Delhi District Court
Cb I vs . 1 Sh. S Satish Kumar S/O Sh. P C Rao, on 25 March, 2010
1
IN THE COURT OF V .K .MAHESHWARI
SPECIALJUDGE: TIS HAZARI: DELHI
Corruption Case No. 38/2001
CB I Vs. 1 Sh. S Satish Kumar s/o Sh. P C Rao,
r/o TC-7/1707 Suraj, Karovilla Road,
Srichitra Nagar, Pangoda,
Thiruvanantha Puram, Kerala
2 Tilak Raj Bedi s/o Late Swaran Singh,
r/o 854/2, Punjab Mata Nagar,
Ludhiana, Punjab.
Date of Institution 5.7.2001
R.C No. 3 (E)/98/CBI/BS & FC/DLI/N D
Under Section U/s 120 B r/w 420IPC and U/sec. 13( 2)
r/w 13 (1) ( d) of P C Act, 1988.
Arguments concluded
on 6.3.2010
Date of order 20.3.2010
JUDGMENT:
The case RC 3 (E)/ 98/BS & FC/ Delhi was registered on the basis of a written complaint dt. 24.8.1998 lodged by Sh. A. Subramanium, Chief Vigilance Officer, Syndicate Bank on the allegation that M/s Priya Textiles, B-125, Malviya Nagar,, New Delhi through its partner defrauded the bank to the tune of Rs. 1.08 crores by obtaining various credit facilities with the collusion of its official and a fake export order was used for obtaining packing credit limit (PCL) C C NO. 38/2001 1/55 2 2 On completion of investigation, the chargesheet was submitted against accused S. Satish Kumar (Public Servant) and Tilak Raj Bedi (Authorized signatory to operate account No. 3246 of M/s Priya Textiles with Syndicate Bank, Mayapuri Branch, New Delhi) for commission of offences u/s 120 B r/w 420 IPC and sec 13(1) (d) of PC Act and substantive offences u/s 420 IPC and u/s 13(2) r/w 13(1) (d) of PC Act.
3 Prosecution case, in nut shell, is that M/s Priya Textiles, Garments/ fabric exporters through its partner Sh. Dalijeet Singh and Smt. Kalpana Bedi opened a current account no. 3246 Mayapuri, New Delhi on 22.4.92 subsequently on 24.7.92 the partners of M/s Priya Textiles authorized Tilak Raj Bedi to operate its account. Sh. Tilak Raj Bedi is husband of Smt. Kalpana Bedi and brother of Sh. Dalijeet Singh Bedi.
4 M/s Priya Textiles had various credit limits amounting to Rs. 255 lacs since 9.12.92 Subsequently, on 19.1.1995 these limits were raised to Rs. 317 lacs on the recommendation dt. 1.10.1995 of Sh. S. Satish Kumar (A-1), Chief Manager, Syndicate Bank, Myapuri Branch, New Delhi wherein he had suppressed vital information regarding highly adverse conduct of account of M/s Priya Textile.
5 M/s Meghna Garments, Dhaka, Bangladesh opened a letter of credit dt 13.3.1995 for approximately Rs. 20.50 lacs issued by Arab Bangladesh Bank Ltd., Dhaka in the name of M/s Priya Exports, a sister concern of M/s Priya Textiles. The LC was advised by the bank of Tokyo Ltd. Parliament Street, New Delhi. Conditions were stipulated as per the C C NO. 38/2001 2/55 3 LC; (i) the last date of shipment is 30.3.95, but it should not be prior to LC opening date i.e. 13.3.95 and the last date of negotiation of bills is 14.4.95. (ii) The LC is transferable and notice of transfer must be informed to the LC opening Bank Viz. Arab Bangladesh Bank Ltd. Dhaka.
6 On the basis of an undated letter of request from Sh. Tilak Raj Bedi (A-2) the entire amount of LC was transferred in the name of M/s Priya Textile, however, the LC opening i.e. Arab Bangladesh Bank Ltd. Was not informed about these transfers. On 30.3.95, an application (PCL 52/95) under the signature of Sh. Tilak Raj Bedi (A-2) was lodged by M/s Priya Textiles for release of Packing Credit loan of Rs. 5.00 lakhs against the aforesaid LC under their sanctioned PCL/LC limit of Rs. 115 lacs. This amount of Rs. 5.00 lacs was released on the order of accused S. Satish Kumar (A-1) on the same day, i.e. 30.3.95 which also was the last date of shipment. Again on 20.4.95, M/s Priya Textiles submitted an application (PCL 62/95) under the signature of Shri Tilak Raj Bedi for release of Packing Credit loan of Rs. 9.60 lacs against the same LC under their PCL/LC limit of Rs. 115 lacs. This amount was also released on the order of accused S. Satish Kumar (A-1) on the same day i.e. 8.5.95 by ignoring the last date of shipment and the last date of negotiation of the bill as per the LC which were 30.3.95 and 14.5.95 respectively.
7 Through cable message dtd 16.5.95, the LC opening Bank i.e. Arab Bangladesh Bank Ltd. Dhaka advised through the Bank of Tokyo, New Delhi had informed Syndicate Bank, Mayapuri Branch, New Delhi that the LC opener M/s Meghna Garments Ltd. Dhaka had requested the LC opening bank of cancellation of LC No. C C NO. 38/2001 3/55 4 MJ/EXP/BB/102/ACU/95, dtd. 13.3.95 as the LC had expired on 14.4.95. Thus accused S. Satish Kumar (A-1) has caused undue favour to M/s Priya Textiles by gross violation of the guidelines/instructions of the bank in collusion with Sh. Tlika Raj Bedi (A-2).
8 M/s Priya Textiles had dispatched only 2 export consignment to M/s Meghna Garments Ltd. during March 1995 but the consignment were not released from custom at Banladesh by the buyer i.e. Meghna Garments Ltd. No further consignment was dispatched to Dhaka against the aforesaid PCL/LC hence the entire amount of Rs 25.50 lacs obtained as packing credit loan remained outstanding against M/s Priya Textiles.
9 There is also allegation relating to M/s Bengal Knitex Ltd. Dhaka, Bangladesh. However, the charge sheet shows that M/s Priya textiles had made export of fabrics against the LC opened by M/s Bengal Ltd. And entire amount of loans have been released by the Bank. Similarly there are allegations that M/s Priya Textiles applied and obtained 6 PCLs, out of which 3 were released under the orders of Sh. R. Sunderrajan, Manager and three PCLs bearing no. 80/95, 81/95 and 84/95 were released under the order of Sh. S. Satish Kumar (A-2). Out of the fund release under PCL/LC limit which were credited in the account No. 3246 of M/s Priya Textiles, total amount of R 10.25 lacs was diverted through 3 pay orders of Rs. 6 lacs, Rs 2.25 lacs and 2 lacs to the SB account No. 12957 of Smt. Kalpana Bedi Maintained with the Canara Bank, Malviya Nagar Branch, New Delhi instead of utilizing the funds towards purchase of raw material for the purpose of export activity as per terms of the limit. An amount of Rs. 21.18 lacs was withdrawn in C C NO. 38/2001 4/55 5 cash by Sh. Tilak Raj Bedi (A-2) through self/bearer cheques from the account no. 3246 of M/s Priya Textiles, out of the proceed of aforesaid PCL the amount was also utilized for meeting of personal expenses than the obligation of the PCL limit. As such diversion of funds from the PCL limit for the Purpose other than the purpose of export is a violation of the terms and conditions of the PCL. PCL carries a concessional rate of interest but other limits for purpose of capital goods for the company or for the day to day running of company attract higher rate of interest. Higher limits of credit were sanctioned for M/s Priya Textiles by Export Finance Committee of the Bank. It was subject to certain conditions. One of the condition was that branch had to obtain collateral security of the value of Rs. 25 lacs within three months. Collateral security was not obtained from M/s Priya Textiles, as per the terms of the sanction of the limits. S. Satish Kumar 9A-1) did not insist for the additional collateral security and thereby showed undue favour to M/s Priya Textiles.
10 Sh. S. Satish Kumar (A-1) had demanded and obtained an amount of Rs. 10,000/- from Sh. Tilak Raj Bedi (A-2) in October 1994 as he required for the purchase of second hand Maruti Car. In order to obtain this amount S. Satish Kumar unauthorisedly allowed Sh. Tilak Raj Bedi (A-2) to withdraw an amount of Rs. 25,000/- from the current account no 3246 of M/s Priya Textiles on 25.10.1994, when the balance in this account was only Rs. 1,005.70 (Cr.). Similarly, another withdrawal of Rs. 25,000/- was also unauthorisedly allowed on 25.10.94 by accused S. Satish Kumar from current account No. 3335 of M/s Priya Exports to Sh. Tilak Raj Bedi (A-2) when the balance in the said account was only Rs 153.50. Both the above accounts were not enjoying any C C NO. 38/2001 5/55 6 overdraft facility. A-1 had issued a cheque for withdrawing an amount of Rs. 10,000/- from his account No. 594 maintained in Syndicate Bank, Mayapuri Branch, New Delhi. The cheque was passed for payment but subsequently he got cancelled the cheque and the amount was re-credited in his account.
11 On 18.9.95, accused S. Satish Kumar (A-1) had issued a false confidential report in respect of the conduct of the account of M/s Priya Textiles with Syndicate Bank to Sh. Tilak Raj Bedi (A-2) for submission to RBI for allotment of Export Code No. to M/s Priya Textiles. In that confidential report, accused S. Satish Kumar (A-1) had concealed the adverse remarks "the accounts are irregular made by the subordinate officers of the bank" by applying white fluid over it. Sh. S. Satish (A-1) was dismissed by the bank on 7.12.1999 12 Copies required U/S 207 Cr P C supplied to accused. My Ld. Predecessor after hearing both the parties on 13.7.04 had framed a charge against both the accused for the offences punishable U/s 120-B R/W Sec. 420 IPC and U/sec. 13( 2) r/w 13 (1) ( d) of P C Act, 1988. & substantive offence U/sec. 13( 2) r/w 13 (1) ( d) of P C Act, 1988 & substantive offence U/sec.420 IPC had also been framed against A-1 & against A-2. Both the accused pleaded not guilty to the charge and claimed trial. Hence, this trial.
13 Prosecution, in order to prove its case, has produced following witnesses:
C C NO. 38/2001 6/55 714 PW1 Sh. Prem Nath has proved certified copy of statement of account of S Satish Kumar Ex PW1/A, cheque Ex PW1/B, credit slip Ex.PW 1/C, cheque Ex.PW 1/D, cheque Ex.PW 1/E, certified copy of statement of account of M/s Priya Exports, Ex.PW 1/F & certified copy of statement of account of M/s Priya Textiles Ex.PW 1/G. 15 PW2 Ms. Meera Srinivasan has proved documents already proved by PW1.
16 PW3 Sh. A Subramaniam has proved complaint Ex PW3/A. 17 PW4 Sh. Jagdish Kumar Sharma has proved document D- 2/Ex. PW-4/B and 4/C, D-3/Ex. PW-4/D, D-4/Ex. PW-4/E, D-5/Ex. PW- 4/F, D-6/Ex. PW-4/G, D-7/Ex. PW-4/H, D-8/Ex. PW-4/I, D-9Ex. PW- 4/J, D-10/Ex. PW-4/K, D-11 Mark A, B, C and D-12/Ex. PW-4/L, D- 13/Ex. PW-4/M, D-14/Ex. PW-4/N, D-15/Ex. PW-4/O, D-16/Ext PW- 4/P1 to P5, D-17/Ex. PW-4/P6, D-18/Ex. PW-4/P7, D-19/Ex. PW-4/P8, D-20/ Mark A, B, C, and E, D-21/Ex. PW-4/Q1, D-22/Ex. PW-4/Q2, D- 23/Ex. PW-4/Q3, D-24/Ex. PW-4/Q4, D-26/Ex. PW-4/R1, R2, D-27/Ex. PW-4/S1, S2, D-29/Ex. PW-4/T, D-49/Ex. PW-4/U, D-50/Ex. PW-4/U1, D-51/Ex. PW-4/U2, D-52/Ex. PW-4/U3, D-53/Ex. PW-4/V1 to V5, D- 54/Ex. PW-4/V6, D-55/Ex. PW-4/V7, D-56/Ex. PW-4/V8, D-57/Ex. PW- 4/V9, D-58/Mark A-2 to F-2, D-59/Ex. PW-4/W1 to W5, D-60/Ex. PW- 4/W6, D-61/Mark A-3 to E-3, D-62/Ex. PW4/X, D-63/Ex. PW-4/Y, D- 64/Ex. PW-4/Z, D-65/Mark A-4 to E-4 D-66/Ex. PW-4/AA, D-67/Ex. PW-4/BB, D-68/Ex. PW-4/CC, D-69/Ex. PW-4/DD, D-70/Ex. PW-4/EE, D-71/Ex. PW-4/FF, D-72/Ex. PW-4/GG-1 to GG-5, D-73/Ex. PW-4/GG-
C C NO. 38/2001 7/55 86, D-74/Ex. PW-4/GG-7, D-75/Ex. PW-4/GG-8, D-76 Mark A-5 to E-5, D-77/Ex. PW-4/GG-9, D-78/Ex. PW-4/HH, D-79/Ex. PW-4/II, D-80/Ex. PW-4/JJ, D-81 Mark A-6, D-82 Mark A-7, B-7, C-7, D-7, E-7, D-83/Ex. PW-4/KK, D-84/Ex. PW-4/LL, D-85/Ex. PW-4/MM, D-86/Ex. PW- 4/NN, D-87/Ex. PW-4/OO, D-88/Ex. PW-4/PP, D-89/Ex. PW-4/QQ, D- 90 Mark A-8, D-91/Mark A-9 to E-9, D-92/Ex. PW-4/RR, D-93/Mark A- 10, D-94/Ex. PW-4/SS, D-95/Ex. PW-4/TT, D-96/Ex. PW-4/UU, D- 97/Mark A-11 to E-11, D-98/Ex. PW-4/WW, D-99/Ex. PW-4/XX, D- 100/Ex. PW-4/VV, D-101/Mark A-12, D-102/Mark A-13 to E-13, D- 103/Ex. PW-4/YY, D-104/Mark A-14, D-105/Ex. PW-4/ZZ, D-106/Ex. PW-4/A-1, D-107/Ex. PW-4/A-2, D-108/Ex. PW-4/A-3, D-109/Mark A- 15, D-110/Ex. PW-4/A-4, D-111/Ex. PW-4/A-5, D-112/Ex. PW-4/A-6 D-114/Ex. PW-4/A-7, D-115/Ex. PW-4/A-8, D-116/Ex. PW-4/A-9, D- 117/Ex. PW-4/A-10, D-118/Ex. PW-4/A-11, D-119/Ex. PW-4/A-12, D- 122/Mark A-16 to A-20, D-123/Ex. PW-4/A-13, D-124/Mark A-21, D- 125/Ex. PW-4/14, D-126/Ex. PW-4/A-15.
18 PW5 Sh. S P Bhai made oral deposition only. He has proved the documents already proved by other witnesses.
19 PW6 Sh. A G Bhat has proved account opening form ExPW6/A, specimen signature card Ex PW6/B and copy of statement of account of account No. 12957 Ex.PW 6/C. 20 PW7 Sh. S Panduranga Rao & PW8 Sh. A K Dhar have proved the documents already proved by PW4.
C C NO. 38/2001 8/55 921 PW9 Sh. Sudershan Kumar Abrol has proved cheque returning registers of Syndicate Bank, Mayapuri for the period 23.3.94 to 22.12.94 & 23.12.94 to 31.12.95 Ex.PW 9/A and Ex.PW.9/B, certified copy of chapter No.2, 6 ,Ex PW9/C, Annual Property Returns ExPW9D (collectively), statement of account No.3246 Ex PW9/E, Production Memo Ex.PW 9/F and list of documents Ex.PW 9/G & Ex.PW 9/H (collectively), his report Ex. PW 9/I, D-44 bearing the signature of his colleague Sh. S Madan at point A Ex PW9/J and D46/1 to D46/4 bearing the signature of Sh. J K Sharma at point A in Ex PW9/K. 22 PW10 Sh. T S Rao has proved the documents already proved by PW6.
23 PW11 Sh. C P Balachandern Nayyer has proved D43 Ex PW11/A and pay order Ex.PW 11/B. 24 PW12 D R Handa has proved report Ex.PW 12/A forwarding letter Ex.PW 12/B and enlarged photographs on the file Ex PW12/C. 25 PW13 Sh. J K Mehta has proved FIR ExPW13/A, letter No. 611-0363/95 dt. 17.5.95 of Bank of Tokyo Ex PW13/B, D40/1 to D40/3 Ex PW13/C and D41 Ex PW13/D. 26 PW14 Sh. T K Ray Choudhary Inspector CBI is the part IO of the case and has done investigation after the transfer of Sh. J K Mehta and proved D-42 Ex PW14/A, After completion of investigation he filed the charge sheet in the court.
27 Statements of the accused U/s 313 Cr PC recorded.
C C NO. 38/2001 9/55 1028 In his statement U/s 313 Cr PC accused S Satish Kumar has admitted most of the case/evidence of prosecution and stated that he signed on the recommendation of Asstt. Manager, Sub Manager and Manager. He has further stated that he is innocent. He joined the bank as Agriculture Field Officer. He did not have the opportunity to work in specialised Foreign Exchange and also he did not have any training in Foreign Exchange. Because of this lower level officers have taken advantage in misleading him. He was fully dependant on Asst. Manager, Sub Manager and Manager. He has not intentionally created any loss to the bank during the 30 years of his service in bank. He has a clean record and made efforts for the welfare of the bank. He has been falsely implicated in this case.
29 Accused Tilak Raj has denied all the allegations made against him and evidence produced by the prosecution against him and stated that he is innocent. He has been falsely implicated in this case. Export order pertaining to Meghna Garments, PCLs were obtained against those export orders. Against those PCLs he had purchased the raw material and goods were prepared. Two consignments in respect of the above said order were sent to Bangla Desh but the consignee did not got release the consignment. Custom Department got the consignment auctioned and original documents were received back in the bank. Thereafter, They did not send the consignment because the purchaser had not got released the earlier consignments. After preparation of material/goods They had sold the same in the open market and payment was made to the bank. In the matter of Export order pertaining to Bengal Knittex they obtained the PCL, prepared the goods against the C C NO. 38/2001 10/55 11 LC, exported the material and payment was received by the bank from the buyer. Bank realisation certificate was also issued by the bank. The goods prepared for APT Impex were not exported because that export order was received through Meghna Garments. As the Meghna Garments had not got released the garments, therefore they had not sent the goods in anticipation that consignment will not be got released. The remaining goods against that order were re-exported and the amount was deposited with the bank. Bank thereafter had issued no objection certificate and |Due Clearance Certificate. His collateral securities were returned.
30 In defence following witnesses were examined:
31 DW1 Sh. K P Chandrasekhran has proved No Due Certificate dt. 16.1.2002 Ex DW1/A. 32 DW2 Sh. A K Julka, Managr, Syndicate Bank has proved letter No.116/9066/ARMB/98/2002 dt. 16.1.02 with respect to the file pertaining to M/s Priya Textiles c/o Puneet Export ILC, 854/2 Punjab Mata Nagar, Pakhowala Road, Ludhiana as Ex DW2/A 33 DW3 Sh. Onkar has proved true copy of Minutes dt. 9.5.97 Ex DW3A and Production Memo Ex DW3/B. 34 DW4 Sh. Sunil Kumar Saxena has proved certified copies of various documents Ex DW4/A-1 to Ex DW4A-17.
C C NO. 38/2001 11/55 1235 DW5 Sh. G D Rao has proved Certificate dt. 16.1.2001 Ex DW5A and photo copy of letter dt. 11.2.2002 Ex DW5/B. 36 Counsel for accused T R Bedi has also tender in evidence certified coy of original application moved before D R T, New Delhi dt. 16.8.96 titled as Syndicate Bank Vs. M/s Priya Textiles & Ors. Which is Ex DD-1 and certified copy of order of DRT Dt. 31.1.2002 in O A No.10/97 Ex DD-2.
37 Ld. PP Sh. S Islam referring the statement of witnesses and documents produced and proved by the prosecution on the judicial file argued in detail that accused No.1 Sh. S Satish Kumar, being Chief Bank Manager, was a public servant who in connivance and conspiracy with A-2, Sh. Tilak Raj Bedi, who was the authorised signatory of M/s Priya Textiles, a partnership firm, whose partners are Mrs. Kalpana Bedi w/o T R Bedi and Daljeet Singh, brother of Sh. T R Bedi, caused wrongful gain to Mr. T R Bedi and wrongful loss of equal amount to bank by abusing his official position. It is argued that T R Bedi was the actual & real beneficiary in this case. He has further argued that in this case, charge has been framed against A- 1 for the offence punishable u/s 13 (1) (d) of PC Act, 1988 i.e. obtaining pecuniary gain for himself or for any other person by abusing his position as a public servant. It is proved on the file that A-1 being Chief Manager of the bank had obtained pecuniary benefits in favour of T R Bedi by abusing his official position as public servant and caused wrongful gain in his favour. Ld. PP also argued that it is proved that A-1 had obtained Rs. 10,000/- for himself from A-2. On C C NO. 38/2001 12/55 13 account of brevity I am not reproducing all the arguments addressed by Ld. PP.
38 It is argued on behalf of A-1 that he is innocent. Initially loan was sanctioned by his predecessor Sh. K S Chauhan, thus he was the first person to get the relevant documents executed, but he has not been implicated an accused in this case. A-1, being the Chief Manager of Syndicate Bank, Mayapuri Branch was not the sanctioning authority of advances granted in favour of m/s Priya Textiles. He had simply forwarded the proposals prepared by his subordinate/assistant staff to the Zonal Office. He had furnished all the necessary particulars in the prescribed format of the bank. He had neither concealed any facts/information nor prepared any document. He had simply acted on the recommendation of his Assistant Manager, Sub Manager and Manager. He had carried out the proceedings as per banking rules. He had not obtained any pecuniary benefit for himself. Prosecution has utterly failed to prove any demand of money made by A-1 or acceptance of money by him. Entire amount has been paid by the borrower, bank has not suffered any wrongful loss. Detailed Written submissions have been filed on behalf of A-1 in addition to the oral submission made in the court. As the written submissions are on record, hence the same are not being reproduced in this judgment on account of brevity. It is prayed that accused may be acquitted.
39 Ld. Defence Counsel for A-2 has addressed his oral submissions and also filed written submissions. It is argued that entire charge sheet does not reflect basis of institution of present proceedings against A-2. It is admitted case of bank that loan was obtained by C C NO. 38/2001 13/55 14 partnership firm by executing necessary documents. Limits were sanctioned and enhanced on the request of partners of firm. A-2 is only a authorised signatory. He has not obtained any wrongful gain for himself. Partners of the bank had authorised him vide Ex PW4/F to act on their behalf. Prosecution has not produced any evidence to show that A-2 had controlled or managed the affairs of firm or he was the brain behind the act and conduct of partnership firm. Merely because he had acted as agent under the direction of his principal, he cannot be exposed to the present criminal prosecution and its consequences thereto. Though, Sh. K S Chauhan , Chief Manager, Syndicate Bank had initially sanctioned the limit and Sh. R Sunderrajan had enhanced the PCL but they have not been cited as accused in the chargesheet.
40 It is argued that in a case of cheating prosecution has to prove that accused had fraudulent or dishonest intention at the time of making representation or inception of the agreement. No such culpable intention exists in this case. M/s Priya Textile had a valid export order with which it approached bank for grant of PCL. Prosecution could not produce any evidence to prove that M/s Priya Textiles had used forged export order purportedly to be issued by M/s APT Impex, Dhaka. Prosecution has failed to produce any evidence to prove dishonest intention leading to any criminal offence, in any loan transaction, thus, no case of cheating is made out against accused T R Bedi. Accused was having no criminal intention at the inception of contract, is also clear from the fact that four properties were submitted as collateral security to the bank including two built up houses, a factory land and a residential plot in New Delhi worth of lacs of rupees. Bank had been dealing with C C NO. 38/2001 14/55 15 M/s Priya Textiles since 1992, it already had export order valid all over India. Limits of party were enhanced/sanctioned by Zonal Office which could only be done if the dealings of the party with the bank was satisfactory. Accused had never sought any confidential report which infact was called by RBI from the concerned bank. It was not prepared on the request of accused T R Bedi nor he had taken any steps for procuring/obtaining it. PW4 has also admitted in his cross examination that there was no written request from the party seeking confidential report.
41 It is argued that it is admitted fact that two consignment were sent to Meghna Garments but party failed to get it release and ultimately consignments were auctioned by the custom department of Bangladesh. Auction paper has been produced by the accused in his defence evidence. Third consignment was not sent to the party, it was sold in open market and money was paid to the bank. L.C was transferable which is clear from various clauses in Ex PW4/52. It is argued that entire shipment was exported to Bengal Knitex Dhaka by the party , total amount was realized by the bank and relaisation certificate was also issued by the bank.
42 It is argued with regard to allegations of using money for other purpose then for which it was sanctioned, prosecution has proved only the withdrawn entries of the amount from the bank by Mrs Kalpana Bedi but it has not proved the mode of expenditure of the amount withdrawn. Prosecution has not produced any evidence to prove that amount was used for any other purpose. Consistent stand of accused is C C NO. 38/2001 15/55 16 that the amount was used for buying raw material and for paying the labour engaged by him .
43 It is argued that bank has filed recovery proceeding in DRT in the year 1996 while FIR in this case has been lodged in the year 1998. Matter was compromised in DRT between accused and bank. Entire money has been paid by accused in terms of settlement arrived between them, thus, bank has not suffered any wrongful loss.
44 It is argued with regard to allegation of prosecution that accused T R Bedi had paid Rs.10,000/- to co accused S Satish Kumar the then Chief Manager, Syndicate bank, Mayapuri Branch for purchasing of a second hand car,in this regard cross examination of PW5 S P Bhai is relevant . This witness has firstly stated that he came to know that T R Bedi had given Rs.10,000/- to A-1. In the same breath he has improved his statement by stating that he had seen passing of the money in the closed cabin of A-1 which was at a distance of 15 yards from his seat. Mere paying of money does not mean paying of illegal gratification . Even if it is presumed to be true, without admitting, it cannot lead to the conclusion that gratification was paid to A-1. Burden was on the prosecution to prove that such money was given for a particular illegal purpose. Prosecution had to prove what had transpired between the parties. Statement of PW 5 SP Bhai that T R Bedi told him that accused S Satish Kumar had demanded money, is inadmissible peace of evidence. There is reference in this context in his statement recorded U/S 161 Cr P C wherein he had stated that " He" not " I" ( S P Bhai) had seen the money passing the hands. Prosecution had made an attempt for improving this version, PW30 J K Mehta has stated that word / letter "
C C NO. 38/2001 16/55 17He" is a typographical mistake which should actually be "I" suggesting that it was S P Bhai who had witnessed the transaction and not " He"
such interpretation of the statement of witness cannot be given and it has to be read simplicitor as the words suggest because the statement was not recorded by layman but a senior inspector of CBI dealing with the bank securities and fraud cases.
45 It is argued that prosecution has pointed out some irregularities allegedly committed by the party during the course of dealing with the bank. It is argued that our Hon'ble Supreme Court 1980 Crl L J page -220 had observed even if prosecution proves the irregularities in execution of the work the same would not be sufficient for conviction of a accused. In 1998 Cr L J page 651 it was held where a bank exercising discretion within limits in case of an old customer does not amount to cheating or causing advantage to the customer. In 1987 Crl L J 533 ( SC) in which the Supreme Court in case of bribe had held that there has to be a clear evidence about what talk preceded the passing of currency notes and in the absence of the same the conviction of appellant was set aside by the Court shortly on that ground. In AIR 1971 SC 1480 the Hon'ble Supreme Court has held that in the absence of an agreement that the officer would not pay back for the goods obtained from the party, he can not be said to have obtained pecuniary advantage even if he does not intend to pay back. In 1992 Crl L J page 2430 the accused was acquitted by the Court in a case of bribe, and one of the considerations taken by the Court was that it was highly improbable that the accused could have accepted the amount in full public view which he could have accepted when he was alone with the complainant.
C C NO. 38/2001 17/55 1846 It is argued that investigating agency has not conducted the investigation fairly and converted a civil dispute in a criminal case. In this regard Ld Defence counsel has placed reliance on Ranjan Prasad Verma Vs State of Bihar 2000 (3) AD SC 145, followed by Hon'ble High Court of Delhi in 2006 (4) AD 647 and 2003 (2) SCC 219.
47 Sh. Subramanium (PW-3) has deposed that he joined Syndicate Bank on 2.2.1998 as Chief Vigilance Officer. His duty was to review various cases dealt by the bank including petty cases. He had the occasion to review the case of M/s Priya Textiles and found irregularities relating to advances and there was an outstanding of more than crore of rupees, therefore, decided to refer the matter to CBI for investigation. He has identified his signature/ initial on Ex. PW-3/A which is a carbon copy of original, which was lodged with DIG Bank Securities and Fraud Cell, Delhi for investigation in the matter of fraud committed by M/s Priya Textiles in connivance with the Bank Officer. He has deposed that the case RC 3/98/ BS & FC/ Delhi dt. 10.8.1998 (Ex. PW-13/A) has been registered on the basis of his complaint .
48 From the evidence of prosecution, it is proved that M/s Priya Textiels, a partnership firm, of which Mrs Kalpana Bedi and Daljeet Singh were the partners, was having account No. 3246 in Syndicate Bank, Mayapuri, Branch. Accused Tilak Raj Bedi was authorized signatory to operate this account vide authority letter dated 24.07.1992 i.e. Ex.PW-1/F. As such this account was operated by accused Tilak Raj Bedi as authorized signatory. These facts have been proved by Shri Jagdish Kumar Sharma PW-4 and other prosecution C C NO. 38/2001 18/55 19 witnesses vide Ex.PW-4/A, Ex.PW-4/B, Ex.PW-4/C, Ex.PW-4/D, Ex.PW-4/E and Ex.PW-4/F. Apart from that these facts have also been admitted by accused Satish Kumar in his statement U/s. 313 Cr. PC. Who was Chief Manager during year 1994-96 in Syndicate Bank, Mayapuri Branch, New Delhi.
49 M/s. Priya Textile had various credit limits total amounting to Rs.225 lacs. Accused Satish Kumar being Chief Manager Syndicate Bank, Mayapuri Branch, New Delhi recommended on 1.10.95 to sanction the enhanced credit limit as stated in process note dated 01.10.1994 Ex.PW-4/H. As per his recommendation zonal office Syndicate Bank, New Delhi had sanctioned credit limits/facilities PCL/LC 115 lacs, FDBP/FUBP (LC) Rs.180 lacs, FDBP/FUBP (WLC) Rs.20 lacs and B.G Rs.2 lacs as mentioned in Ex.PW-4/I with the conditions including that branch shall obtain additional collateral security of the value of Rs.25 lacs within 3 months. Accordingly, Ex.PW-4/J was issued by Zonal Office, Syndicate Bank, New Delhi. Regarding sanction of these limits accused Satish Kumar informed M/s. Priya Textile vide Ex.PW-4/K. Sh. S. Islam, Ld. PP, has drawn my attention to the testimony of Sh. Sudharshan Kumar Abrol, PW-9, who has stated that accused Satish Kumar should not have recommended these facilities because the past record of M/s. Priya Textile was highly unsatisfactory and irregular. He has also proved cheque returning register of Syndicate Bank, Mayapuri Branch for the period 23.03.1994 to 22.12.1994 and another cheque returning register for the period 23.12.1994 to 31.12.1995 which are Ex.PW-9/A and Ex.PW-9/B wherein the entries of cheques pertaining to account . of M/s. Priya Textile presented to Syndicate Bank, C C NO. 38/2001 19/55 20 Mayapuri Branch, New Delhi and were returned unpaid/dishonored for the reasons insufficient funds in the account . No.3246 of M/s. Priya Textile. PW-9 has also deposed that accused Satish Kumar did not mention fully all the irregularities appearing in the account . of M/s. Priya Textile particularly large nos. of cheque being returned unpaid and large amount of over dues under PCL & bill facilities, etc. Perusal of evidence, oral and documentary, it manifestly clear that accused Satish Kumar deliberately and malafidely recommended said facilities/limits in favour of M/s. Priya Textile and abused his official position being public servant.
50 Vide Ex. PW-4/R-2 i.e. Original Telex dated 23.3.95 of Arab Bangladesh Bank Ltd. Moti Jheel Branch, Dhaka, Bangaldesh, whereby this bank issued a letter of credit No.MJ/Ex.PBB/7/102/95 dated 13.3.95at the request and on account of M/s. Meghna Garments favoring Priya Export, 125, B Malviya Nagar, Basement, New Delhi, with the conditions among other that (a) the last date of Shipment is 30.3.95, but it should not be prior to LC opening date 13.3.95 and the last date of negotiation of bills is 14.4.95 (b) The LC is transferable and notice of transfer must be informed to the LC opening Bank.
51 This LC is advised by the Bank of Tokyo Ltd., Parliament Street, New Delhi. Hence, Ex. PW-4/R-2 was forwarded along with covering letter i.e. Ex. PW-4/R-1 of the Bank of Tokyo to the Syndicate Bank, Mayapuri Branch, New Delhi. Ex Pw-4/S-1 and Ex. PW-4/S-2 which are forwarding letter of Bank of Tokyo and LC wherein details of various PCLs sanctioned to M/s. Priya Textile are mentioned. It is pertinent to mention here that said LC vide Ex.PW-4/R-2 was issued in C C NO. 38/2001 20/55 21 favour of M/s.Priya Export but accused Tilak Raj Bedi being proprietor of the same requested vide letter Ex.PW-4/T to the Manager Syndicate Bank, Mayapuri Branch, New Delhi for transfer of LC in favour of M/s.Priya Textile. LC was transferred accordingly by the bank as per endorsement on Ex.PW-4/R-2 and Ex.PW-4/S-2. Learned P.P. has drawn my attention that as per Ex.PW-4/R-2, one of the condition was that, the LC is transferable and notice of transfer must be informed to LC opening Bank but no information was sent , regarding transfer of LC including transfer of amount in the name of Priya Textile which further proves the connivance & conspiracy between both the accused.
52 Accused Tilak Raj Bedi filed an application i.e. Mark-A on 30.3.95 in respect of PCL52/95 for grant of packing credit Limit of Rs.5 Lakhs and he also signed it's annexures marked B, C, D and E. Same have been certified by PW4 Sh. J.K. Sharma. In pursuance of this application Ex.PW4/L i.e. Manager's Order Slip dated 30.3.95 for release of packing credit Loan of Rs.5 Lakhs to M/s. Priya Textile was finally endorsed by accused S. Satish Kumar with the observation that "documents are in order and we may arrange the PCL". Ex.PW-4/M Debit voucher dated 30.3.95 for Rs.5 Lakhs pertaining to the PCL 52/92 and Ex. PW-4/N Credit Slip dated 30.3.95 of Rs. 5 Lakhs in respect of current account of 3246 of M/s. Priya Textiles. In respect of this transaction PW-4 has proved Ex.Pw-4/O which shows entry of Rs.5 Lakhs on 30.3.95 in respective column. On 20.4.95 accused Tilak Raj Bedi submitted an application Ex. PW-4/P-1 in respect of PCL 62/95 of M/s. Priya Textiles for grant of Packing Credit Limit of Rs.9.60 Lakhs and its enclosures are Ex. PW-4/P-2 to Ex. PW-4/P-5. Vide Ex.Pw-4/P-
C C NO. 38/2001 21/55 227 the amount of Rs.9.60 Lakhs was transferred to the account . No.3246 and Ex.Pw-4/P-6 i.e. Debit Voucher signed by accused T R Bedi for having received this amount. Ex.PW-4/P-8 is packing Credit Loan register sheet pertaining to PCL No. 62/95 of M/s. Priya Textiles wherein entries are reflected with regard to amount of Rs.9.60 Lakhs in respective column. Similarly, accused Tilak Raj Bedi and his wife Smt. Kalpana Bedi with their signatures submitted application i.e. Mark-A in respect of PCL 73/95 of M/s. Priya Textiles for grant of packing credit Loan of Rs.3.90 Lakhs along with its enclosures which are Mark-B, C, D and E all are signed by Smt. Kalpana Bedi. Vide Ex. PW-4/Q-1 i.e. Manager order Slip in respect of this LC 73/95 wherein S. Satish Kumar had finally remarked to arrange the PCL and accordingly transaction was done vide Ex.PW-4/Q-2 & Q-3 which are Debit and Credit vouchers dated 8.5.95 for Rs.3.90 Lakhs. Apart from documentary evidence, PW- 8 Sh. A.K. Dhar has deposed that the amount of Rs.5 Lakhs, Rs.9.60 Lakhs, Rs.3.90 Lakhs pertaining to aforesaid PCL No.52/95, 62/95, 73/95 respectively was released and credited in the Account of M/s. Priya Textiles at the instance of Accused S. Satish Kumar. Learned P.P. has drawn my attention to the testimony of PW-9 who has stated that the PCL were infact arranged in contravention of the conditions as imposed in Letter of Credit Number 102/95 i.e. Ex. PW-4/R-2 and Ex.PW-4/S-2 that last date of shipment 30.3.95 but not prior to LC Opening date 13.3.95 and Last date of Negotiation 14.4.95. Moreover, Ex.PW-13/B i.e. Cable Message dated 16.5.95 along with covering Letter of Bank of Tokyo sent and was informed to Syndicate Bank, Mayapuri Branch, New Delhi that the LC Opener C C NO. 38/2001 22/55 23 M/s. Megha Garments Ltd., Dhaka had requested the Bank for cancellation of aforesaid LC Number 102/95 dated 13.3.95, as, had expired on 14.4.95. All such irregularities including that M/s. Priya Textiles had dispatched only two export consignments to M/s. Megha Garments Ltd. during March 1995 but the consignments were not got released from custom at Bangladesh by the Buyer and no further consignment was dispatched to Dhaka against aforesaid certain LC/PCL. Hence, the entire amount obtained as PCL remained outstanding against M/s. Priya Textiles. As such prosecution has proved that accused S. Satish Kumar abused his official position as Public Servant and committed criminal misconduct as he dishonestly and fraudulently obtained pecuniary advantage to accused Tilak Raj Bedi authorized signatory of M/s. Priya Textiles.
53 Perusal of record also show that M/s. Priya Textiles had applied and obtained 6 PCL, out of which 3 packing Credit numbers 80/95, 81/95 and 84/95 were released under the order of accused Sh. S. Satish Kumar. Application pertaining to PCL No. 80/95 of M/s. Priya Textile and it enclosures Marked as A-11, B-11, C-11, D-11, E-11 signed by accused Tilak Raj Bedi submitted for grant of PCL Rs.7.64 Lakhs. Ex. PW-4/A-15 i.e. Manager Order Slip, Ex. Pw-4/W W i.e. Debit Slip, Ex. PW-4/V V i.e. Credit Slip and Mark-A-12 i.e. Certified copy of PCL Registered Sheet are pertaining to PCL No. 80/95.
54 Application pertaining to PCL No. 81/95 of M/s. Priya Textile and it enclosures Marked as A-13, B-13, C-13, D-13, E-13 signed by Smt. Kalpana Bedi submitted for grant of PCL of Rs.12.65 C C NO. 38/2001 23/55 24 Lakhs. Ex. PW-4/Y Y i.e. Manager Order Slip, Ex. Pw-4/Z Z i.e. Debit Slip, Mark-A-14 i.e. Certified copy of PCL Registered Sheet are pertaining to PCL No. 81/95.
55 Ex. PW-4/A-3, Ex. PW-4/A-4 and Mark A-15 are Manager Order Slip for release of PCL of Rs.6.95 Lakhs, Debit Slip for Rs.6.95 and Certified copy of PCL Registered Sheet of M/s. Priya Textile, are pertaining to PCL No. 84/95. Perusal of all the record pertaining to PCL 81/95, 81/95, 84/95 shows that Sh. Satish Kumar had released the amount against these PCL in the account of M/s. Priya Textile. Accused S. Satish Kumar has admitted all these documents and the transactions in his statement U/s. 313 Cr. P.C. 56 Ex. PW-4/W1 to Ex PW4/W5, Ex. Pw-4/V-6 and Ex. PW- 4/V-7 pertaining to PCL 56/95, Documents Marks A-3, B-3, C-3, D-3 and E-3, Ex. PW-4/Z and Ex. Pw-4/X pertaining to PCL No. 66/95, documents Marked A-4 to E-4, Ex. PW-4/AA, PW-4/B, PW-4/C and PW-4/F pertaining to PCL 67/95, Ex. Pw-4/GG-1 to PW-4/GG-5, Ex. PW-4/GG6, Ex. PW-4/GG-7 and Ex. PW-4/GG -8, pertaining to PCL No. 70/95 and documents marked A-16, A-17, A-18, A-19, A-20 and A- 21, Ex. PW-4/A-13, Ex. PW-4/A pertaining to PCL 50/95 show that M/s. Priya Textile applied and obtained the said PCL for the amount as mentioned therein. Sh. J.K. Sharma, PW-4 has proved all the documents and identified the signature of concerned. SH. A.K. Dhar, PW-8 has stated that the said PCL's were released and credited into the Account of M/s. Priya Textile at the instructions of Accused S. Satish Kumar.
C C NO. 38/2001 24/55 2557 Perusal of document mark A5, B-5, C-5, D-5, E-5 and Ex PW4/II pertaining to PCL 75/95, documents marked as A-7, B-7, C-7, D- 7, E-7, Ex PW4/KK, Ex PW4/LL and Ex PW4/MM pertaining to PCL 76/95 and documents marked as A-9, B-9, C-9, D-9, A-10, E-9, Ex PW4/RR and ExPW4/SS pertaining to PCL 77/95 showed that M/s Priya Textiles obtained said PCL also and amount thereof released and credited in the account No. 3246 of M/s Priya Textiles.
58 Prosecution has also proved that out of the funds released under PCLs/LC Limits which were credited in the account no.3246 of M/s Priya Textiles, an amount of Rs.10.25 lacs was diverted through three pay orders of Rs.6 lacs, Rs.2.25 lacs and Rs.2 lacs to SB account no. 12957 of Smt. Kalpana Bedi w/o accused Tilak Raj Bedi maintained with Canara Bank, Malviya Nagar, New Delhi. Prosecution in support of its case has proved that Ex PW4/PP i.e. pay order No. 557199 dt. 19..95 for Rs. 2 lacs, Ex PW4/A-2 i.e. pay order for Rs. 6 lacs and another pay order Ex PW11/B for Rs.2.25 lacs were debited through Ex PW4/OO, Ex PW4/A-1 and Ex PW4/A-6 from account No. 3246 of M/s Priya Textiles, Syndicate Bank, Mayapuri Branch, New Delhi, credited in the account of Mrs. Kalpana Bedi. All these three pay orders were collected by Canara Bank in clearing. Prosecution has also examined PW6 and PW9 who have proved account no. 12597 in the name of Mrs. Kalpana Bedi in Canara Bank Malviya Nagar, New Delhi vide Ex PW6/A , Ex. PW 6/B and Ex PW6/C. Apart that, accused Tilak Raj Bedi had withdrawn cash by issuing self cheques Ex PW4/U, Ex PW 4/U1, Ex PW4/U2, Ex PW4/V6, Ex PW4/DD, Ex PW4/EE, and Ex C C NO. 38/2001 25/55 26 PW4/A-7 and self cheques Ex PW4/U-3, Ex PW4/Y, Ex PW4/JJ and Ex PW4/NN issued by Kalpana Bedi and amount was withdrawn against the same. All these cheques are reflected in statement of account No. 3246 of M/s Priya Textiles i.e. Ex PW4/E. Ld. PP submitted that accused T R Bedi dishonestly and fraudulently in connivance and conspiracy with accused S Satish Kumar got diverted the funds of PCL/LC for other personal purposes instead of utilising the funds towards purchase of raw material for the purpose of export activity as per terms of limit. This diversion of funds in such manner from PCL Limit other than the purpose of export is total violation of terms & condition of PCL as mentioned in Ex PW4/H, Ex PW4/I and Ex PW4/J. Prosecution has successfully proved and placed clinching evidence, both documentary and oral which clearly shows that accused T R Bed fraudulently diverted the funds of PCL/LC and had used for personal purposes.
59 Sh. Jagdish Kumar Sharma (PW-4) has stated that he was posted from February 1995 to February 1999 as Manager Audit and Operation. Mr. Satish Kumar was working as Chief Manager and remained in the said branch up to 1996. He has also identified the signature of Mr. R. Sunderrajan, Sh. S.P. Bhai, Sh. S.K. Khanna, Sh. S.P. Rao, Sh Ashok Kumar Dhar, Sh. S.K. Gupta and Sh. S.C. Gupta (all bank officers of Syndicate Bank) because he had seen them writing and signing in official capacity and have proved respective documents under their signatures/initial.
C C NO. 38/2001 26/55 2760 Sh. Jagdish (PW-4) has deposed that there was an account of M/s Priya Textiles in Syndicate Bank, Mayapuri Branch, New Delhi. M/s Priya Textiels was a partnership firm. Partners were Sh. Daljeet Singh and Smt. Kalpana Bedi. The account was operated by authorized signatory i.e. Sh. Tilak Raj Bedi (A-2). He has stated that he is well conversant with the handwriting and signature of Tilak Raj Bedi, Sh. Kalpana Bedi and Sh. Daljeet Singh as he had seen them writing and signing in course of banking business.
61 From the above discussion it is proved beyond reasonable doubt on the file that accused T R Bedi, husband of Smt. Kalpana Bedi and brother of Sh. Daljeet Singh, who are the partners of M/s Priya Textiles was the real and actual beneficiary in this case. From the above discussion it is also proved that amount has also been transferred in the account of Smt. Kalpana Bedi and has also been received by her. It is also proved from above discussion that amount of PCLs/LC has also been received in cash by accused T R Bedi. Thus, there is no merit in the defence argument that T R Bedi, is only the authorised signatory of partnership firm and has not enjoyed any financial benefit from these transactions.
62 Prosecution has also alleged that on 18.9.95, accused S. Satish Kumar (A-1) had issued a false confidential report i.e. D-25/Ex. Pw 4/A-16 in respect of the conduct of the account of M/s Priya Textiles with Syndicate Bank to Sri Tilak Raj Bedi (A-2) for submission to RBI for allotment of Export Code No. to M/s Priya Textiles. In the said confidential report, accused S. Satish Kumar had concealed the adverse C C NO. 38/2001 27/55 28 remarks, "the accounts are irregular" made by the subordinate officers of the Bank by applying white fluid over it. With regard to this allegation prosecution examined Sh. Jagdish Sharma (PW-4) who has deposed that Mr. S. P. Rao, the then AMID, of Syndicate Bank (PW-7) had approached him on 18.9.95 with this report certifying in column no. 8, the conduct of account satisfactory and Sh.S. P. Rao had requested him to put his (Sh. Jadish PW-4) initial on the same for further putting up to the Chief Manager Sh. S. Satish Kumar (A-1) for his final signature. After going though the report, he (Sh. Jagdish PW-4) objected to the report being given as satisfactory and advised him (Sh. S. P. Rao PW-7) to mention the overdue position and irregular accounts in this report as a pre-condition for his (Sh. Jagdish PW-4) initial. Sh. Jagdish has also deposed that Sh. S. P. Rao pleaded that this is as per CM Sh. S. Satish Kumar's advice and he may not like the overdue position to be added in this report. Sh. Jagdish has also deposed that on insistence he (Sh. S. P. Rao PW-7) added the words "as per my advice" in his own handwriting below the typed wordings prepared earlier. At this Sh. Jagdish also put his initial after being satisfied about the mention of overdue position and irregular accounts of M/s Priya Textiles. PW-4 has also stated that report Ex. PW-4/A-16 was given to Sh. S. P. Rao who put it before Sh. S. Satish Kumar in his cabin for his signatures. PW-4 further deposed that subsequently he was informed by Sh. V. K. sehgal, then sub Manager (Advances), Syndicate Bank that inside the cabin, Sh. S. Satish Kumar (A-1) had applied white fluid on the wordings added in report and he had put his initials under the round seal of the bank authenticating the correction so made by applying white fluid.
C C NO. 38/2001 28/55 2963 PW-7 Shri S.Panduranga Rao, has also corroborated the version of PW-4 and stated that accused Satish Kumar had given him Ex.PW-4/A-16 i.e. confidential report to obtain the signature of Shri J.K. Sharma (PW-4) and Mr. Sehgal when report was taken to J.K. Sharma word satisfactory was written on it, Mr. J.K. Sharma had asked him to right irregular on it because the account was irregular at that time. PW-7 has also deposed that at the instance of Sharma he had written account irregular and thereafter Mr. Sehgal and Shri J.K. Sharma initialed the same. Thereafter this report was sent to the cabin of Chief Manager (accused Satish Kumar). PW-7 had also deposed that the "word irregular" written below column 8 by him on Ex. PW-4/A-16 is now not visible and some fluid has been applied and accused Satish Kumar had authenticated fluid by putting his initials at points 2, 5 and 1. PW-7 has also stated that initially when the report came to him fluid was not applied on it. This fact has also been confirmed in Ex PW12/A. 64 Relevant portion of Ex PW12/A is as under:
" The obscured correcting fluid writings appearing in the red enclosed portion marked Q1 when deciphered with the help of Video Spectral Comparator and Transmitted light examination appear to read as follows:
"DEALINGS WITH US; ACCOUNTS ARE IRREGULAR".
65 The existing type scripts in the red enclosed portion marked Q-2 have been written after obscuring with the help of correcting fluid original writings/type scripts and when thee writings/type writings were C C NO. 38/2001 29/55 30 examined with the help of Video Spectral Comparator and Transmitted light examination, the original writings/type scripts could be deciphered.
66 I have also observed Ex PW4/A-16, i.e. the underneath portion of white fluid from back side, facing it towards the tube light, with the magnifying lense, wording "DEALINGS WITH US; ACCOUNTS ARE IRREGULAR". is clearly visible underneath the white fluid.
67 It is proved on the judicial file beyond reasonable doubts from the evidence of PW9 that account of M/s Priya Textiles was highly irregular. Relevant portion of his statement is as under:
"During investigation I found that the account of M/s Priya Textiles were being conducted in a highly irregular manner. Large number of cheques issued by M/s Priya Textiles were being returned unpaid by our Mayapuri Branch because of insufficient fund in the account of M/s Priya Textiles. I came to know this fact of large returning of cheques on going through the cheque returning ledgers maintained at our Mayapuri, New Delhi Branch. I have seen D-120 i.e. cheque returning Register of Syndicate Bank, Mayapuri for the period 23.3.94 to 22.12.94 i.e. the same which I examined. In this register the entries pertaining to return of cheques issued by M/s Priya Textiles are appearing on page No. 3, 4 7 to 14, 16, 18 to 22. All these entries are tick maked in the register which are pertaining to M/s Priya Textiles. These entries indicate that the cheques issued by M/s Priya Textiles and presented to our various banks were returned unpaid/dishonored for the reasons of insufficient funds in the account of M/s Priya Textiles. This C C NO. 38/2001 30/55 31 register i.e. D-120, is Ex PW9/A. Similarly I had also examined another cheque returning register i.e. D121 maintained at our Mayapuri Branch for the period 23.12.94 to 31.12.95. In this register also I found many entries pertaining to returning of cheques issued by M/s Priya Textiles due to insufficient funds in the account. These entries are appearing on page No.2 to 14, 16, 17, 19, 20, 24, 25, 16, 28, 31, 43, 47 & 49. All these entries have also been tick marked in the register which are pertaining to the account of M/s Priya Textiles. These entries denote return of cheques of M/s Priya Textiles in lots account for the reasons of insufficient funds. This register D-121 is Ex PW9/B."
68 PW4 Sh. J K Sharma has deposed that M/s Priya Textiles had applied for confidential report for the allotment of exporter code. He has also stated that report can be given to the party by hand in order to expedite the matter. From his statement and that of PW7 it s proved that fluid was applied inside the chamber of S Satish Kumar wherein T R Bedi and accused S Satish Kumar were present, who are now facing this trial. In these circumstances it is very difficult for the prosecution to prove this fact by direct evidence, however, prosecution has proved this fact beyond reasonable doubts by circumstantial evidence. Following portion of the Statement of PW4 is relevant in this regard.
"Now I have seen D-25 which is the confidential report in the prescribed format dt. 18.09.95 issued by Syndicate Bank, Mayapuri branch under the signature of Sh. S. Satish Kumar at Point F. It also bears the initials of Sh. S. Satish Kumar under the round seal of Syndicate C C NO. 38/2001 31/55 32 Bank, Mayapuri branch at 5 places and at Points 1,2,3,4 and 5. This report is addressed to Joint controller, Exchange Control Deptt., RBI, New Delhi/Chandigarh. This report is in respect of allotment of Exporter's Code to account of M/s. Priya Textiles. This report bars the initials of Sh. S. P. Rao, Sh. V K Sehgal and myself at Point Z, Y and H respectively. I identify the initials and signatures of Sh. S P Rao and Sh V K Sehgal who were working as AMID and Sub Manager Advances respectively in Syndicate Bank, Mayapuri at that time and I have seen their signatures in normal course of work. This report is now Ex.PW4/A-
16. Mr. S P Rao, AMID had approached me on 18.09.95 with this report certifying in column no.8 the conduct of the account as satisfactory and had requested me to put my initials on the same for further putting up to the Chief Manager Mr. S. Satish Kumar for his final signature. On going through the report I objected to the report being given as satisfactory and advised him to mention the overdue position and irregular accounts in this report as a pre condition for my initials. Initially, he pleaded that this is as per CM Sh. S. Satish Kumar's advice and he may not like the overdue positions to be added in this report. On my insistence, he added the words 'as per my advise' in his own handwriting below the typed wordings prepared earlier. At this I also put my initials after being satisfied about the mention of overdue position and irregular accounts of M/s. Priya Textiles. This report was given back to Sh. S P Rao, AMID who took it to Sh. S. Satish Kumar cabin for his signatures.
69 Subsequently, I was informed by Mr. V K Sehgal, Sub Manager (Advance) that inside the cabin of Sh. S Satish Kumar, Chief Manager the party Mr. T. R. Bedi had objected to adding these words and C C NO. 38/2001 32/55 33 Mr. Satish Kumar had applied white fluid on the wordings added in the report on my advise and he had put his initials under the round seal of the bank authenticating the corrections so made by applying white fluid. (objected to as hearsay)."
70 In his crossexamination this witness has stated as follows;
"As per normal procedure, the confidential report is sought by the RBI, but in order to expedite sometimes the party makes a personal request to the branch to issue the same dasti. It is wrong to suggest thats the confidential report being a confidential document is never given to the party and is to be sent to the RBI as per the procedure. Document Ex.PW4/A-16 was handed over to the party on 18.09.95 by the Chief Manager Mr. S.Satish Kumar."
71 M/s. Priya Textile through its authorised signatory T R Bedi was the sole beneficiary for obtaining exporters code on the basis of this confidential report. It is also proved from the above discussions that the fluid was applied in the chamber of A-1 where A-2 was present therefore, prosecution can only prove it by circumstantial evidence. From the quoted crossexamination of PW4 it is also proved that confidential report can also be handed over to the party to expedite the matter. Thus in view of above discussion it is proved that confidential report Ex.PW4/A- 16 was tampered with by A-1 so as to suit the purpose of A-2.
72 Prosecution also alleged that S. Satish Kumar (A-1) had demanded and obtained an amount of Rs. 10,000/- from Tilak Raj Bedi which he required for the purchase of second hand Maruti Car. With C C NO. 38/2001 33/55 34 regard to this allegation PW-4 has stated that during his tenure in Syndicate Bank, Mayapuri Mr. S. P. Bhai used to give lift in his car after closing the bank upto some distance. PW-4 has also deposed that Sh. S. P. Bhai once informed that in 1994 Mr. Satish Kumar had asked for Rs. 10,000/- for arranging purchase of a car to which he expressed his inability . However, he (S. Satish Kumar) had requested Mr. T. R. Bedi to help him financially in this regard.
73 Shri S. P. Bhai, PW-5 has also corroborated the testimony of PW4 Sh. J.K. Sharma and deposed that in the month of Oct. and Nov. 1994 accused Satish Kumar had asked him to land Rs.10,000/- for purchasing a car but he refused to give that amount. On the same day accused Tilak Raj Bedi came to the Bank and from him accused Satish Kumar demanded Rs.10,000/- for purchase of car. PW-5 has also stated that he came to know that accused Tilak Raj Bedi had withdrawn amount from his account and gave Rs.10,000/- to accused S Satish Kumar. PW-5 has also deposed that he had seen Tilak Raj Bedi giving money to accused Satish Kumar. PW5 Shri S.P. Bhai, has also proved Ex.Pw4/L, Ex.Pw4/M, Ex.Pw4/N, Ex.Pw4/P-6, Ex.Pw4/P-7, Ex.Pw4/Q2, Ex.Pw4/Q-3, Ex.Pw4/Q-4, Ex.Pw4/U, Ex.Pw4/U1, Ex.Pw4/U-2, Ex.Pw4/U-3, Ex.Pw4/V6, Ex.Pw4/V-7, Ex.Pw4/X, Ex.Pw4/AA, Ex.Pw4/BB, Ex.Pw4/CC, Ex.Pw4/DD, Ex.Pw4/EE, Ex.Pw4/GG6 & GG7, Ex.Pw4/KK, Ex.Pw4/LL, Ex.Pw4/MM, Ex.Pw4/NN, E.Pw4/OO, Ex.Pw4/QQ, Ex.Pw4/N, RR, Ex.Pw4/SS, Ex.Pw4/TT, Ex.Pw4/UU, Ex.Pw4/VV, Ex.Pw4/WW, Ex.Pw4/XX, Ex.Pw4/YY, Ex.Pw4/ZZ, Ex.Pw4/A-3, Ex.Pw4/A-4, Ex.Pw4/A-5, Ex.Pw4/A-7, Ex.PW4/A-13, Ex.Pw4/A-14 and Ex.Pw4/A-15.
C C NO. 38/2001 34/55 3574 Prosecution has also examined PW1 Shri Premnath who has proved statements of account no. 594, cheque no.598381 dated 25.10.1994 for Rs.10,000/-, CR. Voucher dated 25.10.1994 for Rs.10,000/- which are Ex.PW-1/A, Ex.PW-1/B, Ex.PW-1/C respectively. PW-1 has also proved Ex.PW-1/D, Ex.PW-1/E, Ex.PW- 1/F, Ex.PW-1/G. Ms. Meera Sriniwasan, PW-2 has also proved Ex.PW- 1/B & Ex.PW-1/C. 75 Ld. Defence counsel argued that PW4 in his cross examination has admitted that neither demand of money was made in his presence nor he had seen T R Bedi giving Rs. 10,000/- to Sh. S Satish Kumar or Sh. S Satish Kumar had accepted this amount. It is argued that PW 5 S P Bhai in his cross examination has admitted that his seat was at a distance of 15 yards from the cabin of S. Satish Kumar, therefore, he could not see the alleged transaction of exchange of money between T R Bedi and S Satish Kumar. It is also argued by Ld. Defence Counsel referring the statement of Sh. S P Bhai recorded U/s 161 Cr PC during the investigation that he has used word "He" for the person who had seen the alleged transaction of exchange of money and not "I " which proves that he himself had not seen the alleged transaction of exchange of money between both the accused. It is argued that Sh. S P Bhai has also been confronted with his statement recorded U/s 161 Cr PC Ex PW5/DA in this regard but he could not give any satisfactory explanation, therefore, his evidence should not be relied upon.
76 I have gone through the relevant portion of cross examination of PW5 S P Bhai which is as under:
C C NO. 38/2001 35/55 36"Mr. J K Sharma remained posted from 1994 to 1996 in this branch. Whenever Sh. J K Sharma was on duty he would normally accompany me in my car as his house was on the way. Cabin of accused S Satish Kumar was at a distance of 15 yards from my seat. The cabin of S Satish Kumar was a closed cabin with transparent glass. I cannot tell the number of times, Mr. Bedi might have visited me in October, November, 1994. I shall not be in a position to tell the dates of his visits. I cannot tell the date when S Satish Kumar demanded loan aforesaid. (Vol. That it was at the time when S Satish Kumar wanted to buy a car). S Satish Kumar had obtained a loan for purchase of car from the bank. I cannot tell the date when T R Bedi informed me that S Satish Kumar had asked for a loan from him. I cannot tell the amount for which the car was purchased by S Satish Kumar. The cabin and the activity inside the cabin of Satish Kumar were visible from my seat. I cannot tell the amount withdrawn by T R Bedi in October, November, 1994".
77 It is correct that in the statement dt. 8.12.98 of PW5 Sh. S P Bhai recorded U/s 161 C r P C word "He" has been used and not "I". Relevant portion of his statement recorded U/s 161 Cr PC is as under:
"I further state that sometime during October, November, 1994 Mr. S Satish Kumar the then Chief Manager requested me two - three times to lend Rs. 10,000/- to him since he was in need of this amount for the purchase of car. I politely declined. The same day Tilak Raj Bedi came to the bank and after some official dealings Sh. Bedi told me that Sh. S SatishKumar had demanded Rs.10,000/- from him, which had fallen short for the purchase of Car. After few minute he saw Tilak Raj C C NO. 38/2001 36/55 37 Bedi giving Rs.10,000/- to S Satish Kumar after he had withdrawn money from the bank. Shri Tilak Raj Bedi had also subsequently confirmed to him about the payment of Rs. 10,000/- to S Satish Kumar for purchase of Car. After sometime I narrated this matter to J K Sharma, Manager of the Branch."
78 Sh. S P Bhai has appeared in this court as PW5 and deposed in this regard also. A statement recorded U/s 161 Cr PC is not substantive evidence, what a witness deposed in the court is substantive piece of evidence. Relevant portion of his statement in this regard is as under;
"I was interrogated by the CBI officer 7-8 times. I cannot tell the interval of my visit to CBI office. I cannot tell the year when I had been interrogated by CBI officer 7-8 times. I must have told CBI Officer that I had seen T R Bedi paying money to S Satish Kumar. (Confronted with the statement Ex PW5/DA, portion A to A. The Ld. Sr. PP submits that the letter "He" at point X is a clerical mistake whereas the Ld. Defence counsel submits that he refers to some third person. Objected to be decided at final stage). I told the matter of payment of Rs. 10,000/- to Shri J K Sharma on the same day."
79 In this regard Sh. J K Mehta, IO of this case, has appeared in the witness box as PW13. Mr. Mehta had recorded statement of S P Bhai U/s 161 Cr PC. In this regard he has stated as follows:
"During the course of investigation of this case I had also recorded the statements of various witnesses J K Sharma, S K Abrol, SP C C NO. 38/2001 37/55 38 Bhai, A K Dhar and others, whatever they stated. I have also seen Ex PW5/DA which is further statement of Sh. S P Bhai recorded on 8.12.98 by me and it bears my signatures at point A. In this statement the letter/word "He" at point X is a typographical mistake. Actually it should be "I" instead of "He" at point X."
80 In view of above discussion and after going through the entire statement of PW 5 S P Bhai recorded in this court and U/s 161 Cr PC this court is of opinion that word "He" has been written due to typographical error for word "I", which is used for PW5 S P Bhai himself.
81 PW5, in this regard, has specifically deposed as follows:
"Mr. Tilak Raj Bedi used to meet me regarding the account of M/s Priya Textiles. In the month of October/ November 1994 accused Satish Kumar had asked me to ledn Rs. 10,000/- for purchasing his car, which had falling short. I refused to give that amount. On the same day, accused Tilak Raj Bedi came to the bank for business dealing. After business dealing, accused Tilak Raj Bedi told me that accused Satish Kumar has demanded some money i.e. Rs. 10,000/- for purchase of car, which have fallen short. I came to know that Tilak Raj Nedi had withdrawn the amount from his account and gave Rs. 10,000/- to accused Satish Kumar. (Objected to as hear say. I had seen of giving money by Tilak Raj Bedi to accused Satish Kumar. I know Shri J K Sharma, who was Manager during that period. In Mayapuri Branch. Sometimes, he used to accompany me in my car after bank hours and I used to drop him. I had a general talk with Sh. J K Sharma with regard to C C NO. 38/2001 38/55 39 the aforesaid amount of Rs.10,000/- given by Tilak Raj Bedi to accused Satish Kumar."
82 His statement has also been corroborated by PW4 J K Sharma and documentary evidence. Following portion of the statement of PW4 J K Sharma, in this regard, is as under:
"During 1995, the overdue position of accounts of M/s Priya Textiles was a matter of serious concern and our higher authorities had ordered for the special inspection in the matter. During that time this was the matter of discussion with the fellow officers in the branch. Mr. S P Bhai had once informed that in 1994 Mr. S Satish Kumar, the then Chief Manager had asked for Rs.10,000/- for arranging the purchase of a car, to which he expressed his inability to lend. However, he had requested Mr. T R Bedi to help him financially in this regard. (Objected to as hearsay)."
83 From the above statement of PW5 and PW4 it is well proved that at the relevant time, both these persons used to travel in the car of PW5 Sh.. S P Bhai and during the conversation PW5 had disclosed this fact to PW 4. PW5 has categorically deposed that he had seen T R Bedi giving Rs.10,000/- to accused S Satish Kumar. PW5 in his cross examination has specifically stated that glasses of cabin of S Satish Kumar were transparent and the activity inside the cabin of S Satish Kumar were visible to him from his seat. Thus, there is no merit in the argument that from 15 yard distance Mr. S P Bhai could not notice the transaction between A-1 and A-2. Moreover, PW5 S P Bhai has stated C C NO. 38/2001 39/55 40 the distance of 15 yards on the basis of his assessment, but has not given the exact distance.
84 This version has also been corroborated from the fact that A-1, on 25.10.94 had given a self cheque of Rs.10,000/- Ex PW1/B which was presented to PW1 for encasement but the amount of Rs.10,000/- was not collected by Sh. S Satish Kumar till the closure of banking hours , therefore, the amount of Rs. 10,000/-was re-credited in the account of A-1.
85 PW1 has also deposed that A-1 had allowed temporary overdrafts of two cheques Ex PW2/D and Ex PW2/E of Rs.25,000/- each on 25.10.94 in favour of the party and the payment was made by this witness in cash to the party i.e. to accused T R Bedi. It is also proved on the file that this temporary overdrafts facility was granted by A-1 to A-2 when there were negligible balance in the relevant accounts and these accounts were not enjoying overdraft facility.
86 Shri Satish Kumar has admitted in his statement U/s. 313 of Cr. PC issuing of cheque Ex.PW-1/B from his account no. 594 and not collecting of the payment against this cheque and also to allow temporary/draft by making payment vide Ex.PW-1/D dated on 25.10.1994 for Rs. 25,000/- pertaining to account . No.3335 of M/s. Priya Export. Accused Satish Kumar has also allowed the payment of Rs. 25,000/- (temporary/draft) vide cheque no. 577942 Ex. PW-1/E dated 25.10.1994 pertaining to account . no. M/s. Priya Textile.
C C NO. 38/2001 40/55 4187 While appreciating evidence of a witness court has to read his statement as a whole and in case it reaches to the conclusion that the evidence of a witness has a ring of truth it can be relied upon. The Hon'ble Supreme Court in case State of UP V/S M.K. Anthony, AIR 1985 SC 48 has laid down the principle for appreciating the evidence of a witness as under:
" While appreciating the evidence of a witness the approach must be whether the evidence of the witness read as a whole, appears to have a ring of truth. Once that impression is formed, it is undoubtedly necessary for the Court to scrutinize the evidence more particularly keeping in view the deficiencies, draw backs and infirmities, pointed out in the evidence as a whole and evaluate them to find out whether, it is against the general tenor of the evidence given by the witness and whether the earlier evaluation of the evidence is shaken as to render if unworthy of belief. Minor discrepancies of trivial matter, not touching the core of the case, hypertechnical approach by taking sentence torn out of context here and there from the evidence, attaching importance to some technical error committed by the investigating officer not going to the root of the matter, would not ordinarily permit rejection of evidence as a whole."
" Their Lordships further observed:
" Unless there are reasons weighty and formidable it would not be proper to reject the evidence on the ground of minor variations of infirmities in the manner of trivial details. Even honest and truthful witnesses may differ in some details unrelated to the main incident because power of observation, retention, and reproduction differ with individuals. Cross examination is an unequal dual between the rustic and refined lawyer."
88 From the above discussion it is proved on the record that statement of PW5 in this regard have a ring of truth and is duly corroborated by PW4 and from documentary evidence. There is no C C NO. 38/2001 41/55 42 merit in the argument raised on behalf of accused in this regard. From the testimony of witnesses and above referred Exhibited documents prosecution had established its case that accused Satish Kumar had demanded and obtained amount of Rs.10,000/- from accused Tilak Raj Bedi for the purchase of Maruti Car.
89 It is argued on behalf of A-1 that he had not /withheld/ concealed any information while recommending enhancement of loan/ limit to M/s. Priya Textile. A-1 had filled in the prescribed proforma of the bank and all information as required in the format has been furnished. I have carefully gone through D-7 Ex.PW4/H, the process note format for large borrowal accounts. It is a detailed proforma column VI of which is of "brief history". On page 6 of this proforma A-1 had given the turn over of project and marketing facility etc. There are various columns in it which requires disclosure of the soundness of the borrower. Thus, A-1 was duty bound to disclose the fact of account of borrower of Priya Textile was highly irregular at the relevant time.
90 It is argued on behalf of A-1 that he was chief Manager of the bank. Cheque dishonored register was dealt by the clerical staff of bank hence, he had no occasion to have any information with regard to dishonoring of the cheque of M/s. Priya Textile / irregularity of its accounts. It is also argued on behalf of A-1 that he acted on the advice of his Asst. Manager, Sub-Manager and Manager. Hence, no concealment of fact in this regard can be attributed to him. A-1 admittedly was the Chief Manager of the bank who had forwarded the enhancement proposal of the loan in question. Being the chief Manager he was duty bound to go through the entire facts and circumstances of the matter before C C NO. 38/2001 42/55 43 forwarding the enhancement proposal. Being the chief Manager 'A-1 was also duty bound to verify the correctness of the information submitted to him by his subordinates. There is no merit in this argument.
91 There is no merit in the arguments of Ld. Defence counsel for A-1that he had not favoured illegally A-2 by not obtaining additional collateral security because there was no such directions. From Ex.PW4/I it is clear that limit was enhanced subject to obtaining additional collateral security of the value of around Rs. 25,00,000/- within three months. The relevant clause (3) of it is as follows;
"3. The branch shall obtain additional collateral security of the value of around Rs. 25.00 lacs within next three months."
92 The distinction between mere breach of contract and the offence of cheating is a fine one. It depends upon the intention of the accused at the time of inducement which may be judged by his subsequent conduct also. Mere breach of contract cannot give rise to criminal prosecution U/s 420 IPC, unless fraudulent or dishonest intention is shown right at the beginning of the transaction i.e. the time when the offence is said to have been committed.
93 Intention is defined as the purpose or design with which an act is done. Intention is an internal state of mind. Sometime it may be expressed sometime it may be implied. Implied intention is to be inferred from the acts and conducts of the parties . It is on the principle that every man knows the consequences of his act or conduct. If the consequences are foreseen as the certain results of the doer acts, it shall be taken as intended. Sometimes the intention is imputed from the act or C C NO. 38/2001 43/55 44 the consequences. If a particular act has been done, the law will presume that the person doing it has the intention to do it without the enquiry as to whether actually he had the intention or not. From the above discussion it is clear that A-1, being a public servant, at the time of moving proposal for enhancement of limit/loan in connivance & conspiracy of A-2 had malafidely concealed the material information, abusing his official position, in order to obtain pecuniary benefits to A-2.
94 A-1 had not disclosed the fact that account of M/s Priya Textiles was highly irregular and its cheques were being dishonored because of insufficiency of funds in the account, in ExPW4/H Process note for enhancement of the PCL/LC. Thus, dishonest intention of accused at the time of processing enhancement limit is proved beyond reasonable doubts. It is also proved on the file that on 25.10.94 A-1 had received Rs.10,000/- from A-2 for purchasing a second hand Maruti Car. It is also proved on the file that A-1 in connivance of A-2 on 18.9.95 had tampered with confidential report Ex PW4/A-16. All these facts prove the existence of dishonest intention of A-1 and A-2 at the time or around the time of moving of enhancement note Ex PW4/H. It is also proved that A-1 had not obtained additional collateral security of value of Rs.25 lacs in terms of ExPW4/I and disbursed the enhanced amount without obtaining the same.
95 Our Hon'ble Supreme Court in Tulsi Ram Vs State of UP AIR 1963 SC 666 has held that when an allegations is made that a person was dishonestly induced another to par with property what has to be considered whether by his act the offender has caused a wrongful loss to the person who parted with the property orhas made a wrongful gain to himself. It then pointed that both the element of wrongful loss and C C NO. 38/2001 44/55 45 wrongful gain need not necessarily present in each case in the following words:
" These are two facets of the definition of dishonestly and it is enough to establish the existence of one of them. The law does not require that both should be established."
96 Viewed in that prospective, there can be no difficulty in holding that the borrowers in each case had committed the offence of cheating . Even though each advancement of loan was made on the security of property and on account of it there had been no loss to the bank. Yet it follows that each of the borrowers had made a wrongful gain to himself by making dishonest representation tot he bank in getting the loan amount. Had the borrowers told the bank even in the beginning that they were not going to dig any well or that they were going to buy only old engine, the bank would have not advanced money to them. There can therefore, be no doubt that the borrowers had gain wrongfully by obtaining the loan amount from the bank on false pretEx. The offence committed by them clearly satisfied the requirement so Section 415 IPC and therefore the State is justified in its contention that the acquittal of borrowers in each case by the trial magistrate is wrong and erroneous."
97 Hon'ble High Court of Madras in State Vs Ramados Naidu 1977 CRI. L. J. 2048 has observed as follows"
" Cheating - Ingredients explained- Accused persons by fraudulent representation obtained loan from the Bank- Held, accused were guilty of offence of cheating."
98 In the instant case the accused persons obtained loans from the banks by making fraudulent representation to the bank. Therefore, even though each advancement of loan was made on the security of p;property and on account of it there had been no loss to bank yet it follows that each of the borrowers had made a wrongful gain to himself by making dishonest representation to the bank in getting the loan C C NO. 38/2001 45/55 46 amount. Therefore the borrowers in each case had committed the offence of cheating.
99 Our Hon'ble Supreme Court in Tammineedi Bhaskara Rao & Ors. Vs. State of A P & Anr. 2007 CRL. L J 1204 has held as follows:
"The definition of cheating contains two classes of acts which the person deceived may be induced to do. Firstly, he may be induced fraudulently or dishonestly to deliver any property to any person or to consent that any person shall retain any property. The second class of acts is the doing or omitting to do anything which the person deceived would not do or omit to do if he/she were not so deceived. In the first class of acts, the inducement must be fraudulent or dishonest and in the second class of acts, it must be intentional but not fraudulent or dishonest. "Deceiving" means causing to believe what is false or misleading as to a matter of facts or leading into error. Whenever a person fraudulently represents as an existing fact, that which is not an existing fact, he commits deception. The person cheated must have been intentionally induced to do an act which he would not have done, but for the deception practiced on him. The intention at the time of the offence and the consequence of the act for omission has to be considered. The damage which is caused by the act or omission must be direct, natural or a probable consequence of the induced act. The person deceived must have acted under the influence of the deceit. It is necessary that harm should be caused to the person deceived. In the present case, the allegations in the complaint, in relation to "cheating" under sections 417, 418 and 420, IPC are that the accused had cheated complainant with C C NO. 38/2001 46/55 47 knowledge that they were using her money, influence and position in the USA for their gain, causing wrongful loss to the complainant in every aspect of her life. Accepting as true the allegations that the intention of the accused was that the main accused should use his marriage, with the complainant to go to the USA and to make them part with their money to ask his studies, stay in the USA and as dowry, in effect, the complainant and her parents were induced to do something which they would not have done had they not been so deceived. It cannot, therefore, be said that the ingredient of "cheating" are not attracted, even primafacie".
100 It is argued on behalf of A-2 that bank had filed a suit for recovery against the accused in DRT prior to lodging of this FIR. A-2 had compromised the matter in DRT and had paid all the amount to bank in terms of compromise. Ld. Defence Counsel further argued that in view of compromise arrived between the parties present criminal proceedings do not survive. In support of his arguments he has placed reliance on Ramesh Chand Gupta Vs. Union of India, 2009 (4) AD (Delhi) 381 wherein it is held as follows:
"Penal Code, 1860 - Sections 420, 465, 468, 471, 34 & 120-B- FIR-Quashing of, valid in case of absence of ingredients of offence - Dispute of Civil nature - Offences under Sections 420/ 465/ 468/ 471/ 34/120-B IPC - Petitioner, President and members of governing body of society - Dispute involving induction of new members without proper procedure and without obtaining sanction of other members, specially, when complainant was admittedly secretary of society at relevant time - Complainant found signing minutes of governing body without recording the objection to enrollment of new members when Petitioner-President was empowered to enroll new members - Petitioner- President, accordingly enrolled ten members whose names were squeezed in between space left by complainant while signing minutes - Why said space was left, remained as a mystery and probably same could not be C C NO. 38/2001 47/55 48 solved -Investigating Officer filed a closure report before MM - Minutes subsequently found to be approved in second meeting which were also approved minutes of meeting dt. 20.5.1996, 15.6.1996 and 26.7.1996 - He never raised any objection to enrollment of new members by President in any of these meetings, duly attended by him - Further, nothing available one record to show that petitioners concealed facts from complainant - Material also did not reveal that petitioners fabricated minutes for purpose of cheating complainant i.e. to cause wrongful loss to complainant and wrongful gain to themselves - nothing placed on record to show that minutes were fraudulently used as genuine by petitioners - Complaint found to be filed in 2005 i.e. after about nine years of enrollment of new members or alleged commission of forgery and fabrication in minutes by petitioners, specially petitioner-President - Civil litigation inter se parties started somewhere in 2001, dismissed utpo Supreme Court - Complainant found raising same defences, as are his allegations in FIR in all civil suits - Crux of dispute which existed and was bone of contention decided in civil suits was in regard to election as well as appointment of new members - This dispute resurrected by complainant in form of impugned FIR - Police failed to arrest petitioners in absence of concrete evidence - In view of above, ingredients of cheating and forgery prima facie not made out - Findings of civil court regarding filing in of names of new members in space in between proceedings and signatures of complainant, could be said to be relevant - FIR and consequent summoning order, quashed - Evidence Act, 1872 - Sections 41 to 43 - Criminal Procedure Code, 1973 - Section 482 - Civil Procedure Code, 1908 - Section 9."
101 There is no dispute with the preposition of law laid down in the above cited authority, however, as discussed above facts and circumstances of our case are entirely different than the above cited authority. Abuse of the official position by A-1 for obtaining illegal pecuniary gain by corrupt means in favour of A-2 is well proved in our case. Causing of wrongful loss to the bank and wrongful gain to A-2 by A-1 is also proved in this case. It is also proved that A-1 had obtained Rs. 10,000/- from A-2. It is also proved that A-1 at the instance of A-2 C C NO. 38/2001 48/55 49 had tampered with the confidential report. It is well settled legal preposition that a party can avail civil and criminal proceedings simultaneously if permissible, as per law. In this case, cause of action in both the proceedings are different, hence both these proceedings can be availed by the bank simultaneously.
102 Hon'ble Supreme Court in CBI Vs. A Ravi Shanker Prashad, Crl. Appeal No.1080 to 1085 of 2009 decided on 15.5.09 in para No.46 has observed as follows:
"Before parting with the case we would like to observe that mere repayment of loan under a settlement cannot exempt the accused from the criminal proceeding in the facts of this case."
103 Hon'ble Supreme Court in Rumi Dhar Vs. State of West Bengal & Anr. Criminal Appeal No.661 of 2009 decided on 8.4.2009 has held that criminal proceedings cannot be quashed merely on the ground that settlement had arrived in a civil case and entire amount has been paid. Similar view has been taken by our Hon'ble High Court in Rajeev Khanna Vs. State, Criminal Misc. Main 2238/2009 decided on 1.5.2009 and Dhanpat Bothra Vs. State of Delhi Govt. of NCT of Delhi & Anr. 2008 IX AD (DELHI) 495.
104 Accused T R Bedi in this case also had gone to Hon'ble High Court for getting these proceedings quashed on the ground that he had paid the entire amount, vide Crl. M (C No.1139/2009, but Hon'ble High Court vide detailed order running in 19 pages after relying upon and discussing all the authorities cited before the Hon'ble High Court and now in this court has dismissed the petition of accused on 9.10.2009. In these circumstances there is no merit in this argument.
C C NO. 38/2001 49/55 50105 It is correct that A-2 had furnished collateral security of four properties initially but he cannot escape the criminal liability on this ground alone because additional securities have also to be furnished in terms of Ex PW4/I because of enhancement of limit.
106 Though to establish the charge of conspiracy there must be agreement, there need not be proof of direct meeting or combination , nor need the parties be brought in each other's presence; the agreement may be inferred from the circumstances raising presumption of a common concerted plan to carry out the unlawful design.
107 Conspiracy hatched in secrecy and executed in darkness. In a case of conspiracy, it is not expected from the prosecution that it will produce evidence to show that conspirators executed agreement to commit crime before the witnesses to prove the existence of conspiracy. Conspirators take all precautions to keep their plan secret hence prosecution cannot produce direct evidence to prove agreement to commit conspiracy.
108 It is not an ingredient of the offence of criminal conspiracy that all the parties should agree to do a single illegal act. It may comprise the commission of a number of acts. The entire agreement must be viewed as a whole and it has to be ascertain as to what in fact the conspirators intended to do or the object they want to achieve.
109 The agreement to conspire may be inferred from circumstances, which raised a presumption of a concerted plan to C C NO. 38/2001 50/55 51 carryout an unlawful design / act . Conspiracy need not be established by proof which actually brings the party together; but may be shown like any other fact, by circumstantial evidence.
110 In Kher Singh Vs State AIR 1988 SC 1883 it is observed as follows:
" Generally, a conspiracy is hatched in secrecy and it may be difficult to adduce direct evidence of the same. The prosecution will often rely on the evidence of acts of various parties to infer that they were done in reference to their common intention. The prosecution will also more often rely upon the circumstantial evidence. The conspiracy can be undoubtedly proved by such evidence direct or circumstantial. But the Court must require whether the two persons are independently pursuing the same end or they have come together to the pursuit of the unlawful object. The former does not render them conspirators, but the later does. It is however, essential that the offence of conspiracy required some kind of physical manifestation or agreement the express agreement however need not be proved. Nor mutual meetings of the two persons is necessary. Nor it is necessary to prove the actual words of communication. The evidence as to transmission of thoughts sharing the unlawful design may be sufficient. Conspiracy can be proved by circumstances and other material."
111 It is argued by Ld. Defence Counsel that there may be some illegalities in the operation of account for which departmental action would have been sufficient but there was no need of present criminal trial in any circumstances. There is difference between irregularity and illegality as proved on this file and discussed above, the acts and conduct of both the accused was illegal and not irregular.
C C NO. 38/2001 51/55 52112 It is argued on behalf of accused that prosecution has not produced any evidence to prove that amount withdrawn by Sh. T R Bedi and Mrs. Kalpana Bedi was used for the purpose other than for which the loan was sanctioned. It is argued that the amount was used for purchasing raw material and for payment to the labour. From the foregoing discussion it is clear that prosecution has proved beyond reasonable doubts on the file that A-2 and his wife Mrs. Kalpana Bedi had withdrawn the amount in cash. It was in the special knowledge of A-2 and his wife for which they had utilised the amount. Thus, onus of proof was on A-2 to prove that amount was utilised for purchasing raw material and for payment to the labour. A-2 has not produced any evidence to prove it. In these circumstances there is no merit in this argument raised on behalf of A-2.
113 It is argued by Ld. Defence Counsels that prosecution has not produced any evidence to prove that A-1 had demanded money from A-2 or accepted the same from A-2. thus, no offence under P C Act made out. In this case a charge for the offence defined U/s 13 (1) (d) and punishable U/s13 (2) of P C Act, 1988 has been framed. In case U/S 13 (1) (d) of P C Act 1988 prosecution has to prove that :
i) That accused should be a public servant.
ii) That he should used some corrupt or illegal means or otherwise abused his position as a public servant, C C NO. 38/2001 52/55 53
iii) That the accused should have thereby obtained a valuable thing or pecuniary advantage for himself or for any other person.
A reading of this provision would make it ample clear that all the three wings of clause (d) of Section 13 (1) (a) are independent and alternative and this conjunctive for constituting the ingredient of the offence U/s 13 (1) (d) as is clear from the use of words or at the end of each sub clause. Thus, u/s 13 (1) (d) (I) obtaining any valuable thing or pecuniary advantage by corrupt or illegal means by a public servant in itself would satisfy the requirement of criminal mis conduct U/ 13 (1) (d) of P C Act, 1988. On the same reasoning "obtaining a valuable thing or pecuniary advantage merely by abusing official position" as contemplated u/s 13 (1) (d) (II) in itself would satisfy the ingredients of criminal mis conduct u/s 13 (1) (d) (II).
114 Without admitting, in alternative it is argued on behalf of accused that even if it is accepted that A-1 had received Rs.10,000/- from A-2, there is no evidence on the file that it was accepted as illegal gratification, rather there is evidence of prosecution itself that A-1 had demanded loan of Rs. 10,000/-from A-2. Thus, A-1 had not committed any offence as defined Under P C Act, 1988. According to CCS Conduct Rules, no public servant can have any financial dealing with a person to whom he is having official dealings without permission/information to his department. A-1 has not produced any evidence that he had taken the amount of Rs. 10,000/- as loan from A-2. In these circumstances there is no merit in this argument raised on behalf of accused.
C C NO. 38/2001 53/55 54115 In view of above discussion it is clear that for the offence U/s 13 (1) (d) proving of demand and acceptance of money by accused for himself, is not required. Demand of illegal gratification and its acceptance are the ingredients of Section 7 of P C Act, 1988. Thus, there is no merit in this argument raised on behalf of accused.
116 Prevention of Corruption Act is a social legislation enacted with the object to curb illegal activities of public servants, in these circumstances according to the law of interpretation of Statute, its provision should be interpreted so as to achieve its object. Our Hon'ble Supreme Court in Ram Singh Vs. State of MP (2000) 5 Supreme Court Cases-88 has held as follows:
"Prevention of Corruption Act, 1988 - Nature and interpretation of -Held is a social legislation to curb illegal activities of public servant and should be liberally construed so as to advance its object and not liberally in favour of the accused - interpretation of Statutes -Particular statutes or provisions - Penal statute - Social Legislation - Interpretation of".
117 Our Hon'ble Supreme Court in State of Punjab Vs. Pohla Singh, 2003 (3) CCC 75 has held as follows:
"Appreciation of evidence - The prosecution is not supposed to meet every hypothetical question raised by the defence -If crime is to be punished in a glosseme way niceities must yield to realistic appraisal."
118 In view of above discussion it is proved beyond reasonable doubt from the evidence produced by the prosecution that accused S Satish Kumar, who was then working as Chief Manager, Syndicate Bank, Mayapuri Branch, who by abusing his official position in connivance and conspiracy with his co-accused obtained pecuniary C C NO. 38/2001 54/55 55 advantage illegally or by corrupt means to Sh T R Bedi/ M/s Priya Textiles and caused wrongful loss to the bank and wrongful gain to Sh. T R Bedi and M/s Priya Textiles. In these circumstances this court is of opinion that prosecution has proved its case beyond reasonable doubts against accused, hence accused S Satish Kumar and T R Bedi are convicted for the offences punishable U/s 120B r/w 420IPC and U/sec. 13( 2) r/w 13 (1) ( d) of P C Act, 1988. Accused S Satisxh Kumar is also convicted for the substantive offence U/s 13 (2) r/w 13 (1 )(d) of P C Act, 1988 and accused Tilak Raj Bedi is also convicted for the substantive offence punishable U/s 420 IPC.
announced in open court ( V. K. Maheshwari) On this 20th March, 2010 SPECIAL JUDGE: DELHI C C NO. 38/2001 55/55 56 IN THE COURT OF V .K .MAHESHWARI SPECIALJUDGE: TIS HAZARI: DELHI Corruption Case No. 38/2001 CB I Vs. 1 Sh. S Satish Kumar s/o Sh. P C Rao, r/o TC-7/1707 Suraj, Karovilla Road, Srichitra Nagar, Pangoda, Thiruvanantha Puram, Kerala 2 Tilak Raj Bedi s/o Late Swaran Singh, r/o 854/2, Punjab Mata Nagar, Ludhiana, Punjab. Date of Institution 5.7.2001 R.C No. 3 (E)/98/CBI/BS & FC/DLI/N D ORDER ON SENTENCE:
Vide my separate judgment dated 20.3..2010 accused S Satish Kumar and T R Bedi were convicted for the offences punishable U/s 120B r/w 420IPC and U/sec. 13( 2) r/w 13 (1) ( d) of P C Act, 1988. Accused S Satish Kumar was also convicted for the substantive offence punishable U/s 13 (2) r/w 13 (1 )(d) of P C Act, 1988 C C NO. 38/2001 56/55 57 and accused Tilak Raj Bedi was also convicted for the substantive offence punishable U/s 420 IPC.
Arguments on sentence heard. It is argued on behalf of convict S Satish Kumar that he is not a previous convict. He is Senior citizen of 66 years old . He is facing this trial since 2001 .
He had regularly attended this Court during the trial. He used to come from Hyderabad to attend the Court proceedings inspite of his bad health. He has never tried to delay the proceedings. He has been punished by his employer by compulsorily retiring him in the year 1999. He has lost his pension and other benefits. He has to look after his 90 years old and infirm mother, who generally remains affected with old age diseases. It is argued that this case was register only because the loan taken by the co-accused was not refunded in time . In these circumstances, lenient view may be taken against him.
It is argued on behalf of convict Tilak Raj Bedi that he is not a previous convict. He remained in custody for three months. He is facing this trial since 1998 . He has been regularly attending this C C NO. 38/2001 57/55 58 Court. He has never tried to delay the proceedings. He is sole bread earner of his family. He has to look after his son who is appearing in 10+ 2 examination . His daughter is of marriageable age. He is engaged in manufacture of ready made garments in Ludhiana. He has employed 100 persons, in case he will be sent to jail his entire manufacturing unit will come to standstill and families of the employees will also suffer. He has paid all the outstanding loan amount to the bank after settling the matter in DRT. In these circumstances, lenient view may be taken against him.
It is argued on behalf of CBI that convict S Satish Kumar, who was the then working as Chief Manager, Syndicate Bank, Mayapuri Branch, by abusing his official position in connivance and conspiracy with his co-accused obtained pecuniary advantage illegally or by corrupt means to Sh T R Bedi/ M/s Priya Textiles and caused wrongful loss to the bank and wrongful gain to Sh. T R Bedi and M/s Priya Textiles. They should be awarded maximum punishment and heavy fine may be imposed on them keeping in view of the provision of Section 16 of PC Act.
C C NO. 38/2001 58/55 59Corruption is a scourge that not only severally affects progress and development in the society but also poses a grave challenge to governance itself. The United Nations Global Reports on Crime and Justice quotes public opinion surveys in a number of countries, to point out that citizenry in those countries ranks corruption as one among the five most important problems facing their society. More importantly, the public in such countries seriously questions the ability of the Criminal Justice Administration to provide any bulwark against corruption. The consequence of such perceptions is a growing public cynicism and distrust in almost all the Government institutions, which is a matter of serious concern.Unfortunately, India ranks prominently high in the list of countries plagued by corruption. Anti Corruption measures in India are perceived by the people to be weak and ineffective. More than corruption itself , it is the widespread public perception that corruption is not or would be not punished, that is detrimental to the society.
C C NO. 38/2001 59/55 60After considering all the arguments raised before me I consider it proper to award convict S Satish Kumar Three years RI along with a fine of Rs.50,000/- ( Fifty Thousand only ) I D three Months S I U/S U/s 13 (2) r/w 13 (1 )(d) of P C Act, 1988 and Three Years RI along with a fine of Rs 50,000/- (Fifty Thousand ) I D Three Months S I U/S 120-B r/w Section 420 of IPC r/w Section 13 (2) r/w 13 (1 )(d) of P C Act, 1988 .
Convict T R Bedi is awarded Three years RI along with fine of Rs 1,00,000/- (One lac ) I D three months S I U/S 120-B r/w 420 of IPC r/w Section 13 (2) r/w 13 (1 )(d) of P C Act, 1988 and Three Years RI along with a fine of Rs.1,00,000/- ( One lac ) I D Three Months S I U/S 420 IPC .
Both the sentences will run concurrently. Benefit of Section 428 Cr P C be also given to accused.
A copy of judgment and this order on sentence be given to both the convicts free of costs. File be consigned to RR.
ANNOUNCED IN OPEN COURT (V K MAHESHWARI) C C NO. 38/2001 60/55 61 TODAY ON 25th March. 2010 SPECIAL JUDGE: DELHI C C NO. 38/2001 61/55