of 178 (In Rs.) Statement of RTGS document of Account M/s National Traders 14.01.2011 9,50,000/- RTGS 12 of D-113 D-172 R-UBINH11014083651 17.10.2011 16,00,000/- RTGS Back of page D-188 R-UBINH11290045841 22 of D-113 24.05.2012 2,50,000/- RTGS 32 of D-113 D-195 R-UBINH12145083594
84. PW26 Jitender, Assistant Manager, Yes Bank, Rajouri Garden has further proved statement of account of M/s Durga Agencies with Yes Bank, Rajouri Garden bearing account no.
003084000002046 as Ex. PW26/B-12 (D-121). Perusal of this statement of account show receipt of following amounts from M/s National Traders:-
Date Amount Mode of Transfer Page No. of Corresponding (In Rs.) Statement of RTGS document Account of M/s National Traders 18.10.2011 7,00,000/- RTGS 9 of D-121 D-199 R-UBINH11291061711 14.05.2012 40,00,000/- RTGS 20 of D-121 D-190 R-UBINH12135076550 23.05.2012 95,00,000/- RTGS 21 of D-121 D-194 R-UBINH12144073130
85. PW24 Sh. Deepak Kumar, Branch Manager, Corporation Bank has proved the statement of account along with certificate of M/s A.P. Enterprises bearing account no. CBCA/01/000068 with CC No. 3/2019 CBI Vs. Surender Singh & Ors. Page No. 56 of 178 Corporation Bank as Ex. PW24/C (D-84). After seeing the account, has deposed that on 13.01.2011 an amount of Rs. 8,19,610/- was received in this account from M/s National Traders in complainant bank, through RTGS. Perusal of the statement of account shows that the relevant entry is reflected on page 24 of the statement of account. The witness has further deposed that on the same day a sum of Rs. 4,00,028/- and 4,19,197/- were transferred to M/s Surya Enterprises( proprietorship firm of A-1) through RTGS.
86. From the perusal of the aforesaid statements of account of M/s National Traders, M/s Surya International, M/s Durga Agencies and M/s A.P. Enterprises, it is evident that:-
(i) On 11.01.2011 packing credit of Rs. 85 lacs were released by complainant bank in the Cash Credit account of M/s National Traders (proprietorship firm of A-1). Out of this amount, Rs. 8,19,610/- were transferred in the Corporation Bank Account of M/s A.P. Enterprises (partnership firm of A-2 and A-5) through RTGS on 13.01.2011 and on the same day M/s A.P. Enterprises transferred a sum of Rs. 4,00,028/-
and 4,19,197/- in the account of M/s Surya Enterprises (proprietorship firm of A-1) through RTGS. Another amount of Rs. 9,50,000/- was transferred by M/s National Traders on 14.01.2011 in Yes Bank account of M/s Sai International (proprietorship firm of A-5).
(ii) On 17.10.2011 packing credit of Rs. 29.43 lacs was released by complainant bank in the Cash Credit account of M/s National Traders and on the same day, a sum of Rs. 16 lacs was transferred by M/s National Traders in the Yes Bank Account of M/s Sai International (proprietorship firm of A-5) through RTGS (D-188). On 18.10.2011 a CC No. 3/2019 CBI Vs. Surender Singh & Ors. Page No. 57 of 178 sum of Rs. 7 lacs was transferred by M/s National Traders in the Yes Bank Account of M/s Durga Agencies (proprietorship firm of A-5) through RTGS (D-199).
(iii) On 14.05.2012 packing credit of Rs.185 lacs was released by complainant bank in the Cash Credit account of M/s National Traders and on the same day, a sum of Rs. 40 lacs was transferred by M/s National Traders in the Yes Bank Account of Durga Agencies (proprietorship firm of A-5) through RTGS (D-190).
(iv) On 22.05.2012 packing credit of Rs. 97.92 lacs was released by complainant bank in the Cash Credit account of M/s National Traders and on 23.05.2012, a sum of Rs. 95 lacs was transferred by M/s National Traders in the Yes Bank Account of Durga Agencies (proprietorship firm of A-5) through RTGS (D-194). Another sum of Rs. 2,50,000/- was transferred by M/s National Traders in the Yes Bank account of M/s Sai International (proprietorship firm of A-5) through RTGS (D-195).
87. The defence taken by A-5 that he had no concern with the accounts of M/s Durga Agencies and M/s Sai International in Yes Bank and that he had no concern with the partnership firm M/s A.P. Enterprises has already been found to be false in the foregoing paras and it has been held that A-5 had opened the bank accounts in Yes Bank in the name of M/s Sai International and M/s Durga Agencies and he was the partner in M/s A.P. Enterprises and had opened bank account with Corporation Bank. In these circumstances, the defence taken by A-5 that A-1 and A-2 had been defrauding the complainant bank and he had no concern with them cannot be believed. A-5 has admitted that he was proprietor of M/s Sai International and was having CC No. 3/2019 CBI Vs. Surender Singh & Ors. Page No. 58 of 178 close business relations with A-1 and A-2. The transfer of large amount of money in the bank accounts of M/s A.P. Enterprises, M/s Sai International and M/s Durga Agencies by A-1 through his proprietorship firm M/s National Traders raises serious doubts about the utilization of the credit facilities by A-1. There are absolutely no records showing any business transactions between M/s National Traders on one hand and the other firms of A-5 on other hand which gives rise to an inference that these accounts were opened by A-5 in conspiracy with other co-accused to siphon of the amount released by complainant bank.
88. Ld. Counsel for A-5 has vehemently argued that IO has reached the conclusion that money was siphoned of as there were no records of business transactions between the parties. He argued that no notice u/s 91 Cr.P.C was given to the accused persons to produce the books of accounts and other documentary evidence nor any efforts were made by the IO to seize the business records of these firms. However, I am not inclined to accept these arguments. The records of business transactions between M/s National Traders and partnership/ proprietorship firms of A-5 were the facts within the special knowledge of accused persons including A-5. Hence, mere inability of the IO to trace out the records of these business transactions cannot give any advantage to A-5. As per Section 106 of Indian Evidence Act, the burden of proving a fact especially within the knowledge of a person lies upon him. Hence, when the prosecution has succeeded in proving that money was transferred from the CC account of M/s National Traders to the accounts of partnership/proprietorship firms of A-5, the onus shifted on A-5 to show that money was received for supply of goods/services.
CC No. 3/2019 CBI Vs. Surender Singh & Ors. Page No. 59 of 178 However, no evidence has been led by A-5 to prove this fact which was especially within his knowledge. Hence, an adverse inference can be drawn against A-5 that the accounts of M/s Sai International and M/s Durga Agencies in Yes Bank Rajouri Garden and account of M/s A.P. Enterprises in Corporation Bank, Rajouri Garden were opened and used to siphon the credit facility released by complainant bank to M/s National Traders. This inference is also fortified by the transactions in the statement of account of M/s A.P. Enterprises Corporation Bank where money was received from the proprietorship firm of A-1 i.e. M/s National Traders and on the same day the money was transferred to another firm of A-1 i.e. M/s Surya Enterprises and there is no evidence to show business transactions between these firms.
89. Hence, in view of the aforesaid discussion, I am of the considered opinion that the prosecution has proved its allegation against A-1 beyond reasonable doubts.
ALLEGATION No. 3A-5 falsely verified about the credentials of M/s National Traders during the verification conducted by A-7 Sharad Joshi as revealed in the Due Diligence Report dated 10/9/2010 Ex.PW35/C (D-20).
90. Ld. PP for CBI argued that after A-1 Surender Singh had applied for loan/credit facility in the name of M/s National Traders, A-7 had prepared Due Diligence Report of M/s National Traders dated 10.09.2010 Ex.PW35/C(D-20). Perusal of this report shows that A-7 had made inquiry about A-1 from Parmeet Singh of Reliable Motors, A-
CC No. 3/2019 CBI Vs. Surender Singh & Ors. Page No. 60 of 178 5 Ashish Puri of Durga Agencies and Avinash Ahluwalia of M/s Orient Auto Parts. It was argued that A-7 has reported that they had expressed positive opinion about A-1.
91. Ld. PP has placed reliance on the testimonies of PW-9 Amardeep Singh, PW-11 Jasmeet Singh, PW-14 Parmeet Singh, PW- 35 Rajiv Ranjan and PW-57 H/Ct. Kuldeep Kumar in support of his arguments. It has been submitted PW-35 Ravi Ranjan has identified the signature of A-7 on the Due Diligence Report Ex.PW35/C. PW-11 and PW-14 have denied that any bank official had met them regarding due diligence of A-1 Surender Singh or his firm M/s National Traders. PW-9 Amardeep has denied having knowledge of Avinash Ahluwalia of M/s Orient Auto Parts despite the fact that he himself was having the shop in the same complex i.e., Vardan House, Kashmere Gate during the relevant time. He argued that the report Ex.PW-57/A(D-153) prepared by PW-57 H/Ct. Kuldeep Kumar also establishes that Avinash Ahluwalia or Orient Auto Parts never existed on the given address. A-7 falsely verified the credentials of M/s National Traders as he was in conspiracy with other co-accused to cheat the bank.
92. Per Contra, Ld. Counsel for A-5 has argued that in para 10 of the chargesheet, it has been stated that A-7 prepared a false Due Diligence Report of M/s National Traders on 10.09.2010. In the said report, A-7 fraudulently mentioned that he had made inquiry about the borrower Surender Singh (A-1) from (1) Parmeet singh of M/s Reliable Motors, (2) Sh. Ashish Puri(A-5) of M/s Durga Agencies and (3) Avinash Ahluwalia of M/s Orient Auto Parts, whereas no such person or firm as Avinash Ahluwalia of M/s Orient Auto Parts existed on the CC No. 3/2019 CBI Vs. Surender Singh & Ors. Page No. 61 of 178 given address, Parmeet Singh did not recognize any such person as A- 7 and even denied that any person from complainant bank had conducted verification for M/s National Traders, proprietor Surender Singh (A-1). A-5 denied having met any official of complainant bank for verification of M/s National Traders.
93. Ld. Counsel for A-5 referred to the testimony of PW57 Kuldeep Kumar who had attempted to serve notice u/s 160 Cr.P.C to Sh. Avinash Ahluwalia. He deposed that on inquiry he could not find Avinash Ahluwalia or office of M/s Orient Auto Parts on the given address and he prepared his report which was exhibited as Ex. PW57/A (D-153). Counsel for A-5 has argued that perusal of the report would show that the firm was not traceable on the given address and even the Joint Secretary of the Market Association stated that he had not seen any firm by this name in Vardan House. Another witness Parmeet Singh who was examined as PW14 has also deposed that he had been known to A-2 but no one from Complainant bank had approached him for verification of M/s National Traders. It was submitted that A-5 was also a friend of A-2 and hence his name had also been given but no verification was conducted from him. Counsel for A-5 also submitted that the firm name of A-5 and address of A-5 used in the Due Diligence Report was also incorrect. A-5 was not the proprietor of M/s Durga Agencies and the address of the firm mentioned in the due diligence report was used by A-5 from 2005 to 2007 only. Ld. Defence counsel argued that perusal of testimony of PW14 shows that he has not deposed truthfully and has concealed material facts. He also argued that PW14 in his cross examination could not tell as to how the stamp of M/s Reliable Motors was CC No. 3/2019 CBI Vs. Surender Singh & Ors. Page No. 62 of 178 recovered by CBI from the office of M/s National Traders. PW14 also denied having any business relation with M/s National Traders. However, during the cross examination of PW14 he had put the statement of account of M/s National Traders Ex.PW14/A (colly) (D-6) to the witness which reflected a transfer of Rs.2.08 lacs by RTGS to M/s Reliable Motors. It was argued that the circumstances of A-5 and PW14 are same but A-5 has been arrayed as an accused whereas Parmeet Singh has been made a witness in this case which raises serious doubts on the conduct of the IO. It was argued that A-1 to A-4 had forged the photographs, signature and rubber stamp of A-5. He also referred to the Due Diligence Report dated 10.09.2010 and pointed out that the particulars of Parmeet Singh mentioned in the report are correct whereas the particulars of A-5 have been incorrectly mentioned in the report. It was submitted that the particulars of A-5 have been misused by A-1 to A-4.
94. In order to show the modus operandi of A-1 to A-4, Ld. Counsel for A-5 also referred to para 11 of the chargesheet and submitted that the names of the witnesses mentioned in the Due Diligence Report of property no. J-7/53, Rajouri Garden, Delhi were also found to be fictitious. He submitted that PW58 Ct. Bijender proved his report Ex. PW58/A (D-154) and Ex. PW58/B (D-155) which shows that no such person existed on the given addresses. It also shows that A-1 to A-4 were fraudulently giving the names of fictitious persons to A-7 to be used in the reports. It was argued that from the evidence available on record, prosecution has failed to show that A-5 had falsely verified the address and credit worthiness of A-1 and M/s National Traders in the Due Diligence Report Ex. PW35/C. CC No. 3/2019 CBI Vs. Surender Singh & Ors. Page No. 63 of 178
95. I have carefully perused the Due Diligence Report dated 10.09.2010 Ex.PW35/C. As per this report, A-7 had conducted due diligence of M/s National Traders from three persons including A-5 Ashish Puri. Parmeet Singh appeared as PW14 and has denied having met any official from Complainant bank for verification of credential of A-1 Surender Singh, proprietor of M/s National Traders. His brother Jasmeet Singh appeared as PW11 and he has also deposed on the same lines. PW Avinash Ahluwalia of M/s Orient Auto Parts was not found traceable as per the report Ex.PW57/A given by PW57 Head Constable Kuldeep Kumar. It is also be pertinent to note here that IO of the case PW33 Inspector Sushil Kumar in his cross examination has deposed that he had inquired from Ashish Puri (A-5) and he disclosed that he was not contacted by any banker and further deposed that since during the investigation he came to know that A-5 Ashish Puri used to sit in the office of M/s National Traders at the time of visit of bank officials and his statement that he was not contacted by bank officials was not relied by him.
96. It is surprising that even though CBI has claimed that the Due Diligence Report dated 10.09.2010 Ex.PW35/C prepared by A-7 was false and two of the witnesses did not support the Due Diligence Report but even thereafter, it discarded the statement of A-5 regarding the fact that he was not contacted by any bank officials for Due Diligence Report without any corroboration from independent sources. Apart from the bald statement of I.O., there is no other cogent evidence available on record to prove that A-5 had verified about the credential of the borrower except for the fact that his name is mentioned in Due CC No. 3/2019 CBI Vs. Surender Singh & Ors. Page No. 64 of 178 Diligence Report Ex.PW35/C. In view of the fact that PW-14 Parmeet Singh has denied having met any bank official and PW Avinash Ahluwalia was not traceable on the given address, the genuineness of the report itself becomes doubtful. A-5 has reiterated in reply to question No. 183 of his statement recorded u/sec.313 Cr.P.C that neither anyone had ever visited to him nor he stood for any such verification ever. This fact was informed to CBI officials and IO also during the course of investigation but IO did not choose to verify this fact from any independent source and out rightly rejected the version of A-5.
97. Hence, in the absence of any cogent and positive evidence to establish that A-5 had verified the credential of the borrower, I am of the considered opinion that the prosecution has failed to prove this allegation against A-5.
ALLEGATION No. 4A-5 had taken on rent a godown at C-79, Sector 65, Noida. The said godown was shown as rented premises of A-1 Surender Singh (prop. of M/s National Traders) and forged rent agreements Mark PW22/E & Mark PW22/F were submitted by A-1 with complainant bank at the time of obtaining Credit facilities.
98. Ld. PP has argued that A-1 along with his loan application had submitted two rent agreements Mark PW22/E and Mark PW22/F in support of his claim that he had taken a godown on rent bearing no. C- 79, Sector 65, Noida (UP) from Sh. Karan Aggarwal. Ld. PP has submitted that in fact this godown was taken on rent by A-5 Ashish Puri for use of his business. However, A-5 in conspiracy with A-1 to A-4 assisted A-1 in preparation of the forged rent agreement with a view to CC No. 3/2019 CBI Vs. Surender Singh & Ors. Page No. 65 of 178 help A-1 in securing the loan. It was argued that PW22 Sh. Karan Aggarwal, the owner of the godown, has testified that he had given the godown on rent to A-5 Ashish Puri. He also proved the seizure memo Ex. PW22/D (D-78) vide which he had handed over the rent agreements Ex. PW22/A (D-79), Ex. PW22/B (D-80) and Ex. PW22/C (D-81) to the IO during investigation. He further deposed that he did not know any Surender Singh in context with his property and his signature on the rent agreements Mark PW22/E and Mark PW22/F were copied and he had never executed any such agreements with Surender Singh. It was argued by Ld. PP that without A-5 providing the copies/original rent agreement executed between him and Karan Aggarwal, the forged rent agreements Mark PW22/E and Mark PW22/F could not be prepared. It is argued that the preparation of the forged rent agreements itself indicate towards the conspiracy between A-1 to A-5.
99. Per Contra, Ld. Counsel for A-5 has argued that PW22 Karan Aggarwal has denied having executed any rent agreement with Surender Singh (A-1) in respect of his Noida godown. He has also deposed that his signatures on the forged rent agreements have been copied and he had never executed these agreements. He also argued that A-5 had obtained the godown for his own business purpose and he was running a godown in the tenanted premises. In his cross examination PW22 deposed that he had not heard about Surender Singh before having knowledge of this case. He also deposed that no one had never visited his premises for inquiry about Surender Singh. PW22 even did not express any suspicion over anyone as to who could have forged those agreements. It was argued that A-1 and A-2 took CC No. 3/2019 CBI Vs. Surender Singh & Ors. Page No. 66 of 178 away the copies of rent agreements and other documents from the office of A-5 and misused them.
100. Counsel for A-5 has argued that Sh. Ashish Jain, Manager (Credit) had visited the Noida godown of M/s National Traders on 21.02.2010 and had recommended for disbursal of limit as there was sufficient stocks in the godown. PW56 Ashish Jain in his examination- in-chief deposed that he had conducted the inspection of the godown of M/s National Traders at the instruction of A-7 Sharad Joshi and had given his report Ex.PW18/H (D-11, page 24). Ld. Counsel for A-5 argued that the deposition of PW56 Ashish Jain regarding his visit to Noida godown is contradicted by the testimony of PW22 who has categorically deposed that no official from complainant bank had visited the godown for physical verification. Ld. Defence counsel further argued that this clearly shows that A-1 to A-4 were in conspiracy with the bank officials and had obtained false verification report. He further argued that A-5 was not involved in the preparation of the said report nor he has been cited as a witness in the said report. Similarly, there is no evidence to show the involvement of A-5 in preparation of forged and fabricated rent agreements Mark PW22/E and Mark PW22/F. Even PW22 Karan Aggarwal has not expressed his suspicion on A-5 or any other person for the forgery of the aforesaid rent agreements. There is no other evidence connecting A-5 with the alleged forged agreements. Hence, prosecution has failed to prove the involvement/role of A-5 in the alleged forgery.
101. On careful perusal of the testimony of PW22, it becomes crystal clear that PW22 had given his godown on rent to A-5 Ashish Puri vide CC No. 3/2019 CBI Vs. Surender Singh & Ors. Page No. 67 of 178 rent agreements Ex. PW22/A to Ex. PW22/C and Surender Singh was never let out the said Noida Godown. The inspection report prepared by PW56 Ashish Jain at the instance of A-7 Sharad Joshi appears to be false on the face of it in view of the categorical denial by PW22 that no official from complainant bank had visited the property for physical verification. The defence taken by A-5 that the copies of rent agreements were taken by A-1 and A-2 along with other documents from his office is also a bald defence which is not supported by any complaint of theft or missing report of documents lodged by A-5 with the police.
102. In so far as the question of forgery of rent agreements Mark PW22/E and Mark PW22/F is concerned, PW33 Inspector Sushil Kumar in para 63 of his cross examination has deposed that the signature of Ashish Puri (A-5) are not seen in these copies of the rent agreements. He also admitted that these copies of rent agreements were used by A-1 Surender Singh in the complainant bank. He also did not conduct investigation to verify whether any bank official had actually and physically visited the godown premises as per forged rent agreements.
103. Apart from the aforesaid evidence, there is no oral or documentary evidence available on record to show that A-5 had either forged and fabricated these rent agreements Mark PW22/E and Mark PW22/F or he had supplied copies of original rent agreements to A-1 for preparation of forged and fabricated rent agreements Mark PW22/E and Mark PW22/F in favour of A-1.
CC No. 3/2019 CBI Vs. Surender Singh & Ors. Page No. 68 of 178
104. Hence, in the absence of any cogent evidence to connect A-5 in preparation of the aforesaid forged and fabricated rent agreements, I am of the considered opinion that prosecution has failed to prove this allegation against A-5 beyond reasonable doubts.
ALLEGATION No. 5:
A-5 assisted A-1 to A-4 in getting loans/ credit facilities from different banks by using false and forged documents.
105. Ld. PP for CBI has argued that it is undisputed fact that A-5 was well known to A-1 to A-4 and they were together operating many firms. However, there is no documentary evidence on record to show that there was business transaction between A-1 and A-5. It was argued that A-5 assisted A-1 to A-4 to obtain loans from different banks and provided forged documents to cheat the banks. Ld. PP has submitted that the fact that A-5 was in criminal conspiracy with A-1 and A-2 for cheating the banks is also reflected from the Due Diligence Report Ex.PW35/C of M/s National Traders prepared by A-7. In this report, A-5 was one of the witnesses who had falsely verified the credential of M/s National Traders. He further argued that A-5 had also availed CC facility of Rs. 2 crores from PNB, Ashok Vihar and A-1 Surender Singh stood as guarantor and mortgaged his property i.e. basement at J-5/152, Rajouri Garden as collateral security. It was also argued that A-5 also issued order contracts from the firm M/s Mapex International in favour of M/s National Traders and helped A-1 in release of PC limit from complainant bank which was later on siphoned of.
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106. Per Contra, Ld. Counsel for A-5 has argued that as per the chargesheet, during the search of house and office of A-1 situated at J- 7/53, and J-5/152, Rajouri Garden, 73 rubber stamps of different companies including the firm of A-5 were recovered from the office of M/s National Traders besides original registration papers of firm M/s Mapex International FZE in which A-5 was shown as a Manager. Ld. Counsel for A-5 argued that possibility of A-1 and A-2 forging these documents cannot be ruled out as no signatures of A-5 were required. He argued that only two questioned signatures of A-5 were sent to GEQD for comparison i.e. Q-3 and Q-4 and out of these two signatures only Q-4 has matched with the specimen signature of A-5 according to the report Ex.PW39/B given by PW39 Sh. Vijay Verma. He argued that PW39 in his cross examination has specifically deposed that as regards A-5, he had received only two questioned signatures i.e. Q-3 and Q-4 and further volunteered that Q-3 was the reproduced copy and not original and therefore, no opinion was given either way with respect to Q-3. It was argued by counsel for A-5 that merely showing A-5 as Manager of M/s Mapex International FZE is not sufficient to make him a culprit. As regards the allegations that A-5 assisted A-1 to A-4 for obtaining the loan from various banks on forged and fabricated documents and thus defrauding the bank, it was argued that there is no evidence at all to show that A-5 had in any manner assisted A-1 to A-4 in obtaining the bank loans. He argued that even in the present case of loan being obtained by A-1 from complainant bank, there is no document prepared or signed by A-5. A-5 was neither a guarantor nor even a witness to the documents submitted by A-1 with the complainant bank. It was stated that A-5 was in fact not even aware CC No. 3/2019 CBI Vs. Surender Singh & Ors. Page No. 70 of 178 about the loan obtained by A-1.
107. Perusal of the record shows that prosecution has not been able to point out any document prepared or signed by A-5, which was used by A-1 to A-4 in obtaining the bank loans. In fact, PW33 Inspector Sushil Kumar has admitted that A-5 was neither a co-applicant nor guarantor in the loan obtained by M/s National Traders from complainant bank. He also deposed that there is no document given by A-5 in the loan file of M/s National Traders, which showed that he had affirmed that A-1 was the sole and absolute owner of entire built up property on plot no. J-7/53, Rajouri Garden, Delhi. PW33 also deposed that the forged documents submitted by A-1 to complainant bank do not find any mention or reference of A-5 Ashish Puri. PW33 has also deposed that he had not investigated about the role of A-5 in availing the cash credit facility from Corporation Bank by M/s Durga Agencies depicting A-3 Har Sahib Singh as its proprietor. He further deposed that the form and other documents for availing cash credit facility from Corporation Bank do not bear handwriting, signature or photograph of A-5, although, his name along with mobile number was mentioned in the reference column in the application Ex.PW10/A (D-139). However, it is pertinent to note here itself that mere mentioning the name and mobile number of a person as a reference by the borrower is not sufficient by itself to make that person criminally liable without anything more being done by that person. PW33 has also deposed that he had not investigated from the Corporation Bank whether any bank official had called A-5 and had verified from him before the grant of cash credit facility.
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108. PW33 also admitted that the copies of rent agreements Mark PW22/E and Mark PW22/F used by A-1 in complainant bank do not bear the signature of A-5. In reply to a specific question by counsel for A-5, PW33 has replied that he had inquired from A-5 and A- 5 had disclosed that he was not contacted by any bank regarding confirmation of credit worthiness of Surender Singh (A-1). However, he had not relied on the said statement of A-5. None of the witnesses examined by the prosecution have deposed regarding the involvement of A-5 in obtaining bank loan by A-1 to A-3 from different banks.
109. Hence, in the absence of any cogent evidence on record to connect A-5 with the process of obtaining loans by A-1 to A-4 from different banks, I am of the considered opinion that prosecution has failed to prove this allegation against A-5.
ALLEGATION No. 6:
A-5 was Manager of M/s Mapex international FZE and he prepared false orders/invoices and Bills of Exchange for facilitating release of Credit Limits to M/s National Traders by complainant bank.
110. Ld. PP has submitted that during the search conducted at the office premises of M/s National Traders and residence of A-1 Surender Singh, 73 rubber stamps were recovered along with one original registration certificate of M/s Mapex International showing A-5 as Manager of the firm. He argued that these documents were seized vide seizure memo dated 24.09.2014 Ex.PW33/G (D-33). He further argued that A-5 under his signatures issued order contracts on the letter heads of M/s Mapex International FZE which helped A-1 to get CC No. 3/2019 CBI Vs. Surender Singh & Ors. Page No. 72 of 178 PC released from complainant bank and the said amount was later on siphoned of.
111. Ld. PP has also referred to the testimonies of PW17 Arush Bawa who has proved the collection bills of M/s Mapex International as Ex. PW17/D (D-92), Ex.PW17/E (D-93), Ex.PW17/F (D-94), Ex.PW17/K (D-98), Ex.PW17/M (D-100) and Ex.PW17/P (D-102). It was argued that PW39 Vijay Verma has proved his report Ex.PW39/B and has deposed that as per his opinion, the questioned signature Q-4 on bill of exchange Ex. PW39/C matched with the specimen signature of the person as provided to him vide S-13 to S-22 [Ex.PW39/D (colly)] which were attributed to A-5 Ashish Puri. It was argued that this fact clearly establishes that M/s Mapex International FZE was a firm of A-5 Ashish Puri and it was being operated by him. He argued that on the basis of the order contract of M/s Mapex International dated 18.04.2012 (Ex. PW17/T-4), packing credit of Rs. 63.60 lacs were released to M/s National Trader by complainant bank on 14.05.2012; on the basis of the order contract of M/s Mapex International dated 27.04.2012 (Ex. PW17/T-6), packing credit of Rs. 20.35 lacs were released to M/s National Trader by complainant bank on 17.05.2012 and on the basis of the order contract of M/s Mapex International dated 08.05.2012 (Ex. PW17/T-7), packing credit of Rs. 97,92,200/- were released to M/s National Trader by complainant bank on 23.05.2012.
112. Per Contra, Counsel for A-5 has argued that the documents recovered from the office search of M/s National Traders, the photographs might have been taken by A-2 from the office of A-5 as A- 2 was a frequent visitor to the office of A-5. He further argued that the CC No. 3/2019 CBI Vs. Surender Singh & Ors. Page No. 73 of 178 list of seized articles filed by CBI does not contain any rubber stamp of firm owned by A-5 Ashish Puri. It was submitted that in his statement recorded u/s 313 Cr.P.C, A-5 has also stated that A-1 and A-2 were regular and frequent visitors to his office and godown and therefore, they would have stolen some documents from his office.
113. Ld. Defence counsel has argued that PW33 Inspector Sushil Kumar in his cross examination has deposed that he had not issued any notice u/s 91 Cr.P.C to A-1 or A-5. He further deposed that during the course of investigation he had come across documents of M/s Mapex International FZE signed by A-5 in the file of M/s National Traders. Original registration form of M/s Mapex International FZE on which name of A-5 was written as Manager was also found in the office of M/s National Traders which showed that there was no business transactions between M/s Mapex International FZE and M/s National Traders and they were working for each other. It was also argued that IO has further admitted in his cross examination that he found photo of Ashish Puri in the office of M/s National Traders and on inquiry about the photo from the guards and the offices staff, they informed that A-5 was friend of A-2 and he used to sit in that office with A-2. IO further admitted that he had not mentioned the aforesaid facts in the chargesheet nor he had recorded the statement of guards or office staff not they were cited as witness. It was argued that the IO has carried out the investigation in a biased manner against A-5 and he has been arrayed as an accused only on the basis of assumption and presumption.
114. From the perusal of the evidence and documents on CC No. 3/2019 CBI Vs. Surender Singh & Ors. Page No. 74 of 178 record, it is revealed that no rubber stamps of the firms of A-5 were recovered from the office search of M/s National Traders. File D-36 Ex.PW33/K contains the ink impression rubber stamps seized by the IO. A bare perusal of this file would show that there are no ink impression of the stamps of the firms of A-5 in this document i.e. M/s Sai International, M/s Durga Agencies, M/s A.P. Enterprises and M/s Mapex International.
115. As regards the original certificate of M/s Mapex International FZE Ex.PW33/P (D-40), perusal of the same shows that this certificate mentions Ashish Puri as a Manager of the firm and it was recovered from the office search of M/s National Traders. A-5 has nowhere specifically denied his connection with M/s Mapex International. Even in the statement recorded u/s 313 Cr.P.C, he has not specifically denied that he had no concern with M/s Mapex International. In reply to question no. 217 regarding recovery of original commercial license of the firm M/s Mapex International FZE from the office of M/s National Traders, A-5 has replied that A-1 and A-2 were in regular business terms and relation with him, therefore, they were regular and frequent visitors to his office and godown. Therefore, they would have stolen some documents from his office. This reply of A-5 coupled with the fact that A-5, he had signed the Bill of Exchange Ex.PW39/C clearly establishes the connection between A-5 and M/s Mapex International. A-5 was the best person who had the knowledge of his relations with M/s Mapex International and only he could have explained if he was the owner of the firm or merely an employee of the firm but A-5 has not given any explanation as to why and in what capacity he had signed the Bill of Exchange Ex. PW39/C if he had no CC No. 3/2019 CBI Vs. Surender Singh & Ors. Page No. 75 of 178 concern with the firm. In the absence of any cogent explanation, an adverse inference has to be drawn against him.
116. It is also surprising that A-5 did not file any complaint to the police, even after he came to know that the registration certificate of his firm had been stolen by A-1 and A-2 from his office. The conduct of A-5 is not the conduct of an ordinary prudent person. No satisfactory explanation has been given by A-5 for not filing any such police complaint. The conduct of A-5 in neither demanding back the original registration certificate, nor filing any police complaint indicates that he was working hand in gloves with A-1 to A-4 in defrauding the banks and siphoning of the money.
117. Perusal of the record also shows that A-1 had used the following order contracts issued by M/s Mapex International FZE for the release of PC limits from complainant bank:-
Date of Order Amount (in US $ as Amount of PC Document well as Indian Rupee) released (in No./Exhibit No. Rupees) 18.04.2012 US $ 1,20,000.00 63,60,000/- on D-11, Page 459, (INR 63,60,000/-) 14.05.2012 Ex.PW17/T-4 27.04.2012 US $ 40862.50 20,35,000/- on D-11, Page 475, (INR 22,06,575/-) 17.05.2012 Ex. PW17/T-6 08.05.2012 US $ 198515.00 97,92,200/- on D-11, Page 472, (INR 1,05,21,295/-) 23.05.2012 Ex. PW17/T-7
118. Besides the aforesaid order contracts, perusal of the record shows that A-1 had also submitted the bill of exchange signed CC No. 3/2019 CBI Vs. Surender Singh & Ors. Page No. 76 of 178 by A-5 at point Q-4 Ex.PW39/C along with other documents to complainant bank for collection/discounting. PW39 Sh. Vijay Verma, Sr. Scientific Officer after comparing the signature at point Q-4 on Bill of Exchange Ex.PW39/C with specimen signatures of A-5 Ex.PW- 39/D(S-13 to S-22) had opined in his report Ex. PW39/B that the questioned signature Q-4 matched with the specimen signature of the same person as provided to him vide S-13 to S-22 which were attributed to A-5 Ashish Puri.
119. The aforesaid evidence on record clearly establishes beyond any reasonable doubt that A-5 was the proprietor of M/s Mapex International FZE and he had signed the bill of exchange Ex. PW39/C which was misused by A-1 for cheating complainant bank. Hence, prosecution has established this allegation against A-5.
120. After considering all the evidence available on record against A-5 Ashish Puri, I am of the considered opinion that prosecution has failed to prove the charges of sec.468 and 471 I.P.C. against the accused.
121. As regard the offence of criminal conspiracy, Ld. Counsel for A-5 has vehemently argued that there is no evidence on record to prove that A-5 was in conspiracy with other co-accused. It was argued that suspicion howsoever strong cannot take place of legal proof. It was argued that the 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. He further argued that in the charge of conspiracy, the court has to guard itself against the danger of CC No. 3/2019 CBI Vs. Surender Singh & Ors. Page No. 77 of 178 unfairness to the accused as introduction of evidence against some may result in the conviction of all which has to be avoided. Ld. Counsel has argued that there has to be cogent and convincing evidence against each accused charged with the offence of conspiracy. He further argued that the accused is entitled to benefit of every reasonable doubt and when the accused offers a reasonable explanation of his conduct, then, even though he cannot prove his assertion, they should ordinarily be accepted unless the circumstances indicate that they are false. Ld. Counsel for A-5 has placed reliance on the citations mentioned in para 40 herein above.
122. I have gone through the case law relied by Ld. Counsel for A-5. Unlike other offences, where the direct evidence may be forthcoming, it is very difficult to find direct evidence in the offence of criminal conspiracy because criminal conspiracy is always hatched in the darkness and there are obviously no written agreements for committing such offences. The essence of criminal conspiracy is an agreement to do an illegal act and such an agreement can be proved by circumstantial evidence as it is a matter of common experience that direct evidence to prove conspiracy is rarely available. The circumstances proved before and after the occurrence have to be considered to decide about the complicity of the accused.
123. Coming to the facts of the present case, there are number of such circumstances which show that A-5 was involved in conspiracy with A-1 to A-4 for defrauding the complainant bank and siphoning of the funds like opening of accounts in the names of firms of A-5 in Yes Bank and Corporation Bank in 2009-2010 just prior to A-1 applying with CC No. 3/2019 CBI Vs. Surender Singh & Ors. Page No. 78 of 178 complainant bank for credit facilities. Use of order contracts of the firm of A-5 M/s Mapex International by A-1 for release of credit limits by A-1 and then transfer of those funds in the accounts of firms of A-5 which had no business relations with M/s National Traders. These funds were again transferred to another firm of A-1 namely Surya Enterprises on the same day when funds were received from National Traders without any evidence of there being any business relations between Surya Enterprises and M/s A.P. Enterprises. A-5 has not been able to give any explanation, leave apart cogent explanation, about this circular movement of money. He has not led any evidence to prove his defence that A-1 to A-4 had stolen documents from his office and had misused them without his knowledge or consent. Hence, his defence has remained a bald statement which cannot be relied upon. These circumstances against A-5, proved by the prosecution, are sufficient to establish that A-1 was hand in gloves with A-1 to A-4 and had the knowledge of illegal objects of A-1 to A-4. Hence, I am of the considered opinion that prosecution has established beyond reasonable doubts that A-5 was in criminal conspiracy with A-1 to A-4 to cheat the complainant bank.
ROLE OF A-6 SUBODH KUMAR SINGH ADVOCATE.
124. Admittedly A-6 Subodh Kumar Singh, Advocate was legal retainer of Union Bank of India. He has given legal search report dated 16.08.2010 (D-18 page 65-72) Ex. PW23/D to complainant bank in respect of property no. J-7/53, Rajouri Garden, New Delhi at the instance of the complainant bank. He has also given one supplementary report dated 25.11.2010 to the bank. These reports have also been proved by PW-33 Inspector Sushil Kumar as Ex. PW CC No. 3/2019 CBI Vs. Surender Singh & Ors. Page No. 79 of 178 33/S (D-69 page 65-75).
125. As per para 16 of the chargesheet, it has been alleged that A-6 had fraudulently given false title verification report of the property mortgaged with the loan account. He intentionally gave his legal search report on 16.08.2010 i.e., two days prior to visiting the Sub-Registrar Office as is revealed from the receipt of fees payment dated 18.08.2010. This clearly shows that A-6 did not bother to check the record before giving his report. In his report Ex. PW 23/D, A-6 certified that A-1 Surender Singh had a good, clear, valid, enforceable, absolute and marketable title in respect of the entire aforesaid property consisting of basement, ground floor, first floor, second floor and third floor along with the roof rights. It was further stated that the falsehood of the report came to light when another report dated 10.09.2013 Ex. PW20/A (D-69, page 259-271) was given by Sh. D.S. Dalal, advocate.
126. Vide order dated 18/1/2017 charge has been framed against A-6 for the offences under Section 120-B IPC read with Section 420/468/471 IPC and 13(1)(d) of P.C. Act. Charge has also been framed against him for the substantive offences under Section 420/468/471 IPC.
127. Ld. PP has argued that A-6 was assigned the duty of verification of title documents of the collateral security given by A-1 and he has shown A-1 to be the owner of entire property no. J-7/53, Rajouri Garden, Delhi. However, the investigation reveals that A-1 was not the owner of the entire property as he had sold the first floor along with the roof rights of the said property to his son A-2 vide sale deed dated CC No. 3/2019 CBI Vs. Surender Singh & Ors. Page No. 80 of 178 31.01.2007, A-2 further sold the second floor without roof rights to A-5 on 03.03.2009 vide registered sale deed and third floor without roof rights to A-3 on 01.06.2010 vide registered sale deed. He further argued that the falsity of the report becomes apparent from the fact that the inspection receipt dated 18.08.2010 has been filed along with the inspection report. A-6 has not inspected the record of Sub Registrar and has merely filed his report on the basis of documents supplied by Union Bank of India. He also submitted that the testimony of PW-3 Desh Bandhu Gosain shows that A-1 had sold the first floor of the property with roof rights to Angad Singh (A-2) who further sold the second floor without roof rights to A-5 Ashish Puri on 03.03.2009 and third floor without roof rights to A-3 on 01.06.2010 which clearly establish that A-1 was not the exclusive owner of the entire property when he applied for the loan/credit facility with the bank.
128. Ld. PP further referred to the legal search report dated 10.09.2013 Ex. PW20/A (D-69) and testimony of PW20 Dhurender Singh Dalal to argue that his report also falsifies the report filed by A-6. He further argued that PW36 Raghubir Chander Goel in his staff accountability report Mark PW36/A in relation to the account of M/s National Traders has stated that it appeared that A-6 made mistake in not disclosing the transfer of first floor with roof rights of property at J- 7/53, Rajouri Garden, Delhi. Ld. PP argued that in the present case, A- 6 was not required to give any legal opinion but he had been assigned the responsibility to give finding on the facts regarding the title of A-1 qua property no. J-7/53, Rajouri Garden, Delhi but A-6 failed to perform his duty and has given a false report, on the basis of which the loan application of A-1 was processed and loan was sanctioned and CC No. 3/2019 CBI Vs. Surender Singh & Ors. Page No. 81 of 178 disbursed to A-1.
129. Per Contra, Ld. Counsel for A-6 has vehemently denied any misconduct on the part of A-6. He submitted that A-1 obtained the loan by deceitful means by falsely showing himself to be the owner of entire property no. J-7/53, Rajouri Garden, Delhi. He argued that neither in the complaint Ex. PW21/A (D-2) nor in the FIR Ex.PW33/A (D-1), A-6 has been named as an accused. Even PW21 Bharat Bhushan admitted in his cross examination that the complaint was directed against proprietor of M/s National Traders.
130. Ld. Counsel for A-6 argued that the date "16.08.2010" on the legal search report was a typographical error and the same is apparent from the fact that A-6 had enclosed the receipt dated 18.08.2010 when he visited the Sub Registrar Office. He submitted that mere typographical mistake of the date in the report Ex.PW23/D cannot impute criminal liability on A-6 without any other positive evidence to show the culpability of A-6 in the offence. He argued that PW33 Inspector Sushil Kumar in para 53 of his cross examination has admitted that A-6 had annexed two receipts of inspection along with his report submitted to Union Bank of India. He also admitted that A-6 had also submitted another report dated 25.11.2010 (wrongly mentioned in the deposition as 28.11.2010) along with the receipt dated 14.11.2010 to the bank which clearly indicates that the date on the report Ex.PW23/D was a mere typographical error and nothing more.
131. Ld. Counsel for A-6 also referred to the below mentioned legal search reports conducted by counsels for other banks:-
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(i)Legal search report dated 05.06.2009 Ex.PW60/K (D-45, page 113 to
120) given by Ujjawal Kumar to Bank of Baroda;
(ii)Title search report dated 11.02.2009 Ex. PW33/DA (D-37, page 106 to 115) given by G. Rajyalakshi Sharma to Canara Bank, Gole Market;
(iii)Title search report dated 12.07.2010 Part of Ex.PW2/D (D-143, page 14 to 25) given by Sh. S.K. Jha to Allahabad Bank, South Ex. New Delhi;
(iv)Title search report dated 28.06.2012 Ex.PW10/B (D-139, page 50 to
57) given by Ajant Kumar to Corporation Bank, Vasant Vihar, New Delhi;
(v) Title search report dated 15.10.2012 Ex. PW55/DA (D-18, page 63 to 58) given by Sanjeev Gupta to complainant bank;
(vi) Legal search report dated 09.05.2013 Ex. PW55/F (D-12, page 229-
230) given by Sanjeev Gupta to complainant bank; and
(vii) Title search report dated 10.09.2013 Ex. PW20/A (D-69, page 259 to 271) given by Sh. Dhurender Singh Dalal to complainant bank.
(viii) Title search report dated 26.03.2010 Ex. PW2/D (D-143, page 2 to
13) given by Bhardwaj Vashisth & Associates to Allahabad Bank, South Extn. Branch, New Delhi.
132. Ld. Counsel for A-6 argued that perusal of these reports would show that the lawyers who had conducted the title search had given their reports on the basis of the copies of title documents supplied to them by the bank and the reports were confined finding the genuineness of the copies of documents supplied by the Banks. He argued that the first title search report was conducted by Sh. Ujjawal Kumar, Advocate but even he was not able to find any title document executed by A-1 in favour of A-2 or the sale deed executed by A-2 in CC No. 3/2019 CBI Vs. Surender Singh & Ors. Page No. 83 of 178 favour of A-5 on 03.03.2009, sale deed dated 23.10.2007 in favour of Gurmukh Singh and Satnam Singh or the sale deed executed by Gurmukh Singh and Satnama Singh dated 28.05.2009 in favour of A-3 Gur Sahib Singh. Ld. Counsel for A-6 has argued that even the report Ex.PW20/A given by Sh. Dhurender Singh Dalal, Advocate is confined to the documents supplied to him by the bank and he could not search any title documents different from the documents provided by the bank. It was also argued that all these transactions had already come to the knowledge of Union Bank of India and there was nothing new which was stated in the report Ex.PW20/A.
133. Ld. Counsel for A-6 has also argued that A-6 in his title search report dated 16.08.2010 Ex. PW23/D has stated in clause 15 that the entire chain of sale deed given to him were verified by A-6 in the office of Sub-Registrar, Janak Puri and the same were found genuine. He further submitted that in clause 17 of his report, A-6 had given rider to the bank that the property should be physically verified but no physical verification as carried out by the bank after 16/18.08.2010. It was also argued that in the report dated 25.11.2010, A-6 had clearly stated that he had inspected the original title documents in Bank of Baroda and his report was confined to genuineness of the documents.
134. Ld. Counsel for A-6 also argued that fraud was committed by A-1 with Bank of Baroda in the year 2009 and Bank of Baroda did not file any complaint against the said fraud. The title search report Ex. PW60/K (Part of D-45) given by Sh. Ujjawal Kumar also did not reveal the sale of part of the property no. J-7/53, Rajouri Garden by A-1 and if CC No. 3/2019 CBI Vs. Surender Singh & Ors. Page No. 84 of 178 he has not been made an accused, how the criminal liability can be affixed on A-6. He further argued that there is no evidence on record to show that A-6 was in conspiracy with other accused persons or had met any other accused persons or had gained any pecuniary advantage for giving false report. He argued that PW33 during his cross examination has admitted that no other incriminating evidence was found against A- 6 during the course of investigation except the two reports dated 16.08.2010 and 25.11.2010. He further argued that perusal of testimony of PW35 Ravi Ranjan shows that the proposal sent by the branch to the Regional Office did not contain the title search report prepared by A-6, even in the queries sought by the Regional Office, no clarification was asked regarding the title search report and sanction granted by the Grid and ratified by General Manager without going through the reports filed by A-6, hence, the report of A-6 were not the basis of grant of sanction as they were not even considered by the Regional Office nor any witness has deposed to the effect that reports filed by A-6 formed basis of grant of sanction of the credit facility/loan to M/s National Traders.
135. I have perused the record carefully and have also gone through the judgments relied upon by counsel for A-6. At the outset, it may be mentioned that there is no dispute to the fact that A-6 has filed two reports dated 16.08.2010 Ex.PW23/D and the report dated 25.11.2010 (both the reports also collectively exhibited as Ex.PW33/S) at the instance of complainant bank. It is also forthcoming of the testimonies of the witnesses that there is no other incriminating evidence against the accused except these two reports. The testimonies of witnesses particularly PW35 also show that the reports CC No. 3/2019 CBI Vs. Surender Singh & Ors. Page No. 85 of 178 filed by A-6 never formed part of the documents sent to the Regional Office along with the proposal sent by the Branch Office. No clarification was also sought by Regional Office regarding the title search reports prepared by A-6 and the proposal prepared by the Regional Office was considered and approved by the Grid, DGM (the sanctioning authority) and General Manager without going through the reports prepared by A-6. Hence, it is established beyond any reasonable doubt that the reports prepared by A-6 did not form the basis of decision arrived upon by the sanctioning authority.
136. Hon'ble Supreme Court in CBI Vs K. Narayanarao, VII 2012 SLT 260 observed in para 26 and 27 as under:
"26. Therefore, the liability against an opining advocate arises only when the lawyer was an active participant in a plan to defraud the Bank. In the given case, there is no evidence to prove that A-6 was abetting or aiding the original conspirators.
27. However, it is beyond doubt that a lawyer owes an "unremitting loyalty" to the interests of the client and it is the lawyer's responsibility to act in a manner that would best advance the interest of the client. Merely because his opinion may not be acceptable, he cannot be mulcted with the criminal prosecution particularly, in the absence of tangible evidence that he associated with other conspirators. At the most, he may be liable for gross negligence or professional misconduct if it is established by acceptable evidence and cannot be charged for the offence under Sections 420 and 109 of IPC along with other conspirators without proper and acceptable link between them. It is further made clear that if there is a link or evidence to connect him with the other conspirators for causing loss to the institution, undoubtedly, the prosecuting authorities are entitled to proceed under criminal prosecution. Such tangible CC No. 3/2019 CBI Vs. Surender Singh & Ors. Page No. 86 of 178 materials are lacking in the case of the respondent herein."
137. In Nita Deep Rastogi Vs CBI (Supra), Hon'ble Delhi High Court in para 8 of the judgment observed as under:
"8. ........... Apart from the mere statement that her report is false, there is no material to show that she was in criminal conspiracy with any of the accused to commit the offences aforementioned. The report by itself cannot constitute either the substantive evidence or even a piece of circumstantial evidence to bring home the charge against the petitioner for committing the offence for criminal conspiracy it also cannot constitute even a prima facie material to charge her with the substantive offence under Section 467 Cr.P.C. It is one thing to say that the petitioner could have exhibited greater professional care and competence and quite a different thing to say that her professional opinion attracts criminal liability in the manner alleged by the prosecution"
138. In the latest judgment Hon'ble Chhattisgarh High Court in Subha Jakkanwar Vs State of Chhattisgarh (supra) while relying upon the judgment of Hon'ble Supreme Court in CBI Vs K. Narayanarao (supra) observed that liability against an opining advocate arises only when the lawyer was an active participant in a plan to defraud the bank. It was further observed that merely because his opinion may not be acceptable, he cannot be mulcted with the criminal prosecution, particularly, in the absence of tangible evidence that he associated with other conspirators. At the most, he may be liable for gross negligence or professional misconduct, if it is established by acceptable evidence and cannot be charged for the offences u/s 420 IPC and 109 IPC along CC No. 3/2019 CBI Vs. Surender Singh & Ors. Page No. 87 of 178 with other conspirators without proper and acceptable link between them.
139. As already noticed in the foregoing paras, prosecution has not been able to establish any active participation of A-6 with other co- accused to cheat or defraud bank. In fact there is no evidence at all to show that A-6 had ever been in touch with A-1 to A-5 or that he had given his report in furtherance of criminal conspiracy with them. There is also no evidence on record to establish that A-6 gained any pecuniary benefit as a result of preparing such report. Apart from the statement in the charge-sheet that report prepared by A-6 was false, there is no material to show that A-6 was involved in the criminal conspiracy with other co-accused to commit the offence as alleged. The report by itself is neither substantial nor even a circumstantial piece of evidence to bring home the charges against the accused Subodh Kumar Singh for committing the offence of criminal conspiracy. Hence, in view of the law laid down by Hon'ble Supreme court and various Hon'ble High Courts, as discussed above, I am of the considered opinion that prosecution has failed to prove the charges of criminal conspiracy, cheating, forgery for the purpose of cheating and use of forged documents as genuine documents against A-6 beyond reasonable doubts.
ROLE OF A-7 SHARAD JOSHI
140. A-7 Sharad Joshi was AGM and Branch Head of complainant bank at the relevant time.
141. As per the charge sheet filed by the CBI, following CC No. 3/2019 CBI Vs. Surender Singh & Ors. Page No. 88 of 178 allegations have been levelled against A-7:-
(I) A-7 prepared false Due Diligence Report dated 10.09.2010 Ex.
PW35/C (D-20) of M/s National Traders. [This report has also been exhibited as Ex. PW23/B (D-10)] (II) A-7 prepared false due diligence report dated 12.08.2010 Ex. PW35/B (D-20 Page 382) of property no. J-7/53, Rajouri Garden, New Delhi. [This report was also marked as Mark PW12/1 (D-20 Page 382 )] (III) A-7 did not check the CIBIL report of M/s National Traders and on query by Regional Office, A-7 fraudulently wrote that they had checked the CIBIL report of firm/guarantor and report is satisfactory. However, no such report was obtained from CIBIL.
(IV) A-7 released the funds on the basis of photocopy of process note Ex. PW18/F(D-10) signed by DGM without obtaining proper sanction letter after approval by G.M. along with his observation and its compliances.
(V) On 14.05.2012 M/s National Traders applied for release of PC limit of Rs.185 lacs which was processed by Lalit Kumar and fraudulently approved by A-7. PC was released after unauthorized merger of FDBP limit with PC limit.
142. Vide order dated 18/01/2017 charge was framed against A-7 for the offences under Section 120-B IPC read with Section 420/468/471 IPC and 13(1)(d) of P.C. Act. Charge was also framed against him for the substantive offences u/sec. 420/468/471 IPC and 13(2) r/w Section 13(1)(d) of PC Act.
143. Now I shall take up allegations levelled against A-7 one by one and see if the prosecution has been able to prove these allegations or not.
ALLEGATION No.1 A-7 prepared false Due Diligence Report dated 10.09.2010 CC No. 3/2019 CBI Vs. Surender Singh & Ors. Page No. 89 of 178 Ex. PW35/C (D-20) of M/s National Traders. [This report has also been exhibited as Ex. PW23/B (D-10)]
144. Ld. PP for CBI has argued that A-7 had prepared false Due Diligence Report of M/s National Traders dated 10.09.2010 Ex.PW35/C (D-20, page 256). It was submitted that the report named three witnesses (1)Parmeet Singh of M/s Reliable Motors, (2)Ashish Puri of M/s Durga Agencies(A-5), and (3) Avinash Ahluwalia of M/s Orient Auto Parts from whom inquiry was made by A-7 regarding the firm and they expressed positive opinion about the party. It was further stated in the report that overall party enjoys good reputation and has a name in the market. It was argued that Ashish Puri (A-5) is one of the conspirators of the offence and has been arrayed as accused no. 5 in the case. He has denied that any bank official had contacted him for verification of M/s National Traders. Avinash Ahluwalia was a fictitious person and report Ex. PW57/A(D-153) of PW57 HC Kuldeep Kumar establishes that no such person or firm existed on the address mentioned in due diligence report.
145. Ld. PP has further argued that prosecution has examined Parmeet Singh as PW14 and his brother Jasmeet Singh as PW11 and both these witnesses have deposed that no bank officials visited them to verify the credentials of M/s National Traders. PW14 Parmeet Singh also deposed that he had never heard the name of Surender Singh Chandhok and M/s National Traders and he never had business dealing with them. Although, he had admitted that he knew Angad Singh but he never had any business dealing with him also. PW14 further testified that he had never heard the names of Sharad Joshi (A-7) and S.K. Grover (A-8) and the bank officials from complainant bank had CC No. 3/2019 CBI Vs. Surender Singh & Ors. Page No. 90 of 178 never sought any information from his father regarding the credential of the borrower. Ld. PP argued that the aforesaid testimony of the witnesses clearly establishes that due diligence report was falsely prepared by A-7. Ld. PP also pointed out that PW9 Amardeep Singh in para 1 of his testimony has deposed that his firm M/s Satguru International was conducting activities from 36, Vardan House, Kashmere Gate. Ld. PP has argued that Amardeep Singh is brother of A-1 Surender Singh and in the cross examination by counsel for A-7, he testified that he did not know any Avinash Ahluwalia or M/s Orient Auto Parts. It was argued that later on PW9 volunteered to depose that it is possible that M/s Orient Auto Parts of Avinash Ahluwalia may be in the same complex but the volunteered portion of PW9 is an attempt to save his brother Surender Singh (A-1).
146. Per Contra, Ld. Counsel for A-7 has argued that testimonies of PW14 Parmeet Singh and PW11 Jasmeet Singh cannot be safely relied upon as they have not deposed truthfully and have concealed material facts from the court. It has been argued that both these witnesses are real brothers and in their examination-in-chief they have deposed that their father Surjeet Singh used to look after the business of M/s Reliable Motors during his life time and after his death in 2011, these witnesses conducted the business of the firm. They also deposed that they had no knowledge or information that A-1 Surender Singh or M/s National Traders had applied for credit facility from complainant bank. In their examination-in-chief, both these witnesses denied that any official of the bank had inquired from them regarding the credential of M/s National Traders. Counsel for A-7 argued that PW11 in para 2 of his cross examination had admitted that their firm CC No. 3/2019 CBI Vs. Surender Singh & Ors. Page No. 91 of 178 had landline number 23936202 and he had also one mobile connection of Dolphin Service provider but he could not recall the number. PW11 stated that his father might have received the call from the bank but he never informed him about the same. PW14 Parmeet Singh also deposed in the cross examination that his father may have received any call from the bank but he was not aware of it. He also admitted that his father was having separate mobile number of Dolphin mobile. Counsel for A-7 submitted that PW11 in the cross examination has stated that they used to have transactions with M/s National Traders but PW14 deposed that he was not aware if their firm was having business transactions with M/s National Traders. Counsel for A-7 also submitted that he had pointed out RTGS transaction Rs. 2.08 lacs to M/s Reliable Motors and statement of account of M/s National Traders (D-6) showing the relevant entries along with the relevant certificate issued by the bank was proved as Ex. PW14/A (colly). He also argued that both these witnesses had admitted that their firm was having account in PNB, Kashmere Gate. PW14 also could not tell as to how the stamp of M/s Reliable Motors was recovered by CBI from the office of M/s National Traders. He also denied the suggestion that M/s National Traders had given their telephone number since they were known to them. Ld. Counsel for A-7 further pointed out the entries showing payment to M/s Reliable Motors dated 21.06.2010, 15.09.2010, 01.10.2010 and 11.10.2010 in the statement of account of M/s National Traders at Punjab National Bank available at D-145 and the statement of account of Saab Enterprises in Yes Bank showing entry dated 22.05.2009 of payment to Reliable Motors available at D-117, page 9 to argue that these entries show that there was business relation between M/s National Traders and Reliable Motors.
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147. Ld. Counsel for A-7 argued that another witness in the due diligence report is A-5 Ashish Puri. He argued that PW48 Shiv Kant Sahu has admitted in the cross examination by Ld. PP that in his statement u/s 161 Cr.P.C before IO, he had stated that he had identified the signature of Ashish Puri on the PAN card bearing no. AOQPP2164L. He further argued that testimony of PW59 Devender Singh also shows that A-5 Ashish Puri was known to A-1 Surender Singh, A-2 Angad Singh, A-3 Guru Sahib Singh and A-4 Harleen Kaur and they all were working together. It was argued that PW33 Inspector Sushil Kumar in the cross examination dated 13.05.2019 has deposed that during the search of office of M/s National Traders, he found the original registration certificate of M/s Mapex International FZE in which the name of the Manager was mentioned as A-5 Ashish Puri. He further admitted that during the course of investigation he had come across of documents of M/s Mapex International FZE signed by A-5 Ashish Puri in the file of M/s National Traders which shows that they were working with each other. PW33 further replied to a question that he had inquired from Ashish Puri (A-5) and he disclosed that he was also not contacted by the banker and further replied that during investigation it came to his knowledge that A-5 Ashish Puri was friend of A-2 Angad Singh and he used to sit in the office of M/s National Traders even at the time of visit of bank official and his statement that he (A-5) was not contacted by the bank official was not relied by him. PW33 further deposed that he came to the conclusion that A-5 used to sit in the office of M/s National Traders as he found the photo of Ashish Puri in the office of M/s National Traders and on inquiry about the photo from the guards and the staff of the office, they informed that the photo CC No. 3/2019 CBI Vs. Surender Singh & Ors. Page No. 93 of 178 belongs to Ashish Puri and he was friend of A-2 Angad Singh and he used to sit in that office with A-2 Angad Singh. Counsel for A-7 also pointed out that the two photographs of A-5 found in the office of M/s National Traders are available in file D-36 Ex. PW33/K and the registration certificate of M/s Mapex International Ex. PW33/P is available in file D-46. It was argued that these facts clearly shows that A-5 was well known to A-1 Surender Singh and he has falsely denied having met the officials of Complainant bank for verification of credential of M/s National Traders.
148. As regards the third witness to the Due Diligence Report dated 10.09.2010 Ex. PW35/C, namely Avinash Ahluwalia, counsel for A-7 has argued that the address of the firm M/s Orient Auto Parts is the same as that of PW9 Amardeep Singh who was also having his office at the same address. It was argued that PW9 Amardeep Singh has deposed that he was earlier conducting the activities of his firm from 36, Vardan House, Kashmere Gate. He also deposed that A-1 Surender Singh was his elder brother. He argued that in the cross-examination PW9 deposed that he did not know of any Avinash Ahluwalia or M/s Orient Auto Parts but volunteered that Vardan House was a big complex having around 100 to 150 shops at different floor and it is possible that M/s Orient Auto Parts of Avinash Ahluwalia may be in the same complex. Ld. Counsel for A-7 argued that testimony of this witness creates a doubt on the story of the prosecution that there was no firm by the name of M/s Orient Auto Parts in Vardan House. He argued that perusal of the Due Diligence Report shows that A-7 had mentioned the mobile number of Avinash Ahluwalia in the report. However, this mobile number was not mentioned in the notice u/s 160 CC No. 3/2019 CBI Vs. Surender Singh & Ors. Page No. 94 of 178 Cr.P.C by the IO. He argued that A-7 has examined D7W7 Rajnish Narang, Branch Manager, UBI, and Rajouri Garden Branch, who has produced the account opening form along with documents of Ms Jasmeen Kaur Chandok as Ex.D7W7/A (colly). He argued that perusal of the mobile bill attached with the account opening form shows the number 9911112625 which is the same as that of Orient Auto Parts mentioned in the due diligence report. He also argued that statement of accounts of M/s National Traders (D-6, page 16) shows payment of Rs. 19,45,213/- to M/s Sat Guru International by RTGS on 23.04.2011. Similarly, the statement of account of M/s National Traders (available at D-5, page 19) shows payment of Rs.1.5 lac on 04.10.2012 to Sat Guru International. He also argued that the audited balance sheets filed by M/s National Traders mentions the name of Amardeep Singh in the details of unsecured loan as on 31.03.2009 (D-10, page126), 31.03.2011 (D-10, page 173) and 31.03.2010 (D-10, page 336). It was argued that PW-57 did not make proper attempt to serve Avinash Ahluwalia and I.O. also did not provide mobile numbers of the witness to the process server, which could have helped him in tracing out the witness. It was argued that the Due diligence report dated 10/9/2010 was correct.
149. I have given my thoughtful consideration and have perused the record carefully. Perusal of the Due Diligence Report Ex. PW35/C shows that A-7 had made inquiry from three witnesses out of which two have denied having met A-7 or any other bank official and the third witness was untraceable on the given address which creates doubt on the genuineness of the report.
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150. Ld. Counsel for A-7 had tried to discredit the testimony of PW14 Parmeet Singh and PW11 Jasmeet Singh on the ground that they have not deposed truthfully as they concealed their business relations with A-1 Surender Singh and A-2 Angad Singh which was established from the statement of account of M/s National Traders Ex. PW14/A (colly) which contained entries of payments to M/s Reliable Motors. He also argued that these witnesses have also admitted that their business address and landline number mentioned in the Due Diligence Report was correct. However, they deliberately deposed that they were not contacted by the bank official for verification of M/s National Traders.
151. A careful perusal of testimony of PW11 as well as PW14 would show that both these witnesses have deposed that their father Surjeet Singh used to look after the business of Reliable Motors during his lifetime and after his death in 2011 they had started conducting the business of the firm. They have specifically deposed that they were not contacted by any bank official regarding the credentials of M/s National Traders but they were not aware if their father might have received any call from the bank in this regard. They have also deposed that their father was having a separate mobile number of Dolphin Mobile. Their deposition raises serious doubts on the genuineness of the Due Diligence Report Ex. PW35/C prepared by A-7. Nowhere in the cross examination of PW11 and PW14, any suggestion has been given by Ld. defence counsel that PW14 was also looking after the business of M/s Reliable Motors during the lifetime of his father. The Due Diligence Report dated 10.09.2010 is of the period when Sh. Surjeet Singh was alive and was looking after the business. In such a situation, the Due CC No. 3/2019 CBI Vs. Surender Singh & Ors. Page No. 96 of 178 Diligence Report ought to have mentioned the name and mobile number of Surjeet Singh (father of PW14) if A-7 had contacted Surjeet Singh either personally or through telephone for verification of credentials of M/s National Traders instead of the name and mobile number of PW14 Parmeet Singh who was not even involved in the business in 2010.
152. As regards A-5 Ashish Puri, Ld. Counsel for A-7 has argued that testimonies of PW48 Shiv Kant Sahu and PW59 Devender Singh clearly show that A-5 was having close relations with A-1 to A-4 and they were working together. Testimony of PW-33 Inspector Sushil Kumar shows that during the search of office of M/s National Traders, documents of M/s Mapex International signed by A-5 and original registration certificate were recovered which also corroborates the fact that they were working together. PW33 also deposed that he had not relied upon the statement of A-5 that he was not contacted by any banker as during the investigation, he came to know that A-5 was friend of A-2 and he used to sit in the office of M/s National Traders. It was argued that A-5 had falsely denied having met the official of Complainant bank for verification of credential of M/s National Traders.
153. However, as noted in the foregoing paras, A-5 has categorically stated in his statement u/s 313 Cr.P.C that he was not contacted by A-7 or any bank official from complainant bank for verification of credential of M/s National Traders and he has informed this fact to IO and other CBI officials during the course of investigation also but his statement was not believed by the IO. Perusal of the Due Diligence Report Ex.PW35/C shows that it does not bear the signature CC No. 3/2019 CBI Vs. Surender Singh & Ors. Page No. 97 of 178 of A-5. A-7 has not examined any independent witness to substantiate his claim that he had made inquiries from the persons named in his report. Even IO has not conducted any inquiry from independent sources before rejecting the version given by A-5. Hence, in the absence of any signature of A-5 on the Due Diligence Report and his categorical denial, I am of the considered opinion that A-7 should have produced some oral/documentary evidence to substantiate his defence that he had made inquiry from A-5. In the absence of any such independent evidence produced by A-7 to corroborate the fact he had made enquiry from A-5, I am not inclined to accept the version given by him.
154. Ld. Counsel for A-7 has submitted that Avinash Ahluwalia of M/s Orient Auto Parts was having the same address as that of PW9 Amardeep Singh who is the elder brother of A-1 Surender Singh and was having his office on the same address i.e. 36, Vardan House, Kashmere Gate. It was argued that in the cross examination, PW9 Amardeep Singh has deposed that he did not know of any Avinash Ahluwalia or M/s Orient Auto Parts but volunteered that Vardan House was a big complex having around 100 to 150 shops at different floors and it is possible that M/s Orient Auto Parts may be in the same complex. It was argued that testimony of this witness creates doubt on the report of the process server PW-57HC Kuldeep Kumar. He further argued that the mobile number of Avinash Ahluwalia appearing in the Due Diligence Report was not mentioned in notice u/s 160 Cr.P.C. He argued that A-7 had examined D7W7 Rajnish Narang, Branch Manager, UBI, Rajouri Garden who had produced account opening form of Ms Jasmeen Kaur Chandok as Ex.D7W7/A. It was argued that CC No. 3/2019 CBI Vs. Surender Singh & Ors. Page No. 98 of 178 the mobile bill attached with the account opening form show the number 9911112625 which is the same as mentioned in Due Diligence Report. It was also argued that the statement of account of M/s National Traders Ex. PW14/A (D-6) shows payment of Rs. 19,45,213/- to M/s Sat Guru International on 23.04.2011 and payment of Rs. 1.5 lacs on 04.10.2012. It was also argued that audited balance sheet filed by M/s National Traders (D-10) mentions the name of Amardeep Singh in the details of unsecured loan as on 31.03.2009 (on page 126), 31.03.2011 (Page 173) and 31.03.2010 (Page 336). It was argued that PW57 did not make proper attempts to serve Avinash Ahluwalia and the report Ex.PW35/C was correct.
155. The contention of Ld. Defence counsel that testimony of PW9 creates doubt on the story of prosecution that there was no firm by the name of Orient Auto Parts in Vardan House is without any substance. Arguments of counsel for A-7 that PW9 Amardeep Singh was elder brother of A-1 and was also having business relations with A- 1 and on the other hand, he did not even know about Avinash Ahluwalia doing business in the same business complex are self contradictory. If PW9 was so close to A-1, there is more reason to believe that he must also have been aware of the fact that Avinash Ahluwalia was having his office in Vardan House, more particularly, if he was using the same number which was appearing in the mobile bill of his wife Jasmeen Kaur Chandok. There is no explanation as to why wife of PW-9 was paying the bill of mobile number which was being used by Avinash Ahluwalia. However, it is also highly doubtful as to why a businessman who is doing independent business would use the mobile number of another person. It is also pertinent to note here that the copy of the CC No. 3/2019 CBI Vs. Surender Singh & Ors. Page No. 99 of 178 mobile bill attached with D7W7/A pertains to the period 10.04.2010 to 09.05.2010. Hence, the possibility of Avinash Ahluwalia possessing the mobile number which was earlier used by Jasmeen Kaur is also ruled out as this mobile number was being used by Jasmeen Kaur during the said period. Rather, it raises a strong doubt that A-1 in conspiracy with A-7 gave a fictitious name using the address and mobile number of his sister-in-law in the Due Diligence Report Ex.PW35/C. Mere fact that firm of PW-9 was having business transaction with firm of A-1or that name of PW-9 was shown in the list of Unsecured Loans in the audited balance sheet of M/s national Traders does not lend any weight to the testimony of PW-9 Amar deep Singh.
156. The report Ex.PW57/A prepared by PW57 HC Kuldeep Kumar shows that the process server had made inquiry not only from the shopkeepers but also from the Joint Secretary of the Association but neither Avinash Ahluwalia nor office of M/s Orient Auto Parts was traceable. Mere non-mentioning of the mobile number by the IO on the notice u/s 160 Cr.P.C does not vitiate the report. Hence, this report can be safely relied upon.
157. In view of the aforesaid facts and circumstances, I am of the considered opinion that the Due Diligence Report Ex. PW35/C(D-
20) prepared by A-7 is false and appears to have been made without conducting proper due diligence. The prosecution has proved the allegation beyond reasonable doubts.
ALLEGATION No. 2A-7 prepared false due diligence report dated 12.08.2010 Ex. PW35/B (D-20 Page 382) of property no. J-7/53, Rajouri CC No. 3/2019 CBI Vs. Surender Singh & Ors. Page No. 100 of 178 Garden, New Delhi. [This report was also marked as Mark PW12/1 (D-20 Page 382 )]
158. Ld. PP further submitted that the due diligence report prepared by A-7 qua the collateral security i.e. property no. J-7/53, Rajouri Garden, New Delhi was also found to be false. As per this report, A-7 had made inquiry from two witnesses namely Aman Singh of M/s Perfect Property and Mr. Negi of Parl Property. However, the witnesses mentioned in the report from whom A-7 had purportedly made inquiries, were not found at their addresses mentioned in the report. This fact stands established by the testimony of PW58 Ct. Bijender Singh who has proved his report Ex. PW58/A (D-154) qua Aman Singh and report Ex. PW58/B (D-155) qua Mr. Negi. It was argued that both these witnesses were fictitious persons and for this reason only A-7 did not produce any one of these witnesses before the court in his defence evidence despite examining as many as seven witnesses in his defence.
159. Per Contra, Ld. Counsel for A-7 has submitted that although the report dated 12.08.2010 Ex.PW-35/B has been signed by A-7 but the contents of the report have been filled by A-8 (this fact was also admitted by counsel for A-8 during the course of arguments after confirming from A-8). It has been submitted that as per para 11 of the charge-sheet, A-7 had fraudulently mentioned that he inquired from Aman Singh, M/s Perfect Property and Mr. Negi, M/s Parl Property whereas no such firms existed on the given addresses. Counsel for A- 7 has submitted that cross examination of PW58 Bijender Singh would show that he has deposed that mobile numbers of the persons to whom notice u/s 160 Cr. P.C was to be served, were not provided to him. He CC No. 3/2019 CBI Vs. Surender Singh & Ors. Page No. 101 of 178 also deposed that he had not mentioned the year regarding which he was making the inquiry. Counsel for A-7 has argued that perusal of the report Ex.PW58/A (D-154) would show that the witness had met the son of Sheetal Khanna who informed him that no person by the name of Aman Singh was residing in the property no. 3/70 whereas PW58 in his testimony has deposed that he had met Sheetal Khanna who introduced herself as owner of property and informed that no such person is available hence the testimony of PW58 is contradictory to his report and cannot be relied upon.
160. As regards Mr. Negi, Parl Property, Ld. Defence counsel has argued that the correct name was "Paul Property". A-7 has produced D-7W2 Sh. Mukesh Kumar, JJA, Record Room (Civil), Tis Hazari Courts in his defence evidence. This witness has produced certified copy of the order dated 17.07.2015 Ex.D7W2/A passed by Sh. N.K. Kashyap, the then CCJ-cum-ARJ (West), Tis Hazari Courts, Delhi in M. NO. 19/2014, titled as "Bhupinder Singh Vs Jaspal Singh M/s Paul Property Dealer, Shop No. 2, J-3/103 Rajouri Garden, New Delhi". Counsel for A-7 has argued that in the report Ex.PW58/B(D-
155), PW58 has not mentioned that he had inquired about Mr. Negi or Paul Property existed there or not in the year 2010 or not. He argued that the certified copy of the order Ex. D7W2/A shows that Paul Property Dealer was existing and working on the address given in the petition and it existed there till 2015. He also argued that PW33 Insp. Sushil Kumar in para 86 of his cross examination has admitted that he had not inquired about the name of the customer in whose name the telephone numbers mentioned in Due Diligence Report of M/s National Traders existed and he did not collect any documentary evidence in this CC No. 3/2019 CBI Vs. Surender Singh & Ors. Page No. 102 of 178 regard. It was argued that had the IO given the mobile numbers of the witnesses mentioned in the Due Diligence Report, PW58 could have easily traced out those persons and served notices on them and they could have been examined by the IO to substantiate the factum of verification of the property by A-7. Due to the lapse of the IO, these witnesses could not be served and examined during the investigation and no attempts were made by the IO to summon these witnesses by making telephone calls to them on the numbers given in the Due Diligence Report. It was further argued that the due diligence was not merely conducted by A-7 but PW15 Sh. Ravi Kumar Gupta had also visited the property no. J-7/53, Rajouri Garden while considering the proposal for sanction and this fact has been admitted by him in para 8 of his examination in chief. Therefore, the credit facility was sanctioned to M/s National Traders only after the visit to property by A-7 and PW15 Ravi Kumar Gupta and the prosecution cannot claim that the due diligence report prepared by A-7 is false or fabricated or that the same was prepared by A-7 and A-8 while sitting in the office.
161. I have perused the testimony of the witnesses and have heard counsels carefully. At the outset, it is pertinent to note here that as per para 2.4 of the instruction Circular no. 7948 dated 28/3/2008 Mark PW1/2(D-22, Pg.3-4) it is the duty of Branch Head (A-7 in the present case) to ensure that due diligence is carried out on borrower/mortgagor as well as mortgaged property and in case of advances of Rs. 1 crore and above he has to invariably lead the due diligence verification.
162. In the present case, the advances being more than Rs. 1 CC No. 3/2019 CBI Vs. Surender Singh & Ors. Page No. 103 of 178 crore, A-7 was primarily responsible for carrying out due diligence. Hence the argument of Ld. counsel for A-7 that due diligence form was filled by A-8 cannot exonerate him from his responsibilities and duties. Perusal of Due Diligence Report Ex.PW35/B shows that enquiry was made from two persons namely Aman Singh of Perfect Property and Mr. Negi of Parl Property. However, both these witnesses were untraceable on the addresses mentioned in the report when I.O. made attempts to serve them with notice u/sec. 160 Cr.P.C. The name and address of Mr. Negi was found to be incomplete.
163. Ld. Counsel for A-7 has argued that the report Ex. PW58/A(D-154) qua Aman Singh given by PW-58 Ct. Bijender Singh is contradictory to his statement given in the court. The report does not mention the period for which he had made the enquiry. In the report PW-58 has mentioned that he met the son of Sheetal Khanna whereas during his evidence PW-58 has deposed that he had met Sheetal Khanna. The mobile number appearing in the report has not been mentioned by I.O. on the notice u/sec.160 Cr.P.C.
164. No doubt, perusal of the report show that there are some discrepancies in the report and the deposition of PW-58 in the court but those discrepancies are in the nature of minor variations and are not fatal to the report. It is common experience that human memory gets blurred with the passage of time and a person tends to forget the minute details. It has not been disputed by ld. Defence Counsel that process server had visited the address mentioned on the notice which is the same as appearing in the Due Diligence Report and Aman Singh was not found on the address. The son of Sheetal Khanna informed CC No. 3/2019 CBI Vs. Surender Singh & Ors. Page No. 104 of 178 that no such person resided there. Merely because in his deposition PW-58 has stated that he met Sheetal Khanna instead of her son is not sufficient to discredit his report. Similarly non mentioning of mobile number of Aman Singh on the notice does not create any doubt on the genuineness of the report. Hence, I find the report to be trustworthy and it can be safely relied upon.
165. As regards the report Ex.PW-58/B (D-155) qua Mr. Negi, counsel for A-7 has argued that the correct name was "Paul Property". He has relied upon certified copy of the order dated 17.07.2015Ex.D7W2/A passed by Sh. N.K. Kashyap, the then CCJ- cum-ARJ (West), Tis Hazari Courts, Delhi in M. NO. 19/2014, titled as Bhupinder Singh Vs Jaspal Singh M/s Paul Property Dealer, Shop No. 2, J-3/103 Rajouri Garden, New Delhi and has argued that process server had not inquired if Paul Property existed on the address in the year 2010 or not. It was argued that "Paul Property" existed on the address till about 2015. He also argued that PW-33 Sushil Kumar has admitted in his cross-examination that he had not enquired about the name of customer from the service providers and did not collect documentary evidence in this regard.
166. It may be noted here that Due Diligence Report Ex.PW35/B does not mention either the complete name of the person or his complete address. A-7 being the Branch Head was under a duty to carry out due diligence of the mortgaged property thoroughly and diligently, which he has failed to perform. It is impossible to trace a person or property in Delhi without complete name and address. Process server has also mentioned in his report that he could not trace CC No. 3/2019 CBI Vs. Surender Singh & Ors. Page No. 105 of 178 Parl Property in the area and hence the notice remained unserved. Even if there was some doubt or ambiguity whether it was "Parl Property" or "Paul Property', it would be impossible to trace a person without complete name and address. The certified copy of the order Ex.D7W2/A mentions the complete name and complete address but there is no connecting evidence to show that "Jaspal Singh" is same "Mr. Negi" from whom A-7 had purportedly made enquiries. The certified copy nowhere mentions the caste of Jaspal Singh as "Negi". Similarly the Due Diligence Report Ex.PW-35/B does not mention the complete address so it cannot be said with certainty that he was the same person from which A-7 had made enquiry. Hence A-7 has not been able to show that certified copy of order pertains to the same person with whom he had made enquiries and therefore, this order is of no benefit to A-7.
167. Ld. Counsel for A-7 has also argued that PW-15 Ravi Kumar Gupta had also visited the property while considering the loan proposal for sanction and this fact was admitted by him in his evidence and credit facility was sanctioned to M/s National Traders only after visit of property by A-7 and PW-15 and prosecution cannot claim that due diligence report is false and fabricated. I do not find any merit in this argument. As is seen from para 2.4 the circular No.7948 dtd. 28/03/2008 Mark PW1/2, A-7 was primarily responsible for carrying out due diligence of the mortgaged property. Mere visit of PW-15 to the property cannot be a equated with the due diligence to be carried out by the Branch Head. Even PW-15 has not deposed that he had gone to conduct due diligence of the property. Hence A-7 cannot avoid his responsibility or shift it to shoulder of someone else.
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168. Even A-7 has not produced either of the two witnesses in his defence evidence to substantiate his defence that the report prepared by him was true and correct which further fortifies the case of the prosecution that a false report was prepared by A-7 & A-8 in conspiracy with A-1 and fictitious persons have been named as witnesses to the report.
169. In view the above said discussion I am of the considered opinion that prosecution has proved this allegation beyond reasonable doubts.
ALLEGATION No. 3:
A-7 did not check the CIBIL report of M/s National Traders and on query by Regional Office, A-7 fraudulently wrote that they had checked the CIBIL report of firm/guarantor and report is satisfactory. However, no such report was obtained from CIBIL.
170. Ld. PP has argued that in para 13 of the chargesheet, IO has stated that Sh. Ravi Ranjan, Sr. Manager (Credit) had prepared detail of deficiency in the proposal including non inclusion of report of CIBIL of the firm. A-7 in reply fraudulently wrote that they had checked the CIBIL report of firm/guarantor and the report was satisfactory, although no such report was extracted from the CIBIL website and sent to Regional Office with the recommendation.
171. It was argued that PW1 Sunil Yadav has deposed that CC No. 3/2019 CBI Vs. Surender Singh & Ors. Page No. 107 of 178 there was no CIBIL report of the borrower M/s National Traders. He argued that PW12 Sh. Vishnu Kant Bansal identified the CIBIL report dated 19.02.2010 of A-4 Ms. Harleen Kaur (D-20, page 293) and A-1 Surender Singh (D-20, page 295) sent by the A-7 along with the proposal and deposed that these reports were drawn much prior to submission of proposal by the branch. PW12 also identified the signature of A-7 on due diligence report of M/s National Traders dated 10.09.2010 Mark PW12/3 (D-12, page 256)[Also exhibited as Ex.PW35/C(D-20)] and stated that as per this report, A-7 had mentioned that they had checked the CIBIL report of the firm/guarantor and the report was found satisfactory. PW12 also deposed that Sh. Ravi Kumar Gupta, DGM vide his letter dated 29.09.2010 Ex. PW12/B (D-20, page 209) had raised certain queries to the branch office and one such queries was:-
"CIBIL report and due diligence on the firm from three persons engaged in the same line of business have not been received by us".
A-7 replied to the said query vide reply dated 21.10.2010 Ex. PW12/C (D-20, page 239) and along with this letter A-7 forwarded EMA of borrower, CIBIL report of A-4 and A-1 dated 19.02.2010, Due Diligence Report of M/s National Traders, pre-inspection report of Noida Godown and copies of export orders of the parties. Ld. PP has argued that perusal of the reply would show that as regards the CIBIL report, A- 7 has given the reply "copies of CIBIL report of borrower, guarantor have already been sent along with the proposal". It was argued that the CIBIL report of the firm was not obtained and sent along with reply Ex. PW12/C. CC No. 3/2019 CBI Vs. Surender Singh & Ors. Page No. 108 of 178
172. Ld. PP has further argued that PW35 Ravi Ranjan has also deposed that A-7 had sent the due diligence report dated 10.09.2010 already marked as Mark PW12/3 mentioning that he had checked the CIBIL report of firm/guarantor and the report was satisfactory. Ld. PP further argued that PW36 Raghubir Chander Goel in his staff accountability report Mark PW36/A (D-21, page 1 to 6) had also observed on page 5 of the report that "CIBIL report of the firm M/s National Traders was not verified at the time of sanction". CIBIL report generated on 28.12.2012 indicates cash credit facility of Rs. 390 lacs, PC of Rs. 50 lacs and FDBP of Rs. 50 lacs from PNB Wazirpur Branch on 17.06.2010, and all these limits were NPA since 30.09.2012.
173. It was argued that the conduct of A-7 in not generating the CIBIL report of M/s National Traders at the time of sanction was an act of criminal negligence and dereliction of duties on the part of A-7. He argued that PW55 Atul Kumar proved the CIBIL report of M/s National Traders dated 11.09.2012 (D-11, page 189 to 200) generated during his tenure as Ex.PW55/B, He argued that it is beyond comprehension as to why the same was not generated by A-7 before sanction of the loan. It was argued that the conduct of A-7 in not generating the CIBIL report of M/s National Traders amounted to dereliction of duties on his part.
174. Per contra, Ld. Counsel for A-7 has argued that CIBIL report can be taken out by two methods i.e. individual and commercial. He also argued that there is no difference between the proprietor and proprietorship firm in the eyes of law. He argued that PW1 Sunil Yadav in his cross examination by counsel for A-7 has also confirmed these CC No. 3/2019 CBI Vs. Surender Singh & Ors. Page No. 109 of 178 facts and has deposed that in the branch CIBIL report is generated by Credit Officer and in the Regional Office it is generated by Advance Officer. He further stated that PAN number, address or other ID is required to be mentioned to generate CIBIL report. PW-1 further admitted that in order to generate the CIBIL report of proprietorship firm, the PAN number of the proprietor is to be mentioned. He further admitted that proprietorship firm has same PAN number as the proprietor.
175. Ld. Counsel for A-7 also referred to the testimony of PW12 Sh. Vishnu Kant Bansal, the then Chief Manager (Credit) in Regional Office, Delhi. It was submitted that in the cross examination by counsel for A-7, he has deposed that during the sanction of this proposal he was posted in Regional Office (North) in November, 2010. He had verified the process note prepared by the officer after receipt of proposal from the branch. In reply to a question, PW12 has deposed that in Due Diligence Report Mark PW12/3, AGM of the branch(A-7) had confirmed that they had checked the CIBIL report of the firm and the guarantor and the same was found to be satisfactory. He further deposed that there was no CIBIL report was attached with the Due Diligence Report Mark PW12/3 and volunteered that they had relied upon the confirmation given by A-7, AGM of the branch. In reply to the question as to why he had not called for the copy of CIBIL report of the firm from the branch, PW12 deposed that he did not called for the copy as A-7 had confirmed that they had checked the CIBIL report of the firm/guarantor and the report was found satisfactory. He also deposed that in column no. 21 of Ex. PW1/B, it was mentioned that CIBIL report was generated at RO level on 25.10.2010 for A-1 Surender Singh and CC No. 3/2019 CBI Vs. Surender Singh & Ors. Page No. 110 of 178 A-4 Smt. Harleen Kaur and not for the firm. Ld. Counsel also argued that in para 7 of the examination in chief, PW12 has deposed that at that time, CIBIL report of the firm used to be not there and the report of the proprietor of the firm used to considered which shows that in the relevant period the CIBIL report of proprietor was taken to be the report of proprietorship firm as well. Counsel for A-7 argued that in the proposal dated 09.09.2010 forwarded by the branch to Regional Office Ex. PW18/E (D-10, page 158), it has been merely mentioned by A-7 that copy of the CIBIL report of borrower and guarantor were enclosed. Counsel for A-7 argued that PW15 Ravi Kumar Gupta, the then DGM in Regional Office has also deposed in para 14 of his cross examination that if required at Regional Office, the CIBIL report is taken out primarily by Credit Officer. If the CIBIL report is sent by Branch, then the same is not taken out afresh in the Regional Office. He further deposed that as far as he could recollect, in 2009-10 and 2010-11, the proprietorship firm used to have the same CIBIL report as of the proprietor. Ld. Counsel for A-7 also referred to para 21 of memorandum dated 23.10.2010 Ex.PW18/F [D-10 (page 488 to 507)] wherein it was mentioned that CIBIL report dated 25.10.2010 on A-1 and A-4 showed no credit history and as per the RBI defaulter list as of March, 2010 needs of the firm, proprietor/guarantor do not figure in RBI defaulter/caution list/willful defaulter list which shows that the Regional Office had also satisfied itself about the credit worthiness of A-1 and A-4 before sanctioning the limits. Ld. Counsel for A-7 further referred to testimony of PW35 Sh. Ravi Ranjan who has deposed in para 9 of his examination in chief that A-7 had given clarification on almost all the aspects and even he had talked to A-7 on phone regarding certain clarifications and A-7 had also sent him one more document i.e. CC No. 3/2019 CBI Vs. Surender Singh & Ors. Page No. 111 of 178 photocopy of valuation report along with letter dated 27.10.2010 Ex.PW35/A (D-20, page 231).
176. I have heard counsels for the parties and have carefully gone through the testimonies of witnesses and documents on record. From the perusal of testimony of witnesses, it becomes clear that CIBIL was introduced in the year 2009 and it was not so well established in 2010. In order to generate the CIBIL report of an individual or firm PAN number or the particulars of the firm were required.
177. There also seems to be confusion among the witnesses as to whether the proprietor and firm had same PAN number or different PAN numbers and whether the CIBIL report of proprietor could be considered as CIBIL report of the firm. PW-8 Ramesh B. Bidwai admitted that initially CIBIL was not fully operational and initially the firm's CIBIL report could not be generated He also deposed that the PAN number of an individual and his firm are different. On the other hand, PW-12 Vishnu Kant Bansal and PW-15 Ravi Kumar Gupta have deposed that they had no knowledge if PAN number of proprietor and proprietorship firm were same. PW-12 further deposed that at that time the CIBIL report of firms used to be not there. The report of the proprietor of the firm used to be considered. PW-15 Ravi Kumar Gupta has similarly deposed that as far as he could recollect, in 2009-10 and 2010-11 the proprietorship firm used to have the same CIBIL report as of the proprietor.
178. In this background, where senior officers of the bank were also not having clarity whether CIBIL report of proprietorship firm could CC No. 3/2019 CBI Vs. Surender Singh & Ors. Page No. 112 of 178 be generated separately or not and whether the CIBIL report of proprietor of firm could be considered as CIBIL report of the firm also, A-7 sent the CIBIL reports of A-1 Surender Singh (D-20 Pg.295) and A- 4 Harleen Kaur (D-20 Pg.293) dated 19/2/2010 along with the proposal to Regional office. PW-1 Sunil Yadav has deposed that there was no CIBIL report of borrower M/s National Traders. However, A-7 in Due Diligence Report dated 10/09/2010 Ex.PW35/C mentioned that they had checked the CIBIL report of the firm/guarantor and report was found satisfactory.
179. PW-12 Vishnu Kant Bansal has also deposed that Sh. Ravi Kumar Gupta, DGM vide his letter dated 29.09.2010 Ex. PW12/B (D-20, page 209) had raised certain queries to the branch office and one such queries was "CIBIL report and due diligence on the firm from three persons engaged in the same line of business have not been received by us". A-7 replied to the said query vide reply dated 21.10.2010 Ex. PW12/C (D-20, page 239) and along with this letter A-7 forwarded CIBIL report of A-4 and A-1 dated 19.02.2010 along with other documents. Ld. PP has argued that perusal of the reply would show that as regards the CIBIL report, A-7 has given the reply "copies of CIBIL report of borrower, guarantor have already been sent along with the proposal". It was argued that the CIBIL report of the firm was not obtained and sent along with Ex. PW12/C. He has submitted that even PW36 Raghubir Chander Goel in his staff accountability report Mark PW36/A (D-21, page 1 to 6) had also observed on page 5 of the report that "CIBIL report of the firm M/s National Traders was not verified at the time of sanction". He argued that CIBIL report of M/s National Traders dated 10/09/2012 was CC No. 3/2019 CBI Vs. Surender Singh & Ors. Page No. 113 of 178 proved by PW-55 Atul Kumar as Ex. PW-55/B (D-11Pg.189-200). According to prosecution, non-generation of CIBIL Report of firm was an act of negligence and amounted to dereliction of duty by A-7.
180. However, perusal of testimony of PW-12 Vishnu Kant. Bansal would show that in his cross examination he has deposed that there was no CIBIL report attached with Due Diligence Report Mark PW-12/3 and they had relied upon the confirmation of A-7 . He also deposed that in column no. 21 of Ex. PW1/B, it was mentioned that CIBIL report was generated at RO level on 25.10.2010 for A-1 Surender Singh and A-4 Smt. Harleen Kaur and not for the firm. Now the question arises that when Regional Office could generate the CIBIL Reports of A-1 & A-4, why it did not bother to generate the CIBIL report of the Firm M/s National Traders separately, if in 2010 there was an option available to generate the CIBIL report of the Firm separately. Not only this perusal of para 21 of memorandum dated 23.10.2010 Ex.PW18/F [D-10 (page 488 to 507)] mentions that CIBIL report dated 25.10.2010 on A-1 and A-4 showed no credit history and as per the RBI defaulter list as of March, 2010 needs of the firm, proprietor/guarantor do not figure in RBI defaulter/caution list/willful defaulter list. PW-35 Ravi Ranjan has also deposed that A-7 had given clarification on almost all the aspects and even he had taken certain clarifications from A-7 on telephone which shows that the Regional Office had also satisfied itself about the credit worthiness of A-1 and A-4 before sanctioning the limits. PW-12 Vishnu Kant Bansal in his cross examination has also deposed that once he had approved after satisfactory reply of the queries raised by his department, then process note was put to AGM of SARAL. After approval by AGM it had gone to recommendation to Grid. After CC No. 3/2019 CBI Vs. Surender Singh & Ors. Page No. 114 of 178 recommendation of the Grid process note had gone to the DGM. He also admitted that in this account Grid had given "Nil Observation"
which means no adverse feature in the proposal was found. In reply to specific question, PW-12 has answered that Grid had given "Nil Observation" even when CIBIL report of the firm was not received by the RO because A-7 had confirmed in Due Diligence Report Mark PW- 12/3 that they had checked the CIBIL report of the firm and guarantor and same is found to be satisfactory.
181. The aforesaid testimony of the witnesses clearly indicate to the possibility that in 2010, there was no option of generating separate CIBIL report of the firm and the CIBIL report of the proprietor used to be considered as report of the firm as well, otherwise nothing could have stopped the Regional office, or GRID or DGM or General Manager to insist on the separate CIBIL report of the Firm and to have declined or returned the proposal in the event of non filing of CIBIL report of the Firm M/s National Traders. Hence, in view of the aforesaid discussion, I am of the considered opinion that prosecution has failed to prove this allegation against A-7 beyond reasonable doubts.
ALLEGATION No. 4:
A-7 released the funds on the basis of photocopy of process note Ex. PW18/F (D-10) signed by DGM without obtaining proper sanction letter after approval by G.M. along with his observation and its compliances.
182. Ld. PP for CBI has submitted that A-1 had filed proposal Ex. PW18/C (D-10 Pg.17-53) with the complainant bank for taking over CC No. 3/2019 CBI Vs. Surender Singh & Ors. Page No. 115 of 178 CC limit of M/s National Traders from BoB, Rajouri Garden on 19.07.2010. A-8 prepared the process note dated 08.09.2010 Ex. PW18/D (D-10, page 145 to 157) after verifying the documents. A-7 recommended the process note and forwarded the same to Regional Office vide his letter dated 09.09.2010 Ex. PW18/E (D-10, page 158) as he was not competent to sanction the loan above Rs. 4 crores. The Regional Office processed the loan and prepared the note and it was placed before the Grid Committee which was approved by the Grid Committee on 22.11.2010. Since there were deviations from the approved norms, the proposal was placed before General Manager who approved the same on 03.12.2010 with certain observations/conditions. It was submitted that the branch started the disbursement of the loan on receipt of photocopy of the memorandum dated 23.10.2010 Ex. PW18/F (D-10, page 384 to 365). It was argued that perusal of Ex. PW18/F would show that it does not contain the signature of the GM and observations/conditions imposed by him while approving the proposal.
183. It was argued that PW1 Sunil Yadav has deposed that in case of take over loan, the credit rating should not be less than CR-4 and for the purpose of releasing the credit facility, consent of sanctioning authority is required. PW1 also referred to the loan policy 2010-12 along with its annexure and deposed that as per para 26.6.6.2, the loan can be taken over from other banks, only if the rating is less than CR-4. He further deposed that since there were some deviations on account of take over norms in case of M/s National Traders the proposal was put for approval of deviation before the General Manager. He proved the note of General Manager at encircled portion X in the CC No. 3/2019 CBI Vs. Surender Singh & Ors. Page No. 116 of 178 handwriting of GM on Ex.PW1/B (D-20, page 185 to 204). Ld. PP submitted that PW12 Vishnu Kant Bansal has also proved the memorandum to Competent authority for approval Ex. PW1/B wherein Sh. Ravi Kumar Gupta had approved the deviation as mentioned in the note. He has also deposed that deviation in the ratio of total outside liability/total net worth in take over norms which is prescribed as 5.07 and in case of takeover of the loan account, the sanctioning authority is the next higher authority of the sanctioning authority who was General Manager Sh. D.S. Tripathi. He identified the handwriting of GM Sh. D.S. Tripathi at page no. 204 of D-20 (part of Ex. PW1/B) at point X ratifying the deviation approved by the DGM with certain conditions mentioned therein.
184. Ld. PP also referred to the testimony of PW15 Sh. Ravi Kumar Gupta, the then DGM, Regional Officer, North and argued that PW15 has deposed that the takeover norms were only dealt at the level of DGM and in case of deviation of take over norms, the concurrence had to be obtained from the next higher authority to the sanctioning authority before the disbursal of credit facility. He also deposed that the debt equity ratio of the firm M/s National Traders was 5.07:1 which was in deviation as it was above the bench mark level of 4:1 stipulated for trade account. He also deposed that Sh. D.S. Tripathi, General Manager while ratifying the proposal had given some suggestions at point X on page 204 of D-20 Ex. PW1/B. Ld. PP has pointed out that PW15 has also deposed that the branch cannot disburse the loan before the sanction letter Ex. PW1/B.
185. Ld. PP has argued that PW35 Ravi Ranjan has CC No. 3/2019 CBI Vs. Surender Singh & Ors. Page No. 117 of 178 categorically deposed that as per the approval accorded by the General Manager, the branch was required to check up the conduct of the family account of the borrower, maintained with Opera House Branch of Complainant bank since account was getting transferred from Bank of Baroda within 18 months; conduct of account with BoB to be doubly ensured by verifying statement of account and thorough due diligence to be carried out by the branch from the people in the same line and collateral security be inspected for its value and marketability.
186. Ld. PP further pointed out that PW53 Sh. D.S. Tripathi, the then General Manager, has deposed that all the takeover loans had to be ratified by the next higher authority before its disbursement and the deviation of take over norms by the regional office had to be ratified by the General Manager. PW53 further deposed that the proposal in respect of M/s National Traders was received from complainant bank and it was ready in the Regional Office on 01.11.2010 and approved by DGM Sh. Ravi Kumar Gupta on 22.11.2010 and thereafter was ratified by him on 03.12.2010 as there were deviation in the takeover norms. He further deposed that Ex.PW18/F (D-10, page 365 to 384) is the copy of Ex.PW1/B but it does not bear his signature/observation. PW53 also deposed that the branch should not have disbursed the loan without his ratification. PW53 also deposed that after going through D- 20, he did not file any reply/compliances to the stipulation made by him on 03.12.2010 available on record.
187. Ld. PP has submitted that perusal of testimony of PW23 Sh. Satish Kumar Khanna who had conducted Credit Process Audit (CPA) on 14.02.2010 in complainant bank on the basis of various CC No. 3/2019 CBI Vs. Surender Singh & Ors. Page No. 118 of 178 documents show that the credit sanction note Ex.PW18/F available in the branch was merely photocopy without the signature and observation of the General Manager who had approved the deviation. PW23 has also admitted that when he was shown the credit sanction note Ex.PW18/F, it did not bear the signature of then General Manager who had approved the deviation. Ld. PP has argued that A-7 released the credit facility to M/s National Traders without obtaining the sanction note containing the ratification of deviation by the General Manager and observations made by him which clearly amounts to criminal misconduct and dereliction of duties on the part of A-7.
188. Ld. PP for CBI has further pointed out to the testimony of PW36 Raghubir Chander Goel and has argued that in his staff accountability report Mark PW36/A, this witness has observed that proper due diligence was not conducted by the branch.
189. Per Contra, Ld. Counsel for A-7 has argued that loan proposal Ex. PW18/C (D-10 Page 17 to 53) was received in the branch from A-1 on 19.07.2010. On 09.09.2010 A-7 had forwarded the processing note recommended by him to the Regional Office and the Regional Office processed the proposal on 23.10.2010. The proposal was was signed by DGM on 22.11.2010 and limits were sanctioned. The deviations were approved/ratified by GM on 3/12/2010. A-1 executed loan documents in favour of Complainant bank on 06.12.2010. These documents were vetted by Advocate Aditya Madan on 11.12.2010. He further argued that the Regional Office also appointed Credit Process Audit Officer (CPAO) Sh. Satish Kumar Khanna on the request letter dated 13.12.2010 from Patel Nagar CC No. 3/2019 CBI Vs. Surender Singh & Ors. Page No. 119 of 178 Branch. Sh. Satish Kumar Khanna submitted his report dated 14.12.2010 as disbursement to the party could be made after the report of CPAO. He also argued that the CC limit was disbursed for the first time on 23.12.2010 which is evident from the entry in the statement of account (D-6 at page 2) and the PC limit was released on 21.11.2010 which is reflected in Packing Credit Account available at page 2 of D-7. Similarly, the amount of first bill was released to M/s National Traders on 30.03.2011 which is reflected in D-8 at page 3.
190. Ld. Counsel for A-7 has further argued that the proposal sent by branch to the Regional Office is first appraised by credit officer and fresh process note is prepared. The process note is then sent to Grid Committee consisting of four members of different departments. The secretary of the Grid processes the proposal. Objections, if any, are pointed out to the branch and clarification is sought from the branch. After satisfying all the aspects, the proposal is approved and sent to the Sanctioning Authority for grant of sanction. The sanctioning authority personally visits the property for due diligence. It was submitted that even thereafter the sanctioning authority cancel decline the proposal.
191. Ld. Counsel for A-7 pointed out that PW1 Sunil Yadav has admitted that the Grid Committee is headed by DGM, one member is AGM, one is Chief Manager (Credit) and one is Risk Management Department RMD (Credit). He also deposed that the Grid Committee headed by DGM, is the final authority to sanction the loan proposal. PW8 Ramesh B. Bidwai and PW12 Sh. Vishnu Kant Bansal have also corroborated PW1 on the aforesaid facts and PW-8 has further CC No. 3/2019 CBI Vs. Surender Singh & Ors. Page No. 120 of 178 deposed that the person who used to process the proposal was called the Secretary of the Grid. In his cross examination by counsel for A-7, PW12 has admitted that he had verified the process note prepared by the officer after receipt of proposal from the branch. He further admitted that in this case, Grid had given "Nil Observation" and which meant that no adverse feature in the proposal was found. He also admitted that the proposal is not completed in a single day and the working goes on till it is completed. In this case, the proposal was produced before the AGM on 01.11.2010 and proposal was under the process from 23.10.2010 till 01.11.2010.
192. Ld. Counsel for A-7 also referred to the testimony of PW35 Rajiv Ranjan who had deposed that A-7 had given clarification on almost all the aspects. A-7 had also sent one more document vide letter dated 27.10.2010 Ex. PW35/A after he had talked with A-7 on telephone for seeking certain clarification. PW35 also proved the proposal-cum-sanction by Regional Office as Ex. PW1/B. He deposed that the terms and conditions of sanction were given in clause 37. However, on account of deviation in the takeover loan, the proposal was put up for approval before the General Manager and it was approved by Sh. D.S. Tripathi, the then General Manager. Ld. Counsel for A-7 has further submitted that PW35 in para 20 of the cross examination had admitted that his role included to study the proposal sent by the branch to the RO and to prepare detailed process note. He also explained the entire procedure followed at the Regional Office and admitted that he was Member Secretary of the Grid. In para 22 of his cross examination, the witness admitted that sanctioning authority takes its decision regarding sanction independently after CC No. 3/2019 CBI Vs. Surender Singh & Ors. Page No. 121 of 178 studying the proposal separately and based on its merits.
193. Ld. Counsel for A-7 referred to para 12 of cross examination of testimony of PW53 Sh. D.S. Triparthi, the then General Manager, where the witness has deposed that the deviation, if any, has to be pointed out by Regional Credit Committee and not by the branch office. He also referred to the testimony of PW33 Inspector Sushil Kumar who has described the procedure followed by the bank in paras 70, 71 and 72 of his cross examination by Ld. Counsel for A-8.
194. It was further argued by counsel for A-7 that PW12 Sh. Vishnu Kant Bansal in para 7 of the cross examination by counsel for A-7 has deposed that as per the record, the compliance of the terms and conditions put up with the sanction of credit facility was not sought from the branch. He argued that perusal of the memorandum dated 23.10.2010 Ex. PW18/F (D-10, page 384 to 365) would show that this memorandum does not contain any terms or comments of the General Manager. He submitted that the terms imposed by the General Manager were never communicated with the branch by the Regional Office. PW53 D.S. Tripathi in para 13 of his cross examination has deposed that the Regional Office was under the duty to communicate the observations made by him while ratifying the deviation to the branch. He further deposed that he was not aware of it.
195. Ld. Counsel for A-7 has referred to clause 24.4 of loan policy 2009-2010 of Complainant bank (D-9, page 45) which states that the objective of CPA is to ensure that the branch, before parting with the bank's funds, has taken all necessary measures for creation of CC No. 3/2019 CBI Vs. Surender Singh & Ors. Page No. 122 of 178 security and safety. Further the purpose of CPA is to ensure verification of compliance of pre-disbursement terms of sanction by an independent and experienced officer, not connected with the sanction/disbursement who is expected to point out deficiency, if any, in compliance at the right time so that corrective measures can be taken immediately. The system envisages reporting to the sanctioning authority about the compliance of pre-disbursement conditions and to seek his approval in case of deviation/non compliance. Ld. Counsel for A-7 referred to the testimony of PW23 Sh. Satish Kumar Khanna, CPAO and argued that he had conducted the credit process audit on 14.12.2010 in complainant bank and had given his report Ex.PW23/E. Ld. Counsel pointed out that in the cross examination, PW23 admitted that no adverse report was given by him in M/s National Traders. He also argued that no communication was received from the Regional office regarding deviation. Ld. Counsel referred to the draft proposal Ex.PW35/DE (D-10, page 327 to 307) and argued that the draft proposal and approved proposal was sent to the branch by the Regional Office but the deviation and observation made by GM while ratifying the deviation were never sent to the branch. Hence, the question of complying with the deviation did not arise and the allegation that A-7 did not comply with the terms and conditions of the sanction are false.
196. I have heard rival submissions and perused the evidence and documents available on record carefully. It is an admitted fact that credit facility advanced to M/s National Traders was a takeover loan from Bank of Baroda. Instruction circular No.8914 dated 19/03/2011Mark PW1/3 (D-22 Pg. 5-52) contains Loan Policy 2010- CC No. 3/2019 CBI Vs. Surender Singh & Ors. Page No. 123 of 178 2012 of complainant bank . Para 26.6.6.2 of the policy stipulates that as a matter of policy, no take over beyond hurdle rate i.e., CR-4 should be entertained. It is also not in dispute that the debt equity ratio of M/s National Traders was 5.07:1 which was in deviation as it was above the bench mark level of 4:1 stipulated for trade account. PW-15 Ravi Kumar Gupta has deposed that the takeover norms were dealt only at the level of DGM and in case of deviation of take over norms the concurrence had to be obtained from the next higher authority to the sanctioning authority before the disbursal of facility who was General Manager D. S. Tripathi in the present case. Admittedly, the process note prepared by regional office was approved by GRID committee on 22/11/2010. Since there were deviations from the approved norms, the proposal was placed before the General Manager who had approved the same on 3.12.2010 with the following conditions:-
"(i). Branch to check up conduct of family accounts maintained with Opera House Branch.
(ii) Party has relationship with Bank of Baroda since July 2009.
Shifting of accounts within 18 months is not a good indication. Branch to doubly ensured about the conduct of accounts with Bank of Baroda by verifying statement of accounts and carry out thorough due diligence from the people in same line.
(iii) Collateral Security be inspected for its value and marketability."
197. Sh. D.S. Tripathi has appeared as PW-53 and has proved the aforesaid conditions at point 'X' on Ex. PW1/B and has also identified his signatures at point 'C'.
198. Ld. PP has argued that A-7 disbursed the loan on the basis of photocopy of the credit sanction note Ex.PW-18/F (available in file D- 10 pages 365-384). He has submitted that perusal of Ex. PW-18/F would show that it does not contain the approval of General manager CC No. 3/2019 CBI Vs. Surender Singh & Ors. Page No. 124 of 178 and the conditions imposed by him while approving the deviations.
199. On the other hand, Ld. Defence counsel has argued that PW-53 D.S. Tripathi has deposed in his cross examination has deposed that the deviation, if any has to be pointed out by the Regional Credit Committee and not by the branch. He further argued that the terms imposed by General manager were never communicated to the Branch by the Regional office. PW-53 in his cross examination has deposed that it was the duty of the R.O. to communicate the observations made by him while ratifying the deviations to the branch but he was not aware of it. Ld. Counsel also argued that disbursal could not have taken place without the report of CPAO. PW-23 Satish Kumar Khanna who had given his CPA report dated 14/12/2010 Ex.PW23/E (D-17) has admitted that no adverse report was given by him in M/s National Traders. It was also argued that PW-12 Vishnu Kant Bansal has also deposed in his cross-examination that as per record, the compliance of the terms and conditions put up with the sanction of credit facility was not sought from the branch. It was argued that since the Regional office never communicated the deviations and observations made by General Manager while ratifying the deviations to the Branch, the question of complying with the does not arise and the allegations against A-7 that he had not complied with the terms and conditions of the sanction were false.
200. At the outset, it may be pointed out that PW-15 Ravi Kumar Gupta DGM and PW-53 D.S. Tripathi have categorically deposed that branch cannot disburse the loan without the sanction note Ex.PW-1/B. A bare perusal of copy of Sanction Ex. PW-18/F available CC No. 3/2019 CBI Vs. Surender Singh & Ors. Page No. 125 of 178 in the branch file D-10 would show that it was merely copy of credit sanction note Ex.PW1/B (D-20) and it does not contain the signatures of G.M. D.S. Tripathi and observations made by him while ratifying/approving the deviations. This fact is also proved from the testimonies PW-53 D.S. Tripathi, PW-23 Satish Kumar Khanna and PW-12 Vishnu Kant Bansal. Hence, Ex. PW18/F was not a valid sanction in the eyes of law and A-7 could not have disbursed the credit facilities to M/s National Traders on the basis of an invalid sanction note.
201. The argument advanced by Ld. Defence Counsel that Regional Office did not communicate the sanction note Ex.PW1/B to the Branch and A-7 was not aware of the deviations or the conditions put by G.M. while ratifying /approving the deviations and hence same were not complied with, is without any substance. A-7 was working as a Branch Head and was officer of the level of AGM. He was expected to know the bank circulars and rules and was expected to work diligently and cautiously while dealing with the public money. Even if for the sake of arguments, it is assumed that Regional Office failed to communicate the credit sanction note Ex. PW1/B to the Branch, A-7 was also under a duty to bring this lapse to the notice of Regional office and demand the valid sanction Note containing the approval of GM. Bare reading of last page of Ex.PW18/F makes it crystal clear that the proposal was being put up for approval of deviation on account of deviation in takeover norms. Not only this, there was a clear noting that GM was on tour and in case deviation was approved, the same may be ratified from G.M. upon his resumption. Therefore, in the absence of ratification of deviations by GM there was no valid sanction for grant of credit facility.
CC No. 3/2019 CBI Vs. Surender Singh & Ors. Page No. 126 of 178 The question arises if A-7 was not even aware of the ratification by G.M. and thereby sanction of credit facilities to M/s National Traders how and why he disbursed the credit facility to M/s National Traders on the basis copy of incomplete credit sanction note Ex.PW18/F.
202. The argument of Ld. Defence Counsel that disbursement was made after the ratification on 3/12/2010 and hence there was no illegality is also devoid of merits. On one hand A-7 is pleading ignorance about the conditions imposed by G.M. while ratifying the deviations and on the other hand, he claims that the disbursement was made after the ratification by G.M. If A-7 was really aware about the ratification and the conditions imposed, then question arises why those conditions were not complied with. Even though compliance of the conditions was not sought by Regional Office, it does not mean that the same could be ignored. PW-53 has categorically deposed that after going through the file D-20, he did not find any reply/compliances to the stipulations made by him on 3/12/2010 on record. Hence, I do not find any merits in the arguments advanced by Ld. Defence Counsel for A-7 and the same are rejected being devoid of any merits. Not only this, perusal of the credit sanction note Ex.PW1/B show that A-7 also failed to comply with the conditions which were mentioned in the credit sanction note and this fact is corroborated by PW- 36 Sh. Raghubir Chander Goel who in his Staff Accountability report mark PW-36/A(D-
21) has observed that "Account was not yet rated from the External Agency"; " Packing credit facility was allowed to the extent of 100% value of the orders without keeping stipulated margin"; No proof of shipment/export bill submitted by the borrower for collection after availing packing credit facility" beside non CC No. 3/2019 CBI Vs. Surender Singh & Ors. Page No. 127 of 178 compliance by the branch to the observations made by G.M. which clearly show that A-7 failed to act diligently and his acts/omissions amount to criminal misconduct.
203. In view of the aforesaid discussion, I am of the considered opinion that prosecution has proved this allegation against A-7 beyond reasonable doubts.
ALLEGATION No. 5:
On 14.05.2012 M/s National Traders applied for release of PC limit of Rs.185 lacs which was processed by Lalit Kumar and fraudulently approved by A-7. PC was released after unauthorized merger of FDBP limit with PC limit.
204. Ld. PP for CBI has argued that as per 21 of the chargesheet, A-1 had applied for release of PC of Rs. 185 lacs on 14.05.2012 by merging PC limit of Rs. 85 lacs and FDBP limit of Rs. 100 lacs. A-7 unauthorizedly merged the limits and disbursed the amount to M/s National Traders without prior permission of the sanctioning authority. He argued that FDBP limit was post-shipment finance whereas PC limit was pre-shipment finance. Since pre- shipment finance is necessary to be backed by post-shipment finance for insurance cover, tracking of finance and getting foreign currency for the country, so stand alone PC cannot be given.
205. Ld. PP referred to the testimony of PW1 Sunil Yadav and has submitted that PW1 has deposed that vide Credit sanction note Ex. PW1/B (D-20),CC limit of Rs.400 lacs, PC limit of Rs. 85 lacs and FDBP of Rs. 100 lacs, totaling to Rs. 585 lacs were sanctioned to M/s CC No. 3/2019 CBI Vs. Surender Singh & Ors. Page No. 128 of 178 National Traders. He has further deposed that by A-7 sent a proposal dated 24.05.2012 Mark PW1/4 (D-20, page 98 to 110 ) to Regional Office recommending enhancement of PC limit to Rs. 185 lacs and FDBP was recommended to be reduced to Nil. Ld. PP has argued that PW18 Sh. Vinod Kumar Narula has also proved the copy of memorandum dated 23.10.2010 available in the branch file (D-10, page 365 to 384) as Ex.PW18/F. He further argued that PW18 also proved the proposal dated 11.05.2012 sent by A-7 to DGM, Regional Office for modification of sanctioned term i.e. requesting them to utilize PC limit upto 185 lacs by earmarking their foreign bill purchase limit till renewal of the limit as Ex. PW18/L (D-11, Page 133 to 135).
206. Ld. PP further pointed out to the testimony of PW6 Ms. Kalpana Prusty who deposed that as per Short Term Review of account Ex.PW1/C (D-20, page 93 to 96), on the request of M/s National Traders, FDBP limit of Rs. 85 lacs was merged with PC limit of Rs. 100 lacs. She further deposed that the facility for stand alone PC could not have been given to the party i.e. M/s National Traders.
207. Ld. PP further argued that PW16 Sh. Radhey Shyam Bansal has also corroborated PW6 and has deposed that the fact regarding merger of both facilities is mentioned in para 5 at point X on page 94 of D-20 (Ex. PW1/C). He further deposed that the merger was permissible by the sanctioning authority and it was allowed by the sanctioning authority Sh. R.B. Bidwai, DGM.
208. Ld. PP has argued that PW42 Lalit Kumar has deposed that against the four orders, limit of Rs. 1.85 crores was released to M/s CC No. 3/2019 CBI Vs. Surender Singh & Ors. Page No. 129 of 178 National Traders on 14.05.2012 and the note pertaining to the release of packing credit was made by Ms. Sunaina Mittal who was also working as Assistant Manager. He identified the note and signature of Sunaina Mittal encircled at point A. He also identified his signature at point B. He further deposed that Ex. PW18/M (D-11, page 140) also bears the note and signature of A-7 which read as under:
"Discuss with DGM. Permission obtained for availing PC limit upto 185 lacs. Letter for ratifying Br. Action is sent to R.O"
209. Ld. PP further referred to the testimony of PW53 Sh. D.S. Tripathi, the then General Manager who has deposed that according to Ex. PW1/B, the original sanction of credit facility by DGM was separately cash credit, PC and FDBP. However, on page 98 to 100 of D-20, there was a proposal for renewal/enhancement of limit dated 24.05.2012 from the branch to the Regional Committee and there was no formal sanction note of merger of FDBP limit with PC limit. However, a short term review dated 29.06.2012 submitted to zonal committee by DGM office. It is mentioned on page 90 that DGM permitted temporary merger of FDBP limit to PC limit and accordingly, the Zonal Level Credit Committee approved the short term review upto 30.06.2012 on 29.06.2012. He proved the approval note and regional office proposal as Ex. PW53/A (colly). Ld. PP submitted that PW53 has deposed that in certain circumstances, stand alone PC can be given for example where the overseas buyers remit funds directly to the exporter or where time taken in shipment is very short. However, he has clarified that sanction is always taken from the sanctioning authority before disbursement.
CC No. 3/2019 CBI Vs. Surender Singh & Ors. Page No. 130 of 178
210. Ld. PP has submitted that even PW-33 Inspector Sushil Kumar, during his cross examination in reply to a specific question, has deposed that the proposal of merger of FDBP limit with PC limit was not sanctioned.
"Q: Did you enquire from the DGM regarding the permission granted by the Regional Office to the branch to merge the existing FDBP Limit with PC Limit?
Ans. Yes. I had enquired about the merger of FDBP limit with PC Limit from officials posted at Regional Office and it was found that a note dated 7.6.2012 was prepared in the Regional Office on the proposal dated 24.5.2012 of branch office but this proposal was not signed by any office of Regional Office so the proposal of merger of FDBP Limit with PC Limit was not sanctioned."
211. Ld. PP has argued that perusal of testimony of above witnesses clearly show that A-7 unauthorizedly merged the PC limit and FDBP limit and released Rs. 185 lacs as packing credit to A-1 without obtaining prior sanction from the sanctioning authority for merger of the limits. He argued that this act of A-7 amounted to abuse of his authority.
212. Per Contra, Ld. Counsel for A-7 argued that M/s National Traders wrote letter dated 01.05.2012 (D-11, page 152) for release of limit in the cash credit account and letter dated 27.04.2012 for adjustment of FBPL and packing credit account to the AGM, CC No. 3/2019 CBI Vs. Surender Singh & Ors. Page No. 131 of 178 complainant bank. A-7 wrote letter dated 11.05.2012 Ex. PW18/L (D- 11, page 135-133) to the Regional Office for modification of limit and recommended the request of M/s National Traders for utilizing PC limit upto 185 lacs. Another letter dated 14.05.2012 (D-11, page 142-144) was written by A-7 to the Regional Office for the same purpose. Regional Office vide its memorandum to credit approval committee for approval dated 29.06.2012 (D-11, page 339-336), in para 19 recommended short review of the account till 30.06.2012 to avoid slippage of account under in NPA category. Ld. Counsel for A-7 submitted that PW18 Vinod Kumar in para 22 of his deposition also admitted that the Regional Office permitted the branch to merge the existing FDBP limit with PC limit. PW16 Sh. Radhey Shyam Bansal in his examination in chief also deposed that the fact regarding merger of both the facility was mentioned at page no. 94 in 5th para at point X in Ex. PW1/C (D-20, page 93-96). He further deposed that the merger was allowed by the sanctioning authority Sh. R.B. Bidwai, DGM. He further deposed that the merger was permissible by the Sanctioning Authority. Ld. Counsel for A-7 also referred to the testimony of PW36 Sh. Rabhubir Chander Goel who in his cross examination denied the suggestion that he had wrongly mentioned in his report Mark PW36/A that the ratification from the RO was not held on record whereas such ratification was there. It was argued that all the above circumstances show that Regional Office had granted permission to the branch for merger of the limits. Ld. Counsel for A-7 also argued that PW53 Sh. D.S. Tripathi in his evidence deposed that in certain circumstances stand alone PC can be given. Ld. Counsel for A-7 has also referred to instruction circular no. 7495 dated 26.09.2006 of complainant bank Ex. PW18/B which deals with management of Credit Portfolio Delegation of CC No. 3/2019 CBI Vs. Surender Singh & Ors. Page No. 132 of 178 Loaning Powers. He argued that as per Annexure-I of these instructions under column 10.1 the power of controlling authority for sanctioning ad- hoc limit has been given and perusal of the same would show that GM has been given the power to sanction ad-hoc limits upto 5 crores. He further argued that as per para 1.4.8.3 of Annexure-III to these instructions, it has been clarified that in case of an ad-hoc though the facility can be sanctioned for a period of three months, the underlined transactions need not necessarily be completed within the aforesaid period of three months. However, the delegate can exercise its respective powers for such transactions. It was further clarified that the request of issue of Letter of Guarantee(LG) even on single transaction basis where the expiry period of LG falls beyond a period of 90 days will have to be treated as request for modification to be placed with the competent authority only. Ld. Counsel for A-7 argued that the deposition of PW53 as well as the aforesaid instructions demolishes the case of prosecution that stand alone PC cannot be given. He also argued that memorandum to the competent authority for approval Ex. PW1/B (D-20, page 185) was signed by DGM who was also the sanctioning authority and thus, the merger was duly ratified by the sanctioning authority and A-7 cannot be held guilty for the same.
213. I have heard Ld. Counsel for the parties and have perused the testimonies of witnesses and documents available on record carefully.
214. Admittedly, the credit facility to M/s National Traders was sanctioned vide credit sanction note dated 23.10.2010 Ex. PW1/B (D- 20 Page 185 to 204). Perusal of the sanction note shows that Complainant bank had sanctioned credit facility of Rs. 585 lacs as per CC No. 3/2019 CBI Vs. Surender Singh & Ors. Page No. 133 of 178 the following details:-
(a) Cash Credit - Rs. 400 lacs
(b) Packing Credit - Rs. 85 lacs
(c) FDBP/FUDBP - Rs. 100 lacs
215. PW53 D.S. Tripathi has deposed that as per Ex. PW1/B sanction of credit facilities was separate for cash credit, packing credit and FDBP/FUDBP.
216. Perusal of the record further shows that A-7 vide Inter Office letter dated 11.05.2012 Ex. PW18/L (D-11 Page 133 to 135) requested to the Regional Office for modification of limits and made a request to utilize PC limit up to Rs. 185 lacs by earmarking their foreign bill purchase scheme till renewal of the limit. On 24.05.2012 proposal for renewal/enhancement of limit Mark PW1/4 was put by the Regional Office and the same was approved/ratified by DGM Sh. R.B. Bidwai and as per the proposal for short review of the account for the period of three months dated 29.06.2012 Ex.PW1/C (D-20 Page 93 to 96). PW6 Ms Kalpana Prusty and PW16 Radhey Shyam Bansal have deposed that the request of M/s National Traders for merger of PC limit and FDBP limit was allowed and limits were merged. PW16 has further deposed that merger was permissible by sanctioning authority and the same was allowed by the sanctioning authority Sh. R.B. Bidwai.
217. In nutshell, the case of the prosecution is that A-7 unauthorisedly released the amount of Rs. 185 lacs to M/s National Traders without prior permission of the sanctioning authority. When there was no formal sanction note of merger of FDBP limit with PC limit CC No. 3/2019 CBI Vs. Surender Singh & Ors. Page No. 134 of 178 whereas the defence of A-7 is that the merger was permitted/ratified by the sanctioning authority and no illegality was committed by A-7. It was argued that deposition of PW53 and the Instruction Circulars also make it clear that stand alone PC can be given. Therefore, A-7 is not at all guilty.
218. At the outset it may be mentioned that as per Credit sanction note Ex. PW1/B, the credit facility for the PC and FDBP limits were separate which has also been reiterated by PW-53 Sh. D.S. Tripathi. It has also been established from record that merger of PC limit with FDBP limit had been temporary permitted by the sanctioning authority vide approval for short review of the account dated 29.06.2012 Ex. PW1/C. Hence, the only question which requires consideration of this court is whether A-7 was entitled to disburse the amount without prior permission of the sanctioning authority or not.
219. PW42 Lalit Kumar has deposed that on the letter of request dated 14.05.2012 Ex. PW18/M by A-1, limit of Rs. 1.85 crores was released to M/s National Traders on 14.05.2012 itself. He also identified the note prepared by Sunaina Mittal and her signature and also the note and signature of A-7 which reads as under:
"Discuss with DGM. Permission obtained for availing PC limit upto 185 lacs. Letter for ratifying Br. action is sent to R.O"
220. The aforesaid noting would imply that A-7 had obtained permission from the then DGM but there is no such permission on record. Sh. Ramesh Babanrao Bidwai was the DGM and sanctioning CC No. 3/2019 CBI Vs. Surender Singh & Ors. Page No. 135 of 178 authority in the year 2012. He has appeared as PW-8 in the witness box. However, perusal of his testimony would show that neither in his examination-in-chief nor in his cross-examination he has deposed that he had given any oral permission for merger of FDBP with PC Limits on 14.05.2012. Even in the cross-examination, no question/suggestion has put to the witness in this regard. This creates a serious doubt on the aforesaid self serving note made by A-7.
221. In this connection, it is also pertinent to note that PW-53 General Manager Sh. D.S. Tripathi has deposed that there was no formal sanction note of merger of FDBP limit with PC limit but DGM had permitted temporary merger in the short term merger which was approved by the Zonal Level Credit Committee in the short term review dated 29.06.2012 Ex. PW1/C. He has also categorically deposed that "sanction is always taken from the sanctioning authority before disbursement".
222. It has also been clarified by PW53 that stand alone PC is not to be allowed in a routine manner but only under certain circumstances e.g. where the overseas buyers remit funds directly to the exporters or where the time taken in shipment is very short. Perusal of letter dated 11.05.2012 Ex. PW18/L shows that it does not mention any such exigency, similarly the proposal dated 24.05.2012 Mark PW1/4 also does not mention any such exigency which necessitated merger of limit and granting of stand alone PC to M/s National Traders. The letter dated 27/04/2012 on the letter head of National Traders written by A-1 Surender Singh which is available at page 129 of D-11 gives the reason for merger as under :-
CC No. 3/2019 CBI Vs. Surender Singh & Ors. Page No. 136 of 178 "The reasons behind converting FBPL limit to packing credit limit is that our entire shipment will be done on 100% advance basis, therefore, no credit will be given to any of our overseas buyers. Moreover, we will also save Rs. 8 lacs of premium amount paid to ECGC annually for insurance to cover our overseas buyers."
223. The aforesaid reason, in my considered opinion do not show any such exigency for merger of FDBP with PC Limit. A-7 without even waiting for prior permission/formal sanction from the sanctioning authority i.e.,DGM released the amount of Rs. 185 lacs to M/s National Traders on 14/05/2012 itself.
224. The aforesaid facts clearly establish that A-7 has clearly abused his authority by releasing the amount of Rs. 185 lacs to M/s National Traders without obtaining prior permission from the sanctioning authority for the merger of the FDBP and PC limits. Hence, in view of the aforesaid discussion, I am of the considered opinion that prosecution has proved this allegation against A-7 beyond reasonable doubts.
ROLE OF A-8 S.K. GROVER
225. Admittedly, A-8 was the Sr. Manager (Credit) posted with East Patel Nagar Branch of complainant bank. He was the in-charge of the Credit Branch. A-8 being the processing officer, had processed the loan application of A-1 after examining the documents submitted by A-
1. He had prepared the processing note Ex.PW18/D (D-10 Page 145-
157) which was signed by A-7 and the same was forwarded to Regional office. After the loan was approved by the regional Office, A-8 had CC No. 3/2019 CBI Vs. Surender Singh & Ors. Page No. 137 of 178 signed sanction letter dated 4/12/2010 for and on behalf of A-7.
226. According to the chargesheet filed by CBI, the following allegations have been levelled against A-8 :-
(I) A-8 was earlier posted in Rajouri Garden Branch of complainant bank where A-1 was also having his account and he was availing credit facility through his firm M/s Bombay Brake and Clutches. A-8 being acquainted with A-1 helped him in obtaining the credit facility from complainant bank.
(II) A-8 being the processing officer, was responsible for proper verification of the genuineness of financial documents and KYC documents of A-1 & A-4 but he did not conduct proper verification of the documents which were later on found to be forged and fabricated during the course of investigation.
(III) A-8 prepared false credit report of A-1 and A-4 on the basis of false information submitted by A-1 and thereafter prepared process note dated 08.09.2010 Ex.PW18/E (D-
10 page 145-157) for sanction of loan to M/s National Traders.
227. Vide order dated 18/01/2017 charge has been framed against A-8 for the offence under section120-B IPC read with Section 420/468/471 IPC and 13(1)(d) of P.C. Act. Charge has also been framed against him for the substantive offences u/sec. 420/468/471 IPC and 13 (2) r/w Section 13 (1)(d) of PC Act.
228. Now I shall take up allegations levelled against A-8 one by one and see if the prosecution has been able to prove these allegations or not.
CC No. 3/2019 CBI Vs. Surender Singh & Ors. Page No. 138 of 178 ALLEGATION No.1 A-8 was earlier posted in Rajouri Garden Branch of complainant bank where A-1 was also having his account and he was availing credit facility through his firm M/s Bombay Brake and Clutches. A-8 being acquainted with A-1 helped him in obtaining the credit facility from complainant bank.
229. Ld. PP submitted that A-8 was known to A-1 prior to this transaction since the time when he was posted in Rajouri Garden Branch of UBI where A-1 was also having his account. It was argued that A-8 helped in getting the loan of A-1 transferred from BoB to complainant bank. It was argued that PW51 Sh. Akhileshwar Choudhary has been examined by CBI and he has proved the letter Ex. PW51/A (D-148) which gives posting details of A-1 S.K. Grover. He argued that loan application of A-1 was processed by A-8 and the casual and negligent manner in which A-8 had scrutinized the documents submitted by A-1 along with the loan proposal clearly establish that he was in conspiracy with A-1 and had helped him in securing the credit facility with complainant bank with the help of documents which were found to be forged and fabricated during the course of investigation.
230. Per Contra, A-8 in his written arguments has submitted that A-8 was posted in Rajouri Garden Branch from 26.05.1990 to 17.05.1993 and from 28.07.1999 to 23.04.2001 as an Accountant and he was in no way related to credit/loan. He was looking after the routine functioning of the branch during his posting in Rajouri Garden Branch and was not dealing with Credit Department/ Loan Department as is evident from letter dated 27.11.2015 Ex.PW51/A (D-148) written CC No. 3/2019 CBI Vs. Surender Singh & Ors. Page No. 139 of 178 by PW-51 Sh. Akhileshwar Choudhary. It was further submitted that IO has also reaffirmed this fact in para 42 of his examination in chief. PW33 further stated in para 49 that A-1 was known to A-8 during his previous posting in Rajouri Garden Branch. It has been submitted on behalf of A-8 that he was in no way acquainted with A-1 and merely because A-1 used to visit Rajouri Garden Branch, it does not imply that A-1 and A-8 were known to each other. It has been stated that PW33 Sushil Kumar did not make any investigation in this regard and never visited Rajouri Garden Branch in connection with the investigation on this aspect. PW33 has admitted this fact in para 73 of his cross examination that he cannot say that A-8 was working in the Account Department and not in the Credit Department during his posting in Rajouri Garden Branch and he had not visited Rajouri Garden Branch during the course of his investigation. It was submitted that except for the bald allegation made in the chargesheet, there is no evidence on record to show that A-1 and A-8 were acquainted with each other.
231. I have heard Ld. PP for CBI and perused the written arguments filed by A-8. I have also perused the testimonies of the witnesses and documents available on record carefully. From the letter Ex. PW51/A (D-148), it is evident that A-8 S.K. Grover was posted in Rajouri Garden Branch of UBI from 26.05.1990 to 17.05.1993 and again 28.07.1999 to 23.04.2002 as Accountant and thereafter from 24.04.2002 to 30.06.2002 as Sr. Manager. A-8 has also admitted this fact. It has been submitted that A-8 had no concern with the Credit Department/Loan Department and he was looking after the routine functioning of the branch. He has denied that he was acquainted with A-1 Surender Singh or that he had helped A-1 in obtaining credit facility CC No. 3/2019 CBI Vs. Surender Singh & Ors. Page No. 140 of 178 from Complainant bank.
232. Prosecution has not examined any witness to prove that A- 8 and A-1 were acquainted with each other. PW33 IO Inspector Sushil Kumar in para 42 of his examination in chief has admitted that he had received the letter Ex. PW51/A giving posting details of A-8 and this letter shows that A-8 S.K. Grover was posted in Rajouri Garden Branch from 26.05.1990 to 28.01.1993, 28.07.1999 to 30.06.2002 and in Patel Nagar Branch from 19.11.2007 to 31.07.2012. In para 49 of his examination in chief, he has deposed that A-1 was known to A-8 during his previous posting in Rajouri Garden. A-8 did not verify the genuineness of KYC documents and balance sheet which were later on found to be forged and fabricated. PW33 in para 73 of his cross examination has admitted that he had not visited Rajouri Garden Branch during the course of his investigation. He also could not say that A-8 was working in the Accounts Department and not in the Credit Department during his posting in the Rajouri Garden. He further admitted that as per Ex. PW51/A, A-8 was not posted in Rajouri Garden Branch in the year 1988 and he was not aware about the constitution of M/s Bombay Brake and Clutches. He was also not aware about its owner. He volunteered that the firm was related to A-1 Surender Singh. He was also unable to recollect as to which account was being operated by M/s Bombay Brake & Clutches in Rajouri Garden Branch in the year 1988.
233. Perusal of the record also shows that apart from the testimony of PW33 and PW51, no other witness has been examined by prosecution to prove this allegation. Testimonies of both these CC No. 3/2019 CBI Vs. Surender Singh & Ors. Page No. 141 of 178 witnesses does not throw any light on the relations of A-1 and A-8. There is nothing on record to prove that A-1 and A-8 were well acquainted with each other from the posting of A-8 in Rajouri Garden Branch. There is also no evidence on record to suggest that A-8 had helped A-1 in securing the credit facility from complainant bank. Hence, in the absence of any evidence, I am of the considered opinion that prosecution has failed to prove its allegation against A-8.
ALLEGATION No.2 A-8 being the processing officer, was responsible for proper verification of the genuineness of financial documents and KYC documents of A-1 & A-4 but he did not conduct proper verification of the documents which were later on found to be forged and fabricated during the course of investigation."
234. Ld. PP has submitted that A-8 failed to properly scrutinize the KYC documents and financial documents submitted by A-1 alongwith the loan proposal to the bank. He argued that the balance sheets filed by A-1 were found to be forged and fabricated. Similarly income tax returns filed by A-1 show that two different PAN numbers were used by A-1 in filing these returns.
235. To substantiate his arguments, Ld. PP has referred to the testimony of PW4 Sudhir Rana who has proved the tax audit report, balance sheet, profit and loss account with annexure of M/s National Traders for the financial year 2010-11 as Ex.PW4/A (D-11, page 581-
595). He further deposed that the data for preparing the balance sheet was provided by Angad Singh (A-2). He also deposed that data was provided regarding loan availed from Complainant bank under heading CC No. 3/2019 CBI Vs. Surender Singh & Ors. Page No. 142 of 178 "secured loan". He also deposed that M/s National Traders had not provided any data regarding taking of loan from Punjab National Bank. He also deposed that he prepared the balance sheet of the M/s National Traders of 2012.
236. Ld. PP also referred to the testimony of PW5 Sandeep Sharma, Chartered Accountant who deposed that Form No. 3 CB of M/s National Traders Mark PW5/1 did not bear its signature and the said signature was bogus. On 30.06.2010, which is a date of preparation of the form, M/s Harish Malik & Company was not in existence as it had already merged with M/s Gulati & Malik Chartered Accountant on 01.01.2010. He also deposed that on page no. 348 of D-10 the letterhead of M/s Ryder Matic Bevel Gears is used and the bottom of this letterhead forged stamp of M/s Harish Malik & Company has been affixed. He also deposed that he never worked for M/s National Traders and never met with its proprietor Surender Singh.
237. Ld. PP further submitted that this shows the negligent manner in which A-8 had scrutinized the documents filed by A-1 along with the proposal form. He also argued that specimen signature of PW5 and rubber stamp impression S-23 to S-28 and S-65 to S-70 was sent to CFSL and the same was found forged.
238. Ld. PP has also referred to the testimony of PW29 Manish Goel, Chartered Accountant who has deposed that he did not know M/s National Traders or its proprietor Surender Singh and had never audited their balance sheets and never visited the premises of the said firm. After seeing the various balance sheets contained in D-133 [Mark CC No. 3/2019 CBI Vs. Surender Singh & Ors. Page No. 143 of 178 29/A (colly)]. He deposed that his membership number was 503563 but he neither audited nor had put his seal or signature on any such balance sheets and the balance sheets were forged. He further deposed that he had given one bunch of audited balance sheets contained in D-159 [Ex.PW29/B (colly)] to CBI which was sent to CFSL for comparison and it also show that Mark PW29/A (colly) are forged documents. Ld. PP has argued that as per the report of CFSL expert, the signature and seal of PW29 on Mark PW29/A were found to be forged.
239. Ld. PP has further referred to the testimony of PW49 Arun Kumar Maheshwari, Chartered Accountant who has deposed that the balance sheets of M/s National Traders Mark PW49/A (D-10, page 126-
144) were not prepared and signed by him and the signatures and stamps appearing on the balance sheets are forged. He also deposed that he had never met A-2 Angad Singh but he had given a certificate regarding capital and unsecured loan after seeing the relevant documents which were produced by the ex-employee of his office who was working with A-2 at that time. He also deposed that he had never met A-1 Surender Singh and he had received an email from Angad Singh for providing unsecured loan and capital certificate on 31.08.2009 and he had provided the certificate. He proved the copy of email and certificate provided by him to the IO as Ex. PW49/B and Ex. PW49/C. He also deposed that except this certificate, he had not done any other work for Surender Singh, Angad Singh, M/s National Traders. He further deposed that on 02.12.2011 he had received notice from Income Tax seeking information of proprietor of Kamdhenu Overseas but since he had not audited the Books of this firm, he filed a CC No. 3/2019 CBI Vs. Surender Singh & Ors. Page No. 144 of 178 complaint to Income Tax Department. He provided the copy of notice and complaint Ex. PW49/D to IO. He also provided copy of complaint made by him to Institute of Chartered Accountant of India in 2013 Ex. PW49/E regarding misuse of his signature and stamps by the firm Jagriti Impex to the IO. He also lodged a complaint at PS Nihal Vihar in this regard and the copy of the same was also provided to the IO. He also provided format of balance sheet during the period of 2008-2009 to the IO (Ex. PW49/F).
240. Ld. PP has argued that the specimen signatures S-1 to S- 6 and rubber stamps S-55 to S-60 were sent to CFSL and as per the opinion of expert, all the signatures and stamp impressions on the balance sheets of M/s National Traders Marks PW49/A were found to be forged.
241. Ld. PP has argued that these documents show that A-1 had forged the documents for the purpose of obtaining the loan and these documents were not properly verified by A-8.
242. On the other hand, A-8 in his written submission has submitted that there was no system in the bank in the year 2010 to authenticate/verify the audited balance sheet or any other documents submitted by the borrower. The bank relied on these documents for sanction of loans/limits. The Regional Office relied on these documents and sanctioned the loan of A-1. It was further submitted that there were no guidelines for verification of balance sheet before 28.11.2013. On 28.11.2013 the bank issued circular no. 9751 Ex.PW15/DA and as per para 4 and 5 of the said circular, it has become mandatory to verify the CC No. 3/2019 CBI Vs. Surender Singh & Ors. Page No. 145 of 178 balance sheet from the concerned chartered accountant as part of pre- sanction due diligence process. It was further submitted that PW8 Sh. R.B. Bidwai in para 2 and 3 of his cross examination deposed that he does not remember the fact whether there was any system in the bank to authenticate or verify the balance sheet or any other documents submitted by the borrower before sanction of the credit limit and further, no such instruction were received in this regard. It was also submitted that RO had not sought any compliance certificate with regard to verification of the documents submitted by the borrower from the branch to the bank.
243. It was further submitted on behalf of A-8 that PW35 Sh. Ravi Ranjan in his cross examination has admitted that there was no mechanism with the bank to ascertain the authentication of the balance sheet in the year 2010 but the same could be assessed through MCA pertaining to the Company's account. He further admitted that the borrower in this case was a proprietorship concern and its name would not be reflected on the website of MCA pertaining to the company. PW35 further stated that he was aware about the circular Ex. PW15/DA.
244. It was further submitted that PW36 Sh. Raghubir Chander Goel in his cross examination has categorically deposed that there was no procedure to verify the statement submitted by the borrower which were otherwise audited by CA. It was submitted that these facts have also been corroborated by PW15 and PW35. It was further submitted that PW4 Sudhir Rana has also categorically deposed that the balance sheet was prepared by him without providing the supporting documents CC No. 3/2019 CBI Vs. Surender Singh & Ors. Page No. 146 of 178 and he had not verified the previous balance sheet of M/s National Traders either from Bank of Baroda or Punjab National Bank or from M/s Raj K. Aggarwal and Associates. It was further submitted that IO Inspector Sushil Kumar (PW33) also admitted in his cross examination that he had not come across the circular Ex. PW15/DA during the course of his investigation.
245. As regards not pointing out the page of M/s Ryder Matic Bevel Gears, it was submitted that this discrepancy was pointed out during scrutiny in R.O. and was replied by the branch. It was a typographical error by the auditor of A-1 and accepted by A-1. The page was rectified and sent to the R.O. by the branch vide reply dated 27.10.2010 Ex. PW33/DB (D-10 page 240-242) before vetting of proposal by Credit Approval Grid. It was submitted that this rectification letter is part of the document submitted by the prosecution but it has not been mentioned in the chargesheet and deliberately ignored to falsely implicate A-8. It was further submitted that the name and the title of the borrower's firm which wrongly appeared had only the accounting policy of the firm and did not bear any financial data, thus was of no consequence and no loss could have been caused to anyone.
246. It was submitted that prosecution has miserably failed to disclose as to which KYC document submitted by A-1 were forged and had not been verified by A-8. It was submitted that PW33 Inspector Sushil Kumar in para 47 in his cross examination has deposed that A-1 had submitted duly self attested copies of PAN Card, driving license, electricity bill, certificate of import and export code registration as KYC documents with the bank. However, he was not aware about the copy CC No. 3/2019 CBI Vs. Surender Singh & Ors. Page No. 147 of 178 of the passport as the same was not available in the file D-10. It was submitted that the prosecution has miserably failed to prove the allegation against A-8 and the allegation is baseless and without any merits in it.
247. I have heard counsel for the parties and have perused the record carefully. It has been argued by Ld. PP that A-8 failed to properly scrutinize the KYC documents and financial documents of A-1 submitted along with the loan proposal. He has submitted that the balance sheets filed by A-1 were found and fabricated. Similarly, Income Tax Return filed by A-1 show the use of two different PAN number in filling these returns and A-8 failed to properly verify the financial documents and KYC documents submitted by A-1 Surender Singh alongwith the loan proposal.
248. Perusal of testimonies of the Chartered Accountants namely PW-4 Sudhir Rana, PW-5 Sandeep Sharma, PW-29 Manish Goel and PW-49 Arun Maheshwari clearly establish that the tax audit report, balance sheets profit and loss account of M/s National Traders submitted by A-1 Surender Singh were forged and fabricated documents which were not prepared by them. These witnesses have also denied their signatures and stamps/seals on these documents. These documents were sent to CFSL for comparison with the specimen signatures. Rubber stamps and seals used by these witnesses during relevant period. PW-39 Vijay Verma has proved his report Ex.PW-39/B which also corroborate that seals/ rubber stamps and signatures on the balance sheets and other financial documents were forged and fabricated. Hence there is not an iota of doubt left that A-1 had used the CC No. 3/2019 CBI Vs. Surender Singh & Ors. Page No. 148 of 178 forged and fabricated financial documents along with his loan application.
249. Now the question arises whether there was any negligence or deliberate omission on the part of A-8 in verifying these documents or not. In this regard, it is important to note that after verification of documents, A-8 had prepared process note which was forwarded to Regional office alongwith supporting documents. The regional office further checked and verified these documents and discrepancies /shortcomings were pointed out vide letter dated 29/9/2010 Ex.PW12/B(D-20 Pg.209). The same was duly replied by the branch vide letter dated 21/10/2010 Ex.PW-12/C(D-20 Pg.239) and the deficiencies/ discrepancies were removed. PW-15 Ravi Ranjan has deposed that A-7 had given clarification on almost all the aspects and after being satisfied he prepared the process note Ex. PW1/B and eventually loan was sanctioned. In his cross-examination, PW-35 has deposed that the GRID approved the proposal with "NIL observation"
which meant that no adverse feature was noticed in the proposal.
250. Thus from the perusal of testimony of PW-35 shows that no discrepancy in the documents came to the notice of either branch officers or the officers in the Regional office and proposal of A-1 was approved. This shows that no negligence or deliberate omission can be attributed to A-8 in scrutiny of financial documents. Not only this testimony of PW-8 R.B. Bidwai, PW-35 Ravi Ranjan, PW-36 Raghubir Chander Goel also show that there was no system in place in the bank for authentication of balance sheets in the year 2010 and there was also no procedure to verify the statements submitted by the borrower CC No. 3/2019 CBI Vs. Surender Singh & Ors. Page No. 149 of 178 which were otherwise audited by CAs. Although PW-35 has deposed that the genuineness of balance sheets of companies could be assessed through the website of MCA but since the borrower in the present case was a proprietorship concern its name would not be reflected in the website of MCA.
251. It was only on 28.11.2013 that the Bank issued circular no. 9751 Ex.PW15/DA and as per para 4 and 5 of the said circular, it has become mandatory to verify the balance sheet from the concerned chartered accountant as part of pre sanction due diligence process. This circular was issued keeping in view the increasing cases of forged and fabricated documents submitted by the borrowers with the bank.
252. The allegation of prosecution that A-8 failed to point out the page of M/s Ryder Matic Bevel Gears, it is pertinent to note that this discrepancy was pointed out during scrutiny in R.O. and was rectified by the Branch before approval of the loan and it cannot be held to be a deliberate omission on the part of A-8.
253. As regards the scrutiny of KYC documents by A-8 is concerned, PW33 Inspector Sushil Kumar in para 47 in his cross examination has deposed that A-1 had submitted duly self attested copies of PAN Card, driving license, electricity bill, certificate of import and export code registration as KYC documents with the bank. However, he was not aware about the copy of the passport as the same was not available in the file D-10. There is also no evidence that A-8 has scrutinized the documents negligently or had deliberately omitted to point out the forged and fabricated documents during the scrutiny at the CC No. 3/2019 CBI Vs. Surender Singh & Ors. Page No. 150 of 178 time of preparation of process note.
254. Hence, in view of the above discussion, I am of the considered opinion that prosecution has failed to prove its allegation against A-8.
ALLEGATION No. 3:
A-8 prepared false credit report of A-1 and A-4 on the basis of false information submitted by A-1 and thereafter prepared process note dated 08.09.2010 Ex.PW18/E (D-10 page 145-157) for sanction of loan to M/s National Traders.
255. It has been argued by Ld. PP for CBI that A-1 had filed application Ex.PW18/C as proprietor of M/s National Traders seeking credit facility from complainant bank. A-8 being the processing officer of the branch scrutinized the documents submitted along with the application and thereafter prepared a credit report of A-1 and A-4. Thereafter, he prepared a process note Ex.PW18/D which was also signed by A-7 and the same was sent to Regional Office vide forwarding letter dated 09.09.2010 Ex.PW18/E. Ld. PP has argued that PW23 Sh. Satish Kumar Khanna has identified the signature of A-7 and A-8 on the credit information report Ex. PW23/A (D-10, page 107-
110). Ld. PP has further argued that PW12 Vishnu Kant Bansal has deposed that A-8 had processed the proposal at branch level and it was recommended by A-7 as a branch head. He also identified the signature of A-7 and A-8 on the last page of the proposal. PW18 Sh. Vinod Kumar Narula also corroborated the aforesaid fact and proved the processing note as Ex.PW18/D (D-10 page 145-157) and forwarding letter as Ex.PW18/E (D-10 page 158).
CC No. 3/2019 CBI Vs. Surender Singh & Ors. Page No. 151 of 178
256. On behalf of A-8, it has been submitted that as per the role, function and delegation of duties of the officials of bank, A-8 filled up a credit information form supported with relevant documents and on the basis of information provided by the borrower. It was stated that A-8 prepared the credit report/process note. Documents received with the application were considered as authentic while initiating and processing the case. After discussing the case with A-7, the credit proposal was prepared and sent with the documents to the Regional Office along with confidential report of Bank of Baroda. It was further stated that these documents were further verified/vetted at various stages by panel lawyer and at various levels in the Regional Office. These documents were checked in the office and discrepancies and short comings were pointed out. The same were complied by the branch. Thereafter the proposal was processed and put up to Chief Manager (Credit) and AGM (Credit) for checking/vetting for onwards submission to Credit Approval Grid headed by DGM. It was submitted that due diligence report was given by the branch head i.e. A-7.
257. It was also submitted that the credit information report Ex.PW-60/Z(D-17 Pg.6-7) received from BoB termed the account as "satisfactory" and the account was also declared as "standard" for the last three years, despite the fact that BoB had already received information from PNB that A-1 had defrauded PNB. This information was not disclosed by BoB in their confidential report. PW60 Pritam Singh Arora has admitted this fact in his cross examination. PW27 Sh. Tirath Ram Singh Chawla has also deposed in his examination in chief that there were two aspects indicating the fraud. Firstly, the party i.e. M/s National Traders was already having CC and foreign exchange CC No. 3/2019 CBI Vs. Surender Singh & Ors. Page No. 152 of 178 limit from PNB, Ashok Vihar and such fact was not disclosed by them while availing loan facility from Patel Nagar Branch of UBI.
258. I have heard ld. PP for CBI and have carefully perused the testimony of witnesses and documents available on record. A-8 has admitted that he had prepared the Credit Information Report Ex.PW- 23/A(D-10 Pg.107-110) in performance of his official duties. He has further submitted that the Report was filled on the basis of information provided by the borrower and guarantor and the documents received with the loan application which were considered as authentic. It was also submitted that material information was concealed by BoB in its Credit information Report Ex. PW60/Z(D-17) regarding the account of A-1 being declared NPA and the fact that A-1 had defrauded PNB Noida.
259. Perusal of the record shows that the credit Information report alongwith other documents and process note was forwarded to Regional Office. It was again scrutinized and verified and after being satisfied, the proposal was forwarded to GRID and ultimately approved by the GRID with "Nil Observation". Thereafter, the credit facility was sanctioned to the applicant M/s National Traders. In his cross- examination, PW-35 Ravi Ranjan has deposed that the GRID approved the proposal with "NIL observation" which meant that no adverse feature was noticed in the proposal.
260. Thus perusal of testimony of PW-35 shows that no discrepancy in the credit information report came to the notice of either branch officers or the officers in the Regional office and proposal of A-1 CC No. 3/2019 CBI Vs. Surender Singh & Ors. Page No. 153 of 178 was approved. This shows that no negligence or deliberate omission can be attributed to A-8 in preparation of credit information report Ex.PW23/A or the process note Ex.PW18/D dated 08/09/2010. Hence, in my considered opinion, prosecution has not been able to prove this allegation against A-8 beyond reasonable doubts.
ALLEGATIONS COMMON TO A-7 SHARAD JOSHI AND A-8 S.K. GROVER.
261. Admittedly, A-7 and A-8 were posted together as Branch Head and Sr. Manager(Credit) in complainant bank in 2010 and had dealt with the credit facilities granted to M/s National Traders. CBI, in its charge-sheet has levelled some allegations where role has been assigned to both of them. After having dealt with the allegations wherein individual roles were assigned to A-7 and A-8, now I shall deal with the allegations wherein roles are common to both of them.
ALLEGATION No. 1A-8 alongwith A-7 prepared a false Pre-inspection report of Noida Godown of A-1 Ex. PW35/D (D-20 Pg.257) without visiting the godown or making proper inquiry and it was revealed during the investigation that A-1 was not having any Godown in Noida and he had used forged rent agreements for availing the loan.
262. Ld. PP for CBI has argued that A-7 and A-8 prepared false pre-inspection report of Noida godown dated 14.10.2010. It was argued that perusal of the report shows that A-7and A-8 visited the Noida godown situated at C-79, Sector 65, Noida, U.P. on 13.10.2010 along with A-1 Surender Singh. It was observed in the report that the godown CC No. 3/2019 CBI Vs. Surender Singh & Ors. Page No. 154 of 178 was in the basement and was on lease for a period of 22 months and the monthly rent was Rs. 23,000/- per month. It was further observed that on the day of visit to godown, a hall premise was fully occupied by the corrugated boxed in a packed condition and ready for delivery. Sufficient number of boxes containing automobile parts were found there. A-1 informed him that the godown was taken in U.P for the stock received from Uttranchal (now Uttrakhand) for saving freight charges.
263. Ld. PP argued that PW12 Sh. Vishnu Kant Bansal, PW23 Sh. Satish Kumar Khanna and PW35 Sh. Ravi Ranjan have identified the signatures of A-8 and A-7 on the pre-inspection report Ex. PW35/D. He further argued that A-7 and A-8 did not make any inquiry from the owner of the premises or the neighbours regarding the rented godown. It was argued that prosecution examined the owner of godown Sh. Karan Aggarwal as PW22. This witness has deposed that he had let out the godown to A-5 Ashish Puri and also proved the rent agreements executed between him and Ashish Puri as Ex.PW22/A (D-
79), Ex. PW22/B (D-80) and Ex. PW22/C (D-81). He denied having let out the godown to A-1 Surender Singh and deposed that he did not know any Surender Singh in the context of the godown. When he was shown the rent agreement dated 01.02.2009 Mark PW22/E and rent agreement dated 25.03.2010 Mark PW22/F, he deposed that his signature had been copied and he had never executed any such agreement with A-1 Surender Singh. It was submitted that in his cross examination PW22 has deposed that no one had ever visited the premises for inquiry about A-1. Ld. PP argued that these facts clearly shows that pre-inspection report Ex.PW35/D is false and has been prepared by A-7 and A-8 in furtherance of criminal conspiracy with CC No. 3/2019 CBI Vs. Surender Singh & Ors. Page No. 155 of 178 other co-accused.
264. Perusal of the written arguments filed by A-8 shows that A- 8 has not advanced any written arguments qua this allegation.
265. Ld. counsel for A-7 has argued that the pre-inspection of Noida godown was jointly conducted by A-7 and A-8 and they both had signed the aforesaid report. It was also argued that they had collected two rent agreement (Mark PW 22/E and 22/F) relating to the Noida godown from A-1 which are available at page no. 171 to 179 of D-17. It was denied that the pre-inspection report was falsely prepared by A- 7 at the instance of A-1. Ld. defence counsel has further argued that the Noida godown was again visited by PW-56 Sh. Ashish Jain on 21.12.2010 on the instructions of A-7 had given his report Ex. PW 18/H. It was argued that if the pre-inspection report Ex. PW 35/D was false and A-1 was not having any godown in Noida, then how PW-56 had prepared the report Ex. PW 18/H. He further argued that if the report Ex. PW 18/H was also false, why PW-56 Ashish Jain has not been made an accused in the case and why he was cited as a witness by the IO. This shows that the investigation has not been conducted in fair manner by the IO.
266. Perusal of the record shows that Pre-inspection report of Noida Godown Ex.PW35/D bears the signatures of both A-7 and A-8. Their signatures have also been identified by PW-12 Vishnu Kant Bansal, PW-23 Sh. Satish Kumar Khanna and PW-35 Ravi Ranjan. Even A-7 and A-8 have not dispute their signatures on the report Ex.PW-35/D. The testimony of PW-22 Karan Aggarwal has proved CC No. 3/2019 CBI Vs. Surender Singh & Ors. Page No. 156 of 178 beyond any shadow of doubt that the godown in question was let out by him to A-5 Ashish Puri and not to A-1 Surender Singh and A-5 was using the said godown for his business purposes. PW-22 has also denied his signatures on the copies of rent agreements Mark PW-22/D and mark PW-22/ E and has deposed that his signatures on these agreements have been copied and he never executed any such rent agreements with A-1. PW-22 has also deposed that no one had ever visited the premises for inquiring about Surender Singh. This witness has not been cross-examined by counsels for A-7 and A-8. Hence his testimony has remained unchallenged and can be safely relied upon.
267. Testimony of PW-22 Karan Aggarwal has falsified not only the report Ex. PW-35/D but it has also falsified the claim of PW-56 Ashish Jain who has deposed that on the instructions of Sh. Sharad Joshi (A-7) he had conducted the inspection of godown of M/s National Traders on 21.12.2010 and given his report Ex.PW18/H ( page No. 24 of D-11) and on the basis of the said report, a note was put up by Sh. S. K. Grover (A-8) regarding disbursement of CC Limit by directly disbursing the amount to Bank of Baroda for taking possession of property papers for equitable mortgage purposes. It also establishes beyond any doubt that the reports Ex.PW35/D and Ex. PW18/H were false and prepared without making any visit to the Noida godown and both these reports have been prepared only to facilitate sanction of loan and release of limits in favour of M/s national Traders, proprietorship concern of A-1. The argument of Ld. Counsel for A-7, that IO has not investigated the case fairly and impartially in as much as PW-56 Ashish Jain has not been made an accused, does not given any advantage to A-7 and A-8. As perusal of record shows that PW-56 CC No. 3/2019 CBI Vs. Surender Singh & Ors. Page No. 157 of 178 was a very junior level officer who had joined the bank in 2009 only as scale-II officer and he has categorically deposed that he had prepared the report on the instructions of A-7. The possibility cannot be ruled out from the testimony of PW-56 that the report might have been obtained by A-7 from PW-56 by using his undue influence and abusing his official position being the branch head.
268. Hence, in view of the aforesaid discussion, I am of the considered opinion that prosecution has proved this allegation against A-7 and A-8 beyond reasonable doubt.
ALLEGATION No. 2A-7 and A-8 failed to adhere to the stipulated margin of 25% to be kept by the borrower and Packing credit was released by A- 7 and A-8 without keeping the stipulated margin.
269. Ld. PP has argued that vide credit sanction note Ex. PW1/B, the credit facility was sanctioned to A-1 and margin of 25% was stipulated in the sanction advice as regards CC limit and PC limit. It was argued that while releasing the PC limit, the margin of 25% was not adhered to by A-7 and A-8. It was also argued that there was no request for reduction of the sanctioned margin by A-1 at any point of time but still perusal of the record shows that margin has been kept below 25% on PC limit released to A-1 on various dates as detailed in para 20 of the chargesheet.
270. In support of his arguments, Ld. PP has referred to testimony of PW17 Arush Bawa, who has deposed that some of the CC No. 3/2019 CBI Vs. Surender Singh & Ors. Page No. 158 of 178 packing credits were released by the branch without adhering to the minimum margin of 25% stipulated by the sanctioning authority. He deposed that minimum margin of 25% should be kept and only 75% of the FOB value of the invoices should be released. PW17 also gave details of packing credit in para 21 of his deposition where 0% or less than 25% of margin was kept by the branch. Ld. PP also referred to the deposition of PW18 Vinod Kumar Narula who has also testified that as per sanction, the condition of margin was stipulated as 25%. As per the note dated 14.05.2012 Ex. PW18/M (D-11, page 140) and as per the noting appearing on letter Ex. PW18/N (D-11 page 152), the condition regarding margin of 25% was not adhered to.
271. Ld. PP also referred to the testimony of PW17 Arush Bawa who has also deposed that some packing credits were released by the branch without adhering the minimum margin of 25% stipulated by the sanctioning authority. He further deposed that margin was kept below 25% in the following cases:-
Date of release Amount of Party Name/ Margin Ex. No./ Doc. No. of PC PC Order Amount released 07.09.2011 47.34 lacs M/s Max Auto Spares 0% PW17/T-1 (D-16) US $ 102926 (Rs. 47,34,596/-) 17.10.2011 29.43 lacs M/s Ahli & Zamani General Trading 15% PW17/T-2 (D-16) US $ 60075 (Rs. 29,85,192-) 14.05.2012 14.40 lacs Simbani Incorporated 0% PW17/T-3 (D-11) US $ 93265 (Rs. 4943045/-) 14.05.2012 63.60 lacs M/s Mapex International 0% PW17/T-4 (D-11) US $ 1,20,000 (Rs. 63.60 lacs) 14.05.2012 42.00 lacs Jain Trading LLC 0% PW17/T-5 (D-11) US $ 79470 (Rs. 4211910/-) CC No. 3/2019 CBI Vs. Surender Singh & Ors. Page No. 159 of 178 17.05.2012 20.35 lacs M/s Mapex International 8% PW17/T-6 (D-11) US $ 40862 (Rs. 22,06,575/-) 23.05.2012 97.92 lacs M/s Mapex International 7% PW17/T-7 (D-11) US $ 198515 (Rs.1,05,21,295/-)
272. Ld. PP has further argued that all the aforesaid PCs were released by PW42 Lalit Kumar who has admitted in his cross examination by Ld. Sr. PP that he prepared the note regarding releasing of PC limit at point B of Ex. PW17/T-1 and another note at point B of Ex. PW17/T-2 on the instruction of A-8 S.K. Grover. He further admitted that he was a new appointee and was working under the instruction of A-8 S.K. Grover and was not having knowledge of Forex Department. He also admitted that he was not sure that margin was not to be kept below 25% as margin was kept different at the time of different PC limit released.
273. Ld. PP has further argued that PW56 Ashish Jain has deposed that Ex. PW21/C (D-11, page 49) was a request letter on behalf of National Traders for release of PC limit of Rs. 86 lacs. In this case, there was some problem in the FINACLE system, therefore, they were unable to open the PC account. He prepared a note in this regard after consulting with A-7 who told him to allow overdraft in CC account to make the payment and that the overdraft would be adjusted. He proved the note along with his signature on the backside of page 49 of D-11 as Ex.PW56/A. Ld. PP has argued that the deposition of this witness clearly shows that A-7 was involved in the process of release of packing credit to National Traders and he was well aware of the illegalities committed in the release of packing credit by not adhering to the stipulated margin.
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274. Per Contra, Ld. Counsel for A-7 has argued that PW42 Sh. Lalit Kumar has deposed that he was working as Assistant Manager in complainant bank, Patel Nagar Branch. He also deposed that the sanction advice of M/s National Traders provided for 25% margin by the borrower and the same was accepted by the proprietor of M/s National Traders. Ld. Counsel argued that in the cross examination by Ld. Sr. PP, this witness admitted that margin was kept different at the time of different PC limit released. He further argued that in the cross examination by A-7, PW42 admitted that there were three categories of branches in complainant bank in dealing with foreign exchange. The Patel Nagar Branch was C category branch and it forwarded the documents to B category branch for scrutiny (Overseas branch at Connaught Place in this case). Ld. Counsel for A-7 submitted that PW42 had attended the training programmes for C category branches in foreign export, supervisory skills and introduction for probationary officer and he had also served at Ansari Road Branch (which was also C category branch) before joining East Patel Nagar Branch. Hence, it cannot be said that PW42 was a new officer or that he was not having knowledge or experience in the Forex Department.
275. Ld. Counsel for A-7 argued that PW42 had signed various letters such as letter dated 10.10.2011 Ex. PW42/Q (D-102, page 10), letter dated 08.08.2011 Ex. PW42/S (D-102, page 16), letter dated 19.09.2011 Ex. PW42/U (D-102, page 18) and letter dated 24.08.2011 Ex.PW42/W (D-102, page 23) which were sent to the Overseas Branch for scrutiny of the export documents which shows that PW42 was having the knowledge and experience in Forex Department and he was CC No. 3/2019 CBI Vs. Surender Singh & Ors. Page No. 161 of 178 working independently in the branch. He further argued that PW42 in para 47 of his cross examination deposed that he had never recommended for reduction of margin for the account of M/s National Traders. He also admitted that the calculation of drawing power is a departmental work. PW42 further deposed that according to him, no special educational qualification was required for getting a posting in the Forex Branch of UBI which again shows that PW42 was competent to work in the Forex Department having undergone departmental training.
276. It was argued that M/s National Traders had made pre request for release of packing credit limit vide letter dated 17.05.2012 (D-11, page 473-474), letter dated 23.05.2012 (D-11, page 152) and letter dated 14.05.2012 (D-11, page 140). It was argued that the red encircled portion A on the letter dated 14.05.2012 is calculation for release of packing credit. The red encircled portion B is the request made by A-8 to A-7 for release of packing credit. Red encircled portion C are the remarks of A-7. It was submitted that the PC limit calculation on the letter dated 17.05.2012 and 23.05.2012 do not bear the signatures of A-7. It was argued that PW42 Lalit Kumar in para 50 of his cross examination has identified the handwriting on page 474 of D- 11 to be of Sunaina Mittal and stated that she had calculated the amount of PC available and PC to be released. He also deposed that there is no approval or instruction issued by A-7 on Ex. PW17/T-6 and Ex. PW42/D-1 for release of PC. He further admitted that in the letter dated 23.05.2012 Ex. PW18/N Sunaina Mittal had calculated the amount of PC available and PC to be released and there was no approval or instruction issued by A-7 on Ex.PW18/N for release of PC.
CC No. 3/2019 CBI Vs. Surender Singh & Ors. Page No. 162 of 178 PW42 also admitted that the note made by A-7 at point C on letter dated 14.05.2012 Ex.PW18/L mentions only the permission given by DGM for availing PC limit upto Rs. 1.85 crores and there is no recommendation for reduction of margin. He also admitted that no permission was sought for release without margin. Ld. Counsel for A-7 further argued that PW42 further admitted in his cross examination that the sanction limit for M/s National Traders w.r.t. packing credit was 25% and admitted that he had kept margin of 23% while calculating PC to be released in Ex. PW42/D (D-16, page 22) but he did not have any reason as to why he had kept margin of 23%. He also admitted that there was no noting of Sr. Officer on Ex. PW42/D. He also deposed that same was his reply to Ex. PW42/B (D-16 page 5) and Ex. PW42/C (D- 16 page 16) where margin was kept by him for PC to be released was 33%.
277. Ld. Counsel for A-7 argued that PW17 Arush Bawa and PW18 Vinod Kumar Narula have also deposed that the drawing power is calculated by the officer of Credit Department. It was argued that PW42 calculated the drawing power and did not adhere to the margin of 25% as stipulated in the sanction advice but instead of being made an accused, he has been named as a witness in the case whereas A-7 has been made an accused despite favourable staff accountability report (D-21).
278. On behalf of A-8, it has been submitted that A-8 had not dealt with the facilities relating to packing credit limit. It was submitted that PW42 Lalit Kumar on seeing the file Ex. PW21/C (D-11) pertaining to M/s National Traders has deposed that that the sanction advice CC No. 3/2019 CBI Vs. Surender Singh & Ors. Page No. 163 of 178 Ex.PW18/G bears the signature of A-8 S.K. Grover at point Y. The sanction advice provided for 25% margin by the borrower and it was accepted by the proprietor of M/s National Traders. In his cross examination, PW42 admitted that he had prepared the note for release of PC but no written approval was obtained from the branch head. It was submitted that A-8 was not empowered to give any permission to release the PC limit.
279. I have heard Ld. Counsel for parties and have perused the record carefully. Perusal of the testimony of PW42 would reveal that he had released the PCs wherein the stipulated margin of 25% was not adhered to. PW42 has deposed that he was a new appointee and was working under the instruction of A-8. He has also deposed that the note regarding release of PC limit at point B of Ex. PW17/T-1 and note at point B of Ex. PW17/T-2 were prepared on the instruction of A-8 Sh. S.K. Grover. PW42 has further deposed that on 17.05.2012 PC of Rs. 20.35 lacs and on 23.05.2012 PC of Rs. 97.92 lacs were released on the instructions of A-7 and A-8. PW42 has also identified that the note and signature of Ms. Sunaina Mittal on Ex. PW18/M regarding release of PC limit of Rs. 185 lacs. He has further identified his own handwriting and signature and also the signature and handwriting of A- 7 on Ex. PW18/M.
280. Ld. Counsel for A-7 has argued that PW42 was not a new employee and his cross examination would show that he had attended the training programmes for C category branches in foreign export, supervisory skill and introduction for probationary officer and had also CC No. 3/2019 CBI Vs. Surender Singh & Ors. Page No. 164 of 178 served at Ansari Road Branch which was also C category branch before joining East Patel Nagar Branch which was also C category branch. It was argued that PW42 was working independently and was having knowledge and experience in the Forex Department. He has also admitted that calculation of drawing power is departmental work.
281. Ld. Defence Counsel further argued that the PC limit calculation on letter dated 17.05.2012 and 23.05.2012 do not bear signature of A-7. There is no approval or instruction issued by A-7 on Ex. PW17/T-6 and Ex. PW42/DD-1 for release of PC. It was argued that no approval or instruction was issued by A-7 on Ex. PW18/N and the note made by A-7 at point C on letter dated 14.05.2012 Ex. PW18/L only mentions about permission given by DGM for availing PC limit upto Rs. 1.85 crores and there was no recommendation in reduction of margin and no permission was sought for release without margin. It was argued that PW17 and PW18 have also deposed that drawing power is calculated by the officer of credit department and A-7 had no role in calculation of the limits for release of PC as it was clerical/departmental work.
282. No doubt PC limits have been calculated by PW42 Lalit Kumar and Sunaina Mittal but PW-42 he has categorically deposed that PC limits were calculated on the instructions of A-7 and A-8. It is also evident that there are no signature of A-7 on the calculation of PC limit on letter dated 17.05.2012 and 23.05.2012. However, perusal of letter dated 14.05.2012 Ex. PW18/M for the release of packing credit limit of Rs. 185 lacs would show that the noting of A-7 is at the bottom below the calculation of PC limit. A mere glance on the calculation CC No. 3/2019 CBI Vs. Surender Singh & Ors. Page No. 165 of 178 would show that stipulated margin of 25% was not adhered to in the said release. Obviously, the letter must have been placed before A-7 and A-8 after the calculations for release of PC were made and only thereafter A-8 had made a note seeking permission for release of PC. The calculations for the release PC must have come to their notice and being the Branch Head and Sr. Manager(Credit) respectively, it was obligatory upon both A-7 and A-8 to direct their subordinates to adhere to the stipulated margin of 25% while calculating the amount for release of packing credit but there are no such instructions/observations and it appears that both A-7 and A-8 either ignored or turned a blind eye to the wrong calculations for release of PC Limit . A-7 wrote the note for release of PC upto Rs. 185 lacs without even bothering to ensure compliance of the condition of keeping margin of 25% while releasing the packing credit.
283. The documents available on record, particularly the statement of account Ex. PW14/A (D-6) would show that the packing credit has been released in the account of M/s National Traders on 14.05.2012 itself as per the note mentioned on Ex. PW18/M. A-7 being the Branch Head had the responsibility of overall supervision of the activities in the Branch and similarly, A-8 being the Sr. Manager (Credit) had a responsibility to supervise the activities in credit branch and both of them were under a duty to ensure the compliance of the conditions stipulated in the credit sanction note Ex.PW1/B(D-20) but they have failed to perform their duties duty diligently and this clearly amounts to criminal misconduct on his part. A-7 and A-8 cannot shrug away their responsibilities on the ground that calculation of drawing power was departmental work or that A-8 had no power to release CC No. 3/2019 CBI Vs. Surender Singh & Ors. Page No. 166 of 178 Packing credit.
284. Hence, in view of the aforesaid discussion, I am of the considered opinion that prosecution has proved this allegation against A-7 beyond reasonable doubts.
285. Ld. Counsel for A-7 has also argued that there has been no wrongful loss to the complainant bank due to the acts or omissions of A-7 and A-8 as complainant bank had instituted recovery proceedings against A-1 and A-4 bearing OA No. 423/2013 before DRT-III, Delhi. D7W4 Sh. Rajesh Kumar has produced the copy of order passed by Hon'ble DRT dated 27.1.2016 in the aforesaid proceedings which shows that the OA was decreed in favour of the complainant bank. The copy of the order was marked as D7W4/2. This witness also proved the order dated 11.8.2016 passed by DRT-I in TFA No. 210/2015 titled as Surender Singh Vs. Union Bank of India marked as Mark D7W4/1 whereby the objections raised by A-1 were dismissed. He has also proved the copy of the order of Recovery Officer dated 1.7.2019 as Mark D7W4/3 which shows that property no. J7/53, Ground Floor, Rajouri Garden, Delhi was sold in auction.
286. Ld. Counsel for A-7 further argued that D7W6 Rajesh Kumar from DRT-III had proved the order Mark D7W4/2 as Ex. D7W6/A. Ld. Counsel for A-7 further argued that D7W5 Sh. Prem Kumar, Chief Manager from the complainant bank has produced the copy of statement of account no. 308007220000009 for the period 31.12.2012 to 9.9.2019 and account no. 308005040132096 for the period 30.9.2013 to 9.9.2019 of M/s National Traders along with CC No. 3/2019 CBI Vs. Surender Singh & Ors. Page No. 167 of 178 certificate under Bankers' Book of Evidence Act which were exhibited as Ex. D7W5/A and D7W5/B respectively. It was argued that in the absence of any wrongful loss to the bank, no offence of cheating is made out against bank officials, i.e. A-7 and A-8.
287. I have perused the record produced by the aforesaid witnesses. Perusal of the record shows that complainant bank has recovered the money cheated by the accused persons. However, mere recovery of the cheated amount does not wipe off the criminal offences committed by the accused persons. It may be a mitigating circumstance at the stage of deciding the quantum of sentence but it cannot be a ground for acquittal of the accused persons, when their guilt is otherwise proved.
288. Ld. Counsel for A-7 has also argued that mere breach in performance of duties or mere procedural lapses do not amount to criminal misconduct. It was also argued that the evidence against A-7 and A-8 was circumstantial in nature and the prosecution has not been able to prove the complete chain of circumstances which may lead to only hypothesis of guilt of the accused persons. He argued that A-7 and A-8 cannot be convicted merely on the ground of suspicion as suspicion howsoever strong cannot take place of proof. It was also argued that the accused has only committed breach of circulars which do not constitute any criminal offence.
289. From the perusal of evidence available on record, I am of the considered opinion that the acts and omissions of A-7 and A-8 cannot be termed as mere breach of duties or violation of circulars CC No. 3/2019 CBI Vs. Surender Singh & Ors. Page No. 168 of 178 simplicitor. The acts of preparing false due diligence reports, pre- inspection reports and release of limits without even getting valid and proper sanction from the Regional Office shows that accused persons were actively involved in the criminal offences. They not only violated the circulars issued by the bank from time to time but also failed to comply with the conditions mentioned in the credit sanction note Ex. PW-1/B. Non-adherence to the minimum margin stipulated in the sanction note, unauthorized merger of PC and FDBP facilities and disbursal of the amount to the borrower without even waiting for permission from the sanctioning authority clearly indicate their dishonest and criminal intention to cheat the bank. A-7 and A-8 not only committed criminal offences but also abused their authority for causing wrongful gain to M/s National Traders and its proprietor. Hence, I do not find any merits in the arguments advanced by Ld. Counsel for A-7 and the same are, accordingly, rejected.
CONCLUSION
290. In view of the aforesaid discussion, I am of the considered opinion that the prosecution has proved its case against accused No. 5, A-7 and A-8 beyond reasonable doubt. However, prosecution has miserably failed to prove its case against A-6.
291. Accordingly, the final judgment w.r.t different accused in this case is summarised as under:
(i) Accused No.5 Ashish Puri stands convicted for the offences u/s 120-B IPC r/w Sections 420/468/471 IPC and Section 13 (1) (d) r/w Section 13 (2) of PC Act. However, he is acquitted for offences under Section 468/471 IPC.
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(ii) Accused No. 6 Subodh Kumar Singh is acquitted for the offence under Section 120-B read with Section 420/468/471 IPC and Section 13(1)(d) of PC Act, 1988. He is also acquitted for the offences under Section 420/468/471 IPC. He is directed to furnish bail bond under Section 437-A Cr.P.C. on or before the next date of hearing.
(iii) Accused No. 7 Shard Joshi is convicted for the offence under Section 120-B read with Section 420/468/471 IPC and Section 13(2) read with section13(1)(d) of PC Act. He is also convicted for offences under Section 420/468/471 IPC and 13(2) read with Section 13(1)(d) of PC Act, 1988.
(iv) Accused No. 8 S. K. Grover is convicted for the offence under Section 120-B read with Section 420/468/471 IPC and Section 13(2) read with section 13(1)(d) of PC Act. He is also convicted for offences under Section 420/468/471 IPC and 13(2) read with Section 13(1)(d) of PC Act, 1988.
292. Let the convicts be heard on the point of sentence.
Announced in open court Today:29.08.2020 (ANIL KUMAR SISODIA) SPECIAL JUDGE (PC ACT)(CBI)-07:
ROUSE AVENUE COURTS: NEW DELHI CC No. 3/2019 CBI Vs. Surender Singh & Ors. Page No. 170 of 178 IN THE COURT OF ANIL KUMAR SISODIA SPECIAL JUDGE (PC ACT)(CBI)-07: ROUSE AVENUE COURTS:
NEW DELHI New CNR No. DLCT11-000111-2019 (Old CNR No.02401R0012392016) New CC No. 3/2019 (Old CC No. 01/2016) RC No. 219-2014(E)0013/CBI/EO-1/ND CBI Versus 1. Surender Singh @ S. Surender Singh @ Surender Singh Chandok s/o late Daleep Singh R/o J-5/152, 2nd & 3rd Floor, Rajouri Garden, Delhi.
(Proclaimed Offender).
2. Angad Singh s/o Surender Singh J-5/152, 2nd & 3rd Floor, Rajouri Garden, Delhi.
(Proclaimed Offender).
3. Harsahib Singh @ Gursahib Singh @ Sahib Singh s/o Surender Singh J-5/152, 2nd & 3rd Floor, Rajouri Garden, Delhi.
(Proclaimed Offender).
4. Harleen Kaur Chandok W/o Surender Singh J-5/152, 2nd & 3rd Floor, Rajouri Garden, Delhi.
(Proclaimed Offender).
5. Ashish Puri CC No. 3/2019 CBI Vs. Surender Singh & Ors. Page No. 171 of 178 s/o Late Sh. Inder Mohan Puri R/o J-112, Main Market, Rajouri Garden, New Delhi-110027.
(Convicted on 29.08.2020)
6. Subodh Kumar Singh s/o Late Sh. S. P. Singh R/o 2314/4, Hudson Lane, Kingsway Camp, Delhi-110009 (Acquitted on 29.08.2020)
7. Sharad Joshi s/o Late Sh. B. P. Joshi, R/o B-43, Kamal Pushpa Society, Bandra Reclamation, Bandra West, Mumbai-400050 (Convicted on 29.08.2020)
8. Surendra Kumar Grover Late Sh. R. L. Grover R/o EA-25, Inderpuri, New Delhi-110012.
(Convicted on 29.08.2020) Memo of Appearance:
Sh. A. K. Kushwaha, Ld. PP for CBI.
Sh. Mirnal Singh, Ld. Proxy counsel for Sh. M. S. Bammi, Ld. Counsel for Convict Ashish Puri with Convict in person. Sh. Siddharth Joshi, Ld. Counsel for Convict Sharad Joshi with Convict in person.
Sh. Ashok Kumar, Ld. Counsel for Convict S.K. Grover with Convict in person.
ORDER ON SENTENCE
1. Arguments on the point of sentence have been heard on behalf of Sh. A.K. Kushwaha, Ld. PP for the CBI and Sh. Mirnal Singh, Ld. Proxy counsel for Convict Ashish Puri, Sh. Siddharth Joshi Ld. Counsel CC No. 3/2019 CBI Vs. Surender Singh & Ors. Page No. 172 of 178 for Convict Sharad Joshi and Sh. Ashok Kumar Ld. Counsel for convict S.K. Grover.
2. Ld. PP for CBI has argued that convicts are guilty of grave and serious offences of criminal conspiracy, cheating, forgery and corruption. It was argued that such crimes are greed based crimes and adversely affect the society. He argued that the convicts had caused huge loss to the public money by committing the aforesaid offences.
He argued that the convicts should be awarded maximum sentence as public money was lost in the crime committed by the convicts and could be recovered only after litigation by the bank. He argued that the punishment awarded should be directly proportionate to the nature and magnitude of the offence and cardinal principle of sentencing policy is that sentence imposed on an offender should reflect the crime he has committed and should be proportionate to the gravity of offence. Any liberal attitude by awarding meager sentences or taking too sympathetic view will result counter productive in the long run and against the interest of the society. He further argued that the court will be failing in its duty if appropriate punishment is not awarded for a crime which has been committed against the society.
3. Sh. Mirnal Singh, Ld. Proxy counsel for convict Ashish Puri has submitted that the convict is aged about 38 years. He is not a habitual offender and he is not facing any other criminal trial. He is not a previous convict. Convict is the sole male member of his family and is also sole bread earner of his family. His family comprises of widow mother, wife and sister who is having matrimonial dispute with her husband. It was argued that a lenient view should be taken against him.
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4. Sh. Siddharth Joshi Ld. Counsel for Sharad Joshi has argued that convict is a senior citizen aged about 67 years. He has retired from the bank after 37 years of unblemished service. Convict is has clean antecedents and has never been convicted in the past for any office. The convict is suffering from severe diabetes and hypertension. The wife of the convict had undergone knee replacement surgery in 2019 and thereafter she has been suffering from panic attacks and had to be admitted again in the hospital. One son of the convict is residing in USA and other son is living with him.
It was further submitted that the offence relates to the year 2010 to 2013 and the minimum punishment prescribed under Section 13(2) P. C. Act, 1988 at that time was one year. A prayer has been made for taking lenient view against the convict. Ld. Counsel for convict has also placed reliance on the following judgments in support of his arguments:
i) Nanhaku Ram Vs. State of Jharkhand [2015 CrLJ 4890];
ii) K. S. Panduranga Vs. State of Karnataka [2013(2) SCC(Cr) 257];
iii) Antony Cardoza Vs State of Kerala [2014(4) Crimes 324(SC)];
iv) P. P. Singh Vs. CBI [2014(4) AD (Delhi)67] and
v) Sombhai Gopalbhai Pate Vs. State of Gujarat [2015(2) Crimes 36(SC)].
5. Sh. Ashok Kumar Ld. Counsel for convict S.K. Grover has also prayed for taking a lenient view against the convict on the ground that convict is a senior citizen aged about 68 years and had retired from the bank in the year 2012. It was argued that convict has no previous criminal record and is not facing any trial. He is living with his wife and none of his children are living with him and hence, he is the only person to look after his wife. It was further submitted that the convict is CC No. 3/2019 CBI Vs. Surender Singh & Ors. Page No. 174 of 178 suffering from ailments like thyroid, cholesterol and arthritis. A prayer has been made for taking lenient view against the convict. Ld. Counsel for convict S.K. Grover has also filed written submissions in support of his oral arguments.
6. The object of sentencing is that the offender does not go unpunished and the justice be done to the victim of crime and the society. The measure of punishment in a given case must depend upon the gravity of the crime; the conduct of the offender and the nature of offence. Imposition of appropriate punishment is the way adopted by the courts for responding the society's desire for justice against the criminals. Justice demands that Courts should impose punishment fitting to the crime.
7. It was held in case of Siddarama & Ors. V State of Karnataka, (2007) 1 SCC (Cri) 72 :-
" the object should be to protect the society and to deter the criminal in achieving the avowed object to law by imposing appropriate sentence. It is expected that the courts would operate the sentencing system so as to impose such sentence which reflects the conscience of the society and the sentencing process has to be stern where it should be. Imposition of sentence without considering its effect on the social order in many cases may be in reality a futile exercise. The social impact of the crime e.g. where it relates to offences relating to narcotic drugs or psychotropic substances which have great impact not only on the health fabric but also on the social order and public interest, cannot be lost sight of and per se require exemplary treatment. Any CC No. 3/2019 CBI Vs. Surender Singh & Ors. Page No. 175 of 178 liberal attitude by imposing meager sentences or taking too sympathetic view merely on account of lapse of time or personal inconveniences in respect of such offences will be result wise counterproductive in the long run and against societal interest which needs to be cared for and strengthened by a string of deterrence inbuilt in the sentencing system".
8. After carefully going through the rival submission, I am of the considered opinion that two out of the three convicts are senior citizens and have been suffering from various old age ailments. Convict Sharad Joshi and S. K. Grover were public servants who had retired after long service to the bank and there is no history of any previous conviction against them. Convict Ashish Puri is young age and is sole bread earner of his family and he is also not a previous convict.
9. Another mitigating circumstance which has not been argued but has been proved during the evidence by convict Sharad Joshi is that the bank has already recovered the money lost due to the fraud committed by the convicts and their associates through DRT and as such the bank has not suffered any loss of public money.
10. In view of the aforesaid facts, particularly the fact that there is no aggravating circumstance against any of the convicts, I am of the considered opinion that the case does not warrant maximum punishment stipulated in law but at the same time they cannot be dealt with too leniently as it will send wrong signal to the society. Accordingly, after considering all the facts and circumstances including mitigating factors, I hereby sentence the convicts as under:-
CC No. 3/2019 CBI Vs. Surender Singh & Ors. Page No. 176 of 178 Name of convict Quantum of sentence Ashish Puri One year R.I. and fine of Rs. 25,000/- for offences u/s 120-B IPC r/w Sec 420/468/471 IPC and Section 13(1)(d) read with Section 13(2) PC Act-1988 (In-default sentence would be Six months S.I. for non payment of fine.) Sharad Joshi One year R.I. and fine of Rs. 25,000/- for offences u/s 120-B IPC r/w Sec 420/468/471 IPC and Section 13(1)(d) read with Section 13(2) PC Act-1988 Two years R.I. and fine of Rs. 25,000/- for offence u/s 420 IPC.
Two years R.I. and fine of Rs. 25,000/- for offence u/s 468 IPC.
Two years R.I. and fine of Rs. 25,000/- for offence u/s 471 IPC One year R.I. and fine of Rs. 50,000 for offence under Section 13(1)(d) r/w Section 13(2) of P. C. Act (In-default sentence would be Six month S.I. for each category of fine.) S. K. Grover One year R.I. and fine of Rs. 25,000/- for offences u/s 120-B IPC r/w Sec 420/468/471 IPC and Section 13(1)(d) read with Section 13(2) PC Act-1988 Two years R.I. and fine of Rs. 25,000/- for offence u/s 420 IPC.
Two years R.I. and fine of Rs. 25,000/- for offence u/s 468 IPC.
Two years R.I. and fine of Rs. 25,000/- for offence u/s 471 IPC One year R.I. and fine of Rs. 50,000 for offence under Section 13(1)(d) r/w Section 13(2) of P. C. Act (In-default sentence would be Six month S.I. for each category of fine.)
10. All the sentences would run concurrently. All the convicts would be entitled to benefit of provision contained u/s 428 Cr.P.C. The bail bonds of the convicts stand cancelled. Convicts be taken into custody.
CC No. 3/2019 CBI Vs. Surender Singh & Ors. Page No. 177 of 178 Convicts be sent to jail under appropriate warrants for serving the sentence.
A copy of the judgment and order on sentence be given to the convicts free of cost.
Ahlmad is directed to paginate and index the file for facilitating its digitization.
File be consigned to record room after due compliance.
ANIL KUMAR Digitally signed by ANIL KUMAR
SISODIA
SISODIA Date: 2020.09.07 13:03:35 +05'30'
Announced in the open court (ANIL KUMAR SISODIA)
On 07th day of September, 2020 Special Judge (PC Act) (CBI)-07
Rouse Avenue Courts: New Delhi
CC No. 3/2019 CBI Vs. Surender Singh & Ors. Page No. 178 of 178