Delhi District Court
In Re: Cbi vs . Santosh Kumar Bagla Etc. on 4 June, 2014
IN THE COURT OF GAURAV RAO: ADDITIONAL CHIEF METROPOLITAN
MAGISTRATE: PATIALA HOUSE COURTS : NEW DELHI
In Re: CBI Vs. Santosh Kumar Bagla etc.
RC1(E)/2004/EOW1/DLI dated 16.01.2004
U/s 420/120B IPC
Date of Institution of Case : 30.04.2007
Judgment Reserved for : 04.06.2014
Date of Judgment : 04.06.2014
JUDGMENT:
(a) The serial no. of the case : 6/1/13
(b) The date of commission of offence : 20002001
(c)The name of complainant : Sh. K. Subbaraman, Zonal
Manager, Bank of India, New
Delhi.
(d) The name, parentage, of accused : 1. Santosh Kumar Bagla s/o Late Sh. Laxmi Narain Bagla, R/o X14A, Green Park, New Delhi.
2. Vimal Joshi s/o Sh. R.L. Joshi, R/o 355, SFS Hauz Khas Apartment, Hauz Khas, New Delhi.
CBI Vs. Santosh Kumar Bagla etc. 1/12 (e) The offence complained of : U/s 420/120B IPC (f) The plea of accused : Pleaded not guilty (g) The final order : Both accused persons Acquitted (h) The date of such order : 04.06.2014 Brief statement of the reasons for the decision:
1. In brief the case of the prosecution is that a complaint dated 29.12.2003 was received by the CBI from Sh. K. Subbaraman, Zonal Manager, Bank of India, New Delhi against Santosh Kumar, Arun Kapoor and Vimal Joshi, all Directors of M/s Bhagya Products (P) Ltd. (M/s BPPL). On the basis of the complaint the present FIR No. RC1(E)2004EOW1/DLI dated 16.01.2004 was registered.
2. The allegations appearing in the complaint are that in April 2000 M/s BPPL approached the Bank's Overseas Branch, Barakhamba Road, New Delhi for sanction of credit facilities to execute an export order of Optical Metal Frames received by M/s BPPL from M/s MMTC Ltd. against the export order received by MMTC Ltd. from M/s Zirkoon, General Trading (LLC), Dubai. The genuineness of the export order was confirmed by the Branch from Dr. BBL Madhukar, Director and Sh. K.D. Pandey, Deputy General Manager, MMTC Ltd.
CBI Vs. Santosh Kumar Bagla etc. 2/12 New Delhi. The credit proposal of Rs. 50 lacs as packing credit limit (PCL) was processed and sanctioned at the Branch level on 20.06.2000. The facility (PCL) was secured by the personal guarantee of the Directors of the firm and also by collateral security of an immovable property i.e. property situated as part of Khasra No. 298/32 measuring 525 Sq. Yards in Vill. Ghitorni, Kapasheda, New Delhi registered in the name of Santosh Kumar vide sale deed dated 03.06.2000. The property was overvalued by Sh. R.P. Gupta, Govt. Approved Valuer. Apart from the sanctioned PCL the concerned Branch/Bank also allowed overdraft facility of Rs. 5 lacs in C/D A/C of M/s BPPL in the pay order of Rs. 5 lacs was also issued in favour of M/s Protect Intrade Ltd. which was credited in the C/D A/C of the said company in the Central Bank of India, South Extn. Branch, New Delhi. It is alleged that the PCL of Rs. 50 lacs was siphoned off by the Directors of M/s BPPL through other current accounts of M/s Protech Intrade Ltd., sister concern of M/s BPPL, held in Central Bank of India and Innovate Cooperative Urban Bank Ltd, New Delhi without executing the export order.
3. It is further alleged that without making any exports, M/s BPPL again approached Overseas Branch of the respondent bank in August 2000 for sanction/release of additional PCL of Rs. 50 lacs on the ground that they could not raise unsecured loans and hence could not execute the export order. The additional PCL of Rs. 50 lacs was sanctioned by the branch on 19.09.2000 and the property situated as part of Khasra no. 298/32 measuring 500 Sq. Yards CBI Vs. Santosh Kumar Bagla etc. 3/12 registered in the name of M/s BPPL was mortgaged with the bank as collateral security towards additional PCL. It is alleged that this property was again overvalued by Sh. R.P. Gupta. It is alleged that the additional amount of Rs. 50 lacs of PCL was also siphoned off through the Current Accounts of M/s Protech Intrade Ltd. and M/s Plastic Processor in which the employees of Santosh Kumar were the Directors.
4. It is alleged that after availing PCL to the tune of Rs. 1 crore M/s BPPL again approached the Overseas Branch for additional PCL of Rs. 50 lacs which the bank was not inclined to sanction. However in the meanwhile on the request of M/s BPPL the accounts were transferred from Overseas Branch to Nehru Place Branch. In the so transferred branch of Nehru Place an additional PCL of Rs. 50 lacs was sanctioned on 22.01.2001 and an overdrawing in the account to the tune of Rs. 21.35 lacs was allowed and Rs. 20 lacs were released as PCL. However the additional amount i.e. Rs. 30 lacs of the Rs. 50 lacs PCL so sanctioned was not released as the company did not comply with the sanction conditions.
5. It is alleged that accused Santosh Kumar had approached the bank with dishonest intention to cheat the bank as he concealed his actual name i.e. Santosh Kumar Bagla and also suppressed the fact that he had association with a number of companies particularly with M/s Bhupinder Industries Ltd., having CBI Vs. Santosh Kumar Bagla etc. 4/12 large exposure in various banks/financial institutions. His name also appears in the list of borrowal accounts against which the banks/financial institutions have filed suits for recovery of funds of Rs. 1 crore & above as on 31.03.1999 published by RBI wherein he was shown as Director of M/s Bhupinder Industries Ltd. and M/s Bhupinder Capital & finance Ltd. The name of Shri Santosh Kumar Bagla also appears in the Head Office Circular on undesirable accounts vide HO IOM No. CRMD:PMR:200001/87 dated 25.05.2000 of the bank. Therefore he falsely declared in form CBD23 that his name does not appear in the defaulter list and his liabilities are Nil.
6. It is further alleged that disbursement of PLCs were made at their Overseas Branch as well as Nehru Place Branch, New Delhi by issuing pay orders in favour of the supplier M/s Protech Intade Ltd. and M/s Acme Mataliks Pvt. Ltd. The inquiries also revealed that the proforma invoice, letters and invoices bearing Nos. 212 dated 20.12.2000, 227 dated 03.01.2001 and letter dated 08.01.2001 of M/s Acme Metaliks Pvt. Ltd were bogus/fake as the said firm does not exist at the address D14/5, Phase I, DLF Gurgaon, Haryana as such it is a nonexistent firm.
7. Thus the accused persons cheated the Bank of India to the tune of Rs. 1.2 crores during the year 20002001 by obtaining the amount of PCLs fraudulently by using bogus/fake invoices and diverting the funds without CBI Vs. Santosh Kumar Bagla etc. 5/12 executing any export order.
8. Charge sheet was filed in the court on 03.04.2007 and vide orders dated 31.05.2007 the Ld. Predecessor of this court took cognizance of offence u/s 420 r/w section 120B IPC against accused Santosh Kumar Bagla and Vimal Joshi. Though the complaint was filed against Arun Kapoor, one of the Director of M/s BPPL and R.P. Gupta, Approved Valuer as well, however as reflected in para 14 of the charge sheet, during the investigation CBI could not find any criminality on their part and they were accordingly not sent for trial and were not summoned by the court as is reflected in orders dated 31.05.2007. Regarding the role of the bank officials it is reflected in para 13 that the competent authority of the Bank did not accord the sanction for prosecution of the bank officials and accordingly their names have not been included in the charge sheet.
9. After filing their appearance the accused persons were admitted to bail by the Ld. Predecessor of this court on 09.08.2012 and 11.10.2012 respectively.
10. Presently the matter is pending at the stage of consideration of charge however the accused persons have prayed for compounding of the offence on the basis of the settlement as arrived with the bank and statement of Sh. Satnam Singh, Senior Manager, Assets Recovery Branch, Bank of India as CBI Vs. Santosh Kumar Bagla etc. 6/12 recorded on 25.03.2014 coupled with Ex. A1.
11. The plea of compounding the matter is strongly opposed by Sh. Atul Sharma, Ld. Special PP for CBI. It is submitted by Ld. SPP for CBI that offence u/s 120B is non compoundable and therefore the only option open to the accused persons is to approach the Hon. High Court of Delhi for quashing of the FIR. Reliance was also placed on orders of the Hon. High Court of Delhi dated 17.05.2010 vide which the quashing petition was dismissed by Hon. High Court of Delhi.
12. Heard the parties and perused the records. After going through the material available on record, I am of the firm opinion that it is solely in the interest of justice that the matter is allowed to be compounded and present litigation brought to an end. The reasons are listed as under:
13. The matter as its stands today is already 7 years old. It is still pending at the stage of consideration of charge. The incident occurred in the year 2000 and the charge sheet was filed in the year 2007. 7 years period the accused persons have been appearing in the court is itself sufficient punishment for them.
14. The complainant bank has duly settled the matter with the accused CBI Vs. Santosh Kumar Bagla etc. 7/12 persons. I have perused Ex. A1 dated 25.03.2014 filed by Sh. Satnam Singh, the Senior Manager in this regard. Compromise in modern society is the sine qua non of harmony of orderly behaviour. In fact there can be nothing more satisfactory than an order based on compromise between the parties. Keeping the aspect into mind, it is always safer for the society that if parties want to live happily and peacefully, without no kind of illwill and enmity, they should be allowed to do so. This is also not the intention of law that no compromise should be allowed, let the parties fight and hurt each other. Some sacrifice can be made for ensuring peace and if the parties want to live peacefully the Court should not be a party to unnecessarily drag them into hostility.
15. The law seeks fair dealing, equity and redress of grievance for, these are the benefits of legal system. In Mrs. Shakuntala Sawhey v. Mrs. Kaushalya Sawhey and others (1980) 1 SCC 63, Hon'ble Krishna Iyer, J. aptly summoned up the essence of compromise in the following words: "The finest hour of justice arrives propitiously when parties, despite falling apart, bury the hatchet and weave a sense of fellowship of reunion. The power to do complete justice is the very essence of every judicial dispensation system. It cannot be diluted by distorted perceptions and is not a slave to anything, except to the caution and circumspection, the standards of which the Court sets before it, in exercise of such plenary and unfettered power inherently vested in it while donning the cloak of compassion to achieve the ends of justice".
16. Further reliance may be placed upon the observations made in CBI Vs. Santosh Kumar Bagla etc. 8/12 case titled as Madan Mohan Abbot v. State of Punjab, (SC), 2008(2) R.C.R .
(Criminal) 429 wherein it was held:
"Keeping in matter alive with no possibility of a result in favour of the prosecution is a luxury which the Courts, grossly overburdened as they are, cannot afford and that the time so saved can be utilized in deciding more effective and meaningful litigation".
17. Trial of the case shall be sheer wastage of public time and an exercise in futility. Continuance of proceedings would amount to misuse of process as there would be no fruitful outcome. As per the sociological school of jurisprudence to maintain harmony in the society is the basic objective of law. Resolution of dispute by way of compromise between two warring groups should be encouraged. (2007(3) RCR(Crl.) 1052 (P&H)(LB).
18. When the complainant bank has categorically stated that the dues of the bank have been duly paid along with the interest and it is no longer interested in pursuing the present matter, I find no reasons to continue with the present litigation which will be nothing but loss of precious judicial time.
19. As far as the contention of Ld. SPP for CBI is concerned that section 120B IPC is non compoundable suffice would be to say that when the substantive offence of cheating u/s 420 IPC has been compounded then section CBI Vs. Santosh Kumar Bagla etc. 9/12 120B of IPC i.e. a criminal conspiracy to commit the offence automatically becomes compoundable. Reliance may be placed on orders dated 13.02.2007 passed by Hon. High Court of Delhi in Jitender Rana and ors Vs. State 2007 Cri. L. J. 1641 and Mukesh D. Ambani Vs. State of Bihar 2007 Cri. L. J., 1565. Reliance may also be placed on Uday Singh and ors Vs. State of Rajasthan as decided on 09.09.2013 and Jiut Bandhan Vs. State of UP decided on 04.10.2007.
20. Regarding the observations made by Hon. High Court of Delhi in Crl. Misc No. 6955/2006 whereby the Hon. High Court of Delhi vide orders dated 17.05.2010 had dismissed the quashing petition of the accused persons suffice would be to say that the observations on account of subsequent developments does not estop the court from exercising its power u/s 320 Cr.P.C. I have perused the orders of Hon. High court of Delhi as above. The reasons for refusal to quash the FIR were three folds. First reason as reflected in paras 12 and 19 of the order was that the entire amount payable to the bank as per the settlement was not paid by the accused persons till the date of order i.e. 17.05.2010 as certain controversy arose between the parties regarding the title deeds/sale of property for satisfaction of the decree/payment of the settlement amount. However it is a matter of record that the entire payment has been paid now. Ex. A1 is categoric in this regard. Secondly the reference seeking sanction for prosecution of the bank officials was pending with the Central Vigilance CBI Vs. Santosh Kumar Bagla etc. 10/12 Commission. Its outcome was not known and as per the complaint allegations of conspiracy by the bank officials was there. Let that be the case it is reflected in the charge sheet now that no sanction was granted by the competent authority of the bank and the CVC endorsed the recommendations of bank authority of not according the sanction for prosecution of the bank officials while opining that the bank officials acted in normal course of business and no malafide or ulterior motive could be discernible. Furthermore when the bank officials have not been charge sheeted the CBI shall not be able to bring forth/prove the elements of "criminal conspiracy". Thirdly, the Hon. High Court had also made certain observations regarding the role of private persons. However, those private persons i.e. the government Approved Valuer and Arun Kapoor, one of the Director of M/s BPPL have not been charge sheeted as is reflected from charge sheet. In fact it is the case of the CBI itself that no criminality could be attributed to them. Hence I am of the firm opinion that the orders of the Hon. High Court of Delhi do not curtail the power of the court to compound the present offence. Moreover I fail to understand what purpose will be served by continuation of present litigation once the bank i.e. complainant party is not interested in pursuing the present litigation. It will be a futile exercise which will lead to sheer wastage of the valuable time of the court. Accordingly, in terms of affidavit dated 25.03.2014 i.e. Ex. A1 and as offence u/s 420 IPC is compoundable coupled with the fact the accused persons have voluntarily offered to and compensated the government to the tune of Rs. 50,000/ each towards the litigation expenses (vide CBI Vs. Santosh Kumar Bagla etc. 11/12 receipts no. 88100 and 88101), I in light of the observations made by Hon. High Court of Delhi in Jitender's case (supra) hereby allow the compounding of the offence. Matter stands compounded.
21. Accused persons i.e. Santosh Kumar Bagla and Vimal Joshi stand acquitted in terms of section 320 Cr.P.C.
22. I order accordingly.
Announced in the open court
on 04.06.2014 (Gaurav Rao)
ACMMII (ND)/New Delhi
CBI Vs. Santosh Kumar Bagla etc. 12/12
04.06.2014 CBI Vs. Santosh Kumar Bagla etc.
RC1(E)/2004/EOW1/DLI
Pr: Sh. Atul Sharma, Ld. Special PP for CBI.
Both accused are present on bail with their counsels. Vide my separate judgment announced today in the open court, matter has been compounded and accused persons have been acquitted of the charges in the present case.
Bail bond cancelled, surety discharged, endorsement if any be cancelled, original documents be returned as per rules and procedure.
Accused persons are directed to furnish fresh bail bonds u/s 437A Cr.P.C. within 2 days from today.
File be consigned to Record Room.
(Gaurav Rao) ACMMII (ND)/Delhi.
04.06.2014
CBI Vs. Santosh Kumar Bagla etc. 13/12