Delhi District Court
Cbi vs . Surender Kappor Etc on 31 August, 2016
IN THE COURT OF SHRI NARESH KUMAR LAKA
CHIEF METROPOLITAN MAGISTRATE
EAST DISTRICT, KARKARDOOMA COURTS, DELHI
RC No. 220/14/E/001/CBI/EOUIV/EOII/New Delhi
CBI Vs. Surender Kappor etc
Dated: 31.08.2016
ORDER
Brief facts: On 01.01.2014, a complaint was made to the CBI by an Officer of Punjab National Bank (PNB) reporting cheating and fraud of Rs.350 lacs by the account holder of M/s. Radhey Shyam Mittal. During investigation conducted by CBI, it was revealed that in the year 2013 a criminal conspiracy was hatched by following accused persons to cheat bank by availing cash credit loan. Accordingly these accused persons opened various paper made fictitious companies and got opened various accounts in different banks by using fake identity and other documents. Their brief role is as under:
Accus Actual name of Impersonating act and forgeries ed accused No. 1 Surender Kapoor Took a godown on rent in fictitious name for showing doing of business Prepared forged identity cards, forged lease deed, forged property documents.
2 Sunil Kapoor - do -
3 Ved Prakash Impersonated as Radhey Shyam
Kashyap Mittal and opened a fictitious
account in the name of Radhey
Shyam Mittal & Sons at PNB
Preet Vihar.
Impersonated as Ashish Kumar
Gupta, proprietor of M/s.
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Radhey Shyam Mittal and M/s.
Prime Marketing and opened
account in Central Bank of India,
Savita Vihar, Delhi
Impersonated as Ashish Kumar
Gupta, proprietor of M/s. Prime
Marketing and opened account
in Central Bank of India, Savita
Vihar, Delhi
4 Meena Nigam Impersonated as Geeta Devi
Mittal (wife) and stood Guarantor for
Ved Prakash Kashyap and signed all
guarantee documents in that name
Impersonated as Geeta Devi
Mittal and opened account in Indian
Bank, Naveen Shahdara in the name
of M/s. Narula Traders
Impersonated as Adarsh Chibbar
and opened two accounts in the name
of M/s. Shree Mahadev Traders and
M/s. New India Sales at Dena Bank,
Shahdara.
5 Sanjay Asthana Impersonated as Harish Khattar
and opened two accounts - M/s.
Khattar Trading co. and M/s.
Standard Marketing at PNB,
Vishwas Nagar, Delhi.
6 Ravi Kumar Purchased two sim cards which
were used in the aforesaid
accounts and at the time of
availing loan and post loan.
7 Naveen Kumar Impersonated as Chandra
Prakash Khattar and opened
account as M/s Bharat Food
India at Central Bank of India,
New Seelampur
8 Sudhir Dwivedi A financial consultant did
unlawful liaison with concerned
AGM of PNB who sanctioned
loan of Rs.350 lacs in question.
Huge amount was paid to him.
He also disclosed to have paid
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Rs.5 lacs to said AGM.
Accus Concerned AGM His role is under consideration on the
ed put of PNB. point of prosecution sanction.
in
Col.12
2. The loan of Rs. 350 was obtained by showing three properties viz. (1) Office at Khari Baoli, Delhi (2) A godown situated at Alipur, Delhi (2) Ownership of property situated at Kavi Nagar, Ghaziabad in the name of Guarantor Ms. Geeta Devi. But the investigation revealed that the said first office was not working and godown was taken on rent for a short period by citing impersonated names and it was found working only at the time of inspection of bank officers. The residential property of Kavi Nagar which was given as collateral security never belonged to Geeta Devi but it was already under mortgage by some other actual owner.
3. The accused persons fraudulently managed verification of the abovesaid properties by showing their physical presence at other properties claiming to be the so called properties for which documents were submitted and loan applied. Lapses were found on the part of empaneled agency of Advocates and it was recommended for black-listing.
4. Immediately after disbursal of the said loan amount, the entire loan amount was diverted to the aforesaid fictitious accounts in a few days by the borrowers and withdrawn by accused no.1 to 7. Finding irregularities, the matter was enquired at the level of PNB and it was found that they have no collateral security and the bank was duped. The bank suffered a loss of Rs.350 of public money. Thus the matter was reported to the CBI.
5. After completion of investigation, the CBI filed final report (charge-
sheet) before this court alleging offences under Section 420, 467, 468, 471 CBI Vs. Surender Kappor etc Page no. 3 of 17 and 120B IPC. On perusal of the charge-sheet, it was found that the accused no.1 to 8 were never arrested during investigation nor they were produced in custody at the time of filing of charge-sheet despite the fact that the alleged offences were non-bailable. Even no reason has been written in the charge- sheet for not arresting the accused persons contrary to the statutory provision of Sec.41 Cr.P.C.
6. Keeping in view the seriousness of offences, this court sought clarification from the Joint Director, CBI as well as I.O. Inspector Ganesan on the points - as to what are the internal instructions for arresting or not arresting a person and as to why the accused persons of the instant case were not arrested.
7. In response to the said queries, a reply was received from CBI stating therein that as per the CBI Manual, arrest is made when the accused persons are involved in heinous crimes only. In this regard, the CBI relied on the case of Joginder Kumar vs. State of U.O. 1994 AIR SC 1349 which appears to be the basis for incorporation of such instructions in the CBI Manual. With all humility and respects, the observations of the Hon'ble Supreme Court in the abovesaid case of Joginder Kumar were made for not arresting the accused persons except in heinous crimes while considering the misuse of power of police to arrest suspect person on flimsy and baseless grounds. In that case the brother of the petitioner Joginder Kumar was detained by U.P. Police for five days without even registration of the case and accordingly, his rights of liberty were violated. The facts of the cited case are distinguishable to the facts of present case. Even otherwise, keeping in view the manner of the commission of the offences of the present case, this Court is of the opinion that the offences come under the category of heinous crime.
8. This court specifically asked Ld. APP for the CBI as to what are the offences/crimes which come within the purview of "heinous crimes", to CBI Vs. Surender Kappor etc Page no. 4 of 17 which he replied that the nomenclature "heinous crime" has not been defined in the CBI Manual. He orally tried to satisfy that such cases are like murder, rape, kidnapping, ransom, corruption, etc. This Court opined that there was no clarity as regards the period of punishment of a heinous crime, therefore, it was felt that it is not possible to determine whether the offences of cheating, fraud and forgery come in the category of heinous crime or not.
9. The Ld. APP for CBI further argued that the CBI does not generally arrest accused persons in offences of cheating, fraud and forgery since the investigation requires lengthy time and if the accused persons are arrested, then the investigation is required to be completed within 60-90 days as per Section 167 of Cr.P.C. which creates hurdles in investigation of cases.
10. The aforesaid argument appears to be logical from the practical point of view but it is not based on law. Further, this court had observed that in many cases CBI did not adopt uniform approach and even arrested many persons in similar offences of cheating, fraud and forgery which is seen from the court records as well as various Press Releases published on the website of CBI.
11. Even this Court scrutinized all the charge-sheets pertaining to the CBI cases pending in the East District where the undersigned is exercising jurisdiction and it has been observed that out of total 53 files, 47 cases pertain to the offences involving cheating, fraud, forgery etc.
12. Out of 47 cases of cheating, in only 11 cases, the CBI had arrested the accused persons. It shows percentage of arrest as 23.40%.
The relevant legal position
13. After the enactment of the Delhi Special Police Establishment Act 1946, the superintendence of the S.P.E. was transferred to the Ministry of CBI Vs. Surender Kappor etc Page no. 5 of 17 Home Affairs. The Central Bureau of Investigation (CBI) was established vide Resolution No.4/31/61T, dated 1st April, 1963 passed by Ministry of Home Affairs, Government of India.
14. The mandate of CBI has been expanded over the years and today it handles investigation of variety of serious cases, viz. Corruption in govt. offices, murders, kidnappings, cheating, fraud, forgery, criminal breach of trust, etc.
15. The CBI (CRIME) Manual (published in 2005) provides the guidelines of general practice. Chapter 12 of the said Manual speaks about the procedure of arrest, custody, bail and remand and the relevant extracts are as under:
"CHAPTER 12 - ARRESTS, CUSTODY, BAIL & REMAND.
Power of Arrest 12.1 The Police Officers of Delhi Special Police Establishment may arrest an individual, concerned in any cognizable offence or against whom a reasonable suspicion exists of his having been involved in the crime, without any warrant of arrest issued by a competent Court. This power is derived from Section 41 of the Code of Criminal Procedure (Cr.P.C).
12.3 However, as arrest takes away liberty of an individual, the power to arrest vested under Section 41 Cr.P.C. must be exercised with due care and caution. The power being discretionary must be used with due care to ensure that the human rights of any individual are not violated under any circumstances. The arrest may be made only when it is reasonably felt that the individual so arrested is involved in the commission of a heinous crime and will be prosecuted in the Court of Law for the offences committed by him and if it is feared that he is likely to tamper with or destroy evidence or is likely to evade the process of law."
16. Although CBI has been created by a resolution of Central Home Ministry, but it is claimed that the CBI is a body created in pursuance to enactment of Special Police Establishment Act, 1946. On perusal of the said CBI Vs. Surender Kappor etc Page no. 6 of 17 Act, this court did not find any provision which enables the CBI or any executive body to make any delegated rules or manual. The CBI has also not mentioned in the said Manual as to under what provision of law or delegated powers or rules, the said manual has been made.
17. Even if it is presumed that the said Manual has been made for guidance of the investigating officers only, then also, it is the settled position of law that the executive body i.e the CBI should adhere to the statutory legislations. This position has been even recognized by the CBI itself in the Para 14.6 of the said Manual which provides that "The powers and duties of a Police Officer making an investigation are laid down in Sections 157 to 173 of the Cr.P.C." In Para 12.3 in question the CBI further endorses this fact by stating that the power to arrest must be exercised as vested in Section 41 Cr.P.C.
18. As per the CBI Manual, now it is the practice that "The arrest may be made only when it is reasonably felt that the individual so arrested is involved in the commission of a "heinous crime." But in the absence of clear definition of "heinous crime", the discretion of the I.O. to arrest appears to be unguided.
19. It is the well known fact that the law is a dynamic process and it changes with the changing needs of the society from time to time. The judgment of the Supreme Court relied by the CBI was passed long back in the year 1994 and the CBI Manual was made in the year 2005. For the last 11 years, many changes took place in law especially the law of arrest.
20. On the one hand, the right of the accused or suspect person has been protected by prohibiting automatic arrest if the offence is less than 7 years of punishment but on the other hand, the power of arrest still remains on the statue book, if the offence is grave and reasonable CBI Vs. Surender Kappor etc Page no. 7 of 17 grounds exist to believe commission of such offence.
21. The Sec. 41 of Cr.P.C. has been broadly amended in the year 2009 (effective from 1.11.2010) which provided a fine balance in the rights of individual suspect as well as the need of police agency to arrest. The amended Section 41 and the new additional Sections of the CR.P.C. are reproduced for a quick reference as under:
After amendment of Cr.P.C. in 2009 and 2010, the position of arrest is as under:
Sec. 41. When police may arrest without warrant.-
(1) Any police officer may without an order from a Magistrate and without a warrant, arrest any person -
a) who commits, in the presence of a police officer, a cognizable offence;
b) against whom a reasonable complaint has been made, or credible information has been received, or a reasonable suspicion exists that he has committed a cognizable offence punishable with imprisonment for a term which may be less than seven years or which may extend to seven years whether with or without fine, if the following conditions are satisfied, namely:-
i) the police officer has reason to believe on the basis of such complaint, information, or suspicion that such person has committed the said offence;
ii) the police officer is satisfied that such arrest is necessary
-
a) to prevent such person from committing any further offence; or
b) for proper investigation of the offence; or
c) to prevent such person from causing the evidence of the offence to disappear or tampering with such evidence in any manner, or
d) to prevent such person from making any inducement, CBI Vs. Surender Kappor etc Page no. 8 of 17 threat or promise to any person acquainted with the facts of the case so as to dissuade him from disclosing such facts to the Court or to the police officer; or
e) as unless such person is arrested, his presence in the Court whenever required cannot be ensured, and the police officer shall record while making such arrest, his reasons in writing:
Provided that a police officer shall, in all cases where the arrest of a person is not required under the provisions of this sub-section; record the reasons in writing for not making the arrest."
(ba) against whom credible information has been received that he has committed a cognizable offence punishable with imprisonment for a terms which may extend to more than seven years whether with or without fine or with death sentence and the police officer has reason to believe on the basis of that information that such person has committed the said offence;
c) who has been proclaimed as an offender either under this Code or by order of the State Government; or
d) in whose possession anything is found which may reasonably be suspected to be stolen property and who may reasonably be suspected of having committed an offence with reference to such thing; or
e) who obstructs a police officer while in the execution of his duty, or who has escaped, or attempts to escape, from lawful custody; or
f) who is reasonable suspected of being a deserter from any of the Armed Forces of the Union; or
g) who has been concerned in, or against whom a reasonable complaint has been made, or credible information has been received, or a reasonable suspicion exists, of his having been concerned in, any act committed at any place out of India which, if committed in India, would have been punishable as an offence, and for which he is, under any law relating to extradition, or otherwise, liable to be apprehended or detained in custody in India; or CBI Vs. Surender Kappor etc Page no. 9 of 17
h) who, being a released convict, commits a breach of any rule made under sub-section (5) of section 356; or I) for whose arrest any requisition, whether written or oral has been received from another police office, provided that the requisition specifies the person to be arrested and the offence or other cause for which the arrest is to be made and it appears therefrom that the person might lawfully be arrested without a warrant by the officer who issued the requisition.
22. Amended provisions make it compulsory for the police to record the reasons for making arrest as well as for not making an arrest in respect of a cognizable offence for which the maximum punishment is upto seven years. Reference in this connection may also be made to Section 41A inserted vide Act 5 of 2009 w.e.f. 01.11.2010, which reads as follows:
"41A. Notice of appearance before police officer - (1) The police officer shall, in all cases where the arrest of a person is not required under the provisions of sub-section (1) of section 41, issue a notice directing the person against whom a reasonable complaint has been made, or credible information has been received, or a reasonable suspicion exists that he has committed a cognizable offence, to appear before him or at such other place as may be specified in the notice.
(2) Where such a notice is issued to any person, it shall be the duty of that person to comply with the terms of the notice.
(3) Where such person complies and continues to comply with the notice, he shall not be arrested in respect of the offence referred to in the notice unless, for reasons to be recorded, the police officer is of the opinion that he ought to be arrested.
(4) Where such person, at any time, fails to comply with the terms of the notice or is unwilling to identify himself, the police officer may, subject to such orders as may have been passed by a competent Court in this behalf, arrest him for the offence mentioned in the notice."
23. Above mentioned provisions make it compulsory for the police to issue a notice in all such cases where arrest is not required to be made under CBI Vs. Surender Kappor etc Page no. 10 of 17 Clause (b) of sub-section (1) of the amended Section 41. But, all the same, unwillingness of a person who has not been arrested to identify himself and to whom a notice has been issued under Section 41A, could be a ground for his arrest.
24. No doubt, the liberty of individual person is of utmost importance, but at the same time, the victims' feelings and the general will of the society which is reflected from the wisdom of Parliamentary legislation are not of less importance.
25. In large number of cases involving offences of cheating, fraud, forgery and big scams, mostly innocent gullible poor persons are duped of their hard earned money by playing tricks or by giving fake promises e.g. in cases of fake property bookings/sale, fake LIC and mutual funds, fraud with banks, etc.
26. It is felt that in some of the cases, the CBI had adopted the easiest way of not arresting the accused persons as it may involve time limitation to complete investigation within 60 or 90 days by taking shelter to clause of "heinous crime." This feature is reflected from the data of this court based on 10 years experience in different districts of Delhi, I am sure the same would be the percentage in the entire Delhi relating to cases of cheating and fraud except cases of corruption under P. C. Act and some other serious cases which are in lime light.
27. The law demands that investigation of cases should be done in accordance with provisions of law but it appears that more weightage/importance has been given to the liberty of the accused persons by the CBI. In this context, the position of Delhi Police is far better since invariably arrests are made in similar cases mostly. For example in similar cases of cheating against some of the same accused persons investigated by CBI Vs. Surender Kappor etc Page no. 11 of 17 Delhi Police, they were arrested in cases (1) FIR No. 880/04 u/s 406/420/468/471/120B IPC, PS R. K. Puram, (2) FIR No.572/05 u/s 419/420/467/468/471/120B IPC, PS Mehrauli, (3) FIR No. 239/05 u/s 420/468 IPC, PS Connaught Place and (4) FIR No. 380/05 u/s 420 IPC, PS Connaught Place.
28. Needless to say, since the very beginning and even after amendment of Section 41 of Cr.P.C., it is not the position that the power of investigating agency has been taken away to arrest accused persons but only some safeguards have been added e.g. in offences punishable upto 7 years, a requirement of serving notice has been prescribed and it is made mandatory that "reasons for arrest" as well as "reasons for no arrest" should be mentioned in every case during investigation (including charge-sheet).
29. In the decision of the Hon'ble Apex Court in the case of Arnesh Kumar vs. State of Bihar and Anr. reported in (2014) 8 SCC 273, following directions were given by the Hon'ble Apex Court to the effect that:
(1) All the State Governments to instruct its police officers not to automatically arrest when a case under Section 498-A of the IPC is registered but to satisfy themselves about the necessity for arrest under the parameters laid down above flowing from Section 41 CrPC;
(2) All the police officers be provided with a check list containing specified sub-clauses under Section 41(1)(b)(ii); (3) The police officer shall forward the check list duly filed and furnish the reasons and materials which necessitated the arrest, while forwarding/producing the accused before the Magistrate for further detention;
(4) The Magistrate while authorising detention of the accused shall peruse the report furnished by the police officer in terms aforesaid and only after recording its satisfaction, the Magistrate will authorise detention;
(5) The decision not to arrest an accused, be forwarded to the Magistrate within two weeks from the date of the institution of the CBI Vs. Surender Kappor etc Page no. 12 of 17 case with a copy to the Magistrate which may be extended by the Superintendent of Police of the District for the reasons to be recorded in writing;
(6) Notice of appearance in terms of Section 41A of CrPC be served on the accused within two weeks from the date of institution of the case, which may be extended by the Superintendent of Police of the District for the reasons to be recorded in writing; (7) Failure to comply with the directions aforesaid shall apart from rendering the police officers concerned liable for departmental action, they shall also be liable to be punished for contempt of court to be instituted before High Court having territorial jurisdiction;
(8) Authorising detention without recording reasons as aforesaid by the judicial Magistrate concerned shall be liable for departmental action by the appropriate High Court.
We hasten to add that the directions aforesaid shall not only apply to the cases under Section 498-A of the IPC or Section 4 of the Dowry Prohibition Act, the case in hand, but also such cases where offence is punishable with imprisonment for a term which may be less than seven years or which may extend to seven years; whether with or without fine."
30. It is the settled law that Judicial Magistrate is not bound by the views or findings of I.O. Broadly speaking this court can decline cognizance, take cognizance of an offence or direct further investigation. The "arrest" is one of the important components of investigation and accordingly this court can very well scrutinize whether the accused persons should have been arrested or not by keeping in mind the facts of case and the Section 41 Cr.P.C. This court is also not bound to accept the theory of "heinous crime" as mentioned in the CBI Manual which is contrary to provision of Section 41 Cr.P.C.
31. In the instant case, no reason has been given in the entire charge- sheet as to why accused persons were not arrested. But in response to order of this court seeking clarification, it has been replied that since the accused persons joined investigation from time to time, they were not arrested.
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32. The offence of forgery of a valuable document under Section 467 IPC alleged against accused no. 1 to 7 in the instant case is punishable with imprisonment for life or upto 10 years. So the discretion for "not to arrest" is limited as per Section 41(1)(ba) in comparison to Section 41 (1) (b) Cr.P.C. The IO can exercise his discretion for offences punishable upto 7 years only and for rest of the cases providing punishment for more than 7 years, the arrest needs to be made if the police has reason to believe that such person committed the offence.
33. Keeping in view the gravity of the offences, the manner in which they are committed in a pre-planned manner by creating various fictitious accounts and embezzlement of huge sum of Rs.350 lacs pertaining to a nationalized bank, this court is of the opinion that accused no.1 to 7 must have been arrested and the discretion exercised by the I.O. is not judicious. The explanation given to the effect that IO did not arrest accused persons since they joined investigation from time to time, is not satisfactory when there are prima facie ground to believe commission of alleged offences. In other words, if a person, who is accused of murder or rape if joins investigation from time to time, the same can never be a ground for not arresting him. Likewise the gravity of the present offences punishable upto life imprisonment or upto 10 years is also one of the important considerations which the IO should keep in mind.
Consequences of non-arrest - No true justice in real sense in most of the cases
34. Based on experience, this court also wants to draw attention of the higher officers of CBI to some of the important consequences of "no-arrest"
as under:
It encourages accused persons to further indulge in criminal activities with more zeal.
CBI Vs. Surender Kappor etc Page no. 14 of 17 Some of the accused persons (mostly the master minds or king- pins) abscond and they are declared proclaimed offenders (P.O.) but they are rarely traceable due to lack of infrastructure with police agency.
Generally such accused persons are white collar criminals having battery of lawyers and they adopt all sorts of dilatory tactics to delay the trial by challenging all interlocutory orders or proceedings time and again. On account of such reasons, it takes many years to conclude trial.
With the passage of time, either the witnesses become not traceable or they settle cases under duress, resulting in acquittal of cases.
If anyhow some of the accused persons are convicted by trial court, they prefer appeals and in some cases upto the level of Hon'ble Supreme Court. During this process, mostly the accused persons either die or attain age of 70-80 years and files various medical certificate (with natural or artificial diseases) and this way, they escape the required punishment.
It is also observed that whenever such matters are investigated by the local police i.e. Delhi Police, the accused persons are mostly arrested not only in cheating cases but also in all small cases of theft or possession of stolen gas cyliner, electric motor, mobile phone, vehicles, etc. But when the matter is investigated by the CBI, such white collar criminals committing very serious offences of cheating and embezzlement of crores of rupees enjoy the liberty throughout their lives.
Although under law, all criminal are equal but the above scenario shows different approach for rich and poor criminals.
The above phenomenon shows different approach being adopted by two different agencies despite the fact that both are following the same criminal investigation system as provided in Cr.P.C.
CBI Vs. Surender Kappor etc Page no. 15 of 17
35. In the reply, the CBI tried to justify their contention of "no arrest" by showing the personal liberty of individual by relying on the case of Arnesh Kumar (supra). With due respect, in the case of Arnesh Kumar, the observations were given by Hon'ble Apex court in the situation where arrests were used to be made frequently of the husband and his family members in dowry harassment cases under Section 498A IPC. In my humble opinion, neither the Honorable Apex Court nor the Cr.P.C. bar arrest of accused persons wherever they deserve the same.
36. Even the accused persons involve in offences punishable upto 7 years can also be arrested as provided under Section 41 (1) (b) Cr.P.C. In the instant case some of the accused persons involved in many fraud cases are operating gangs to cheat banks and their case is altogether different than the other cases.
37. With the aforesaid observations, the charge-sheet is returned to the CBI to further investigate this case with regard to arrest of accused no.1 to 7 (who had prima facie committed serious offences in a pre-planned manner and fraudulently caused loss of Rs.350 lacs to the nationalized bank in particular and to the society in general and present it again as per law at the earliest.
38. Copy of this order be also sent to the Director, CBI to consider, in his wisdom, the issues raised in this order and to take appropriate action at the earliest especially to modify/amend the Crime Manual by incorporating the statutory provision of Section 41, 41A, 41B, 41C, 41D etc (as amended till date) and remove the clause of "heinous crime" which is vague. An action taken report be filed before this court on 05.10.2016.
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39. The Ahlmad is also directed to hand over complete original charge- sheet (except court records) to the I.O. of CBI along with copy of this order for compliance.
(Naresh Kumar Laka)
CMM/EAST/DELHI
31.08.2016
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