Delhi District Court
(C.B.I. vs . Subhash Chandra Sachdeva & Ors.) on 14 December, 2018
(C.B.I. Vs. Subhash Chandra Sachdeva & Ors.)
C.C. No. 40/11
Dated : 14.12.2018
IN THE COURT OF Dr. VIJAY KUMAR DAHIYA :
SPECIAL JUDGE : CBI [PC ACT]:
DWARKA COURTS : NEW DELHI.
In the matter of :
CBI Vs. Subhash Chandra Sachdeva & Ors.
CC No.: 40/11
FIR No. RC4 (E)/2002EOWI/DLI
dated 09.05.2002
Branch : CBI/EOWI/New Delhi
U/s : 120B r/w 420,467,468 r/w 471 IPC
r/w Sec. 13(2) r/w 13(1)(d) of Prevention
of Corruption Act, 1988.
CENTRAL BUREAU OF
INVESTIGATIONS (C.B.I)
V e r s u s
1.Subhash Chandra Sachdeva Sr. Manager, Allahabad Bank, Field Inspection Office, Karol Bagh, New Delhi5.
R/o B5, Sector15, Noida, U.P. Page 1 of 237 (C.B.I. Vs. Subhash Chandra Sachdeva & Ors.) C.C. No. 40/11 Dated : 14.12.2018
2. Sachida Nand Rai S/o Sh. Nand Kumar Rai, Director, M/s Kamakhya Fresh Food Limited, R/o Village & P.O. Reotipur, Tehsil Zamania, Distt. Ghazipur (U.P).
3. Sri Kant Rai S/o Late Sh. Nand Kumar Rai, Director, M/s Kamakhya Fresh Food Limited, R/o Village & P.O. Reotipur, Tehsil Zamania, Distt. Ghazipur (U.P).
4. Pashupati Nath Rai S/o Late Sh. Nand Kumar Rai, Director, M/s Kamakhya Fresh Food Limited, R/o Village & P.O. Reotipur, Tehsil Zamania, Distt. Ghazipur (U.P).
5. M/s Kamakhya Fresh Food Limited, Corporate Office, A14, Sector15, Noida, U.P. Its Directors works :
Village Bhadaura, Tehsil Zamania, Distt. Ghazipur (U.P).
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6. Kamla Rai S/o Sh. Ram Adhar Singh, Sr. Manager, Allahabad Bank, Dullahpur, Branch Distt. Ghazipur (U.P).
R/o Sidheshwar Nagar Colony, Lanka, Ghazipur, (U.P).
7. Murli Dhar Singh S/o Late Sh. Shahdev Singh Director, M/s Kamakhya Fresh Food Limited, R/o B1/116, Rail Vihar, Indrapuram, Distt. Ghazipur (U.P) Permanent Address : Village Chhatauna, PO Belwa, PS Chaoni, Tehsil Haraiya, Distt. Basti (U.P) Date of Institution : 29.09.2003 Date on which the case was : 12.10.2011 received on transfer in this court Date of reserving judgment : 01.11.2018 Date of pronouncement : 14.12.2018 : J U D G M E N T :
1. Brief facts of the case, to delve upon the matter, as emanating from the chargesheet, which had to registration of Page 3 of 237 (C.B.I. Vs. Subhash Chandra Sachdeva & Ors.) C.C. No. 40/11 Dated : 14.12.2018 FIR and filing of the chargesheet by CBI in court for trial of accused persons are as under : On the basis of written complaint dated 06.05.2002 from Sh. S.S.Thapar, General Manger, Regional office, Allahabad Bank, A17, Parliament Street, New Delhi, this case was registered. Sh. Sachida Nand Rai, Sh. Sri Kant Rai and Sh. Pashupati Nath Rai, Directors of M/s Kamakhya Fresh Foods Limited, Ghazipur, a Public Limited company having its corporate office at Noida (U.P.) in connivance with some bank officials cheated the Allahabad Bank, Okhla Branch, New Delhi to the tune of Rs. 88,51,330/ + Rs. 26,16,000/ = Rs. 1,14,67,330/ + interest by way of obtaining working capital facilities on the basis of forged documents. Page 4 of 237
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2. For the sake of convenience accused Subhash Chand Sachdeva, Sachida Nand Rai, Sri Kant Rai, Pashupati Nath Rai, M/s Kamakhya Fresh Food Ltd. Corporate Office (KFFL), Kamla Rai (expired) and Murli Dhar Singh (expired) are hereinafter referred to as A1 to A7 respectively and Registrar of Companies, Banaras State Bank, Allahabad Bank, Union Bank of India, Bank of Baroda, Samyukt Kshetriya Gramin Bank and their Regional office, Zonal office, Head Office are hereinafter referred to as ROC, BSB, AHB, UBI, BOB, SKGB, RO, ZO & HO respectively.
3. It is alleged that KFFL has two divisions namely Cold Storage Division and Food Processing Unit. The Page 5 of 237 (C.B.I. Vs. Subhash Chandra Sachdeva & Ors.) C.C. No. 40/11 Dated : 14.12.2018 plant site of both the divisions is located at Vill.Bhadaura, Teh.Zamania, District Ghazipur (UP). The company was initially incorporated in the year 1985 under the name of Shri Baba Kisan Cold Storage & Ice Factory Pvt. Ltd. but in Jan' 1995 and its name was changed to KFFL which was engaged in manufacturing of Sauces, Pickles and Ketchup.
4. It is alleged that in furtherance of conspiracy on behalf of KFFL A2, Director under his signatures submitted a common undated application in the prescribed FormB of AHB for obtaining credit facilities i.e. (i) Working Capital Rs. 150 lacs, (ii) Other Facilities like LC / Bank Guarantee Rs. 30 lacs, Total Rs. 180 lacs to meet the requirement of purchasing of raw materials and packing materials etc. for their Food Page 6 of 237 (C.B.I. Vs. Subhash Chandra Sachdeva & Ors.) C.C. No. 40/11 Dated : 14.12.2018 Processing Unit to the Okhla Branch, AHB, New Delhi, A2 to A4 and A7 in furtherance of conspiracy submitted a copy of letter dated 08.10.97 in Okhla Industrial Area Branch, AHB purportedly issued by Manager (Law), BSB addressed to the Managing Director, M/s KFFL, mentioning that after clearance of the seasonal advance against the Cold Storage unit by 1511 97, the formalities for vacating the charge will be completed at their end and this letter is found forged/bogus.
5. It is alleged that after appraisal of the loan application at branch level A1, the then Sr. Manager, AHB, Okhla Industrial Area Branch, New Delhi recommended for sanction of the following limits to KFFL to AGM, RO, AHB New Delhi on 17.09.97 for an amount of Rs.160 lacs under various Page 7 of 237 (C.B.I. Vs. Subhash Chandra Sachdeva & Ors.) C.C. No. 40/11 Dated : 14.12.2018 heads i.e. OD, CC (Hy.) FBD, LOC for an amount of Rs. 40 lacs, Rs.75 lacs, Rs.15 lacs, Rs.30 lacs respectively.
6. It is alleged that the RO, AHB forwarded the proposal to ZO, AHB Delhi recommending sanction of credit facilities for Rs. 140 lacs. It was also recommended that sub limit of Rs. 20 lacs under the overall CC limit of Rs. 50 lacs may be allocated to Ghazipur Branch of AHB to have effective financial control. Subsequently, DGM, ZO, AHB, New Delhi further forwarded the proposal to G.M. (Credit) at HO, Calcutta vide letter dated 02.12.97 recommending the same credit facilities and terms and conditions as recommended by the RO.
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7. It is alleged that HO, AHB sanctioned the limits as recommended and conveyed the sanction vide letter dated 10/14298 which was received in ZO on 12.03.98. DGM, ZO, AHB, New Delhi vide letter dated 18.03.98 conveyed the said sanction to RO, AHB specifying special terms and conditions of the sanction.
8. The branch received the sanction order on 19.3.98. The credit facilities were sanctioned to KFFL i.e. CC (Hy), OD, JBD, LOC & BG for an amount of Rs.55 lacs, 40 lacs, 15 lacs, 20 lacs, 10 lacs respectively. A1 released credit facilities to KFFL on 27.3.98. A current account No. 106634 was opened in the branch on 11.9.97 in the name of KFFL. This account was Page 9 of 237 (C.B.I. Vs. Subhash Chandra Sachdeva & Ors.) C.C. No. 40/11 Dated : 14.12.2018 converted into CC account No. 300019 on 27.3.98 for operation of CC limit. A2 and A7 were authorized signatories of this account.
9. It is alleged that on the instructions of RO, A1 and A.K.Rana, Manager SSI, RO, AHB, New Delhi visited the plant site of KFFL at Bhadaura, Ghazipur on 13.10.97 for verification and completion of perappraisal formalities. During their visit they contacted A6. A1 in furtherance of conspiracy asked A6 to obtain credit reports regarding KFFL from their previous bankers i.e. UBI, BOB, BSB, SKGB and AHB of Ghazipur and send the same to A1. For this purpose A1 handed over letter dated 10.10.97 written in his own hand writing to A6. A6, in furtherance of conspiracy forwarded the Page 10 of 237 (C.B.I. Vs. Subhash Chandra Sachdeva & Ors.) C.C. No. 40/11 Dated : 14.12.2018 credit reports obtained from UBI, BOB and BSB, Ghazipur Branches to A1 by post.
10. It is alleged that UBI, Ghazipur vide his letter dated 15.10.97 intimated that M/s Kamakhya Agro Industries Ltd, Ghazipur, a sister concern of KFFL was enjoying credit facilities with them to the extent of Rs. 64.5 lacs. The Directors of KFFL with the object to cheat the bank, did not make a mention of this fact in their loan proposal submitted to Okhla Industrial Area Branch, AHB.
11. It is alleged that BSB, Ghazipur vide letter dated 21.10.97 purportedly signed by V. K. Chaubey, the then Branch Manager replied that the Cold Storage Division of KFFL was Page 11 of 237 (C.B.I. Vs. Subhash Chandra Sachdeva & Ors.) C.C. No. 40/11 Dated : 14.12.2018 enjoying the following credit facilities with them. But during investigation, it has been proved that the letter dated 21.10.97 was not issued by V. K. Chaubey.
12. It is alleged that A1 and A. K. Rana submitted their visit report (date not mentioned) to AGM, RO, AHB, New Delhi stating therein that A6, told them that the promoters of this company are influential and renowned persons of the area and the branch intended that major part of the proposed cash credit limit be alloted to Ghazipur Branch.
13. It is alleged that before disbursing the funds to KFFL, the DGM, ZO, New Delhi vide letter dated 11.02.98 asked DGM, ZO, AHB, Varanasi to take up the matter with Page 12 of 237 (C.B.I. Vs. Subhash Chandra Sachdeva & Ors.) C.C. No. 40/11 Dated : 14.12.2018 Ghazipur branch to find out the credentials of the core promoters and the company. It was also requested that A6 should contact the UBI and BSB and to submit his report to them. A copy of this letter was also marked to A6 for necessary action immediately.
14. It is alleged that A6 in furtherance of conspiracy forwarded a credit report dated 28298 of KFFL allegedly received from BSB, Ghazipur Branch and purportedly signed by V.K.Chaubey, the then Branch Manager, BSB, Ghazipur to the DGM, AHB, New Delhi vide his letter dated 3398 through post. He also handed over a copy of the same to S.C.Gupta, the Senior Manager (Advances), RO who visited AHB, Ghazipur Branch on 03.03.98. Shri S. C. Gupta has stated that he Page 13 of 237 (C.B.I. Vs. Subhash Chandra Sachdeva & Ors.) C.C. No. 40/11 Dated : 14.12.2018 personally carried the letters addressed to BSB and UBI, Ghazipur seeking their views on the conduct of KFFL account with their branches. But he did not deliver these letters to the respective branches because A6 told him that he had already received a call from ZO, Varanasi in this regard, and he has sent letters dated 28298 to the Branch Managers, UBI and BSB, Ghazipur Branch asking for their credit reports and A6 has also obtained the reply from BSB vide letter dated 28298. This credit report mentioned that Cold Storage Division of KFFL was sanctioned credit facilities as CC(H)Rs. 22 lacs, OD Rs. 4.75 lacs and present outstanding in CC(H) is nil and in OD it is Rs. 4.12 lacs. This letter purportedly signed by V. K. Chaubey the then Branch Manager has been found to be forged.
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15. It is further alleged that A2, in furtherance of conspiracy filed three sets of forms No. 17 and 13 on 22.01.98 signed by him in the office of ROC, Kanpur alongwith three forged letters dated 16.01.98 allegedly signed by V. K. Choubey, the then Branch Manager, BSB, Ghazipur addressed to ROC, Kanpur (U.P) regarding satisfaction of charge by KFFL, Ghazipur which was earlier created in favour of BSB for amounts of Rs. 2675000/, Rs. 2475000/ and Rs. 11675000/ respectively. On the basis of these 3 forged letters ROC, Kanpur satisfied the charges in favour of BSB on 24.02.98.
16. It is alleged that KFFL in furtherance of the conspiracy under the signatures of A7, Director filed form No. 8 Page 15 of 237 (C.B.I. Vs. Subhash Chandra Sachdeva & Ors.) C.C. No. 40/11 Dated : 14.12.2018 & 13 on 23.3.98 before ROC, Kanpur for creation of charge over immovable/movable assets of Cold Storage Division for Rs. 151 lacs and filed another form no. 8 & 13 on 23.3.98 itself for creation of exclusive charge on current assets viz. Plant, Machinery, Engines, Stocks, Book Debts etc. of Food Processing Unit of the Company in favour of AHB. The said charges were fraudulently got created on 22.5.98 and 22.4.98, respectively.
17. It is alleged that KFFL also submitted a loan proposal to Ghazipur Branch of BSB for obtaining credit facilities for its food processing unit in the month of Aug. 97. After processing of the loan application, credit facilities worth Rs. 90 lacs were sanctioned vide letter dated 29.10.97 and released in the month of Dec. 97. A2 to A5 & A7 concealed this Page 16 of 237 (C.B.I. Vs. Subhash Chandra Sachdeva & Ors.) C.C. No. 40/11 Dated : 14.12.2018 fact from AHB and instead conspired with A6 and submitted forged letter dated 28298 purportedly written by V. K. Choubey giving credit report without mentioning the said credit facility already obtained from BSB, Ghazipur during the month of Dec., 97.
18. It is alleged that S. K. Das, the then DGM, BSB, Varanasi vide letter dated 25.6.98 informed RM, AHB that KFFL has been granted credit facilities for over Rs. 125 lacs by BSB for their Food Processing Unit and Cold Storage Unit at Ghazipur. He further informed that it has come to their notice that Okhla Industrial Area Branch of AHB has considered credit facilities of over Rs. 100 Lacs to KFFL for the unit situated at Ghazipur and as prescribed by RBI, AHB should Page 17 of 237 (C.B.I. Vs. Subhash Chandra Sachdeva & Ors.) C.C. No. 40/11 Dated : 14.12.2018 have obtained NOC from them before making available the credit facilities to the subject company. A1 vide his letter dated 23.03.98 addressed to the RM, AHB, New Delhi forwarded original loan documents viz. Equitable mortgage, alongwith other loan documents for verification and Senior Manager (Law), AHB after verification of the documents instructed that charges to be registered with ROC within 30 days from the execution of documents.
19. It is alleged that A1 in furtherance of conspiracy wrote a letter dated 18.03.98 addressed to the DGM, IDBI, New Delhi and letter dated 18.03.98 to the Executive Director, NHB, Gurgaon asking for issue of letter for ceding of second charge in favour of AHB as IDBI and NHB were having first charge over Page 18 of 237 (C.B.I. Vs. Subhash Chandra Sachdeva & Ors.) C.C. No. 40/11 Dated : 14.12.2018 fixed assets of Food Processing Unit of KFFL. A1 handed over these two letters to one of the representatives of KFFL. The replies from IDBI, New Delhi and NHB, Gurgaon dated 19.03.98 and 20.3.98 respectively were given to A1 again by the same representative of KFFL. The reply from IDBI, New Delhi dated 19.03.98 was purportedly signed by H. R. Mishra, Assistant Manager (Legal) and reply from NHB, Gurgaon dated 20.03.98 was purportedly signed by Dr. Lily Mitra, Dy. Director (Marketing), NHB, Gurgaon. In both the replies it was stated that they have no objection in ceding 2 nd charge in respect of company's food processing division in favour of AHB. The letters written by A1 and both said letters purportedly received from IDBI, New Delhi and NHB, Gurgaon are forged. Page 19 of 237
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20. It is alleged that out of total CC limit of Rs. 55 lacs sanctioned, CC limit of Rs. 25 lacs was transferred to Ghazipur Branch of AHB in the name of KFFL, Current Account of which was already there. This C/A was converted into CC Account. A2 to A4, all Directors were the authorized signatories for operating this Account. The outstanding amount in this account was Rs. 33,00,174/ as on 30.06.2000.
21. It is alleged that A1 allowed frequent over drawings in the account without reporting to the RO / ZO/ AHB and account remained constantly overdrawn after 01.10.98 which was never brought within the limit & was not regularised despite specific instructions of the RO, New Delhi, that as per the terms and conditions stipulated in loan sanctioning letter, Page 20 of 237 (C.B.I. Vs. Subhash Chandra Sachdeva & Ors.) C.C. No. 40/11 Dated : 14.12.2018 verification of stock and book debts were to be checked periodically at least once in a month at irregular intervals and adverse feature, if any, were to be brought to the notice of immediate higher authorities. A1 in conspiracy with A2 to A5 and A7 violated the terms and conditions and got the verification of stocks and book debts done only on 110798 whereas the funds were released in the month of March 98.
22. It is alleged that A1 in furtherance of conspiracy allowed operation in CC account No. 300019 and OD account 500046 till 3132000 and also allowed discounting of 64 Nos. of bills during the period from JulyDec, 98 even after knowing the fact KFFL had concealed the fact about credit facilities availed by it from BSB and has obtained credit facilities from Page 21 of 237 (C.B.I. Vs. Subhash Chandra Sachdeva & Ors.) C.C. No. 40/11 Dated : 14.12.2018 AHB on the basis of forged letters. The branch also continued to discount bill despite the fact that a large number of previous bills were returned unpaid. The account was declared NPA on 31.02.2000 and total outstanding was Rs. 1,43,24,238/ as on 30.06.2000.
23. A1 and A6, AHB officers by their acts of connivance facilitated A2 to A5 and A7, Directors of KFFL in achieving their ulterior objectives. Whenever credit report(s) were obtained from BSB, forged letters were submitted to AHB on behalf of BSB. No written communication was ever sent to BSB, by post. A6 allegedly collected credit reports twice from BSB. These two credit reports have been found forged. Page 22 of 237
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24. It is alleged that KFFL could submit forged letters on behalf of IDBI, New Delhi and NHB, Gurgaon in respect of ceding of second charge only because A1 chose to hand over the letters addressed to IDBI and NHB to a representative of KFFL. These letters never reached their intended addressees and A1 accepted the replies allegedly given by IDBI and NHB from the representative of KFFL.
25. It is alleged that A1, A6 in conspiracy with Directors of KFFL namely A2 to A5 and A7 have cheated the AHB and caused wrongful pecuniary loss to AHB and correspondence pecuniary gain to the extent of Rs. 1,43,34,238/ to A2 to A5 and A7. Therefore, offences punishable U/s 120B r/w 420, 467, 468 Page 23 of 237 (C.B.I. Vs. Subhash Chandra Sachdeva & Ors.) C.C. No. 40/11 Dated : 14.12.2018 r/w 471 IPC r/w sections 13(2) r/w 13(1)(d) of PC Act 1988 and substantive offences thereof against A1 to A7 and A5 being a Juristic Person, cannot be a part of the conspiracy but the company is to be tried for financial accountability through its Directors.
26. Pursuant to filing of Chargesheet and after perusal of the same in the light of supporting documents, the Ld. Pre decessor of this court took cognizance of offences and accused persons were summoned and due compliance of Section 207 Cr.PC was made. Ld. Predecessor of this Court framed requisite charges u/s 120B IPC read with section 420, 467, 468 & 471 IPC and 13 (2) r/w section 13 (1) (d) of Prevention of Corruption Act against all the accused persons and separate Page 24 of 237 (C.B.I. Vs. Subhash Chandra Sachdeva & Ors.) C.C. No. 40/11 Dated : 14.12.2018 charges u/s 13 (2) r/w section 13 (1) d of Prevention of Corruption Act, 1988 was framed against A1 & A6. A separate charge u/s 420/468 & 471 IPC was also framed against A2, A3, A4 and A7. The accused persons pleaded not guilty and claimed trial.
PROSECUTION EVIDENCE:
27. In order to prove the aforementioned charges, the prosecution has examined 36 witnesses in all. The witnesses so examined by the prosecution to substantiate their case can be broadly categorized in six categories.
28. The witnesses of first category deposed regarding admitted / specimen signatures of witnesses and accused Page 25 of 237 (C.B.I. Vs. Subhash Chandra Sachdeva & Ors.) C.C. No. 40/11 Dated : 14.12.2018 persons were taken by the IO in their presence. This category comprises of : (1) PW22 Sh. Baldev Singh (2) PW23 Sh. Ram Pal Sharma (3) PW24 Sh. V.Swaminathan (4) PW25 Sh. Prem Singh Suhag (5) PW26 Sh. Ganesh Kumar (6) PW27 Sh. S.K.Gupta (7) PW32 Sh. Brijendra Singh (8) PW33 Sh. J.R.Gandhi (9) PW34 Sh. O.P.Tanwar (10) PW35 Sh.M.L.Chawla
29. The witnesses of second category pertains to bank officials of IDBI and NHB, that no second charge was to be conceded by IDBI & NHB in favour of AHB. This category comprises of : Page 26 of 237 (C.B.I. Vs. Subhash Chandra Sachdeva & Ors.) C.C. No. 40/11 Dated : 14.12.2018 (1) PW1 Dr. Lily Mitra (2) PW3 Ms. Nitu Sethi (3) PW5 Sh. Hari Ram Mishra (4) PW31 Sh. Ajay Sharma
30. The witnesses of third category deposed regarding mode and manner adopted by the accused persons to culminate the criminal conspiracy hatched by them for conducting the loan sanctioned in favour of KFFL on the basis of forged, fabricated and false documents. This category comprises of the officials / officers from AHB, Okhla Branch, RO, ZO and AHB : (1) PW2 Sh. S.K.Katyar (2) PW4 Sh. Anil Kumar Rana (3) PW12 Sh. Arun Verma (4) PW13 Sh. S.C.Gupta (5) PW14 Sh. J.S.Kohli (6) PW15 Sh. S.P.Roy Chaudhary (7) PW17 Sh. D.P.S.Puri Page 27 of 237 (C.B.I. Vs. Subhash Chandra Sachdeva & Ors.) C.C. No. 40/11 Dated : 14.12.2018
31. The witnesses of fourth category deposed regarding the false and fabricated documents which were used by the accused persons during the subsistence of criminal conspiracy. This category comprises of the witnesses pertaining to UBI, BOB, BSB & ROC, Kanpur: (1) PW6 Sh. Lok Nath Singh (2) PW9 Sh. K.V.Krishna Reddy (3) PW16 Sh. S.K.Das (4) PW18 Sh. V.K.Chaubey (5) PW19 Sh.P.N.Upadhyay (6) PW20 Sh.R.D.Kashyap (7) PW21 Sh. Radhey Mohan Sinha
32. Fifth category of the witnesses examined by the prosecution was those who were associated with the working of KFFL during the relevant time. This category includes : Page 28 of 237 (C.B.I. Vs. Subhash Chandra Sachdeva & Ors.) C.C. No. 40/11 Dated : 14.12.2018 (1) PW7 Sh. Satish Malik (2) PW8 Sh. Harish Jain (3) PW10 Sh. Gyan Chand Aggarwal
33. Sixth Category of witnesses includes those who remained associated with the investigations of the present case in one form or the other, including the Investigating Officers. This category also includes the Handwriting Expert Witness, who assisted the Investigating Agency in investigations. This category consists of : (1) PW11 Sh. R.Chandra, expert (2) PW29 Sh. O.P.Parida First IO (3) PW30 Ms.Rekha Sangwan, Second IO (4) PW36 Sh. B.M.Pandit, Main IO (5) PW28 Sh. S.S.Thapar, General Manager, RO, AHB, New Delhi, who has made a complaint on which the FIR was lodged.
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34. In brief the prosecution witnesses have deposed as under : PW1 Ms. Lilly Mitra was working as Assistant Director in NHB and she deposed that document D55 did not bear her signature as well as monogram of 50 years of independence. PW2 Sh. S.K. Katyar had granted sanction in respect of A1 and A6 through Ex. PW2/A and PW2/A1. PW3 Ms. Neetu Sethi was working as Assistant Manager in the year 1998 where PW5 Sh. H.R. Mishra was working as Assistant Manager (legal) and record of dispatch maintained in IDBI Bank. PW4 A.K. Rana was working as Manager in advance department at RO, AHB, Karol Bagh, New Delhi and appraisal notes qua loan file was prepared by Sh. D.P.S. Puri, SSI officer. Page 30 of 237
(C.B.I. Vs. Subhash Chandra Sachdeva & Ors.) C.C. No. 40/11 Dated : 14.12.2018 KFFL has moved an application which was processed by PW17 D.P.S.Puri and thereafter recommended by A1 through document Ex. PW4/A1, PW4/A2 and PW4/A3 respectively. KFF had applied for a loan of Rs. 180 lakh for setting up four food processing units. PW4 visited the unit of KFFL at Gajipur along with accused A1 where A2 was already present. Thereafter, on the same day, PW4 along with A1 and A6 visited AHB, Gazipur and he submitted his report Ex. PW2/D1 bearing signature of A1. PW4 proved the credit report issued by AHB, BOB and BSB through Ex. PW4/A5 to PW4/A8 respectively. He proved letter dated 10.10.1997 issued by A1 i.e. PW4/A9. PW5 Hari Ram Mishra was working as Assistant Manager (legal) in IDBI at the relevant time and proved the procedure for creation of first/second charge and he has no Page 31 of 237 (C.B.I. Vs. Subhash Chandra Sachdeva & Ors.) C.C. No. 40/11 Dated : 14.12.2018 authority for issuance of letter dated 19.03.1998/Mark D21 (Ex. PW12/F) for ceding second charge. PW5 testified in cross that NOC used to be issued for second charge by Project Finance Department.
PW6 Sh. Lok Nath Singh was working as officer in Bank of Baroda on 25.06.2003 and 12 documents were seized by CBI in his presence through seizure memo Ex. PW6/A. He proved the specimen card of account no. 429 of KFFL. He proved the specimen signature card with respect to the above said account through Ex. PW6/A. He also proved the specimen signature of the accused persons. PW6 proved D102 i.e. statement of account of KFFL. PW7 Sh. Satish Malik was statutory auditor of KFFL. PW8 Sh. Harish Jain deposed that Sh. Satish malik was authorized signatory of Euro bike Ltd. Page 32 of 237
(C.B.I. Vs. Subhash Chandra Sachdeva & Ors.) C.C. No. 40/11 Dated : 14.12.2018 and he introduced Satish Malik for opening an account in the name and style of KFFL. This account was opened in the name of Euro Bike P. Ltd. whose authorized signatories were A1 and A7.
PW9 Sh. K.V. Krishna Reddy was working as branch manager in UBI branch. He proved a letter dated 15.10.1997 Ex. PW4/A6. In cross, he admitted that there is possibility that a letter concerning a particular party can be handed over to the party for onward transmission to the addressee bank seeking certain informations. PW10 Sh. Gyan Chand Aggarwal, by whom a portion of his house was rented out to KFFL. PW11 Sh. R. Chandra, who has proved his reports regarding admitted and disputed handwriting, seal and stamp. PW12 Sh. Arun Verma, Chief Manager, AHB, who was Page 33 of 237 (C.B.I. Vs. Subhash Chandra Sachdeva & Ors.) C.C. No. 40/11 Dated : 14.12.2018 posted as Senior Manager (Vigilance) in RO from 2001 to 2005.
PW13 Sh. S.C. Gupta, who was working as Senior Manager (Credit) in the RO AHB. PW13 has visited the plant of KFFL in March, 1998 at the instance of RM at RO, AHB along with A6. PW14 Sh. J.S. Kohli, who was posted as Senior Manager in AHB, Okhla Branch and he had dealt with the account of KFFL. CBI has seized 57 cheques and 5 vouchers pertaining to KFFL through seizure memo Ex. PW14/A and 57 cheques and five vouchers through Ex. PW14/B1 to PW14/B57 and PW14/C1 to PW14/C5 respectively. CBI has also seized certain documents Ex. PW14/D containing the letter dated 26.03.1999 issued by Senior Manager, Okhla branch to RO and IBD (inland Bill discounting) register as Ex. PW14/D1 and PW 14/D2 respectively. CBI has seized the documents through Ex. Page 34 of 237
(C.B.I. Vs. Subhash Chandra Sachdeva & Ors.) C.C. No. 40/11 Dated : 14.12.2018 PW14/E containing two letters as Ex. PW14/E1 and Ex. PW 3/I. He proved the other documents seized by the CBI already proved by other witnesses. He proved the documents D80, D 81, D82 and D83 as Ex. PW14/F, PW14/G, PW14/H and PW 14/I and the documents D84 to 87 as Ex. PW14/J (colly). Documents D88, D89 and D90 as Ex. PW14/K, PW14/L and PW14/M respectively.
PW15 S.P. Roy Chaudhary was working as Senior Manager at ZO, AHB, New Delhi in the year 2000 and he has examined the record of both branches i.e. AHB, Okhla and AHB, Gazipur and noticed some irregularities and submitted his report vide Ex. PW12/H (D61). PW16 Sh. S.K. Das was posted as DGM with BSB and he proved letter dated 25.06.1998(D22) as Ex. PW4/A15. He has informed the AHB Page 35 of 237 (C.B.I. Vs. Subhash Chandra Sachdeva & Ors.) C.C. No. 40/11 Dated : 14.12.2018 that no NOC has been issued by BSB in favour of KFFL and AHB has not taken any such NOC from the BSB. PW17 D.P.S. Puri had analysed appraisal of loan proposal of KFFL and made a report and submitted to PW14 Sh. J.S. Kohli, who, in turn, recommended the same to accused no. 1 and accused no. 1 in turn forwarded the same to RO.
PW18 V.K.Chaubey, the then Manager, BSB, Gazipur Branch. PW19 P.N.Upadhyay, the then Manager, BOB, Ghazipur in the year 1997 and retired in the year 2001. PW20 R.D.Kashyap, the then Assistant in the office of ROC, Kanpur. PW21 Radhey Mohan Sinha, Branch Manager, UBI, Ghazipur Branch. PW22 Baldev Singh, PW23 Ram Pal Sharma, PW24 V.Swaminathan, PW25 Prem Singh Suhag, PW26 Ganesh Kumar and PW27 S.K.Gupta all these witnesses are witnesses Page 36 of 237 (C.B.I. Vs. Subhash Chandra Sachdeva & Ors.) C.C. No. 40/11 Dated : 14.12.2018 in whose presence specimen signatures of witnesses / accused were taken by the IO.
PW28 S.S. Thapar also testified that Manager (Advances) was assisted by DPS Puri SSIFO for processing of loan proposal as and when the loan proposal is submitted in SSI Unit, the same is processed by the Manager (Advances), AHB and it is a normal practice for Manager (Advances) to discuss the matter with prospective borrowers. PW29 O.P.Parida, First IO of the case. PW30 Rekha Sangwan, Second IO of the case. PW31 Ajay Sharma, the then Asstt. General Manager, IDBI, Jaipur, in whose presence Hari Ram Mishra had signed on letter Ex. PW11/35. PW32 Brijendra Singh, in whose presence PW1 Ms. Lily Mitra has appended specimen signatures on Ex. PW11/A34. PW33 J.R.Gandhi, in Page 37 of 237 (C.B.I. Vs. Subhash Chandra Sachdeva & Ors.) C.C. No. 40/11 Dated : 14.12.2018 whose presence PW1 Ms. Lily Mitra has appended specimen signatures on Ex. PW11/A1 to Ex. PW11/A14.
PW34 O.P.Tanwar and PW35 M.L.Chawla, in whose presence specimen handwriting and signatures of witnesses / accused persons were taken. PW36 B.M.Pandit, Investigating officer of the case.
35. Needless to say that the deposition of the aforementioned witnesses are not being narrated in detail herein for purposes of brevity and the relevant portions thereof and the documentary evidence produced by them have been referred to wherever necessary later in the judgment.
36. The evidence of the aforementioned witnesses was Page 38 of 237 (C.B.I. Vs. Subhash Chandra Sachdeva & Ors.) C.C. No. 40/11 Dated : 14.12.2018 put to the accused persons and their statements were recorded under section 313 Cr.P.C. In the said statements, the accused persons denied that they had committed any offence.
37. In support of their defence, A1 had examined two witnesses i.e. DW1 S.K.Chauhan and DW2 K.Davidson. DW1 S.K.Chauhan, Chief Manager, AHB, New Delhi, who testified the procedure regarding loan application of customers and also testified that the Manager / Senior Manager assigned with the job of advances portfolio, is taking care of the same starting from providing application to processing of loan proposal and ultimately submitted it to Branch Manager with his recommendations or otherwise for his disposal. Whenever any correspondence is made, a copy thereof is required to be kept in Page 39 of 237 (C.B.I. Vs. Subhash Chandra Sachdeva & Ors.) C.C. No. 40/11 Dated : 14.12.2018 the correspondence file alongwith the mode and manner in which the same is sent. There is a system of keeping / maintaining two registers i.e. inward dak register and dispatch register and whatever mail is sent out the same is duly entered in dispatch register and inward dak is entered in the other register. Whenever letter is sent through courier or by post, its receipt is also kept in the dispatch register. Whenever it is sent by a messengers, then his signatures are taken on the office copy. In case it is sent through party, then signatures of the party is taken on the dispatch register.
It is also submitted by DW1 that whenever, any overdraft limit is extended to any party and if the said party withdraws any principal amount over and above this facility extended to it then the said account can be said to be Page 40 of 237 (C.B.I. Vs. Subhash Chandra Sachdeva & Ors.) C.C. No. 40/11 Dated : 14.12.2018 overdrawn. Branch Managers are generally vested with authorities to allow overdrafts to the extent of 10% above the sanctioned limit and in specialized branches like SSI Branches or Industrial Finance Branches this power may go upto 20%. These powers / authorities of the Branch Manager are duly laid down through circulars issued by the bank from time to time.
38. DW2 K.Davidson has produced the letter dated 29.08.2003 Ex. DW2/A received by the then Chief Vigilance Officer S.Roy from CBI for grant of prosecution sanction. He proved the SP's report, Draft sanction order and letter dated 10.09.2003 Ex. DW2/B, Ex. DW2/C and Ex. DW2/D respectively.
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39. A2 had examined five witnesses i.e. DW3 B.N.Srivastava, DW4 Devender Kr. Sharma, DW5 Harish Kr. Popli, DW6 Anil Kr. Sinha, DW7 Saurabh Indora and DW8 P.P.Mangal.
DW3 B.N.Srivastava, Handwriting and Finger Print Expert, had given his opinion regarding signatures of V.K.Chaubey in terms of his report Ex. DW3/1, photographs Ex. DW3/2 to DW3/21 and CD Ex. DW3/22.
DW4 Devender Kr. Sharma is the witness who produced the record from the office of judicial record from the office of DRTI of OA No. 377/2000 in case titled as AHB Vs. Kamakhya Fresh Foods Ltd. and ors. which was filed on 27.09.2007 and proved the document Ex. DW4/A and the affidavit filed by A1 as Ex. DW4/B. Page 42 of 237 (C.B.I. Vs. Subhash Chandra Sachdeva & Ors.) C.C. No. 40/11 Dated : 14.12.2018 DW5 Harish Kr. Popli, Sr. Manager, ZO, AHB, who proved the letters dated 26.09.1998, 16.09.1998, 08.09.1998, 27/29.01.1999 written by AHB as Ex. DW5/B to Ex. DW5/E. DW6 Anil Kr. Sinha, has proved the Assignment agreement entered between the AHB and ASREC (India) Ltd. as Ex. DW6/A. DW7 Saurabh Indora, Dy. Registrar of Companies, UP, Kanpur, who proved the office order Ex. DW7/A whereby attested copy of the certificate of registration for modification of mortgage etc. which certifies that there has been a modification on 30.03.2013 of the charge dated 23.03.1998 created by KFFL in favour of ASREC (India) Ltd. and proved the certificate as Ex. DW7/B. He also proved the Form No. Page 43 of 237 (C.B.I. Vs. Subhash Chandra Sachdeva & Ors.) C.C. No. 40/11 Dated : 14.12.2018 CHG4 pertaining to satisfaction of charge dated 18.01.2016 and the said form also mentions the date of creation of charge 23.03.1998 and modification of charge dated 30.03.2013 as Ex. DW7/C. This witness also proved certificate Ex. DW7/D which also contained the memorandum of satisfaction of charge between KFFL and ASREC (India) Ltd. He also proved the notification dated 26.10.2006 issued by Ministry of Company Affairs as Ex. DW7/E. DW8 P.P.Mangal, Chief Manager, ASREC (India) Ltd., who proved that the satisfaction of charges pertaining to KFFL and thereupon AHB has executed assignment in favour of his company for the debts of KFFL in favour of ASREC (India) Ltd.
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40. After the evidence was concluded on behalf of both the prosecution and the defence, on behalf of the prosecution, Ld. Prosecutor Ms. Shashi Vishwakarma have advanced final arguments. On behalf of A1 Ld. Counsel Sh. Menon ; for A2, A3 & A4, A5 & A7 Ld. Counsel Sh. R.K.Dhawan have advanced final arguments and have also filed written submissions.
41. Ld. PP for CBI has contended that all the accused persons has hatched a conspiracy and got sanctioned an amount of Rs.1,40,000/ in favour of KFFL and in furtherance of said criminal conspiracy A1 visited the site of KFFL on 13.10.1997 and asked A6 obtain credit report regarding KFFL from which previous banks UBI, BOB, BSB, SKGB and AHB and sent the Page 45 of 237 (C.B.I. Vs. Subhash Chandra Sachdeva & Ors.) C.C. No. 40/11 Dated : 14.12.2018 same to A1 as A1 has handed over the letter dated 10.10.97 to A6. A6 forwarded the credit report obtained from previous banks of KFFL and D15 was found to be forged and such forged report was sent by A1 to RO, AHB for recommendation of the sanction for the loan of Rs.160 lacs in favour of KFFL.
In furtherance of the conspiracy, it is submitted that KFFL also submitted a loan proposal of its food processing unit in August'1997 and availed credit facility of Rs.90 lacs through letter dated 29.10.1997 (part of document D70 / Ex. PW36/I1) from BSB which was released in the month of December. Thereafter ZO, AHB wrote a letter dated 11.02.98 DGM Delhi to ZO, AHB, Varanasi in respect of KFFL and copy of the same was sent to A6 and in response to this letter A6 wrote a letter dated 03.03.1998 (D110) whereby credit report in respect of Page 46 of 237 (C.B.I. Vs. Subhash Chandra Sachdeva & Ors.) C.C. No. 40/11 Dated : 14.12.2018 KFFL was sent to ZO, AHB. A6 in response to this letter wrote a letter D17 (Mark X) to the Manager UBI and BSB seeking credit report and in terms of this letter i.e. D17 the credit report D18 & D19 were sent by A6 to ZO and document D18 has been found to be forged. PW13 S.C.Gupta had visited the office of A6 at Gazipur where A6 also informed him that report from BSB had also been received. Therefore, PW13 had not visited personally the office of BSB and UBI and A6 also handed over a copy of D18 & D19 to PW13 S.C.Gupta and said document D18 is found to be forged.
42. It is further contended that thereafter, the said recommendation, made by HO, AHB, were sent to ZO, AHB, New Delhi and ZO, in turn, sent the said recommendations to Page 47 of 237 (C.B.I. Vs. Subhash Chandra Sachdeva & Ors.) C.C. No. 40/11 Dated : 14.12.2018 RO, AHB, New Delhi and such recommendations were communicated to A1 on 19.03.98 but in order to allow the KFFL to get the loan released immediately A1 wrote a letter D62 and D63 on 18.03.98 (prior to communication of sanction of loan proposal of KFFL which was received by A1 on 19.03.98) seeking permission of IDBI of NHB for ceding second charge in favour of AHB.
43. She further submitted that in pursuant to criminal conspiracy hatched by accused persons A2 to A5 and A7 on the basis of the forged Form No. 8, 13, 17 as well as the forwarding letter allegedly issued by PW18 V.K.Choubey, forged document D38 to D43 whereby the first charge in favour of BSB Ltd. was satisfied and consequently was ceded. Thereafter, A2 to A5 and Page 48 of 237 (C.B.I. Vs. Subhash Chandra Sachdeva & Ors.) C.C. No. 40/11 Dated : 14.12.2018 A7 in terms of the sanctioning letter of their loan proposal got executed documents in favour of AHB through letter informing A1 that they will abide by the terms and conditions of the sanction loan. Thereafter, all the accused persons specifically accused A2 to A5 and A7 after having got ceded the first charge of BSB Ltd., on the basis of forged and fabricated documents, got registered the first charge in the name of AHB through document D50, 51, 52 dated 22.05.98 and 22.04.98.
44. The accused A1 had never compiled with the terms and conditions with regard to inspection of the accounts of KFFL periodically and after disbursal of loan he first time in July, 1998, sent PW14 to Gazipur to get the physical condition of the KFFL who in terms of the report has informed A1 that Page 49 of 237 (C.B.I. Vs. Subhash Chandra Sachdeva & Ors.) C.C. No. 40/11 Dated : 14.12.2018 BSB was having first charge over the immovable property of the cold storage unit of KFFL and the said report was sent by A1 to ZO AHB, New Delhi. But in pursuant to the criminal conspiracy hatched A1, thereafter, discounted the bill tendered by KFFL. The conspiracy hatched by accused persons was unearthen when PW15 through his report dated 02.02.00 (D
61) had submitted that letters allegedly given by BSB Ltd. are forged and fabricated and A6 could not give any satisfactorily proof with regard to issuance of letter Ex. PW12/D and Ex. PW15/A.
45. It is further submitted that BSB Ltd. had written a letter D22 dated 25.06.98 whereby it was confirmed that no such letter was issued by BSB Ltd. It was informed to AHB Page 50 of 237 (C.B.I. Vs. Subhash Chandra Sachdeva & Ors.) C.C. No. 40/11 Dated : 14.12.2018 that loan has been advanced to KFFL without seeking NOC from the BSB, through letter dated 28.08.98 informed RO, AHB New Delhi, that the documents D16, D17, D18, D22 are forged and fabricated and has never been issued by BSB. The factum of forging of these letters is proved by PW14 Choubey, which is duly corroborated by opinion of handwriting expert PW11. A1 was under bounded duty to exercise his discretion as per the guidelines issued as detailed in D72.
46. It is submitted that D55 is a marked document but said document can be taken into consideration as the same is proved by the witnesses, who appeared in the court and proved the factum of issuance of documents. Reliance is placed upon Bama Kathari Patil Vs. Rohidas Arjun Madhavi And Page 51 of 237 (C.B.I. Vs. Subhash Chandra Sachdeva & Ors.) C.C. No. 40/11 Dated : 14.12.2018 Anr., 2004 (3) Bom CR 509 ; Sudhir Engineering Company Vs. Nitco Roadways Ltd., 1995 HAD Delhi 189 ; R.V.E. Venkatachala Gounder Vs. Arulmigu Viswesaraswami & V.P., Civil Appeal No. 1058/1996 ; Fakhruddin Vs. The State of Madhya Pradesh, AIR 1967 SC 1326.
47. Lastly, it is submitted that KFFL had cheated AHB as well as BSB in as much as after getting the sanctioned loan amount of Rs. 90 lacs on 28.10.97, accused A1 to A5 and A7 obtained a loan of Rs.140 lacs from AHB on the basis of forged and fabricated document and, thereafter, they got managed the ceding of charge in favour of BSB Ltd. on the basis of forged and fabricated documents tendered in ROC, Kanpur and thereafter, successfully got registered the defective charge registered in Page 52 of 237 (C.B.I. Vs. Subhash Chandra Sachdeva & Ors.) C.C. No. 40/11 Dated : 14.12.2018 favour of AHB on the basis of forged and fabricated documents. The said charge allegedly ceded by BSB Ltd. was revived by Company Law Board on the basis of application filed by BSB through order dated 31.08.2001 (D54). The said charge, even if for the sake of arguments, presumed to have been never got executed in terms of the letter of the Company Law Board and the charge as alleged by the accused is in favour of BHB and, thereafter, the said charge stood transfer in favour of ASREC that does not absolve the accused of cheating and forgery committed by them in availing the loan of Rs.140 lacs from AHB on the basis of forged and fabricated documents.
48. Ld. Counsel for accused A1 submitted that accused A1 has been falsely implicated in the present case in as much Page 53 of 237 (C.B.I. Vs. Subhash Chandra Sachdeva & Ors.) C.C. No. 40/11 Dated : 14.12.2018 as A1 was only a recommending authority and, thereafter, there was four tier checking of the loan document before disbursal of the same by A1. There is no iota of evidence on record to infer involvement of A1 in the alleged criminal conspiracy. It is submitted that prosecution has leveled allegations against A1 that A1 has recommended loan proposal of KFFL upon receipt of it to the RO, whereas loan proposal application (D4 Ex. PW4/A1) of coaccused was submitted by KFFL to the Branch Manager (Advance) AHB, and prior to that the loan proposal was processed by PW17 D.P.S. Puri, SSIFO vide D5 (Ex. PW4/A2) and submitted to Manager (Advance) J.S.Kohli (PW14) and the said reports was recommended by A1.
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49. PW14 and PW17, in their testimonies, has confirmed that the said recommendation were made by them. Sh.S.S Thapar (PW28) has also testified that "it is normal practice for Manager Advance and his staff to discuss the matter with prospective borrowers". PW15 also testified in his testimony that Manager (Advance) was to ensure that all advances proposals including review and renewal cases are appraised properly and submitted to RO/ZO. PW2 and PW4 also confirmed the said procedure adopted by bank, in case, loan application is processed. A1 had handed over a letter dated 10.10.1997 on 13.10.1997 to A6 in the presence of PW4 A.K.Rana as the concerned Manager of BSB was not present on the same day and the credit report of all the previous banks of Page 55 of 237 (C.B.I. Vs. Subhash Chandra Sachdeva & Ors.) C.C. No. 40/11 Dated : 14.12.2018 KFFL was received in the Branch Office, Okhla of AHB in the month of October and prior to that recommendations was sent to the RO AHB through document D6.
50. The loan was sanctioned by the headquarter and disbursal of the same was made by A1 after following the rules and regulations in as much as charges with the ROC namely first charge and second charge were created in favour of AHB as per law. Thereafter, A1 sent J.S.Kohli for the site inspection at the plant of KFFL, Gazipur and immediately forwarded the report to the ZO, AHB through document D34 and whatever the bills were discounted, thereafter, were cleared as per instructions of RO, AHB. There is not a single witness who has testified that any favour has been shown by A1 to KFFL and his Page 56 of 237 (C.B.I. Vs. Subhash Chandra Sachdeva & Ors.) C.C. No. 40/11 Dated : 14.12.2018 Director. The alleged misconduct of A1, even if, for the sake of argument presumed to be there, said official misconduct cannot tantamount to criminal misconduct so as to saddle the A1 with criminal liability. Reliance is placed upon "Union of India Vs. Major J.S.Khanna and Mojor I.C Lal, 1972 Cr.L.J 849".
51. The prosecution has failed to explain the reason as to why the following letters / documents i.e. Letter dated 28.11.97 ; Letter dated 20.11.97 ; Dak register / Dispatch registers of Branch, IDBI, NHB ; Letter dated 27.11.97 from RO to ZO (Mentioned in RO recommendation) ; Letter dated 08.10.97 written in response to 28.09.97 ; Creation of second charge on the properties mortgaged with IDBI and NHB dated Page 57 of 237 (C.B.I. Vs. Subhash Chandra Sachdeva & Ors.) C.C. No. 40/11 Dated : 14.12.2018 11.01.99 in favour of AHB with ROC alongwith complete set of documents ; Fresh letters dated 28.09.98 and 19.11.98 for ceding / creation of second charge in favour of AHB ; Letter dated 26.09.98 by the RO, AHB to ZO, AHB New Delhi that the account may be allowed to operate within Limits and Circular bearing no. 5284 dated 21.03.97 were seized but not produced by the prosecution, therefore, adverse inference is to be drawn against the prosecution and with holding of such documents tantamount to suppression of material facts. In this regard, reliance has been placed upon "M.C.D. Vs. State of Delhi and Anr. 2005 CRI.L.J.3077".
52. It is further submitted that prosecution has not proved the sanction qua A1 and A6 as per law in as much as the Page 58 of 237 (C.B.I. Vs. Subhash Chandra Sachdeva & Ors.) C.C. No. 40/11 Dated : 14.12.2018 testimony of PW6 is contrary to the testimony of DW2 so far as the complete documents were also given by the prosecution to the sanctioning authority for grant of sanction relied is placed upon "Basdeo Agarwalia Vs. Emperor AIR 1945 FC 16".
53. It is further contended that the prosecution has not seized the dak register of any of the bank / financial institutions BSB, IDBI, NHB and that of AHB and except the dak register of AHB, Okhla Branch whether A1 was posted and the same has been produced by the prosecution for the reason best known to IO, therefore, adverse inference is to be drawn against the prosecution. All the correspondence was interse between the banking and no witness has testified that any of the documents Page 59 of 237 (C.B.I. Vs. Subhash Chandra Sachdeva & Ors.) C.C. No. 40/11 Dated : 14.12.2018 including credit report was handed over to borrowers / co accused, otherwise also there is no circular / rules that the Bank Manager has to collect credit information in person.
54. It is further submitted that A1 has also taken two additional securities i.e. agricultural loan in the name of P.N.Rai and N.K.Rai. The prosecution has not made the real culprit in as much as SP report it was concluded that S.C.Gupta, Sr. Manager, RO, AHB, New Delhi failed to do his duty assigned as per rules and regulations. The prosecution has withheld the proceedings carried out in the DRT first vide OA No. 377/2000. There is inordinate delay in reporting the CBI in as much as the alleged fraud came to the knowledge of AHB in the year 1998 but the matter has been reported to CBI Page 60 of 237 (C.B.I. Vs. Subhash Chandra Sachdeva & Ors.) C.C. No. 40/11 Dated : 14.12.2018 in the year 2002. The RO has permitted the discounting of the bills through D58 beyond the limit of Rs.15 lacs on 26.03.1999 whereas the irregularity in the documents of IDBI and NHB was reported on 11.07.1998.
55. It is further contended that the prosecution has failed to substantiate the allegations as levelled in the para 25 of the chargesheet. The prosecution has not placed on record any document even to interfere with A1 was supposed to collect all the documents personally and A1 was competent to collect credit information through its counter part by way of correspondence. A1 had never any dishonest intention right from the beginning that is why as and when he got information. He immediately sent PW14 J.S.Kohli to verify the factual Page 61 of 237 (C.B.I. Vs. Subhash Chandra Sachdeva & Ors.) C.C. No. 40/11 Dated : 14.12.2018 position, therefore, in the absence of any mensrea no offence is made out. In this regard, reliance has been placed upon "Anil Kumar Boase Vs. State of Bihar 1974 AIR 1560".
56. It is further submitted that the burden to prove that A1 by using official position has obtained any pecuniary advantage either by for himself or for any other person lies on the prosecution which prosecution fail to discharge and therefore, offence u/s 13 (1) (d) is not made out. The main allegation against A1 is that he sanctioned the loan to KFFL but this contention is not substantiated by testimony of PWs especially that of PW2, PW4, PW14 J.S.Kohli, PW17 and PW28. Second allegation against A1 is that he released limits to KFFL on 27.03.1998 but all the relevant documents Page 62 of 237 (C.B.I. Vs. Subhash Chandra Sachdeva & Ors.) C.C. No. 40/11 Dated : 14.12.2018 including the original title documents of the property of KFFL was sent through document D31, which contained 29 documents, and, thereafter, opinion of Manager (Law), RO, AHB was taken, who opined that amount may be released, therefore, the amount was released to KFFL after having verified the fact of creation of second charge from IDBI and NHB through D62 and D63 respectively. It is further contended that apart from that RO / ZO had meeting with the coaccused as deposed by DW5 vide letter dated 08.09.98, 16.09.98 and 26.09.98. The loan sanctioned in favour of KFFL was strongly recommended by RO and ZO, AHB. The second charge was created in favour of NHB on 11.01.99. PW 36 IO has not conducted any investigation with regard to creation of first charge and second charge in favour of AHB by Page 63 of 237 (C.B.I. Vs. Subhash Chandra Sachdeva & Ors.) C.C. No. 40/11 Dated : 14.12.2018 KFFL. This fact has been admitted by him in his cross examination.
57. It is further contended that so far as connivance of A1 with A6 is concerned all the PWs especially PW4, PW14 and PW15, documents D12, D13, D14 and D15 were received from post sent by AHB, Ghazipur Branch headed by A6. A1 had never allowed frequent over drawing of the amount by KFFL and the coaccused in as much as the account was operated within the sanction limit of cash credit, OD or IBD limits and the said amount was released with the consent of ZO, RO, AHB and, whenever the limits were crossed in respect of the account of KFFL, the matter was reported to ZO, RO, AHB. Otherwise also as per the deposition of PW4, PW13, Page 64 of 237 (C.B.I. Vs. Subhash Chandra Sachdeva & Ors.) C.C. No. 40/11 Dated : 14.12.2018 PW14, the amount of KFFL was operated within permissible limit. A1 exercised his discretionary limit within permissible limit in terms of the circular bearing no. 5449 dated 09.09.1997 (D72).
58. It is further submitted that the verification of stocks as alleged was to be done by the Ghazipur Branch, AHB in terms of the sanction letter dated 19.03.1998 and Okhla Branch headed by A1 was getting stock investigation regularly from April'1998 onwards from Ghazipur Branch of AHB. A1 never allowed the operation of account by KFFL beyond limits after 26.07.1999 as per the statement of account D94. Otherwise also, RO/ZO never issued any instructions and allowed the account to operate till 1998 in terms of letter dated 26.09.1998. Page 65 of 237
(C.B.I. Vs. Subhash Chandra Sachdeva & Ors.) C.C. No. 40/11 Dated : 14.12.2018 So far as issuance of letter dated 18.03.1998 to NHB and IDBI is concerned, PW4 has categorically submitted that after getting sanction from HO, AHB, ZO must have conveyed the communication for grant of sanction that is why A1 has written the letter to NHB, IDBI on 18.03.1998 whereas sanction of letter was received on 19.03.1998.
59. It is further submitted that letter dated 18.03.1998 i.e. Ex.PW4/E1 and Ex. PW3/1 were allegedly handed over to coaccused for the delivery to NHB & IDBI Bank but those documents were sent by A1 to NHB & IDBI by post. It is further submitted that any overdrawing was never granted by A1 and whenever the amount was released, the same was released after sanction letter received from RO. The verification Page 66 of 237 (C.B.I. Vs. Subhash Chandra Sachdeva & Ors.) C.C. No. 40/11 Dated : 14.12.2018 of accounts was got on 10.07.1998 and further more, accounts were supervised by RO. There were concerned auditors who could have posted out discrepancies but no such report has been produced by prosecution. A1 has sent PW14 to Unit of KFFL at Gazipur on quarterly basis and the letter dated D21 and D55 was disowned by IDBI and NHB respectively and report of PW14 dated 15.07.1998 was immediately sent to ZO, AHB.
60. Ld. counsel for accused A2 to A5 and A7 has submitted that accused A3 to A5 and A7 were neither involved in any forgery nor they have created any false documents, in as much as, prosecution has not placed on record any material on record that A2 to A5 and A7 have conspired with A1 & A6 as Page 67 of 237 (C.B.I. Vs. Subhash Chandra Sachdeva & Ors.) C.C. No. 40/11 Dated : 14.12.2018 alleged. It is further submitted that the letter dated 08.10.1997 (D16) was received from BSB in RO, AHB, New Delhi as per admission of PW4. Another letter i.e. credit report i.e. 21.10.1997 (D15) allegedly issued by BSB was also received by AHB and letter dated 28.02.1998 was written by BSB, Ghazipur in response to letter (D92) dated 11.02.1998 written by Northern ZO, AHB, New Delhi.
61. It is further submitted that 3 forwarding letters dated 16.01.1998 i.e. D39, D41 and D43 through which D38, D40 and D42 were issued by BSB to ROC, Kanpur ; are confidential letter and issued by BSB directly to ROC, Kanpur. Therefore, in forging of none of the documents accused A2 to A5 and A7 have any role to play. The charge was created in favour Page 68 of 237 (C.B.I. Vs. Subhash Chandra Sachdeva & Ors.) C.C. No. 40/11 Dated : 14.12.2018 of AHB before ROC, Kanpur. The said charge was created as per law which continued till the said charge was assigned transferred by AHB in favour of private parties as deposed by defence witnesses. PW1 has disowned the letter dated 20.03.1998 (D55) and further said documents has also not been proved as per law. The letter dated 19.03.1998 (D21) was issued by IDBI. The charge was created in favour of AHB, and AHB has admitted creation and continuation of such charge as per complaint and even prior to filing of complaint, such charge was already created/modified before ROC.
62. It is further submitted that there is no evidence on record that letter dated 21.10.1997 (D15) was managed by A2 to A5 and A7 as no opinion has been given by PW11 qua D15. Page 69 of 237
(C.B.I. Vs. Subhash Chandra Sachdeva & Ors.) C.C. No. 40/11 Dated : 14.12.2018 PW4 has categorically testified that letter dated 08.10.1997 (D
16) was received from the BSB Manager (Law), but the said Manager (Law), BSB has not been examined, who was posted in BSB as deposed by PW12. These letters were confidential reports which are received by one Bank from the other banker and PW28 has categorically testified that these letters were never handed over to the borrowers to maintain secrecy. Letter (D18) is signed by PW18 V.K.Choubey and G.E.Q.D has not given any opinion about its forgery i.e. Q8 (qua letter dated 18.10.1997). There is no evidence on record to infer that this document (D18) was not signed by PW18 V.K. Choubey.
63. It is further submitted by ld.counsel for A2 to A5 and A7 that so far as the creation/modification, of first or second Page 70 of 237 (C.B.I. Vs. Subhash Chandra Sachdeva & Ors.) C.C. No. 40/11 Dated : 14.12.2018 charge all the acts are to be performed by banker to banker and no role was to be played by accused persons. A2 to A5 and A7 have disclosed all facts in their application. There was neither any concealment by accused A2 to A5 and A7 nor any information was withheld. PW1 has not denied the letter dated 18.03.1998 (D55) already sent by NHB to AHB and Executive Director of NHB has not been examined to whom the said letter was addressed.
64. The prosecution has not taken the admitted signatures of said PW1 & PW5 for getting these admitted signatures compared with specimen signatures as well as disputed signatures of PW1 and PW5. Therefore, the handwriting expert report is also inconclusive and cannot be Page 71 of 237 (C.B.I. Vs. Subhash Chandra Sachdeva & Ors.) C.C. No. 40/11 Dated : 14.12.2018 looked into any purpose. The charge was created as per law, as testified by PW14. PW14 in his testimony admitted that on the basis of this charge, DRT proceedings were filed by AHB. PW14 has also testified that KFFL has never overdrawn any amount over and above the sanction limit. Neither the company nor his director has any role to play regarding creation/cession of the charge nor any such statement of CEO of KFFL was recorded nor the said CEO has examined by prosecution. Even the FIR (D2) did not refer to any letter of NHB regarding cession of second charge. AHB has also not disclosed the modification of the said charge in their favour on 15.01.1999. The denial of monogram by PW1 and stamp on the letter (D55) is immaterial in as much as the questioned document pertains to year 1997, whereas the stamps sent to GEQD admittedly Page 72 of 237 (C.B.I. Vs. Subhash Chandra Sachdeva & Ors.) C.C. No. 40/11 Dated : 14.12.2018 pertains to the year 2002 and after the expiry of 5 years such specimen materials of the specimen stamps is not relevant. Otherwise, PW1 has admitted cession of the second charge on behalf of letter NHB written to AHB.
65. It is further submitted that IO/PW36 has admitted that he has not examined the Executive Director of NHB to whom the letter D62 was addressed nor he examined Deputy Manager of IDBI to whom the letter (B63) was addressed and PW1 and PW5 have denied the signatures on D55 and D21; but on the basis of other letter issued by NHB & IDBI charge in favour of AHB was created. The said document has not been produced by prosecution despite being seized. Prosecution has even failed to put documents to D38, D40 and D42 to Sh. Page 73 of 237
(C.B.I. Vs. Subhash Chandra Sachdeva & Ors.) C.C. No. 40/11 Dated : 14.12.2018 V.K.Choubey filed by BSB before RO, Kanpur in as much as these documents were directly sent to RO Kanpur. IO has not seized recorded from the office of ROC so as to prove that PW 18 V. K. Choubey has not sent the documents to ROC for ceding of charge. PW20 has also testified that registration, modification and satisfaction is done interse between the bank to bank in which A2 to A5 and A7 has no role to play. PW2 has admitted that on the basis of credit worthiness of any borrower evidencing outstanding that any financial institution further loan can be granted by any other bank provided second charge of the security of the first hold is allowed.
66. It is further submitted that the case of prosecution that the first charge of BSB was defective which was ordered to Page 74 of 237 (C.B.I. Vs. Subhash Chandra Sachdeva & Ors.) C.C. No. 40/11 Dated : 14.12.2018 be deleted through D54 in terms of the order passed by CLB from its record, but prosecution has admitted that even though charge was registered in favour of AHB till 2012 as claimed by KFFL. Accused A2 to A5 and A7 has led evidence and DW6, DW8 has testified that charge was registered in favour of AHB, was got transferred / assigned in the name of ASREC India Ltd. The IO has not placed on record the documents in this regard though such documents were seized by IO. Hence, adverse inference needs to be drawn against prosecution. DW4 has proved that letter dated 19.11.1998 signed by Ms.Lilly Mitra and letter dated 27.10.1998 was issued by NHB whereby second charge was created in favour of AHB.
67. It is further submitted by Ld. Counsel for accused A2 Page 75 of 237 (C.B.I. Vs. Subhash Chandra Sachdeva & Ors.) C.C. No. 40/11 Dated : 14.12.2018 to A5&A7 merely the fact that A3to A7 being merely beneficiary of the loan amount did not tantamount to conclude that they have either created the forged documents or used the forged & fabricated documents,in as much as,the presumption u/s 106 of Evidence Act can be invoked,in case, the prosecution has proved that the said fact was in special knowledge of A2 to A5 & A7. In this regard, reliance placed on judgment passed by Hon'ble Supreme Court in State of Rajasthan Vs. Kashiram in Crl. Appeal No. 745/2000.It is further submitted that so far as the criminal conspiracy is concerned,there must be circumstantial evidence and any link missing in such chain of circumstantial evidence is fatal & on the basis of such defective chain of circumstantial evidence A2 toA5 &A7 cannot be convicted. In this regard reliance is placed on record Ravichandran Vs. Page 76 of 237 (C.B.I. Vs. Subhash Chandra Sachdeva & Ors.) C.C. No. 40/11 Dated : 14.12.2018 State by DSP (Madras) 2010 SCC 120 & Nand Kumar Vs. State of Bihar 992 (Supplementary) SCC 111.
68. Ld.Defence Counsels had led a 3 dimensional attack on the prosecution case. The first dimensional attack was on legal issues. Second dimensional attack was based on mixed questions of law and facts. Whereas, the third dimension of their arguments, revolved around the factual aspects as has come up on record, on the basis of oral and documentary evidence, during the course of trial.
69. Ld.Defence Counsels had opened their arguments raising a LEGAL ISSUE stating that prosecution has wrongly invoked Section 13(1) (d) of P.C.Act. It is contended that as Page 77 of 237 (C.B.I. Vs. Subhash Chandra Sachdeva & Ors.) C.C. No. 40/11 Dated : 14.12.2018 there are no allegations of payment of any illegal gratification by the insured, surveyor or other private accused persons to the accused public servants, therefore, the provisions of Section 13(1) (d) of Prevention of Corruption Act, cannot be invoked.
70. Second dimensional attack of Ld.Defence Counsels was on mixed questions of "Law and Facts". The same was with respect to the sanction for prosecution granted against the public servants. The arguments advanced on this aspect were twofold ie. :
(i) Incompetence of Sanctioning Authority: The authority which had passed the sanction orders qua the public servants was not competent to pass the same, therefore, the sanction Page 78 of 237 (C.B.I. Vs. Subhash Chandra Sachdeva & Ors.) C.C. No. 40/11 Dated : 14.12.2018 orders are bad in law.
(ii) Nonapplication of mind : Even if it is assumed that the sanctioning authority was competent to pass the sanction orders, the same were passed in a mechanical manner and without application of mind as the sanctioning authority has failed to pass sanction order against other similarly situated officers who had performed the same functions, as has been ascribed by the prosecution to accused S.C.Sachdeva and Kamla Rai.
1.
71. Third dimensional attack on the prosecution case raised by Ld.Defence Counsels was on factual aspects, visavis the necessary ingredients of the offences with which accused persons were charged.
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72. These contentions raised by Ld.Defence Counsels are divided in 2 categories. The first one being on behalf of the accused PUBLIC SERVANTS, which are as under :
(i) No meeting of minds : That, there is no evidence brought on record by the prosecution depicting any meeting of mind, amongst the accused public servants on one hand and the private person i.e. KFFL and its Director i.e. A2 to A5 & A7 on the other hand, therefore, there is no question of any conspiracy whatsoever between these two set of accused.
(ii) No overt act on the part of public servants : That, the accused public servants had not done anything, in order to achieve the socalled object of conspiracy as they were not party to any such conspiracy / offence.
(iii) Official discharge of duties: That, the accused public Page 80 of 237 (C.B.I. Vs. Subhash Chandra Sachdeva & Ors.) C.C. No. 40/11 Dated : 14.12.2018 servants did, what was their official duty and had only processed / recommended / passed the claim on the basis of the recommendations / notes prepared by the subordinate staff.
(iv) No knowledge about forgery: That, the accused public servants did not have any knowledge that the documents received from different bankers of KFFL in Okhla Branch and Ghazipur Branch of AHB.
(v) No duty of the public servants for verification of documents: That, even otherwise, it was not the duty of accused public servants to verify the genuineness of the documents. Further, they had no reason to doubt the genuineness of the documents so received by post from the BSB and get deposited with ROC, Kanpur.
(vi) Unfair Investigations : That, the investigations have not been conducted by the investigating agency in a fair Page 81 of 237 (C.B.I. Vs. Subhash Chandra Sachdeva & Ors.) C.C. No. 40/11 Dated : 14.12.2018 manner as "pick and choose policy" was adopted and the officers who had performed similar roles were not made accused and the present accused has been wrongly and falsely implicated, therefore they be acquitted of the charge.
73. Second category of the contentions advanced by Ld.Defence Counsels for accused persons, on factual aspects vis avis the necessary ingredients of the offences, with which this accused was charged. The same are as under:
(i) No meeting of mind: It is contended on behalf of accused A1, that there is no evidence on record to show any meeting of mind amongst A2 to A5 & A7 and the public servants.
(ii) No mensrea / involvement of accused A1: It is contended by Ld.Defence Counsel that accused A1 is not the Page 82 of 237 (C.B.I. Vs. Subhash Chandra Sachdeva & Ors.) C.C. No. 40/11 Dated : 14.12.2018 beneficiary in this case, as he is neither sanctioned the loan of A1 violated any rules and regulations in recommending loan application of KFFL, as has been alleged against him by the prosecution in the charge sheet.
74. Ld.Defence Counsel had contended that prosecution has failed to connect A1, with the offence with which he was charged, by any cogent piece of evidence on record.
A P P R E C I A T I O N O F E V I D E N C E A N D R I V A L C O N T E N T I O N S :
75. Before adverting to appreciate the prosecution as well as defence evidence which has come up on record visavis the charges against the accused persons, as well as the arguments advanced on the mixed questions of facts and law, I Page 83 of 237 (C.B.I. Vs. Subhash Chandra Sachdeva & Ors.) C.C. No. 40/11 Dated : 14.12.2018 deem it appropriate to deal with that contentions first which have been raised by Ld.Defence Counsels, on purely legal aspects, in their quest to demolish the prosecution case at its threshold.
76. The opening contention of Ld.Defence Counsels was that, there is no averment or allegation in the entire charge sheet of extension of any illegal gratification on the part of insured or other private accused persons, to the accused public servants, therefore by no stretch of imagination, the provisions of Section 13(1) (d) of Prevention of Corruption Act, could have been invoked. It is contended that on this ground itself, the case cannot proceed and accused persons should be acquitted.
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77. In order to deal with this contention of Ld.Defence Counsels, it is pertinent to make a mention of the relevant provisions of Section 13 (1) (d) of Prevention of Corruption Act. The same is as follows : Section 13: Criminal misconduct by a public servant : (1) A public servant is said to commit the offence of criminal misconduct,
(a) . . .
(b) . . .
(c) . . .
(d) if he,
(i) by corrupt or illegal means, obtains for himself or for any other person any valuable thing or pecuniary advantage ; or
(ii)by abusing his positioning as a public servant, obtains for himself or for any other person any valuable thing or pecuniary advantage ; or
(iii)while holding office as a public servant, obtains for any person any valuable thing or pecuniary advantage without any public interest ; or
(e) . . .
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78. The phrases namely "corrupt , illegal means" and "by abusing his position as public servants" are different categories of corrupt practices, which are conjuncted by the words "or" and not by the conjunction "and". This in itself indicates that these three different categories are alternate misconduct on the part of public servant and either of these three practices, if done by public servant then the same can constitute an offence under this Section.
79. The phraseology "By abusing his official position as Public Servant" covers the acts done by the public servant otherwise than by corrupt or illegal means. The gist of the offence under this clause is, that a public officer abusing his Page 86 of 237 (C.B.I. Vs. Subhash Chandra Sachdeva & Ors.) C.C. No. 40/11 Dated : 14.12.2018 position as "public servant" obtains for himself or for other person, any valuable thing. The word "abuse" used by the Legislature means "misuse", ie. using his position for something which is not intended. That abuse of the position may be by corrupt or illegal means or otherwise than those means". In view thereof, the Legislature never intended that there has to be an express evidence of illegal gratification before invocation of this section. In case, there are instances and allegations that a person has abused his position as a public servant, in order to cause advantage to anyone, that in itself is sufficient for invocation of this Section.
80. Meaning thereby that in absence of any allegations by the prosecution on the part of public servant of demand and Page 87 of 237 (C.B.I. Vs. Subhash Chandra Sachdeva & Ors.) C.C. No. 40/11 Dated : 14.12.2018 acceptance of illegal gratification for showing any favor to a private individual, the provisions of Prevention of Corruption Act cannot be invoked, as urged by Ld.Defence Counsels, to my mind is farfetched and devoid of merits. As there are allegation of abuse of official position by the public servants in order to cause pecuniary advantage to their coaccused, this clause of P.C.Act very much comes into play.
81. In view thereof, the contention advanced by Ld.Defence Counsels that in the present case there are no allegations on record that any of the public servants, who are accused herein had adopted any corrupt or illegal means or have obtained any pecuniary advantage for themselves, thus section 13(1) (d) of P.C.Act cannot be invoked, is rejected. Page 88 of 237
(C.B.I. Vs. Subhash Chandra Sachdeva & Ors.) C.C. No. 40/11 Dated : 14.12.2018 However, the prosecution has to establish the necessary ingredients of the offences, with which the accused persons have been charged, on the basis of the evidence which has come up on record, with which I shall be dealing hereinafter.
82. Having dealt with the contentions urged by Ld.Defence Counsels on behalf of the accused persons on purely legal grounds, I shall now delve upon to consider the arguments raised involving mixed question of "Law and Facts".
83. Leading a doublepronged attack on the prosecution case, Sh.Raghunath Menon, Ld.Defence Counsel appearing on behalf of the public servant / A1, contended that the provisions of Section 19 of Prevention of Corruption Act is a Page 89 of 237 (C.B.I. Vs. Subhash Chandra Sachdeva & Ors.) C.C. No. 40/11 Dated : 14.12.2018 mandatory provision and the Court does not have the jurisdiction to take cognizance when the "sanction" under this provision is granted in mechanical manner and without application of mind and that too, by an authority which was not competent to grant the same.
84. Public servants in whatever capacities they are holding their offices, are supposed to give effect to the objects for which their organization is functioning, so that the benefits arising out of their actions, should benefit their country in general and their organization in particular. To achieve the object, for which the policies and plans of the organization are put in place, all the public servants are expected to discharge their functions with utmost propriety and all fairness. Page 90 of 237
(C.B.I. Vs. Subhash Chandra Sachdeva & Ors.) C.C. No. 40/11 Dated : 14.12.2018 Experience however has revealed that many public servants, instead of using their good offices for the public good, misuse the same for their personal benefits by indulging into corrupt and improper practices.
85. Legislature in its wisdom in order to curb such corrupt and improper practices had brought "Prevention of Corruption Act, 1988" on the Statute Book for not only, punishing those who had violated the very oath of honesty and sincerity with which they had assumed their office and indulged in 'corrupt practices', but also to deter the others from treading the path of dishonesty.
86. The object and character of this provision is Page 91 of 237 (C.B.I. Vs. Subhash Chandra Sachdeva & Ors.) C.C. No. 40/11 Dated : 14.12.2018 evidently emanating from the words used in the Section by the Legislature : "No Court shall take cognizance of such offence, except with the previous sanction". Use of words "No" and "shall" makes it abundantly clear that the bar on the exercise of power of the Court to take cognizance of an offence is absolute and complete. As per Black's Law Dictionary, the word "cognizance" means jurisdiction or the exercise of jurisdiction. In common parlance, it means "taking notice of". In view thereof, in absence of the sanction, the court is precluded from even taking notice of the offence or exercising its jurisdiction, in respect of a public servant.
87. Thus, the provision has been imparted a mandatory character and has been held so by various authoritative Page 92 of 237 (C.B.I. Vs. Subhash Chandra Sachdeva & Ors.) C.C. No. 40/11 Dated : 14.12.2018 pronouncements by Hon'ble Apex Court. While holding grant of sanction to be a prerequisite or sinequanon for taking cognizance, regard is to be had to the fact that it can be a shield to discourage vexatious prosecution of innocent public servant, but it should not be permitted to be used as a weapon against the prosecution by the guilty.
88. The protection given by the Legislature is to be extended to the extent provided therein and it cannot and should not be stretched elastically to cover those, who are not intended by the Legislature to be under the protective umbrella. As to my mind the Legislature by enacting any provision in the Act, which prohibits the taking of cognizance of offence by a Court, unless certain conditions are complied with, Page 93 of 237 (C.B.I. Vs. Subhash Chandra Sachdeva & Ors.) C.C. No. 40/11 Dated : 14.12.2018 did not purport to condone the offence. Thus, such provision is to be construed on the basis of words used therein, without importing the words, which are not there.
89. In the backdrop of above, I shall consider the arguments advanced by Ld. Defence Counsel raised by him to challenge the authenticity of the sanction order Ex.PW.2/A passed qua A1 and Ex.PW.2/A1 qua A6 by PW2 S.K.Katyar.
90. Firstly, I shall consider the arguments advanced on the aspect of "competence of the sanctioning authority" to pass the sanction orders.
91. Once the sanctioning authority has been produced in Page 94 of 237 (C.B.I. Vs. Subhash Chandra Sachdeva & Ors.) C.C. No. 40/11 Dated : 14.12.2018 the Court unless there is anything brought on record which may vitiate the sanction order, the sanction order has to be taken as proved. In this regard reference be made to the case of 'R. Sundrajan vs. State', 2006 (12) SCC 749. It is also not the requirement of law that sanction should be accorded by mentioning all necessary evidence and detailed facts. Sinaqua non for grant of sanction is placement of complete material before sanctioning authority against the accused and it should be perceptibly clear from sanction order that sanctioning authority had taken into consideration those materials. There is nothing to show had there been any other material before PW2 S.K.Katyar, he would have taken a different view. Where it was discernibly apparent that the sanctioning authority before according sanction had looked into the evidence and material Page 95 of 237 (C.B.I. Vs. Subhash Chandra Sachdeva & Ors.) C.C. No. 40/11 Dated : 14.12.2018 and had considered the circumstances and facts of case and only then had granted sanction, the plea that sanction order suffers from vice of non application of mind cannot be accepted.
92. On a careful perusal of the entire testimony, this court is of the opinion that A1 & A6 has not been able to show any substantial or compelling reason which may persuade this court to hold that sanction Ex.PW2/A and Ex. PW2/A1 was invalid or non est in law.
93. Having held that the sanction for prosecution granted against the public servants was valid, I shall now delve upon the contentions of Ld.Defence Counsels on factual Page 96 of 237 (C.B.I. Vs. Subhash Chandra Sachdeva & Ors.) C.C. No. 40/11 Dated : 14.12.2018 aspects, visavis the necessary ingredients of the offences, with which the accused persons were charged.
94. In view of the duties and obligations which these public servants / A1 & A6, being responsible officers of AHB, were required to fulfil, and terms and conditions laid down in the sanction order whereby loan was sanctioned in favour of KFFL, it is to be seen whether they had performed their duties, as was expected from them or whether the actions and omissions of theirs were laden with any dishonest intention, in order to cause any pecuniary advantage to their coaccused persons for which regard is to be had to the evidence that has come up on record.
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95. Prosecution evidence which has come up on record, visavis each of the accused facing trial is required to be considered. Conspiracy is the most pivotal part of the prosecution case, which is the primary charge against the accused persons, being axis around which revolves the other charges. As per the case of prosecution, the officers of AHB being public servants, had entered into a criminal conspiracy with the private persons, object of which was to cheat AHB.
96. Ld.Public Prosecutor made an endeavour to invoke Section 10 of Indian Evidence Act. She, in order to buttress his arguments, contended that all the conspirators should be made constructively liable for the substantive offences committed, pursuant to the conspiracy on the basis of the Page 98 of 237 (C.B.I. Vs. Subhash Chandra Sachdeva & Ors.) C.C. No. 40/11 Dated : 14.12.2018 "Principle of Agency". He contended that the public servants had entered into a conspiracy with the private persons, therefore the acts done by the private persons, pursuant to the conspiracy, in contemplation of law, should be treated as committed by each one of them, therefore all of them should be held responsible and liable for the same.
97. Bare perusal of Section 10 of the Indian Evidence Act makes it evident that there is no such deeming provision in it, as has been contended by Ld.Prosecutor. No doubt, Section 10 rests on the 'Principle of Agency', but it lays down only a rule of relevancy. As per the provisions of this Section, anything done or said by one of the conspirators in reference to the common intention becomes "relevant fact" as against each of Page 99 of 237 (C.B.I. Vs. Subhash Chandra Sachdeva & Ors.) C.C. No. 40/11 Dated : 14.12.2018 the conspirators, to prove two things :
(i) Existence of the conspiracy ; and
(ii) That, they were party to this conspiracy. This has been held so by Privy Counsel in case titled "Mirza Akbar vs. King Emperor" reported as AIR 1940 PC
176. This interpretation has been followed by Hon'ble Apex Court in catena of decisions.
98. In view thereof, distinction was made between the conspiracy and the offence (s) committed, pursuant to the conspiracy. It is only in order to prove the existence of conspiracy and parties to the conspiracy, that this rule of evidence, can be put in service.
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(C.B.I. Vs. Subhash Chandra Sachdeva & Ors.) C.C. No. 40/11 Dated : 14.12.2018 "Conspiracy to commit a crime itself is punishable as a substantive offence and every individual offence committed pursuant to the conspiracy is separate and distinct offence to which individual offenders are liable to punishment, independent of the conspiracy."
99. In view thereof, I do not find any merits in the contentions advanced by Ld.Public Prosecutor as the "Theory of Agency" cannot be extended thus far, that is to say, to hold all the conspirators guilty of actual offence(s) committed in execution of common design, if such offence(s) were committed by one of them, without participation of others.
100. Whether or not, conspirators will be liable for substantive offence other than the conspiracy and if so, to what Page 101 of 237 (C.B.I. Vs. Subhash Chandra Sachdeva & Ors.) C.C. No. 40/11 Dated : 14.12.2018 extent, has to be proved on record by the prosecution on the basis of evidence which, I shall be adverting to hereinafter.
101. However, before going that far, I would hasten to add that prosecution has first to establish that all the accused persons facing trial, were in fact party to the alleged conspiracy with which they have been charged.
102. Conspiracy is seldom an open affair. Its existence and objects can only be deduced from circumstances of the case and conduct of the accused, who are party to such conspiracy.
As Conspiracy has to be and can only be inferred from the physical manifestation of conduct of the conspirators / accused. Thus, to deduce actual meeting of minds Page 102 of 237 (C.B.I. Vs. Subhash Chandra Sachdeva & Ors.) C.C. No. 40/11 Dated : 14.12.2018 amongst the accused person to find out transmission of thoughts, the actual words used by them during communication, are to be considered.
103. The conduct of the conspirators / accused are to be deciphered not only from the actual words spoken by them but also from their body language, mannerism and behaviour by which they intervene in the conversation taking place between the complainant and coaccused, as their state of mind has to be inferred on the basis of their conduct.
104. Hon'ble Apex Court in case titled "V.C.Shukla vs. State" reported as 1980 (2) SCC ; had held that in most cases it will be difficult to get direct evidence of the crime, but Page 103 of 237 (C.B.I. Vs. Subhash Chandra Sachdeva & Ors.) C.C. No. 40/11 Dated : 14.12.2018 conspiracy can be inferred even from circumstances giving rise to a conclusive or irrepressible inference of an agreement between two or more persons, committing an offence.
105. Hon'ble Apex Court in case titled "Noor Mohd. Yusuf Momin vs. State of Maharashtra" reported as AIR 1971 SC 885, has held : "...in most cases proof of conspiracy is largely inferential though the inference must be founded on solid facts. Surrounding circumstances and antecedent and subsequent conduct, among other factors, constitute relevant material."
106. In case titled "Alvin Krumlewitch v. United States of America" reported as (93 L.Ed. 790) ; it has been held by Justice Jackson that : Page 104 of 237 (C.B.I. Vs. Subhash Chandra Sachdeva & Ors.) C.C. No. 40/11 Dated : 14.12.2018 "codefendant in a conspiracy trial occupies an uneasy seat" and "it is difficult for the individual to make his own case stand on its own merits in the minds of jurors who are ready to believe that birds of a feather are flocked together."
Hon'ble Apex Court in case titled "Esher Singh Vs. State of A.P." reported as 2004 (11) SCC 585 has held as under : "A few bits here and a few bits there on which the prosecution relies cannot be held to be adequate for connecting the accused in the offence of criminal conspiracy. The circumstances before, during and after the occurrence can be proved to decide about the complicity of the accused".
107. Being aware of the fact that for the purposes of appreciating the evidence on record with respect to the allegations of conspiracy, the circumstances in which the accused acted, their actions and mannerism are required to be considered, which I shall look into, mindful of the words of Page 105 of 237 (C.B.I. Vs. Subhash Chandra Sachdeva & Ors.) C.C. No. 40/11 Dated : 14.12.2018 caution laid down by Hon'ble Apex Court in above referred precedents.
108. The first facet of criminal conspiracy hatched by accused persons whereby forged and fabricated documents were used to get the loan sanctioned in favour of KFFL from AHB as set out in the chargesheet is that KFFL i.e. A2 - A5 & A7 in order to cheat the Okhla branch, AHB, New Delhi by way of obtaining working capital facility on the basis of forged documents inconnivance with bank officers of AHB i.e. A1 and A6 (since deceased) facilitated the disbursal of the limits for Rs. 140 lakhs by recommending the sanction of the limits on the basis of forged confidential credit report allegedly received from BSB Gazipur.
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109. It may be noted that, accused A2 to A4 and A7 who happened to be the director of A5 had applied for a loan in BSB Okhla branch, where A1 was working as a Manager, through undated loan application Ex.PW4/A (D4) for a loan of Rs. 180 lakhs wherein A2 - A5 & A7 have disclosed the following credit facilities which were already availed by KFFL from different banking institutions, details of which are reproduced as under: "1. IDBI, New Delhi - Loan sanctioned Rs. 350 lakhs.
2. Soft Loan of NHB Gurgaon Rs. 100 lakhs.
3. The Banaras State Bank - Rs. 40 lakhs."
110. This proposal of the KFFL was entertained and was processed by PW17 D.P.S.Puri through D5 in the capacity of SSI of Okhla branch, AHB as testified by PW17 and PW17 Page 107 of 237 (C.B.I. Vs. Subhash Chandra Sachdeva & Ors.) C.C. No. 40/11 Dated : 14.12.2018 submitted his appraisal report Ex.PW4/A2 proved by PW4 A.K.Rana and PW17 admitted that he had made recommendations at point X on Ex.PW4/A2 observing that "limit recommended subject to the satisfactory visit report of the Unit".
111. This recommendation of PW17 are, thereafter, dealt with by PW14 J.S.Kohli and in his testimony PW14 has admitted that at relevant time he was working as Manager (Advance) in the year 1997 and A1 was working as branch Manager, Okhla branch, AHB. He testified that KFFL had applied for opening of a current account bearing No. 106627 on 1.9.1997 through document Ex.PW8/A (D25). PW14 has further testified that he prepared an appraisal note dated 16.09.1997 Ex.PW4/A2 (D5) and he also exhibited the Page 108 of 237 (C.B.I. Vs. Subhash Chandra Sachdeva & Ors.) C.C. No. 40/11 Dated : 14.12.2018 documents annexed therewith as Ex.PW4/A4. PW17 in his appraisal note Ex.PW4/A2 has given the details of the banking institutions which has advanced loan of various facilities to KFFL details of which are as under: "1. IDBI Term Loan Rs. 350 lakhs
2. NHB Soft Loan Rs. 100 lakhs
3. RCTC Rs. 40 lakhs".
112. This appraisal note / report prepared by DW14 J.S.Kohli and PW17 D.P.S.Puri was recommended by A1 through his recommendation dated 17.09.1997 Ex.PW4/A3 (D
6). By making following observations : "The Companies accounts have been opened and accounts are in operation:
In no loan account, the company deposited Rs. 36 lakhs which was released by NHB (National Horticulture Board). The IDBI is also releasing Rs. 50 lakhs by 27 th Sept. Page 109 of 237
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The company envisages to commence its commercial production by mid October 97.
The proposal carries our recommendations for your kin consideration and sanction".
113. These recommendations made vide Ex.PW4/A3 were sent to the RO, AHB and were considered by RO and, after recommendations, were forwarded to ZO, AHB by RO, AHB Delhi as proved by PW2 through document/ recommendation dated 02.12.1997 Ex.PW2/DA (D7) with the terms and conditions and the relevant one are 'h' and 'L' which are reproduced as under: "(h) Credit report from present bankers (Banaras State Bank Ltd.) has been submitted and is satisfactory. The company will continue to avail credit facilities for its cold storage plant from the same Bank. The Bank has agreed to vacate the first Page 110 of 237 (C.B.I. Vs. Subhash Chandra Sachdeva & Ors.) C.C. No. 40/11 Dated : 14.12.2018 charge on the fixed assets of the cold storage unit for the credit facilities to be granted for the proposed activity in favour of our Bank."
"(L) Submitted charge of IDBI and NHB has been registered only on the first assets of the processing unit of the company charge on fixed assets of the cold storage unit has been registered in favour of Banaras Bank which it is ready to vacate."
And so far as security was concerned , it was recommended in following terms: "Primary: Hypothecation charge over the stocks convert assets of the processing unit both present and future:
Collateral: (a) Second charge over the fixed assets of the processing unit both present and future.
(b) First charge over the fixed assets of the cold storage unit both present and future."
xxxxxxxxxx
114. The recommendations of RO, AHB were sent to ZO, AHB had been recommended by ZO, AHB as testified by PW12 Arun Verma through document /recommendation letter dated 02.12.1997 Ex.PW12/A (D8) laying down therein the following Page 111 of 237 (C.B.I. Vs. Subhash Chandra Sachdeva & Ors.) C.C. No. 40/11 Dated : 14.12.2018 conditions: "Security: (a) Second charge over the fixed assets of the food processing unit.
(b) First charge over the fixed assets of the cold storage unit of the company.
xxxxxxxxxx Other observations: (3) The unit of the company situated at Ghazipur was visited by SSI. FO of Regional office alongwith Senior Manager, Okhla Branch on 13.10.1997 and found the project at nearly completion stage.
(4) Conduct of account from its existing bankers is reported satisfactory."
xxxxxxxxxx..........In view of the above and having regard to recommendations of branch / Regional office, we recommend the proposal for consideration and sanction the following credit facilities on the following terms and conditions : xxxxxxxxx Security Primary
(a) Second charge over the fixed assets of the processing unit, both present and future.
(b) First charge over the fixed assets of the cold storage unit, both present and future.
Xxxxxxxxxxx Page 112 of 237 (C.B.I. Vs. Subhash Chandra Sachdeva & Ors.) C.C. No. 40/11 Dated : 14.12.2018
115. The recommendations made by ZO, AHB for sanction of credit facility to KFFL were sent to AHB HQ, Calcutta and the HO sanctioned a loan facility of 140 lakhs to KFFL vide sanction letter dated 14.02.1998 (D9) Ex. PW4/D1 with the terms and conditions namely:
8) All documentations should be completed before release of the limits. Please note that funds are to be released only after the completion of all stipulations and documentations. All security documents are to be examined by Senior Manager (Law) posted at RO, New Delhi who will give a certificate that documentation has been done in terms of sanction letter and documents are enforceable in the court of law.
9) Since the unit of the company is situated at Ghazipur. As opined by you, the modalities for transfer of part limit to the extent of 25% of limit sanctioned to the nearest branch to the unit may be pleased worked out in consultation with DGM, Zonal office Lucknow under advice to us.
10) The detailed terms and conditions for sanction of funded and Non funded limits will be observed as per AnnexureI. Page 113 of 237 (C.B.I. Vs. Subhash Chandra Sachdeva & Ors.) C.C. No. 40/11 Dated : 14.12.2018
11) All general terms and conditions will be furnished while conveying sanction to the company as per Annexure J.
Apart from these conditions some conditions are also detailed in Annexure I appended to these recommendations, relevant are produced as under : "Securities: Primary: Exclusive Hypothecation charge on the entire stocks, book debts and other current assets of the company, both present and future.
Collateral: ( a) Second charge over he fixed assets of food processing division of the company at village Ram Garh, Block Bhadaura, Tehsil Zamania, Distt. Ghazipur (UP). xxxxxxxxxxx
(b) First charge over fixed immovable/movables assets of the cold storage division of the company (Estimated value Rs. 359.67 lakhs as on 31.3.98) for which the Banaras State Bank ltd. has agreed to vacate their first charge after clearance of their seasonal advance by 15.11.97."
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116. These recommendations were conveyed to ZO, AHB by HO, AHB, Calcutta through Ex.PW4/D1 and ZO, AHB, in turn, informed RO, AHB through letter dated 18.03.1998 Ex. PW4/A10 (D29) and RO on receipt of Sanction letter informed A1 regarding sanction of loan to KFFL through letter dated 19.03.1998 Ex.PW4/A11 (D30). Thereafter A1 wrote a letter dated 23.3.1998 (D31) Ex.PW4/A12 (D31) alongwith relevant documents, papers and undertakings, in original, for verification by Senior Manager (Law) of RO, AHB, New Delhi to enable A1 to disburse the loan facility to KFFL and the Senior Manager (Law), RO had found all the documents intact and had made the following observations at the end of letter (D31): "All the documents in original as mentioned at Sl. No.1 and 29 have been verified to judge its enforceability. I am of the view that documents are enforceable in the limit of law. Page 115 of 237
(C.B.I. Vs. Subhash Chandra Sachdeva & Ors.) C.C. No. 40/11 Dated : 14.12.2018 All the documents in original are required for equitable mortgage as mentioned in the letter/search report of Sh. Ashwani Kumar Roy, Ghazipur. Branch should ensure that he is n the panel of the bank. Party should be advised to put special efforts for search of sale deed executed by Sh. Raj Giri and Sh. Rajinder and Sh. Ban Bihari Rai and if found shall form part of documentation. Charge to be registered with ROC in 30 days from date of execution of documents."
This sanction of loan was conveyed to KFFL by A1 through letter dated 24.3.1998 Ex.PW4/A13 (D32) and thereafter loan was disbursed.
117. It is relevant to mention there that prosecution has led evidence through PWs namely PW4 A.K.Rana, PW6 Lok Nath Singh, PW9 K.V.Krishnareddy, PW11 R.Chandra, Hand Writing expert PW12 Arun Verma, PW14 J.S.Kohli, PW15 S.P.Roy Chaudhary, PW16 S.K.Das, PW17 B.P.S.Puri, PW18 Page 116 of 237 (C.B.I. Vs. Subhash Chandra Sachdeva & Ors.) C.C. No. 40/11 Dated : 14.12.2018 V.K.Chobey, PW20 R.K.Kashyap and IO PW36 B.K.Pandit to prove that accused persons got sanctioned the loans on forged and false documents.
118. It may be noted that KFFL through its directors moved an undated application D4 for a loan of Rs. 1.8 Crores and the said application after being dealt with by PW17 D.P.S.Puri and PW14 J.S.Kohli was recommended by A1 through D6 (Ex. PW4/A3) on 17.9.1997 and as deposed by PW14 and PW17 physical visit was to be paid to the unit and in compliance of the same PW4 A.K.Rana alongwith A1 had gone to Ghazipur at the unit of KFFL and PW4 testified that he dealt with the file of KFFL in connection with processing credit limit proposal. PW4 also proved the credit report dated Page 117 of 237 (C.B.I. Vs. Subhash Chandra Sachdeva & Ors.) C.C. No. 40/11 Dated : 14.12.2018 21.10.1997 Ex.PW4/A5 (D12), Credit opinion report dated 15.10.1997 Ex.PW4/A6 (D13), Credit opinion report dated 15.10.1997 Ex.PW4/A7 (D14) and Credit opinion report dated 21.10.1997 Ex.PW4/A8(D15) which were sent by AHB, Ghazipur, UBI, Ghazipur, BOB, Ghazipur and BHB, Ghazipur respectively and these credit opinion report were sent by different banks were dealt by PW4 which were containing the reports that the promoters/KFFL and its directors were sound and credit worthy and so far as report (D15) is concerned it was detailed that overdues were Nil.
119. PW4 has further testified that he alongwith A1 and A2 visited the unit of KFFL and Food processing machines/plant were installed in the unit and entire process Page 118 of 237 (C.B.I. Vs. Subhash Chandra Sachdeva & Ors.) C.C. No. 40/11 Dated : 14.12.2018 was done in terms of his report dt. 13.10.1997 Ex.PW2/D1 (D
10). He had paid the visit alongwith A1 on the directions of Manager PW28 S.S.Thapar, RO New Delhi and purpose of his visit was to check whether plant was installed or not. PW4 alongwith A1 and A6 visited Ghazipur branch of AHB and, thereafter, PW4 alongwith A1 and A6 visited BSB Ghazipur branch, where he was informed that his credit opinion report will be sent to AHB Ghazipur branch in due course and the said report i.e. Ex.PW4/A8 (D15) was received in AHB Okhla branch and no report of Sanyunkt Shetriya Gramin Bank Ltd. was received.
120. PW4 further testified that A1 had given the letter Ex.PW4/A9 (D10) dated 10.10.1998 to A6 for confirming the Page 119 of 237 (C.B.I. Vs. Subhash Chandra Sachdeva & Ors.) C.C. No. 40/11 Dated : 14.12.2018 creditworthiness of KFFL addressed to its different previous bankers for granting working capital limits by AHB and this letter was given so that A6 may collect the Credit report of KFFL from different banks and sent the same to Okhla branch, AHB. He testified that the sanction order of loan to KFFL i.e. Ex.PW4/D1 was signed by Dy. General Manager, DGM Zonal office, New Delhi and was received in RO, AHB on 18.03.1998. He further testified that A1 in compliance of sanction letter of credit limit to KFFL sent letter dt. 23.03.1998 (D31) which was dealt with by Sr. Manager (Law) RO, AHB and thereafter limits were released by A1 to KFFL through letter dated 24.03.1998 (Ex.PW4/A13).
121. It may be noted that upto the stage of recommending Page 120 of 237 (C.B.I. Vs. Subhash Chandra Sachdeva & Ors.) C.C. No. 40/11 Dated : 14.12.2018 the case of KFFL for grant of Rs. 1.8 Crores (1.4 crores sanctioned by HO, AHB) as loan facility two documents namely document Ex.PW4/A4 (D16) and the letter/document dated:
19.10.1998 (D15) Ex. PW4/A8 allegedly issued by the BSB Ghazipur branch are forged and fabricated.
122. In this regard it may be relevant to mention here that letter dated 8.10.1998 (D16) Ex.PW4/D2 allegedly written by HO, BSB, Varanasi to MD KFFL contains the following information: "In Reference to your Request letter dt. 28.09.1997 forwarded by the Branch, we are to inform you after clearance of the seasonal advance against the Cold Storage unit by 15.11.97, the formalities for vacating the charge will be completed at our end."
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123. This letter issued by HO, BSB, Varanasi was written in response to the letter dt. 28.9.1997 (D22) Ex. PW12/DA written by Director of KFFL, the relevant details of which are as under: xxxxxxxxxx "Our request for working capital assistance is under active consideration with AHB. We have offered the Cold Storage property worth Rs. 288.34 lakhs as collateral security to them. Since after vacation for the UPFC charge, your second charge has been automatically converted into first charge with R.O.C."
124. This letter D16 allegedly written by Manager (Law), BSB, HO, Varanasi but there is no post of Manager (Law) in Ghazipur branch of BSB as testified by PW18 V.K.Chobey and PW16 S.K.Das has also testified that letter dt. 08.10.97 (Ex.PW4/D2) is a forged one as the same does not bear any Page 122 of 237 (C.B.I. Vs. Subhash Chandra Sachdeva & Ors.) C.C. No. 40/11 Dated : 14.12.2018 signature and such type of letter is generally issued by the branch and not by the Head office and thirdly the address mentioned on this letter is of old location/building where the branch of BSB was existing earlier. But in cross PW16 S.K.Das admitted that as on 8.10.1997 Sh. A.V.Ghosh, Manager (Law) was posted with BSB, and he cannot say as to whether this letter was written to KFFL by BSB, HO in response to their letter.
125. PW18 V.K.Chobey has testified that he was working as Manager BSB Ghazipur branch w.e.f. August 1995 to May 1998. He denied having received any letter Ex.PW4/A9 (D11). PW18 also denied having issued letter dated 21.10.1998 (Ex.PW4/A8) in as much as the forged letter has been issued on Page 123 of 237 (C.B.I. Vs. Subhash Chandra Sachdeva & Ors.) C.C. No. 40/11 Dated : 14.12.2018 the letter head which was not in use in the BSB.
126. It may be relevant to mention here that this letter Ex.PW4/D4 (D16) was received in RO, AHB, New Delhi and admittedly IO PW36 Sh.B.M.Pandit has not collected any DAK / receipt / dispatch register to prove the interse correspondence amongst bank to bank except the Dak / receipt / dispatch register seized from the AHB, Okhla branch, New Delhi and even the said Dak register has not been placed on record by the IO for the reason best known to the IO and Ld. Public prosecutor. Therefore, admittedly there is no material on record in the shape of Dak register or other documentary evidence except the solitary statements of the PWs that as to how and through what mode letters/documents were sent and received Page 124 of 237 (C.B.I. Vs. Subhash Chandra Sachdeva & Ors.) C.C. No. 40/11 Dated : 14.12.2018 from AHB, Okhla branch, RO, AHB, New Delhi, ZO, AHB, HO, AHB, Calcutta and BSB Ghazipur, UBI Gazipur, BOB Gazipur, SKGB Gazipur and KFFL and viceversa.
127. It may be noted here that one fact is clear that letter Ex.PW12/DA (part of D22) was sent and received in the office of BSB, Ghazipur Branch and in turn, BSB HO Varanasi sent this letter alongwith Ex. PW4/A15 as proved from the testimony of PW12 as well as PW16 S.K.Das who was posted as DGM with BSB, HO from 1997 to 1999 and thereafter from 1999 to 2002. PW16 testified that as a DGM he wrote a letter dt. 25.6.1998 (Ex.PW4/A15) (D22) to AHB, when PW16 came to know that KFFL has taken a loan from AHB without obtaining NOC from BSB as BSB had already advanced loan to Page 125 of 237 (C.B.I. Vs. Subhash Chandra Sachdeva & Ors.) C.C. No. 40/11 Dated : 14.12.2018 KFFL and letter dated 21.09.1997 (Ex. PW12/DA) written by KFFL to BSB, Ghazipur admitting the factum of KFFL having applied for loan facility to AHB, Okhla branch, New Delhi. The above said letter dated 25.06.1998 Ex. PW4/A15 (D22) was written by BSB, HO to AHB has been seized by the IO from PW12 from RO, AHB, Delhi meaning thereby that this letter dated 21.09.1997 (Ex. PW12/DA) was accompanying the letter dt. 25.6.98 written by BSB, HO to AHB, RO, New Delhi. AHB, RO, New Delhi in response to the letter dated 25.6.98 D22 (Ex.PW4/A15) had written letter dt. 3.7.98 Ex.PW4/D3 (D93). The contents of which read as under: "In this connection, we draw your attention to your Ghazipur, Branch letter no. GZP/KAMAKHYA/132 dated 28.2.98 submitting us the credit report on the above company Page 126 of 237 (C.B.I. Vs. Subhash Chandra Sachdeva & Ors.) C.C. No. 40/11 Dated : 14.12.2018 (copy enclosed) in reply to our Ghazipur Branch letter no. GZP/KFFL/72 dated 28.2.98 and also your letter No. LPO/LEGAL/578 dated: 8.10.97 in response to above company's letter dated 28.9.97 (a copy of each these letters enclosed). It is apparent from the exchange of communications that it was well within the knowledge of your bank that the proposal of above company for credit facilities for food processing unit is under our active consideration and you had given your consent to vacate your charge over the cold storage plant of Co. by 20.11.97. We fail to understand as to why the your specific approval was required for extending our bank's exposure to the company we feel that there is no violation in RBI norms for our making/considering any advance to Co. for their said unit for processing/manufacturing of Tomato Puri, Tomato catchup, pickles etc."
128. This letter D16 (Ex. PW4/D2) has also been taken into consideration and loan was sanctioned on the basis of this letter that BSB will vacate its first charge by 20.11.97 as this is one of the consideration on the basis of which loan was sanction in favour of KFFL as has been observed in the foregoing para. Page 127 of 237
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129. Although no opinion of handwriting expert has been taken on this letter 08.10.1997 (D16) Ex. PW4/D2 in as much as there was no post of Manager (Law) at BSB Ghazipur as testified by PW18 but PW16 admitted that Sh.A.V.Ghosh was working as Manager (Law) with BSB and despite that IO has not examined whether this document D16 bears signatures of whom in as much as no opinion of handwriting expert has been taken nor any witness examined in this regard as to whether, if any, there was any post of Manager (Law) in BSB, HQ and who was posted as Law officer.
130. Apart from the testimony of PW18 that this letter D16 was never issued by BSB, his version is also duly Page 128 of 237 (C.B.I. Vs. Subhash Chandra Sachdeva & Ors.) C.C. No. 40/11 Dated : 14.12.2018 corroborated by PW16 S.K.Das. Although, the letter Ex.PW 4/A15 written by BSB, HO to RO, AHB, New Delhi annexing the copy of letter dated 21.09.1998 (Ex.PW12/DA) written by KFFL to BSB Ghazipur admitting that KFFL is to avail loan for AHB, therefore, charge is to be vacated by BSB yet from this piece of evidence it can not be safely concluded that letter Ex.PW4/D12(D16) dt. 08.10.97 is a forged document in as much as there is neither documentary evidence that such letter was never issued by BSB, HQ, Varanasi nor handwriting of any of the accused is admittedly there on this document.
131. Although prosecution has failed to lead any evidence as to by whom this document has been forged and handed over to RO, AHB and A2, A3, A5 & A7 have submitted the Page 129 of 237 (C.B.I. Vs. Subhash Chandra Sachdeva & Ors.) C.C. No. 40/11 Dated : 14.12.2018 explanation that this is a document issued by BSB, HO and sent to AHB RO,New Delhi as admitted by PW4 in his cross examination, therefore, KFFL has no concern whatsoever, yet the factum of issuance of letter dt. 28.9.97 (Ex.PW12/DA) by KFFL to BSB, Gazipur Branch lead to conclude that KFFL had written a letter to BSB, Ghazipur disclosing therein that KFFL is availing loan facility from AHB Okhla Branch, New Delhi.
132. The prosecution witnesses namely PW4, PW12, PW14 and PW18 have admitted that confidential letters can be sent either from bank to bank or can be handed over to private party but in the absence of any document on record as observed herein above, it cannot be concluded that letter D16 was handed over by accused A2, A3, A4 and A7 either to BSB, HQ, Varanasi or to BSB, Ghazipur Page 130 of 237 (C.B.I. Vs. Subhash Chandra Sachdeva & Ors.) C.C. No. 40/11 Dated : 14.12.2018 Branch to be deposited with AHB, RO, New Delhi. In addition to it PW4 has admitted that letter D16 was received in RO AHB from BSB. The fact that accused A2 to A5 and A7 are beneficiary to this document (D16) in as much as the loan was sanctioned by AHB HO Calcutta on the basis of other forged documents including D16, cannot lead to conclude that this document D16 is forged document and was forged by accused persons and, thereafter, used by the accused persons by depositing with RO, AHB.
133. The another forged and false document to avail the loan facility used by the accused persons is letter dt. 21.10.97 (Ex.PW4/A8) issued by BSB, Gazipur branch to A1. This document which is confidential credit report of KFFL alongwith Page 131 of 237 (C.B.I. Vs. Subhash Chandra Sachdeva & Ors.) C.C. No. 40/11 Dated : 14.12.2018 the credit report from different banks namely AHB, Ghazipur branch, UBI, BOB and BSB was received by A1 in Okhla Branch AHB i.e. document (Credit Opinion Report) namely document Ex.PW4/A5, Ex. PW4/A6, Ex. PW4/A7 and Ex. PW 4/A8 (D12, D13, D14 and D15) respectively. All these documents except D15 (Ex. PW4/A8) allegedly issued by BSB, Ghazipur Branch are found to be genuine and all these letters were received in response to the letter dated 10.10.97 Ex.PW4/A9 (D11) written by A1 to different previous bankers of KFFL and this letter (D11) was given by A1 to A6 as deposed by PW4 A.K.Rana.
134. This letter D15 is alleged to be forged in view of testimony of PW18 V.K.Chobbey who categorically testified that Page 132 of 237 (C.B.I. Vs. Subhash Chandra Sachdeva & Ors.) C.C. No. 40/11 Dated : 14.12.2018 D15 was not issued by him as the same does not bear his signature. He further testified that letter D15 is a forged letter and as much on the letter head on which D15 is written was not in use in the BSB at the address of the office of BSB at the relevant of time had already changed form that of the address mentioned on this letter D15. The writing in this letter is neither of him nor of any of official posted in the bank at that time. He had never met accused A2 and he has never written any letter D15.
135. PW11 R.Chandra, handwriting expert has not corroborated the testimony of PW18 V.K.Chobey and, relying upon his report, he testified that he has prepared his report after going through the material sent by the prosecution and Page 133 of 237 (C.B.I. Vs. Subhash Chandra Sachdeva & Ors.) C.C. No. 40/11 Dated : 14.12.2018 admitted signature of PW18 V.K.Chobey were examined but no opinion could not be given regarding disputed signature as contained in D15 (Ex. PW4/A8) at Q7 in terms of his report. From the solitary testimony of PW18 it can not be safely concluded that this document Ex.PW4/A8 (D15) is a forged and fabricated document in as much as prosecution has lead no documentary evidence that this document was not issued from BSB, Ghazipur and thereafter this document was not received in AHB, Okhla Branch.
136. Now the question arises whether this document D15 is forged one in as much as except solitary statement of PW18, there is nothing on record to support the testimony of PW18 that this document Ex. PW4/A8 is forged and fabricated and Page 134 of 237 (C.B.I. Vs. Subhash Chandra Sachdeva & Ors.) C.C. No. 40/11 Dated : 14.12.2018 even if, for the sake of arguments it is presumed, that this document is forged and fabricated by the accused persons, and sent to the AHB Okhla branch. In this regard, it may be noted that there is no documentary evidence on recorded even to infer that this documents was handed over by BSB Ghazipur to A2 - A5 and A7 to be delivered to AHB Okhla Branch New Delhi. Otherwise, PW4 admitted that this document D15 was received in BSB Okhla branch by post.
137. Therefore, although this document is presumed to be forged and fabricated for the sake of arguments, there is no evidence on record that this document was forged by the accused persons and got deposited with AHB Okhla branch, New Delhi. The mere fact that accused A3 to A5 and A7 are Page 135 of 237 (C.B.I. Vs. Subhash Chandra Sachdeva & Ors.) C.C. No. 40/11 Dated : 14.12.2018 beneficiary of this document as loans was advanced by headquarter, AHB by taking this letter (D15) Ex. PW4/A8 into consideration; but from this fact it cannot be concluded that this document is forged one and either A1 and A6 or A2 to A5 and A7 forged this document in as much as this document was received in Okhla branch AHB, Okhla branch, New Delhi after recommendation of loan proposal of KFFL by A1 and sent to RO, AHB, New Delhi.
138. The another facet of the criminal conspiracy hatched by accused persons is that ZO, AHB, New Delhi sought verification of credit worthiness report regarding KFFL again from A6, Manager of AHB, Ghazipur branch by issuing letter dated 11.02.98 (D92) Ex. PW28/D4 to ZO, AHB, Varanasi and Page 136 of 237 (C.B.I. Vs. Subhash Chandra Sachdeva & Ors.) C.C. No. 40/11 Dated : 14.12.2018 a copy of which was sent to A6. A6 in response to this letter (D
92), forged (D17) Mark 'X' dated 28.02.1998. Document / letter Ex. PW12/D (D18) dated 28.2.1998 as per prosecution (in the document date is written as 28.00.98). [This document is also exhibited as Ex.PW13/C (D33)]. This document D18 is also alleged by prosecution to be forged and fabricated. The same is allegedly handed over by A6 to PW13 Sh. S.C.Gupta, Manager, RO, New Delhi.
139. PW13 has testified that he was working as Senior Manager (credit), RO, AHB, New Delhi. PW13 at the instance of RM in March 1998 had visited plant of KFFL to see as to whether the plant was carrying on production or not as a loan proposal of KFFL was pending with AHB. PW13 alongwith A6 Page 137 of 237 (C.B.I. Vs. Subhash Chandra Sachdeva & Ors.) C.C. No. 40/11 Dated : 14.12.2018 had conducted joint inspection of the plaint in the presence of A2 and they had not examined any document as A2 had informed that books of account were maintained in their NOIDA office.
140. PW13 has further testified that the appraisal of KFFL was not having the inventory and receivables to the extent it was required for assessment of working capital and there was a deficit of Rs. 6070 lakhs gap as per projection of apprasail note and actual inventories receivables available and it was further informed that KFFL was arranging loans from their close relatives and friends. It was required to visit KFFL local bankers to obtain confidential credit reports form UBI and BSB.
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141. PW13 alongwith A6 went to UBI Ghazipur branch and A6 collected the report and handed over a copy of the same to PW13. A6 further informed PW13 that confidential credit report of KFFL from BSB, Ghazipur has already been received by A6 and Manager of BSB, Ghazipur branch was not available so no visit was paid to BSB, Gazipur. A copy of report of BSB which was collected by A6 was handed over to PW13. PW13 carried Confidential credit report from BSB and UBI qua KFFL, which were received by him, therefore, the two letters issued in this regard were not delivered by PW13 to the respective bankers of KFFL.
142. PW13 further testified that A6 had sent the confidential credit report of BSB qua KFFL separately to the Page 139 of 237 (C.B.I. Vs. Subhash Chandra Sachdeva & Ors.) C.C. No. 40/11 Dated : 14.12.2018 ZO, AHB, New Delhi through letter D110 (Ex. PW11/A32) in compliance of instructions given by the said ZO in as much as through letter dt. 11.2.1998 Ex.PW28/D4 (D92), DGM, Northern ZO, AHB, New Delhi, had directed the DGM, Varanasi, AHB for getting confidential credit report of KFFL and the copy of said letter was also sent to A6. PW13 S.C.Gupta had paid a visit in terms of above said letter and A6 had handed over a copy of PW12/D (D18) to PW13 S.C.Gupta and the copy of the same was sent to the Northern ZO, New Delhi directly. PW13 also proved his visit report paid at Ghazipur unit of KFFL through report dt. 5.3.1998 (Ex.PW13/A) and the letter allegedly given by A6 of confidential credit report of UBI and BSB as Ex.PW13/B and Ex.PW13/C respectively.
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143. So far as issuance of letter at Ex. PW12/D (D18) is concerned, PW18 Sh. V.K.Chobey testified that document Ex.PW12/D (D18) was not issued by him as the said letter did not bear his signature and signature affixed at point A on the document D18 are not appended by him. He further testified that document Ex.PW12/D (D18) is forged letter in as much as the letter head on which this letter is written was not in use in the BSB, Ghazipur branch as the address of BSB at the relevant of point of time has already changed from that of the address mentioned on the letter Ex.PW12/D (D18). He further testified the writing on this letter is neither of him nor of any official posted in the bank at that point of time. He had never visited Ghazipur branch AHB to meet A6.
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144. The testimony of PW18 is corroborated in material particulars by PW16 S.K.Das, who deposed that Ex.PW12/D is forged letter bearing forged signature of PW18 V.K.Chobey. He further testified the address mentioned in this letter Ex.PW12/B of BSB is incorrect. The testimony of PW18 and PW16 is further corroborated by the report of handwriting expert wherein it is observed that signature at Q9 on Ex.PW12/D is not that of PW18 V.K.Chobey and no report is given qua handwriting on Ex. PW12/D at Q8. From this piece of evidence it can be safely concluded that this document ex.PW12/D is a forged and fabricated document.
145. But now the question arises as to when and by whom this document was forged and fabricated. A copy of this Page 142 of 237 (C.B.I. Vs. Subhash Chandra Sachdeva & Ors.) C.C. No. 40/11 Dated : 14.12.2018 document was allegedly given by A6 to PW13 S.C.Gupta and another copy was sent by post through Ex. PW11/A32 (D110) to Northern ZO AHB, New Delhi. Prosecution has not placed on record any documentary evidence except the solitary statement of PW13 S.C.Gupta that this document (D18) was collected by A6 from BSB Ghazipur branch and sent to Zonal office AHB, New Delhi and another copy was handed over to PW13 S.C.Gupta, when PW13 had paid a visit to Ghazipur branch, AHB in March'1998. There is no documentary evidence on record that this confidential credit report was collected either by A1 & A6 or by accused A2 to A4 and A7 from BSB, Ghazipur branch and got deposited with Northern ZO, AHB, New Delhi, therefore, by way of the anology of reasoning given in foregoing paras regarding document D15, D16, the Page 143 of 237 (C.B.I. Vs. Subhash Chandra Sachdeva & Ors.) C.C. No. 40/11 Dated : 14.12.2018 prosecution has failed to prove that accused persons have forged and fabricated this document and got deposited with Northern ZO, AHB, New Delhi, for sanctioning disbursal of loan in favour of KFFL.
146. Another facet of criminal conspiracy is alleged fabrication of documents D21 and D55. As far as the allegation of forgery, fabrication of document D21 whereby IDBI consented for ceding the second charge in favour of AHB by the accused persons is concerned. It may be noted that it is alleged that document dated 19.3.1998 Ex.PW12/F (D21) is allegedly forged by accused persons as testified by PW5 Hari Ram Mishra whose testimony is duly corroborated by PW11 R.Chandra a handwriting expert.
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147. The genesis for production / fabrication of these documents commenced when A1 wrote letter Ex.PW3/1 (D63) to the DGM, IDBI, New Delhi, seeking ceding of second charge by IDBI in favour of AHB and in response to this letter written by A1, IDBI has not issued any letter and accused persons has forged and fabricated this document Ex.PW12/F (D21) so that loan in terms of the conditions detailed in sanction letter Ex. PW4/D1 may be sanctioned in favour of KFFL.
148. The contention of prosecution is that A1 much before getting sanctioning letter dt. 14.2.1998 Ex.PW4/D1(D9), which was sent to zonal office and zonal office conveyed to RO, AIHB through letter dated; 18.3.1998 Ex.PW4/A10(D29) and RO, AHB, in turn, through document/letter dt. 19.3.1998 Page 145 of 237 (C.B.I. Vs. Subhash Chandra Sachdeva & Ors.) C.C. No. 40/11 Dated : 14.12.2018 Ex.PW4/A11(D13) informed A1 regarding sanctioning of the loan, A1 through letter dt. 18.3.1998 Ex.PW14/E1(D62) and letter dt. 18.3.1998 Ex.PW3/1 (D63) sought the consent of these banks i.e. NHB, IDBI for conceding second charge on the properties of KFFL from Executive director AHB and DGM IDBI, New Delhi. The IDBI and NHB are alleged to have never issued letter Ex.PW12/F (D21) dt. 19.3.1998 and letter D55 Ex.PW11/A (Mark X) dt. 20.3.1998.
149. This letter D55 Mark X (Ex. PW11/A) is alleged to have been forged by accused persons and to prove this forgery the prosecution has led evidence of PW1 Dr. Lily Mitra who was working as Deputy Director since 1993 and soft loan was being given by AHB to promote the horticulture at the rate of 4% Page 146 of 237 (C.B.I. Vs. Subhash Chandra Sachdeva & Ors.) C.C. No. 40/11 Dated : 14.12.2018 service charge. PW1 testified that letter dt. 20.3.1998 mark X Ex.PW11/A (D55) addressed to Sr. Manager, AHB relating to financial assistance given to KFFL & ceding second charge in terms of AHB was not issued by PW1 and this letter did not bear her signature. PW1 was not having any authority to sign letters on behalf of Executive Director. PW1 further testified that this letter D55 did not bear the monogram of 50 years of independence which was being used by NHB in the year 1998 and usually on a letter written on the letter head , NHB did not put the rubber stamp on the same.
150. PW1 further testified that if any letter written by any other bank received by Executive director AHB the said letter was being sent to PW1 as well as to Indian overseas bank Page 147 of 237 (C.B.I. Vs. Subhash Chandra Sachdeva & Ors.) C.C. No. 40/11 Dated : 14.12.2018 i.e. NHB's bank for financial matter for relating to ceding of second charge of the requesting bank. She further testified that NHB has a joint charge for the property of KFFL with IDBI in terms of Ex. PW20/B (D36) and property mortgaged by KFFL through Ex. PW1/D1 (D37) and in case second charge was to be ceded, the Indian overseas Bank, the banker of NHB would be required to sign the requisite proforma in ROC. She further testified that NHB has not ceded the second charge to any bank in respect of the properties of KFFL. PW11 had submitted his report and has testified that the signature on mark X(D55) at Q3 are forged and fabricated and not signed by PW1.
151. The contention of the counsel for accused persons is that this document D55 is a marked document 'X' and not Page 148 of 237 (C.B.I. Vs. Subhash Chandra Sachdeva & Ors.) C.C. No. 40/11 Dated : 14.12.2018 proved as per law, appears to be attractive but the same fallacious in as much as the marking of a document as exhibit or mark is immaterial in view of law laid down by superior courts and Hon'ble High court of Delhi in Sudhir Engineering (supra) has observed as under : "(1) Admission of a document in evidence is not to be confused with proof of a document.
(2) When the Court is called upon to examine the admissibility of a document it concentrates only on the document. When called upon to form a judicial opinion whether a document has been proved, disproved or not proved the Court would look not at the document alone or only at the statement of the witness standing in the box; it would take into consideration probabilities of the case as emerging from the whole record. It could not have been intendment of any law, rule or practice direction to expect the Court applying its judicial mind to the entire record of the case, each time a document was placed before it for being exhibited and form an opinion if it was proved before marking it as an exhibit.
(3) The marking of a document as an exhibit, be it in any Page 149 of 237 (C.B.I. Vs. Subhash Chandra Sachdeva & Ors.) C.C. No. 40/11 Dated : 14.12.2018 manner whatsoever either by use of alphabets or by use of numbers, is only for the purpose of identification. While reading the record the parties and the Court should be able to know which the document before the witness when it was deposing. Absence of putting an endorsement for the purpose of identification no sooner a document is placed before a witness would cause serious confusion as one would be left simply guessing or wondering while was the document to which the witness was referring to which deposing. Endorsement of an exhibit number on a document has no relation with its proof. Neither the marking of an exhibit number can be postponed till the document has been held proved; nor the document can be held to have been proved merely because it has been marked as an exhibit."
In view of the above proposition of law this contention is hereby rejected.
152. So far as second contention regarding the opinion of handwriting expert is concerned I found some force in the contention of the Ld. Counsel for accused persons in as much as Page 150 of 237 (C.B.I. Vs. Subhash Chandra Sachdeva & Ors.) C.C. No. 40/11 Dated : 14.12.2018 the admitted signature of PW1 Dr. Lily Mitra are of the year 2002 whereas the alleged forgery was committed in the year 1998. Therefore, the admitted signature of PW1 despite being available was not taken by the IO, for the reason known best to him in as much as PW Rekha Sangwan admitted that she received the specimen signature sent by PW1.
153. There is no dispute about the preposition of law that there is no bar to send the disputed handwriting/signature for comparison to expert because time gap between admitted handwriting/signature and disputed handwriting/signature is long as laid down by full bench of Andhra Pradesh High Court in Siva Shankara Srinivasa Prasad Vs. Ravi Surya Prakash 2016 Vol. II ALD Page1 (FB), but this is not the Page 151 of 237 (C.B.I. Vs. Subhash Chandra Sachdeva & Ors.) C.C. No. 40/11 Dated : 14.12.2018 ratio of the judgment passed by the full bench of Andhra Pradesh High Court that despite availability of admitted handwriting/signature, such admitted handwriting/signature must not be sent for comparison with the forged handwriting/signature of the writer. It is not in every case that the ratio of the full bench in the above said judgment is to be applied rather the same is exception to the normal course where the contemporaneous signature or the handwriting are not available, the expert's opinion with regard to the disputed documents where it become inevitable can be called for. When the contemporaneous signature are available for comparison that would give the correct and the best picture. In this regard reliance is placed upon Dinta Kurthi Narayana Vs. Rachura Bhaskara 2017 5 ALT 411.
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154. Therefore, handwriting expert report Ex. PW11/B2 of PW11 R.Chandra qua Q3 on documents D55 cannot be taken into consideration, as such prosecution is left to with the testimony of PW1 to prove that D55 is forged and fabricated and prosecution failed to prove that this document D55 is forged one. Even if the testimony of PW1 is presumed to have proved that document mark X (D55) is a forged and fabricated document, it is not going to help the prosecution in as much as apart from the solitary statement of PW1 Dr. Lily Mittra; the IO has collected no documentary evidence as to how and when this document D55 was got prepared and got despatched from AHB, Okhla branch in as much as IO has not collected any document in the shape of Dak register / Dispatch register either from the NHB, Gurgaon, Haryana or Okhla branch AHB, New Page 153 of 237 (C.B.I. Vs. Subhash Chandra Sachdeva & Ors.) C.C. No. 40/11 Dated : 14.12.2018 Delhi so as to conclude that no such letter dated 18.3.1998 Ex.PW14/E1 was received in the office of Executive Director, NHB, Gurgaon, Haryana and in response of the above said letter, NHB has not issued letter dated 20.03.1998 mark X (D
55). From the above discussions, it can be safely concluded by adopting the analogy of reasoning as observed in the foregoing paras of the judgment that prosecution has failed to prove that this document D55 was forged and fabricated by accused persons.
155. Now coming to document D21 (Ex.PW12/F) dated 19.3.1998. This document is alleged to have been issued by IDBI in response to the letter dt. 18.3.1998 Ex.PW3/1 (D63) issued by A1 and to proved that this document is forged and Page 154 of 237 (C.B.I. Vs. Subhash Chandra Sachdeva & Ors.) C.C. No. 40/11 Dated : 14.12.2018 fabricated the prosecution has led the evidence of PW3 Ms. Neetu Sethi, DGM, IDBI and PW5 Sh. Hari Ram Mishra the then Asstt. Manager, (Legal) IDBI. PW3 has testified that in the year 1998 PW5 was working as Asstt. Manager (legal ) in the bank and letter mark X D21 (Ex.PW12/F) (Q10) was never issued by the legal department of the bank and PW3 was not in a position to speak about rubber stamp impression appearing on this letter mark X. PW3 admitted that when a letter is being despatched by the legal department a record is maintained in that regard. In cross examination she admitted that she cannot say what is the concept of the second charge over the property as that is dealt with project department. PW3 had no idea as to who will deal letter Ex.PW3/D1 and in all probabilities it must have been dealt with project finance department as the Page 155 of 237 (C.B.I. Vs. Subhash Chandra Sachdeva & Ors.) C.C. No. 40/11 Dated : 14.12.2018 said department deal with ceding of second charge qua the property.
156 PW5 has testified that the procedure regarding creation of charge of immovable property in IDBI is that if it is the first time of creation of mortgage, the borrower would submit a photocopy of the title document and relevant revenue record. Thereafter, investigation of title was to be done and the title report was to be submitted to Deputy General Manager Legal. If the title is accepted by DGM, Legal, then the borrower was permitted to create mortgage. The borrower has to pass the Board Resolution. There was one declaration and undertaking to be taken by the borrower at the time of deposit of title deed by the borrower. The title deed was to be deposited with DGM, Page 156 of 237 (C.B.I. Vs. Subhash Chandra Sachdeva & Ors.) C.C. No. 40/11 Dated : 14.12.2018 legal. During his tenure at IDBI Delhi PW5 had dealt with the matter of KFFL, who had sought for a loan of Rs. 3.5 crore. PW5 had investigated the title of KFFL. PW5 also visited the subregistrar office for confirming the revenue record of KFFL which were found correct.
157. PW5 testified that letter dt. 19.3.1998 Mark X Ex.PW12/F(D21) did not bear his signature at point Q10 and the stamp appearing on this letter at portion Q11 is not belonging to him and he has no authority to issue such letter mark X Ex.PW12/F (D21) for ceding second charge. He admitted that permission for creation of second charge on the property is granted by project finance department of IDBI and first document required for second charge is NOC from Project Page 157 of 237 (C.B.I. Vs. Subhash Chandra Sachdeva & Ors.) C.C. No. 40/11 Dated : 14.12.2018 finance department and, thereafter, the borrower company has to pass board resolution, then authorized director of the borrower company used to visit the office of IDBI and give one declaration and undertaking to the DGM legal and orally confirm that he is giving his oral consent of creation of mortgage over borrower company. He could not say whether IDBI issued any letter bearing No. PFD (III) 2635 dated 28.9.98 for creating second charge on immovable property, in favour of AHB was sent to the concerned bank for creation of second charge on the property of KFFL.
158. Handwriting expert PW11 R.Chandra had corroborated the testimony of PW5 so far as handwriting/signature of PW5 on this letter dt. 19.3.1998 Page 158 of 237 (C.B.I. Vs. Subhash Chandra Sachdeva & Ors.) C.C. No. 40/11 Dated : 14.12.2018 Ex.PW12/F (D21) through his report Ex. PW11/B2, but admittedly admitted signature of PW5 Hari Ram Mishra pertains to the year 2002 at the time when specimen signatures were taken, therefore, despite availability of admitted signature of PW5 Hari Ram Mishra, the IO had not collected the admitted signature of PW5, nor rubber stamp used in IDBI bank in the year 1998 for the reason best known to him, therefore by way of the analogy of reasoning as observed in the fore going paras of the judgment this piece of evidence i.e. opinion of handwriting/expert qua handwriting/signature/rubber stamp of PW5 cannot be taken into consideration and handwriting expert opinion of PW11 cannot be taken into consideration so far as writing / signature of PW5 on D21 is concerned and further IO has not collected any dispatch / receipt register of Page 159 of 237 (C.B.I. Vs. Subhash Chandra Sachdeva & Ors.) C.C. No. 40/11 Dated : 14.12.2018 any bank i.e. AHB, Okhla Branch as well as IDBI, therefore, by way of analogy of the same reasoning as discussed in forging paras, even if it presumed that for the sake of arguments, this D21 is forged and fabricated, except solitary statement of PW5 there is no evidence that this document is forged and fabricated in as much as IO has not verified issuance of this letter from the DGM, IDBI Bank or collected Dak register etc. As such this document is not proved by prosecution to be forged one.
159. Now coming to the another facet of the criminal conspiracy so far as deletion of first charge registered in favour of BSB (i.e. borrower of KFFL) on the basis of forged documents.
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160. In this regard it may be noted that KFFL and other accused namely A2, A3, A4, A5, A6 & A7 had informed BSB, Ghazipur branch through letter dt. 28.09.1997 Ex.PW12/DA requesting for vacation of first charge on cold storage unit of KFFL so that legal formalities for creation of mortgage with AHB may be completed. After submission of this letter to BSB, Ghazipur branch A2 to A5 and A7 had applied for a term loan to HO, BSB, Varanasi through document dt. 29.10.1997 Ex.PW36/I1(D70) whereby a loan of Rs. 70 lakhs i.e. CC (N) :
Rs. 50 lakhs (Rupees fifty lacs only) against stocks. CC (H) :
Book Debts: Rs. 20 lakhs (Rupees Twenty Lakhs only), in terms of the proposal dt. 17.9.97 of KFFL was sanctioned and disbursed.
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161. The prosecution in order to prove that accused persons has got ceded the first charge registered in favour of BSB with the ROC Kanpur on the basis of forged and fabricated documents has led the evidence of PW18 V.K.Chobey and PW20 Sh. R.K.Kashyap.
162. Admittedly the first charge on the cold storage unit of KFFL was registered in favour of BSB in terms of the documents namely D44, D45 exhibited as Ex. PW20/I, Ex. PW20/J. The said charge has been got satisfied and thereafter, allegedly ceded by BSB on 16.01.1998 in terms of the document D38, D40 and D42 for the loan amount Rs. I,16,75,000/ dt. 03.11.98, Rs. 24,75,000/ dt. 3.4.1997 and Rs. 26,75,000 dt. 23.05.97 i.e. Ex.PW20/C, Ex.PW20/E and Page 162 of 237 (C.B.I. Vs. Subhash Chandra Sachdeva & Ors.) C.C. No. 40/11 Dated : 14.12.2018 Ex.PW20/G respectively, namely form 17 submitted under Companies Act by the accused A2, A3 to A5 and A7, which were sent to ROC through forwarding letter D39, D41, D43 i.e. Ex.PW20/D, Ex.PW20/F and Ex.PW20/H respectively.
163. Prosecution has led evidence of PW18 in this regard, who testified that documents D39/Mark Z (Ex.P20/D), D 43/Mark Y (Ex.P20/H) and D41 Mark X (Ex.PW20/F) respectively were not issued by him or from his bank as the same did not bear his signature at point A. PW18 further testified that the letter head on which these documents Ex.PW20/F, Ex.PW20/D and Ex.PW20/H are written was not in use in the BSB as the address of the bank at the relevant point of time had already been changed from the address mentioned Page 163 of 237 (C.B.I. Vs. Subhash Chandra Sachdeva & Ors.) C.C. No. 40/11 Dated : 14.12.2018 on this letter. These letters were not even typed in his branch as there was no typing machine in the branch at that time.
164. PW 18 also admitted that he had written the letter documents D128 to D131 i.e. Ex.PW18/B to Ex.PW18/E respectively. He proved his admitted specimen handwriting and signature taken by IO on Ex.PW18/F1 to Ex.PW18/F26, he cannot say as to whether Rs. 22 lakhs against CC limit were outstanding against this firm on 21.10.1997. But when PW18 had taken the charge of the branch the account of KFFL was declared NP account. He admitted that in October 1997 KFFL got sanctioned loan of Rs. 90 lakhs in different parts and record with respect to the account must be available with the branch. Page 164 of 237
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165. PW18 denied that outstanding figure against KFFL was given by him in document D15. BSB was merged in Bank of Baroda in July, 2002. He denied having visited the office of ROC Kanpur. He further denied having signed form 17 in the office of ROC to state that charge of all the properties of KFFL has already been discharged. He further denied having handed over documents D39 and D41 to the office of ROC as he had never visited the office of ROC. He further denied the suggestion that he had put his signatures on the documents D 41 (Ex.PW20/G) in the office of ROC. He denied having given the specimen signatures at the instance of IO. He denied the fact that IO had shown him the documents and instructed the PW18 to sign in a particular fashion. He admitted that registration of charges in the office of ROC is done by the bank Page 165 of 237 (C.B.I. Vs. Subhash Chandra Sachdeva & Ors.) C.C. No. 40/11 Dated : 14.12.2018 by sending the requisite documents to the office of ROC. PW18 was not aware as to whether KFFL had applied for taking advance limit with AHB, but he later on came to know that KFFL had taken advance from AHB in the year 1998 when he was posted in the head office of BSB after having left the Ghazipur branch, BSB in May 1998. He has no knowledge of operation of account of KFFL in Ghazipur branch after he left BSB.
166. PW18 admitted that the record of charge maintained by ROC is a public document and in case the ROC makes any modification in its records pertaining to charge of a particular bank, then the said being a public document can be assessed by anyone including the bank whose charge was there Page 166 of 237 (C.B.I. Vs. Subhash Chandra Sachdeva & Ors.) C.C. No. 40/11 Dated : 14.12.2018 on the said property. PW18 did not know whether ROC in their records had recorded satisfaction of charge pertaining to BSB on 16.1.1998. PW18 further denied having knowledge as to whether the charge on the properties of KFFL in favour of AHB was registered in the office of AHB in April 1998. PW18 denied that the charge of AHB remained registered with the office of ROC on the properties of KFFL till 2001 and there was no charge of BSB. PW18 did not know as to whether BSB and AHB had a dispute with respect to their respective charges on the properties of KFFL. PW18 did not know whether BSB had filed any petition with Companies Law Board in the year 2002.
167. PW18 had further admitted that he do not have any knowledge with respect to the fact that charge of the bank can Page 167 of 237 (C.B.I. Vs. Subhash Chandra Sachdeva & Ors.) C.C. No. 40/11 Dated : 14.12.2018 be registered against the property only after satisfaction of any previous charge on other bank on those properties. PW18 did not know as to what category of charges are registered in the favour of bank in the office of ROC. PW18 did not know whether the charges were satisfied on 16.1.1998. Head office of BSB while writing a letter Ex.PW4/A15 might have asked the then Manager when the said letter was written to AHB but BSB had not asked about NOC from PW18. He admitted that head office of BSB while writing letter Ex.PW12/G had not made any inquiries from PW18. He admitted that as per the practice, registration as well as modification of charge are to be dealt with the bank interse.
168. PW20 R.D.Kashyap was working as Assistant ROC Page 168 of 237 (C.B.I. Vs. Subhash Chandra Sachdeva & Ors.) C.C. No. 40/11 Dated : 14.12.2018 Kanpur at the relevant time In the year 1998. He testified that document D36 (Ex.PW20/B) bearing particular charges created by the companies are mentioned. He proved documents D38 to D43 Ex.PW20/C to Ex. PW20/H as per prosecution these are forged documents) respectively. PW20 further proved D44 D 45, as Ex.PW20/I and Ex.PW20/J where charge was created in favour of BSB on 23.05.1997 and 02.06.1997 respectively. PW20 further proved documents D50, D51, D52, D53 as Ex.PW20/M to Ex.PW20/P. He further proved documents D54 (Ex.PW16/A), the order passed by Company law Board.
169. PW20 testified that document regarding creation/registration of charge and satisfaction of charge are generally submitted in the office of ROC by the representative Page 169 of 237 (C.B.I. Vs. Subhash Chandra Sachdeva & Ors.) C.C. No. 40/11 Dated : 14.12.2018 of company and at times the concerned bank. He further testified that it was not a mandatory condition for personal visit of the directors of the companies for submission of documents in the office of ROC. In cros examination PW20 has admitted that as per companies Act there is prescribed procedure for registration/creation of charge and creation of charge has to be registered in the office of ROC within 30 days and, thereafter, it can be registered within the further period of 30 days with late fees. He admitted that charge can be modified by virtue of form 8 and registered as per Section 125 of Companies Act.
170. The contention of the counsel of accused A2 to A5 and A7 is that these documents namely D38 to D43 i.e. Ex. PW20/C, Ex. PW20/D, Ex. PW20/E, Ex. PW20/F, Ex. PW Page 170 of 237 (C.B.I. Vs. Subhash Chandra Sachdeva & Ors.) C.C. No. 40/11 Dated : 14.12.2018 20/G, Ex. PW20/H were submitted by BSB directly to ROC and as per the admission of PW20 R.D.Kashyap these documents Ex.PW20/D, 20/F and 20/H were received from BSB in the office of ROC, therefore, A2 to A5 and A7 had no concern whatsoever with these documents except putting the signature by one of the accused namely Sachidanand Rai in the capacity of Director of KFFL and further the documents D38, D40 and D42 Ex.PW20/C, PW20/E, PW20/G were not shown to PW18 at the time of his examination, therefore, these documents are cannot be read in evidence. This contention appears to be attractive but the same is fallacious in as much as Ex.PW18 and PW20 had admitted that the documents submitted by the parties/banks are public documents and documents Ex.PW 20/E, Ex.PW20/C and Ex.PW20/G are public documents. Page 171 of 237
(C.B.I. Vs. Subhash Chandra Sachdeva & Ors.) C.C. No. 40/11 Dated : 14.12.2018 Although these documents Ex.PW20/E, Ex. PW20/C and Ex. PW20/G were not put to PW18 Sh. V.K.Chobey by the Ld. Public prosecutor for the reasons best know to him, yet it may be relevant to observe there that the document D39, 41 and D 43 namely document Ex.PW20/D, Ex.PW20/F and Ex.PW20/H respectively were shown to PW18 who in categorically terms has testified that these documents namely the forwarding letters documents appended to Forms 17 i.e. D38, D40 and D 42 i.e. Ex.PW20/E, Ex.PW20/C and PW20/G respectively were sent to the office of ROC for ceding of charge registered in favour of BSB did not bear of signature of PW18. The said testimony of PW18 is duly corroborated by handwriting expert opinion given by PW11 Sh. R.Chandra in terms of his report Ex.PW11/C2 and Ex.PW11/D2. Apart from that, in cross Page 172 of 237 (C.B.I. Vs. Subhash Chandra Sachdeva & Ors.) C.C. No. 40/11 Dated : 14.12.2018 examination conducted by counsel for accused no. 1, 2, 4 & 5. PW18 specifically denied that he signed the Form 17 under provision of Companies Act. In reply to further suggestion given by counsel PW18 specifically denied having signed D42 in the office of ROC meaning thereby PW18 has specifically denied his signing any document including D38, D40 & D42 in the office of ROC.
171. From the above discussions, it can be safely conceded that all the documents D38, D40 & D42 namely Form 17 regarding satisfaction of charge were submitted alongwith forged documents i.e. forwarding letter appended to these documents D38 (Ex.PW20/C), D40 (Ex.PW20/E) & D42 (Ex. PW20/G) namely D39, D41 and D43 i.e. document Ex. PW Page 173 of 237 (C.B.I. Vs. Subhash Chandra Sachdeva & Ors.) C.C. No. 40/11 Dated : 14.12.2018 20/D, Ex.PW20/F and Ex.PW20/H respectively are proved to have been forged and fabricated. Documents D38, D40 and D 42 did not found bearing the signature of Sh.V.K.Chobey in terms of the handwriting expert report and as stated above proved by PW11 R.Chandra. Therefore even though the document D38, D40, D42 i.e. Form 17 submitted for ceding of charge registered in favour of BSB are not put to PW18 by the prosecution but being public documents these are duly proved as per law by PW20 and these documents are not found containing the signatures of PW18 Sh. V.K.Chobey in terms of the testimony of PW18 duly corroborated by PW11 and PW18 specifically in cross denied the suggestion of signing any Form 17 i.e. D38, D40 and D42. The prosecution, therefore, has proved that these documents D38 to D43 are forged and false Page 174 of 237 (C.B.I. Vs. Subhash Chandra Sachdeva & Ors.) C.C. No. 40/11 Dated : 14.12.2018 documents.
172. As far as the contention of the Ld. Counsel for accused persons that handwriting expert DW3 has opined that documents signed by PW18 bears signature of PW18 in terms of his report Ex. DW3/1, therefore, the documents signed by PW18 are admittedly bearing his signatures, is concerned ; suffice is to say that a private handwriting expert tend to depose in favour of the party who had called him. Reliance in this regard is placed upon judgment passed by Hon'ble High Court of Delhi in Mrs. Indira Rai Vs. Shri Bir Singh, bearing no. CS (OS) No. 1386/2001 on 23 November, 2010, wherein it has been observed as under : xxxxxxxxx Page 175 of 237 (C.B.I. Vs. Subhash Chandra Sachdeva & Ors.) C.C. No. 40/11 Dated : 14.12.2018 "It would be useful here to refer to the decision of Supreme Court in Gulzar Ali Vs. State of H. P. (1998) 2 SCC 192, where the accused had produced a handwriting expert to show that the opinion of the Government examiner of questioned documents was faulty. The High Court had observed that there was an inter alia tendency on the part of an expert witness to support the view of the person who called him and, therefore, it preferred the opinion of the Government examiner PW20 M. L. Sharma. It was held by the Supreme Court that the aforesaid observation of the High Court could not be downstaged for many so called experts had been shown to be remunerated witnesses making themselves available on hire to pledge their oath in favour of the party paying them. Relying upon the aforesaid decision of the Supreme Court, this Court in Deepa Arora Vs. Saurabh Arora & Anr. FAO No. 3/05 decided on 10 th December, 2007 declined to rely upon the testimony of the handwriting expert produced by the Objector before the Court holding that not much importance could be attached to the testimony and report of the handwriting expert."
173. Therefore, this contention deserves to be rejected and is hereby rejected. In the same manner, the contention of ld. Counsel for accused persons that opinion of handwriting Page 176 of 237 (C.B.I. Vs. Subhash Chandra Sachdeva & Ors.) C.C. No. 40/11 Dated : 14.12.2018 expert deserves to be discarded in as much as PW1 had failed to give any opinion in his first report and through PW18 had given his report in piecemeal, appears to be attractive at the first bluss, but the same deserves to be rejected in as much as prosecution has written a letter dated 24.01.2003 (D74) Ex. PW11/E to the concerned authorities for getting opinion of handwriting expert and PW11 send his GEQD report dated 05.03.2003 D76 Ex. PW11/B2 wherein it is detailed that admitted signatures of PW1 & PW5 is not tallying with the disputed signatures and no opinion could be given to Q4 to Q9 (disputed signatures of V.K.Choubey) on account of non supply of complete documents. In response to this, letter / GEQD report, the prosecution again through letter dated 02.06.2003 (D77) Ex. PW11/F sent some more documents / material Page 177 of 237 (C.B.I. Vs. Subhash Chandra Sachdeva & Ors.) C.C. No. 40/11 Dated : 14.12.2018 containing signatures witnesses including that of PW18 V.K.Choubey and, thereafter, GEQD sent the report dated 17.07.2003 (D79) Ex.PW11/C2 detailing therein that disputed signatures in D18, D39, D41 and D43 did not tally with the admitted signature of PW18. PW11 also opined that it has not been possible to express any opinion on the rest of the items on the basis of material supplied. Therefore, the CBI again vide letter dated 09.09.2003 (D106) Ex. PW11/G sent the materials bearing the admitted handwriting / signature of V.K.Choubey to PW11. Thereafter, PW11 through his GEQD report D111 Ex. PW11/D2 opined that D38, D39, D40 did not bear the signature of PW18 V.K.Choubey. As such this contention is hereby rejected.
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174. Now the question arises as to by whom documents D38 to D43 are forged and fabricated. As observed above, the IO had not collected any document from either of any bank or from the office of ROC even to infer as to by whom and when i.e. either by BSB or the accused persons these documents were submitted to the office of ROC directly. But one fact has been proved by the prosecution that these documents D38 to D43 are forged and fabricated and these false documents were submitted in the office of ROC.
175. Now the question arises as to whether accused A2 to A5 and A7 can be assigned special knowledge regarding using of these false documents for ceding of charge on the cold storage Page 179 of 237 (C.B.I. Vs. Subhash Chandra Sachdeva & Ors.) C.C. No. 40/11 Dated : 14.12.2018 of unit of KFFL registered in favour of BSB. The contention of counsel for Accused A2 to A5 and A7 by relying upon case titled as State of Rajasthan Vs. Kanshi Ram (2006) 12 Supreme Court Cases 268, that provisions of 106 of Indian Evidence Act can be invoked only when it is proved by prosecution that such fact was specially within the knowledge of the accused persons appears to be attractive but the same is fallacious and deserves to be rejected. In this regard it may be noted in Kanshi Ram (supra) of Hon. Supreme Court has observed as under : "It is not necessary to multiply with authorities. The principle is well settled. The provisions of Section 106 of the Evidence Act itself are unambiguous and categoric in laying down that when any fact is especially within the knowledge of a person, the burden of proving that fact is upon him. Thus, if a person is last seen with the deceased, he must offer an explanation as to how and when he parted company. He must Page 180 of 237 (C.B.I. Vs. Subhash Chandra Sachdeva & Ors.) C.C. No. 40/11 Dated : 14.12.2018 furnish an explanation which appears to the Court to be probable and satisfactory. If he does so he must be held to have discharged his burden. If he fails to offer an explanation on the basis of facts within his special knowledge, he fails to discharge the burden cast upon him by Section 106 of the Evidence Act. In a case resting on circumstantial evidence if the accused fails to offer a reasonable explanation in discharge of the burden placed on him, that itself provides an additional link in the chain of circumstances proved against him. Section 106 does not shift the burden of proof in a criminal trial, which is always upon the prosecution. It lays down the rule that when the accused does not throw any light upon facts which are specially within his knowledge and which could not support any theory or hypothesis compatible with his innocence, the Court can consider his failure to adduce any explanation, as an additional link which completes the chain. The principle has been succinctly stated in Re. Naina Mohd. AIR 1960 Madras, 218."
176. It may be noted that the contention of the counsel for accused A2 to A5 and A7 is that the prosecution has to establish its case against accused persons beyond reasonable doubts and merely by submission of documents before ROC bearing Page 181 of 237 (C.B.I. Vs. Subhash Chandra Sachdeva & Ors.) C.C. No. 40/11 Dated : 14.12.2018 signatures of accused A2 cannot tantamount to conclude that the alleged false documents were submitted by the accused persons in the office of ROC.
177. No doubt it is a settled preposition of law that burden of proof of criminal trial always rest on the prosecution and that it never shifts. However, the legislature while recognizing the onerous task enjoined on the court to unearth the truth, has incorporated the provision of section 106 of Indian Evidence Act. This rule/provision would apply, when the facts are "specially within the knowledge of the accused"
and it would be impossible or at any rate disproportionately difficult for the prosecution to establish such fact which are specially within the knowledge of the accused. The prosecution Page 182 of 237 (C.B.I. Vs. Subhash Chandra Sachdeva & Ors.) C.C. No. 40/11 Dated : 14.12.2018 is not required to eliminate all possible defences or circumstances which may exonerate the accused. If certain facts in the knowledge of the accused, then accused has to prove them. Of course, prosecution has to prove is case in the first instance. Reliance is placed upon Murlidhar vs. State of Rajasthan AIR 2005 Supreme Court 2345 and Santosh Kumar Singh vs. State 2010 (9) SCC 747. Prosecution through the deposition of PW18 and PW20 R.D.Kashyap has proved on record that document D38 to D43 are forged and fabricated and the false documents were tendered in the office of ROC for ceding of charge registered in favour of BSB by KFFL.
178. PW6 Sh. Lok Nath Singh has proved the account opening form of KFFL as well as the other documents including Page 183 of 237 (C.B.I. Vs. Subhash Chandra Sachdeva & Ors.) C.C. No. 40/11 Dated : 14.12.2018 statement of accounts namely Ex.PW6/H and Ex.PW6/I i.e. document D101 and D102 respectively. In document D101 Ex.PW6/G an amount of Rs. 49,97,285/ was outstanding in the name of KFFL on 13.01.1998 and on 20.01.1998 this outstanding amount was Rs. 50,02,163/. In statement of account Ex. PW6/J in March 1998, the outstanding amount was Rs. 52,87,817/ and in April'1998 an amount of Rs. 52,87,817/ was deposited and balance amount outstanding was Nil in terms of Ex.PW6/J.
179. No cross examination of this witness has been conducted by accused A3 to A7, therefore, the documents proved by this PW6 has gone unrebutted so as to conclude that on the day i.e. 16th of January 1998 this amount was Page 184 of 237 (C.B.I. Vs. Subhash Chandra Sachdeva & Ors.) C.C. No. 40/11 Dated : 14.12.2018 outstanding against the KFFL in the account maintained by BSB. Accused persons A2 to A5 & A7 through its Director A2 has averred in documents D38, D40 and D42 that the registered charge for the respective loan amount as detailed in these documents were satisfied in full on 16.01.1998, the debts for which the charge was given having been paid or satisfied.
180. The contention of the counsel for A2 to A5 and A6 that PW2 Sh. S.K. Katiyar has testified that on the basis of credit worthiness of any borrower having the outstanding with any financial institution further loan can be granted by any other bank provided second charge of the security of the first lender is allowed, appears to be attractive, but the same is fallacious and deserves to be rejected in as much as this bald Page 185 of 237 (C.B.I. Vs. Subhash Chandra Sachdeva & Ors.) C.C. No. 40/11 Dated : 14.12.2018 statement of PW2 will not had to conclude that first charge can be ceded by BSB in favour of AHB without payment of all its dues in terms of the loan facilities availed by KFFL, otherwise, also accused led no evidence in this regard. PW2 also deposed that it is the duty of branch head to get charge registered with the ROC. Account statement of KFFL also depicts that hefty amount was outstanding in the name of KFFL on 16.01.1998 and it is settled law that documentary evidence takes precedents over oral testimony.
181. Therefore, this averment made in these documents D38, D40 and D42 are, primafacie, false averments and contrary to the details as given in Ex.PW6/J i.e. statement of KFFL. Apart from that accused persons in their statements Page 186 of 237 (C.B.I. Vs. Subhash Chandra Sachdeva & Ors.) C.C. No. 40/11 Dated : 14.12.2018 U/s.313 Cr.PC has not given any explanation as to whether on 16.1.1998 no amount was outstanding against KFFL in the accounts maintained by BSB in respect of the loan fallacious availed by KFFL from BSB. Although the accused persons has led defence evidence but in defence evidence no oral or documentary evidence has been led by accused A2 to A5 & A7 that on the date of cessation of charge of BSB on 16.1.1998, all the dues on account of the loan facility availed by the KFFL were paid to BSB.A2 to A5 & A7 did not lead any evidence as to how they have compliedwith mandatory provision of Companies Act namely section 134, 135, 136 & 138 so far as filing of the particulars of registration of charge as well as modification of charge with the ROC and, thereafter, maintaining a copy of each & every registered charge and lastly information to the Page 187 of 237 (C.B.I. Vs. Subhash Chandra Sachdeva & Ors.) C.C. No. 40/11 Dated : 14.12.2018 Registrar of company of payment or satisfaction, in whole or in part, of any charge relating to company and regarding registration within 21 days from the date of such payment.
182. Therefore, it can be safely concluded that this fact was within specific knowledge of accused persons A2 to A5 and A7 that all the dues of KFFL in terms of loan facility availed from BSB were paid on 16.01.1998 but the accused had made no effort to prove this fact. Apart from that, the charge so ceded which was registered in favour of BSB stands deleted by the Company Law Board in terms of D54, (Ex.PW16/A).
183. This charge was ordered to be deleted by the Company Law board and this fact was detailed in the Page 188 of 237 (C.B.I. Vs. Subhash Chandra Sachdeva & Ors.) C.C. No. 40/11 Dated : 14.12.2018 documents D38, D40 and D42 and admitted by PW20 in his testimony. Thus by virtue of Section 106 of Indian Evidence Act, this fact i.e. the outstanding amount in terms of the loan facility amount availed by KFFL from BSB being in exclusive knowledge of accused persons i.e. A2 to A5 and A7 should have been established on record by them, as prosecution has discharged initial burden by virtue of documents D38 to D43 coupled with deposition of PW6, PW16 S.K.Das, PW18 V.K.Chobey and PW20 R.D.Kashyap. Therefore prosecution has been successful in establishing that documents D38 to D43 are forged and fabricated, which is also one of the allegation in the chargesheet and detailed in the order on charge as well as in formal charges that accused have by using false documents have cheated the BSB by ceding the charge registered in favour Page 189 of 237 (C.B.I. Vs. Subhash Chandra Sachdeva & Ors.) C.C. No. 40/11 Dated : 14.12.2018 of BSB by KFFL.
184. So far as contention of the counsel for A2 to A5 and A7 that charges were ceded by BSB and these accused persons have no role to play is concerned. In this regard it may be noted that the first charge registered in favour of BSB was ceded on the basis of forged, fabricated and false documents as discussed in foregoing paras of the judgment. Admittedly the first charge was registered in favour of AHB, after ceding of the first charge of BSB, through documents D50, 51 & 52 Ex. PW 20/M, Ex. PW20/N and Ex. PW20/O. This first charge got registered in the name of AHB, and thereafter the said first charge enforced by AHB in terms of the defence evidence i.e. DW4,who proved DRT proceedings filed by AHB on the basis of Page 190 of 237 (C.B.I. Vs. Subhash Chandra Sachdeva & Ors.) C.C. No. 40/11 Dated : 14.12.2018 first charge registered in its favour through D50, D51 and D
52. DW6 proved assignment agreement executed between AHB and ASREC and DW7 proved modified charge through Ex. PW7/A to Ex. PW7/E proved assignment deed executed by AHB in favour of ASREC lead by A2, but the charge registered in favour of BSB was got deleted/ceded on the basis of false documents. The documents placed on record by the accused in defence including legal proceedings taken by AHB against KFFL before DRT Delhi claiming that charge was registered in favour of AHB by KKFL, but merely filing of these proceedings and culmination thereof cannot absolve these accused A2 to A5 and A7 from their criminal liability in getting the charge ceded registered in favour of BSB on the basis of false documents. Page 191 of 237
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185. As far as the contention that IO has not placed / annexed the documents alongwith chargesheet whereby second charge was conceded in favour of AHB by NHB and IDBI is concerned. Although PW14 J.S. Kohli testified that he did not know whether letter dated 28.11.1998, 19.09.1998 & 10.10.1998 respectively allegedly issued by IDBI were not received in AHB. PW14 has also admitted that letter dated 17.08.1998 written to Branch Manager, Gazipur of AHB is signed by him whereby additional security offered by KFFL and the IO has not recorded the statement of Mr. Pandey who was chief accountant of KFFL. Although IO has not conduct the investigation with regard to creation of second charge by IDBI & AHB through documents Ex. DW4/A (collectively totaling 17 pages) in favour of AHB and thereafter, its continuation of such charge in favour Page 192 of 237 (C.B.I. Vs. Subhash Chandra Sachdeva & Ors.) C.C. No. 40/11 Dated : 14.12.2018 of AHB and also creation / modification of first charge in favour of AHB by KFFL after ceding of the charge registered in favour of BSB through documents D38 to D43 and its continuation thereof in as much as the only charge left against the accused person is to the extent of cheating and using false documents in conceding of first charge registered in favour of BSB by KFFL. But such modification of charge, registration of second charge in favour of AHB with the consent of NHB and IDBI will not exonerate the accused A2 to A5 and A7 from their criminal liability.
186. The contention of the ld. counsel for the accused A3 to A7 that vide D55 order passed by Company Lal Board was never executed in as much as the charge got created in favour of Page 193 of 237 (C.B.I. Vs. Subhash Chandra Sachdeva & Ors.) C.C. No. 40/11 Dated : 14.12.2018 AHB in 1998 by KFFL was valid till the said charge was assigned by AHB in favour of ASREC is devoid of force inasmuch as the judicial order was passed and it is mentioned in D38, D40 and D42 that the said charge stands deleted in terms of the order passed by the Company Law Board through document (D54) Ex. PW 16/A. Although accused persons have examined DW6 Anil Kumar Sinha, DW7 Saurabh Indora and DW8 P.P. Mangal to prove the factum of charge created and continued to exist in favour of AHB and thereafter transfer / assignment of said charge, in favour of ARSEC in terms of the document agreement Ex. DW6/A & such charge was ultimately satisfied by KFFL on 18.01.2016 yet the first charge registered in Form of BSB that A2 to A5 and A7 was got ceded on the basis of forged & false documents, is proved by prosecution. Page 194 of 237
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187. The contention of the accused A2 to A5 and A7 that no person has been cited as witness so as to whether accused A 2 to A5 and A7 or A1 to A6 had any role to play with regard to ceding and registration of second charge between the bankers is neither here nor there in as much as prosecution has proved that the documents D38 to D41 are forged and fabricated and Ld. Prosecutor has conceded that charges of forging of documents cannot be substantiated and only charge of cheating and use of false documents are made out against the accused persons including A2 to A5 and A7. So far as the contention regarding FIR not containing any reference of letter of NHB in getting ceding of charge is also devoid of merit in as much as FIR is not an encyclopedia.
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188. From the above discussion, it can be concluded that the false document D38 to D40 were used by A2 to A5 & A7 for ceding first charge in favour of BSB,therefore, the said act of these accused persons tantamount to conclude that they have committed cheating & used false document in getting such cessation of first charge registered in favour of BSB. Thereafter, accused persons got registered the first charge in favour of AHB through D51 & D52 & thereafter accused persons have executed relevant documents / security documents in favour of AHB through D80 to D82, D83, D84 to D87 & D88 to D90 namely Ex. PW14/F to Ex.PW14/G, Ex.PW14/H, Ex. PW14/I, Ex. PW14/J collectively, Ex.PW14/K, Ex.PW14/L & Ex.PW 14/M respectively & at the time of execution of these documents it was very much in the knowledge of these accused persons Page 196 of 237 (C.B.I. Vs. Subhash Chandra Sachdeva & Ors.) C.C. No. 40/11 Dated : 14.12.2018 that KFFL had availed loan facility of more than about 70 lacs from BSB in the month of October'1997 & it is not the case of these accused persons that no loan amount is due and payable by KFFL,therefore,the averments contained in these documents were false and were within the knowledge of these accused persons which they failed to explain,therefore, prosecution has proved on record that A2 to A5 and A7 has committed offence of cheating and use of false documents by hatching a criminal conspiracy amongst themselves.
189. Now, coming to the role of the accused A1 & A6 played in hatching the conspiracy, it may be noted that the accused no. 1 and 6 in connivance with other accused A2 to A5 and A7, after hatching the criminal conspiracy forged and fabricated the documents and used in getting sanctioned and, Page 197 of 237 (C.B.I. Vs. Subhash Chandra Sachdeva & Ors.) C.C. No. 40/11 Dated : 14.12.2018 thereafter, release of loan of Rs. 1.4 Crore from AHB Okhla Branch. In this regard, it may be noted that qua A6 trial has been abated but the role of the A1 and A6 is to be discussed so far as the commission of offences in the chargesheet is concerned.
190. The contention of the ld. counsel for A1 is that A1 recommended the loan of Rs. 160 lakh on the application of KFFL on 17.09.1997 and sent to RO, AHB thereafter, he has no role to play. It may be noted that KFFL as discussed in the forgoing paras, applied for a loan in the branch of accused no. 1 at Okhla AHB. As per circular bearing no. 5284, the responsibility of dealing with loan proposal was with Manager (Advances) for supplementary verification, disbursal and Page 198 of 237 (C.B.I. Vs. Subhash Chandra Sachdeva & Ors.) C.C. No. 40/11 Dated : 14.12.2018 operation as well as manipulating of loan account. PW17 D.P.S. Puri had analysed appraisal of loan proposal of KFFL and made a report and submitted to PW14 Sh. J.S. Kohli, who, in turn, recommended the same to accused no. 1 and accused no. 1 in turn forwarded the same to RO. PW14 confirmed the procedure of recommendation of proposal to RO AHB.
191. PW28 S.S. Thapar also testified that Manager (advances) was assisted by DPS Puri SSIFO for processing of loan proposal as and when the loan proposal is submitted in SSI Unit, the same is processed by the Manager (Advances) and it is a normal practice for Manager (advances) to discuss the matter with prospective borrowers. DW5 had testified that responsibilities and duties of Manager (advances) is to ensure Page 199 of 237 (C.B.I. Vs. Subhash Chandra Sachdeva & Ors.) C.C. No. 40/11 Dated : 14.12.2018 that all the advances proposals including review and renewal cases are appraised properly and submitted to RO/ZO AHB. PW28 is corroborated in material particulars by PW2. PW4 Sh. A.K. Rana also testified and confirmed that appraisal note prepared by PW17 and PW14 and branch recommendation by A1 is forwarded to RO AHB. PW17 also admitted that being SSIFO it was his duty of processing of loan applications filed by SSI Units and giving the report of appraisal to Manager (Advances) and he recommended the loan proposal of KFFL subject to satisfactory visit report in terms of documents Ex. PW4/A2. PW4 along with A1 and A6 visited unit of KFFL and handed over the letter seeking confidential credit report from the different bankers qua KFFL. It may be relevant to observe here that to this stage of recommending of loan Page 200 of 237 (C.B.I. Vs. Subhash Chandra Sachdeva & Ors.) C.C. No. 40/11 Dated : 14.12.2018 application by A1, no dishonest intention is made out against A1.
192. The contention of the ld. counsel for accused no. 1 that handing over of the letter D11 (Ex. PW4/A9) to A6 is not an illegal act appears to be having force in law in as much as A1 along with other bank officials including PW4 visited the unit to complete the pre appraisal formalities. There is nothing illegal and violation of the rules in such visit in as much as PW 4 admitted that on the direction of Sh. S.S. Thapar, PW4 along with A1 and A6 visited the unit to checks the viability of unit of KFFL as joint visit was required in terms of circular dated 09.09.1997 (D72) EX. PW 36/I. He proved his visit report Ex. PW2/D1 and further testified that D11 Ex. PW4/A9 (Letter Page 201 of 237 (C.B.I. Vs. Subhash Chandra Sachdeva & Ors.) C.C. No. 40/11 Dated : 14.12.2018 dated 10.10.1997) was handed over by A1 to A6 for collection of credit report from previous bankers of KFFL and the practice of handing over of letters to A2 by A1 was never objected by any bank officers including S.S. Thapar. PW12 Arun verma also corroborated the version of PW4 regarding visit of PW4 at Gazipur unit of KFFL.
193. I also found force in the contention of the ld. counsel for A1 that all the four credit opinion reports / letters Ex. D12, D13, D14 and D15 i.e. Ex. PW4/A1 were received from A6 and A1 has no role in getting these letters and these letters were simply forwarded to RO, AHB inasmuch as the recommendations in the loan proposal of KFFL was sent on 17.09.1997 to RO AHB i.e. before the receipt of these letters Page 202 of 237 (C.B.I. Vs. Subhash Chandra Sachdeva & Ors.) C.C. No. 40/11 Dated : 14.12.2018 from Gazipur branch AHB by accused no. 1. The bank officials of AHB Gazipur branch failed to supply information either to PW14 and PW13 despite visit made by them personally.
194. So far as the role of A1 is getting forged documents for creation of second charge by IDBI and NHB in favour of AHB is concerned. It is relevant to note here that letter dated 18.03.1998 Ex. PW14/E1 and letter dated 19.03.1998 Ex. PW 3/1 allegedly sent by A1 to IDBI and NHB for ceding the second charge in favour of AHB can be presumed to have been sent through proper channel in as much as the prosecution despite seizing the dak register from Okhla Branch, AHB has failed to produce the same, therefore, adverse inference is to be drawn against prosecution. It may be noted that PW14 has testified Page 203 of 237 (C.B.I. Vs. Subhash Chandra Sachdeva & Ors.) C.C. No. 40/11 Dated : 14.12.2018 that he did not remember as to whether the letter from IDBI and NHB i.e. D21 and D55 were received directly or handed over to branch directly. PW14 further admitted that accused no. 1 sent him to visit Gazipur branch of BSB to ascertain extent of account of KFFL but BSB did not disclose anything in this regard. Therefore, A1 cannot be presumed to be having any dishonest intention inasmuch as he had instructed PW14 to visit IDBI and NHB to make enquiry report regarding creation of second charge in favour of AHB. PW14 has admitted that he has written letter dated 17.12.1998 to Manager Gazipur branch AHB for verification and search report for additional securities.
195. The contention of the ld. counsel for accused no. 1 Page 204 of 237 (C.B.I. Vs. Subhash Chandra Sachdeva & Ors.) C.C. No. 40/11 Dated : 14.12.2018 that accused no. 1 has released the limits on 27.03.1998, as per law, appears to be having force in law. In this regard, it may noted that after receiving the sanction of limit through document (Ex. PW4/D9) whereby PW14 being manager (advances) got completed documentation/supporting documents and letters of consent issued by IDBI, NHB i.e. D21 Ex. PW 12/F and D55 (Mark X) Ex. PW11/A (for ceding second charge in favour of AHB) respectively along with other documents numbering 29 were sent to Manager (Law), RO AHB for verification through documents D31 (Ex. PW4/A12) and after getting the verification and instruction of Senior Manager (Law) the sanctioned limit was released by A1. The sanction limit was released to KFFL as per the legal advice and rules. PW14 has admitted that he had dealt with these accounts Page 205 of 237 (C.B.I. Vs. Subhash Chandra Sachdeva & Ors.) C.C. No. 40/11 Dated : 14.12.2018 during his posting in this branch. PW14 further testified that the required documents were sent for verification by Manager (Law) RO AHB through document D31, which was written by Sh. J.S. Kohli and signed by A1 and RO, AHB was informed regarding release of fund through document D32 (PW4/A13).
196. The first charge was created and got registered within time in terms of the legal opinion of Senior Manager (Law) RO AHB given vide D31 and first charge was got registered in favour of AHB through D51 and D52. So far as second charge is concerned this is admittedly got registered in favour of AHB on 16.01.1999 as discussed in foregoing para of the judgment. Apart from that A1 has made every efforts to get second charge registered in favour of AHB. Otherwise also, Page 206 of 237 (C.B.I. Vs. Subhash Chandra Sachdeva & Ors.) C.C. No. 40/11 Dated : 14.12.2018 IO has not conducted any investigation in this regard. RO/ZO had also never objected to the creation of second charge in favour of AHB by IDBI and NHB, otherwise RO/ZO/AHB duly remained in touch with IDBI and NHB in this regard.
197. It may be relevant to observe here that in terms of the seizure memo D62 dated 26.02.2003 (Ex. PW14/E) the letters dated 28.07.1998 were written to IDBI and NHB by AHB for ceding second charge. All these documents have not been produced by the prosecution for the reason best known to the IO. IDBI through its letter dated 28.09.1998 consented for ceding second charge in favour of AHB and on these documents second charge was created in favour of AHB on 11.01.1999. Page 207 of 237
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198. DW 5 had proved the record from DRT as the case in DRT was filed on 25.07.2000 and the complaint by Sh. S.S. Thapar was made on 06.05.2002. All the documentation regarding ceding of second charge, fresh letter received from IDBI and NHB and mortgage of additional securities worth Rs. 130 lakh were verified from the DRT office and proved by Devender Kumar Sharma. It is relevant to mention here that all the documents were filed in the DRT filed by AHB on 25.07.2007 in OA no. 377 by Sh. V.K. Kapoor senior manager, Okhla branch AHB, who has not been made a witness by prosecution for reasons best known to the IO. The factum of pendency of recovery suit in DRT is not known to any other witness namely PW28, PW2, PW12, PW13, PW4 and PW14. Page 208 of 237
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199. It may be noted that IO/PW36 had admitted that he has not collected the documents regarding creation of second charge in favour of NHB on 11.01.1999. PW36 also admitted that he has never came across the letter dated 28.09.1998 nor he was aware as to who has written it and to whom. PW36 also admitted that he never came to know about letter dated 19.11.1998 written by NHB. IO was not aware as to by whom it was written. PW36 also denied having knowledge of additional security given by KFFL to AHB. PW36 has admitted that neither he has examined Executive Director of NHB to whom letter for ceding of second charge was written nor he collected the dak receipt register and dak outlet register from the office of Executive Director NHB. IO has admitted that he has not examined DGM IDBI, higher officers AHB, HO nor he had Page 209 of 237 (C.B.I. Vs. Subhash Chandra Sachdeva & Ors.) C.C. No. 40/11 Dated : 14.12.2018 taken the statement of loan manager regarding security document executed by KFFL in favour of AHB.
200. It is relevant to observe here that the loan proposal of KFFL was dealt with/scrutinized at branch level/RO Level/ZO and HO but discrepancies made in the loan proposal of KFFL were not noticed by the other officers at RO/ZO/HO, AHB level but no other officers/officials except A1 and A6 has not been made accused from AHB. The role of other officers has not been investigated in as much as the role of PW13 was also depreciated during the inquiry/investigation in various report including the SP report.
201. So far as the allegations of forging documents by A1 Page 210 of 237 (C.B.I. Vs. Subhash Chandra Sachdeva & Ors.) C.C. No. 40/11 Dated : 14.12.2018 and A6 for getting cessation of first charge registered in favour of BSB is concerned. It may be relevant to observe here that IO has also admitted that he visited the office of ROC, Kanpur regarding entry, registration and modification of charge on 22.04.1998 in favour of AHB and bank officials has to file requisite forms along with documents with the office of ROC for registration of charge within a period of 30 days from the date of execution of loan documents. IO had not made enquiry from the office of ROC regarding names of officers, who visited their office from BSB. IO denied having seen seen the documents / letter dated 28.09.1998 and 19.11.1998 i.e. mark Y and Y1 respectively. IO also denied being aware of any additional security taken by AHB from KFFL by way of mortgage. The issuance of letters dated 18.03.1998 by A1 to NHB and IDBI i.e. Page 211 of 237 (C.B.I. Vs. Subhash Chandra Sachdeva & Ors.) C.C. No. 40/11 Dated : 14.12.2018 letter Ex. PW14/E1 and Ex. PW3/1 in response of which IDBI and NHB had issued letter D21 & D55 i.e. much before the receipt of sanction order Ex. PW4/D1 issued by HO, AHB on 19.03.1998 cannot lead to conclude that A1 was having dishonest intention / mensrea to help the coaccused in getting expedited the disbursal of loans in favour of KFFL in as much as PW4 has admitted that the said information regarding sanction of loan in favour of KFFL by HO, AHB must have been received before receipt of said sanction order in Okhla branch, AHB by A1. In addition to it, such Act cannot tantamount to show any connivance on the part of A1 in as much as the letter sent by A1 to NHB and IDBI are not alleged to be forged, otherwise, letter allegedly sent by IDBI and NHB are claimed by prosecution to be forged.
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202. So far as the role of accused A1 and A6 in getting registered / modified the first charge registered in favour of BSB and, thereafter, the said charge got deleted from the name of BSB and got registered in favour of AHB, the contention of the ld. counsel for A1 appears to be having force in as much as that after getting the sanction of loan of KFFL by HO A1 sent documents to Senior Manager (Law) AHB, who after verification instructed the charge may be registered within 30 days as detailed in the foregoing paras of the judgment. The charge was registered with ROC on 22.05.1998 and 22.04.1998 through D51 and D52 (Ex.PW20/N and Ex.PW20/O respectively) and PW14 has testified that all the conditions laid down in the sanction letter were fulfilled by branch office Page 213 of 237 (C.B.I. Vs. Subhash Chandra Sachdeva & Ors.) C.C. No. 40/11 Dated : 14.12.2018 for release of funds to KFFL and PW4 had visited office of ROC on 22.05.1998. Otherwise also the letters D62 and D63 i.e. Ex. PW14/E and Ex. PW3/1 allegedly issued by AHB and IDBI, which are allegedly forged and fabricated were received on 23.03.1998 through proper channel and IO has failed to collect the dak register to prove the factum of non issuance of these letters as per banking norms as deposed by PW36. None of the witnesses has testified that these documents were handed over by A2 to A5 and A7 either to A1 or to A6. PW14 has testified that he did not remember from whom letter D21 and D55 were received. Prosecution has not proved that accused A1 and A6 have been instrumental in forging the false documents used in ceding of the first charge registered in favour of BSB. Therefore, from above discussion, it can be safely concluded Page 214 of 237 (C.B.I. Vs. Subhash Chandra Sachdeva & Ors.) C.C. No. 40/11 Dated : 14.12.2018 that prosecution failed to prove that accused A1 or A6 has any role to play in fabrication of these documents through which first charge was registered in favour of AHB after ceding of the said first charge registered in favour of BSB.
203. So far as charge of overdrafting was allowed by A1 in the account of KFFL is concerned, suffice is to say that the account of KFFL was allowed to be operated within the sanction limit of cash credit as admitted by PW14 in his deposition and PW4 further testified that account of KFFL was monitored by RO/ZHO, AHB. It may be noted that PW14 admitted that as per register Ex. PW14/D2 i.e. in the detailed account register there is no remarks that KFFL has operated the account over and above the sanctioned limit. PW13 has Page 215 of 237 (C.B.I. Vs. Subhash Chandra Sachdeva & Ors.) C.C. No. 40/11 Dated : 14.12.2018 testified that he did not know whether branch headed by A1 was under constant audit, otherwise, inspection of branch used to be done on half yearly or yearly basis by RO, AHB and ZO, AHB respectively and he did not remember whether any adverse report was given in respect of account of KFFL. Apart from that, A1 allowed discounting of six bills in terms of the directions issued by RO, AHB through letter dated 26.03.1999 (D58) Ex. PW14/D1.
204. As far as the charge that A1 in connivance with other accused never inspected the unit of KFFL is concerned, suffice is to say that PW14 visited unit of KFFL at Gazipur on 11.07.1997 and submit that his report Ex. PW14/N (D34) and A1 sent such report vide document / forwarding letter Ex. PW Page 216 of 237 (C.B.I. Vs. Subhash Chandra Sachdeva & Ors.) C.C. No. 40/11 Dated : 14.12.2018 28/DY to ZO on 15.07.1997 despite that RO, AHB directed A1 to discount bills of KFFL. PW13 has also admitted that he cannot state as to whether A1 was regularly sending reports regarding operation of account of KFFL and RO AHB has ever communicated to A1 that reports regarding operation of account of KFFL are not being sent. PW4 in categorical terms has admitted that operation of account is allowed only when the same is within the permissible limits and sanction limits. Otherwise also, in terms of D72 dated 09.09.1997 accused no. 1 was empowered to exercise its discretion by permitting overdraft upto 10% over and above the sanctioned limits.
205. So far as the contention of A1 that A1 is not the sole officer, who had recommended the loan in favour of KFFL, Page 217 of 237 (C.B.I. Vs. Subhash Chandra Sachdeva & Ors.) C.C. No. 40/11 Dated : 14.12.2018 otherwise, officers of RO/ZO were instrumental in sanctioning and releasing the loan is concerned, I found force in the said contention in as much as that ZO, AHB, through letter dated 08.09.1998 (Ex. DW5/D) informed RO, AHB that in para 5 has observed as under : "It was reported earlier that consent letter from IDBI and NHB do not appear to be genuine. The branch has not commented thereupon. Whether IDBI and NHB has been contacted by your office to know the genuineness of these letters. If these letters are found to be forged what action you have taken. Whether fresh consent letter have been obtained from IDBI / NHB. If not, why ?"
And that in para 8 it is further observed as under : "We would like to state that the credit facilities to the above were sanctioned on your strong and repeated recommendations and on your being fully satisfied upon the integrity and repayment capacity of the borrower. Now on the above development we are forced to believe that the bonafides of the company are not beyond doubt and as stated by you the entire irregularities appears to have been perpetuated."
Bare perusal of contents of this letter depicts that it is not A1 only who recommended the loan in favour of KFFL but officers Page 218 of 237 (C.B.I. Vs. Subhash Chandra Sachdeva & Ors.) C.C. No. 40/11 Dated : 14.12.2018 of RO were instrumental in recommending the loan in favour of KFFL. In response to above said letter RO through letter dated 16.9.1998(DW5/C) directed A1 to ensure compliance of relevant instructions as communicated by ZO, AHB, New Delhi, in terms of the letter dated 08.09.1998. Thereafter,RO, AHB, New Delhi, through letter dated 26.09.1998 (DW5/B) informed DGM, ZO, New Delhi that a meeting between RM, RO, AHB and DGM, ZO, AHB with MD,KFFL was held on 18.9.1998 in the office of ZO and A1 was directed to implement various action points and it was further informed that RO,AHB has maintained a constant touch with DGM,IDBI and it was further opined by RO, AHB to continue and allow operation in the account within already sanctioned limits and permissible DP and the branch has been instructed to ensure that proper monitoring and credit Page 219 of 237 (C.B.I. Vs. Subhash Chandra Sachdeva & Ors.) C.C. No. 40/11 Dated : 14.12.2018 discipline in the account is maintained all times to come.
206. Thereafter, through letter dated 27.01.1999 (Ex. DW5/E), RO informed DGM, ZO, AHB that necessary forms 8 & 13 alongwith consent letter from IDBI and NHB and hypothecation deed for registration of 2nd charge over the assets of food processing unit of the company have been filed with ROC, Kanpur, by personal visit of Manager (Law) of this office and Sr. Manager of branch to ROC, Kanpur on 15.01.99. These documents have been inspected and verified by Manager (Law) posted at this office.
207. From the above discussion, it is clear that RO & ZO, AHB had agreed for creation of second charge after loan Page 220 of 237 (C.B.I. Vs. Subhash Chandra Sachdeva & Ors.) C.C. No. 40/11 Dated : 14.12.2018 amount was released to KFFL and ultimately the said second charge was agreed in terms of the documents Mark Y1, Y2, Y3 and Y4 placed on record by the defence witnesses.
208. So far as the verification of stocks to be done in one month suffice is to say that the account limit of Rs. 55 lakh qua KFFL was sanctioned out of these account limits 25 lakh were allocated to Ghazipur branch AHB & monthly stock statement was to be supervised by Ghazipur branch headed by A6 & accused no. 1 was receiving the stock statement regularly from Gajipur branch AHB and even the audit branch of RO AHB has never raised any objection regarding the accounts of KFFL.
209. DW5 has testified that ROC charge verified by J.S. Page 221 of 237 (C.B.I. Vs. Subhash Chandra Sachdeva & Ors.) C.C. No. 40/11 Dated : 14.12.2018 Kohli on 03.09.1998 and the said information was supplied to RO/ZO through letter dated 04.09.1998 and in terms of letter dated 08.09.1998 written by DGM, ZO, AHB to A1 ; A1 was further directed to cross verify the genuineness of letter issued by IDBI, NHB whereby second charge was to be created in favour of AHB.
210. It may be noted that through letter dated 27 29.01.1999 written by RO to ZO it was informed that additional mortgage has been created valuing Rs. 30 lakh in the name of Direction/guarantor and all the documents were inspected by Manager and documents for second charge has been filed as IDBI and AHB has consented for creation of second charge. Page 222 of 237
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211. The contention of the ld. counsel for A1 that A1 never allowed KFFL to operate the said account till 31.03.2000 and never allowed discounting of bills from July to December, 1998 is having force in law. It may be noted as per statement (D94) Ex. PW14/DX the operation in CC and OD account were upto 26.07.1999 and remaining entries are only for the application of interest on quarterly basis and the last credit in the account of KFFL on 23.07.1999 and thereafter operation in the accounts were made on restrictive basis as admitted by PW 13 in his testimony that RO/ZO never gave instruction to stop the account. In addition to it, as per circular no. 5284 dated 21.03.1997 (placed on record by A1 in his examination u/s 313 Cr.PC) it was duty of Manager (Advances) along with his officers/officials namely Deputy Manager (Advances) for proper Page 223 of 237 (C.B.I. Vs. Subhash Chandra Sachdeva & Ors.) C.C. No. 40/11 Dated : 14.12.2018 maintenance of the account of SSI branch.
212. So far as A6 is concerned, A6 is alleged to have forged document D15, D16, D18 in connivance with other co accused, but as discussed in earlier part of the judgment, IO has failed to place on record any evidence that document D15 Ex. PW4/A8 and D18 Ex. PW12/D were not received in AHB, Gazipur branch. The said documents namely D15 was admitted by PW4 that it was received in AHB, Okhla branch by post. Therefore, in the absence of any document A6 cannot be saddled with criminal liability that in connivance with other coaccused, A1 has forged document D15. Otherwise, D15 could not have been proved by prosecution as forged document in as much as signature of PW18 on this document could not be Page 224 of 237 (C.B.I. Vs. Subhash Chandra Sachdeva & Ors.) C.C. No. 40/11 Dated : 14.12.2018 ascertained by PW11 in terms of his report. D16 was allegedly issued by BHB, HQ, Varanasi to KFFL and as admitted by PW4 D16 was received in RO, meaning thereby this document D16 was never dealt with by A6 and there is no other evidence on record to infer that A6 had played any role in forging this document in connivance with other coaccused. As far as D18 is concerned this document was sent by A6 by post to ZO, AHB, New Delhi through D110 (Ex. PW4/A32) and a copy of the same was given to PW13 S.C. Gupta and PW13 testified that copy of this letter was given to him by A6 when he paid a visit in March'1998 as per direction issued by the ZO, AHB, New Delhi. But the solitary statement of PW13 is not going to help the prosecution in as much as there is no document in support of this part of testimony of PW13 that A6 Page 225 of 237 (C.B.I. Vs. Subhash Chandra Sachdeva & Ors.) C.C. No. 40/11 Dated : 14.12.2018 has collected D18 either himself or with the help of accused A2 to A5 and A7 and got deposited with BSB, HQ, Varanasi. Therefore, prosecution has also failed to prove that A6 has any role to play in forging D18 in connivance with other coaccused.
213. Last contention urged on behalf of the accused public servants, was that their actions and inactions does not constitute the offence under Prevention of Corruption Act as the same at best, can amount to misconduct. It is contended that this misconduct, by no stretch of imagination, can be termed as "criminal".
214. The word "misconduct" has been defined in Black's Law Dictionary, which reads as under: Page 226 of 237 (C.B.I. Vs. Subhash Chandra Sachdeva & Ors.) C.C. No. 40/11 Dated : 14.12.2018 "The transgression of some established rule of action, dereliction from duty, unlawful behaviour, improper or wrong behaviour".
215. The term "misconduct" implies wrong intention & not a mere error of judgment. The word misconduct is a relative term, & has to be construed with reference to the subject matter and the context wherein the term occurs, having regard to the scope of the Act or Statute which is being construed. Misconduct literally means wrong conduct or improper conduct. In usual parlance, misconduct means a transgression of some established and definite rule of action.
216. Section 13(1) (d) of the Prevention of Corruption Act, does not make any negligence or a plain and simple misconduct on the part of any public servant, a Page 227 of 237 (C.B.I. Vs. Subhash Chandra Sachdeva & Ors.) C.C. No. 40/11 Dated : 14.12.2018 punishable offence. Hon'ble Apex Court in a catena of judgement while interpreting the provisions of this Act has laid down that a blatant carelessness or gross negligence on the part of any public servant, does not ipsofacto, comes within the domain of this Section. The alleged misconduct on the part of public servant has to be actuated with criminal intent. The abuse of his position as a public servant in order to come within the mischief of the section must necessarily be dishonest intention on the part of said officer qua the alleged act.
217. The burden to prove affirmatively that accused by abusing his official position had obtained any pecuniary advantage either for himself or for any other person, lies on the prosecution. The prosecution on the basis of evidence led by it Page 228 of 237 (C.B.I. Vs. Subhash Chandra Sachdeva & Ors.) C.C. No. 40/11 Dated : 14.12.2018 on record, has to satisfy the principal that all inculpatory facts, established on record must be inconsistent with the innocence of the accused and incapable of explanation of any other hypothesis than that of his guilt.
218. In the backdrop of above, the analysis of evidence adduced by the prosecution during the course of trial, and observed by me hereinabove, in my considered opinion has led to an unerring certainty that accused A1 & A6 were not acting inconcert, with each other being public servants, had abused their official position as such and facilitated coaccused A2 to A5 & A7 to get wrongful pecuniary advantage in favour of KFFL, by getting sanctioned a loan of Rs.140 lacs on the basis of false and forged documents, thereby causing wrongful loss Page 229 of 237 (C.B.I. Vs. Subhash Chandra Sachdeva & Ors.) C.C. No. 40/11 Dated : 14.12.2018 to AHB and BSB.
219. These actions and omissions of theirs, is short of "criminal misconduct" as the same is not laden with a dishonest intention, with which they had acted while dealing with loan application of KFFL and sanctioning and releasing a loan of Rs.140 lacs in favor of KFFL. Their actions have not clearly transgressed plain & simple misconduct and, therefore, has not entered in the contours of "criminal misconduct".
220. As responsible officers of AHB, it was expected of A1 & A6 being obligatory on their part, to have acted in the best interest of the company. But that was not to be and A1 & A6 acted with gross negligence in performance of their Page 230 of 237 (C.B.I. Vs. Subhash Chandra Sachdeva & Ors.) C.C. No. 40/11 Dated : 14.12.2018 official duties. They might have obviated what basic standard of care and caution they were expected to adopt while performing their official duties. Rather, they very negligent so much so that their coconspirators cheated the AHB & BSB by causing wrongful loss to them. The "rule of prudence" demand that they should have scrutinized the documents / letters sought to be placed on record in support of the loan proposal by A2 to A5 and A7, which would have saved AHB & BSB from the wrongful loss. But that was not done. But as discussed above, the Act and omission of A1 & A6, however, negligent may be, cannot be termed as criminal misconduct.
221. This has brought me down to the next contention urged on behalf of accused public servants by Ld.Defence Page 231 of 237 (C.B.I. Vs. Subhash Chandra Sachdeva & Ors.) C.C. No. 40/11 Dated : 14.12.2018 Counsels, that the investigating agency had been unfair and adopted "Pick and Choose Policy" to falsely implicate accused A1 and A6 and exonerating other similarly situated officers.
222. Need of fair, honest, efficient and thorough investigations is the single most important factor which directly determines the fulfillment of the object for which various provisions of P.C.Act were brought on the Statute Book. Investigations lays the foundation on which arch of trial is erected. An important link, if missed by the investigating agency and if detected late, leads to crumbling of this arch. Therefore, the investigating agency while performing its duty, needs to be vigilant so as to collect all material and relevant evidence linked with the case.
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223. An import link, if missed, could lead to hazardous results as time and resources spent on trial becomes irretrievable. Whether such evidence or link did not exist or intentionally skipped by the investigating agency however is required to be looked into. For that, I have considered the entire prosecution evidence, and the report filed vide D61. I have also considered the deposition of both the Investigating officers. There was no evidence against the other officers of AHB, who as per Ld.Defence Counsels for accused public servants, have performed similar roles.
224. From the evidence which has come up on record as discussed hereinabove, I do not see from material on record that the investigating agency had intentionally skipped evidence Page 233 of 237 (C.B.I. Vs. Subhash Chandra Sachdeva & Ors.) C.C. No. 40/11 Dated : 14.12.2018 against other officers of AHB. Therefore, this contention of Ld.Defence Counsels that investigating agency had conducted the investigations in an unfair manner adopting "Pick and chose Policy" is turned down.
225. Consequently, from the material placed and proved on record by the prosecution, it is established that there was prior meeting of minds amongst A2 to A5 and A7, who acting inconcert had hatched a conspiracy, the object of which was to obtain a loan facility to the tune of Rs.140 lacs, on the basis of false and forged documents. Prosecution has been able to establish on record that accused A2 to A5 and A7 had performed their assigned roles of commissions and omissions, in the process of achieving the object of conspiracy. Had there Page 234 of 237 (C.B.I. Vs. Subhash Chandra Sachdeva & Ors.) C.C. No. 40/11 Dated : 14.12.2018 been no prior meeting of minds, then the accused persons would not have conducted themselves, the way they have, as held by me hereinabove.
226. In view thereof, I do not find any merits in the contentions advanced by Ld.Counsels for accused A2 to A5 and A7 that the material on record is not sufficient to infer that there was no meeting of mind amongst the accused persons to carry out any illegal design.
227. The cumulative effect of the facts established on record by the prosecution which are inconsistent with the innocence of the accused persons A2 to A5 and A7 and incapable of any explanation or any loopholes, other than Page 235 of 237 (C.B.I. Vs. Subhash Chandra Sachdeva & Ors.) C.C. No. 40/11 Dated : 14.12.2018 guilt of the accused A2 to A5 and A7, I am of the considered opinion that apart from the offence of commission of criminal conspiracy to commit offences, the same are sufficient for proving substantive offences of cheating and use of false documents.
228. In view thereof, I proceed to dispose off the present case as under: F I N A L V E R D I C T : Having regards to the facts and circumstances and the discussions as delineated hereinabove:
(a) All accused i.e. A1 S.C.Sachdeva, A2 Sachidanand Rai, A3 Sri Kant Rai, A4 Pashupati Nath Rai, A5 M/s KFFL, A6 Kamla Rai (since expired) and A7 Murli Dhar Singh (since expired) stands acquitted for offences punishable under section 120B r/w section 420/467/468/471 IPC, & section 13 (2) read with 13(1)(d) of Prevention of Corruption Act,1988. Page 236 of 237
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(b) Accused no. 1 S.C.Sachdeva and Accused no. 6 Kamla Rai (since expired) stands acquitted for substantive offences under section 13(1)(d) read with section 13(2) of Prevention of Corruption Act.
(c) A2 Sachidanand Rai, A3 Sri Kant Rai, A4 Pashupati Nath Rai, and A7 Murli Dhar Singh (since expired) stands convicted for substantive charges / offences under section 420/471 IPC.
(d) A2 Sachidanand Rai, A3 Sri Kant Rai, A4 Pashupati Nath Rai, A5 KFFL and A7 Murli Dhar Singh (since expired) stands convicted for charges / offences under section 120B/420/471 IPC.
1.
(e) A2 Sachidanand Rai, A3 Sri Kant Rai, A4 Pashupati Nath Rai, and A7 Murli Dhar Singh (since expired) stands acquitted for substantive charges / offences under section 468 IPC.
Let all the convicts be heard on the point of sentence.
Digitally signed
VIJAY by VIJAY KUMAR DAHIYA Announced in the Open Court KUMAR Date: On the 14th Day of December, 2018. DAHIYA 2018.12.20 13:19:51 +0530 (DR. V.K. DAHIYA) SPECIAL JUDGE : CBI (P.C.ACT) DWARKA COURTS, NEW DELHI Page 237 of 237