Delhi District Court
Cbi vs Bimal Kumar Sood @ B.K. Sood on 9 April, 2010
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IN THE COURT OF SH. AMAR NATH
SPECIAL JUDGE: CBI-II : ROHINI COURTS: DELHI
CBI Vs Bimal Kumar Sood @ B.K. Sood
CC No. 25/2009
RC no. BD1/2004/E/0005
Date of institution : 25.02.2009
Date of order reserved : 25.03.2010
Date of order announced : 09.04.2010
ORDER
Facts of the case, in nutshell, are that the case was registered on the basis of written complaint dated 19.06.2004 received from Sh. S.Roy, Chief Vigilance Officer, Allahabad Bank Head Office, 2-Netaji Subhash Road, Kolkata-01 alleging therein that Sh.B.K.Sood being Incharge of RBB was responsible for processing the housing loan applications, sanctioning and recovery of loan. He disbursed loan on the basis of false and fictitious documents in connivance with the borrowers, thus, he misappropriated and misused the funds of the bank by committing various irregularities in respect of CBI Vs. B. K. Sood in CC no. 25/09 -2- sanction and disbursement of Housing Loan Public (HLP) and Housing Loan Furnishing (HLF) in RBB, Rajouri Garden, New Delhi.
Investigation was carried out, case was registered by CBI on 28.01.2005 on the basis of aforesaid complaint vide RC no. RC BD1/2004/E/0005 for the offence punishable U/s 120(B) read with section 420/468/471 IPC besides U/s 13(2) read with section 13 (1) (d) PC Act.
I have given my thoughtful consideration to the rival contentions advanced on behalf of both the sides and carefully perused the charge sheet as well as the documents annexed therein in the light of written submissions of accused.
Ld. Defence counsel vehemently contended that there is no iota of evidence either oral or documentary to indicate that the accused Bimal Kumar Sood had conspired with anyone or any meetings of mind between him and his co- accused to commit crime. There is absolutely nothing on record to establish the allegations of conspiracy on his part. He agitated that there is no evidence to connect him with the creation of false and fabricated documents in any manner.
CBI Vs. B. K. Sood in CC no. 25/09 -3- Documents filed by the prosecution itself absolves the accused from the charge and criminality alleged by the CBI. Hence, no charge can be framed on the basis of evidence collected during the course of investigation.
On the other hand, Ld. PP on behalf of CBI has refuted the arguments of the Ld. Defence Counsel contending that accused B. K. Sood committed the offence of criminal misconduct by abusing his official position as a public servant by entering into a criminal conspiracy with Sh.Surender Dang, Smt. Saroj Dang and Mr.Himanshu Dang (All are absconding) to cheat Allahabad bank to the tune of Rs.20,34,792/- in sanctioning housing loan no. 5A/65 on the basis of false and fabricated documents viz., Income tax returns, property related ownership documents etc. Short question arises for consideration is :
What was required to be done by accused B. K. Sood being Incharge of RBB while processing the loan application, sanction of the loan and its disbursement?
CBI Vs. B. K. Sood in CC no. 25/09 -4- The RBB was opened with a concept of single window system to sanction housing loan, car loan, consumer loan, personal loan and other details in a hassle free and accused B. K. Sood being RBB Manager was empowered to sanction housing loan upto a maximum limit of rupees fifteen lacs depending on the cost of the project and repaying capacity of the applicant/borrower. The loan application was required to be submitted along with the income credentials, residential and identity proof. The borrower either intends to renovate its existing property or to acquire new property, in both the situations, the same were required to be verified by him. The income tax returns were required for the last three years and the repaying capacity for sanction of the loan was to be calculated on the basis of last year income tax return. The loan installment was fixed in such a way that it should not exceed 50% of his net income. After receipt of loan application, a pre sanction visit was to be made and proposal note was to be prepared as per bank's proforma. The property papers were to be handed over to the bank's empaneled advocate for legal search and non-encumbrance report. The valuation report of the property from approved valuer was required.
The income tax returns and all other papers CBI Vs. B. K. Sood in CC no. 25/09 -5- submitted by the borrowers were to be verified with the originals after obtaining his signatures on all these papers/documents in token of their correctness. The applicant was required to open a Savings Bank Account with the bank for release of sanctioned loan installments. The loan amount was to be released in a phased manner i.e four/five installments. The next installment was to be released on production of a prescribed request letter along with the certificate from architect after making a visit to the property to assess the utilisation of the earlier released installments. The visit was to be recorded in file and checked by the senior officers on weekly basis. No bill was required with the request letter for release of installment. The primary security for the housing loan was mortgage of property. It was his duty to take sufficient security in the form of mortgage of the property and other collateral security against the loan sanctioned by him.
Now, the questions arise for consideration :
(a) Whether the accused has committed any irregularity in discharging of his official duties which renders him liable for prosecution.
(b) If so, then the court has to proceed with trial on the basis of evidence collected by the CBI.
CBI Vs. B. K. Sood in CC no. 25/09 -6- Now, let me deal with the rival contentions of both the sides in light of the record.
Ld. Public Prosecutor heavily emphasized that the property papers were not got inspected, checked and verified by accused B. K. Sood while processing loan application, sanction of loan and its disbursement. It stands falsified in view of the Legal & Search Report (D-11) which indicates that empaneled advocate of the bank had conducted the search qua the property paper including title deed submitted by the borrower from the office of the Sub-Registrar concerned and thereafter report was submitted by Sh. Anjum Kumar being empaneled advocate mentioning therein that property is unassailable, un-encumbrance and marketable and bank could safely accept the documents for creation of mortgage by deposit of title deeds.
Another allegation against him is that income papers were required to be compared/verified with originals and the same were to be obtained from the applicant with self attestation. Self attested income tax returns verified with the originals were obtained from the applicant as referred in D-11. There is no other evidence to connect the accused B. K. Sood CBI Vs. B. K. Sood in CC no. 25/09 -7- with irregularity to that effect, thus, allegation of the prosecution is not substantiated with any evidence. Moreover, there is no such allegation that he being the Incharge RBB had accepted the forged income tax return knowing fully well. It was the borrowers who utilised the forged documents knowing it to be non-genuine which facilitated them to avail loan. It needs to be noticed that the borrowers namely Surender Dang, Himanshu Dang and Smt. Saroj Dang are absconding and they have not been charge sheeted. The loan application was appraised and considered for sanction of loan after observing the norms of the bank as so required. As per the banking practice, after sanction and disbursement of each installment, the documents and papers were inspected and checked by Branch Manager/Senior Bank Officials/Concurrent External Auditor (CA). The next installment was used to be considered for disbursement only after their clearance. This procedure was adhered in this case also.
As regards the inspection of the site/premises of the borrowers is concerned, the said procedure has been followed by the accused which is apparent from the Appraisal report (D-11). Sh. N. S. Nimwal (Prosecution Witness) has also confirmed by stating that borrower's premises/site was visited CBI Vs. B. K. Sood in CC no. 25/09 -8- for appraisal before sanction and the report was prepared in that regard and the same was kept with the security/loan file.
Ld. PP has also laid stress contending that accused sanctioned rupees fifteen lakhs as housing loan no.5A/65 in the name of Surender Dang, Himanshu Dang for extension/renovation of House no. WZ/405-A, Janak Puri, Hari Nagar, Delhi. He processed the loan application and accepted the Sale Deed of registration no. 794 dated 21.01.2003 executed by Smt. Saroj Dang in favour of Sh. Surender Dang in respect of the property mentioned above as mortgaged. The said sale deed was fraudulently created on the basis of forged and false documents. Accused Surender and Himanshu knowing fully well submitted false and forged site plan of the building along with the sanction letter no. 23/HE/Bldg/WZ dated 25.01.03 purportedly issued by MCD West Zone and same were accepted by B. K. Sood. The said site plan and sanction letter as fully described above are found forged as the same were not issued by the concerned authority. Sh.B.K.Sood dishonestly prepared appraisal report without visiting or verifying the site and even did not verify the title deed. So, these are the violations of the Rules & Regulations of the bank regarding sanction of the housing loan and disbursement of the CBI Vs. B. K. Sood in CC no. 25/09 -9- same on his part. Besides that, he over looked the suspicious sale transaction from a wife in favour of her husband. He failed to adhere the guidelines contained in note book of instructions (Chapter-IV).
As regards the conspiracy which is alleged to have been entered into between the accused B. K. Sood being Incharge of RBB and borrowers (not challaned being absconders), I shall advert to the law of conspiracy with its definition, the essential features and required proof.
Section 120 A of IPC defines criminal conspiracy i.e that when two or more persons agree to do, or cause to be done an illegal act, or an act which is not illegal but by illegal means, such an agreement is designated a criminal conspiracy. Section 120 B provides the punishment for criminal conspiracy.
Section 10 of Indian Evidence Act provides that where there is a reasonable ground to believe that two or more persons have conspired together to commit an offence or an actionable wrong, anything said, done or written by any one of them, after the time when such intention was first entertained by any of them is a relevant fact as against each of the persons CBI Vs. B. K. Sood in CC no. 25/09
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believed to be so conspiring as for the purpose of showing that any such person was a part of it.
In the instant case, the allegations of conspiracy has been levelled against accused Bimal Kumar Sood on the ground that he abused his official position as a public servant by committing various irregularities in respect of sanction and disbursement of Housing Loan Public (HLP) and Housing Loan Furnishing (HLF) which came to light in RBB, Rajouri Garden, New Delhi. In a number of cases, loan availed was not used for the purpose it was raised. The acquisitions/invoices submitted by the borrowers were computer generated receipts and the firms do not exist and thereby the entire amount of HLF was allowed to be mis-utilised. He being boutique incharge in connivance of outsiders sanctioned and disbursed housing loan to good number of borrowers violating banks norms and procedures and exposed the bank to huge loss.
In most of the cases, the conspiracies are proved by the circumstancial evidence as the conspiracy is seldom an open affair. While appreciating the evidence, the court has to see each and every incriminating circumstance to be established by reliable evidence and the circumstance must CBI Vs. B. K. Sood in CC no. 25/09
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form a chain of events from which the only irresistible conclusion about the guilt of the accused could be safely drawn, and no other hypothesis against the guilt is possible. Conspiracy consists of the scheme or adjustment between two or more persons which may be express or implied or partly express and partly implied. Mere knowledge, even discussion of the plan would not per se constitute conspiracy. The suspicion cannot take the place of a legal proof and prosecution would be required to prove each & every circumstance so as to complete the chain of circumstances. The prosecution evidence is completely lacking in that regard.
In K. R. Purushothaman Vs. State of Kerala 2005 [3] JCC 1847, their lordships were pleased to observe as follows :-
"Conspiracy - Meaning of - To constitute a conspiracy, agreement between two or more persons for doing an illegal act, or an act by illegal means, is a sine qua non - That the charge of conspiracy being not proved, the accused/appellant could not be held responsible for other act done by A-3."
CBI Vs. B. K. Sood in CC no. 25/09
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Similarly, in State (NCT of Delhi) Vs. Navjot Sandhu @ Afsan Guru, 2005 (3) JCC 1404 : JT 2005 (7) SC 1, (P.63) it was observed as under :-
"We do not think that the theory of agency can be extended thus far, that is to say, to find all the conspirators guilty of the actual offences committed in execution of the common design even if such offences were ultimately committed by some of them, without the participation of others. We are of the view that those who committed the offences pursuant to the conspiracy by indulging in various overt acts will be individually liable for those offences in addition to being liable for criminal conspiracy ; but, the non-participant conspirators cannot be found guilty of the offence or offences committed by the other conspirators. There is hardly any scope for the application of the principle of agency in order to find the conspirators guilty of a substantive offence not committed by them. Criminal offences and punishments therefore are governed by statute. The offender will be liable only if he comes within the plain terms of CBI Vs. B. K. Sood in CC no. 25/09
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the penal statute. Criminal liability for an offence cannot be fastened by way of analogy or by extension of a common law principle."
If the facts of the case along with allegations as set out in the charge sheet are examined in the light of the provisions referred to above and the proposition of law laid down by apex court in the judgments (Supra), it makes clear that the accused B. K. Sood was not the party to the criminal conspiracy to do criminal misconduct as already discussed in detail. It was not for him to verify the genuiness of the sale deed. As per bank guidelines, the bank's empaneled Advocates have to search the record to ascertain the genuiness of the sale deed from the office of Sub-Registrar where the Sale Deed alleged to have been registered. All that has been done in this case also. Furthermore, I failed to understand as to why empaneled advocate has not been arraigned as one of the accused more particularly when he opined by way of Legal & Search Report mentioning therein as follows :-
2. (a) Provisions of Urban Land (ceiling and Regultion) Act are not applicable.
(b) Income Tax Clearance Certificate is not required in the present case.
CBI Vs. B. K. Sood in CC no. 25/09
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The mortgage if created will be perfect and available to the bank for enforcement against the liability of the intending borrower, SHRI SURINDER DANG SON OF SH. KULDIP RAI DANG R/O WZ-405-A/1, JANAK PARK, HARI NAGAR, NEW DELHI I, certify that SHRI SURINDER DANG SON OF SH.
KULDIP RAI DANG R/O WZ-405-A/1, JANAK PARK, HARI NAGAR, NEW DELHI is the present owner of the said property and he has valid clear unassailable and marketable title in the property/s shown above and perfect valid mortgage by deposit of title deed can be created in favour of the bank.
Sh. N. S. Nimwal (Prosecution Witness) categorically stated that the application was processed by B. K. Sood after preparing a credit opinion report on both the borrowers he visited the site on various dates thereafter submitted said inspection report in that regard. The bank has also obtained CBI Vs. B. K. Sood in CC no. 25/09
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registered mortgaged deed dated 20/2/2003. Apart from this, he obtained the colateral security in the form of one LIC Policy of Rs.2 lakhs which was assigned with the bank by the borrowers. The loan amount was transferred in the Savings Bank Account no. 106027 of the borrowers in Allahabad Bank, Rajouri Garden Branch in five installments which were credited on different dates.
It is evident that loan installments were released in a phased manner on the basis of borrowers request on bank's proforma and utilisation certificate of earlier released fund. After each disbursement of installment and prior to release of next installment, the site was invariably visited and report was prepared on the bank's prescribed proforma and the same was kept with the security /loan file. The report and the relevant papers were again inspected and checked by Branch Manager/Senior Bank Official/Concurrent External Auditor. The next installment was considered for disbursement only after their clearance and the installment as per the bank practice.
The loan installment amount was credited to the borrower's SB Account for his independent utilisation or the CBI Vs. B. K. Sood in CC no. 25/09
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same was released as per the borrower's request. This fact has been confirmed by the Sh. N. S. Nimwal (Prosecution Witness) in his statement. The loans were disbursed as per valuation report (D-11).
As regards the allegations that the site plan of the building along with the sanction letter purportedly issued by MCD West Zone are found forged as the same were not issued by the concerned authority are concerned, these allegations are mis-conceived as the loan was sanctioned for renovation of existing property thus, the sanction plan was not required. This fact is confirmed by Sh. N. S. Nimwal (Prosecution Witness). It is relevant to mention here that estimate from approved architect was obtained in view of D-11. All the stipulated guidelines were strictly adhered to and proper registered mortgage was created. Only after observing the abovesaid norms, loan application was appraised and considered.
On considering the factual position in the background of legal principles elaborated above along with the bank guidelines, in the light of ratio of the judgments (Supra) it cannot be said that the act of Sh. B. K. Sood being Incharge CBI Vs. B. K. Sood in CC no. 25/09
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of RBB was in any manner connected with any of the irregularity as so alleged by prosecuting agency on the basis of evidence collected including documents. He is discharged in this case by dropping the proceedings against him. His bail bond stands cancelled and surety is also discharged. File be consigned to the record room.
Announced in the open court on 9th day of April, 2010.
AMARNATH SPL. JUDGE : CBI-II ROHINI : DELHI CBI Vs. B. K. Sood in CC no. 25/09