Delhi District Court
Anthony vs State Of Kerala And Others, Air 2001 Sc ... on 4 November, 2015
State through CBI v. Shreya Jha & others
State through CBI v. Nandita Bakshi & others
IN THE COURT OF SH. PAWAN KUMAR JAIN,
SPECIAL JUDGE, CBI-01, NORTH-WEST DISTRICT,
ROHINI COURTS COMPLEX, DELHI
IN THE MATTER OF:
CBI No. 01/2012
ID No. : 02404R0519272002
FIR No. : RC-4E/2000/CBI/SPE/SIU-IX/New Delhi
U/Sec: 120B/409/419/420/468/471 IPC
and 13(2) r/w 13(1)(d) of PC Act 1988
and substantive offences thereto
Police Station: CBI/SPE/SIU-IX/New Delhi
STATE
THROUGH
CENTRAL BUREAU OF INVESTIGATION,
NEW DELHI
VERUS
SHREYA JHA & OTHERS
CBI No. 1/12 & 2/12 Page No. 1 of 124
State through CBI v. Shreya Jha & others
State through CBI v. Nandita Bakshi & others
AND
CBI No. 02/2012
ID No. : 02404R0519282002
FIR No. : RC-3E/2000/CBI/SPE/SIU-IX/New Delhi
U/Sec: 120B/409/419/420/468/471 IPC
and 13(2) r/w 13(1)(d) of PC Act 1988
and substantive offences thereto
Police Station: CBI/SPE/SIU-IX/New Delhi
STATE
THROUGH
CENTRAL BUREAU OF INVESTIGATION,
NEW DELHI
VERUS
NANDITA BAKSHI & OTHERS
Appearance : Ms. Shashi Vishwakarma, Public Prosecutor
for CBI
Sh. Srinivasan, Advocate, counsel for
Nandita Bakshi, Shreya Jha, V.K. Jha, Vivek
Sood
CBI No. 1/12 & 2/12 Page No. 2 of 124
State through CBI v. Shreya Jha & others
State through CBI v. Nandita Bakshi & others
Sh. Islam Khan, Advocate, counsel for
Shafiqur Rehman
Sh. K.K. Patra, Advocate, counsel for Sanjay
Malik
Sh. Rajpal Singh, Advocate, counsel for
URG Bhatt
Sh. Vijay Kumar, Advocate, counsel for
Rekha Anand
Sh. Yasvir Singh, Advocate from DLSA for
accused Kirpal Singh
Ms. Shashi Jaiswal, Advocate, counsel for
Shashi Bala Sharma
ORDER RESERVED ON : 11.09.2015
ORDER PRONOUNCED ON : 04.11.2015
O R D E R :-
1. Above two cases are subject matter of this order.
2. In both the cases, short but interesting question of law has been raised by the counsels for accused persons i.e whether more than one FIR can be registered on the basis of one complaint?
3. Briefly stated facts of prosecution cases are that on September 01, 2000, General Manager named Kamalkar M. Shet made the following written complaint to the S.P of CBI, New Delhi:-
CBI No. 1/12 & 2/12 Page No. 3 of 124State through CBI v. Shreya Jha & others State through CBI v. Nandita Bakshi & others के नरा बै क CANARA BANK CANARA BANK (HO : BANGALORE ) Ref : DCL/F-495/1931/2000. LEGAL SECTION Date : Ist September 2000 CIRCLE OFFICE, 8TH FLOOR 38, ANSAL TOWER NEHRU PLACE NEW DELHI-110 019.
The Superintendent of Police Central Bureau of Investigation S.I.U.- IX, 5th floor, C G O Complex, Lodhi Road, New Delhi.
Sir, SUB : COMPLAINT REGARDING THE COMMISSION OF CRIMINAL OFFENCE SUCH AS FRAUD AND FORGERY IN AVAILING CREDIT FACILITIES BY THE BORROWERS IN OUR BANK BY DEPOSITING FAKE PROPERTY DOCUMENTS/TITLE DEEDS AS COLLATERAL SECURITIES- AMOUNT INVOLVED Rs. 596.11 LACS. ****************************************************************** We submit the following details for your kind consideration and action :
Shri Vijay Kumar Jha is residing at B-180, Section-31, NOIDA- 20301 and Smt. Nandita Bakshi is residing at C-349, Defence Colony, New Delhi. They are in the line of business of Export of gold Jewellery and precious stones from 1998. The following are the three concerns with us in which they are interested :
1. M/s Juniper Jewellery (P) Limited - Shri V. K. Jha, Managing (Address : 253, IInd floor, Director Shahpur Jat, New Delhi- 110049) Smt. Nandita Bakshi, Director CBI No. 1/12 & 2/12 Page No. 4 of 124 State through CBI v. Shreya Jha & others State through CBI v. Nandita Bakshi & others
2. M/s Kamayani Fine Jewellery - Smt. Nandita Bakshi, (Address : 11, Hauz Khas Village, (Proprietrix) New Delhi- 110016)
3. M/s Anamika Enterprises - Ms. Shreya Jha (Proprietrix) (Address : 12, Hauz Khas Village, (daughter of Shri V. K. Jha) New Delhi- 110016 The above parties approached our branches in Delhi for the Bank finance for the export of gold jewellery and precious stones (prime securities) and offered Collateral Security of immovable properties besides personal guarantees. After making credit appraisal and assessment of their credit requirements, limits were considered by our branches taking gold jewellery and precious stones as prime securities for bank finance besides the Collateral Securities offered by the parties.
CREDIT FACILITIES EXTENDED BY OUR PARLIAMENT STREET BRANCH, NEW DELHI AND CHANDNI CHOWK BRANCH, DELHI.
1. M/S JUNIPER JEWELLERY (P) LIMITED : CREDIT LIMIT :
Rs.296.11 Lacs PRESENT LIABILITY : Rs. 331.85 Lacs The Company had requested the branch for sanction of Rs. 4.00 Crores during May ' 98 by offering the title deeds of the property at E-39, Greater Kailash-IInd floor, Front Portion, Lajpat Nagar, New Delhi. But, the branch, on 10.6.98, had sanctioned only Rs. 80.00 lacs under Fund based limit (PC & FBE) and Rs. 50.00 lacs under Non-Fund based limits (ILC & Guarantee) i.e. totalling Rs. 1.30 Crores, against the prime security of gold, jewellery and precious stones and collateral security of EMT of the aforesaid property and personal guarantee of Shri V. K. Jha, Smt. Nandita Bakshi and Shri Raj Malhotra, the mortgagor.
As per the systems and procedures of the Bank, Lawyer's Scrutiny Report (LSR) on the title deeds was obtained from Ms. Rekha Anand, our Panel Advocate. The documents of the title deeds were deposited in the Bank on 10.6.98 and EMT was put through. The party had availed financial assistance from the CBI No. 1/12 & 2/12 Page No. 5 of 124 State through CBI v. Shreya Jha & others State through CBI v. Nandita Bakshi & others Bank from time to time. Subsequently, the conduct of the account was not satisfactory and became sticky with huge liability. Hence, the branch had verified the property documents with the Sub-Registrar Office in July 99 and it came to light that Shri Raj Malhotra is not the true owner of the property and the property was sold to one Shri Rai Bahadur Chunilal by DLF United Pvt. Limited and the documents of title deeds deposited in the bank were found to be fake.
Hence, the borrower Company in connivance with the outsiders have submitted forged property documents as Collateral Security for the Bank finance.
2. M/S KAMAYANI FINE JEWELLERY : CREDIT LIMIT : Rs.
150.00 LACS PRESENT LIABILITY : Rs. 189.37 lacs The subject firm, during 1998 was enjoying credit facilities of cash credit limits of Rs. 20.00 lacs and ILC limit of Rs. 20.00 lacs at our Chandni Chowk branch, Delhi. The limits were sanctioned by the branch on 12.5.98 and against the prime securities of gold, jewellery and precious stones and on the collateral security of immovable properties offered by the party. Subsequently, the account was transferred to our Parliament Street branch on 8.9.98. Our Parliament street branch had enhanced the OCC limit of Rs. 75.00 lacs on 8.9.98 on the existing securities.
The details of the property documents offered by the party are :
1. Property at Khasra No. 737/18, Measuring 5 Biswas situated at Abadi Lal Dora, Village Maidan Garhi, Tehsil Mehrauli, standing in the name of Shri J. D. Sharma and Shri Sukh Dev Sharma.
2. Property at N-106, Greater Kailash-I, New Delhi in the name of Shri Sham Lal Nayar.
Both the properties were mortgaged to the Bank at our Chandni Chowk, Delhi branch and further EMT was taken at Parliament Street branch, New Delhi for enhanced limits after getting LSR from the panel advocate of the Bank, i.e. Ms. Rekha Anand.
CBI No. 1/12 & 2/12 Page No. 6 of 124State through CBI v. Shreya Jha & others State through CBI v. Nandita Bakshi & others On verification of the mortgaged properties at Sub-Register's Office by the branch during Aug '1999, it came to light that in respect of Ist property, the certified copy of the sale deed was obtained from the office of Registrar of Assurances and found that there was major discrepancies in the documents produced by the party to the branch and the property stood in the individual name of Shri J. D. Sharma and on enquiry of the Halqua Patwari, it is observed that the property is an agricultural land and the persons mentioned are not the owners of the property and the documents submitted to the bank are the fake ones. Hence, it came to light that the panel advocate, Smt. Rekha Anand did not seem to have verified the revenue records.
In respect of the property at N-106, Greater Kailash-I, New Delhi in the name of Shri Sham Lal Nayar, there is no such document/title deed registered in any Sub-Registrar Office at Delhi and enquiries at the given address revealed that Shri Sham Lal Nayar had already expired in 1992-93 and the said property was already sold to some builder. Hence, someone has impersonated as Sham Lal Nayar. As such the mortgaged document is a fake one and fraud and forgery is observed in getting the bank finance.
3. M/S ANAMIKA ENTERPRISES : LIMIT : 150.00 LACS PRESENT LIABILITY : 164.75 Lacs The party was sanctioned various credit limits by the branch at our Chandni Chowk Delhi branch on 30.11.98 to the tune of Rs. 150 lacs for export business. The firm offered documents of title deeds of :
(a) Landed property at village Janapur, Tehsil Mehrauli in the name of Smt. Krishna Kaur valued Rs. 719.25 lacs (as per Valuation Report dated 8.7.98).
(b) The property of Shri Subhash Chabbra situated at Village Mandavali, Fazalpur in the Abadi of Ganesh Nagar, Shadara, Delhi, valued at Rs. 83.85 lacs, as Collateral Securities for the bank finance.
On obtaining LCR from the Bank's Panel Advocate, Ms. Rekha Anand on the aforesaid properties as per systems and procedures, the properties were mortgaged to the bank on CBI No. 1/12 & 2/12 Page No. 7 of 124 State through CBI v. Shreya Jha & others State through CBI v. Nandita Bakshi & others putting through EMT on 31.10.98. Subsequently, in Aug '1999, when the branch conducted verification of title deeds and inspection of the properties, the following facts came to light :
On verification of the title deeds in the name of Smt. Krishna Kaur (item as above) at Sub-Registrar office. Asaf Ali Road, Delhi, it was found that the particulars of the title deed were different from that of Registration at Registrar office. Further, on verification of the revenue records of the Patwari at Sub- Registrar office at Mehrauli, it came to light that Smt. Krishna Kaur had expired on 5.8.91. In view of the above, it is evident that the sale deed submitted to the bank by the party is a forged one.
Similarly, as regards the title deeds in the name of Shri Subhash Chabbra, given to the bank, on verification of Sub- Registrar office at Kashmere gate, Delhi and at Seelampur, Delhi, it came to light that particulars of sale deed differed with that of Registrar office. On spot verification of the property at Mandavali Fazalpur, one Shri Subhash Chabbra is owning the said plot but he has denied having mortgaged the property to the Bank.
In view of the above, the borrower Company/Firms in connivance with outside persons have submitted forged property documents as original title deeds as collateral Security for the bank finance and gained undue pecuniary benefits to the tune of Rs. 596.11 lacs from the Bank. Hence, we request you to kindly register a complaint against the above parties of the Firms/Company and investigate the same.
Yours faithfully, General Manager.
4. On the basis of said written complaint, CBI had registered three separate FIRs bearing No. RC-
2(E)/2000/CBI/SPE/SIU-IX, New Delhi; RC-3(E)/2000/CBI/SPE/SIU- IX, New Delhi and RC-4(E)/2000/CBI/SPE/SIU-IX, New Delhi.
CBI No. 1/12 & 2/12 Page No. 8 of 124State through CBI v. Shreya Jha & others State through CBI v. Nandita Bakshi & others
5. After completing investigation, CBI had filed three separate charge-sheet in the above said cases.
(i). In first FIR, charge-sheet was filed against 13 accused namely M/S Juniper Jewellery through its Director Vijay Kumar, Vijay Kumar, Nandita Bakshi, Shafiqur Rehman, R.T. Nayak, G. Sampath Kumar, R.K. Anand, Vivek Sood, Shreya Jha, Rekha Anand, Yogendra Pal Singh, Hardial Singh and Gyan Chand Khanna.
(ii). In second FIR, charge-sheet was filed against nine accused persons namely Nandita Bakshi, V.K. Jha, Shafiqur Rehman, Sanjay Malik, Kirpal Singh, Raghubir Singh, Rajan Kumar Nair, U.R.G. Bhatt and Vivek Sood for the offences punishable under Section 120B/409/419/420/467/468/471 IPC read with Section 13(2) read with Section 13(1) (d) of Prevention of Corruption Act and substantive offences thereto.
(iii). In third FIR, charge-sheet was filed against nine accused persons namely Shreya Jha, V.K. Jha, Nandita Bakshi, Shafiqur Rehman, Sanjay Malik, U.R.G. Bhatt, Rekha Anand, Vivek Sood and Shashi Bala Sharma for the offences punishable under Section 120B IPC read with 409/419/420/467/468/471 IPC and Section 13(2) read with Section 13(1) (d) of Prevention of Corruption Act 1988 and substantive offences thereto.CBI No. 1/12 & 2/12 Page No. 9 of 124
State through CBI v. Shreya Jha & others State through CBI v. Nandita Bakshi & others
6. Learned Counsels appearing for accused persons sagaciously submitted that a written complaint was addressed to SP of CBI on September 01, 2000 alleging that V.K. Jha and Nandita Bakshi were Managing Director and Director of M/s Juniper Jewellery Pvt. Ltd. respectively. It was also alleged that Nandita Bakshi was also proprietor of another firm named M/s Kamayani Fine Jewellery whereas Shreya Jha d/o V.K. Jha was proprietor of another firm named M/s Anamika Enterprises. It was further alleged that the above said persons being the Managing Director, Director and Proprietor of the said firms approached the complainant bank for certain credit limits at different branches. At the time of taking the limits, they had played some fraud/forgery with the bank and caused pecuniary loss to the bank to the tune of ` 596.11 lacs. On receipt of the said complaint, CBI had registered three different FIRs i.e. bearing RC No. RC 2E/2000/CBI/SPE/SIU-IX/New Delhi, RC 3E/2000/CBI/SPE/SIU- IX/New Delhi and RC 4E/2000/CBI/SPE/SIU-IX/New Delhi.
(i) It was vehemently argued that under Section 154 Cr.
P.C., police is required to register an FIR on receipt of every information disclosing the commission of any cognizable offence. It was contended that by giving the above complaint, bank had disclosed the commission of a cognizable offence, which resulted pecuniary loss to the tune of ` 596.11 lacs to the bank, thus bank had furnished only one information disclosing the commission of a cognizable offence, which resulted loss to the bank, thus CBI was bound to register only one FIR under Section 154 Cr. P.C. It was CBI No. 1/12 & 2/12 Page No. 10 of 124 State through CBI v. Shreya Jha & others State through CBI v. Nandita Bakshi & others argued that under Section 154 Cr. P.C, no discretion has been given to the police to bifurcate the information at the stage of recording the FIR, thus CBI had no jurisdiction to bifurcate the information furnished in the complaint by lodging three separate FIRs.
(ii) It was further astutely contended that since in the instant case, no other information except the written complaint dated September 01, 2000 had been received to the CBI, there was no occasion for the CBI to register three separate FIRs.
(iii) It was vigorously argued that the second and subsequent FIR are not permissible under law as the same amount violation of Article 21 of Constitution of India. In support of their contentions, counsels strongly placed reliance on the judgments, T.T. Anthony Vs State of Kerala and others, AIR 2001 SC 2637 and Amit Bhai Anil Chandra Shah Vs CBI and others (2013) 6 SCC
348.
(iv) It was perspicaciously contended that in the said cases, the second FIR was registered on receipt of some further information whereas in the present case, no further information was received to the CBI, thus present case is on much better footing.
7. Per contra, learned Public Prosecutor refuted the said contentions by vigorously arguing that in the facts and circumstances of the cases at hand, the above judgments are not applicable. It was CBI No. 1/12 & 2/12 Page No. 11 of 124 State through CBI v. Shreya Jha & others State through CBI v. Nandita Bakshi & others further vehemently argued that no doubt single complaint was received to the CBI but the said complaint relates to three different offences, which were committed at three different times, thus there is no illegality, if CBI had registered three separate FIRs qua each offence. It was further contended that there is no legal embargo to register separate FIR for a separate offence, thus there is no substance in the submissions raised by the counsel for accused persons.
(i) To support her contentions, learned Public Prosecutor placed reliance on two judgments Babu Bhai Vs State of Gujarat and others (2010) 12 SCC 254 and Surender Kaushik and other Vs State of UP and others, Criminal Appeal No. 305 of 2013 announced by Apex Court on February 14, 2013. It was contended that in both the said cases, Supreme Court upheld the second FIR where it relates to separate and distinct offence. It was further argued that since in the instant case all three offences, mentioned in the written complaint, were separate and distinct, thus there is no illegality in registration of second and third FIR.
8. I have heard rival submissions advanced by counsel for both the parties, perused the record and case law cited by them carefully and gave my thoughtful consideration to their contentions.
9. From the submissions advanced by counsel for the parties short but interesting question emerges whether the act of CBI CBI No. 1/12 & 2/12 Page No. 12 of 124 State through CBI v. Shreya Jha & others State through CBI v. Nandita Bakshi & others to register separate FIR on the basis of one written complaint is permissible under Section 154 of Code of Criminal Procedure or not?
10. Before proceeding further, I deem it appropriate to refer to relevant portion of Section 154 Cr. P.C which read as under:-
154. Information in cognizable cases. - (1) Every information relating to the commission of a cognizable offence, if given orally to an officer in charge of a police station, shall be reduced to writing by him or under his direction, and be read over to the informant; and every such information, whether given in writing or reduced to writing as aforesaid, shall be signed by the person giving it, and the substance thereof shall be entered in a book to be kept by such officer in such form as the State Government may prescribe in this behalf:
* * * * * * * (2) A copy of the information as recorded under sub-section (1) shall be given forthwith, free of cost, to the informant.
(3) Any person, aggrieved by a refusal on the part of an officer in charge of a police station to record the information referred to in sub-section (1) may send the substance of such information, in writing and by post, to the Superintendent of Police concerned who, if satisfied that such information discloses the commission of a cognizable offence, shall either investigate the case himself or direct an investigation to be made by any police officer subordinate to him, in the manner provided by this Code, and such officer shall have all the powers of an officer in CBI No. 1/12 & 2/12 Page No. 13 of 124 State through CBI v. Shreya Jha & others State through CBI v. Nandita Bakshi & others charge of the police station in relation to that offence.
(emphasis supplied)
11. Bare perusal of Section 154 (1) Cr. P.C makes it clear that essential ingredients to record the First Information Report are as under : -
(i) Information must be relating to commission of a cognizable offence.
(ii) Such information may be oral or in writing.
(iii) If it is oral, same shall be reduced to writing and be read over to the informant.
(iv) Such information whether oral or in writing shall be signed by the person giving it.
(v) The substance of such information shall be entered in a book to be kept by such officer in the police station.
12. Indisputably in the instant case, the information was furnished by the General Manager of the Bank in writing through his letter dated September 01, 2000. It is also undisputed fact that the subject matter of the said written information is fraud and forgery to CBI No. 1/12 & 2/12 Page No. 14 of 124 State through CBI v. Shreya Jha & others State through CBI v. Nandita Bakshi & others the tune of ` 596.11 lac committed by the persons with the bank, whose names are mentioned in the said complaint.
(i) Admittedly, in his above complaint, complainant had also furnished the detail of the fraud/forgery committed by said persons. After giving the detail of fraud/forgery, complainant alleged that borrower company/firms in connivance with outside persons have submitted forged property documents as original title deeds as collateral security for the bank finance and gained undue pecuniary benefits to the tune of ` 596.11 lacs from the bank, hence request was made to register a complaint against the above parties of the firms/company and investigate the same.
(ii) It is undisputed fact that CBI had not received any other information/complaint/letter except the above from the complainant or from any other person relating to the fraud/forgery mentioned in the above said complaint.
(iii) Admittedly, the said complaint was received in the office of CBI on September 01, 2000 itself. On the basis of said complaint, CBI registered first FIR at about 16:30 hours; second FIR was registered 17:30 hours and third FIR was registered at 18:30 hours. Thus, within a span of 03:00 hours, CBI had registered three separate FIR on the basis of above written complaint.
(iv) It is pertinent to state that neither there is anything on CBI No. 1/12 & 2/12 Page No. 15 of 124 State through CBI v. Shreya Jha & others State through CBI v. Nandita Bakshi & others record to show that any preliminary inquiry was made before registration of three FIRs nor there is any such averment.
(v) Thus, it becomes clear that CBI had received only one information disclosing commission of a cognizable offence i.e. fraud/forgery which caused pecuniary loss to the bank to the tune of ` 596.11 lacs. Hence, in terms of Section 154 Cr. P.C., CBI was supposed to record one FIR on the basis of said written complaint.
13. Now question arises whether the investigating agency is empowered to restrain its investigation relating to the offence/accused mentioned in the complaint only or it may investigate the matter qua other connected offences and accused?
14. This issue was clarified by the Apex Court in T.T. Antony Vs State of Kerala (supra) by holding that the officer-in- charge of the police station has to investigate not merely the cognizable offence reported in the FIR but also other connected offences found to have been committed in the course of same transaction or the same occurrence and file one or more reports as provided in Section 173 of the Cr. P.C.
15. Now question crop up whether the written complaint relates to connected offences to have been committed in the course of same transaction or occurrence or relates to separate or distinct offences?
CBI No. 1/12 & 2/12 Page No. 16 of 124State through CBI v. Shreya Jha & others State through CBI v. Nandita Bakshi & others
(i) It is pertinent to state that at the time of registration of the FIR, there was no material with the CBI except the complaint dated September 01, 2000.
(ii) As already stated that complainant informed the CBI that the persons whose name mentioned in the complaint had committed forgery/fraud with the bank which caused pecuniary loss to the bank to the tune of ` 596.11 lacs. It was also alleged that borrower company/firms in connivance with outside persons had submitted forged documents with the bank to avail credit limits and they gained pecuniary benefits to the tune of ` 596.11 lacs. In the said complaint, there was nothing which may show prima-facie that complainant had disclosed the information relating to distinct and separate offences. As per the complaint, all offences were connected to each other.
(iii) Moreover, the question whether the said offences were distinct and separate or not was the matter of investigation. At the stage of registration of FIR, there was nothing on record which may show that the complainant had furnished three separate information to the CBI relating to three distinct and separate offences.
(iv) Surprisingly, in all the FIRs, it is recited that borrower company/firms had gained undue pecuniary benefits to the tune of ` 596.11 lacs by submitting forged property documents as collateral CBI No. 1/12 & 2/12 Page No. 17 of 124 State through CBI v. Shreya Jha & others State through CBI v. Nandita Bakshi & others security with the bank. This further shows that even at the time of registration of FIR, investigating agency believed the version of the complainant as narrated in the written complaint dated September 01, 2000.
16. Now coming to the case law cited by the counsel for the parties. Firstly, I deem it appropriate to deal with the case law cited by learned Public Prosecutor.
17. Learned Public Prosecutor strongly placed reliance on the two judgements namely Surender Kaushik & others v. State of UP & others (supra) and Babu Bhai vs. State of Gujarat (supra). I have perused both the judgements carefully. But to my mind, the said judgements are not helpful to the prosecution in any manner as facts of both the cases are totally different from the facts of the case at hand.
(i) In case Surender Kaushik & other (supra), first FIR bearing No. 274/12 was lodged by appellant Surender Malik on May 29, 2012 against Dr. Subhash Gupta and others alleging some allegations for the offence punishable under Section 420/467/468/471 IPC. Thereafter Dr. Subhash Gupta filed an application before the Chief Judicial Magistrate, Meerut under Section 156 (3) Cr.P.C alleging some allegations against several persons including Surender Kaushik. On the basis of directions issued by Learned Magistrate, an FIR bearing No. 425/12 was lodged on August 21, 2012 for the CBI No. 1/12 & 2/12 Page No. 18 of 124 State through CBI v. Shreya Jha & others State through CBI v. Nandita Bakshi & others offence punishable under Section 406/420/467/468/471/504/506 IPC. After considering the case law, Hon'ble Apex Court held as under:-
24. "From the aforesaid decisions, it is quite luminous that the lodgment of two FIRs is not permissible in respect of one and the same incident. The concept of sameness has been given a restricted meaning. It does not encompass filing of a counter FIR relating to the same or connected cognizable offence. What is prohibited is any further complaint by the same complainant and others against the same accused subsequent to the registration of the case under the Code, for an investigation in that regard would have already commenced and allowing registration of further complaint would amount to an improvement of the facts mentioned in the original complaint. As is further made clear by the three Judge Bench in Upkar (supra), the prohibition does not cover the allegation made by the accused in the first FIR alleging a different version of the same incident.
Thus, rival versions in respect of the same incident do take different shapes and in that event, lodgment of two FIRs is permissible".
(emphasis supplied)
(ii) As already stated that present case does not relate to counter case, thus the above judgement is not applicable in the facts and circumstances of the case at hand. Rather from the above judgement, it becomes clear that complainant is prohibited to lodge a fresh complaint against the same accused for an offence for which investigation has already been commenced. Thus, after registration of the first FIR, even complainant was not competent to get registered CBI No. 1/12 & 2/12 Page No. 19 of 124 State through CBI v. Shreya Jha & others State through CBI v. Nandita Bakshi & others second FIR on the basis of same complaint.
(iii) In case Babu Bhai v. State of Gujarat (supra) first FIR was lodged on the information provided by Sub-Inspector regarding some incident that had taken place at 10:00 AM whereas second FIR was registered on the same day on the complaint of complainant regarding the same incident.
(iv) After considering the case law, Apex Court upheld the view of High Court, which quashed the second FIR. The relevant portion is reproduced as under : -
19. "It is also evident that houses of the Bharwad were inside the village in contiguous areas and the offence had spread over the entire area as is evident from the panchnama of the scene of offence drawn in C.R. No. I-155 of 2008 as well as from the contents of the said FIR. Same situation regarding the place of occurrence appears from the panchnama of the scene of incident in C.R. No. I-154/2008. Panchnama of the scene of incident of C.R. No. I-154/2008 includes the scene of occurrence of C.R. No. I-
155/2008 which makes it clear that both the FIRs pertain to the two crimes committed in the same transaction. The scene of offence panchnamas establish clearly that the incidents in both the cases should not be distinct and independent of each other. In fact, it is nobody's case that incident relating to CR No. I-155/08 occurred at Dhedhal Chokdi (Cross-Roads).
20. "In view of the above, we are the considered opinion that the High Court reached the correct CBI No. 1/12 & 2/12 Page No. 20 of 124 State through CBI v. Shreya Jha & others State through CBI v. Nandita Bakshi & others conclusion and second FIR C.R. I-155/2008 was liable to be quashed".
(emphasis supplied)
(v) This judgement is not helpful to the prosecution in any manner. Rather from the said judgement, it is clear if two crimes are committed in the same transaction, second FIR is not permissible. In the instant case as per the complaint, accused persons had caused pecuniary loss to the complainant by committing forgery/fraud while availing credit limits from the bank from time to time. According to the complaint, all acts/offences were committed by the accused persons in the same transaction i.e. in pursuance of same conspiracy.
18. Now coming to the judgements cited by counsel for accused persons.
19. In T.T. Antony v. State of Kerala & others (supra) police had opened fired at two places, consequently, two separate FIRs i.e. Crime No. 353/94 and 354/94 were registered in the same police station. Since, the incident of police firing gave rise to public uproar, Government had appointed a Judicial Commission of inquiry, who had submitted the report against police officials. The report was accepted by the new Government. On the basis of said report, recommendation was made to register a case immediately and matter be investigated by senior officer, accordingly, a fresh FIR i.e. Crime No. 268/97 was registered in the police station. On the basis of CBI No. 1/12 & 2/12 Page No. 21 of 124 State through CBI v. Shreya Jha & others State through CBI v. Nandita Bakshi & others contentions raised by the parties, four following points arose before the Apex Court for determination:
(i) whether registration of a fresh case, Crime No. 268 of 1997, Kuthuparamba Police Station on the basis of the letter of the DGP dated 2-7-
1997 which is in the nature of the second FIR under Section 154 Cr.PC, is valid and it can form the basis of a fresh investigation;
(ii) whether the appellants in Appeals Nos. 689 and 4066 of 2001 [arising out of SLPs (Crl.) Nos. 1522 and 8840 of 2000] and the respondent in Appeals Nos. 690-91 of 2001 [arising out of SLPs (Crl.) Nos. 2724-25 of 2000] have otherwise made out a case for quashing of proceedings in Crime No. 268 of 1997, Kuthuparamba Police Station;
(iii) what is the effect of the report of Shri K. Padmanabhan Commission of Inquiry; and
(iv) whether the facts and the circumstances of the case justify a fresh investigation by CBI.
(i) In para No. 17 to 20 and 27 Apex Court discussed the legal position, same are reproduced as under:
17. Sub-section (1) of Section 154 Cr.P.C.
contains four mandates to an officer in charge of a police station. The first enjoins that every information relating to commission of a cognizable offence if given orally shall be reduced to writing and the second directs that it be read over to the informant; the third requires that every such information whether given in writing or reduced to writing shall be signed by CBI No. 1/12 & 2/12 Page No. 22 of 124 State through CBI v. Shreya Jha & others State through CBI v. Nandita Bakshi & others the informant and the fourth is that the substance of such information shall be entered in the station house diary. It will be apt to note here a further directive contained in sub-section (1) of Section 157 Cr.P.C. which provides that immediately on receipt of the information the officer in charge of the police station shall send a report of every cognizable offence to a Magistrate empowered to take cognizance of the offence and then proceed to investigate or depute his subordinate officer to investigate the facts and circumstances of the case. Sub-section (2) entitles the informant to receive a copy of the information, as recorded under sub-section (1), free of cost. Sub-section (3) says that in the event of an officer in charge of a police station refusing to record the information as postulated under sub-section (1), a person aggrieved thereby may send the substance of such information in writing and by post to the Superintendent of Police concerned who is given an option either to investigate the case himself or direct the investigation to be made by a police officer subordinate to him, in the manner provided by Cr.P.C., if he is satisfied that the information discloses the commission of a cognizable offence. The police officer to whom investigation is entrusted by the Superintendent of Police has all the powers of an officer in charge of the police station in relation to that offence.
18. An information given under sub-section (1) of Section 154 Cr.P.C. is commonly known as first information report (FIR) though this term is not used in the Code. It is a very important document. And as its nickname suggests it is the earliest and the first information of a cognizable offence recorded by an officer in charge of a police station. It sets the criminal law in motion and marks the commencement of the investigation which ends up with the formation of opinion under Section 169 or 170 Cr.P.C., as the CBI No. 1/12 & 2/12 Page No. 23 of 124 State through CBI v. Shreya Jha & others State through CBI v. Nandita Bakshi & others case may be, and forwarding of a police report under Section 173 Cr.P.C. It is quite possible and it happens not infrequently that more informations than one are given to a police officer in charge of a police station in respect of the same incident involving one or more than one cognizable offences. In such a case he need not enter every one of them in the station house diary and this is implied in Section 154 Cr.P.C. Apart from a vague information by a phone call or a cryptic telegram, the information first entered in the station house diary, kept for this purpose, by a police officer in charge of a police station is the first information report -- FIR postulated by Section 154 Cr.P.C. All other informations made orally or in writing after the commencement of the investigation into the cognizable offence disclosed from the facts mentioned in the first information report and entered in the station house diary by the police officer or such other cognizable offences as may come to his notice during the investigation, will be statements falling under Section 162 Cr.P.C. No such information/statement can properly be treated as an FIR and entered in the station house diary again, as it would in effect be a second FIR and the same cannot be in conformity with the scheme of Cr.P.C. Take a case where an FIR mentions cognizable offence under Section 307 or 326 IPC and the investigating agency learns during the investigation or receives fresh information that the victim died, no fresh FIR under Section 302 IPC need be registered which will be irregular; in such a case alteration of the provision of law in the first FIR is the proper course to adopt. Let us consider a different situation in which H having killed W, his wife, informs the police that she is killed by an unknown person or knowing that W is killed by his mother or sister, H owns up the responsibility and during investigation the truth is detected; it does not require filing of fresh FIR against H --
CBI No. 1/12 & 2/12 Page No. 24 of 124State through CBI v. Shreya Jha & others State through CBI v. Nandita Bakshi & others the real offender -- who can be arraigned in the report under Section 173(2) or 173(8) Cr.P.C., as the case may be. It is of course permissible for the investigating officer to send up a report to the Magistrate concerned even earlier that investigation is being directed against the person suspected to be the accused.
19. The scheme of Cr.P.C. is that an officer in charge of a police station has to commence investigation as provided in Section 156 or 157 Cr.P.C on the basis of entry of the first information report, on coming to know of the commission of a cognizable offence. On completion of investigation and on the basis of the evidence collected, he has to form an opinion under Section 169 or 170 Cr.P.C., as the case may be, and forward his report to the Magistrate concerned under Section 173(2) Cr.P.C.
However, even after filing such a report, if he comes into possession of further information or material, he need not register a fresh FIR; he is empowered to make further investigation, normally with the leave of the court, and where during further investigation he collects further evidence, oral or documentary, he is obliged to forward the same with one or more further reports; this is the import of sub-section (8) of Section 173 Cr.P.C.
20. From the above discussion it follows that under the scheme of the provisions of Sections 154, 155, 156, 157, 162, 169, 170 and 173 Cr.P.C. only the earliest or the first information in regard to the commission of a cognizable offence satisfies the requirements of Section 154 Cr. P.C. Thus there can be no second FIR and consequently there can be no fresh investigation on receipt of every subsequent information in respect of the same cognizable offence or the same occurrence or incident giving rise to one or more cognizable offences. On receipt of CBI No. 1/12 & 2/12 Page No. 25 of 124 State through CBI v. Shreya Jha & others State through CBI v. Nandita Bakshi & others information about a cognizable offence or an incident giving rise to a cognizable offence or offences and on entering the FIR in the station house diary, the officer in charge of a police station has to investigate not merely the cognizable offence reported in the FIR but also other connected offences found to have been committed in the course of the same transaction or the same occurrence and file one or more reports as provided in Section 173 Cr. P.C.
27. A just balance between the fundamental rights of the citizens under Articles 19 and 21 of the Constitution and the expansive power of the police to investigate a cognizable offence has to be struck by the court. There cannot be any controversy that sub-section (8) of Section 173 Cr.P.C. empowers the police to make further investigation, obtain further evidence (both oral and documentary) and forward a further report or reports to the Magistrate. In Narang case [(1979) 2 SCC 322 : 1979 SCC (Cri) 479] it was, however, observed that it would be appropriate to conduct further investigation with the permission of the court. However, the sweeping power of investigation does not warrant subjecting a citizen each time to fresh investigation by the police in respect of the same incident, giving rise to one or more cognizable offences, consequent upon filing of successive FIRs whether before or after filing the final report under Section 173(2) Cr.P.C. It would clearly be beyond the purview of Sections 154 and 156 Cr.P.C., nay, a case of abuse of the statutory power of investigation in a given case. In our view a case of fresh investigation based on the second or successive FIRs, not being a counter- case, filed in connection with the same or connected cognizable offence alleged to have been committed in the course of the same transaction and in respect of which pursuant to the first FIR either investigation is under way or CBI No. 1/12 & 2/12 Page No. 26 of 124 State through CBI v. Shreya Jha & others State through CBI v. Nandita Bakshi & others final report under Section 173(2) has been forwarded to the Magistrate, may be a fit case for exercise of power under Section 482 Cr.P.C. or under Articles 226/227 of the Constitution.
(emphasis supplied)
(ii) After considering the case law and facts of the case, Hon'ble Apex Court quashed the second FIR i.e. Crime No. 268 of 1997, relevant portion para 28 is as under :
28. ........ Perhaps the endorsement of the Inspector General of Police for registration of a case misled the subordinate police officers and the said letter with regard to the incident of 25-
11-1994 at Kuthuparamba was registered again under Section 154 Cr.P.C. which would be the second FIR and, in our opinion, on the facts of this case, was irregular and a fresh investigation by the investigating agency was unwarranted and illegal. On that date the investigations in the earlier cases (Crimes Nos. 353 and 354 of 1994) were pending. The correct course of action should have been to take note of the findings and the contents of the report, streamline the investigation to ascertain the true and correct facts, collect the evidence in support thereof, form an opinion under Sections 169 and 170 Cr.P.C., as the case may be, and forward the report/reports under Section 173(2) or Section 173(8) Cr.P.C. to the Magistrate concerned. The course adopted in this case, namely, the registration of the information as the second FIR in regard to the same incident and making a fresh investigation is not permissible under the scheme of the provisions of Cr.P.C. as pointed out above, therefore, the investigation undertaken and the report thereof cannot but be CBI No. 1/12 & 2/12 Page No. 27 of 124 State through CBI v. Shreya Jha & others State through CBI v. Nandita Bakshi & others invalid. We have, therefore, no option except to quash the same leaving it open to the investigating agency to seek permission in Crime No. 353 or 354 of 1994 of the Magistrate to make further investigation, forward further report or reports and thus proceed in accordance with law.
(emphasis supplied)
20. It is pertinent to state that in T.T. Antony (supra) second FIR was registered on the basis of fresh information received whereas in the instant case, no such information was even received to the CBI. As already stated that the information received in the office of CBI relates to forgery/fraud to the tune of ` 596.11 lacs committed by the persons whose names were mentioned therein with the connivance of some other persons. Thus, even no fresh information was received to the CBI relating to the second and third FIR.
21. In Amit Bhai Anil Chandra Shah v. CBI (supra) , Apex Court followed the law laid down in T.T. Antony's case and same is clear from para 36 and 37, which read as under :
36. Now, let us consider the legal aspects raised by the petitioner Amit Shah as well as CBI. The factual details which we have discussed in the earlier paragraphs show that right from the inception of entrustment of investigation to CBI by order dated 12-1-2010 [(2010) 2 SCC 200 :
(2010) 2 SCC (Crl) 1006] till filing of the charge-
sheet dated 4-9-2012, this Court has also treated CBI No. 1/12 & 2/12 Page No. 28 of 124 State through CBI v. Shreya Jha & others State through CBI v. Nandita Bakshi & others the alleged fake encounter of Tulsiram Prajapati to be an outcome of one single conspiracy alleged to have been hatched in November 2005 which ultimately culminated in 2006. In such circumstances, the filing of the second FIR and a fresh charge-sheet for the same is contrary to the provisions of the Code suggesting that the petitioner was not being investigated, prosecuted and tried "in accordance with law".
37. This Court has consistently laid down the law on the issue interpreting the Code, that a second FIR in respect of an offence or different offences committed in the course of the same transaction is not only impermissible but it violates Article 21 of the Constitution. In T.T. Antony [(2001) 6 SCC 181 : 2001 SCC (Cri) 1048] , this Court has categorically held that registration of second FIR (which is not a cross-case) is violative of Article 21 of the Constitution. The following conclusion in paras 19, 20 and 27 of that judgment are relevant which read as under: (SCC pp. 196-97 & 200).
* * * * * * * * * * * * The above referred declaration of law by this Court has never been diluted in any subsequent judicial pronouncements even while carving out exceptions.
(emphasis supplied)
(i) Apex Court dealt with the plea of same transaction in para 42 to 44 and same is reproduced as under :
42. The learned counsel for the petitioner has placed reliance on the following decisions of this Court which explained "same transaction":CBI No. 1/12 & 2/12 Page No. 29 of 124
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(i) Babulal Choukhani v. King Emperor [(1937-
38) 65 IA 158 : AIR 1938 PC 130] , (ii) S. Swamirathnam v. State of Madras [AIR 1957 SC 340 : 1957 Crl LJ 422] , (iii) State of A.P. v.
Kandimalla Subbaiah [AIR 1961 SC 1241 :
(1961) 2 Cri LJ 302] and (iv) State of A.P. v.
Cheemalapati Ganeswara Rao [AIR 1963 SC 1850 : (1963) 2 Cri LJ 671] .
43. In Babulal [(1937-38) 65 IA 158 : AIR 1938 PC 130] , the Privy Council has held that: (IA p.
176) "... if several persons conspire to commit offences, and commit overt acts in pursuance of the conspiracy (a circumstance which makes the act of one the act of each and all the conspirators), these acts are committed in the course of the same transaction, which embraces the conspiracy and the acts done under it. The common concert and agreement which constitute the conspiracy serve to unify the acts done in pursuance of it."
44. In Swamirathnam [AIR 1957 SC 340 : 1957 Cri LJ 422] , the following conclusion in para 7 is relevant: (AIR p. 344) "7. On behalf of the appellant Abu Bucker it was contended that there has been misjoinder of charges on the ground that several conspiracies, distinct from each other, had been lumped together and tried at one trial. The advocate for Swamirathnam, however, did not put forward this submission. We have examined the charge carefully and find no ground for accepting the contention raised. The charge, as framed, discloses one single conspiracy, although spread over several years. There was only one object of the conspiracy and that was to cheat members of the public. The fact that in the course of years others joined the conspiracy or that several incidents of cheating took place in pursuance of CBI No. 1/12 & 2/12 Page No. 30 of 124 State through CBI v. Shreya Jha & others State through CBI v. Nandita Bakshi & others the conspiracy did not change the conspiracy and did not split up a single conspiracy into several conspiracies. It was suggested that although the modus operandi may have been the same, the several instances of cheating were not part of the same transaction. Reliance was placed on the case of Sharpurji Sorabji v.
Emperor [AIR 1936 Bom 154] , and on the case of Choragudi Venkatadri v. Emperor [ILR (1910) 33 Mad 502] . These cases are not in point. In the Bombay case, no charge of conspiracy had been framed and the decision in the Madras case was given before Section 120-B was introduced into the Penal Code. In the present case, the instances of cheating were in pursuance of the conspiracy and were therefore parts of the same transaction."
(emphasis supplied)
(ii) Para 58.3 to 58.9 are also relevant and same are reproduced as under :
58.3. Even after filing of such a report, if he comes into possession of further information or material, there is no need to register a fresh FIR, he is empowered to make further investigation normally with the leave of the court and where during further investigation, he collects further evidence, oral or documentary, he is obliged to forward the same with one or more further reports which is evident from sub-section (8) of Section 173 of the Code. Under the scheme of the provisions of Sections 154, 155, 156, 157, 162, 169, 170 and 173 of the Code, only the earliest or the first information in regard to the commission of a cognizable offence satisfies the requirements of Section 154 of the Code. Thus, CBI No. 1/12 & 2/12 Page No. 31 of 124 State through CBI v. Shreya Jha & others State through CBI v. Nandita Bakshi & others there can be no second FIR and, consequently, there can be no fresh investigation on receipt of every subsequent information in respect of the same cognizable offence or the same occurrence or incident giving rise to one or more cognizable offences.
58.4. Further, on receipt of information about a cognizable offence or an incident giving rise to a cognizable offence or offences and on entering FIR in the station house diary, the officer in charge of the police station has to investigate not merely the cognizable offence reported in the FIR but also other connected offences found to have been committed in the course of the same transaction or the same occurrence and file one or more reports as provided in Section 173 of the Code. Sub-section (8) of Section 173 of the Code empowers the police to make further investigation, obtain further evidence (both oral and documentary) and forward a further report(s) to the Magistrate. A case of fresh investigation based on the second or successive FIRs not being a counter-case, filed in connection with the same or connected cognizable offence alleged to have been committed in the course of the same transaction and in respect of which pursuant to the first FIR either investigation is underway or final report under Section 173(2) has been forwarded to the Magistrate, is liable to be interfered with by the High Court by exercise of power under Section 482 of the Code or under Articles 226/227 of the Constitution.
58.5. The first information report is a report which gives first information with regard to any offence. There cannot be second FIR in respect of the same offence/event because whenever any further information is received by the investigating agency, it is always in furtherance CBI No. 1/12 & 2/12 Page No. 32 of 124 State through CBI v. Shreya Jha & others State through CBI v. Nandita Bakshi & others of the first FIR.
58.6. In the case on hand, as explained in the earlier paragraphs, in our opinion, the second FIR was nothing but a consequence of the event which had taken place on 25-11-2005/26-11-
2005. We have already concluded that this Court having reposed faith in CBI accepted their contention that Tulsiram Prajapati encounter is a part of the same chain of events in which Sohrabuddin and Kausarbi were killed and directed CBI to "take up" the investigation.
58.7. For vivid understanding, let us consider a situation in which Mr A having killed B with the aid of C, informs the police that unknown persons killed B. During investigation, it revealed that A was the real culprit and D abetted A to commit the murder. As a result, the police officer files the charge-sheet under Section 173(2) of the Code with the Magistrate. Although, in due course, it was discovered through further investigation that the person who abetted Mr A was C and not D as mentioned in the charge-
sheet filed under Section 173 of the Code. In such a scenario, uncovering of the later fact that C is the real abettor will not demand a second FIR rather a supplementary charge-sheet under Section 173(8) of the Code will serve the purpose.
58.8. Likewise, in the case on hand, initially CBI took a stand that the third person accompanying Sohrabuddin and Kausarbi was Kalimuddin.
However, with the aid of further investigation, it unveiled that the third person was Tulsiram Prajapati. Therefore, only as a result of further investigation, CBI has gathered the information that the third person was Tulsiram Prajapati. Thus a second FIR in the given facts and CBI No. 1/12 & 2/12 Page No. 33 of 124 State through CBI v. Shreya Jha & others State through CBI v. Nandita Bakshi & others circumstances is unwarranted: instead filing of a supplementary charge-sheet in this regard will suffice the issue.
58.9. Administering criminal justice is a two-end process, where guarding the ensured rights of the accused under the Constitution is as imperative as ensuring justice to the victim. It is definitely a daunting task but equally a compelling responsibility vested on the court of law to protect and shield the rights of both. Thus, a just balance between the fundamental rights of the accused guaranteed under the Constitution and the expansive power of the police to investigate a cognizable offence has to be struck by the court. Accordingly, the sweeping power of investigation does not warrant subjecting a citizen each time to fresh investigation by the police in respect of the same incident, giving rise to one or more cognizable offences. As a consequence, in our view this is a fit case for quashing the second FIR to meet the ends of justice.
(emphasis supplied)
22. From the above judgments, it becomes crystal clear that second or subsequent FIRs are not permissible for the same offence or the offences committed in the same transaction or committed in the same conspiracy.
23. Applying the above settled proposition of law in the facts of the cases at hand, following facts emerge:-
(i) that bank had given a written complaint dated September 1, 2000 to the CBI;CBI No. 1/12 & 2/12 Page No. 34 of 124
State through CBI v. Shreya Jha & others State through CBI v. Nandita Bakshi & others
(ii) that the subject matter of the said complaint was fraud/forgery committed with the bank by the borrowers to the tune of ` 596.11 lacs;
(iii) that as per the complaint the said fraud/forgery was committed by three persons namely V. K. Jha, Nandita Bakshi and Ms. Shreya Jha d/o V. K. Jha with the connivance of outside persons;
(iv) that as per the complaint modus-operandi of the above persons to commit fraud/forgery was to avail credit limits from different branches of the complainant bank by furnishing forged and fabricated documents as collateral securities;
(v) that bank requested to register the complaint and investigate the matter;
(vi) that no other complaint/information was received to the CBI from the bank;
(vii) that since only one complaint/information was received to the CBI, thus in terms of Section 154 (1) Cr. P.C, CBI was bound to register only one FIR and CBI had no jurisdiction or occasion to bifurcate the said complaint in three parts;
(viii) that there was no material with the CBI to form any opinion even prima-facie that the fraud to the tune of CBI No. 1/12 & 2/12 Page No. 35 of 124 State through CBI v. Shreya Jha & others State through CBI v. Nandita Bakshi & others ` 596.11 lacs was committed by the above said persons by hatching three different conspiracy. On the contrary, from the complaint prima-facie it appears that accused had acted in pursuance of one conspiracy;
(ix) that moreover the fact whether the above said persons had committed the said fraud/forgery in pursuance of one conspiracy or different conspiracy was subject matter of investigation and there was no material with the CBI to bifurcate the information at the threshold level by registering three separate FIRs on the basis of one information received from the bank;
(x) that at the time of registering three separate FIRs, CBI mentioned in all the FIRs that pecuniary loss to the tune of ` 596.11 lacs was caused to the bank by the act of accused persons, which further corroborates the complainant version that the forgery/fraud was committed in furtherance of one conspiracy hatched by the said persons alongwith their co-accused;
(xi) that even after completing the investigation, CBI had not mentioned in the charge-sheets that the accused persons had formed three different conspiracies; CBI had not even mentioned the period of any such conspiracy. If the above fraud/forgery was committed in furtherance of three different conspiracies, CBI was supposed to mention in the charge-sheet about the period when the conspiracy was started and ended;
CBI No. 1/12 & 2/12 Page No. 36 of 124State through CBI v. Shreya Jha & others State through CBI v. Nandita Bakshi & others
(xii) that in the charge-sheet of second FIR (CC No. 2/12), CBI had mentioned as under:-
"Investigation revealed that Mrs. Nandita Bakshi, V.K. Jha, Shafiqur Rehman, Sanjay Malik, Chartered accountant formed a cartel and entered into a criminal conspiracy with the intention to cheat different banks by way of obtaining the credit facilities/loans in the name of different companies/firms in the name of Nandita Bakshi, V. K. Jha,..."
(xiii) that similarly in the charge-sheet of third FIR, CBI mentioned:-
"Investigation revealed that Shreya Jha, V. K. Jha, Nandita Bakshi, Shafiqur Rehman, Sanjay Malik, Rekha Anand, Vivek Sood entered into a criminal conspiracy along with other accused persons and formed a cartel with the intention to cheat the bank by obtaining credit facilities/loan in the name of their several companies and proprietorship firm formed by them in their names or in the name of their relatives."
(xiv) that from the charge-sheets filed by the CBI, it becomes crystal clear that the conspiracy was hatched with an intention to cheat different banks by way of obtaining credit limits facilities/loans in the name of different companies/firm in their names or in the name of their relatives. This further corroborates the complainant's version that the three persons namely V. K. Jha, Nandita Bakshi and Shreya Jha committed fraud/forgery with the bank by obtaining credit facilities from different branches CBI No. 1/12 & 2/12 Page No. 37 of 124 State through CBI v. Shreya Jha & others State through CBI v. Nandita Bakshi & others by producing forged documents as a collateral securities;
24. From the above, it becomes abundantly clear that the fraud/forgery to the tune of ` 596.11 lacs as mentioned in the written complaint dated September 1, 2000 was committed in furtherance of one conspiracy. Mere fact that accused persons committed the said forgery in three different accounts is not sufficient to hold even prima- facie that the offences were distinct or separate. Rather, it was the modus-operandi of the accused persons to obtain credit limits from different accounts by producing forged/fabricated documents as collateral securities. Thus, CBI was supposed to register one FIR in terms of Section 154(1) Cr.P.C and to investigate the matter in terms of Section 157 Cr.P.C and filed the charges-sheet in accordance with Section 173 Cr.P.C.
25. Pondering over the ongoing discussion, I am of the considered opinion that the act of CBI registering separate i.e. FIR No. RC-3E/2000/CBI/SPE/SIU-X/New Delhi and RC-4E/2000/CBI/ SPE/SIU-X/New Delhi was in violation of Section 154(1) Cr.P.C. Since the second and third FIR is not permissible under the provisions of Cr.P.C, thus the investigation undertaken in the said subsequent FIRs and the report filed thereof cannot but be invalid, thus the same cannot be read to form even prima-facie opinion whether prima-facie case is made out against the accused persons or not. No doubt, investigating agency has a right to conduct further investigation in the first FIR as held by Apex Court in T.T. Antony v. State of Kerala & CBI No. 1/12 & 2/12 Page No. 38 of 124 State through CBI v. Shreya Jha & others State through CBI v. Nandita Bakshi & others others (supra), thus CBI is permitted to conduct further investigation in the first FIR case and file supplementary challan, if it desires.
26. Now, I proceed to examine both the cases one by one.
27. Facts of CC No. 1/2012 in brief are as under :-
(i) It was alleged that accused Ms. Shreya Jha (A1), V.K. Jha (A2) (father of of A1), Ms. Nandita Bakshi (A3), Shafiqur Rehman (A4), Sanjay Malik (A5), Rekha Anand (A7) and Vivek Sood (A8) entered into a criminal conspiracy along with other accused persons with an intention to cheat the bank by obtaining various credit facilities/loan in the name of their several companies and proprietorship firms or in their own names or in the name of their relatives.
(ii) It was alleged that in pursuance of the alleged conspiracy, A1 had opened a current account on December 08, 1997 with Canara Bank, Chandni Chowk Branch in the name of her proprietorship firm named M/s Anamika Enterprises.
(iii) It was further alleged that Sanjay Malik (A5) was a Chartered Accountant by profession and he introduced A2 and A3 to the Chief Manager Mr. U.R.G. Bhatt (A6), accordingly, current account bearing No. 10031 was opened.CBI No. 1/12 & 2/12 Page No. 39 of 124
State through CBI v. Shreya Jha & others State through CBI v. Nandita Bakshi & others
(iv) It was further alleged on December 09, 1997, an application was submitted for credit facilities for export business of jewellery for a limit of ` 60 lac (Packing Credit, ` 20 lac, Foreign Demand Bill (FDB), ` 25 lac, Letter of Credit/Document against acceptance ` 10 lac and bank guarantee of ` 5 lac).
(v) It was further alleged that Shafiqur Rehman (A4) in furtherance of the said conspiracy, arranged fictitious persons/forged documents for collateral security and also arranged fake owners to execute the equitable mortgage to the bank.
(vi) It was alleged that A4 had arranged forged property documents i.e. title deed of property measuring 645 yards Plot No. 1, Khasra No. 560 with boundary wall situated at Mandawali, Fazalpur, Abadi, Ganesh Nagar, Shahdara, Delhi, which stood in the name of Subash Chhabra. During investigation, it was revealed that neither he had mortgaged the said property with the bank nor he executed any guarantee deed in favour of borrower and this fact has also been established from the GEQD report as the signature of Subhash Chhabra available on the documents were found forged.
(vii) Borrower had furnished another property as collateral security i.e. property measuring 20 Bigha, 11 Viswas located at Village Jonapur, Tehsil Mehrauli, Delhi. As per documents, the said property belonged to Krishna Kaur, who had already died on August CBI No. 1/12 & 2/12 Page No. 40 of 124 State through CBI v. Shreya Jha & others State through CBI v. Nandita Bakshi & others 05, 1991. It was alleged that in place of deceased Krishna Kaur, borrower had produced Shashi Bala Sharma (A9) to execute the guarantee deed as well as to execute equitable mortgage of the said property with the bank.
(viii) It was alleged that Rekha Anand (A7) was a panel advocate of the bank but she had submitted a false and bogus legal scrutiny report qua property located at Seemapuri to the bank vide her report dated December 11, 1997. Accordingly, it was alleged that she was also the member of the said conspiracy.
(ix) It was further alleged Mr. U.R.G. Bhatt (A6) knowingly and deliberately did not obtain the opinion letter from previous banker of the party and he deliberately accepted the letter issued from the Bank of Madura Ltd., Nehru Place, New Delhi showing that the borrower was having current account No. 27920 with the said bank whereas the said account was opened with the Bank of Madura Ltd. only on December 09, 1997. It was alleged that though it was the duty of A6 to obtain opinion letter from previous banker to verify the credential of the borrower as exporters but A6 accepted the letter of Bank of Madura Ltd. without any verification.
(x) It was further alleged that A2 and A3 in connivance with accused Sanjay Malik (A5) submitted forged/fake audited balance sheet and profit and loss account for the period March 31, 1997 and October 31, 1997 showing the turnover of the firm to the CBI No. 1/12 & 2/12 Page No. 41 of 124 State through CBI v. Shreya Jha & others State through CBI v. Nandita Bakshi & others tune of ` 156.22 lacs and 218.36 lacs respectively whereas during investigation, it was revealed that the firm was not in existence prior to December 08, 1997.
(xi) It was further alleged that on the basis of said forged/false documents, on December 18, 1997 A6 had sanctioned Packing Credit Facility to the tune of ` 40 lacs, Foreign Bill Discount Facility to the tune of ` 10 lac. Inland Letter of Credit Facility to the tune of ` 10 lac, Bank Guarantee to the tune of ` 5 lac and ` 15 lacs including ` 5 lac as sub limit.
(xii) It was alleged that after sanctioning of the above said limits, A3 Nandita Bakshi furnished her personal guarantee in favour of the borrower.
(xiii) It was further alleged that Vivek Sood (A8) had introduced the firm at the time of opening of the account in the Bank of Madura Ltd., Nehru Place, New Delhi. It was further alleged that Vivek Sood (A8) is a family friend of Ms. Shreya Jha.
(xiv) It was further alleged that limit of the M/s Anamika Enterprises was further enhanced on September 05, 1998 on the recommendation of A6. It was alleged that A6 prepared the recommendation for enhancement of the credit limit to the tune of ` 1.75 crores despite the fact that the borrower had already created a huge liability to the tune of ` 94.90 lacs. It was alleged that since A6 CBI No. 1/12 & 2/12 Page No. 42 of 124 State through CBI v. Shreya Jha & others State through CBI v. Nandita Bakshi & others had already released the amount to the party, he recommended for ratification of ` 94.90 lacs to the Circle Office knowingly well that party was not doing any business.
(xv) It was further alleged that Vivek Sood (A8) is younger brother of A3 and in furtherance of criminal conspiracy, he aided and abetted the commission of crime by opening account in the name of different firms such as M/s Sunder Diamonds, M/s Chanda Exports and M/s Anubhuti Trading in different banks. It was further alleged that A1, A2 and A3 had transferred huge amounts in the said firms.
(xvi) It was further alleged that A2 and A3 were actually managing the affairs of M/s Anamika Enterprises and they diverted the money to the other sister concerns in which A2, A3 and A8 were directors and Ms. Shreya Jha (A1) acted at their instance knowingly well that the fund pertained to the loans which were fraudulently got sanctioned from Canara Bank on the basis of forged/fake documents.
(xvii) Accordingly, a charge-sheet was filed against the accused persons for the offece punishable under Section 120B IPC, 409/420/471 IPC and Section 13 (1) (d) of Prevention of Corruption Act, 1988 and substantive offence 409/420/471 IPC and Section 13 (1) (d) of Prevention of Corruption Act, 1988. It was further alleged that accused persons caused wrongful loss to the bank to the tune of ` 1,74,54,229/- and obtained corresponding wrongful gain jointly and severally.
CBI No. 1/12 & 2/12 Page No. 43 of 124State through CBI v. Shreya Jha & others State through CBI v. Nandita Bakshi & others (xviii) It was alleged that since A6 was a public servant, necessary sanction under Section 19 of PC Act was obtained.
28. Learned counsel appearing for A1, A2 and A3 vigorously contended that no charge can be framed against them as there is no separate complaint in this case and on the basis of complaint on record, a charge had already been framed against the accused persons in M/s Juniper Jewellery's case. It was further alleged that since in M/s Juniper Jewellery's case, Hon'ble High Court pleased to discharge Ms. Shreya Jha, thus no charge can be framed against her in this case as there is no new complaint against Ms. Shreya Jha.
(i) It was further astutely argued that the entire prosecution case is based on the allegation that Shreya Jha being the proprietor of M/s Anamika Enterprises had availed various credit facilities and loan from Canara Bank, Chandni Chowk Branch to the tune of ` 1.5 crore and at the time of availing the said credit limit, A1 had mortgaged two properties as collateral security but later on it was revealed that the title deeds of the said properties were forged and fabricated. It was thus argued that prosecution has built up a case that by furnishing forged title deeds, borrower with the conspiracy of other accused persons induced the bank to sanction the said credit limits. However, it was vehemently argued that there is no merit in the said allegations as it is admitted case of prosecution that the alleged CBI No. 1/12 & 2/12 Page No. 44 of 124 State through CBI v. Shreya Jha & others State through CBI v. Nandita Bakshi & others documents were replaced by Shreya Jha on October 23, 1999. It was further argued that CBI in its reply categorically admitted that the title deeds of the said properties were found genuine. It was further urged that since the FIR was lodged only on September 01, 2000 whereas documents had been replaced much prior to that i.e. on October 23, 1999, thus, there was no cause of action to lodge an FIR on September 01, 2000.
(ii) It was further vigorously contended that though there is no evidence on record to show even prima-facie that Shreya Jha had changed the alleged forged documents at the instance of bank, but assuming for the sake of arguments that A1 had changed the documents at the instance of bank, but it only shows that she had no dishonest intention to cheat the bank otherwise she would not have replaced the documents. It was perspicaciously argued if it is established that there was no dishonest intention on the part of borrower, no charge can be framed against any of the accused persons. It was further sagaciously argued that from the statement of PW2 H.S. Bhist, it becomes clear that prior to sanctioning the credit limits, bank official visited the business premises of the borrower and they satisfied themselves before making recommendation for grant of credit limits to the borrower. It was thus argued that there is no substance in the allegation that firm was not doing any business prior to December 08, 1997.
(iii) It was further contended that PW3 Sachidanand in his CBI No. 1/12 & 2/12 Page No. 45 of 124 State through CBI v. Shreya Jha & others State through CBI v. Nandita Bakshi & others statement clarified that even no collateral security was required to grant the credit facilities and it was further urged that the credit facilities were sanctioned on the basis of stock, which was found sufficient. It was thus contended that if no collateral security was required to obtain various credit facilities, it cannot be said that A1 had any dishonest intention at the time of availing the credit facility. It was further argued that from the statement of PW8 K. Uma Prasad, it becomes clear that loan was sanctioned after detailed inquiry and satisfaction recorded by bank officials, which further rules out the possibility that Shreya Jha had any dishonest intention to cheat the bank.
(iv) It was further contended that initially a limit of ` 40 lacs was granted which was enhanced by Circle Office and PW19 V.G. Prabhu testified in his statement that Chief Manager was empowered to sanction the loan/limit to the extent of ` 40 lacs, thus it was argued that there is no merit in the allegation that U.R.G. Bhatt had extended any favour to the borrower.
(v) It was further argued that since, the credit limit was enhanced by Circle Office from ` 40 lacs to ` 1.50 lacs, this itself shows that the firm was doing business. Mere fact that later on firm became irregular in making the payments to the bank does not mean that accused had any dishonest intention at the time of availing credit facilities. It was further argued that there is no evidence on record to show that A1, A2, A3 and A8 had committed any kind of forgery.
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(vi) It was further vigorously argued that A2 has been impleaded as an accused in this case mere on the ground that he is father of A1 otherwise there is no allegation against him. Similarly, it was contended that A3 has been impleaded as an accused in this case mere on the ground that she stood guarantor but there is nothing on record, which may show that she had misrepresented the bank in any manner. It was further contended that A8 Vivek Sood has been impleaded as an accused mere on the ground that some fund had been transferred from the account of M/s Anamika Enterprises to his firm but PW40 B. Sukumaran in his statement clarified that such transfer is permissible with the permission of the bank. But during investigation, no investigation was done to find out whether any permission was obtained or not.
(vii) At last, it was argued that the firm had already made the entire payment to the bank in the year 2008, which further shows that there was no dishonest intention on the part accused persons.
29. Shri Islam Khan, Advocate, counsel appearing for A4 sagaciously argued that A4 has been roped in conspiracy on the ground that certain payments were made to A4 by sister concerns of the firm of borrower. It was argued that as per charge-sheet, a cheque of ` 1.74 lac was issued by M/s Kamayani Fine Jewellery in favour of A4 on November 17, 1997 whereas a cheque of ` 3.15 lac was issued by Balaji Export in favour of A4 on November 15, 1997. It CBI No. 1/12 & 2/12 Page No. 47 of 124 State through CBI v. Shreya Jha & others State through CBI v. Nandita Bakshi & others was astutely contended that as per the charge-sheet, the alleged conspiracy was hatched on December 08, 1997. It was submitted that if the conspiracy was hatched on December 08, 1997, it is not clear how the alleged payments became relevant to rope A4 in the said conspiracy. It was argued that if the said payments were made in pursuance of the alleged conspiracy, Balaji Export should also be an accused but CBI had not impleaded Balaji Export as an accused.
(i) It was further alleged that though prosecution has also relied upon the statement of various witnesses to connect A4 with the conspiracy such as PW2, PW18, PW22, PW24 and PW25, but it was argued that their statements are quite vague. It was further contended that mere fact that A4 met with the said witnesses is not sufficient to make out a prima-facie case that he was a member of the alleged conspiracy. It was further submitted that though PW18 had also disclosed the name of several other persons, namely, M.L. Joshi and Niranjan but CBI preferred not to implead them as an accused, which shows that CBI had adopted pick and choose policy.
30. Shri K.K. Patra, Advocate, counsel appearing for A5 Sanjay Malik submitted that there are two allegations against A5 Sanjay Malik. Firstly, that he introduced the borrower to U.R.G. Bhatt and he got opened the account with his introduction; secondly, that A5 had submitted a forged and fabricated audited balance sheet and profit and loss account for the period ending March 31, 1997 and October 31, 1997 showing that the turnover of firm was to the tune of CBI No. 1/12 & 2/12 Page No. 48 of 124 State through CBI v. Shreya Jha & others State through CBI v. Nandita Bakshi & others ` 156.22 lacs and ` 218.36 lacs respectively whereas the firm was not in existence till December 08, 1997. It was vehemently argued that there is no evidence on record to show that A5 had prepared/certified/arranged the alleged balance sheet and profit and loss account. It was argued that it is admitted case of CBI that the said documents were certified by M/s R.K. Munjal and Associates and there is no evidence on record to show that there is any nexus between A5 and the said firm. It was argued that assuming for the sake of arguments that A5 introduced the borrower to the Chief Manager (A6), but this fact is not sufficient in any manner to show prima-facie that A5 was involved in any kind of conspiracy. It was further contended that it is admitted case of CBI that A2 had an account with the bank. Even other firms, in which her father was associated, had also an account in the bank, thus there is no substance in the allegation that bank had opened the account of the borrower only on the introduction of A5. It was further argued that there is no other evidence against A5, thus submitted that A5 deserves discharge in this case.
31. Shri Rajpal Yadav, Advocate, counsel appearing for A6 U.R.G. Bhatt sagaciously contended that at the relevant time, A6 was working as Chief Manager and in discharge of his official duty he had entertained the request of borrower to grant PCL and FDBP and sanctioned the same. It was further argued that the proposal was put up before him by Accountant and Manager after thorough checking. Both in their notes dated January 07, 1998 recommended to sanction CBI No. 1/12 & 2/12 Page No. 49 of 124 State through CBI v. Shreya Jha & others State through CBI v. Nandita Bakshi & others the limits. At the time of making recommendation, they also obtained LSR and visited the premises of the borrower. On the basis of their recommendations, A6 sanctioned the limit. It was further contended that there is nothing on record to show that A6 had any dishonest intention while acting on the recommendation of his subordinates. It was submitted that surprisingly CBI had not impleaded either Accountant or Manager who made recommendation in favour of the borrower, which shows that there was no fault in making recommendation in favour of the borrower.
(i) It was further contended that collateral security was taken as an abundant caution and this fact has been testified by PW3 and PW19 in their statements. It was contended that this shows that A6 was not acting under any conspiracy otherwise no collateral security would have been taken.
(ii) It was contended that A6 has been charge-sheeted mere on the ground that he had dealt with the file. If this was a criteria, CBI should also have impleaded PW2, PW4 and PW8 as an accused as they had also dealt with the file but CBI did not implead them as an accused. It was further contended that mere fact that A6 being the Chief Manager had assigned the application of borrower to his subordinate is not sufficient to draw a conclusion that A6 was acting in furtherance of any conspiracy.
(iii) It was further contended that the next allegation CBI No. 1/12 & 2/12 Page No. 50 of 124 State through CBI v. Shreya Jha & others State through CBI v. Nandita Bakshi & others against A6 is that he had enhanced the limit in pursuance of conspiracy violating the Rules and Regulations of the bank. It was contended that the limit was enhanced by Circle Office and not by A6 when a meeting had taken place on October 20, 1998 under the Chairmanship of DGM wherein it was unanimously decided to enhance the limit. It was further contended that the said meeting had taken place in pursuance of the letter dated September 15, 1998 sent by A6. It was argued that if A6 be in conspiracy with the borrower, he would not have sent the letter to the Circle Office; rather he would have enhanced the limit at his own level.
(iv) It was further argued that the borrower had already returned all outstanding amount to the bank. Mere fact that later on it was revealed that initially borrower had furnished some forged/fabricated documents is not sufficient to impose criminal liability against Chief Manager. It was further contended that there is no allegation of forgery/cheating against A6 and he has been impleaded as an accused for the offence punishable under Section 120B IPC read with Section 13 (1) (d) of Prevention of Corruption Act.
(v) It was further argued that though departmental proceeding was initiated against A6, but he had been exonerated from all the charges, which further strengthen the defence version that there was no violation on the part of A6 while he acted in discharge of his official duties.
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32. Shri Vijay Kumar, Advocate, counsel appearing for A7 contended that A7 has been charge-sheeted on the ground that she had furnished a false report in pursuance of the conspiracy. It was argued that A7 in the beginning of her report clarified that the report was based on the photocopy of sale deed dated December 12, 1968 and inspection carried out of the record available in the office of sub registrar for the period January 01, 1985 to December 11, 1997. Even in her report, she advised the bank to obtain relevant original documents and verified the possession of the owner. It was further contended that said report was scrutinised by legal department of the bank and during scrutiny, legal department did not find any illegality in the report. It was further submitted that report was submitted on the basis of documents furnished by the bank to A7. It was argued that A7 had submitted the report in accordance with the settled bank practice, thus it cannot be said that either A7 had committed any forgery or cheating or A7 had entered into any kind of conspiracy with the borrower or her associates. In support of his contention, counsel placed reliance on two judgments namely Neeta Deep Rastogi v. CBI in Criminal Revision Petition No. 77/2008 decided by the High Court of Delhi on January 21, 2009 and CBI v. K. Narayana Rao in Criminal Appeal No. 1460 of 2012 decided by the Supreme Court on September 21, 2012.
33. Learned counsel appearing for A9 contended that A9 is an illiterate lady and she was not aware about the outcome of her act. It was submitted that one person named Arshad approached her CBI No. 1/12 & 2/12 Page No. 52 of 124 State through CBI v. Shreya Jha & others State through CBI v. Nandita Bakshi & others for execution of some documents in the bank and promised to pay ` 5000/- in lieu of that work. It was argued that since A9 was in the need of ` 5000/-, she agreed to appear in the bank to execute the documents. Accordingly, she executed the said documents at the instance of Arshad.
34. On the contrary, learned Public Prosecutor appearing for CBI refuted the contentions raised by counsels for the accused persons. It was vehemently contended that borrower had dishonest intention since inception and due to that reason, borrower had not only furnished false balance sheet and profit and loss account of her firm but also produced the fictitious persons before the bank to execute equitable mortgage and guarantee deed papers. Thus, it was argued that mere fact that later on borrower had replaced the forged documents with genuine documents is not sufficient to exonerate the borrower at this stage. It was further argued that in the said episode, A2, A3 and A8 being the close relatives and friends of A1 had played active role and they all acted in furtherance of the common object of the conspiracy i.e. to cheat the bank. It was further contended that though the firm was not in existence on December 08, 1997, but the borrower had furnished the balance sheet for the period much prior to December 08, 1997. It was further argued that mere fact that A1 had been discharged by the Hon'ble High Court in M/s Juniper Jewellery's case is not sufficient to exonerate her in the present case also as both the cases are different. Mere fact that there is no separate FIR in the present case is also not a ground to discharge the accused. It CBI No. 1/12 & 2/12 Page No. 53 of 124 State through CBI v. Shreya Jha & others State through CBI v. Nandita Bakshi & others was further argued that the role of A4 was to arrange forged/fake title deeds of the property and fictitious persons to execute the equitable mortgage and guarantee papers with the bank, thus it cannot be said that A4 had not played any role in the conspiracy. It was further argued that from the payments received by A4 proves prima-facie that A4 rendered his service to the borrower otherwise there was no occasion for A4 to arrange fake title deeds/fictitious persons for the borrower.
(i) It was further argued that A5 Sanjay Malik was involved in procuring fake audited balance-sheet and profit and loss account in favour of the borrower, thus it cannot be said that A5 was not part of the conspiracy. It was further submitted A6 U.R.G. Bhatt knew the borrower and due to that reason, he had agreed to became the part of the conspiracy and in furtherance of the said conspiracy, he had shown undue favour to the borrower and due to that reason, he had not verified the credential of the borrower from the previous banker and he accepted the letter of previous banker, which was produced by the borrower and no effort was made to verify the same from the bank. Similarly, he also did not verify the genuineness of the title deeds before accepting the same as collateral security. Though borrower had huge liability but he made recommendation in favour of the borrower to enhance the limits, which further shows that A6 was in conspiracy. It was further argued that mere fact that later on borrower had returned all dues to the bank is not sufficient to exonerate the accused persons from their criminal misconduct.
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(ii) Learned Public Prosecutor submitted that being the panel advocate, it was the duty of A7 to examine the documents minutely but she preferred to give a false report stating that the property was in the name of Subhash Chhabra whereas the property was in dispute as it belonged to village community and was in the possession of religious sect.
(iii) It was argued that A8 was an instrumental in assisting the borrower to get opened a current account in the Bank of Madura Ltd. and he also rendered his service in opening of other accounts in which the borrower had transferred huge fund. It was further contended that A9 impersonated herself as Krishna Kaur.
35. I have heard rival submissions advanced by counsels for both the parties at length, perused the record carefully and gave my thoughtful consideration to their contentions.
36. From the submissions advanced by counsels for both the parties, first question arises for consideration whether there is any cogent evidence to show prima-facie that the firm i.e. M/s Anamika Enterprises came into existence on December 08, 1997, when the firm got opened a current account in Canara Bank, Chandni Chowk Branch, Delhi as alleged by the CBI in the charge-sheet.
37. Though CBI in the charge-sheet categorically alleged CBI No. 1/12 & 2/12 Page No. 55 of 124 State through CBI v. Shreya Jha & others State through CBI v. Nandita Bakshi & others that the firm came into existence on December 08, 1997 but during investigation CBI failed to collect any cogent evidence in this regard. On being specifically asked, learned Public Prosecutor submitted that in the charge-sheet no such evidence has been mentioned; nor it has also been clarified when the firm was incorporated. From the above submission, it can safely be culled out that during investigation, CBI had not collected any evidence to establish even prima-facie that the firm was not in existence prior to December 08, 1997 or that the firm came into existence only on December 08, 1997.
(i) Perusal of the record reveals that there are statements of witnesses contrary to the claim of CBI that the firm was not in existence prior to December 08, 1997. In this regard, the statement of PW2 H.S. Bhist, Grade-II Officer of Canara Bank is relevant. In his statement, he testified that he had inspected the business premises of the firm where he was shown the stock of the firm. Though he deposed that the showroom of M/s Kamayani Fine Jewellery and M/s Anamika Enterprises was common and it was not possible to separate the stock as the borrower informed that the stock of M/s Anamika Enterprises was also in the same showroom. It is admitted case of CBI that the accused persons were running several companies. In these circumstances, if two firms were found running in the same premises does not mean that the firm was not in existence. Moreover, this fact was in the knowledge of the bank that the stock of M/s Anamika Enterprises was nor separable from the stock of M/s Kamayani Fine Jewellery. Thus, it cannot be said that the borrower CBI No. 1/12 & 2/12 Page No. 56 of 124 State through CBI v. Shreya Jha & others State through CBI v. Nandita Bakshi & others had concealed this fact from the bank in any manner. From the statement of PW2, it becomes crystal clear that after inspecting the business premises, he made a recommendation to grant credit limit in favour of the firm. In other words, PW2 believed that the firm was running business. Moreover, it is also admitted case of CBI that the firm was dealing in export of jewellery. But CBI did not deem it appropriate to collect any document in this regard. Even, there is nothing in the charge-sheet, which may show that IO of the case had sought any explanation from the borrower to ascertain when the said firm was incorporated. In these circumstances, I am of the considered opinion that there is no evidence on record to support the version of CBI that the firm came into existence only on December 08, 1997.
38. Next question crops up whether there was any dishonest intention on the part of the borrower while applying for various credit facilities with the Canara Bank, Chandni Chowk Branch, Delhi.
39. In order to prove prima-facie that the borrower had dishonest intention, prosecution has relied upon primarily on three facts, firstly that the firm had produced fake and fabricated balance- sheet and profit and loss account for the period March 31, 1997 and October 31, 1997 wherein the turnover of the firm had been shown to the tune of ` 156.22 lacs and ` 218.36 lacs respectively; secondly that the firm had not only produced forged property documents as collateral security but also produced fictitious persons to execute the CBI No. 1/12 & 2/12 Page No. 57 of 124 State through CBI v. Shreya Jha & others State through CBI v. Nandita Bakshi & others equitable mortgage; thirdly that the firm did not have any bank account and when bank asked the credential of the firm from its previous banker, borrower had opened a current account on December 09, 1997 with the Bank of Madura Ltd. and produced a letter from the said bank to the Canara Bank.
40. As per the charge-sheet filed by CBI, the balance- sheet and Profit & Loss Accounts were certified by M/s R.K. Munjal and Associates. During investigation, it was revealed that they had not certified the said documents and it was also revealed that M/s Anamika Enterprises was not their client. So the question of certifying balance-sheet and Profit & Loss Account for M/s Anamika Enterprises does not arise. In these circumstances, onus under Section 106 Evidence Act is shifted upon the borrower to explain from whom they got audited balance-sheet and Profit & Loss Account. This prima-facie shows that the fabricated audited balance-sheet and Profit & Loss Accounts were produced by the borrower to obtain the various kind of credit facilities from the bank.
41. At the time of availing various kind of facilities from Canara Bank, borrower had also produced collateral security of two properties. One property is located at Mandawali, Fazalpur, Abadi, Ganesh Nagar, Shahdara, Delhi and claimed that the said property belonged to Subhash Chhabra whereas the another property was located at Village Jonapur, Mehrauli, Delhi and claimed that the said property belonged to Smt. Krishna Kaur.
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(i) During investigation, it was revealed that the property located at Mandawali, Fazalpur, Abadi, Ganesh Nagar, Shahdara, Delhi was in dispute. Moreover, its owner Subhash Chhabra testified before the CBI that he had never executed any mortgaged deed in favour of the borrower before Canara Bank, Chandni Chowk Branch, Delhi. However, the identity of the person, who appeared before the Canara Bank as Subhash Chhabra and executed the documents as Subhash Chhabra could not be identified.
(ii) During investigation, it was further revealed that Krishna Kaur had died on August 05, 1994 and A9 was produced as Krishna Kaur before the bank to execute the documents.
(iii) It is undisputed fact that A1 had applied for various kinds of credit facilities from the bank and in order to obtain the said facilities, the said persons were produced before the bank to execute necessary documents. However, during investigation not only the documents were found forged but the persons who executed the documents in favour of borrower also found fictitious. Being the borrower, A1 should know the credential of the persons to whom she produced as her guarantor or to execute the equitable mortgage before the bank. Since, Krishna Kaur had died in August, 1994, it means that the borrower did not know Krishna Kaur. But despite that she was produced in the bank to execute the documents in her favour. This shows that either she had malafide intention or she CBI No. 1/12 & 2/12 Page No. 59 of 124 State through CBI v. Shreya Jha & others State through CBI v. Nandita Bakshi & others asked someone to arrange such person to execute the said documents. But at this stage, the above conduct of A1 is sufficient to show prima-facie that she had some dishonest intention.
(iv) I do not find any substance in the contention of learned defence counsel that if she had any dishonest intention, she would not have replaced the forged documents with genuine documents on October 23, 1999. Here, some dates are quite crucial. It is pertinent to state that account was got opened on December 08, 1997. Credit facilities were sanctioned on January 10, 1998. Limit was enhanced on September 15, 1998 and thereafter a meeting had taken place between the bank officers and the borrower on October 20, 1998. Thereafter, the borrower had replaced the documents, it means that the documents were replaced at belated stage. In these circumstances, there is every possibility that the borrower had replaced the documents when it was pointed out to the borrower that the documents submitted by her were fake. Moreover, this is a matter of trial and cannot be decided at this stage.
(v) Further, it is not a simpliciter case that the documents relating to collateral securities were fake. There may be possibility that the person is genuine but the documents are not to the satisfaction of the bank or it may be forged. In that situation, the borrower may take a plea that since she knew the particular person, she approached that person for execution of certain documents in her favour but that person inadvertently produced documents which were CBI No. 1/12 & 2/12 Page No. 60 of 124 State through CBI v. Shreya Jha & others State through CBI v. Nandita Bakshi & others not to the satisfaction of the bank or were forged. But here the position is quite different because not only the documents are fake and fabricated but the persons who were produced before the bank were also fictitious. Being the borrower, it was the minimum expectation of the bank that borrower would produce genuine persons before the bank to execute the documents. Thus, at this stage, I do not find any substance in the contention of the learned counsel that since the borrower had replaced the documents, she had no dishonest intention.
42. It is undisputed fact that the borrower had furnished a bank certificate from the Bank of Madura Ltd. In this regard, the testimony of PW2 is relevant. In his statement, he testified that in order to verify whether the party had any account in any other bank, he asked from the party about the same and its status. Accordingly, party informed him that she had an account in Bank of Madura Ltd., Nehru Place, New Delhi, accordingly, PW2 prepared a letter. Thereafter, a certificate from the Bank of Madura Ltd. dated December 11, 1997 was filed confirming that the firm was maintaining a current account in the said bank. During investigation, it was revealed that the said account was opened with Bank of Madura Ltd. only on December 11, 1997. It means that the firm was not having any account in the Bank of Madura Ltd. on December 09, 1997 when she applied for various kinds of facilities. If A1 was not maintaining any bank account in the Bank of Madura Ltd. on December 09, 1997, there was no occasion for her to make a false statement to the bank CBI No. 1/12 & 2/12 Page No. 61 of 124 State through CBI v. Shreya Jha & others State through CBI v. Nandita Bakshi & others that she was maintaining an account with the Bank of Madura Ltd. This further shows that she had some dishonest intention.
43. Learned counsel appearing for A1 also vehemently contended that since collateral security was not essential to avail various kinds of facilities as prime security was stock, thus it cannot be said that borrower had any dishonest intention. Admittedly, the prime security was stock and collateral security was not required to sanction the credit limit. But the question is whether the bank was inclined to grant the said limits without collateral security. There is no evidence on record to show that the bank was inclined to grant the said limits without taking collateral security. On the contrary, evidence available on record is that the bank had taken collateral security as an abundant caution to protect the interest of the bank. If the bank was not inclined to grant credit facilities to the borrower in the absence of collateral security, it is immaterial whether the prime security was sufficient to grant loan or not.
44. From the above, it can safely be culled out that the collected evidences are sufficient to show prima-facie that A1 had availed various kinds of credit facilities on the basis of forged/fabricated documents and she also produced fictitious persons in order to get the said facilities, thus prima-facie borrower had dishonest intention while availing the said facilities, hence borrower (A1) is liable for the offence punishable under Section 420 IPC.
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45. No doubt, there is no evidence on record to prove that A1 had committed any forgery or prepared any false document but there are evidence on record to prove prima-facie that A9 had forged the signature of Krishna Kaur and similarly the signature of Subhash Chhabra on the documents executed before the bank were forged. Indisputably, the said documents were used by A1 in order to avail the various kinds of facilities. Thus, A1 is also liable for the offence punishable under Section 471 IPC. Besides that she is also liable for the offence punishable under Section 468 IPC read with Section 120B IPC.
Role of A4 Shafiqur Rehman :-
46. Admittedly, in the charge-sheet, it is recited that the alleged conspiracy was hatched on December 08, 1997. Simultaneously, it is also recited in the charge-sheet that A4 had received certain payments from M/s Kamayani Fine Jewellery and M/s Balaji Export in the month of November, 1997. Thus, it is admitted case of CBI that the alleged payments were received by A4 prior to hatching the alleged conspiracy. But in the charge-sheet, CBI failed to explain how the said payments are relevant to connect A4 with the said conspiracy. Even, during course of arguments, learned Public Prosecutor failed to explain how the said payments are relevant to connect A4 with the alleged conspiracy.
(i) But there are certain other evidence on record to show CBI No. 1/12 & 2/12 Page No. 63 of 124 State through CBI v. Shreya Jha & others State through CBI v. Nandita Bakshi & others that A4 was involved in the alleged conspiracy. Statements of PW2, PW18, PW22, PW24 and PW25 prima-facie shows that he was involved in the inspection of properties which were mortgaged with the bank as collateral security. This prima-facie shows that he had arranged the said properties/guarantors at the instance of A1 which is sufficient at this stage to show prima-facie the nexus between A1 and A4. Thus, at this stage, it cannot be said that he was not a member of the conspiracy.
Role of A5 Sanjay Malik :-
47. As per charge-sheet, role attributed to A5 is that he had introduced A1, A2 and A3 to A6 and A5 was a Chartered Accountant by profession. It was further alleged that in connivance with A2 and A3, A5 had submitted a forged/fake audited balance- sheet and profit and loss account for the period ending March 31, 1997 and October 31, 1997. Thus, as per the allegations, A5 not only knew A1, A2 and A3 but he also submitted the forged/fake audited balance-sheet.
48. Admittedly, there is no cogent evidence on record to establish that Sanjay Malik was associated with M/s R.K. Munjal and Associates who allegedly certified the audited balance-sheet and profit and loss account. However, during investigation, it was revealed that the said firm had not audited the accounts of the borrower firm.
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(i) However, PW2 H.S. Bhist in his statement testified before the CBI that Sanjay Malik submitted the documents of the borrower and when he inquired about the balance-sheet submitted by the borrower, Sanjay Malik confirmed that the balance-sheet had been prepared under his supervision and borrower i.e. M/s Anamika Enterprises is a solid party. The said statement shows prime-facie that the alleged balance-sheet was prepared under the supervision of A5. At this initial stage, this Court has no reason to disbelieve the categorical statement made by PW2.
(ii) PW21 Sanjeev Gupta in his statement testified that he used to visit the office of V.K. Jha and Nandita Bakshi along with Sanjay Malik. But they had never assigned the job of auditing the accounts of their firms. He also testified that Nandita Bakshi and V.K. Jha used to talk about the bank loan, accordingly, Sanjay Malik offered to render his service as he had acquaintance with some bank Managers. A combined reading of the statements of PW21 and PW2, makes prima-facie case that before approaching U.R.G. Bhatt, some talks had taken place between V.K. Jha, who is father of A1 and thereafter the loan was applied in the name of firm of A1 and A5 got prepared the balance-sheet, which was submitted along with the loan application. In these circumstances, at this stage, it is seldom to discard the prosecution case that A5 was not a part of the conspiracy.
Role of A2 V.K. Jha :-
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49. A2 is the father of A1. From the statement of PW21, it becomes prima-facie clear that whenever Sanjay Malik used to visit his office, he used to talk about loan, consequently, A5 offered his service to arrange the loan as he had acquaintance with some Managers. This shows that A5 had introduced V.K. Jha and others with an intention to get a loan from the branch of A6. There is also evidence available on record that A2 had attended several meetings with the officers of the bank and Circle Office when the firm of accused persons failed to maintain financial discipline. From the statement of PW21, it also reveals that A5 did not know A1 but he knew A2 V.K. Jha. Since, the loan application was made in the name of firm of A1, it prima-facie shows that same was made at the instance of A2. As already stated that there is evidence on record to show that audited balance-sheet was prepared under the supervision of A5, thus at this stage, it is difficult to say that A2 was not the member of the conspiracy.
Role of A8 Vivek Sood :-
50. As already stated that borrower had claimed before the Canara Bank that she had another account in the Bank of Madura Ltd., Nehru Place, New Delhi despite the fact that she had no bank account on December 09, 1997. During investigation, it was revealed that A1 had opened current account with the Bank of Madura Ltd. and the said account was introduced by A8 Vivek Sood. The said account CBI No. 1/12 & 2/12 Page No. 66 of 124 State through CBI v. Shreya Jha & others State through CBI v. Nandita Bakshi & others was opened on December 11, 1997. Besides that there is also evidence on record that some money was transferred in the firm of A8. No doubt, PW40 B. Sukumaran, DGM of the bank testified before the CBI that transfer of fund to the sister concern is not generally permitted, but the same is permissible with the permission of the bank provided the transactions involved between the firms relate to genuine business transaction. As per the allegations made in the FIR, transfers were made to siphon of the fund, thus at this stage, it is difficult to say that there is no material on record against A8 that he was not the member of the conspiracy.
Role of A7 Rekha Anand :-
51. Admittedly, A7 was a Panel Advocate of Canara Bank and she had submitted Legal Scrutiny Report (LSR) in this case. As per charge-sheet, A7 had furnished a false report to the bank. As per learned defence counsel, the said report was furnished on the basis of documents supplied by the bank and the report is based on the basis of inspection carried out of the record available in the office of Sub-Registrar for the period January 01, 1985 to December 11, 1997.
(i) Perusal of the record further reveals that she advised the bank to keep on record the latest receipt of the payments of property tax; an affidavit declaring from the owner Subhash Chhabra; letter of confirming of depositing the title deed must be substantive to the creation of equitable mortgage. Record further reveals that the CBI No. 1/12 & 2/12 Page No. 67 of 124 State through CBI v. Shreya Jha & others State through CBI v. Nandita Bakshi & others said report was scrutinised by the Legal Department of Canara Bank but no major infirmity was found in the said report.
(ii) In support of his contention, learned counsel placed reliance upon the two judgments, Neeta Deep Rastogi v. CBI (supra) and CBI v. K. Narayana Rao (supra).
(iii) In case Neeta Deep Rastogi v. CBI (supra), facts of the case were quite identical to the facts of the case at hand. In this matter, learned Trial Court framed a charge against the panel advocate on the ground that panel advocate had furnished a false Legal Scrutiny Report (LSR) like in this case. The said order was challenged by the panel advocate. In the said matter, Hon'ble High Court discharged the revisionist i.e. panel advocate from criminal liability. Relevant paras are 8 and 9 and same are reproduced as under : -
Para 8 : In the considered view of this Court none of the statements throw any light on the role played by the petitioner here in preparing the scrutiny report in question. The CBI itself relies upon the receipt issued by the Sub Registrar's office for the payment received by it for the investigation carried out by the petitioner on 8th May 2002 for the years 1972 to 2002. Therefore, the fact that the petitioner did carry out a search is substantiated. The report prepared by the petitioner itself shows that she had advised the bank to obtain further documents as noticed herein-before. Apart from the mere statement that her report is false, there is no material to show CBI No. 1/12 & 2/12 Page No. 68 of 124 State through CBI v. Shreya Jha & others State through CBI v. Nandita Bakshi & others that she was in criminal conspiracy with any of the accused to commit the offences aforementioned. The report by itself cannot constitute either the substantive evidence or even a piece of circumstantial evidence to bring home the charge against the petitioner for committing the offence of criminal conspiracy. It also cannot constitute even a prima-facie material to charge her with the substantive offence under Section 467 Cr. P.C. It is one thing to say that the petitioner could have exhibited greater professional care and competence and quite a different thing to say that her professional opinion attracts criminal liability in the manner alleged by the prosecution.
Para 9 : In the impugned order on charge there is no discussion on any of the above documents.
The impugned order merely reproduces what is stated in the chragesheet about the various transactions involving the subsequent purchase of the property in question. It further adds that Adesh Jain had in his statement stated that "a watch man was there for 24 hours and he never told us that any bank officer ever visited plot for any verification or evaluation". The petitioner, as a panel Advocate asked to prepare a scrutiny report is not required to visit the property herself. That really was the task of the bank officials. Further it appears that she had in fact not given an unqualified report and advised the Bank that before creating an equitable mortgage it should obtain further documents, which evidently it did not. In the circumstances, it is difficult to hold that there was material available to show, even prima facie, that the petitioner intended to cheat or defraud the Bank or acted in criminal conspiracy with the other accused to commit the offences in question.
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(iv) In case CBI Vs. K. Narayana Rao (supra), panel advocate was charge-sheeted on the ground that he had submitted a false report. In this case also, Apex Court held that mere submitting a false report does not attract any criminal liability. In this regard, para 22, 23, 26 and 27 are relevant and same are reproduced as under:
Para 22: The High Court while quashing the criminal proceedings in respect of the respondent herein has gone into the allegations in the charge sheet and the materials placed for his scrutiny and arrived at a conclusion that the same does not disclose any criminal offence committed by him. It also concluded that there is no material to show that the respondent herein joined hands with A-1 to A-3 for giving false opinion. In the absence of direct material, he cannot be implicated as one of the conspirators of the offence punishable under Section 420 read with Section 109 of IPC. The High Court has also opined that even after critically examining the entire material, it does not disclose any criminal offence committed by him. Though as pointed out earlier, a roving enquiry is not needed, however, it is the duty of the Court to find out whether any prima-facie material available against the person who has charged with an offence under Section 420 read with Section 109 of IPC. In the banking sector in particular, rendering of legal opinion for granting of loans has become an important component of an advocate's work. In the law of negligence, professionals such as lawyers, doctors, architects and others are included in the category of persons professing some special skills.
Para 23: A lawyer does not tell his client that he shall win the cases in all circumstances. Likewise, a physician would not assure the CBI No. 1/12 & 2/12 Page No. 70 of 124 State through CBI v. Shreya Jha & others State through CBI v. Nandita Bakshi & others patient of full recovery in every case. A surgeon cannot and does not guarantee that the result of surgery would invariably be beneficial, much less to the extent of 100% for the person operated on. The only assurance which such a professional can give or can be given by implication is that he is possessed of the requisite skill in that branch of profession which he is practising and while undertaking the performance of the task entrusted to him, he would be exercising his skill with reasonable competence. This is what the person approaching the professional may be held liable for negligence on one of the two findings, viz., either he was not possessed of the requisite skill which he professed to have possessed, or, he did not exercise, with reasonable competence in the given case, the skill which he did possess.
Para 26 : Therefore, the liability against an opining advocate arises only when the lawyer was an active participant in a plan to defraud the Bank. In the given case, there is no evidence to prove that A-6 was abetting or aiding the original conspirators.
Para 27 : However, it is beyond doubt that a lawyer owes an "unremitting loyalty" to the interests of the client and it is the lawyer's responsibility to act in a manner that would best advance the interest of the client. Merely because his opinion may not be acceptable, he cannot be mulcted with the criminal prosecution, particularly, in the absence of tangible evidence that he associated with other conspirators. At the most, he may be liable for gross negligence or professional misconduct if it is established by acceptable evidence and cannot be charged for the offence under Sections 420 and 109 of IPC along with other conspirators without proper and acceptable link between them. It is further made clear that if there is a link or evidence to connect him with the other conspirators for causing loss to CBI No. 1/12 & 2/12 Page No. 71 of 124 State through CBI v. Shreya Jha & others State through CBI v. Nandita Bakshi & others the institution, undoubtedly, the prosecuting authorities are entitled to proceed under criminal prosecution. Such tangible materials are lacking in the case of the respondent herein.
52. In the instant case also, the mere allegations against A7 are that she had submitted a false report about the collateral security. Except that there is no other cogent evidence on record to show that she was a member of the conspiracy. Similarly, there is no cogent evidence on record to show that she had taken any monetary benefit from any person to furnish the said report. It is admitted case of CBI that the report had been furnished on the basis of documents furnished by the bank and the inspection carried out for the period mentioned in the report. Besides that she advised the bank to take certain precaution which bank was required to take before sanctioning the limits in favour of borrower. Even, no inherent defect was found in her report, when it was scrutinised by the Legal Department of the bank. In these circumstances, if we apply the above settled proposition of law, I am of the considered opinion that there is no sufficient material on record to make out a prima-facie against A7 Rekha Anand. Thus, in my opinion, she deserves discharge from all the charges, accordingly, I hereby, discharge her from all the charges.
Role of A3 Nandita Bakashi :-
53. Though in the charge-sheet, it is alleged that she CBI No. 1/12 & 2/12 Page No. 72 of 124 State through CBI v. Shreya Jha & others State through CBI v. Nandita Bakshi & others along with other accused persons had hatched a criminal conspiracy to cheat the bank, yet there is no cogent evidence in this regard. The role attributed to A3 is that she had furnished a bank guarantee in favour of the borrower. Except that no other role is attributed to A3. During course of arguments, it is not disputed that A3 had not furnished the guarantee in favour of A1, when A1 availed the various credit limits from the bank. Simultaneously, it is argued that furnishing a guarantee in favour of the borrower does not attract any criminal liability. Admittedly, there is no allegation against A3 that the documents furnished by her were false or fabricated or forged. It is admitted case of the CBI that A3 had also obtained loan from the bank and in the said matter, she is facing trial but this itself is not sufficient to arrive at a conclusion that she was in collusion with A1 in the present case. I found substance in the contention of learned counsel that if A3 had been in conspiracy with A1, she would not have either furnished the guarantee or she would not have furnished her genuine papers of the property. No doubt, A3 knew A1 and A2 previously but this itself is not sufficient to arrive at a conclusion that she was the member of the conspiracy. To prove the conspiracy, prosecution has to show prima-facie that there was some agreement between them for doing an illegal act or an act which was not illegal by illegal means. But there is no evidence in this regard. Indisputably, A3 is facing trial for obtaining credit facility from the bank by furnishing forged and fabricated documents. But it is admitted case of CBI that all the three offences were committed in furtherance of separate conspiracy and all the offences were distinct and separate CBI No. 1/12 & 2/12 Page No. 73 of 124 State through CBI v. Shreya Jha & others State through CBI v. Nandita Bakshi & others and due to that reason, separate FIRs were registered. Thus, mere fact that A3 is facing trial for obtaining credit facility from the bank on the basis of forged documents is not sufficient in the present case to arrive at a conclusion that she was in the conspiracy with A1. It is admitted case of CBI that in M/s Juniper Jewellery case, A1 was the co-accused but she was discharged by the Hon'ble High Court as no evidence was found against her. Similarly, in the instant case also, there is no other allegation against A3 except that she had furnished a guarantee in favour of A1. As already stated that no infirmity was found in the papers, which she executed in the present case, thus it cannot be said that her act i.e furnishing guarantee in favour of A1 attracts any criminal liability. In the absence of any other cogent evidence on record, I am of the considered opinion that collected material is insufficient to make out a prima-facie case against A3, thus I hereby discharge her from all the charges.
Role of A6 U.R.G. Bhatt :-
54. It is undisputed fact that A6 was working as Chief Manager at Chandni Chowk Branch. It is also undisputed fact that he had sanctioned the limit initially on January 10, 1998. From the statement of PW21, prima-facie it appears that A5 (Sanjay Malik) knew A6 and A5 offered A2 and A3 that he would get loan sanctioned to them as he had acquaintance with some Bank Managers. But there is nothing in the statement that A5 told the accused persons that he would get sanctioned the said loan from A6 illegally or contrary to the CBI No. 1/12 & 2/12 Page No. 74 of 124 State through CBI v. Shreya Jha & others State through CBI v. Nandita Bakshi & others Rules and Regulations of the bank. Mere fact that A6 knew A5 is not sufficient to draw a conclusion that A6 was the member of the conspiracy. To establish the conspiracy even prima-facie, there must be some evidence to show that there was some agreement between them for doing an illegal act or an act for doing act which is not illegal by illegal means.
(i) Learned Public Prosecutor insisted that there is sufficient evidence on record to show that A6 entertained the accused persons in his cabin which shows that he was in conspiracy with the accused persons but I do not find any substance in the said contention because it is admitted case of CBI that A6 was working as Chief Manager of the Branch and the accused persons approached him along with A5 for various kinds of limits. Being the Chief Manager, it was his duty to attend his customers in a congenial atmosphere. It is pertinent to mention here that being the Chief Manager, it was his duty to procure business for the bank. In order to procure business, it is minimum requirement that the borrower be attended by the bank properly in a congenial and cordial atmosphere. Now-a-days even bank officers attend their customers at their office/residence. Thus, mere fact that A6 had attended the accused persons in his cabin is not sufficient to hold even prima-facie that he was in conspiracy with them.
(ii) Admittedly, there is no iota of evidence on record that A6 had taken any monetary benefit whatsoever from any of the CBI No. 1/12 & 2/12 Page No. 75 of 124 State through CBI v. Shreya Jha & others State through CBI v. Nandita Bakshi & others accused persons. Had A6 be in conspiracy with the accused persons or he had some malafide intention, he would certainly have obtained some illegal consideration or indirect benefit from the borrower but there is no evidence in this regard.
55. Now question arises whether A6 had shown any undue favour to the borrower which may show that he had acted in furtherance of any conspiracy.
(i) It is admitted case of CBI that the loan proposal was processed by PW2 and PW3 and they put up the proposal before A6 being the Chief Manager with a recommendation to sanction the credit limit. On the basis of their recommendations, A6 examined the proposal and their recommendation and thereafter, he sanctioned the various credit limits. However, at the time of sanctioning the limits, A6 imposed as many as 8 conditions. If A6 was acting in furtherance of any conspiracy with the borrower, he would not have imposed the additional conditions; rather he would simply approve the recommendations made by his subordinates. This shows that A6 had made an attempt to protect the interest of bank by putting numerous additional conditions on the borrower. Mere fact that later on it was revealed that the borrower had furnished some false documents in order to obtain the credit limits does not mean that A6 was the member of the conspiracy.
(ii) During investigation, CBI had examined PW2 H.S. CBI No. 1/12 & 2/12 Page No. 76 of 124 State through CBI v. Shreya Jha & others State through CBI v. Nandita Bakshi & others Bhist, who in his statement testified that he visited business premises of the firm and found that there was sufficient stock to cover their finance. He further testified that he had visited the collateral security i.e. property located at Mandawali, Fazalpur, Abadi, Ganesh Nagar, Shahdara, Delhi and the property was identified by A4. From the bare perusal of the statement of PW2, it becomes clear that the stock was found sufficient to grant the credit limits sought by the borrower and PW2 also satisfied with the collateral security.
(iii) PW3 Sachidanand, Manager of the bank in his statement testified that collateral security of landed property was not essential and it depends upon case to case and to the satisfaction of the competent authority. Similarly, PW19 in his statement testified that collateral security was not essential to grant credit facility. But in this case, A6 had also asked the borrower to furnish collateral security. It means that A6 asked additional security from the borrower in order to protect the interest of bank. Had A6 be in conspiracy with the accused persons, he would not have asked for additional security; rather he would have sanctioned the loan on the basis of prime security i.e. stock but he had not done so which prima-facie shows that he was not the member of the conspiracy.
(iv) So far the false report of A7 is concerned. There is nothing on record, which may show that A6 was aware that the said report was false. It is admitted case of CBI that the said report was scrutinised by the Legal Department of the bank and no major CBI No. 1/12 & 2/12 Page No. 77 of 124 State through CBI v. Shreya Jha & others State through CBI v. Nandita Bakshi & others infirmity or illegality was found in the said report. In these circumstances, there was no occasion for the Chief Manager to raise any doubt over the said report. Mere fact that later on it was revealed that the borrower had played some fraud is not sufficient to hold that A6 was acting in furtherance of any conspiracy. As already discussed, in the instant case, even there is no evidence to show that panel advocate was in the conspiracy. It means that A7 had submitted the report on the basis of record and documents and she did not find any infirmity or illegality in the said documents. In these circumstances, if A6 acted on the said report does not prove that he was in the conspiracy with the borrower.
(v) Though the loan proposal was processed by PW2 and PW3 but they have not been impleaded as an accused. This shows that CBI had not found any incriminating evidence against them. If making recommendation to sanction the credit limit in favour of the borrower was not sufficient to initiate any criminal action against PW2 and PW3, it is not clear how acting on their recommendations with sufficient additional conditions can attract the criminal action against A6. It is pertinent to state that there is no cogent evidence on the file except the fact that A6 knew A5 and he attended the borrower in his cabin, to show prima-facie that either he was member of the conspiracy or he acted in furtherance of any such conspiracy.
(vi) In the charge-sheet, it was alleged that it was the duty of U.R.G. Bhatt to obtain opinion letter from the previous banker of CBI No. 1/12 & 2/12 Page No. 78 of 124 State through CBI v. Shreya Jha & others State through CBI v. Nandita Bakshi & others the borrower to verify the credential of borrower as exporter but A6 accepted the letter of Bank of Madura Ltd. without any verification, accordingly, it was alleged that he was in conspiracy with the accused persons.
(vii) In this regard, the statement of PW4 Ajay Kumar Bhatnagar, bank official is relevant. In his statement, he testified before CBI that while processing the application for credit facilities, it was ascertained whether the party had any account in any other bank, if the party had any such account, same should be verified. He further testified that on asking, borrower informed that she was maintaining a current account in Bank of Madura Ltd., Nehru Place, New Delhi. Accordingly, PW4 prepared a letter and bank of Madura Ltd. confirmed that M/s Anamika Enterprises was maintaining a current account bearing No. 27921 in the bank. Though the letter which was prepared by PW4 is not part of the record as he testified that the said letter is not available in the file. But from the statement of PW4, it becomes clear that at the time of processing the application, he issued a letter and thereafter certificate was obtained. There is nothing on record which may show that the letter was either prepared by A6 or he had given the said letter to the borrower. From the statement of PW4, it becomes clear that the entire exercise of obtaining the clarification from the previous banker was done while processing the proposal of credit facilities. In these circumstances, I do not find any substance in the allegation levelled by the CBI in the charge-sheet that it was the duty of U.R.G. Bhatt to obtain opinion CBI No. 1/12 & 2/12 Page No. 79 of 124 State through CBI v. Shreya Jha & others State through CBI v. Nandita Bakshi & others from the previous banker personally or he had committed an offence, if the bank had accepted the letter of Bank of Madura Ltd., which was submitted by the borrower.
(viii) So far as the question of placing reliance on the LSR is concerned, it is pertinent to mention here that the said report was even examined by the Legal Department of the bank and no major infirmity was found in the said report. Moreover, the said report was also considered by the Accountant and Manager at the time of making recommendation in favour of the borrower to grant various kinds of credit limits. In these circumstances, no criminality can be imposed on A6 mere on the ground that he also placed reliance on the said report at the time of sanctioning the various kinds of limits in favour of the borrower.
56. The next allegation against A6 is that he had made a recommendation in favour of the borrower for enhancement of the credit limit; consequently, Circle Office had enhanced the credit limit to the tune of ` 1.75 crores.
(i) To my mind, the said allegations are not relevant to arrive at a conclusion even prima-facie that A6 was in conspiracy with the accused persons because CBI had set up a case that A6 had entered into a conspiracy with the borrower when the account was opened and limit was sanctioned initially. There is no allegation in the charge-sheet that A6 entered into conspiracy with the party at the CBI No. 1/12 & 2/12 Page No. 80 of 124 State through CBI v. Shreya Jha & others State through CBI v. Nandita Bakshi & others time of enhancement of the limit. As already discussed, there is no sufficient evidence on record to hold prima-facie that A6 was in conspiracy at the time of sanctioning the limit initially.
(ii) Moreover, perusal of the record reveals that A6 had made a recommendation to the Circle Office for enhancement of limits vide his letter dated September 15, 1998. During course of arguments, CBI has failed to point out what wrong fact, he had mentioned in the said letter, which induced the Circle Office to enhance the limit.
(iii) On the contrary, it is admitted case of CBI that on October 20, 1998, a meeting had taken place with the borrower (A1), Guarantor (A3) and her father (A2). In the said meeting besides A6, DGM, V.G. Prabhu and another officer from Circle Office named Sh. L.K. Bansal were also present. During the said meeting, it was noticed that there were certain defaults on the part of borrower. Borrower also explained the reason for the said defaults and assured the DGM that the outstanding payments would be cleared and there will be no default. In the said meeting, borrower also requested to enhance certain limits on ad-hoc basis to the tune of ` 15 lacs each. Accordingly, DGM had enhanced the limits to the tune of ` 7.50 lacs each. Bare perusal of the said meeting makes it clear that a detail discussion had taken place between the bank officers on the one hand and the borrower/guarantor on the other hand. After considering the pros and cons, bank permitted the enhancement of limit on Ad-
CBI No. 1/12 & 2/12 Page No. 81 of 124State through CBI v. Shreya Jha & others State through CBI v. Nandita Bakshi & others hoc basis.
(iv) Record further reveals that A6 vide his letter dated September 15, 1998 made a recommendation to enhance the limit and Circle Office enhanced the limit on December 17, 1998. As already discussed that before enhancing the limit, there was a meeting on October 20, 1998 between the borrower and Circle Office and on the oral request of borrower, DGM had even enhanced the ad- hoc limits to the tune of ` 7.5 lacs each. This shows that the Circle Office was aware about the financial status of the borrower when the Circle Office enhanced the limits as recommended by A6.
(v) As already stated that there is nothing on record, which may show that A6 had acted fraudulently or dishonestly by mentioning wrong facts in his recommendation. In the absence of any such evidence, it cannot be said that by recommending for enhancement of the limit, A6 had committed any offence. Being the Chief Manager, it was his duty to send a proposal mentioning all relevant facts along with his recommendation to the Circle Office. As already discussed, even Circle Office had called the party before enhancement of the limit. Moreover, there is nothing on record, which may show that A6 had misled the Circle office in any manner.
(vi) On the contrary, the act of A6 sending the matter to Circle office for enhancement of limit shows that he was not in conspiracy with the borrower. Had he been in conspiracy with the CBI No. 1/12 & 2/12 Page No. 82 of 124 State through CBI v. Shreya Jha & others State through CBI v. Nandita Bakshi & others borrower, he would have preferred to favour the party at his own level without the involvement of the Circle office. But he preferred to refer the matter to Circle office. Thus, to my mind, the said act of A6 is not sufficient in any manner to hold even prima-facie that he was member of any conspiracy.
(vii) It is admitted case of CBI that there is no iota of evidence on record to show that A6 had obtained any pecuniary benefit or valuable thing either at the time of opening of the account or sanctioning the limit initially or at the time of making recommendation for enhancement of the limit. Even during arguments prosecution has also failed to highlight about any major lapse on the part of A6 either at the time of sanctioning the limits initially or making recommendation for enhancement.
57. As already discussed, there are sufficient material on record to show prima-facie that the borrower had obtained various kinds of limits by producing fabricated/forged documents and fictitious persons, which prima-facie shows that the borrower along with her associates had hatched a criminal conspiracy to cheat the bank to avail various kinds of limits on the basis of such documents. But CBI claimed that in the said conspiracy, bank officer was also involved. Before charge-sheeting a public servant, it is the duty of the CBI to collect sufficient evidence to show at least prima-facie that there was some conspiracy between the public servant and the private persons. Mere fact that public servant had taken certain decision in discharge CBI No. 1/12 & 2/12 Page No. 83 of 124 State through CBI v. Shreya Jha & others State through CBI v. Nandita Bakshi & others of his official duties on the basis of documents placed by private persons does not mean that he was also part of conspiracy or he acted in furtherance of any conspiracy. There may be cases where public servant acts in furtherance of conspiracy with private persons in order to cause loss to the public exchequer but in such cases, there must be some cogent admissible evidence on record. Admittedly, in the instant case, there is no iota of evidence on record to show even prima-facie that A6 obtained any pecuniary benefit or valuable thing or he had any interest in the private persons. In such circumstances, a question naturally arises in the mind of a prudent person why a public servant would act against the interest of his office. Mere fact that borrower succeeded in obtaining various kinds of credit limits on the basis of forged documents/fictitious mortgagor or the borrower failed to repay the payment by one reason or another reason or the fact that certain documents were found forged/fake later on does not ipso-facto show prima-facie that public servant had acted in collusion with the private persons.
(i) Assuming for the sake arguments, if the borrower had not furnished any forged documents or fictitious persons or the balance-sheet be genuine, does it mean that in such a scenario, there would be no chance of having conspiracy of public servant with the borrower. It depends upon case to case. There may be cases where public servant may act in conspiracy with the private persons to cause wrongful loss to the public exchequer and to cause wrongful gain for himself or the persons in whom he has interest even by CBI No. 1/12 & 2/12 Page No. 84 of 124 State through CBI v. Shreya Jha & others State through CBI v. Nandita Bakshi & others acting within the parameters of Rules and Regulations. Simultaneously, there may be cases where the public servant may not be in conspiracy even in cases where the private persons obtained certain benefits through public servant by inducing dishonestly or misrepresentation the facts to the public servant and the public servant fails to detect the said inducement or misrepresenting at that very moment. Thus, to my mind, before prosecuting a public servant, investigating agency should be more careful.
58. In light of the aforesaid discussion, I am of the considered opinion that there is no sufficient evidence on record against U.R.G. Bhatt (A6) to make out a prima-facie case as mentioned in the charge-sheet, accordingly, I hereby, discharge him from all the charges.
Conclusion :-
59. In the light of aforesaid discussion, I am of the considered opinion that there are sufficient evidence on record to make out a prima-facie case against Shreya Jha (A1), V.K. Jha (A2), Shafiqur Rehman (A4), Sanjay Malik (A5), Vivek Sood (A8) and Shashi Bala Sharma (A9) for the offence punishable under Section 120B read with Section 419/420/468/471 IPC.
(i) There are also sufficient evidence on record to make out CBI No. 1/12 & 2/12 Page No. 85 of 124 State through CBI v. Shreya Jha & others State through CBI v. Nandita Bakshi & others a prima-facie case against Shreya Jha (A1) for the offence punishable under Section 420/471 IPC.
(ii) There are also sufficient evidence of record to make out a prima-facie case against accused Shashi Bala Sharma (A9) for the offence punishable under Section 419/468/471 IPC.
(iii) However, I am of the considered opinion that collected material is insufficient to make out a prima-facie case against Nandita Bakshi (A3), U.R.G. Bhatt (A6) and Rekha Anand (A7), thus, I hereby discharge all of them from all the charges.
Now I proceed to examine the facts of CBI case No. 2/12 :-
60. Briefly stated facts of prosecution case are that Nandita Bakshi (A1), V.K. Jha (A2), Shafiqur Rehman (A3) and Sanjay Malik (A4) had formed a cartel and entered into a criminal conspiracy with an intention to cheat different banks by way of obtaining credit facilities/loan in the name of different companies/firms in the name of Ms. Nandita Bakshi, V.K. Jha and in furtherance of the said conspiracy, Sanjay Malik contacted U.R.G. Bhatt (A8), Chief Manager of Chandni Chowk Branch. It was alleged that Shafiqur Rehman (A3) had arranged forged title deeds of the properties which were mortgaged with the bank as collateral securities and he also arranged fictitious persons such as Kirpal Singh (A5), Raghubir Singh (A6) and Rajan Kumar Nair (A7) who impersonated themselves as Jai CBI No. 1/12 & 2/12 Page No. 86 of 124 State through CBI v. Shreya Jha & others State through CBI v. Nandita Bakshi & others Dutt Sharma, Sukhdev Sharma and Shyam Lal Nair respectively.
(i) It was alleged that in the month of April, 1998, A1 and A2 approached Canara Bank, Chandni Chowk Branch with a request for credit facilities for their firm i.e. M/s Kamayani Fine Jewellery, of which A1 was proprietrix. It was alleged that A1 had opened a current account bearing No. 10144 on April 18, 1998 and on April 20, 1998, she had submitted an application for credit facilities along with photostate copy of profit and loss account and balance-sheet as on March 31, 1996 and March 31, 1997, which was purportedly attested by M/s G.N. Gupta and Associates, Chartered Accountant.
(ii) It was further alleged that A8 had sanctioned loan/credit facility in the name of M/s Kamayani Fine Jewellery on May 12, 1998 by opening GA account No. 1937 and ` 20 lacs was sanctioned under open cash credit (OCC) and ` 20 lacs under (ILC) account.
(iii) It was alleged that A8 had sanctioned the loan/credit facility in the name of said firm in gross violation of Banking Rules and he merely sanctioned the above limits on the face value of A1 and A2 as they were Ex-IRS and Ex-IPS Officers respectively. It was further alleged that A8 had sanctioned the said loan/facilities at the instance of A4 without any verification of their credit worthiness and past performance.
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(iv) It was further alleged that U.R.G. Bhatt not only sanctioned the limits in gross violation of Banking Rules but he also permitted the borrower to release the cash credit limit of ` 20 lacs on the very same day whereas revaluation report dated April 17, 1998 showed the valuation of the property at ` 18.60 lacs. It was alleged that U.R.G. Bhatt had obtained the valuation report of another property bearing No. N-106, G.K. Part-II, New Delhi, which was submitted on June 08, 1998. It was further alleged that OCC limit of ` 20 lacs was released on May 14, 1998 whereas the mortgaged deed was executed on June 10, 1998 in the name of Shyam Lal Nair.
(v) It was further alleged that third party collateral securities of the properties i.e. 737/18, Maidan Garhi, Delhi, which stood in the name of Jai Dutt Sharma and Sukhdev Sharma and property bearing No. 106, G.K. Part-II, New Delhi, which stood in the name of Shyam Lal Nair, were accepted without proper verification of the owners of the property despite the fact that while processing the credit report, it was pointed out to Mr. U.R.G. Bhatt (A8) by the bank officials about the over valuation of property bearing No. 737/18, Maidan Garhi, Delhi. It was further alleged that since A8 was in conspiracy, he did not care and accepted the second property as third party collateral security along with first property and got it revaluation and found the value at ` 18.60 lacs, which was much lower than the earlier valuation of ` 73.80 lacs.
(vi) It was further alleged that Legal Scrutiny Reports were CBI No. 1/12 & 2/12 Page No. 88 of 124 State through CBI v. Shreya Jha & others State through CBI v. Nandita Bakshi & others submitted by the party itself purportedly to have been issued by Rekha Anand, Panel Advocate whereas she had not issued any such report.
(vii) It was further alleged that Shafiqur Rehman (A3) had arranged collateral security as well as fictitious persons namely Kirpal Singh (A5), Raghubir Singh (A6) and Rajan Kumar Nair (A7). It was alleged that A5 and A6 were produced in the bank as Jai Dutt Sharma and Sukhdev Sharma being the owners of the property located at Village Maidan Garhi, Delhi with false copy of ration card along with photograph of Kirpal Singh and Raghbir Singh.
(viii) It was further alleged that the said property had been sold by the original owner to one Sh. Rewati Raman Bhardwaj through GPA on July 1, 1996. It was alleged that A3 had approached Sh. Rewati Raman Bhardwaj for getting him bank loan and on this pretext, he obtained the sale deed and copies of GPA. Later on, he had returned the sale deed to him. It was alleged that Rewati Raman Bhardwaj identified A5 as the associate of A3.
(ix) It was further alleged that A7 had impersonated Mr. Shyam Lal Nair, who was the owner of the property located at G.K. Part-II, New Delhi and executed necessary documents in favour of the bank. It was alleged that after the death of Shyam Lal Nair, property had been sold to Mr. Anil Kapoor by the nephew of deceased Shyam Lal Nair named Prem Kumar Nair. It was further alleged that CBI No. 1/12 & 2/12 Page No. 89 of 124 State through CBI v. Shreya Jha & others State through CBI v. Nandita Bakshi & others A7 had produced a forged ration card at the time of impersonating Shyam Lal Nair.
(x) It was further alleged that A4 in furtherance of the conspiracy, introduced A1 and A2 to U.R.G. Bhatt, Chief Manager and thereafter he acted as a middleman between them and facilitated for the sanction of credit facility in pursuance of the said conspiracy to cheat the bank. It was alleged that though A4 had not acted as Chartered Accountant, but he was paid about ` 6.89 lacs through various cheques from the account of M/s Kamayani Fine Jewellery, M/s Anubhuti Trading and M/s Balaji Export. The said companies issued cheques in the name of his firm named M/s Perfect Association and some cheques were issued in the name of his wife Nita Malik. It was alleged that the said amount was paid as remuneration for facilitating the sanction of loan/limits in the name of different firms by exploiting his links with U.R.G. Bhatt.
(xi) It was further alleged that accused Vivek Sood (A9) is the brother of A1 and he entered into in a criminal conspiracy and in furtherance of the said conspiracy, he aided and abetted in siphoning of the fund from the account of M/s Kamayani Fine Jewellery to the account of M/s Anubhuti Trading, M/s Chanda Export and M/s Sunder Diamonds and M/s Chanda International Pvt. Ltd. and M/s Swati Fine Jewellery Pvt. Ltd. It was alleged that A9 was proprietor in the first three firms whereas he was director in the last two companies. In M/s Swati Fine Jewellery Pvt. Ltd., A1 was also one of the directors. It CBI No. 1/12 & 2/12 Page No. 90 of 124 State through CBI v. Shreya Jha & others State through CBI v. Nandita Bakshi & others was alleged that in the account of M/s Anubhuti Trading and M/s Chanda Export, fund to the tune of ` 26,47,618/- and ` 1,68,83,988/- respectively had been transferred through various cheques/demand drafts, which were issued from the account of M/s Kamayani Fine Jewellery. Similarly, an amount to the tune of ` 2,91,76,538.87 had been deposited in the account of M/s Kamayani Fine Jewellery through various demand drafts and cheques. The said cheques were issued from different banks.
(xii) It was alleged that from the oral and documentary evidence, it is established that A1 to A9 were party to the criminal conspiracy and in furtherance of the said conspiracy, they fabricated/got fabricated forged valuable property documents and used the same to cheat the bank and obtained undue pecuniary advantage on the basis of said forged/bogus documents, which were submitted as collateral securities and their said acts caused wrongful loss to the bank to the tune of ` 1,72,62,508.29 and corresponding caused wrongful gain to them jointly and severally.
(xiii) According, CBI had filed a charge-sheet for the offence punishable under Section 120B IPC read with Section 409/419/420/467/468/471 IPC read with Section 13 (1) (d) of Prevention of Corruption Act. It was alleged that A1 is also liable for the offence punishable under Section 420/471/467/468 IPC. It was alleged that A5 to A7 are also liable for the offence punishable under Section 419/420/467/468/471 IPC. It was further alleged that A8 CBI No. 1/12 & 2/12 Page No. 91 of 124 State through CBI v. Shreya Jha & others State through CBI v. Nandita Bakshi & others U.R.G. Bhatt is also liable for the offence punishable under Section 13 (2) read with Section 13 (1) (d) of Prevention of Corruption Act and under Section 409 IPC.
61. Learned counsel appearing for A1, A2 and A9 vehemently contended that on the basis of complaint of the bank, CBI had already filed the charge-sheet in M/s Juniper Jewellery Pvt. Ltd. case and in the said case, CBI had arrayed R.T. Nayak, G. Sampat Kumar and Yogender Pal Singh as accused persons whereas in the present case, CBI had cited them as witnesses. It was urged that this practice is not tenable under law as both the cases were registered on the basis of same complaint.
(i) It was further astutely argued that though in the present matter, it was alleged that the bank had not appointed Ms. Rekha Anand to submit Legal Scrutiny Report, yet accused persons in order to avail the credit facilities submitted a report purportedly to be signed by Rekha Anand, Advocate, but surprisingly CBI did not deem it appropriate to cite Rekha Anand as a witness. It was urged that this shows that investigation had not been conducted in transparent manner.
(ii) It was further vigorously argued that the main allegation against A1 is that she had dishonestly induced the bank to sanction credit facilities in her favour by submitting forged and fabricated documents. It was argued that in fact there is no material CBI No. 1/12 & 2/12 Page No. 92 of 124 State through CBI v. Shreya Jha & others State through CBI v. Nandita Bakshi & others on record to show that the borrower had any dishonest intention at the time of making request for various kinds of credit facilities. It was argued that mere fact that later on the borrower failed to maintain financial discipline does not mean that the borrower had any dishonest intention.
(iii) It was vigorously argued that the loan/credit facilities were sanctioned against prime security of stock and as per evidence collected by CBI, the value of stock was sufficient to sanction the loan, thus it was contended that if value of the primary stock was sufficient to sanction the loan, it cannot be said that the borrower had any dishonest intention to cheat the bank. It was submitted that there is evidence on record to show that the borrower used to furnish detail of the stock on monthly basis and same was used to analyse by the bank and it was also physically verified by the bank.
(iv) It was further contended that prime security was stock in trade and it was audited by M/s Ashok & company and as per its report dated May 22, 2000, value of stock was sufficient. Moreover, this fact is also corroborated by PW2 and PW4 in their respective statement.
(v) It was further vehemently contended that A1 Nandita Bakshi had produced her husband Rajeev Bakshi as one of the guarantors but CBI did not even deem it appropriate either to cite him as a witness or array as an accused. This shows that as per CBI No. 1/12 & 2/12 Page No. 93 of 124 State through CBI v. Shreya Jha & others State through CBI v. Nandita Bakshi & others investigation conducted by CBI, he was not part of the alleged conspiracy. It was contended that if Nandita Bakshi had any dishonest intention, she would not have produced her husband as a guarantor. Similarly, if she had any dishonest intention, she would hatch conspiracy with her husband and not with strangers. This shows that Nandita Bakshi had no dishonest intention when she applied for various kinds of credit facilities.
(vi) It was further contended that it is admitted case of CBI that enhancement was sanctioned by R.T. Nayak on the recommendation of G. Sampat Kumar but neither of them has been arrayed as an accused. This shows that the borrower was not in conspiracy either with R.T. Nayak or G. Sampat Kumar. It was argued that there is no evidence on record to show that R.T. Nayaik had enhanced the limit on the recommendation of U.R.G. Bhatt, Chief Manager, thus it cannot be said that the borrower was in conspiracy with U.R.G. Bhatt.
(vii) It was further contended that as per the statement of PW2, PW4, PW5, PW10, PW15, PW16 and PW18, loan was sanctioned in accordance with the procedure of banks and there is nothing on record, which may show that the bank officials had granted any undue favour to the borrower while dealing with her request, thus it was urged that there is no evidence on record to show that the borrower had any dishonest intention.
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(viii) It was further contended that it is admitted case of CBI that mortgaged properties were valued by PW40, panel valuer of the bank and in his statement, he testified that he had physically verified and measured the property. It was urged that this shows that the property was in existence and its owner had not raised any objection when the property was valued by PW40.
(ix) It was further contended that there is no iota of evidence on record to show that A1 had committed any forgery or she used any forged document fraudulently to avail the credit facilities. It was contended that even CBI had not conducted any investigation to show prima-facie that the submitted documents were forged; or if any forgery was committed, CBI failed to identify the persons, who committed the alleged forgery. It was contended that the borrower was not having any knowledge that the documents furnished by the mortgagor were not genuine or they had committed any kind of forgery.
(x) It was further contended that there is no iota of evidence against A2 V.K. Jha and A9 Vivek Sood. It was submitted that A2 has been impleaded as an accused being the father of Shreya Jha otherwise he had no role in the present matter. Similarly, A9 has been impleaded as an accused merely being the brother of A1 and in order to implead him, CBI had placed reliance on the same set of documents which were used against him in connected matter i.e. CC No. 1/12.
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(xi) At last, it was argued that the borrower had already made the entire payment to the bank in 2008 itself and even bank had withdrawn the recovery suit from the Debt Recovery Tribunal. It was thus urged that the said conduct of borrower further shows that she had no dishonest intention.
62. Shri K.K. Patra, Advocate, counsel appearing for A4 Sanjay Malik contended that the main allegation against A4 is that U.R.G. Bhatt had sanctioned loan at the instance of A4, which is factually incorrect. It was argued that during investigation, investigating officer had recorded the statement of PW18, who testified that U.R.G. Bhatt had sanctioned the loan on his recommendation. It was further argued that there is no allegation that PW18 was in conspiracy either with the borrower or with U.R.G. Bhatt. It was thus contended that if loan was sanctioned on the recommendation of PW18, it cannot be said that U.R.G. Bhatt was in conspiracy either with borrower or A4. It was further argued if U.R.G. Bhatt be in conspiracy, he would not have put additional conditions to protect the interest of the bank; rather he would have simply sanctioned the loan but he had not done so, which again rules out the possibility of his having in conspiracy either with A4 or borrower.
(i) It was further contended that the name of A4 had been inserted in the statement of PW18 and PW45 later on to create a false evidence against him. Moreover, the said afterthought addition CBI No. 1/12 & 2/12 Page No. 96 of 124 State through CBI v. Shreya Jha & others State through CBI v. Nandita Bakshi & others is not helpful to the prosecution to prove the conspiracy against A4 because at the most the said addition may show that A4 knew the borrower, but in the instant case, this fact is irrelevant because in another matter, CBI had charge-sheeted the borrower along with R.T Nayak and G. Sampat, which shows that the borrower knew even higher officers of the bank.
(ii) It was further contended that PW4 in his statement testified that even the borrower had contacts in Ministry of Finance and at one occasion, Mr. Rana from Ministry of Finance made a call to the Circle Office to extend help to the borrower. It was argued that in these circumstances, it cannot be said that bank had sanctioned the loan mere at the asking of the Sanjay Malik. It was further contended that from the statement of the witnesses recorded by CBI, it can safely be culled out that the loan was sanctioned as per the procedure of the bank and no undue favour had been shown to the borrower particularly at the instance of Sanjay Malik.
63. Shri Islam Khan, Advocate, counsel appearing for A3 contended that A3 had been impleaded as an accused on the basis of two cheques both dated November 15th & 17th , 1997 in the sum of ` 3.15 lacs and ` 1.74 lacs, which were issued in his favour by M/s Balaji Exports and M/s Kamayani Fine Jewellery respectively. It was argued that it is admitted case of CBI that in the instant case conspiracy, if any, was hatched in April, 1998 when an application was submitted to the bank for various kinds of credit limits. It was CBI No. 1/12 & 2/12 Page No. 97 of 124 State through CBI v. Shreya Jha & others State through CBI v. Nandita Bakshi & others argued that if conspiracy was hatched in April, 1998, it is not clear how the said payments are relevant to prove the conspiracy. Even CBI had not impleaded M/s Balaji Export as an accused, who issued the cheques in favour of A3.
(i) It was further contended that in order to rope A3 in the alleged conspiracy, CBI placed reliance on the statement of PW6 and PW7, it was urged that but no reliance can be placed on their statements as the same are vague and insufficient to connect the accused with the alleged conspiracy. It was further contended that moreover A6 did not state that the property in question was valued at the behest of A3. Similarly, PW7 testified that the property was physically inspected and he did not state about the valuation of the property. On the contrary, PW30 deposed that the property was valued at the instance of bank. It was further submitted that the statement of PW29, PW42 and PW45 are also not relevant to attract any criminal liability.
64. Shri Rajpal Singh, Advocate, counsel appearing on behalf of accused U.R.G. Bhatt (A8) contended that the main allegations against A8 are that he had committed gross violation of Banking Rules at the time of granting credit facility in favour of A1 and he had permitted the bank to release the cash limit of ` 20 lacs on the very same day despite the fact that as per the revaluation report dated April 17, 1999, property was valued at ` 18.60 lacs.
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(i) It was contended that the borrower had opened a current account on April 20, 1998, and at that time, borrower had moved an application for open cash credit facility, which was processed and examined by PW18, who put up a note before A8 with his recommendation to sanction OCC and ILC of ` 20 lacs each and in his note, he mentioned the value of said property at ` 73.80 lacs. It was contended that the said note was dealt with by A8 first time on May 11, 1998; when he called the party for the purpose of discussion and thereafter on the basis of recommendation made by PW18, A8 sanctioned the limit with six additional conditions including that limit shall be released only after obtaining satisfactory OPL from the Bank of Madura Ltd. It was argued that as per the documents placed by CBI, all the conditions that were imposed by A8, were fulfilled by the borrower on May 14, 1998 under the supervision of PW18 and thereafter A8 permitted to release the limit on May 16, 1998. Thus, it was argued that the allegation of the CBI that A8 had released the limit on the same day is contrary to the record.
(ii) It was further contended that on August 11, 1998, borrower had moved an application for transfer of the account to Parliament Street Branch, accordingly, the account was transferred on August 21, 1998. At the time of transferring the account, Branch of A8 had sent all relevant documents to Parliament Street Branch stating that at that time, the total outstanding amount in the account of borrower was ` 42,31,576.94 and in this regard, Chandni Chowk Branch had raised BAR (Branch Advise Requisition) with the CBI No. 1/12 & 2/12 Page No. 99 of 124 State through CBI v. Shreya Jha & others State through CBI v. Nandita Bakshi & others Parliament Street Branch. It was contended that after August 21, 1998, A8 had no control or connection with the said account in any manner.
(iii) It was further contended that after transfer of the said account, Parliament Street Branch opened a fresh account of the borrower on August 22, 1998 and got executed all relevant documents including fresh hypothecation of the stock. Thereafter, Parliament Street Branch enhanced the limits from time to time. It was contended that if A8 had been in conspiracy with the borrower, he would not have transferred the account; rather he would persuade the borrower to continue the account with his branch so that he could favour him easily without any hindrance, but A8 immediately transferred the account. This shows that he was not in conspiracy in any manner with the borrower.
(iv) It was contended that from the letter dated October 16, 1999, it transpires that several enhancements were sanctioned in favour of the borrower after transfer of the account and this was the main cause of accumulation of the loss to the tune of ` 1.72 crores.
(v) It was further vehemently contended that only two witnesses deposed against A8 i.e. PW18 and PW45, but contended that no reliance can be placed on their statement because the same are contrary to the record. It was contended that though PW18 testified that when the limit was sanctioned by A8 on his CBI No. 1/12 & 2/12 Page No. 100 of 124 State through CBI v. Shreya Jha & others State through CBI v. Nandita Bakshi & others recommendation, he came to know that the valuation of the property was on higher side, accordingly, he informed A8 but A8 ignored his advice and released the limit immediately. On the contrary, PW45 deposed that initially property was valued at ` 73.80 lacs but later on he realised that it was on higher side, accordingly, he informed PW18, who directed him to physically inspect the site, accordingly, PW45 inspected the site and assessed the property between ` 15 lacs to ` 18 lacs. PW45 further testified that thereafter PW18 informed U.R.G. Bhatt. It was contended that there is no document on record to show that PW18 had ever informed about the said revaluation of the property. Admittedly, PW18 had not put up any note before PW8 in this regard.
(vi) It was further contended that there is no iota of evidence on record to show that A8 was in conspiracy in any manner.
65. Learned counsel appearing on behalf of A5 Kirpal Singh submitted that he is an illiterate person and he was approached by Shafiqur Rehman to execute the documents in favour of the borrower and he was not aware about the consequences of his act. It was submitted that A5 had been used in this case and he became the victim of the conspiracy hatched by other accused persons.
66. Per contra, learned counsel appearing for CBI refuted the contentions raised by counsel for the accused persons and submitted that there are ample evidence on record to show that the CBI No. 1/12 & 2/12 Page No. 101 of 124 State through CBI v. Shreya Jha & others State through CBI v. Nandita Bakshi & others accused persons had hatched a conspiracy to cheat the bank and in furtherance of the conspiracy, A1 opened a current account in Canara Bank, Chandni Chowk Branch. Thereafter, she had moved an application for various kinds of credit facilities. It was further contended that Sanjay Malik introduced A1 and A2 to U.R.G. Bhatt, Chief Manager. It was further contended that at the time of availing various kinds of facilities, A1 had produced fictitious audited balance- sheet and profit and loss account. Though the said balance-sheet and profit and loss accounts were not prepared by Sanjay Malik, but he was paid by the accused persons. It was further contended that A1 had produced fictitious persons to execute the documents and mortgaged the property in favour of the bank, which shows that she had dishonest intention since inception. It was further contended that mere fact that later on A1 had repaid the loan amount is not sufficient to exonerate her from the charges. It was further argued that U.R.G. Bhatt had violated the Banking Rules at the time of sanctioning loan and this fact is clear from the statement of PW18 and PW45, which proves that A8 had ignored the advice of PW18 that the valuation of the mortgaged property is a quite meagre and was not sufficient to grant credit facilities to the borrower but he ignored the same as he was in conspiracy with the accused persons. It was further contended that V.K. Jha is also involved in the said conspiracy and he was the brain behind the alleged conspiracy. Similarly, A9 helped A1 to siphon of the fund, thus prima-facie there is sufficient material on record to show that he was also involved in the conspiracy.
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67. I have heard rival submissions advanced by counsel for both the parties, perused the record carefully and gave my thoughtful consideration to their contentions.
68. First question emerges for adjudication whether there is any evidence on record to show prima-facie that there was any dishonest intention on the part of borrower at the time of applying for various kinds of facilities with Canara Bank, Chandni Chowk Branch, Delhi.
69. As per charge-sheet, at the time of applying for various kinds of credit facilities, borrower had annexed photostate copy of profit and loss account and balance-sheet for the financial year ending March 31, 1996 and March 31, 1997 purportedly to be attested by M/s G.N. Gupta and Associates, Chartered Accountant. However, during investigation, it was revealed that the said balance- sheet was never audited by the said firm. In this regard, the statement of PW G.N. Gupta and Vinay Kumar Goel are quite relevant. On perusal of their testimony, it would become prima-facie clear that they had never conducted the audit of the books of accounts of M/s Kamayani Fine Jewellery and they did not know the borrower (A1). Since, A1 had submitted documents along with her application at the time of seeking various kinds of credit facilities from the bank, she has to explain who had conducted the audit of the books of account of her firm. Since, prima-facie prosecution has established that the books of accounts for the financial year ending March 31, 1996 and CBI No. 1/12 & 2/12 Page No. 103 of 124 State through CBI v. Shreya Jha & others State through CBI v. Nandita Bakshi & others March 31, 1997 were not audited by the Chartered Accountants as purportedly mentioned in the annexed photocopy of profit and loss account and balance-sheet, thus onus is shifted upon her to explain from whom she had got audited the books of account. At this stage, there is no reason to disbelieve the statement of witnesses recorded by the CBI.
(i) It is also undisputed fact that at the time of obtaining various kinds of facilities from the bank, borrower had also produced Kirpal Singh (A5), Raghubir Singh (A6) being the owner of the property located at Khasra No. 737/18, Village Maidan Garhi, Tehsil Mehrauli and she also produced one Rajan Kumar Nair being the owner of property bearing No. N-106, G.K. Part-II, New Delhi. However, during investigation, it was also revealed that property located at Maidan Garhi did not belong to A5 and A6; rather it belonged to one Jai Dutt Sharma and Sukhdev Sharma. During investigation, it was revealed that Jai Dutt Sharma and Sukhdev Sharma had not executed any document in favour of the bank; nor they mortgaged their property with the bank. From the statement of witnesses recorded by CBI prima-facie it is established that A5 and A6 had represented themselves as Jai Dutt Sharma and Sukhdev Sharma respectively, thus they impersonated themselves as Jai Dutt Sharma and Sukhdev Sharma. Not only they impersonated themselves as Jai Dutt Sharma and Sukhdev Sharma but they also produced forged ration card to claim themselves as Jai Dutt Sharma and Sukhdev Sharma while impersonating themselves and CBI No. 1/12 & 2/12 Page No. 104 of 124 State through CBI v. Shreya Jha & others State through CBI v. Nandita Bakshi & others mortgaging the said property in favour of the borrower.
(ii) Similarly, at the time of seeking the loan, borrower had also produced one Rajan Kumar Nair (A7) being the owner of property bearing No. N-106, G.K. Part-II, New Delhi. However, during investigation, it was revealed that the said property did not belong to him; rather it belonged to Shyam Lal Nair. It was also revealed that after the death of Shyam Lal Nair, the property had been sold to Anil Kapoor by the nephew of Shyam Lal Nair named Prem Kumar Nair. A7 also produced forged ration card at the time of impersonating himself as Shyam Lal Nair. Thus, prima-facie there are sufficient evidence on record to show that A7 was not the owner of the property; which was mortgaged with the bank in favour of the borrower.
(iii) Since, A5, A6 and A7 appeared before the bank and executed the documents on behalf of the borrower in connection with the sanction of various kinds of limit, thus the borrower has to explain how the said persons appeared and executed the documents before the bank when they were not the owner of the said property.
(iv) From the above, prima-facie it becomes clear that the borrower had not only produced forged/fake audited balance-sheet and profit and loss account but also produced fictitious persons to execute equitable mortgage of their property with the bank. Now, question arises whether in these circumstances, can it be said that CBI No. 1/12 & 2/12 Page No. 105 of 124 State through CBI v. Shreya Jha & others State through CBI v. Nandita Bakshi & others there was no dishonest intention on the part of the borrower while applying for various kinds of limits? To my mind, answer is in negative.
(v) No doubt, various kinds of credit facilities were sanctioned on the basis of prime security of stock and the value of stock was found sufficient as contended by learned defence counsel. But question arises whether bank was ready to sanction various kinds of credit limits only on the basis of prime security. Answer is in negative. And probably, due to that reason, bank asked the borrower to furnish collateral security. If bank was not ready to sanction the requisite loans/credit facility only on the basis of prime security, it cannot be said that the borrower had no dishonest intention because the value of the prime security was sufficient enough to sanction the loan. Since, the borrower had not only produced forged/fake documents but also produced fictitious persons in order to get the loan sanctioned from the bank, I am of the view that it cannot be said at this stage that the borrower had no dishonest intention.
(vi) By producing the forged/fake documents and fictitious persons, borrower had induced the bank to sanction the loan/credit facility in her favour, thus prima-facie there are sufficient evidence on record to make out a prima-facie case against the A1.
CBI No. 1/12 & 2/12 Page No. 106 of 124State through CBI v. Shreya Jha & others State through CBI v. Nandita Bakshi & others Role of V.K. Jha (A2) :-
70. The only allegation against A2 V.K. Jha is that he had introduced the account of Nandita and he met U.R.G. Bhatt 3-4 times along with Nandita Bakshi and Sanjay Malik. Except that, no other role is attributed to him. It is admitted case of CBI that V.K. Jha is the father of Shreya Jha and he used to look after the business of Shreya Jha. It is also admitted case of CBI that Shreya Jha had also taken loan from the same branch. It is also admitted case of CBI that Sanjay Malik used to visit the office of Nandita Bakshi and V.K. Jha and when they desired to get loan, Sanjay Malik offered his service to them stating that he had links in the bank. It is also admitted case of CBI that V.K. Jha knew Nandita Bakshi since long and he had transactions with the bank. In these circumstances, if V.K. Jha had introduced the account of Nandita Bakshi does not mean that he was in conspiracy with Nandita Bakshi and others. Similarly, mere fact that he met with U.R.G. Bhatt in the bank is not sufficient to draw any conclusion that he was a member of the conspiracy either with Nandita Bakshi or with any other accused persons. As already discussed, V.K. Jha used to meet with U.R.G. Bhatt in connection with the loan in favour of his daughter Shreya Jha in another matter, thus, to my mind, there is no sufficient evidence on record to show prima-facie that V.K. Jha was the member of the conspiracy in the present matter.
CBI No. 1/12 & 2/12 Page No. 107 of 124State through CBI v. Shreya Jha & others State through CBI v. Nandita Bakshi & others Role of accused Vivek Sood (A9) :-
71. As per charge-sheet, allegations against A9 is that he is brother of A1 and he was in conspiracy with A1. In furtherance of the conspiracy, he had opened an account in the name of various firms such as M/s Anubhuti Trading, M/s Chanda Export and M/s Sunder Diamonds as the proprietorship concern and he was also director in M/s Chanda International Pvt. Ltd. and M/s Swati Fine Jewellery Pvt. Ltd. As per allegations, the said accounts were opened to siphon of the fund from the account of M/s Kamayani Fine Jewellery Ltd. As per charge-sheet, a sum of ` 26,47,618/- was transferred in the account of M/s Anubhuti Trading whereas a sum of ` 1,68,83,988/- was transferred in the account of M/s Chanda Export from the account of M/s Kamayani Fine Jewellery Ltd. At present, there is no evidence to justify the said transactions, thus prima-facie sufficient to make out a case that the said transfer was in furtherance of the conspiracy hatched by A1. Thus, to my mind, prima-facie there is sufficient evidence on record to hold that A9 was the member of the conspiracy.
72. I found some substance in the contention raised by learned defence counsel Sh. Srinivasan that there are certain lapses in the investigation such as there is no explanation from the CBI why CBI had not cited Rekha Anand as a witness to establish that she had not submitted Legal Scrutiny Report as alleged by the borrower and what is justification to cite R.T. Nayak, G. Sampat Kumar and CBI No. 1/12 & 2/12 Page No. 108 of 124 State through CBI v. Shreya Jha & others State through CBI v. Nandita Bakshi & others Yogender Pal Singh as prosecution witnesses when they are themselves facing trial along with Nandita Bakshi in the connected matter. But the said lapses cannot be looked into in detail at this stage, thus the same are not helpful to the accused at this stage in any manner.
Role qua Safiqur Rehman (A3):-
73. It is admitted case of CBI that in the instant case the alleged conspiracy had been hatched in the month of April 1998, when the application was submitted with the bank for taking loan. It is also admitted case of CBI that the payment of ` 3.15 lac and ` 1.74 lac were made to Safiqur Rehman (A3) in November 1997 from the account of M/s Balaji Export and M/s Kamayani Fine Jewellery Ltd. In other words, it is admitted case of CBI that the alleged payments were made to A3 prior to hatching the alleged conspiracy. But in the charge-sheet, CBI failed to explain how the said payments are relevant to connect A3 with the alleged conspiracy. Even during course of arguments, learned Public Prosecutor failed to explain how the said payments are relevant to connect A3 with the alleged conspiracy.
(i) However, there are certain evidence on record to show that A3 was involved in the affairs of valuation of landed properties, which were mortgaged with the bank as a collateral security. In this regard, the statement of PW6, PW7, PW29, PW42 and PW45 are CBI No. 1/12 & 2/12 Page No. 109 of 124 State through CBI v. Shreya Jha & others State through CBI v. Nandita Bakshi & others quite relevant. On perusal of their statements, prima-facie it appears that accused Shafiqur Rehman (A3) was involved in the affairs of valuation of the landed properties, which were furnished as collateral security with the bank by the borrower. From the statement of PW29 Rewati Raman Bhardwaj prima-facie it appears that A3 had obtained his property documents on the pretext to arrange the loan for him but later on it was revealed that said property documents were mortgaged with the bank through fictitious person i.e. A5 & A6. In view of the above said evidence, I am of considered opinion that at this stage it cannot be said that he was not a member of alleged conspiracy as contended by learned defence counsel.
Role qua A4 Sanjay Malik:-
74. As per the charge-sheet, there are two main allegations against A4, firstly; that he introduced the borrower to the Chief Manager U.R.G. Bhatt (A8), who sanctioned the loan at the instance of A4 without verifying the credit worthiness and past performance of the borrower and secondly, that borrower had paid a sum of ` 8.85 lac to A4 for rendering his service i.e. to act as a middle man between borrower and U.R.G. Bhatt.
(i) During investigation CBI recorded the statement of PW18 Sachidanad, the then Manager of the bank, who categorically testified before the CBI that the limits were sanctioned by U.R.G. Bhatt (A8) on his recommendation. If credit limits were sanctioned on CBI No. 1/12 & 2/12 Page No. 110 of 124 State through CBI v. Shreya Jha & others State through CBI v. Nandita Bakshi & others the recommendation of PW18, it is not clear on what basis it has been alleged that the loan had been sanctioned at the behest of A4. Admittedly, PW18 had not been arrayed as an accused by the CBI, which shows that PW18 was not in conspiracy either with U.R.G. Bhatt or with the borrower. In other words, PW18 made the recommendation in favour of borrower independently after analysing the documents submitted by the borrower. If it was so, there is hardly any reason to believe that the loan was sanctioned at the behest of A4.
(ii) No doubt, there is certain evidence on record to show that A4 had acquaintance with U.R.G.Bhatt but this does not prove even prima-facie that U.R.G. Bhatt had sanctioned the loan just at the face value of A4 violating the rules and regulations of the bank. Since, A4 had acquaintance with U.R.G. Bhatt (A8), it shows that A4 had introduced the borrower to U.R.G.Bhatt due to his acquaintance with him. But this fact is not sufficient to draw a conclusion even prima-facie that either A4 was in conspiracy or U.R.G.Bhatt had sanctioned the loan just at the behest of A4.
(iii) I also found substance in the contention of learned defence counsel that name of A4 had been added subsequently in the statement of PW18 and PW45. Perusal of their statements reveals that their statements were typed on computer but later on the name of Sanjay Malik had been inserted by hand in ink in the statement of PW18 whereas three lines were added by hand in ink in CBI No. 1/12 & 2/12 Page No. 111 of 124 State through CBI v. Shreya Jha & others State through CBI v. Nandita Bakshi & others the statement of PW45. The impact of said insertion in the statement of PW18 and PW45 is that an attempt has been made to show that Sanjay Malik (A4) visited the bank along with Mr. V. K. Jha and Mr. Nandita Bakshi and U.R.G. Bhatt used to meet them in his cabin. However, to my mind, this insertion is not helpful to the prosecution to rope A4 in the conspiracy in any manner because it is on record that A4 knew U.R.G. Bhatt previously and from the statement of PW46, it becomes clear that A4 used to file income tax returns of U.R.G. Bhatt. Probably, due to said affinity, U.R.G. Bhatt used to meet A4 along with his companions in his cabin. Moreover, being the Chief Manager, it was the duty of U.R.G. Bhatt to attend his customers in a congenial atmosphere, thus mere fact that U.R.G Bhatt met with Sanjay Malik and is associates in his cabin does not show even prima-facie that U.R.G. Bhatt had sanctioned the loan either at the behest of Sanjay Malik or he was in conspiracy with them.
(iv) During investigation, CBI had also recorded the statement of PW4 Rohidas Timmappa Nayak. In his statement, he testified that during oral discussion, Circle GM mentioned that he had received a telephonic call from one Mr. Rana, who was working in Ministry of Finance who requested to extend help to the party. But PW4 swiftly added that no credence was given to the said request as party was not prompt in meeting the commitments/assurances made earlier. However, his statement reflects that borrower had links even in Ministry of Finance. Further, it is admitted case of CBI that borrower had been charge-sheeted in the connected matter along CBI No. 1/12 & 2/12 Page No. 112 of 124 State through CBI v. Shreya Jha & others State through CBI v. Nandita Bakshi & others with R.T. Nayak and Mr. Sampat i.e. higher officers of the Circle office, which shows prima-facie that it is admitted case of CBI that borrower was in conspiracy even with the higher officers of the bank. In these circumstances, it is seldom to believe that U.R.G. Bhatt had sanctioned the limits just at the instance of Sanjay Malik. No doubt, in the charge-sheet it is also alleged that certain payments were made to A4 in lieu of rendering his service as a middle man between borrower and the bank. Assuming for the sake of arguments that the alleged payments had been made by the borrower to Sanjay Malik, but this merely shows that Sanjay Malik had rendered his services to the borrower against consideration. Surprisingly, on the one hand CBI claimed that Sanjay Malik and borrower were in conspiracy with the sanctioning authority i.e. U.R.G. Bhatt but on the other hand, CBI also recited in the charge-sheet categorically that Sanjay Malik had exploited his links with U.R.G. Bhatt. If Sanjay Malik had exploited his links with U.R.G. Bhatt, how it can be said that U.R.G. Bhatt was in conspiracy either with Sanjay Malik or with any other accused persons.
75. Similarly, CBI in the charge-sheet alleged that Sanjay Malik was a middle man and probably due to that reason, borrower had paid money to Sanjay Malik for the services rendered by him. To avail the services of any professional in obtaining the loan is not sufficient to draw a conclusion even prima-facie that the said professional was in conspiracy with the borrower. In the absence of any other cogent evidence on record, I am of the considered opinion CBI No. 1/12 & 2/12 Page No. 113 of 124 State through CBI v. Shreya Jha & others State through CBI v. Nandita Bakshi & others that the collected material is not sufficient to make out a prima-facie case against A4 Sanjay Malik. Accordingly, I hereby discharge him from all the charges.
Role qua A5 Kirpal Singh :-
76. As per charge-sheet, A5 impersonated himself as Jai Dutt Sharma and while impersonating so he executed the documents relating to collateral security with the bank in favour of the borrower. While executing the said documents, A5 also produced forged ration card. From the GEQD report prima-facie it is proved that A5 is the person who executed the documents relating to collateral securities before the bank after impersonating himself as Jai Dutt Sharma. Thus, prima-facie there is sufficient evidence on record to prove that he was involved in the alleged conspiracy. Simultaneously, he is also liable for the substantive offences punishable under Section 419/468/471 IPC.
Role attributed to A8 U.R.G. Bhatt :-
77. As per charge-sheet, allegations against U.R.G.Bhatt (A8) are that he had sanctioned loan/credit facilities in favour of borrower in gross violation of banking rules; secondly that he ignored the advice of his subordinate that on revaluation it was found that the valuation of collateral security was at ` 18.60 lac and not ` 73.80 lac; thirdly, that he released the cash credit limits on the very same day;
CBI No. 1/12 & 2/12 Page No. 114 of 124State through CBI v. Shreya Jha & others State through CBI v. Nandita Bakshi & others fourthly, that A8 caused the wrongful loss to the bank to the tune of ` 1,72,62,508.29.
78. It is undisputed fact that the borrower had got opened a current account bearing No. 10144 on April 18, 1998 and on April 20, 1998 borrower had submitted an application for credit facilities. It is also undisputed fact that the said application was processed and examined by Manager Credit i.e. PW18 Sachidanad who put up a note before A8 with a recommendation to sanction OCC and ILC of ` 20 lac each. In his recommendation, PW18 mentioned the value of collateral security at ` 73.80 lac. The said note was put up before U.R.G.Bhatt on May 5, 1998. On receipt of said note U.R.G.Bhatt called the borrower and discussion had taken place with the borrower on May 11, 1998. Thereafter, on the basis of discussion and recommendation made by PW18, U.R.G.Bhatt had sanctioned the loan/credit facilities as recommended by PW18. While sanctioning the loan, A8 had imposed six additional conditions including that limit shall be released only after obtaining satisfactory OPL from Bank of Mudura Ltd. All the conditions that were imposed by A8 were fulfilled on May 14, 1998 under the supervision of PW18. Thereafter, A8 permitted the bank to release the limit only on May 16, 1998. Thus, the allegation of the CBI that U.R.G.Bhatt had released the Cash Credit Limit on the very same day of sanction is contrary to the record.
CBI No. 1/12 & 2/12 Page No. 115 of 124State through CBI v. Shreya Jha & others State through CBI v. Nandita Bakshi & others
79. Now coming to the question whether A8 had ignored the advice of PW18 regarding the less valuation of the collateral security.
80. As per the process note, valuation of the collateral security was ` 73.80 lac. PW18 in his statement testified before the CBI that before releasing the limits, property bearing Khasra No. 737/18 had been physically inspected by Mr. P. P. Singh and he reported to him that the valuation of the said property at ` 73.80 lac seemed to be on very higher side. Accordingly, PW18 reported the matter to the Chief Manager and asked him not to release the limit till the pendency of clearance regarding the valuation of property. He further deposed that Mr. U. R. G. Bhatt informed him that borrower was arranging additional property to cover the loan amount and thereafter, he wrote the remarks "Permitted ` 20 lac" only on May 16, 1998.
(i) In other words PW18 tried to say that after sanction of the loan but before releasing of the limit, Mr. P. P. Singh inspected the property in question physically and found that valuation of the property was on the higher side. Consequently, Mr. P. P. Singh informed PW18, who consequently informed Mr. U.R.G. Bhatt, but he released the limit against his advice. In other words, CBI case is that since U.R.G. Bhatt released the payment knowingly well that the valuation of collateral security was less, he did so as he was in conspiracy with the borrower.
CBI No. 1/12 & 2/12 Page No. 116 of 124State through CBI v. Shreya Jha & others State through CBI v. Nandita Bakshi & others
(ii) As per the statement of PW18 Mr. P. P. Singh had physically inspected the property between May 12, 1998 when the loan was sanctioned by U.R.G. Bhatt and on May 16, 1998 when U.R.G. Bhatt permitted to release OCC of ` 20 lac. It means that the valuation report of Mr. P. P. Singh must be between the said period. But surprisingly no such report is available on record. Only one valuation report dated April 17, 1998 wherein the valuation of property had been valued at ` 18.60 lac is on the record. There is no explanation from the CBI where is the report which was allegedly prepared by Mr. P. P. Singh between May 12, 1998 to May 16, 1998. Moreover, the report dated April 17, 1998 was not filed by Mr. P.P. Singh.
(iii) Further, as per the statement of PW18, Mr. P. P. Singh of his own informed him about the valuation of the said property whereas PW45 testified before the CBI that while he was examining post sanction documents, some suspicion arose in his mind about the valuation of property, accordingly he told to PW18. As per his testimony, PW18 directed him to go to the spot and inspected the spot physically and thereafter, he inspected the spot physically in the presence of Nandita Bakshi and Safiqur Rehman (A3) and he informed PW18 that the valuation of property was not more than ` 15- ` 18 lac. Thus, as per the statement of PW45, he inspected the property as per the directions of PW18 but PW18 did not state so.
CBI No. 1/12 & 2/12 Page No. 117 of 124State through CBI v. Shreya Jha & others State through CBI v. Nandita Bakshi & others
(iv) Assuming for the sake of arguments that Mr. P. P. Singh had informed about the higher valuation of the property in question but there is no explanation why PW18 had not put up a note on file in this regard. Being the Manager (Credit) of the bank, it was his duty to put up a note on the file but he had not done so without any explanation. Moreover, there is no explanation either from CBI or from prosecution where is the valuation report which was allegedly prepared by Mr. P. P. Singh during the period May 12, 1998 to May 16, 1998.
(v) Admittedly, the valuation report of ` 73.80 lac is not on the file. PW18 testified that the said report was on the file when he processed the note with his recommendation to sanction before U.R.G. Bhatt. But there is no explanation where the said report had gone. I do not find any substance in the contention of learned Public Prosecutor that the said report might have been replaced by U.R.G.Bhatt because there is no such material on record. Moreover, it is undisputed fact that after sanctioning of the loan, all formalities were completed under the supervision of PW18 and being the Manager (Credit), the file must be in his custody. Further, there is no point for U.R.G.Bhatt to replace the valuation report of ` 73.80 lac with the valuation report of ` 18.60 lac.
(vi) In view of the above, I am of the considered opinion that there is nothing on record which may show that U.R.G.Bhatt was informed about the less valuation of property before May 16, 1998.
CBI No. 1/12 & 2/12 Page No. 118 of 124State through CBI v. Shreya Jha & others State through CBI v. Nandita Bakshi & others
(vii) It is undisputed fact that on August 11, 1998 borrower had moved an application requesting to transfer the amount to Parliament Street Branch as borrower was having another account at Parliament Street Branch. Accordingly, A8 had transferred the said account on August 21, 1998 and at the time of transferring the account, A8 had sent all relevant documents to Parliament Street Branch highlighting that at that time the total outstanding amount in the account of borrower was ` 42,31,576.94. Accordingly, branch of A8 also raised BAR (Branch Advise Requisition) at the Parliament Street Branch. Since, account was transferred from the branch of A8, A8 had no control or connection with the said account in any manner after August 21, 1998.
(viii) As per the record, after transfer of the said account, Parliament Street branch had opened a fresh account of the borrower on August 22, 1998 and got executed all relevant documents from the borrower including fresh hypothecation of the stock. Thereafter, Parliament Street branch had enhanced the credit limits from time to time. I find substance in the contention of learned defence counsel that if A8 had been in conspiracy with the borrower, he would not have transferred the said account; rather he would have persuaded the borrower to continue the account with his branch so that he could favour him as and when required but U.R.G.Bhatt immediately transferred the account of the borrower, which further rules out the possibility of any conspiracy with the borrower. From the letter dated CBI No. 1/12 & 2/12 Page No. 119 of 124 State through CBI v. Shreya Jha & others State through CBI v. Nandita Bakshi & others October 16, 1999 of the Circle Office, it becomes clear that the limits were enhanced from time to time and the liability in the account rose to the extent of ` 1.72 crores. As already discussed that when the account was transferred, the total liability was merely to the extent of ` 42,31,576.94 but since the limits were enhanced from time to time after transferring of the said account, the liability rose to the extent of ` 1.72 crore. There is no explanation how A8 can be held liable for the enhanced limit sanctioned by Parliament Street Branch. Thus, I do not find any substance in the allegation of CBI that due to the act of A8, loss had been caused to the bank to the tune of ` 1.72 crores.
81. CBI has set up a case that since U.R.G.Bhatt knew the accused Sanjay Malik previously he entered into conspiracy with the borrower through Sanjay Malik and sanctioned various credit facilities in favour of borrower in furtherance of the said conspiracy. But simultaneously, CBI also recited in the charge-sheet that Sanjay Malik got sanctioned the various kinds of limits in favour of borrower by exploiting his links with U.R.G.Bhatt. If Sanjay Malik had exploited his links in order to get loan sanctioned from bank, it is not clear how U.R.G.Bhatt had entered into a criminal conspiracy either with Sanjay Malik or with the borrower. Similarly, if U.R.G.Bhatt was in conspiracy with the burrower or Sanjay Malik, it is not clear how Sanjay Malik could exploit his links. Perhaps, it appears that CBI was not sure whether loan was got sanctioned in favour of the borrower after entering into criminal conspiracy with U.R.G.Bhatt or by exploiting his links with Sanjay Malik.
CBI No. 1/12 & 2/12 Page No. 120 of 124State through CBI v. Shreya Jha & others State through CBI v. Nandita Bakshi & others
(i) As already discussed that there is no scintilla of evidence to show even prima-facie that A8 had obtained any monetary benefit or valuable thing either for himself or for any other person or he had taken any other benefit from the borrower either at the time of sanctioning the limit or later on. Mere fact that he had sanctioned the loan in discharge of his official duty is not sufficient ipso-facto to hold prima-facie that he was in conspiracy with the borrower. At the cost of repetition, it is pertinent to state that mere fact that the borrower had succeeded to get a loan/credit facility from the bank on the basis of forged/fabricated documents and the sanctioning authority failed to detect the said forgery at the time of sanctioning the loan, does not prove ipso-facto even prima-facie that sanctioning authority was in the conspiracy with borrower or his associates.
82. In view of the aforesaid discussion, I am of the considered opinion that collected material is not sufficient to make out a prima-facie case against A8, accordingly I hereby discharge him from all the charges.
Conclusion:-
83. In the light of aforesaid discussion, I am of the considered opinion that:-
(i) Prima-facie case is made out against Nandita Bakshi CBI No. 1/12 & 2/12 Page No. 121 of 124 State through CBI v. Shreya Jha & others State through CBI v. Nandita Bakshi & others (A1) for the offence punishable under Sections 420/471 IPC;
(ii) Prima-facie a case is made out against Kirpal Singh (A5) for the offence punishable under Section 419/468/471 IPC.
(iii) Prima-facie a case is made out against Nandita Bakshi (A1), Safiqur Rehman (A3), Kirpal Singh (A5) and Vivek Sood (A9) that they entered into a criminal conspiracy with the common object to get a loan/credit limits on the basis of forged and fabricated documents and fictitious surety/mortgage, thus, they are also liable for the offence punishable under Section 120B read with 419/420/468/471 IPC.
(iv) Collected material is not sufficient to make out a prima-facie case against V. K. Sood (A2), Sanjay Malik (A4) and U.R.G.Bhatt (A8), accordingly I hereby discharge them from all the charges.
Final outcome of the discussion :-
84. On merits, in CBI case No. 1/12 prima-facie a case is made out against Shreya Jha (A1), V.K. Jha (A2), Shafiqur Rehman (A4), Sanjay Malik (A5), Vivek Sood (A8) and Shashi Bala Sharma (A9) for the offence punishable under Section 120B IPC read with Section 419/420/468/471 IPC. Prima-facie case is also made out against Shreya Jha for the offence punishable under Section 420/471 CBI No. 1/12 & 2/12 Page No. 122 of 124 State through CBI v. Shreya Jha & others State through CBI v. Nandita Bakshi & others IPC. Prima-facie a case is also made out against Shashi Bala Sharma for the offence punishable under Section 419/468/471 IPC.
(i) However, the collected material/evidences are not sufficient to make out a prima-facie case against Nandita Bakshi (A3) U.R.G. Bhatt (A6) and Rekha Anand (A7), thus they stand discharged from all the charges.
(ii) Similarly on merits, in CBI case No. 2/12 prima-facie a case is made out against Nandita Bakshi (A1), Shafiqur Rehman (A3), Kirpal Singh (A5), Raghubir Singh (A6) (since deceased), Rajan Kumar Nair (A7) (since deceased) and Vivek Sood (A9) for the offence punishable under Section 120B IPC read with Section 419/420/468/471 IPC. Prima-facie a case is also made out against Nandita Bakshi (A1) for the offence punishable under Section 420/471 IPC. Prima-facie a case is also made out against accused A5 for the offence punishable under Section 419/468/471 IPC.
(iii) However, collected material/evidences are not sufficient to make out a prima-facie case against accused V.K. Jha (A2), Sanjay Malik (A4) and U.R.G. Bhatt (A8), thus they stand discharged from all the charges.
(iv) As already held that the act of CBI registering FIR No. RC-3E/2000/CBI/SPE/SIU-IX/New Delhi and RC-4E/2000/CBI/ SPE/ SIU-IX/New Delhi was in violation of Section 154(1) Cr. P.C. Since the CBI No. 1/12 & 2/12 Page No. 123 of 124 State through CBI v. Shreya Jha & others State through CBI v. Nandita Bakshi & others second and third FIR are not permissible under the provisions of Cr.P.C, thus the investigation undertaken in the said subsequent FIRs and the report filed thereof cannot but be invalid, thus the same cannot be read to form even prima-facie opinion whether prima-facie case is made out against the accused persons or not. Accordingly, all the accused persons stand discharged from all the charges in both the cases.
(v) However, CBI has liberty to conduct further investigation in the first FIR as held by Apex Court in T.T. Antony v. State of Kerala & others (supra) and file the supplementary charge- sheet, if it desires.
Announced in the open Court on this 04th day of November, 2015 (PAWAN KUMAR JAIN) Special Judge-01, CBI, North West Rohini Courts, Delhi/sv CBI No. 1/12 & 2/12 Page No. 124 of 124