Delhi District Court
National Bank vs . M/S. Ramesh Kumar & Company And Others, on 30 November, 2018
IN THE COURT OF KOVAI VENUGOPAL
SPECIAL JUDGE, PC ACT (CBI) - 09, CENTRAL
TIS HAZARI COURTS, DELHI
CC No. 38/2011 (532264/2016)
R.C. No. 2(E)/06/CBI/EOW-II/ND
CNR No. DLCT-01-000206-2008
CENTRAL BUREAU OF INVESTIGATION
VERSUS
1. V.K. JOLLY (PUBLIC SERVANT)
S/O LATE SH. DHARAM DEV JOLLY
THE THEN SR. MANAGER
PUNJAB NATIONAL BANK
AZADPUR BRANCH
NEW DELHI.
R/O B-457, MAJLIS PARK
DELHI-110033. (DISCHARGED)
2. SH. D.K. MALHOTRA (RETD. PUBLIC SERVANT)
S/O LATE SH. R.D. MALHOTRA
R/O HOUSE NO. 36, SECTOR-E,
SAINIK COLONY
JAMMU.
3. SH. RAMESH KUMAR
S/O LATE SH. GURAN DIVAYA
PROP. M/S. DELHI HARYANA TRADING CO.,
M/S. HIM KASHMIR FRUIT CO.,
M/S. RAMESH KUMAR & CO.,
R/O A-2/384, 2nd FLOOR, SECTOR-8,
ROHINI, DELHI-110083.
4. SH. MAHESH SETIA
S/O SH. SHYAM LAL
PROP. M/S. MAHESH FRUIT CO.
R/O 72/C, BLOCK-AD, SOUTH,
PITAMPURA, DELHI. (PROCLAIMED OFFENDER)
CC No. 38/11(532264/16) 1 /91
Date of Institution : 21.08.2008
Date of Arguments : 20.11.2018
Date of Judgment : 30.11.2018
JUDGEMENT
1. This case was registered by the CBI on 31.05.2006 against accused persons, namely, (1) V.K. Jolly, (2) D.K. Malhotra (3) Ramesh Kumar and (4) Sh. Mahesh Setia on the basis of a written complaint received from Sh. Ved Prakash Deputy Zonal Manager, Punjab National Bank, Zonal Office (North), Delhi. The allegations against the accused persons namely V.K. Jolly and D.K. Malhtora, were that they had acted in violation of the Bank's Guidelines issued with regard to the advance against the uncleared cheques.
CASE OF THE PROSECUTION AS MENTIONED IN THE CHARGE SHEET
2. During the period from May 2001 to 08.07.2004, accused V.K. Jolly was posted as Senior Manager, Incharge, Punjab National Bank, Azadpur Branch, Delhi. Accused D.K. Malhotra the then Chief Manager, Punjab National Bank, Azadpur Branch, succeeded accused V.K. Jolly w.e.f. July 2004 but on 10.11.2004, his discretionary powers had been withdrawn. CC No. 38/11(532264/16) 2 /91
3. It has been alleged that cheques drawn by the borrowers on their allied /associates concerns, having accounts with other banks were purchased by the Bank. Further, in most of the cases, when the cheques were returned unpaid, the same were replaced by fresh cheques, while in very few cases, cash was deposited against unpaid cheques. It has been further alleged that in many cases, the cheques purchased by the Bank officials, which had been returned unpaid for want of sufficient funds were repurchased. The cheques purchased were beyond the sanctioned limits of the concerned parties/account holders and also beyond the discretionary powers of the Bank officials, who had ordered for its purchases. Moreover, the fact about the purchase of these cheques and subsequently received unpaid was not reported to the Regional Office. The Bank Officials thus, acted in violation of the Bank's guidelines issued with regard to the advance against uncleared effects and all the accounts are overdrawn and the total outstanding balance as on 31.03.2005 was Rs.348.59 lacs.
4. During the investigation, it has been revealed that as per the instructions /guidelines issued by the Punjab National Bank vide CC No. 38/11(532264/16) 3 /91 their Circular No. 130 dated 31.12.2002, the Senior Manager and the Chief Manager had discretionary powers to purchase cheques (DD Discounting) upto Rs. 3.75 Lacs and Rs. 20 Lacs respectively, in respect of genuine trade transactions and not qua the transactions accommodative in nature. Vide the said guidelines, Senior Manager /Chief Manager were also authorized to sanction clean overdraft /temporary overdraft to the extent of Rs. 30,000/- and Rs. One Lac respectively.
5. As per the prosecution case, the modus operandi adopted by the Bank officers in connivance with the private parties was by way of fraudulent purchases of cheques in the accounts, which were issued by their associates / sister concerns. In some of the cases, the beneficiary themselves had opened the account with other banks and had issued cheques in their favour. In the process, the parties used to get immediate cash and the bank on its part got the commission. It has been alleged that the practice of getting the cheques purchased was later on misused by the private parties in connivance with accused V.K. Jolly and after him, accused D.K. Malhotra and other officials of the Bank.
6. As per the prosecution case, the main persons in this fraud CC No. 38/11(532264/16) 4 /91 were Ramesh Kumar and Mahesh Satia, who had their current account with PNB, Azadpur, Delhi and they availed the facilities of DD discounting. During the incumbency of Sh. V. K. Jolly, the then Senior Manager, the DD discounting was limited to Rs.3.75 lacs in each account as per the vested power of Senior Manager. Sh. Ramesh Kumar and Sh. Mahesh Setia in criminal conspiracy with the bank officials got opened several other accounts with PNB, Azadpur, Delhi in the name of different firms under their proprietorship. This was done with a view to get more accommodation cheques purchased in each account as per the vested powers of the Incumbent Incharge. The following accounts were got opened by Sh. Ramesh Kumar and Sh. Mahesh Setia :-
(i) M/s. Him Kashmir Fruit Company Prop. Ramesh Kumar.
(ii) M/s. Delhi Haryana Trading Company Prop. Ramesh Kumar.
(iii) M/s. Ramesh Kumar & Company Prop. Ramesh Kumar.
(iv) M/s. Mahesh Fruit Company Prop. Mahesh Setia.
7. Investigation has further revealed that the above persons had conspired individually and severally in as much as they CC No. 38/11(532264/16) 5 /91 introduced the account of each other and also issued accomodatory cheques to each other. For the purpose of getting cheques purchased in the aforesaid accounts, the above persons needed accounts in other banks from where they could get issued cheques drawn in favour of aforesaid accounts. Accordingly, the above persons again managed to get open accounts in the name of themselves, their relatives or friends with other banks. The details of such accounts are as under:-
(i) CA No. 3662 of M/s. Delhi Haryana Trading Company Prop. Ramesh Kumar at J&K Bank Ltd. Azadpur, Delhi.
(ii) CA No. 713 of M/s. Delhi Haryana Trading Company Prop. Ramesh Kumar at The Delhi State Co-operative Bank Ltd., Azadpur, Delhi.
(iii) CA No. 3674 of M/s.Him Kashmir Fruit Company Prop. Mahesh Setia at J&K Bank Ltd., Azadpur, Delhi.
8. It has been alleged that from these accounts, accommodatory cheques were issued and the same were got purchased at the fraudulent accounts of PNB, Azadpur, Delhi.
9. It has been further revealed during the investigation that the cheques so purchased were fraudulently returned unpaid from CC No. 38/11(532264/16) 6 /91 the Drawee bank for want of "Sufficient Funds". Thereafter, the said cheques were either adjusted by purchasing of fresh cheques or by allowing advance against the cheques sent for clearing or by depositing the amount in cash.
10. Investigation has revealed that the funds so generated as a result of discounting of cheques on two consecutive days were used by the borrowers /account holders for their business purposes, whereas the funds generated on the third consecutive day, were utilized for payment by depositing the amount in the concerned Bank account. Thus, the party had cash in hand generated by the discounting of cheques on third day was circulated to adjust the payments of cheques sent in clearing.
11. Investigation has been further revealed that accused V.K. Jolly and accused D.K. Malhotra exceeded their powers frequently and accommodated the various account holders in violation of the rules and regulations laid down in Banking norms/rules and regulations. The return of all the cheques had also not been reported to the Regional Office by accused V. K. Jolly and D.K. Malhotra.
12. The various instances relating to the unauthorized purchase of CC No. 38/11(532264/16) 7 /91 cheques, allowing advance against clearing the cheques sent for collection and also by way of depositing the amount in cash are as under:-
(1) M/s. Delhi Haryana Trading Company Investigation has revealed that this account was opened on 19.07.2004 by Sh. V. K. Saini, the then Manager, PNB, Azadpur, Delhi, who has confirmed to have allowed to open the account.
Sh. Ramesh Kumar Prop. M/s. Delhi Haryana Trading Company was the authorized signatory of this account, which was opened on the introduction of Sh. Sumit Arora, who was having account no. 21126744 with the PNB, Azadpur, Delhi.
Investigation has further revealed that on 08.11.2004, a cheque for Rs.3,74,700/- was purchased vide DD No.7698, and the party withdrew Rs.3,74,000/- through cheque drawn on self. However, the cheques purchased returned unpaid on 13.11.2004 resulting into an outstanding of Rs. 7,44,798/-. Investigation has revealed that the cheques purchased in this account were accommodatory in nature. The cheques No.816437 and 816439 were purchased vide DD No. 7698 and 7740, issued by Sh. Dinesh Khandelwal as Proprietor of M/s. G. CC No. 38/11(532264/16) 8 /91 C. Fruits from its account maintained with J&K Bank Ltd., Azadpur, Delhi. All these cheques were returned unpaid by the drawee bank for the reason "Insufficient fund". Investigation has further revealed that Cheque No.797648, 797655 and 797669 were allowed to be purchased by Sh. D. K. Malhotra the then Incumbent Incharge, were issued from J&K Bank Ltd., Azadpur, Delhi from the account no. 3662 of M/s. Delhi Haryana Trading Company. The purchase of the accommodatory cheques issued by Sh. Ramesh Kumar himself to his own from M/s. Delhi Haryana Trading Company was against the bank's guidelines. The passing of the above cheques from the drawee bank was ensured by depositing cash on the same day into the account.
(2) M/S. Him Kashmir Fruit Co. CA NO. 21-128487 Prop. Ramesh Kumar.
This account was opened on 21.10.2004 by Sh. K. K. Gaur, the then Dy. Manager, PNB, Azadpur, Delhi. Sh. Ramesh Kumar Proprietor of M/s. Him Kashmir Fruit Company was the authorized signatory of this account and the account was opened on the introduction of his own account namely M/s. CC No. 38/11(532264/16) 9 /91 Ramesh Kumar Nimit Kumar with the PNB, Azadpur, Delhi. Investigation has revealed that on 08.11.2004, two cheques for Rs.3,74,500/- and Rs.1,99,540/- were purchased by Sh. D. K. Malhotra the then Chief Manager vide DD No. 7694 and 7711 respectively in this account, which were returned unpaid by the drawee bank on 11.11.2004 and the account remained overdrawn by Rs.5,63,745/-. Similarly, cheque for Rs.3,98,900/- purchased vide DD No. 7738 on 09.11.2004 were returned unpaid by the drawee bank on 13.11.2004 resulting into an outstanding of Rs.9,62,645/- in the account. Investigation has further revealed that the funds generated fraudulently by way of cheating was withdrawn from the account through cheques drawn on self. The cheques got purchased by Sh. Ramesh Kumar Proprietor M/s. Him Kashmir Fruit Company were accomodatory in nature. The cheque nos. 629590 and 629591 purchased vide DD No. 7694 and 7738 respectively were issued by Sh. Ramesh Kumar as Proprietor of M/s. Delhi Haryana Trading Company from its account no. 713 maintained with The Delhi State Cooperative Bank Ltd., New Subzi Mandi, Azadpur, Delhi. All these cheques were returned unpaid by the CC No. 38/11(532264/16) 10 /91 drawee bank for the reason "Insufficient fund". It has also been revealed from the Credit Vouchers that Cheque Nos. 629578,629581 and 629588 allowed to be purchased by Sh. D. K. Malhotra, the then Incumbent Incharge were issued from the Delhi State Cooperative Bank Ltd., Azadpur from the account no. 713 of M/s. Delhi Haryana Trading Company, which were against the bank's guidelines. The purchase of the accommodatory cheques issued by Sh. Ramesh Kumar himself to his own firm M/s. Him Kashmir Fruit Company was also against the bank's guidelines. The passing of the above cheques from the drawee bank was ensured by depositing cash on the same day into the account. The cash was arranged by getting purchased another cheque at PNB, Azadpur, Delhi. (3) M/s. Ramesh Kumar & Company This account was opened on 13.08.1998 on the introduction of Sh. Ramesh Kumar, who was having account of M/s. Ramesh Kumar Nimit Kumar with the PNB, Azadpur, Delhi. Sh. Ramesh Kumar Proprietor of M/s. Ramesh Kumar & Company was the authorized signatory of this account.
Investigation has revealed that on 06.08.2003 cheque for CC No. 38/11(532264/16) 11 /91 Rs.3,74,600/- was purchased vide DD No. 0316. The party withdrew Rs.3,72,000/- through Cheque No. 386736 drawn on self. The cheque purchased however, returned unpaid on 09.08.2003 and the account was allowed to remain overdrawn by Rs.3,73,124/- and the party continued to be accommodated unauthorizedly. The cheques got purchased by the party in its account vide DDs also returned unpaid at the same were adjusted either by depositing of cash, presenting cheque in clearing and allowing the account to be overdrawn. The details of such accommodation are as under:-
Date of Nature of Cheque/ Amount Date of Adjusted by facility facility DD No. DD/Cheque 08.08.03 DD 349 3,74,600/- Retd. on Adjusting by 12.08.03 depositing cash Rs.7,47,724/-
20.09.03 Advance 717370 1,48,000/- Retd. on By allowing the
against 22.09.03 account to remain
clearing overdrawn by
Rs.69,233/-
26.09.03 Advance 717370 1,48,000/- Retd. on By allowing the
against 27.09.03 account to remain
clearing overdrawn by
Rs.61,968/-
12.08.04 DD 4141 3,74,650/- Retd. on By depositing
16.08.04 cash
Rs.3,95,000/-
08.11.04 DD 7697 3,74,800/- 11.11.04 By allowing the
account to remain
overdrawn by
CC No. 38/11(532264/16) 12 /91
Rs.2,83,349/-
09.11.04 DD 7741 3,94,090/- 13.11.04 By allowing the
account to remain
overdrawn by
Rs.6,77,439/-
From the above credit vouchers, it is also revealed that Cheque Nos. 797669, 797664,797681 allowed to be purchased by Sh.
D. K. Malhotra, the then Incumbent Incharge, were issued from the J&K Bank Ltd., Azadpur, from the account No.3662 of M/s. Delhi Haryana Trading Company, Proprietor Sh. Ramesh Kumar. The purchase of the accommodatory cheques issued by Sh. Ramesh Kumar himself to his own firm M/s. Ramesh Kumar & Company was against the Bank's guidelines. The passing of the above said cheques from the drawee bank was ensured by depositing cash on the same day into the account. The cash was arranged by getting purchased another cheque at PNB, Azadpur, Delhi.
(4) M/s. Mahesh Fruit Company This account was opened on 15.07.1999 by Sh. K. K. Gaur, the then Dy. Manager, PNB, Azadpur, Delhi and Sh. Mahesh Setia, Proprietor M/s. Mahesh Fruit Company was the authorized CC No. 38/11(532264/16) 13 /91 signatory of this account. The account was opened on the introduction of Sh. Manmohan Narang Proprietor M/s. Desh Prem Roadways having account with the PNB, Azadpur, Delhi. On 08.11.2004, cheque for Rs.3,75,000/- was purchased by DD NO. 7696 and the party withdrew Rs.3,74,000/- through cheque drawn on self. The cheque purchased returned unpaid on 11.11.2004 resulting into an outstanding of Rs.3,70,843/-. Investigation has also revealed that on 09.11.2004, cheque for Rs.3,97,540/- was purchased vide DD No.7739. The party withdrew the whole amount of Rs.3,96,000/- through cheque drawn on self. However, the cheques purchased returned unpaid on 13.11.2004 resulting into an outstanding of Rs.7,68,383/-.
Investigation has also revealed that the cheques purchased in this account were accommodatory in nature. The cheque no. 813750 purchased vide DD No. 7696 was issued by Sh. Ramesh Kumar from his account maintained with J&K Bank Ltd., Azadpur, Delhi. The other cheque No. 810467 purchased vide DD No.7739 was issued by Mahesh Setia himself as Proprietor M/s. Him Kashmir Fruit Co. from its account CC No. 38/11(532264/16) 14 /91 maintained, J&K Bank Ltd., Azadpur, Delhi. All these cheques were returned unpaid by the drawee bank for the reason "Insufficient fund."
Investigation also revealed that cheque no. 810411 allowed to be purchased by Sh. D. K. Malhotra, were issued from the J&K Bank Ltd., Azadpur, Delhi, from account no. 3674 of M/s. Him Kashmir Fruit Company Proprietor Mahesh Setia. The purchase of the accommodatory cheques issued by Mahesh Setia himself to his own firm M/s. Mahesh Fruit Company was against the bank's guidelines. The passing of the above cheques from the drawee bank was ensured by depositing cash on the same day into the account and the cash was arranged by getting purchased another cheque of PNB, Azadpur, Delhi.
13. After obtaining the sanction for prosecution against accused V.K. Jolly from the competent authority, CBI filed charge-sheet against all the accused persons namely V. K. Jolly, D. K. Malhotra, Ramesh Kumar and Mahesh Setia for the offences punishable u/s 120-B IPC r/w Section 420 IPC and Section 13(2) r/w Section 13(1)(d) of The Prevention of Corruption Act, 1988, as well as substantive offences thereof.
CC No. 38/11(532264/16) 15 /91
14. Vide Order dated 29.09.2012, this Court held that there is sufficient material placed on record by the Prosecution to frame charges against accused no. 2 D. K. Malhotra and accused no. 3 Ramesh Kumar for the offences punishable under Section 120-B read with Section 420 read with Section 13(2) read with Section 13(1)(d) of The Prevention of Corruption Act, 1988, and substantive offences under Section 13(1)(d) read with Section 13(2) of P.C. Act and Section 420 of IPC respectively. Vide the same order, accused no. 1 V.K. Jolly was discharged for the offences under which he was booked by the CBI. Accused Mahesh Setia, was declared PO vide order dated 26.02.2010 as such no charge has been framed against this accused. Proceedings against accused Mahesh Setia shall take place as and when he is produced before the Court.
15. On 20.10.2012, charges against accused no. 2 D.K. Malhotra and accused no. 3 Ramesh Kumar were framed for the offences punishable under Section 120-B read with Section 13(2) read with Section 13(1)(d) of The Prevention of Corruption Act, 1988, and Section 420 of IPC respectively. Substantive Charge against accused no. 2 D. K. Malhotra was also framed for the CC No. 38/11(532264/16) 16 /91 offences punishable under Section 13(1)(d) punishable under Section 13(2) of the Prevention of Corruption Act, 1988. Substantive Charge against accused no. 3 Ramesh Kumar was also framed for the offence punishable under Section 420 of IPC. Both the accused persons pleaded not guilty to the charges and claimed trial.
EVIDENCE OF THE PROSECUTION
16. The prosecution in order to prove its case has examined 26 witnesses.
17. PW-1 is Sh. Ved Prakash. PW 1 deposed that he was posted as Dy. Zonal Manager, North Delhi Zone, Rajendra Place, New Delhi from January, 2006 to May, 2007. He identified the complaint Ex. PW1/A addressed to Superintendent of Police, CBI made on behalf of Punjab National Bank under his signatures dated 31.05.2006. This complaint relates to commission of fraud at their branch office at Azadpur, Delhi.
18. PW-1 identified the letter dated 15.06.2006 Ex. PW 1/B sent by Zonal Office under his signature by which certain documents as mentioned in the letter, were forwarded to Sh. Ajeet Singh, Inspector CBI. He identified the copy of letter dated 29.10.2004 CC No. 38/11(532264/16) 17 /91 Ex. PW 1/B1 received by Zonal Office, Delhi from Bank of Baroda, Azadpur branch.
19. PW-1 also identified part of document D-41 and deposed that it is an internal investigation report Ex. PW 1/B3 which was prepared after an internal investigation carried out in the bank at the level of Chief Inspector. It is signed by Sh. B.B. Chawla and Sh. R.C. Ahuja. He also identified the signatures of Sh B.B. Chawla appearing and Sh. R.C. Ahuja appearing at points A and B. He also identified covering letter Ex. PW 1/B4 by which the said investigation report was sent to Zonal Office.
20. PW-2 is Sh. Ram Kawar Singhmar. During the period from 18.09.2006 to 23.03.2010, PW 2 was posted at New Sabzi Mandi, Azadpur Branch, Delhi of Punjab National Bank as Manager.
21. PW-2 identified Ex. PW-2/A vide which he had handed over to CBI documents pertaining to accounts of M/s Delhi Haryana Trading Co. along with its Annexures, M/s Ramesh Kumar and Co. which are Ex. PW 2/A1, Ex. PW 2/A2/1 respectively and Specimen Signature Card Ex. PW 2/A2/2.
22. PW-2 also identified Ex. PW-2/B vide which he had handed over CC No. 38/11(532264/16) 18 /91 to CBI documents pertaining to account of M/s Him Kashmir Fruit Company along with its Annexures, which are Ex. PW 2/B1. PW-2 also handed over the documents pertaining to account of M/s Mahesh Fruit Company Ex. PW 2/B-2.
23. PW-3 is Sh. Bharat Bhushan Chawla. He deposed that he retired from Punjab National Bank on 31.03.2012 from BRS Nagar, Ludhiana as Chief Manager and from August, 2004 to May, 2006 he was Chief Concurrent Auditor with PNB and was posted at Nehru Place, new Delhi. His duties were to do day to day audit i.e. auditing the accounts of the Branch, where he was posted on daily basis and in case of necessity, he was also deputed to other branches for conducting audit.
24. He identified documents Ex. PW-1/B3 and Ex. PW-1/B4. He deposed that Ex. PW-1/B3 is the report, which was jointly prepared by him and Sh. R.C. Ahuja. This report was prepared with regard to the audit which was conducted by them of PNB Azadpur Branch on 07.01.2005. He further deposed that Ex. PW-1/B4 is the forwarding letter signed by him and Sh. R.C. Ahuja. By this letter, report Ex. PW-1/B3 was forwarded to Deputy General Manager, Zonal Office, Delhi Zone; to Chief CC No. 38/11(532264/16) 19 /91 FPIS, Head Office, New Delhi ; DGM Inspection and Audit Division and Deputy General manager, Zonal Office, NIT Faridabad. This inspection / audit was conducted by him as per the directions of Inspection & Audit Division, New Delhi with regard to the unauthorized accommodation by way of purchasing of cheques in certain accounts.
25. PW-4 is Sh. Amrit Lal. He deposed that he was having a business in the name of M/s. Amrit Lal Kanwar Lal and he was a Commission Agent for the fruits and vegetables. He also has his shop at D-418, New Subzi Mandi, Azadpur, Delhi-110033.
26. PW-4 further deposed that he has account in many banks including Current Account No. 576 in Delhi State Cooperative Bank Limited at D-Block, Azadpur Mandi, which was closed about three years back.
27. PW-4 identified the Account Opening Form Ex. PW-4/A of M/s.
Delhi State Co-operative Bank Limited, Azadpur, Delhi, which was signed by Sh. Ramesh Kumar in his presence.
28. PW-5 is Sh. Jagmohan Singh. He deposed that he has business in the name of M/s. Balaji Fruit Company, having address A-1004, New Subzi Mandi, Azadpur, Delhi. He further CC No. 38/11(532264/16) 20 /91 deposed that he was running his business in the name and style of "M/s. Guru Nanak Fruit Company having address at C-665 and D-402, New Subzi Mandi, Azadpur, Delhi and he was the sole proprietor.
29. PW-5 further deposed that accused Ramesh Kumar was running his business in the name of M/s. Him Kashmir Fruit Company. He identified Account Opening Form Ex. PW-5/A of M/s. Delhi Haryana Trading Company at J&K Bank, Azadpur, New Subzi Mandi, Delhi, which was opened by accused Ramesh Kumar.
30. PW-5 identified Account Opening Form Ex. PW-5/B of M/s. Him Kashmir Fruit Company at J&K Bank, Azadpur, New Subzi Mandi, which was opened by Mahesh Setia and introduced by PW-5 on the request of accused Ramesh Kumar.
31. PW-5 also identified Account Opening Form Ex. PW-5/C of M/s.
G. C. Fruits at J&K Bank, Azadpur, New Subzi Mandi, which was opened by Dinesh Khandelwal and introduced by PW-5 on the request of accused Ramesh Kumar.
32. PW-6 is Sh. Prem Kumar. He deposed that in the year 2008, he was posted as Clerk at the Azadpur Branch of the Bank and CC No. 38/11(532264/16) 21 /91 his duties were to post the cheques in the records and to issue Fixed Deposit receipts. He identified his signature on the photocopy of production cum seizure memo Ex. PW 6/A, vide which he had supplied the cheques and deposit vouchers Ex. PW-6/A1 to Ex. PW-6/A27 as mentioned in the memo, to the CBI.
33. PW-6 also identified his signature on the photocopy of production cum seizure memo Ex. PW 6/B, vide which he had supplied the cheques and deposit vouchers Ex. PW-6/B1 to Ex. PW-6/B51 as mentioned in the memo, to the CBI.
34. PW-7 is Sh. K.K. Gaur. He deposed that in the year 2003-2004, he was posted as Dy. Manager with Azadpur Branch of Punjab National Bank. This witness explained the procedure involved in purchase of cheques by the Bank. The prosecution has brought on record certain cheques and credit vouchers as Ex. PW7/A1 to A28.
35. PW-8 is Sh. Manmohan Lal. He deposed that he has business of Transport in the name of M/s. New Desh Premi Roadways and he had a bank account with PNB, Azadpur Branch, in the above said name.
CC No. 38/11(532264/16) 22 /91
36. PW-8 identified the Account Opening Form Ex. PW-2/B2 of M/s.
Mahesh Fruit Company, which was opened on his introduction by Sh. Mahesh Proprietor of M/s. Mahesh Fruit Company.
37. PW-9 is Sh. Ashok Kumar Kapoor. He was posted as Manager Scale-II at Punjab National Bank, Azadpur branch in the year 2006-2007.
38. PW-9 identified his signature on certificate Ex. PW-9/A under Section 2(A) of the Bankers Book Evidence Act with regard to the statement of Account of current Account No. 21-128210 of M/s. Delhi Haryana Trading Company. This certificate was in respect of statement of account of M/s Delhi Haryana Trading Company Ex. PW-9/A1.
39. PW-9 also identified his signature on certificate Ex. PW-9/B under Section 2(A) of the Bankers Book Evidence Act with regard to the statement of Account of current Account No. 21- 23803 of M/s. Ramesh Kumar & Company. This certificate was in respect of statement of account of M/s. Ramesh Kumar & Company Ex. PW-9/B1.
40. PW-9 identified his signature on certificate Ex. PW-9/C under Section 2(A) of the Bankers Book Evidence Act with regard to CC No. 38/11(532264/16) 23 /91 the statement of Account of current Account No. 21-128487 of M/s. Him Kashmir Fruit Company. This certificate was in respect of statement of account of M/s. Him Kashmir Fruit Company Ex.PW-9/C1.
41. PW-9 also identified his signature on certificate Ex. PW-9/D under Section 2(A) of the Bankers Book Evidence Act with regard to the statement of Account of current Account No. 21- 24185 of M/s. Mahesh Fruit Company. This certificate was in respect of statement of account of M/s. Mahesh Fruit Company Ex. PW-9/D1.
42. PW-9 also identified his signature on photocopy of Production cum Seizure Memo Ex. PW-9/E, vide which he had handed over the documents to CBI mentioned therein including the cheques Ex. PW-7/A20 to Ex. PW-7/A28.
43. PW-9 further identified his signature on the photocopy of Production cum Seizure Memo Ex. PW-9/F. Vide which he had handed over the documents i.e. statement of demand drafts received back unpaid Ex. PW-9/F1 (colly.) ; certified copy of details of cases pending in the Court of Ld. MM U/s 138 of NI Act Ex. PW-9/F2A1 ; letters dated 01.09.2003, 01.11.2004 and CC No. 38/11(532264/16) 24 /91 14.09.2004 written by Branch to Sr. Manager (Audit), Regional Office Ex. PW-9/F2A2 to PW-9/F2A4; letters received from PNB North Delhi Region Audit Section dated 22.08.2003, 30.10.2004, 13.09.2004 and 26.08.2004 Ex. PW-9/F2A5 to PW-9/F2A8 and letter dated 09.09.2004 Ex. PW-9/F2A9 received from Bank of Baroda, to the CBI.
44. PW-10 is Sh. Raj Pal. He deposed that during the period from 2001 to 2005, he was posted at Panchwati Branch of PNB at Azadpur as Computer Operator. He identified the entry numbers put by him on the cheques Ex.PW-6/B8, Ex.PW-6/B22, Ex. PW-6/B25, Ex. PW-6/B37 and Ex. PW-6/B46 and deposed that the numbers put on the cheques, were automatically generated by the Computer.
45. As per PW 10, amounts were withdrawn by accused Ramesh Kumar and others against these cheques i.e. Ex. PW 6/B8, B22, B25, B37 and B46 from their respective accounts.
46. PW-11 is Sh. Ram Kumar Chawla. He deposed that in July 2007, he was posted at North Delhi Zonal Office at Rajendra Place, New Delhi in the inspection department. He identified Circular No. 130 dated 31.12.2002 Ex. PW-11/A defining the CC No. 38/11(532264/16) 25 /91 loan powers of the officers of the different levels and how they are to be sanctioned and released from time to time. He deposed that in terms of circular, the powers of a Senior Manager and Chief Manager with regard to the purchase of cheques were Rs. 3.75 lacs and Rs. 20 lacs respectively.
47. PW-11 identified Seizure Memo Ex. PW-11/B, vide which he had handed over various documents to the CBI as mentioned therein. He further deposed that bunch of documents Ex. PW- 11/B1 (colly.) was received by him from the Azadpur Branch of PNB and passed on to CBI. He also identified the letter Ex. PW- 11/C, vide which he had handed over certified copies of various documents Ex. PW-11/C1, Ex. PW-11/C2 and Ex. PW-11/C3 referred to in the letter after getting the same from Azadpur Branch of PNB.
48. PW-12 Sh. Suresh Kumar Gupta. He deposed that from September, 2004 to June, 2005, he was posted at Azadpur Branch of PNB as Concurrent Auditor. The Azadpur Branch of PNB and Khan Market Branch of PNB were in his jurisdiction. During his tenure of posting at Azadpur Branch as Concurrent Auditor, Sh. D.K. Malhotra was the Chief Manager, Sh. V. K. CC No. 38/11(532264/16) 26 /91 Saini was the Manager and Sh. K.K. Gaur was the DD Incharge. He further deposed that he had conducted the audit of Azadpur Mandi Branch for the period 02.09.2004 to 11.09.2004.
49. PW-12 further deposed that he prepared a detailed report Ex.
PW-12/A of all such accounts and pointed out the irregularities which were committed in respect of the said accounts and had submitted the same to their Zonal Audit Office at Faridabad and also sent a copy of the same to Zonal Manager, Sr. Regional Manager and Chief Manager of the Branch. Thereafter, special investigation was directed to be conducted by Sr. Concurrent Auditor Sh. R.C. Ahuja and Chief Concurrent Auditor Sh. B.B. Chawla.
50. PW-13 is Sh. Phool Chand Gupta. He deposed that he had remained posted at Azadpur Branch of PNB from May 1998 to September/ October, 1998 as Assistant Manager. He identified Account Opening Form Ex. PW-2/A2/1 relating to Current Account No. 2380 of M/s. Ramesh Kumar & Company opened by its Proprietor Sh. Ramesh Kumar.
51. PW-13 also identified the specimen signature of Sh. Ramesh Kumar on Specimen Signature Card Ex. PW-2/A2/2 of the same CC No. 38/11(532264/16) 27 /91 account.
52. PW-14 is Sh. R. C. Ahuja. He deposed that he was posted as Senior Concurrent Auditor from the period July, 2003 to August, 2005 at Subzi Mandi, Ghanta Ghar Branch, Delhi. An investigation with regard to the irregularities committed in Azadpur Branch of Punjab National Bank was marked to him by the Zonal Audit Office, Faridabad and on receipt of orders, he had conducted the investigation with his senior colleagues with Sh. B.B. Chawla, Chief Internal Auditor. After concluding the investigation, Report Ex. PW-1/B3 was submitted by them to the Zonal Office. He also identified his signature on covering letter Ex. PW-1/B4 by which Ex. PW-1/B3 was forwarded to DGM, Zonal Office with copies of DGM, Zonal Audit Office, Chief, FPIS and DGM, Inspection and Audit Division.
53. PW-15 is Sh. Vikas Mathur. He deposed that in January 2008, he was posted as Cashier in Delhi State Cooperative Bank Ltd., at Azadpur Branch. He identified Production cum Seizure Memo Ex. PW-15/A, vide which he had handed over certain documents i.e. Account Opening Form of M/s. Haryana Trading Company Ex. PW-4/A, Specimen Signature Card Ex. PW-15/A1 CC No. 38/11(532264/16) 28 /91 of the same account, Affidavit Ex. PW-15/A2 of the Proprietor Sh. Ramesh Kumar of M/s. Haryana Trading Company, to the Investigating Officer.
54. PW-15 also produced Statement of Account Ex. PW-15/B of M/s. Delhi Haryana Trading Company bearing account no. 713 for the period upto 17.03.2018 from the day the said account was opened, along with the Certificate Ex. PW-15/C issued under Section 2(A) of the Banker's Book Evidence Act.
55. PW-16 is Sh. Chand Ji Kaul. He deposed that in January 2008, he was posted at Branch Office Azadpur Branch of J&K Bank, as Executive. He identified Production cum Seizure Memo Ex. PW-16/A, vide which he had handed over certain documents i.e. (1) Account Opening Form of M/s. G. C. Fruits Ex. PW-5/C, (2) Statement of account of M/s. G. C. Fruits for the period 06.10.2004 to 12.08.2005 Ex. PW-16/A1, (3) Account Opening Form of M/s. Him Kashmir Fruit Company Ex. PW-5/B, (4) Statement of Account of M/s. Him Kashmir Fruit Company for the period 14.09.2004 to 28.06.2006 Mark P-16/1 (5) Account Opening Form of M/s. Delhi Haryana Trading Company Ex. PW-5/A, and (6) Statement of account of M/s. Delhi Haryana CC No. 38/11(532264/16) 29 /91 Trading Company for the period 01.09.2004 to 28.06.2006 Mark P-16/2, to CBI after attesting the same.
56. PW-17 is Sh. M. C. Joshi. He deposed that the documents of this case were submitted by SP, CBI, EOW-II, New Delhi vide letters Ex. PW-17/A1 to Ex. PW-17/A4 for scientific examination and opinion. He deposed that the following documents were supplied to him:-
(i) Questioned documents :- (1) Red enclosed signatures stamped and marked Q-151, Q-152 on Ex. PW-2/A1, (2) Q-156 on Ex. PW-2/A2/1, (3) Q-145, Q-146 on Ex. PW-2/B1 (colly), (4) Q-159 on Ex. PW-7/A20, (5) Q-148 on Ex. PW-7/A21,(6) Q-154 on Ex. PW-7/A22, (7) Q-149 on Ex. PW-7/A24,(8) Q-150 on Ex.
PW-7/A25, (9) Q-160 on Ex. PW-7/A26,(10) Q-155 on Ex. PW- 7/A28, (11) Q-292 on Ex. PW-7/A27, (12) Q-286, Q-287 on Ex. PW-4/A, (13) Q-157 on Ex. PW-7/A5, (14) Q-153 on Ex. PW- 6/B1, (15) Q-158 on Ex. PW-6/B17,(16) Q-291 on Ex. PW-6/B36, (17) Q-147 on Ex. PW-6/B44, (18) Q-283,Q-284,Q-285 on Ex. PW-5/A
(ii) For Scientific examination and comparison of question documents/ items, Specimen Signatures of accused Ramesh CC No. 38/11(532264/16) 30 /91 Kumar S-112 to S-133 i.e. Ex. PW-17/B1 to Ex. PW-17/B22, were supplied to him.
57. PW-17 further deposed that all the above questioned items and specimen signatures were examined by him by using various scientific aids, such as magnifying glasses, stereo microscope and "docu-centre expert". After careful and thorough examination of the questioned items with the supplied specimen items, he expressed his opinion that "the signature in the enclosed portion stamped and marked Q-145 to Q-160, Q- 283 to Q-287, Q-291, Q-292 and S-112 to S-113 have been written by one and the same person". He has filed his Report Ex. PW-17/C1 with the reasons Ex. PW-17/C2. He has also identified signature of Dr. B. A. Vaid on Report Ex. PW-17/C1.
58. PW-17 also deposed that all the documents including the documents relating to this case were sent back to SP, CBI along with his opinion and detailed reasons vide letter Ex. PW-17/C3.
59. PW-18 is Sh. S. K. Punhani. He deposed that in the year 2008, he was posted at Social Welfare Department of Govt. of NCT at Firozshah Kotla, Delhi Gate, Delhi. He further deposed that Specimen Signature Ex. PW-17/B8 to Ex. PW-17/B-22 of CC No. 38/11(532264/16) 31 /91 Ramesh Kumar had taken by the IO Sh. Ajeet Singh in the CBI office in his presence.
60. PW-19 is Sh. Ashok Kumar. He deposed that in the year 2007, he was posted in CBI office in the CGHS Scam Cases w.e.f. October 2005 to April 2008. He identified his signatures on Ex. PW-17/B1 to Ex. PW-17/B7 i.e. Specimen Signatures of Ramesh Kumar.
61. PW-20 is Sh. V. K. Gupta. He deposed that in the year 2008, he was posted as Chief Manager at Azadpur Branch of Punjab National Bank. He identified the photocopy of letter Ex. PW- 20/A, addressed to IO/Inspector Ajeet Singh, vide which certain documents Ex. PW-20/A1 were handed over to him. PW-20 deposed that he had also supplied the Audit Report Mark P-20/1 to Inspector Sh. Ajeet Singh.
62. PW-21 is Ms. Ramanjeet Kaur. PW 21 has not produced original documents like cheques in disputes and their return memos. PW-21 further deposed that she came to know on internal correspondence with her Asset Recovery Branch, from which it appears that the documents were produced in the Court of Ld. CMM, Tis Hazari Courts, Delhi. She further deposed that CC No. 38/11(532264/16) 32 /91 all the said documents were not available in PNB Azadpur Branch, Delhi.
63. PW-22 is Sh. S. C. Chadha. He deposed that he was posted as Scale- I Officer, in PNB, Azadpur Branch from 2002 to 2005 and during this period, he was looking after Saving Accounts Section as a Second Man. Sh. K. C. Aggarwal was Incharge of their Accounts Section during that period. He deposed that in the year 2002, when he joined PNB, Azadpur Branch, Delhi, Sh. V. K. Jolly was the then Senior Manager of the said Branch.
64. PW-23 is Sh. Ajay Malhotra. He deposed that he was posted in PNB Azadpur Branch, Delhi w.e.f. April, 2003 to April, 2006 as Deputy Manager. During his tenure, Sh. V.K. Jolly Senior Manger was the Incumbent Incharge and D.K. Malhotra was the then Chief manager became the Incumbent Incharge of the branch. During the period of D.K. Malhotra as Incumbent Incharge, PW-23 was in the said branch.
65. PW-24 is Sh. Ashwani Kumar Gupta. He deposed that during the period from July 2002 to November 2007, he was posted as a clerk at PNB, Azadpur Branch, Delhi. He deposed that during that period, Sh. V. K. Jolly the then Senior Manager was the CC No. 38/11(532264/16) 33 /91 Incumbent Incharge and after him, Sh. D. K. Malhotra the then Chief Manager had become Incumbent Incharge of the said Branch.
66. PW-24 further deposed that his work was to look after the posting of cheques at the counter of the Bank and forward the same to the officer for passing. When the cheque was presented for encashment at the counter, the name of the person, who present the cheque was mentioned on the cheque and the entry of the said cheque was posted in the account of the parties on computer. The computer creates a specific ID number for particular entry and the same number was mentioned on the cheque. A stamp "Pay to" was also put on cheque where the name of person, who presented the cheque for receiving was written. After that, the cheque was presented before the officer for passing the same.
67. PW-24 deposed that in case there was insufficient balance in the account of the person who issued the cheque, then they brought this fact to the knowledge of the officer /Passing Authority. If the Passing Authority asked for entering the cheque, then they enter and after following the above said CC No. 38/11(532264/16) 34 /91 procedure, the cheque was sent to the Officer for passing the same. After that, the payment was made by the Cashier.
68. PW-24 further deposed that Cheques Ex. PW-6/A1, Ex. PW-
6/A4, Ex. PW-6/A6, Ex. PW-6/A17, Ex. PW-6/A19, Ex. PW- 6/A20, Ex. PW-7/A14, Ex. PW-7/A15, Ex. PW-6/B1, Ex. PW- 6/B18, Ex. PW-6/B24, Ex. PW-6/B38, Ex. PW-6/B44, were presented before him for the encashment by Ganesh and after entering the same in the computer, he put the entries number generated by the computer in his handwriting. He also put the stamp "Pay to" on the said cheques.
69. PW-24 further deposed that Cheques Ex. PW-6/A2, Ex. PW-
6/A3, PW-6/A5, Ex. PW-6/A7, Ex. PW-6/A8, Ex. PW-6/A15, Ex. PW-6/A16, Ex. PW-6/A18, Ex. PW-7/A5, Ex. PW-7/A8, Ex. PW- 7/A9, Ex. PW-6/B2, Ex. PW-6/B3, Ex. PW-6/B5 to Ex. PW-6/B7, Ex. PW-6/B17, Ex. PW-6/B19, Ex. PW-6/B21, Ex. PW-6/B23, Ex. PW-6/B26, Ex. PW-6/B45 and Ex. PW-6/47 were presented before him for the encashment by accused Ramesh Kumar and after entering the same in the computer, he put the entries number generated by the computer in his handwriting. He also put the stamp "Pay to" on the said cheques.
CC No. 38/11(532264/16) 35 /91
70. PW-25 is Inspector Ajeet Singh. He has deposed that FIR Mark PW-25/A of this case was registered on the basis of written complaint of PW-1 Ved Prakash, the then Zonal Manager, PNB, which was assigned to him for investigation.
71. PW-25 further deposed that during investigation, he collected relevant documents from Azadpur Branch of PNB and also from other Banks vide different Seizure Memos and forwarding letters. He also examined the relevant witnesses and recorded their statements.
72. PW-25 deposed that vide Production cum Seizure Memos Ex.
PW-2/A, Ex. PW-2/B, Ex. PW-9/E, Ex. PW-15/A, Ex. PW-16/A, Ex. PW-6/A, Ex. PW-6/B, Ex. PW-9/F, Ex. PW 11/B, Ex. PW 1/B, Ex. PW 11/C and Ex. PW 22/A, he had seized various documents from various Banks. PW 25 deposed that documents Ex. PW 11/C1 to C3 were collected by his during investigation. PW 25 also deposed that specimen signatures of Ramesh Kumar were also collected by him in presence of independent witness Ashok Kumar.
73. PW-26 is Sh. B. L. Gupta. He deposed that he has brought the original Internal Investigation Report dated 12.01.2005 Ex. PW-
CC No. 38/11(532264/16) 36 /91 1/B3 regarding High Value Cheques purchased by B. O. Azadpur Branch, PNB, Delhi, drawn on Bank of Baroda, Delhi and other Banks Details Report.
STATEMENTS OF ACCUSED PERSONS U/S 313 Cr.P.C.
74. After completion of the prosecution evidence, the statements of the accused persons were recorded u/s 313 Cr.P.C. All the incriminating evidence which has come on record against the accused persons were put to the accused persons in their Statements recorded under Section 313 Cr.P.C.
75. Accused D. K. Malhotra has stated in his statement recorded under Section 313 Cr.P.C. that he remained posted as Chief Manager of the Branch from July 2004 to 10.11.2004. On 10.11.2004, he was placed under suspension and was asked to report to Regional Office. The party was already having an account in the Bank before his joining in the said Branch. The party was a known customer of the Bank and the cheques purchased were within his financial powers and pertained to genuine trade transactions. On earlier occasions also, the cheques of this party were being purchased by his Predecessor. Since he relinquished the charge and asked to sit in the CC No. 38/11(532264/16) 37 /91 Regional Office, he could not contact the party to deposit the amount. By now, the entire amount has been recovered from the party.
76. Accused Ramesh Kumar has stated in his statement that he is innocent and he has been falsely implicated in this case. No loss was caused to the Bank due to any act on his part. He has cleared all the dues of the Bank and the Bank had collateral securities with it, in the form of mortgage of his house bearing no. 49, Amardeep Society, Sector-9, Rohini, Delhi and certain LICs policies. The Bank had issued "No Dues Certificate" in this regard to him.
DEFENCE EVIDENCE
77. Accused D.K. Malhotra and accused Ramesh Kumar have examined 4 witnesses in his defence.
78. DW-1 is Sh. Akshay Saxena. He is working as Manager, Punjab National Bank, Circle Office, North Delhi, III, Rajendra Place, New Delhi, at the time of his deposition on 26.10.2016. He deposed that accused D. K. Malhotra the then Chief Manager, PNB, Azadpur Branch, Delhi, was placed under suspension on 31.12.2004 and thereafter, accused D. K. CC No. 38/11(532264/16) 38 /91 Malhotra was not allowed to sit in the said Branch for any official purpose.
79. DW-2 is Sh. Ashwani Kumar. He is working as Chief Manager, PNB, ARMB, Rajendra Place, Delhi, at the time of his deposition on 21.11.2016. He produced the photocopies of the documents Mark DW-2/A (colly.) before the Court.
80. DW-2 also produced the letter dated 07.12.2010 Ex. DW-2/A issued by Punjab National Bank, Asset Recovery Management Branch in respect of Certification that the Bank has received Rs.48 lacs from Sh. Ramesh Kumar as per terms of compromise in full and final settlement of all the dues against him.
81. DW-2 also deposed that the other document required to be brought today in respect of Agreement of Guarantee dated 17.11.2004 for request of purchase of cheques between Sh. Ramesh Kumar and Punjab National Bank, is not available in original in the Bank record as the same has been filed in Suit filed in the court of Sh. Girish Kathpalia, the then ADJ, Room No. 137, Tis Hazari Courts, Delhi. As per record, I can say the said Agreement was executed between Sh. Ramesh Kumar and CC No. 38/11(532264/16) 39 /91 Punjab National Bank.
82. DW-3 is Sh. S. K. Mahajan. He had worked as Senior Manager with Punjab National Bank, Azadpur New Subzi Mandi Branch, New Delhi. DW-3 deposed that he know accused Ramesh Kumar, as he was a good Customer of their Branch, who was having Current Accounts in the name of his firms, prior to his joining in the said Branch.
83. DW-3 further deposed that he sanctioned limit of Rs. 4 lacs in one of his Current Accounts and during the course of Banking Transactions, accused Ramesh Kumar used to deposit cash, withdraw through cheques and was also availing the facility of Bill Discount (Cheque Purchase) from the Bank.
84. DW-3 further deposed that while granting a limit of Rs. 4 lacs to accused Ramesh Kumar, his property situated at Rohini, New Delhi, was got mortgaged as collateral security along with assignment of some insurance policies. The purpose of taking the collateral security and insurance policies is to safeguard the interest of the Bank in case the loan account goes bad, in this case the securities are got realized and the proceeds are deposited in the loan account.
CC No. 38/11(532264/16) 40 /91
85. DW-4 is Sh. Ajit Singh. He is working as JJA, Record Room (Sessions), Tis Hazari Courts, Delhi on 21.07.2017. He has produced the record pertaining to CS No. 29/07 titled as Punjab National Bank Vs. M/s. Ramesh Kumar & Company and Others, which is Suit for Recovery decided on 30.08.2011. The certified copies of the said case is Ex. DW-4/A. ARGUMENTS OF LD. PP FOR CBI
86. Ld. PP for CBI argued that accused Ramesh Kumar and accused D.K. Malhotra conspired to cheat the Punjab National Bank and their acts of cheating resulted in huge loss of Rs. 47 Lacs to the Bank. Ld. PP for CBI argued that accused Ramesh Kumar opened some of his accounts in Punjab National Bank Azadpur Branch during the tenure of accused D.K. Malhotra, Chief Manager and presented certain cheques which were purchased by accused D.K. Malhotra Incumbent Incharge and most of these cheques returned unpaid by the drawee Banks. It is also argued that accused Ramesh Kumar presented cheques which were issued by himself from other Bank accounts and got them purchased and withdrew the money immediately, thereafter, such cheques were dishonoured. The accused D.K. CC No. 38/11(532264/16) 41 /91 Malhotra, it is argued, has purchased those cheques in utter violation of Banking guidelines as mentioned in Circular No. 130 Ex. PW 11/A knowingfully well that cheques of sister concern not related to genuine trade transactions and that of Cooperative Banks should not be purchased. By doing so, it is further argued that, accused D.K. Malhotra obtained pecuniary advantage to accused Ramesh Kumar by dishonest means. Ld. PP further argued that the credit vouchers coupled with entries in Statements of account clearly prove the alleged transactions of cheque purchases. Ld. PP for CBI also argued that the IO could not collect the original cheques from the Bank as the same were filed by the Bank in different Courts in various recovery proceedings, however, the certified copies are filed on record. Ld. PP for CBI also argued that the chain of events of cheque purchases one after the other and the amount of one cheque being adjusted by the cheque purchase amount of another cheque continued till the fraud is unearthed and accused D.K. Malhotra is suspended. Once accused D.K. Malhotra was suspended, the cycle broke and cheques started returning unpaid by the drawee Bank.
CC No. 38/11(532264/16) 42 /91 ARGUMENTS OF LD. DEFENCE COUNSEL
87. On the other hand, Ld. Counsel for accused D.K. Malhotra, has argued that accused has not committed any offence by purchasing cheques presented by accused Ramesh Kumar. It is further argued that by the time, accused D.K. Malhotra, took over as Incumbent Incharge, the account of M/s Ramesh Kumar & Co. was already operational and similar transactions in the said account have also taken place. Ld. Counsel further argued that even if there is any violation of guidelines under Circular No. 130 that does not amount to an offence. Ld. Counsel also argued that there is not even iota of evidence that accused D.K. Malhotra has received any pecuniary advantage for himself or for any other person for purchasing the cheques in question. Ld. Counsel specifically refers to the deposition of the IO PW 25 Ajeet Singh in this regard.
88. Ld. Counsel for accused Ramesh Kumar argued that accused Ramesh Kumar is a businessman and whatever the transactions he did in his account pertain to only genuine trade transactions. It is further argued that accused Ramesh Kumar was not aware of any Circular issued by the Bank with regard to CC No. 38/11(532264/16) 43 /91 the guidelines to be followed for purchasing cheques by the Bank officials. It is also argued that even if there was any such circular that was only for the Bank officials and it should not affect the transactions done by ordinary customers of the Bank. It is also argued that the accused Ramesh Kumar has repaid entire amount due to the Bank in course of DRT proceedings under OTS scheme and, therefore, no loss is said to have been caused by the accused. It is also argued that the prosecution has not brought on record the original cheques, credit vouchers and cheque return memos and, therefore, failed to prove its case.
89. Ld. Counsel submits that accused Ramesh Kumar was an old customer of the Bank and he had good reputation as such legally utilized the benefit of cheque discounting in the past. Ld. Counsel also argued that accused Ramesh Kumar is having a business of fruits which are seasonal, perishable and affected by weather conditions. Ld. Counsel argued that transactions of Ramesh Kumar were done only for the purpose of genuine trade and prosecution has not brought any evidence to show otherwise.
CC No. 38/11(532264/16) 44 /91
90. Ld. Counsel for accused Ramesh Kumar also argued that the statement of account of M/s Ramesh Kumar & Co. and M/s Him Kashmir Fruit Co. cannot be read in evidence in the absence of certificate as required under Section 65-B of Evidence Act. POINTS FOR CONSIDERATION
91. (i) Whether Prosecution has proved the guilt of the accused Ramesh Kumar for the offence punishable U/s 420 of IPC beyond reasonable doubt ?
(ii) Whether Prosecution has proved the guilt of accused D.K. Malhotra for the offence U/s 13 (2) read with Section 13(1)(d) of Prevention of Corruption Act, beyond reasonable doubt ?
(iii) Whether Prosecution has proved the guilt of accused D.K. Malhotra and Ramesh Kumar for the offence of conspiracy U/s 120-B of IPC read with Section 420 of IPC read with Section 13(2) read with Section 13(1)(d) of Prevention of Corruption Act, beyond reasonable doubt ?
DISCUSSION
92. As per the case of the prosecution accused Ramesh Kumar has 3 accounts in Punjab National Bank, Azadpur Branch, Delhi in CC No. 38/11(532264/16) 45 /91 the names of his firms i.e. (1) M/s Ramesh Kumar & Co., (2) M/s Delhi Haryana Trading Co. and (3) M/s Him Kashmir Fruit Co. He also had one account in J&K Bank, Azadpur Branch, Delhi in the name of M/s Delhi Haryana Trading Co. and one account in Delhi State Co-operative Bank Ltd., Azadpur Branch, Delhi in the name of M/s Delhi Haryana Trading Co. Accused Ramesh Kumar is the proprietor of all the above said firms having accounts in Punjab National Bank, J&K Bank and Delhi State Co-operative Bank. It is also the case of prosecution that accused Ramesh Kumar got opened the account by Dinesh Khandelwal in the name of M/s G.C. Fruits Co. in J&K Bank, Azadpur Branch. He also got opened 2 accounts by his known person Mahesh Setia in the names of M/s Mahesh Fruit Co. in PNB, Azadpur and in the name of M/s Him Kashmir Fruit Co. at J&K, Azadpur Branch.
ACCOUNTS AT PNB AZADPUR
93. (1) Prosecution examined one Ram Kanwar Singhmar as PW-2 who worked as Manager at PNB Azadpur Branch and through him brought on record the Account Opening Forms of firms M/s Ramesh Kumar & Co. as Ex. PW2/A2/1, M/s Delhi Haryana CC No. 38/11(532264/16) 46 /91 Trading Co. as Ex. PW2/A1and M/s Him Kashmir Fruit Co. as Ex.PW2/B1.
(2) PW-2 also brought on record the account opening form of M/s Mahesh Fruit Co. as Ex.PW2/B2. This account was opened by PW-7 Sh. K.K. Gaur who identified his signatures on account opening form. Prosecution also examined one Man Mohan Lal as PW-8 who introduced the account of M/s Mahesh Fruit Co. ACCOUNTS AT J&K BANK AZADPUR
94. (1) The account of accused Ramesh Kumar in the name of M/s Delhi Haryana Trading Co. in J&K Bank Azadpur Branch is proved by examining Sh. Chandji Kaul, Senior Executive, J&K Bank as PW-16 who handed over the documents like account opening form and others to the CBI and one Jagmohan Singh PW-5 who introduced the said account. The account opening form is Ex.PW5/A. This account is opened on 04.08.2004, (2) PW-16 also handed over the documents i.e. account opening forms and others of accounts M/s G.C. Fruits opened by Dinesh Khandelwal and M/s Him Kashmir Fruit Co. opened by Mahesh Setia. These accounts were also introduced by PW- 5 and the same are brought on record as Ex.PW5/B and CC No. 38/11(532264/16) 47 /91 Ex.PW5/C. ACCOUNTS AT DELHI STATE CO-OPERATIVE BANK
95. The account of accused Ramesh Kumar in the name of M/s Delhi Haryana Trading Co. in Delhi State Co-operative Bank Azadpur Branch is proved by prosecution by examining Sh. Vikas Mathur, Cashier, Delhi State Co-operative Bank as PW-15 who handed over the documents like account opening form and others to the CBI and one Sh. Amrit Lal PW-4 who introduced the said account. The account opening form is Ex.PW4/A. This account is opened on 27.08.2004.
96. It is the case of prosecution that accused Ramesh Kumar presented some cheques in his 3 accounts maintained at PNB Azadpur Branch, which were issued by himself and his persons namely Dinesh Khandelwal and Mahesh Setia and got them purchased by accused D.K. Malhotra who was the Chief Manager of PNB Azadpur Branch at relevant time. The alleged cheques which were presented by accused Ramesh Kumar and purchased by D.K. Malhotra were either issued by Ramesh Kumar himself from his other accounts maintained at J&K Bank, Azadpur Branch and Delhi State Co-operative Bank, Azadpur CC No. 38/11(532264/16) 48 /91 Branch or issued on his instructions by Dinesh Khandelwal and Mahesh Setia from their accounts maintained at J&K Bank, Azadpur Branch.
97. I proceed to deal with each account of accused Ramesh Kumar and the alleged fraudulent transactions pertaining to the cheques presented by him and purchased by accused D.K. Malhotra.
(I) M/s Ramesh Kumar & Co. bearing A/c No. 2380
98. This is a current account opened by accused Ramesh Kumar as proprietor of the firm M/s Ramesh Kumar & Co. on 13.08.1998 bearing Current A/c. No. 2380. In this account there are 5 transactions of cheque purchases which were alleged to be fraudulent and pecuniary benefit has been obtained to accused Ramesh Kumar.
99. Ex.PW6/B17 to B35 are certain cheques and credit vouchers pertaining to the account i.e. M/s Ramesh Kumar & Co. of accused Ramesh Kumar and handed over to CBI by PW-6. The alleged transactions are as follows -
CC No. 38/11(532264/16) 49 /91
S. Cheque Amount Issued by In favour Purchase Returned Withdrawal
No. No. of d by unpaid details
on
Dated
1 813751 3,74,800/- Ramesh Ramesh D. K. 11.11.04 532768 dated
Kumar from Kumar & 08.11.04 for
DD7697 Malhotra
the A/c of Rs. 3,73,000/-
Co.
08.11.04 Delhi
Haryana
Trading Co., J
& K Bank
2 810468 3,94,090/- Mahesh Setia Ramesh D. K. 13.11.04 532769 dated
DD7741 from the A/c Kumar & 09.11.04 for
Malhotra
of Him Rs. 3,93,000/-
09.11.04 Co.
Kashmir Fruit
Co., J & K
Bank
3 Voucher 3,74,000/- - Ramesh D. K. - 521930 dated
for Ch. Kumar & 13.09.04 for
Malhotra
797669 Rs. 3,73,000/-
Co.
DD5202
13.09.04
4 Voucher 3,74,850/- - Ramesh D. K. - 521931 dated
for Ch. Kumar & 14.09.04 for
Malhotra
797664 Rs. 3,74,000/-
Co.
DD5261
14.09.04
5 Voucher 3,72,000/- - Ramesh D. K. - 521939 dated
for Ch. Kumar & 18.09.04 for
Malhotra
797681 Rs. 3,72,000/-
Co.
DD5450
18.09.04
100. Prosecution has examined one K.K. Gaur as PW-7 and he deposed that Ex.PW6/B28 is a credit voucher dated 13.09.2004 by which cheque bearing no. 797669 dated 13.09.2004 was CC No. 38/11(532264/16) 50 /91 purchased by D.K. Malhotra Chief Manager for Rs.3,74,000/- in this account. PW-7 identified the signature of D.K. Malhtora on Ex.PW6/B28 at point X1 and also identified his own signature at point X2. Ex.PW6/B17 is the cheque bearing no. 521930 dated 13.09.2004 by which accused Ramesh Kumar withdrew an amount of Rs.3,73,000/- on the same day i.e. 13.09.2004 from this account.
101. PW-7 also identified his signature and the signature of D.K. Malhotra on credit voucher Ex.PW6/B29 by which D.K. Malhotra purchased a cheque bearing no. 797664 dated 14.09.2004 for an amount of Rs.3,74,850/-. Ex.PW6/B20 is the cheque by which accused Ramesh Kumar withdrew the amount of Rs.3,74,000/- on the same day i.e. 14.09.2004.
102. PW-7 also identified his signature and the signature of D.K. Malhotra on credit voucher Ex.PW6/B31 by which D.K. Malhotra purchased a cheque bearing no. 797681 dated 18.09.2004 for an amount of Rs.3,72,000/-. Ex.PW6/B22 is the cheque by which accused Ramesh Kumar withdrew the amount of Rs.3,72,000/- on the same day i.e. 18.09.2004.
103. The above credit vouchers i.e. Ex.PW6/B28, B29 and B31 only CC No. 38/11(532264/16) 51 /91 show that the cheques belong to the Bank 'JKB' (as mentioned on credit vouchers) but it is not clear from which account they were issued and by whom. Prosecution has not filed the alleged original cheques on record. All these three cheques were honoured and no financial loss suffered by the Bank. However, it is argued by the Ld. PP that these cheques were issued by accused Ramesh Kumar himself from his account of M/s. Delhi Haryana Trading Co. at J&K Bank Ltd. Azadpur, Delhi in violation of Bank guidelines. As stated above, the cheques are not filed on record and there is no evidence to show that these cheques were issued by Ramesh Kumar himself from the account i.e. M/s Delhi Haryana Trading Co. at J&K Bank Ltd. Azadpur, Delhi. The statement of account Ex.PW9/B1 also does not show any details with regard to the cheques purchased and the account from which they were issued and by whom. The said statement only shows the Bill numbers which are mentioned on credit vouchers.
104. There is another cheque bearing no. 813751 dated 08.11.2004 for an amount of Rs.3,74,800/- which is alleged to have been presented by accused Ramesh Kumar in this account and CC No. 38/11(532264/16) 52 /91 purchased by accused D.K. Malhotra. It is also the case of prosecution that this cheque is issued by Ramesh Kumar himself from his account i.e. Delhi Haryana Trading Co. in J&K Bank, Azadpur, Delhi. To prove this, the prosecution has filed certified copies of cheque, credit voucher and cheque return memo obtained from the court of Ld. MM, Rohini Courts, Delhi. The said certified copies are Ex.PW11/C1.
105. It is argued by the Ld. Counsel for defence that the certified copies i.e. Ex.PW11/C1 are not proved as per the Evidence Act, therefore, cannot be read in evidence. On the other hand, Ld. PP for CBI argued that these documents are certified copies obtained from the Court where the original documents were presented, therefore, they are admissible as secondary evidence.
106. It is seen from the record that Ex.PW11/C1 contains certified copies of cheque, credit voucher and cheque return memo. They are brought on record by the prosecution through witness PW-11 Sh. R.K. Chawla. It is relevant to reproduce the evidence of PW-11 in this connection, which is as follows :
"It is a letter signed by me at point A. By this letter I also CC No. 38/11(532264/16) 53 /91 handed over certified copies of various documents referred to in the letter after getting the same from Azadpur Branch of PNB. The said letter is now Ex.PW-11/C. The documents which I had supplied to CBI are Ex.PW11/C1(D-148)(colly. running into 6 sheets), Ex.PW- 11/C2(D-149)(running into 5 sheets) and Ex.PW-11/C3(D-
150)(running into 4 sheets)."
107. PW-11 Sh. R.K. Chawla was working at North Delhi Zonal Office, Rajendra Place, New Delhi during the period i.e. July, 2007 when he handed over certain documents to the IO. It is an admitted fact by PW-11 in the cross-examination that he was never posted at Azadpur Branch of PNB and was never personally involved in the business of PNB Azadpur Branch. Therefore, it is clear that PW-11 did not have any knowledge nor he was a witness to the documents i.e. Ex.PW11/C1 nor he had seen the originals of these documents. The certified copy of the cheque in dispute was not identified by PW-7 Sh. K.K. Gaur, who was the main witness of prosecution to the alleged transactions. PW-7 also did not identify the credit voucher and the signature of accused D.K. Malhotra on the credit voucher. The cheque return memo which was sent by the J&K Bank, Azadpur Branch is also not proved by any of the witnesses. In CC No. 38/11(532264/16) 54 /91 fact, all these documents like cheque, credit voucher and cheque return memo which are part of Ex.PW11/C1 were not put to any of the witnesses. PW-21, who is the Manager of PNB Azadpur Branch, not produced any record pertaining to the above said cheque, credit voucher and cheque return memo and simply stated that they were not available with the branch. PW 21 further stated that the original documents might have been filed in CMM Court, Tis Hazari. This witness who is the Manager of the PNB Azadpur Branch where alleged transactions have taken place is also not clear as to where are the original documents and her statement that they might have been filed in Court of CMM, Tis Hazari creates a doubt with regard to the documents i.e. Ex.PW11/C1 which are certified copies obtained from the Court of Ld. MM, Rohini, Delhi. This witness though states that the documents Ex.PW11/C1 belong to her branch she admits in cross-examination that she never saw the original documents.
108. It is settled law that mere filing of the document or exhibition of the document does not amount to proving the document as the same has to be proved strictly in terms of the Evidence Act. In CC No. 38/11(532264/16) 55 /91 this regard it is apt to cite the Judgement of Hon'ble Madras High Court in G. Subbaraman & Ors. v. State 2018 Legal Eagle 182 wherein it is held as under :
"36. Normally, any party who wants to prove the content of the document is required to lead evidence by production of the original document before the Court through its author. Under Section 61, the original document can be presented before the Court through the author, who created the document and it can be proved. In alternate, when the content of the document is attempted to be proved by tendering secondary evidence, such document can be tendered under Section 63 read with Section 65 of the Evidence Act provided the conditions laid down in these sections are satisfied. Section 63(2), permits, copies can be made from original by mechanical processes which in themselves ensure the accuracy of the copy and copies compared with such copies. But, in this case, no witness from the prosecution has deposed that the exhibits Ex. P.3 to Ex. P.8, Ex. P.11 to Ex. P.13, Ex. P.15, Ex. P.18, Ex. P.21, Ex. P.22, Ex. P.42, Ex. P.65, Ex. P.85 to Ex. P.89, Ex. P.95 and Ex. P.98 with 'certified copy' seal are photocopies made from original by mechanical processes and he ensure the accuracy of the copy. In alternate some of the witnesses have admitted that they have not seen the original ;
37. ...........
CC No. 38/11(532264/16) 56 /91
38. In H. Siddiqui (D) by LRS v. A. Ramalingam reported in (2011) 4 SCC 240 as observed that :
"The provisions of Section 65 of the 1872 Act provide for permitting the parties to adduce secondary evidence. However, such course is subject to a large number of limitations. In a case where the original documents are not produced at any time, nor has any factual foundation been laid for giving secondary evidence, it is not permissible for the Court to allow a party to adduce secondary evidence. Thus, secondary evidence relating to the contents of a document is inadmissible, until the non-production of the original is accounted for, so as to bring it within one or other of the cases provided for in the Section. The secondary evidence must be authenticated by foundational evidence that the alleged copy is in fact a true copy of the original. Mere admission of a document in evidence does not amount to its proof. Therefore, the documentary evidence is required to be proved in accordance with law. The Court has an obligation to decide the question of admissibility of a document in secondary evidence before making endorsement thereon. (Vide Roman Catholic Mission of State of Madras, State of Rajasthan v. Khemraj, LIC v. Ram Pal Singh Bisen and M. Chandra vs. M. Thangamuthu)" ;
39. In. J. Yashoda v. K. Shobha Rani reported in (2007) 5 SCC 730 Hon'ble Supreme Court has held that ; "9. The rule which is the most universal, namely, that the CC No. 38/11(532264/16) 57 /91 best evidence the nature of the case will admit shall be produced, decides this objection that rule only means that, so long as the higher or the superior evidence is within your possession or may be reached by you, you shall given no inferior proof in relation to it. Section 65 deals with the proof of the contents of the documents tendered in evidence. In order to enable a party to produce secondary evidence it is necessary for the party to prove existence and execution of the original document. Under Section 64, documents are to be provided by primary evidence. Section 65, however permits secondary evidence to be given of the existence, condition or contents of documents under the circumstances mentioned. The conditions laid down in the said Section must be fulfilled before secondary evidence can be admitted. Secondary evidence of the contents of a document cannot be admitted without non- production of the original being first accounted for in such a manner as to bring it within one or other of the cases provided in the Section.
109. The Hon'ble High Court of Delhi in case titled Sudir Engineering Company vs Nitco Roadways Ltd. has categorically observed that mere marking or exhibition of the document will not make the document admissible in evidence unless it is proved as prescribed by the Evidence Act. The CC No. 38/11(532264/16) 58 /91 relevant portion of the said Judgement is as follows :
"15. The marking of a document as an exhibit, be it in any manner whatsoever either by use of alphabets or by use of numbers, is only for the purpose of identification. While reading the record the parties and the Court should be able to know which was the document before the witness when it was deposing. Absence of putting an endorsement for the purpose of identification no sooner a document is placed before a witness would cause serious confusion as one would be left simply guessing or wondering while was the document to which the witness was referring to which deposing. Endorsement of an exhibit number on a document has no relation with its proof. Neither the marking of an exhibit number can be postponed till the document has been held proved; nor the document can be held to have been proved merely because it has been marked as an exhibit."
110. In view of the above it is held that the cheque bearing no.
813751 dated 08.11.2004 for an amount of Rs.3,74,800/- which is alleged to have been presented by the accused Ramesh Kumar and purchased by accused D.K. Malhotra and the corresponding credit voucher and the return memo which are part of Ex.PW11/C1 are not proved. The prosecution has relied CC No. 38/11(532264/16) 59 /91 on the statement of account of M/s Ramesh Kumar & Co. i.e. Ex.PW9/B1 to prove the transaction with regard to the purchase of the above cheque and subsequent withdrawal of the amount. The entry dated 08.11.2004 at point X-15 on Ex.PW9/B1 showing the deposit of an amount of Rs.3,74,800/- against the Bill No. 061800E07697/04 and the entry dated 11.11.2004 at point X-16 showing the withdrawal of the said amount, do not provide any cheque number or the account details to show that the amount deposited and withdrawn at these entries are that of the same transaction of purchase of cheque no. 813751 as alleged by the prosecution. In the absence of such details of cheque, credit voucher, account particulars of the drawee it cannot be made out that an amount of Rs.3,74,800/- was credited to the account of M/s Ramesh Kumar & Co. by purchasing a cheque issued by Ramesh Kumar himself from a different account. Even otherwise statement of account alone is not sufficient to prove the liability let alone guilt of the accused.
111. As per the case of the prosecution, there is another cheque bearing no. 810468 dated 09.11.2004 for an amount of Rs.3,94,090/- issued by accused Mahesh Setia from his CC No. 38/11(532264/16) 60 /91 account M/s Him Kashmir Fruit Co. at J&K Bank, which got discounted by accused D.K. Malhotra in the account of M/s. Ramesh Kumar & Co. and the amount was withdrawn by the accused Ramesh Kumar on the same day. Subsequently, the said cheque alleged to have been returned unpaid by the drawee Bank.
112. Prosecution has brought on record Ex.PW11/C2 which contains the certified copies of cheque, credit voucher and cheque return memo obtained from the Court of Ld. MM, Rohini Courts, Delhi. These documents i.e. certified copies of cheque, credit voucher and cheque return memo which are Ex.PW11/C2 are similar to the documents i.e. Ex.PW11/C1 which are discussed as to their admissibility in preceding transaction. Hence, these documents Ex.PW11/C2 i.e. certified copies of cheque no. 810468 dated 09.11.2004 for an amount of Rs.3,94,090/-, corresponding credit voucher and cheque return memo allegedly issued by J&K Bank, Azadpur Branch are also held not admissible in evidence. The statement of account Ex.PW9/B1 is also not much of use to prove the transaction for the reasons given in preceding paragraphs.
CC No. 38/11(532264/16) 61 /91 (II) M/s Delhi Haryana Trading Co. bearing A/c. No. 211- 28210 This account is opened by accused Ramesh Kumar in PNB Azadpur Branch in the capacity of proprietor of M/s Delhi Haryana Trading Co. on 19.07.2004. To prove the said fact, the prosecution examined PW-2 Sh. Ram Kanwar Singhmar who was Manager at PNB, Azadpur Branch at relevant time. The account opening form of M/s Delhi Haryana Trading Co. is Ex.PW2/A1 with current account no. 21128210.
113. In this account there are 2 cheques which were presented by accused Ramesh Kumar and allegedly purchased by accused D.K. Malhotra the then Incumbent Incharge and the amount was credited in the account. The details of alleged transactions are as follows-
S. Cheque Amount Issued by In favour Purchased Returned Withdrawal
No. No. of by unpaid on details
Dated
1 816437 3,74,700/- Dinesh Delhi D. K. 11.11.04 532707
Khandelwal Haryana dated
DD7698 Malhotra
from the A/c Trading 08.11.04 for
08.11.04 of G.C. Fruits Co. Rs.
Co., J & K 3,74,000/-
Bank
2 816439 3,74,000/- Dinesh Delhi D. K. 13.11.04 532722
Khandelwal Haryana dated
CC No. 38/11(532264/16) 62 /91
DD7740 from the A/c Trading Malhotra 09.11.04 for
of G.C. Fruits Co. Rs.
09.11.04
Co., J & K 3,73,000/-
Bank
114. It is the case of the prosecution that these 2 cheques bearing Nos. 816437 and 816439 were issued by one Dinesh Khandelwal who is a friend of accused Ramesh Kumar without any genuine trade transaction, accomodatory in nature purchased by accused D.K. Malhotra in violation of banking guidelines and the amount was withdrawn by accused Ramesh Kumar on the same day but subsequently the said cheques were returned unpaid by the drawee bank. The prosecution examined PW-7 K.K. Gaur who was working as Manager at PNB Azadpur Branch at relevant time. PW-7 in his evidence brought on record two original cheques i.e. cheque number 532707 dated 08.11.2004 for Rs. 3,74,000/- as Ex. PW 7/A22 and cheque number 532722 dated 09.11.2004 for Rs. 3,73,000/- as Ex. PW 7/A28 by which accused Ramesh Kumar allegedly withdrew the amount which was credited to his account of M/s Delhi Haryana Trading Company on account of purchasing two cheques issued by Dinesh Khandelwal from his CC No. 38/11(532264/16) 63 /91 account M/s G.C. Fruits at J&K Bank, Azadpur Branch, Delhi. The withdrawal entries are also shown in Statement of Account Ex. PW 9/A1 at points X-3 and X-6.
115. Prosecution has filed on record the copies of two cheques Nos.
816437 and 816439 presented by accused Ramesh Kumar and purchased by accused D.K. Malhotra and their corresponding credit vouchers along with cheque return memos and they are marked as Mark-Y (collectively) during the evidence of IO PW
25. The said copies appear to be certified by the concerned Bank Manager who supplied these photocopies to the IO in course of investigation. According to the deposition of PW 25 IO, these copies are certified by Bank Manager R.K. Kapoor of PNB Azadpur Branch and handed over to him during the investigation. The said R.K. Kapoor was examined by Prosecution as PW 9 but he has not stated anything about these photocopies of two cheques and corresponding credit vouchers along with cheque return memos nor he identified his signatures as certifying authority on these photocopies. Admittedly, PW 25 IO did not see the originals of these documents during the course of investigation or any time.
CC No. 38/11(532264/16) 64 /91 Though it is stated by PW 25 that he received these documents in course of investigation, there is no seizure memo which shows how and where from these documents were collected by him. PW 21 Manager PNB Azadpur Branch, Delhi who was summoned to produce the originals of the documents did not produce the originals and stated in her evidence that the originals are not available with the Branch. There is no explanation from any of the witnesses including Bank officials and the IO as to where these originals have gone. These photocopies which are allegedly certified by the PW 9 were not put to the important witness of prosecution i.e. PW 7 who could have identified the documents and the alleged signatures of accused D.K. Malhotra on copies of credit vouchers. In the absence of any such evidence, it is held that prosecution has failed to prove the documents i.e. copies of cheques bearing No. 816437 dated 08.11.2004 for Rs. 3,74,700/- and No. 816439 dated 09.11.2004 for Rs. 3,74,000/- and their corresponding credit vouchers along with cheque return memos. (III) M/s Him Kashmir Fruit Co. bearing A/c. No. 21128487 There are 6 disputed transactions wherein it is alleged by the CC No. 38/11(532264/16) 65 /91 prosecution that cheques were presented in this account by accused Ramesh Kumar and purchased by accused D.K. Malhotra. Out of the said 6 transactions of purchasing of cheques, 3 cheques stated to have been honoured by the drawee bank and 3 cheques were returned unpaid.
116. The alleged transactions pertaining to this account are as follows -
S. Cheque Amount Issued by In favour Purchase Returned Withdrawal
No. No. of d by unpaid details
on
Dated
1 629590 3,74,500/- Ramesh Him D. K. 11.11.04 538263 dated
DD76940 Kumar from Kashmir 08.11.04 for
Malhotra
8.11.04 A/c of Delhi Fruit Co. Rs. 3,73,000/-
Haryana
Trading Co.,
DSCOB
2 816438 1,99,540/- Dinesh Him D. K. 13.11.04 538264 dated
DD77110 Khandelwal Kashmir 08.11.04 for
Malhotra
8.11.04 from the A/c Fruit Co. Rs. 2,00,000/-
of G.C. Fruits,
J & K Bank
3 629591 3,98,900/- Ramesh Him D. K. - 538265 dated
DD77380 Kumar from Kashmir 09.11.04 for
Malhotra
9.11.04 the A/c of Fruit Co. Rs. 3,97,000/-
Delhi
Haryana
Trading Co.,
DSCOB
4 Voucher 3,74,750/- - Him D. K. - 538252 dated
for Kashmir 28.10.04 for
Malhotra
Cheque Fruit Co. Rs. 3,74,000/-
no.
CC No. 38/11(532264/16) 66 /91
629578
DD71532
8.10.04
5 Voucher 3,74,800/- - Him D. K. - 538255 dated
for Kashmir 30.10.04 for
Malhotra
Cheque Fruit Co. Rs. 3,50,000/-
no.
629581
DD7270
30.10.04
6 Voucher 2,30,000/- - Him D. K. - 538261 dated
for Kashmir Malhotra 05.11.04 for
Cheque Fruit Co. Rs. 3,00,000/-
no.
629588
DD7567
05.11.04
117. The details of the 3 honoured cheques which were presented by accused Ramesh Kumar and allegedly purchased by accused D.K. Malhotra the then Incumbent Incharge are :
(i) Cheque no. 629578 dated 28.10.2004 for Rs.3,74,750/-
purchased vide DD No. 7153 ;
(ii) Cheque no. 629581 dated 30.10.2004 for Rs.3,74,800/- purchased vide DD No. 7270 ; and
(iii) Cheque no. 629588 dated 05.11.2004 for Rs.2,30,000/- purchased vide DD No. 7537.
118. PW-15 Mr. Vikas Mathur who is working as Assistant with Delhi State Co-operative Bank Azadpur Branch in his evidence brought on record the statement of account of M/s Delhi CC No. 38/11(532264/16) 67 /91 Haryana Trading Co. which is maintained at Delhi State Co- operative Bank as Ex.PW15/B. Witness PW-15 also stated that accused Ramesh Kumar was operating an account in the name of M/s Delhi Haryana Trading Co. bearing account no. 713 in his bank. The account opening form is Ex.PW4/A is brought on record through witness PW-4 who introduced the said account. The witness PW-7 has identified his signature and the signature of accused D.K. Malhotra on the credit vouchers by which the above said 3 cheques were purchased and the same are brought on record as Ex.PW7/A16, A17 and A18 respectively. The credit vouchers PW7/A16 to A18 only show the cheque nos. and the name of the drawee bank as 'TDSB' which refers presumably to The Delhi State Co-operative Bank. These credit vouchers do not show the name and number of the account on which these cheques were drawn nor they show any details of the person who issued the cheques. Prosecution has not filed original cheques on record. The statement of account Ex.PW15/B shows 3 entries pertaining to these cheques on the third page however, the statement of account does not clearly show the date of the entries. It is admitted fact that these 3 CC No. 38/11(532264/16) 68 /91 cheques were honoured and there is no financial loss caused to the complainant Bank.
119. There are 3 more cheques which were alleged to have been presented by accused Ramesh Kumar in this account, purchased by D.K. Malhotra which are returned unpaid by the drawee bank i.e. Delhi State Co-operative Bank. The details of the 3 cheques returned unpaid are as follows :
(i) Cheque no. 629590 dated 08.11.2004 for Rs.3,74,500/-
purchased vide DD No. 7694 ;
(ii) Cheque no. 629591 dated 09.11.2004 for Rs.3,98,900/- purchased vide DD No. 7738; and
(iii) Cheque no. 816438 dated 08.11.2004 for Rs.1,99,540/- purchased vide DD No. 7711.
120. According to prosecution first two cheques were issued by accused Ramesh Kumar himself from his account M/s Delhi Haryana Trading Co. maintained at Delhi State Co-operative Bank Azadpur Branch, Delhi and the same were purchased by accused D.K. Malhotra in the account M/s Him Kashmir Fruit Co. It is argued by the Ld. PP for CBI that accused Ramesh Kumar by presenting the cheques issued by himself from CC No. 38/11(532264/16) 69 /91 different bank account without having sufficient balance to honour them, committed cheating on the Punjab National Bank. Ld. PP also argued that accused D.K. Malhotra Incumbent Incharge purchased said cheques against the guidelines as stipulated under the circular No. 130 issued by the Punjab National Bank. Ld. PP further argued that as per the said circular the Incumbent Incharge must not purchase the cheques of co-operative banks and cheques of sister concerns. On the other hand, the Ld. Counsel for accused D.K. Malhotra and accused Ramesh Kumar have argued that the prosecution has not filed original circular no. 130 but filed only a copy of it which was Exhibited subject to the objections raised by defence counsel. Ld. Defence Counsel also argued that the violation of the guidelines of Ex.PW11/A, if any, at the most invite a departmental action but does not amount to an offence. Ld. Counsel further argued that prosecution has failed to prove the above alleged cheques and the transactions pertaining to the said cheques by legally admissible evidence.
121. Prosecution through witness PW-7 brought on record 3 cheques bearing nos. 538263, 538264 and 538265 as Ex.PW7/A21, A24 CC No. 38/11(532264/16) 70 /91 and A25 through which accused Ramesh Kumar has withdrawn the amount from this account at PNB, Azadpur branch which is alleged cheque purchase amount pertaining to the 3 cheques, allegedly purchased by accused D.K. Malhotra. Prosecution has not filed the original cheques, credit vouchers and cheque return memos on record. What all prosecution filed was photocopies of cheques and cheque return memos(no credit voucher) pertaining to cheque nos. 629590 & 629591 and copy of only cheque (no credit vouhcer and no cheque return memo) pertaining to cheque no. 816438 and they are marked as Mark Z (colly.). It is necessary to recall that first two cheques were allegedly issued by Ramesh Kumar himself from his account at Delhi State Co-operative Bank and the third cheque was allegedly issued by one Dinesh Khandelwal from his account of M/s G.C. Fruits at J&K Bank. The above photocopies are alleged to be certified by Ashok Kumar Kapoor, Bank Manager, PNB, Azadpur Branch, Delhi. The said Ashok Kumar Kapoor was examined by the prosecution as PW-9 but he did not state anything about these photocopies. In his entire evidence, he has not stated that he has certified these photocopies after CC No. 38/11(532264/16) 71 /91 seeing the original documents nor he identified his signature on these photocopies. It is only PW-25, IO who stated that these photocopies were collected by him during investigation and they are certified by PW-9 and further handed over to him. In the absence of any evidence to prove these photocopies as secondary evidence in terms of section 65 of the Evidence Act, the photocopies i.e. Mark Y and Mark Z are held inadmissible, therefore, cannot be read in evidence. Even otherwise there are no credit vouchers pertaining to these 3 cheques on record to show that these cheques were purchased by accused D.K. Malhotra. Prosecution relies on two statements of account Ex.PW9/C1 i.e. of M/s Him Kashmir Fruit Co. at PNB and Ex.PW15/B i.e. of M/s Delhi Haryana Trading Co. at Delhi State Co-operative Bank. As stated earlier these statements of accounts are not sufficient to prove the liability much less the penal liability. In view of the above it is held that the prosecution has failed to prove the transactions pertaining to the above alleged 3 cheques i.e. cheque nos. 629590, 929591 and 816438.
122. Another argument advanced by Ld. PP for CBI that these CC No. 38/11(532264/16) 72 /91 accounts M/s Delhi Haryana Trading Co. and M/s Him Kashmir Fruit Co. were opened by accused Ramesh Kumar at PNB Azadpur Branch during the incumbency of accused D.K. Malhotra and certain cheques which were purchased in these accounts returned unpaid the moment accused D.K. Malhotra got suspended is a circumstance which indicates that these 2 accused conspired to cheat the bank by way of utilizing cheque discounting facility. First of all the prosecution failed to prove the cheques and the transactions pertaining to the discounting of the cheques which have taken place during the incumbency of accused D.K. Malhotra as discussed in detail in preceding paragraphs. Even otherwise the alleged opening of the accounts during the incumbency of accused D.K. Malhotra and dishonour of cheques after his suspension only create a vague suspicion and nothing more than that.
123. Prosecution has strongly relied on circular no. 130 i.e. Ex.PW11/A and the guidelines mentioned therein. It is not clear why the prosecution has not filed the original circular no. 130. However, the witnesses PW11 and others have clearly stated in their evidence that they are aware of this circular and its CC No. 38/11(532264/16) 73 /91 contents with regard to the precautions in banking transactions. The evidence of PW-11 in this regard is as follows-
"Q. Are you familiar with the loan powers and its guidelines issued by the Head Office?
Ans. Yes. There are Circulars issued defining the loan powers of the officers of the different levels and how they are to be sanctioned and released from time to time. At the relevant time i.e. in the year 2003-2004 was the circular No. 130 dated 31.12.2002. I can identify the same, if shown to me.
(At this stage a copy of Circular is placed on the record of this case and shown to the witness.) I can identify this circular, I had personally handled and used this circular during the course of my official duties. The circular is now Ex.PW-11/A(subject to the objections of the Ld. Defence counsel."
124. Evidence of PW-7 and PW-11 clearly prove the existence and contents of circular 130 Ex.PW11/A. Even accused D.K. Malhotra himself admitted and relied on this circular while answering question no. 33 in his examination under section 313 Cr.P.C.
125. There are 2 important guidelines which according to prosecution are violated by accused D. K. Malhotra to obtain alleged CC No. 38/11(532264/16) 74 /91 pecuniary benefit. They are as follows :
"a. These powers are to be exercised only in respect of cheques representing genuine trade transactions and should not be exercised for cheques of the allied/associated concerns.
b. .........
c. Advance is not to be allowed in any shape against the cheques/pay orders/drafts issued by Co-operative Banks, including State Co-operative Banks. However, in case any exception is to be made, proposal for specific approval of any Co-operative Bank may be moved through the Zonal Manager to CAD(O), HO."
126. It is an admitted fact that cheque purchasing / discounting is a normal banking practice and a facility provided by almost all Banks to their customers. As PW 2 and other witnesses stated this facility is given to the customers who have got good reputation.
127. In this connection, it is pertinent to read the evidence of PW-2 which is as follows-
"Q. Please inform the Court what was the procedure for purchase of cheques in the Branch?
Ans. As per the procedure the Bank Manager was competent to purchase the cheque of a party after examining the cheque and reputation of the party, For this the Bank also used to CC No. 38/11(532264/16) 75 /91 charge its commission. After the purchase the ODD account (Inland Bill Purchase Account) was debited and credited to the party's account after deducting the commission. The cheque thereafter would be sent to the concerned Bank for clearing. Once the cheque is cleared the amount is credited to the ODD account and in case the cheque is not cleared the party's account would be debited along with interest. In case there is not sufficient balance in the account of the party, the party would be notified and if still the account is not put into order the recovery proceedings are initiated against the party".
128. One witness by name S.K. Mahajan who worked as Senior Manager at Punjab National Bank, Azadpur Branch, Delhi was examined as DW 3. His statement in examination in chief is as follows :
"I have worked as Senior Manager with Punjab National Bank, Azadpur New Subzi Mandi Branch, New Delhi. I know accused Ramesh Kumar, present in the Court today as he was Customer of our Branch. He was having Current Accounts in the name of his firms, prior to my joining in the said Branch. He was a good customer.
I sanctioned limit of Rs. 4 lacs in one of his Current Accounts. During the course of Banking Transactions, accused Ramesh Kumar used to deposit cash, withdraw through cheques and was also availing the facility of Bill CC No. 38/11(532264/16) 76 /91 Discount (Cheque Purchase) from the Bank. Bill Discounting is a normal Banking procedure, allowed to good customers having good financial track record, for immediate credit of money to customer's account to be used for business purpose. Bank charges and commissions are deducted in advance from the proceeds of cheque. Bill Discounts are done at branch level as per instructions and guidelines of Head office.
Periodical statements are sent to the Controlling Office in respect of the Bill Discounting facility during that particular period. Head Office keeps a watch on the branches through regular inspections conducted by Concurrent Auditors / Regular Auditors. RBI also at random gets the inspection of branches done through their own Auditors. There are instructions from the Higher Authorities to increase the business of the branch and Bill Discounting is also part of business, which is mutually beneficial to the Bank and the Customers.
The purpose of sending the statements of Bill Discount to Higher Authorities is firstly feed back for them and secondly for rectification or corrective steps, if there is any deviation. While granting a limit of Rs. 4 lacs to accused Ramesh Kumar, his property situated at Rohini, New Delhi, was got mortgaged as collateral security along with assignment of some insurance policies. The purpose of taking the collateral security and insurance policies is to safeguard the CC No. 38/11(532264/16) 77 /91 interest of the Bank in case the loan account goes bad, in this case the securities are got realized and the proceeds are deposited in the loan account."
129. It is also admitted fact by the Bank officials who are examined as witnesses by the Prosecution that such facility is also given to accused Ramesh Kumar in the past i.e. prior to the disputed transactions. It is pertinent to mention that it is not only accused D.K. Malhotra but previous Managers like DW 3 and other Managers like V.K. Saini, have also purchased the cheques of accused Ramesh Kumar in the past. In the above circumstances, it cannot be said that it is only D.K. Malhotra who has given this facility to accused Ramesh Kumar and thereby allowed some pecuniary benefit to be obtained by the accused Ramesh Kumar. The said fact is further strengthened with the fact that the property of accused Ramesh Kumar, as revealed in the evidence of DW 3, was kept as collateral security. It is also admitted fact that the cheques purchased by the D.K. Malhotra were of the value which were well within the limits of the powers of Chief Manager.
130. As discussed above, the cheques presented by accused Ramesh Kumar were purchased in the past by other Managers CC No. 38/11(532264/16) 78 /91 also. Accused D.K. Malhotra has only continued that facility to accused Ramesh Kumar. There is no evidence to show that there was any conspiracy, direct or otherwise, between accused D.K. Malhotra and accused Ramesh Kumar. Infact, it is categorically stated by the IO that in the entire course of investigation, no material found to show that accused D.K. Malhotra, has received any illegal consideration for extending the facility of cheque discounting to accused Ramesh Kumar. The statement of IO PW 25 is as follows :
"Q. Is it correct that Sh. D.K. Malhotra has not obtained any pecuniary advantage in these Banking transactions ? A. No such thing came on record during the course of investigation."
131. It is also pertinent to mention that there is absolutely no evidence to show that there were no genuine trade transactions conducted by accused Ramesh Kumar. Per contra, it is stated in the chargesheet that the amount credited to the account of accused was used for business purpose and Bank earned commission on it (para number 2 at page number 3 of chargesheet). In the above circumstances, the violation of CC No. 38/11(532264/16) 79 /91 guidelines as mentioned in Circular 130 i.e. Ex. PW 11/A cannot be considered to have been done with a criminal intention to cheat the Bank. In this regard, Hon'ble Apex Court in Abdullah Mohd. Pagarkar Vs. State AIR 1990 SC 499 held as follows :
"Though the work was got executed in flagrant disregard or the relevant Rules and even of ordinary norms of procedural behaviour of Governmental officials and contractors such disregard did not amount to any of the offences alleged against them. The onus of proof of the existence of every ingredient of the charge always rests on the prosecution and never shifts. It was incumbent therefore on the State to bring out, beyond all reasonable doubt, that the number of labourers actually employed in carrying out the work less than that stated in the summaries appended to the bills paid for by the Government. The accused could not be convicted relying on the mere impression of the prosecution witnesses regarding the number of labourers employed from time to time. No doubt there were several irregularities giving rise to a strong suspicion in regard to the bona fides of the accused in the matter of the execution of the work but suspicion, however strong, could not be a substitute for proof. And it was not permissible to place the burden of proof of innocence on the person accused of a criminal charge."
CC No. 38/11(532264/16) 80 /91 In A. Sivaprakash Vs. State of Kerala, the Hon'ble Apex Court held as follows :
"17. Section 13(1)(d) of the PC Act reads as under :
"13. Criminal misconduct by a public servant (1) A public servant is said to commit the offence of criminal misconduct, -
xxxxx
(d) If he, -
(i) by corrupt or illegal means, obtains for himself
or for any other person any valuable thing or pecuniary advantage ; or
(ii) by abusing his position as a public servant, obtains for himself or for any other personal any valuable thing or pecuniary advantage ; or
(iii) while holding office as a public servant, obtains for any person any valuable thing or pecuniary advantage without any public interest ; or"
The prosecution has sought to cover the case of the appellant under sub-clause (ii) and not under sub-clause (I) and sub-clause (iii). Insofar as sub-clause (ii) is concerned, it stipulates that a public servant is said to commit the offence of criminal misconduct if he, by abusing his position as a public servant, obtains for himself or for any other person any valuable thing or pecuniary advantage. Thus, the ingredients which will be required to be proved are :
CC No. 38/11(532264/16) 81 /91
(1) The public servant has abused his position.
(2) By abusing that position, he has obtained for himself
or for any other person any valuable thing or pecuniary advantage.
18. It was not even the case set up by the prosecution that appellant had taken that money from some person and had obtained any pecuniary advantage thereby. It was the obligation of the prosecution to satisfy the aforesaid mandatory ingredients which could implicate the appellant under the provisions of Section 13(1)(d)(ii). The attempt of the prosecution was to bring the case within the fold of clause (ii) alleging that he misused his official position in issuing the certificate utterly fails as it is not even alleged in the chargesheet and not even iota of evidence is led as to what kind of pecuniary advantage was obtained by the appellant in issuing the said letter.
19. In C. Chenga Reddy & Ors. V. State of A.P. (1996) 10 SCC 193, this Court held that even when codal violations were established and it was also proved that there were irregularities committed by allotting/awarding the work in violation of circulars that by itself was not sufficient to prove that a criminal case was made out. The Court went on to hold :
"22. On a careful consideration of the material on the record, we are of the opinion that though the prosecution has established that the appellants have CC No. 38/11(532264/16) 82 /91 committed not only codal violations but also irregularities by ignoring various circulars and departmental orders issued from time to time in the matter of allotment of work of jungle clearance on nomination basis and have committed departmental lapse yet, none of the circumstances relied upon by the prosecution are of any conclusive nature and all the circumstances put together do not lead to the irresistible conclusion that the said circumstances are compatible only with the hypothesis of the guilt of the appellants and wholly incompatible with their innocence. In Abdullah Mohd. Pagarkar V. State (Union Territory of Goa, Daman and Diu), (1980) 3 SCC 110, under somewhat similar circumstances this Court opined that mere disregard of relevant provisions of the Financial Code as well as ordinary norms of procedural behaviour of government officials and contractors, without conclusively establishing, beyond a reasonable doubt, the guilt of the officials and contractors concerned, may give rise to a strong suspicion but that cannot be held to establish the guilt of the accused. The established circumstances in this case also do not establish criminality of the appellants beyond the realm of suspicion and, in our opinion, the approach of the trial Court and the High Court to the requirements of CC No. 38/11(532264/16) 83 /91 proof in relation to a criminal charge was not proper....."
132. It is the argument of Ld. PP for CBI that the offence of cheating is proved by circumstances like credit vouchers, account statements, disbursal of amounts and dishonour of cheques by the drawee Banks. It is also argued that the offence of cheating is complete the moment delivery of property has taken place and defence of collateral security of property is of no avail. It has nothing to do with the security offered or the subsequent payment of outstanding dues by the accused Ramesh Kumar.
133. Ld. PP for CBI has relied on the judgment of Hon'ble Supreme Court in Devender Kumar Singla Vs. Baldev Krishan Singla 2004 (2) SCR 459, wherein the Hon'ble Apex Court explained the ingredients of offence punishable u/s 420 IPC and further held as follows "As was observed by this Court in Shivanarayan Kabra v. State of Madras, AIR(1967) SC 986 it is not necessary that a false pretence should be made in express words by the accused. It may be inferred from all the circumstances including the conduct of the accused in obtaining the property. In the true nature of things it is not always possible to prove dishonest intention by any direct CC No. 38/11(532264/16) 84 /91 evidence. It can be proved by number of circumstances from which a reasonable inference can be drawn."
134. In cases where the evidence is of circumstantial in nature the circumstances from which the conclusion of guilt is to be drawn should be fully established. Each fact sought to be relied upon must be proved individually. In regard to proof of primary facts the court has to judge the evidence and decide whether that evidence proves a particular fact and if that fact is proved, the question whether that leads to an inference of guilt of the accused should be considered.
135. The Prosecution in the absence of original cheques placed heavy reliance on credit vouchers and statements of accounts to prove that the disputed cheques were presented by the accused Ramesh Kumar and were purchased by accused D.K. Malhotra and these cheques were returned unpaid. I have carefully gone through the credit vouchers and statements of accounts and my observations in this regard are as below :-
Credit Vouchers
- The name of the drawee account from which cheque is issued is not mentioned on the Credit vouchers.
CC No. 38/11(532264/16) 85 /91
- Drawee account number is not mentioned on the credit vouchers.
- Name of the person who issued the cheque is not mentioned on the credit vouchers.
- Details of amount mentioned on the credit vouchers do not match with the corresponding entry in the statement of account.
For instance, the credit voucher shows Ex.PW6/B28 shows the cheque amount of Rs.3,74,000/- but corresponding entry in the statement of account Ex.PW9/B1 shows the amount as Rs.3,74,600/-.
- Drawee bank name on which cheques in dispute are issued is not properly mentioned. For instance, on the credit voucher Ex.PW7/A16 name of the drawee bank is mentioned as 'TDSB' from which the prosecution seeks the court to infer the drawee bank as 'The Delhi State Co-operative Bank'. Similarly, on the credit voucher Ex.PW7/A19 shows the drawee bank as 'JKB' from which the prosecution infers as 'Jammu & Kashmir Bank'.
Statements of Accounts
- The entries in the statements of accounts do not show the numbers of cheques which are purchased but only show the DD CC No. 38/11(532264/16) 86 /91 No. by which the alleged cheques said to have been purchased.
For instance, statement of account Ex.PW9/B-1 at point X-15 (Same is for all entries).
- Statements of accounts show two entries on same DD No. first for credit of the amount and second for debit of amount (may be towards commission). For instance, Ex.PW9/B1 entry dated 13.09.2004.
- The DD Nos. by which cheque are purchased as mentioned on credit vouchers are different from what is mentioned in the statement of accounts. For instance, the DD No. credit voucher Ex.PW6/B28 shows the DD No. as 5202 while the statement of account Ex.PW9/B1 shows the DD No. as 061800E05202/04. It may be true that the extra numbers as mentioned in the statement of accounts indicate the bank code as submitted by the Ld. PP for CBI but the same is not stated nor clarified by any of the prosecution witnesses.
- The statement of accounts does not show the name of the person who issued the cheque.
- The statement of account does not show the name and number of drawee account or name of the drawee bank.
CC No. 38/11(532264/16) 87 /91
136. In Padala Veera Reddy vs. State of Andhra Pradesh 1989 Supp (2) SCC 706, the legal position on circumstantial evidence was summarised thus :
"(1) The circumstances from which an inference of guilt is sought to be drawn must be cogently and firmly established; (2) Those circumstances should be of a definite tendency unerringly pointing towards guilt of the accused; (3) The circumstances, taken cumulatively, should form a chain so complete that there is no escape from the conclusion that within all human probability, the crime was committed by the accused and none else; and (4) The circumstantial evidence, in order to sustain conviction, must be complete and incapable of explanation of any other hypothesis than that of the guilt of the accused and such evidence should not only be consistent with the guilt of the accused but should be inconsistent with his innocence."
137. In Ramreddy Rajeshkhanna Reddy Vs. State of Andhra Pradesh 2006 III AD (SC) 425, the Supreme Court opined:-
"26. It is now well-settled that with a view to base a conviction on circumstantial evidence, the prosecution must establish all the pieces of incriminating circumstances by reliable and clinching evidence and the circumstances so proved must form such a chain of events as would permit no conclusion other than one of guilt of the accused. The CC No. 38/11(532264/16) 88 /91 circumstances cannot be on any other hypothesis. It is also well-settled that suspicion, however, grave may be, cannot be a substitute for a proof and the courts shall take utmost precaution in finding an accused guilty only on the basis of the circumstantial evidence".
138. The defects in credit vouchers and statements of accounts as pointed above do not prove concretely the facts with regard to the purchase of alleged cheques as argued by the Ld. PP for CBI. This is apart from the fact that there are no credit vouchers on the record in as many as 3 transactions out of total 16 disputed cases of cheque purchase. Also apart from the fact that statement of account from Delhi State Co-operative Bank and statement of account of J & K Bank are not in accordance with the provisions of section 2A of Bankers' Books of Evidence Act.
139. The circumstance as pointed out by the Ld. PP for CBI that the cheques presented by accused Ramesh Kumar started getting dishonoured only after the suspension of accused D.K. Malhotra, is only a circumstance which creates a suspicion. It is settled law that the suspicion however grave it might be, cannot take place of the proof. In this regard, it is apt to quote Hon'ble CC No. 38/11(532264/16) 89 /91 Apex Court in Narender Singh Vs. State of M.P. (2004) 10 SCC 699, which is also quoted in several other cases as follows:
"The Court's decision must not rest upon suspicion but must rest upon legal grounds established by legal testimony. Between "May be true" and "Must be true" there in inevitably a long distance to travel and the whole of the distance is to be covered by legal, reliable and unimpeachable evidence by the prosecution."
140. In the present case, except certain circumstances which at the most create suspicion, there is no legally admissible evidence which prove the commission of offence beyond reasonable doubt.
141. In view of the material available on record and foregoing discussion, I conclude that prosecution has not been able to prove the offences punishable under Section 120-B read with Section 420 IPC read with Section 13(2) read with Section 13(1)
(d) of the Prevention of Corruption Act, 1988 against accused D. K. Malhotra and Ramesh Kumar. The prosecution has also not been able to prove that the accused D. K. Malhotra has committed the offence punishable under Section 13(1)(d) CC No. 38/11(532264/16) 90 /91 punishable under Section 13(2) of the Prevention of Corruption Act, 1988 as charged. The prosecution has also not been able to prove that accused Ramesh Kumar has committed the offence punishable under Section 420 of IPC. Accordingly, accused persons D. K. Malhotra and Ramesh Kumar are acquitted of all the charges.
142. The bail bonds of the accused persons are cancelled and their sureties are discharged. Sh. D. K. Malhotra and Sh. Ramesh Kumar are directed to furnish Personal Bonds in sum of Rs.25,000/- each with one surety of the like amount as required under Section 437-A of Cr. P. C.
143. File be consigned to Record Room. Digitally signed by KOVAI KOVAI VENUGOPAL VENUGOPAL Date:
ANNOUNCED IN THE OPEN COURT 2018.12.05
16:45:29 +0530
TODAY i.e. ON 30.11.2018
(KOVAI VENUGOPAL)
SPECIAL JUDGE, PC ACT, CBI-09,
CENTRAL, TIS HAZARI COURTS, DELHI
CC No. 38/11(532264/16) 91 /91