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The Case Of The Cbi vs Narayan Diwakar And Others Page 4/2 on 4 January, 2012

    IN THE COURT OF PRAVEEN KUMAR, SPECIAL JUDGE, 
               PC ACT, CBI­III, ROHINI COURTS: DELHI.
 
                               CBI No. 72/11
                      RC No. 2A/2006/CBI/ACU­IV/New Delhi.

                CBI 

                Versus 

1.

Narayan Diwakar S/o Late Sh. Chhati Lal R/o G­30, Masjid Moth, Greater Kailash­II, New Delhi.

2. J.S. Sharma S/o Late Sh. Niranjan Singh R/o 1073/A­3, Ward No.1, Mehrauli, New Delhi

3. Raman Verma S/o Late Sh. J.N. Verma R/o F­444, Karampura, New Delhi.

4. Raj Bhushan Chauhan S/o Sh. K.S. Chauhan R/o H.No.8, Panch Mahal, Patparganj, Delhi­92.

5. N.S. Khatri CBI Vs. Narayan Diwakar and others Page 1/20 (NSIC CGHS) S/o Sh. Lal Singh Khatri R/o 89­B, Shakti Khand­1, Indirapuram, Ghaziabad, U.P.

6. Sumer Chand Gupta S/o Late Sh. Parmnuji Wankhede R/o C­3/6, Prashant Vihar, Delhi­110085.

7. Ashutosh Pant S/o Sh. Mahesh Chand Pant R/o B­160, Sadatpur Colony, Karawal Nagar, Delhi­94.

8. Munna Lal Sharma S/o Late Sh. Chote Lal Sharma R/o C­6/249, Yamuna Vihar, New Delhi­53.

9. Prahlad Kumar Thirwani S/o Sh. Moti Ram Thirwani R/o Village Lalsa, P.O. Dansa, Tehsil­Rampur Bushar, Distt.­ Shimla (H.P) ...........Accused persons ( NSIC CGHS) O R D E R O N C H A R G E:

1. The case of the CBI, in brief, is that National Small CBI Vs. Narayan Diwakar and others Page 2/20 (NSIC CGHS) Industries Corporation (NSIC) Employees Cooperative Group Housing Society (CGHS) Limited was registered on 19.5.1971 with office of Registrar Cooperative Societies (RCS) with registration No. 37(H). There were 22 promoter members in the said society who had submitted their affidavits on 19.4.1971 swearing therein that they were domiciled in Delhi/New Delhi. First meeting of the promoters took place on 12.4.1971 who unanimously elected office bearers of the managing committee from amongst themselves. On 22.6.1976 Sh. Rama Sub­Inspector inspected the office of society and reported some irregularities in its functioning. He recommended that the society should be given 15 days time to explain its irregularities. Consequently, RCS issued show cause notice dated 12.10.1976 to the society. Vide order dated 23.3.79 Sh. Ashok Bakshi, the then Deputy Registrar, issued a winding up order on account of following reasons:­ I. That society failed to achieve the objective of movement;

II. That society did not appear to have achieved its aims and objectives as per bye laws nor it would achieve in near future; III. That the society was not following the Delhi Cooperative Rules, 1973 in its day to day working;

IV. That members of the managing committee and other members of the society were not taking interest in the working of society and V. That no useful purpose would be served if society is not wound up.

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(NSIC CGHS)

2. Sh. M L Ahuja was appointed as official liquidator to conduct liquidation proceedings and to submit charge report within three days. Sh. M L Ahuja received documents from Sh. M.R. Girotra, the then Secretary, besides a sum of Rs. 9.62 on 22.07.79 which was closing cash balance.

3. In early 2003 accused Sumer Chand Gupta informed Sh.

Sarabjit Singh Chawla that he wanted to purchase and get revived a defunct society. He asked Sh. Chawla to introduce some persons who could help him. Sh. Chawla, consequently, introduced him to accused M.L. Sharma. During the meeting, accused M.L. Sharma promised to help Sh. Sumer Chand Gupta. In March 2003, a meeting was arranged in Hotel Host, Connaught Place, New Delhi which was attended by Sh. S.S. Chawla, accused Sumer Chand Gupta, accused M.L. Sharma and accused Ashutosh Pant. Accused M.L. Sharma was having some documents of NSIC society with him and demanded Rs. 5 lacs for the same. Accused Ashutosh Pant demanded Rs. 25,000/­ for forging signatures of the applicants and members. Subsequently, on 02.07.03 accused Sumer Chand Gupta paid a sum of Rs. 5 lacs to accused M.L. Sharma under a receipt written and signed by accused M.L. Sharma. Accused Sumer CBI Vs. Narayan Diwakar and others Page 4/20 (NSIC CGHS) Chand Gupta also paid Rs. 25,000/­ to accused Ashutosh Pant for forging membership register and the applications.

4. On 21.07.03, one Satish claiming himself to be President of the Society wrote a letter to the RCS for seeking revival of the society. This letter was signed by accused Ashutosh Pant representing himself as Satish. Accused Narayan Diwakar marked that letter to Rakesh Bhatnagar who marked it to accused J.S. Sharma and ultimately letter reached hands of accused Raman Verma. On 21.08.03 and on 01.09.03 accused Raman Verma put up the letter on the file proposing that accused R.B. Chauhan may be appointed to carry out inspection u/s 54 of Delhi Cooperative Societies Act, 1972. Accused J.S. Sharma forwarded proposal to Rakesh Bhatnagar on 02.09.03. Rakesh Bhatnagar marked that proposal to accused Narayan Diwakar on 03.09.03 who approved the proposal on 04.09.03. Vide letter dated 05.09.03 accused J.S. Sharma directed accused R.B. Chauhan to verify address of the society, records and documents of the society and submit his report within 10 days. Accused R.B. Chauhan submitted his report on 06.09.03 detailing therein that he met President Satish Kumar at the office of society. It was detailed by him CBI Vs. Narayan Diwakar and others Page 5/20 (NSIC CGHS) that address of the society was correct which was functioning properly. Accused R.B. Chauhan submitted false report since society never existed at that address nor he met Satish Kumar. He reported that there were 195 members in the society whereas there had been only 22 promoter members in the original records.

5. Accused Raman Verma put up inspection report on 11.09.03 and suggested that file may be sent to RCS for revival. A note was endorsed by accused J.S. Sharma. Thereafter, accused Narayan Diwakar approved the issue of letter dated 22.09.03 to the President/Secretary for initial hearing on 30.09.03. On 30.09.03 Satish Chand Sharma and Vijay Kumar, President and Treasurer respectively of the society were present and they were directed to submit documents in concerned Zone for verification. Proceeding was adjourned for 23.10.03. On 21.10.03 accused Raman Verma recorded that Satish Chand Sharma has produced documents pertaining to registration, Special General Body Meeting held on 18.05.03, unaudited accounts and managing committee register etc. On 22.10.03 accused Raman Verma again recorded that Subhash Chand Sharma has submitted remaining CBI Vs. Narayan Diwakar and others Page 6/20 (NSIC CGHS) affidavits etc. which were forwarded to accused Narayan Diwakar. On 23.10.03 accused Narayan Diwakar recorded that proper procedure was not followed while winding up the society and, as such, he revived the society vide his order dated 27.10.03. After the completion of investigation, charge­sheet was filed in the court against all the accused persons under the provisions of Indian Penal Code, 1860 (IPC) and Prevention of Corruption Act, 1988 (P.C. Act).

6. I have heard Ld. PP for CBI;

Sh. M K Gupta, Ld. Counsel for A­8 M L Sharma; Sh. R P Shukla, Ld. Counsel for accused N S Khatri and R B Chauhan;

Sh. S K Bhatnagar, Ld. Counsel for accused P K Thirwani & Raman Verma and Sh. Abhishek Prasad, Ld. Counsel for accused J S Sharma.

I have also gone through the written submissions filed on behalf of A­2 J S Sharma, A­6 Sumer Chand Gupta and A­7 Ashutosh Pant.

7. Sh. M K Gupta, Ld. Counsel for accused No. 8 contended that CBI Vs. Narayan Diwakar and others Page 7/20 (NSIC CGHS) accused No. 8 has no role in the revival of the society in question. There is nothing on record from where the documents of the society were procured by M L Gupta. Ld. counsel has drawn the attention of the court towards para 6 of the charge­sheet. According to him, S S Chawla has not been made a witness by the prosecution though the name of S S Chawla is mentioned in para 6 of the charge­sheet wherein it is alleged that S S Chawla knew accused Sumer Chaudhary Gupta and accused S C Gupta had informed Sh S S Chawla that he wanted to purchase and get revived a defunct society. Ld. Counsel contended that Rs. 5 lacs was paid as part payment to accused No.8 Munna Lal (Electrician) as an advance for the electrification work. Accused No. 8 was neither a member of the society nor he committed any forgery of the document. According to Ld. Counsel, accused Munna Lal Sharma has been falsely implicated in this case and he is liable to be discharged as there is nothing on record against him.

8. Sh. Abhishek Prasad, Ld. Counsel for accused J S Sharma, contended that accused J S Sharma was working as Asstt. Registrar (South West) as well as Assistant Registrar (audit) and he had merely forwarded the note to the senior officers. It was not within his knowledge that the forged documents were submitted by the co­ CBI Vs. Narayan Diwakar and others Page 8/20 (NSIC CGHS) accused persons and, as such, no charge can be framed against him. Ld. Counsel further contended that the forgery of the documents was done outside the office of RCS. In this regard Ld. Counsel has placed reliance upon the reply dated 25.8.2010 filed by the CBI in case titled as CBI Vs. Ashwani Sharma and others, CC No. 7/2008 (Neelgagan CGHS). Ld. Counsel vehemently contended that it was not within the scope of duty of accused J S Sharma to verify of the documents submitted by the society and from the perusal of paras 8, 9 and 20 of the charge­sheet it is clear that accused J S Sharma had directed the appointment of R B Chauhan (accused no. 4) to carry out the inspection u/s 54 of DCS Act. Ld. Counsel further contended that accused J S Sharma was given the charge of Assistant Registrar (audit) but he has no knowledge of audit work which is a specialised field and he merely counter signed the audit report given by accused P K Thirwani and, therefore, in such circumstances no inference of any conspiracy/knowledge of false audit report can be attributed to accused J S Sharma.

9. Sh. S K Bhatnagar, Ld. Counsel for the accused Raman Verma and P K Thirwani, contended that there was no meeting of mind among the accused persons to commit the alleged offences and this fact is apparent by reading para 6 of the charge­sheet. Ld. Counsel CBI Vs. Narayan Diwakar and others Page 9/20 (NSIC CGHS) further contended that accused had no knowledge that the documents were forged and it was not their duty to verify each and every document. According to him, the society was legally revived. Ld. Counsel has drawn the attention of this court towards the note sheet 24/N and 25/N. Ld. Counsel further contended that there is nothing on record regarding payment of any money by the accused persons and, as such, alleged offences under PC Act are not made out. So far as accused P K Thirwani is concerned Ld. Counsel contended that accused P K Thirwani's name is not mentioned in the FIR. According to him, the society was not revived on the basis of the audit report and there is nothing on record for framing charge against accused P K Thirwani.

10. Sh. R P Shukla, Ld. Counsel for accused N S Khatri and R P Chauhan, has drawn the attention of this court towards the statement of PWs Virender Kumar Sharma S/o Tarachand and Satish Kumar S/o Ram Avtar . According to him, no election was conducted and all the members were elected unopposed and, as such, it cannot be said that accused N S Khatri submitted a false report. According to Ld. Counsel, no prima facie case is made out against both these accused persons and they are liable to be discharged. CBI Vs. Narayan Diwakar and others Page 10/20

(NSIC CGHS)

11. Accused Sumer Chand Gupta (A­6) contended that there is no evidence on record that he met accused M L Sharma (A­8) in Hotel Host, Connaught Place, New Delhi in March, 2003 as mentioned in para 6 of the charge­sheet. There is also no evidence that accused M L Sharma demanded Rs.5 lacs from him. The receipt dated 2.7.2003 allegedly signed by accused M L Sharma does not reveal any offence punishable under the provisions of DCS Act/DCS Rules or IPC. The receipt only shows that the payment by accused M L Sharma was made in account of NSIC Society. It is further contended that accused Sumer Chand Gupta (A­6) never formed Shri Durga CGHS and he never used names and addresses of members of the said society and, as such, no inference of criminal conspiracy can be drawn against him. There is no evidence that accused Sumer Chand Gupta (A­6) ever visited the office of RCS in connection with revival of NSIC CGHS. In para 27 of the charge­sheet though there are allegations of conspiracy but there is no evidence to the effect that the forgery was committed by accused Sumer Chand Gupta (A­6) or at his instance. It is further contended that CBI has falsely stated that a sum of Rs.5 lakhs was paid on account of revival of NSIC CGHS by accused S C Gupta to M L Sharma. The receipt of Rs.5 lakhs does not show that the amount was paid for revival of NSIC CGHS. No land was allotted by the DDA and, as such, no loss was caused to anybody. In support CBI Vs. Narayan Diwakar and others Page 11/20 (NSIC CGHS) of this contention, accused has placed reliance upon reply dated 8.9.2008 issued by DDA under RTI Act. It is further contended that revival of any society is not an offence under DCS Act.

12. The receipt dated 2.7.2003 is signed by accused M L Sharma and it reads as "received a sum of Rs.5,00,000/­ from Sh. S C Gupta in account of NSIC." During investigation it was found that false record and balance­sheet were created in the name of NSIC Society and submitted to RCS. Thereafter, false proceedings were shown to have been conducted in the RCS. During investigation it was also found that names and addresses of the members of Shri Durga CGHS, with which accused S C Gupta was associated, were falsely used to show them as members of NSIC CGHS also. It is the settled law that it is difficult to establish conspiracy by direct evidence and, therefore, from the facts an inference has to be drawn to establish a connection between alleged conspiracy and the act done pursuant to the said conspiracy. From the documents on record and the statement of witnesses, prima facie there is evidence that accused S C Gupta (A­6) was one of the conspirators for the revival of the defunct NSIC CGHS. The receipt dated 2.7.2003, common members of Shri Durga CGHS and NSIC CGHS and other circumstances prima facie reveal the involvement of accused S C Gupta in the present case. In these CBI Vs. Narayan Diwakar and others Page 12/20 (NSIC CGHS) circumstances, accused S C Gupta cannot be discharged.

13. According to accused Narayan Diwakar, he has done nothing wrong while discharging his functions as RCS. RCS does not deal with land as the same is the subject matter of DDA who allots the land in accordance with the Rules framed under DDA Act, 1957 and Disposal of Development Nazul Land Rules, 1981. CBI has committed various illegalities while investigating the matter. He placed reliance upon the judgment titled as Dr. R.R.Kishore v. CBI 2006 VIII AD (Delhi) 545, wherein it was held that if illegal investigation is brought to the notice of the Trial Court at the initial stage, then the court ought not to proceed with the trial but should direct reinvestigation in order to cure the defect in the investigation. Accused Narayan Diwakar has pointed out following illegalities:

(a) Consent of the State was not taken as required U/s 6 of the DSPE Act, 1946.

(b) Absence of notification U/s 3 of DSPE Act.

(c) Registration of case under various provisions of IPC instead of DCS Act which is a Special Act.

14. The contention that the consent of State was not taken is misconceived in the facts and circumstances of the present case. The investigation was referred to CBI in the present matter by the High Court. Once the order for investigation of a case to CBI is passed by CBI Vs. Narayan Diwakar and others Page 13/20 (NSIC CGHS) the High Court under its inherent powers, permission from State Government is not required. High Court is competent enough to refer a matter for investigation to CBI. Though not referred to and relied upon, for taking view I am supported with the order dated 17.9.2007 passed by Hon'ble Mr. Justice Sh. S.N.Dhingra in Criminal MC No. 2784 of 2007.

15. It is contended that the non­compliance of Sec.3 of DSPE Act, 1946 vitiates the entire investigation. As per Sec. 3 of DSPE Act, 1946, the Central Government makes notification in the official gazette to specify the offences or classes of offences which are to be investigated by Delhi Special Police Establishment. It is contended that the Act confers the jurisdiction on the CBI in relation to the investigation by the Central Government u/s 3 of the Act and such offences, as notified, are mentioned in DSPE Act, 1946. The offences covered by Sec. 3 of the said Act do not include the offences under the Co­operative laws. Thus, the investigation done by the CBI for the co­operative societies is in violation of Sec.3 as it has no jurisdiction to conduct the investigation. In my opinion the offences mentioned in the charge­sheet are all notified offences U/s 3 of the DSPE Act and, therefore, no fresh notification is/was necessary. CBI Vs. Narayan Diwakar and others Page 14/20

(NSIC CGHS)

16. All the accused have raised the contention that the DCS Act, is a complete self contained statute and, therefore, provisions of the Indian Penal Code cannot be invoked. The DCS Act, 1972 provides for a well defined system of addressing the issues relating to various private co­operative societies and it contains the provisions of fine, appeal, punishment and, as such, the application of provisions of the IPC by the CBI is wholly illegal. It is further contended that the matter is covered under the provision of Section 82(3) of DCS Act which completely debars the prosecution without giving the opportunity of being heard as well as previous sanction of RCS. The offence alleged to have been committed by the accused is punishable under the provisions of Special law and, therefore, the provisions of Indian penal Code, being general law, cannot be invoked. In support of this contention, accused have relied upon judgments­ State of Maharashtra Vs. Laljit Rajshi Shah & Ors. AIR 2000 SC 937; and Greater Bombay Coop. Bank Ltd. Vs. United Yarn Textile Pvt. Ltd. & Ors. 2007(5) SCALE 366.

17. On the other hand, it is contended by Ld. PP for CBI that provisions under DCS Act and DCS Rules are for administration of Co­operative Group Housing Society which do not cover conspiracy to cheat, using forged documents as genuine and forgery for purpose CBI Vs. Narayan Diwakar and others Page 15/20 (NSIC CGHS) of cheating. According to him, it cannot be said that the charge­sheet filed by the CBI is barred due to enactment of Special Law.

18. I have gone through the judgments cited by the accused. The cited judgments are not applicable to the facts of the present case. Wherever the Legislature in its wisdom deemed fit, they have restricted/prohibited the applicability of other Acts which could be seen from the provision of section 91 of DCS Act, 1972 which provides "The provisions of the Companies Act, 1956 shall not apply to Co­operative Societies Act". But such restriction/prohibition is nowhere mentioned in DCS Act, 1972 debarring the applicability of IPC or PC Act under which the accused persons have been charge­ sheeted. Thus, DCS Act does not impose any bar to take resort to the provisions of General Criminal Laws.

19. According to accused Narayan Diwakar, he was discharging his quasi judicial functions and as such he cannot be prosecuted. According to him, under the provisions of Section 40 & 41 of the DCS Act, there is a presumption of genuineness of the documents filed in support of the application.

20. The facts and circumstances of the present case prima­facie CBI Vs. Narayan Diwakar and others Page 16/20 (NSIC CGHS) reveal that entire proceedings conducted in the office of RCS were actuated with conspiracy. Bogus documents were used. The modus operandi of re­construction of documents was adopted. The accused Narayan Diwakar followed the procedure with a view to give colour to his acts. Following procedure prescribed under the Act would not validate his acts when they were actuated with conspiracy to cheat the RCS and office of DDA.

21. It has been further contended on behalf of the accused persons that no land was allotted to the society and under these circumstances it can not be said that DDA was cheated. Narayan Diwakar and his subordinate staff/co­accused were bound to protect the interest of office of RCS. They in furtherance of the conspiracy entered into between them, cheated the institution of office of Registrar Cooperative Societies by doing act of revival of the society and they made a request to DDA for allotment of land. Therefore, prima­facie case of cheating is also made out against the accused persons.

22. Further, it is contended that there is no complainant in this case and, thus, the registration of FIR in the present case does not satisfy the ingredients of Section 154 Cr.PC. The contention is devoid of any merit. Our High Court of Delhi while hearing the Civil Writ Petition CBI Vs. Narayan Diwakar and others Page 17/20 (NSIC CGHS) No. 10066/2004 passed order dated 2.8.05 directing the CBI to conduct the thorough investigation in the matter relating to 135 CGHS. In pursuance of the aforesaid order passed by the Delhi High Court in exercise of its inherent powers, an inquiry was conducted by CBI which disclosed commission of cognizable offence by the accused persons in the matter of dishonest and fraudulent revival of society. Therefore, CBI rightly lodged the FIR in the present case. While registering the FIR, the acts and omissions on the part of the accused persons and disclosure of commission of cognizable offences by them were detailed in the FIR. The FIR registered by CBI fully satisfies the ingredients of Section 154 Cr.PC. It is the settled law that once an investigation is directed into alleged offences by the Court, two conditions are necessary to commence the investigation:

(i) The police should have reason to suspect the commission of cognizable offence and;

(ii) A Police Officer should subjectively satisfy himself to the existence of sufficient grounds to enter into investigation.

These two conditions were duly satisfied at the stage of lodging of FIR in the present case by the CBI before entering into investigation. Thus, the present FIR was rightly registered by the CBI and just because the FIR was not lodged on a complaint received from a complainant/individual is not a ground to discharge the accused.

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(NSIC CGHS)

23. Accused have relied upon judgment Sukhvinder Singh Vs. State of Punjab, JT 1994 (4) S.C.1, order dated 23.5.2011 in WP (C) 1786/2011, order dated 23.5.2011 in WP (C) No. 2426/2011, order dated 23.5.2011 in WP (C) No. 2441/2011 and CM No. 5219/2011, all passed by High Court of Delhi and judgment A P Narang Vs. CBI, Crl. Rev. P No. 397/2010 dated 17.1.2011 . I have gone through these judgments/orders. The judgments/orders cited by the counsel/accused are not applicable to the facts and circumstances of the present case.

24. From the documents and the statement of the prosecution witnesses on record, there is a grave suspicion against all the accused persons of having entered into a criminal conspiracy to cheat the Office of RCS and DDA.

25. In view of the above discussion, I am of the opinion that prima­facie case is made out against accused accused Narayan Diwakar (A­1), accused J S Sharma (A­2), accused Raman Verma (A­3), accused R B Chauhan (A­4), accused N S Khatri (A­5), accused S C Gupta (A­6), accused Ashutosh Pant (A­7), accused M L Sharma (A­8) and accused P K Thirwani A­9) for CBI Vs. Narayan Diwakar and others Page 19/20 (NSIC CGHS) committing offences u/s 120B r/w Ss.420/468/471 IPC r/w Section 13 (2) r/w 13 (1) (d) of the PC Act and Section 420/511, 468, 471 of IPC and Section 15 of PC Act.

Announced today in open (PRAVEEN KUMAR) court on 04.01.2012. Special Judge, PC Act CBI­3, Rohini Court, Delhi.

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