Delhi District Court
Cbi vs Om Prakash Bhatia Ors on 27 March, 2024
IN THE COURT OF SH. DEEPAK KUMAR-II, ACMM-2 CUM
ACJ, ROUSE AVENUE DISTRICT COURTS, NEW DELHI
CBI Vs. Om Prakash Bhatia & Ors
Case No. : CBI/244/2019
FIR No. : RC-4/90-SIU(X), CBI,
New Delhi dated
25.04.1990.
U/s : 120B r/w 420 IPC and
substantive offences
thereof
Name of Branch : SIU(X), CBI, New Delhi
JUDGMENT
a) Unique Case ID No. : 02402R0004621994
b) The date of commission : During the year 1987-1988. of the offences
c) Name of the Complainant : Source information
d) Name, parentage & address : (1) Sh. Om Prakash Bhatia of accused persons S/o Late Sh. Chunni Lal Bhatia (declared PO vide order dated 12.04.2010).
(2) Sh. Krishan Kant Bindal S/o Sh. Rajender Lal (proceedings against him stands abated vide order dated 10.02.2023).
(3) Smt. Veena Bindal W/o Sh. Krishan Kant Bindal (Proceedings against her stands abated vide order CC No.CBI/244/2019 RC-4/90-SIU(X), CBI CBI Vs. Om Prakash Bhatia & Ors Page no. 1 of 24 U/s 120B/420 IPC and substantive offences thereof DEEPAK Digitally signed by DEEPAK KUMAR KUMAR Date: 2024.03.27 16:40:50 +0530 dated 27.10.2016).
(4)M/s Dream city builders (Pvt) Ltd (represented through official liquidator).
(5) Sh. Jagdish Sethi S/o Late Sh. G.R. Sethi (Proceedings against him were dropped vide order dated 28.08.2017).
(6) Sh. R.C Suneja (Proceedings against him were dropped vide order dated 28.08.2017).
e) Offences complained of : 120B/420 IPC and substantive offences thereof.
f) The plea of the accused : Pleaded not guilty.
g) Final Judgment : Acquittal. h) Date of institution of case : 23.12.1994 i) Date of Judgment : 27.03.2024
Brief Statement of Reasons for Decision
1. Instant case RC-4/90-SIU(X), CBI, New Delhi dated 25.04.1990 was registered on the basis of source information against accused O.P. Bhatia (A-1), K.K. Bindal (A-2), Veena Bindal (A-3), M/s Dream City Builders (Pvt) Ltd (A-4) and other unknown persons for the commission of offences punishable under section 120B r/w 420 IPC alleging that during the year 1987-1988 they had cheated the New Bank of India by obtaining CC No.CBI/244/2019 RC-4/90-SIU(X), CBI CBI Vs. Om Prakash Bhatia & Ors Page no. 2 of 24 U/s 120B/420 IPC and substantive offences thereof DEEPAK Digitally signed by DEEPAK KUMAR KUMAR Date: 2024.03.27 16:41:03 +0530 advances dishonestly in the name of (A-4) company. It is also alleged that in pursuance of the said conspiracy (A-2) had submitted the application dated 24.02.1987 while suppressing material facts to the New Bank of India, Masjid Moth Branch, where (A-1) was working as Manager before his transfer to the East of Kailash Branch for grant of term loan and other facilities.
2. (A-1) had recommended the application of (A-2) without appraising the same properly and the said proposal was not granted by the regional office of the bank on 20.05.1987 because of financial constraints. When (A-1) joined the office of East of Kailash Branch on transfer, (A-2) again moved a similar application dated 31.07.1987 for grant of loan of Rs. 25 lakhs. It is the case of the CBI that (A-2) and (A-3) were the directors/ partners in various other concerns and were also having different bank accounts where heavy outstanding already existed and that they had concealed the said fact in their application. Moreover, (A-1) without properly appraising the application recommended for the grant of loan applied for on 07.08.1987 and he had also shown the amount as 'nil' in the column relevant for showing borrowers liability. It is the case of the CBI that (A-1) had falsely stated that he had verified the credit worthiness of (A-2) and (A-
3) from the market and from the independent sources. Accordingly, on 24.02.1987, head office of the bank sanctioned the amount of loan applied for and (A-1) again forwarded another proposal dated 02.12.1987 of the (A-4) company recommending enhancement of limit upto Rs. 63 lakhs which was also sanctioned by the head office of the bank. It has been CC No.CBI/244/2019 RC-4/90-SIU(X), CBI CBI Vs. Om Prakash Bhatia & Ors Page no. 3 of 24 U/s 120B/420 IPC and Digitally signed substantive offences thereof by DEEPAK DEEPAK KUMAR Date:
KUMAR 2024.03.27 16:41:22 +0530 alleged that the limits so sanctioned was enhanced to Rs. 1.14 crores and further enhanced to Rs. 1.69 crores by (A-1) unauthorizedly and arbitrarily. It is also alleged that plot at Delhi Gurgaon Road where (A-4) company had proposed to construct building out of the loan amount was the property of M/s Rohit Raj Potteries which was also mortgaged with Dena Bank and that (A-4) company could not have constructed any building on the said plot for the reason that it was under charge with Dena Bank as security for loan. Investigation has disclosed the involvement of the aforesaid accused persons in commission of offences in question. After culmination of the investigation charge-sheet was filed.
3. During the stage of charge, (A-1) was declared PO by the Ld. Predecessor of this court vide order dated 12.04.2010. Charges were framed against (A-2), (A-3), (A-4) company, (A-5) and (A-6) for the commission of offences punishable under section 120B r/w section 420 IPC and 5(2) and 5(1)(d) of the PC Act and for the substantive offences thereof.
4. During the trial, proceedings against accused (A-3) were abated vide order dated 27.10.2016. Later on, proceedings against (A-5) and (A-6) (who were the public servants) were dropped vide order dated 28.07.2017 passed by Ld. Predecessor of this court i.e. Ld. Special Judge (PC Act), CBI, Delhi and in consequence thereof the case was remanded to Ld. CMM (East), Delhi to proceed further with the trial against remaining accused persons in accordance with law. Thereafter, matter proceeded CC No.CBI/244/2019 RC-4/90-SIU(X), CBI CBI Vs. Om Prakash Bhatia & Ors Page no. 4 of 24 U/s 120B/420 IPC and substantive offences thereof Digitally signed DEEPAK by DEEPAK KUMAR KUMAR Date: 2024.03.27 16:41:36 +0530 further for recording of prosecution evidence. Proceedings against (A-2) were also abated vide order dated 10.02.2023. In order to prove its case against accused persons, prosecution has examined as many as twelve witnesses.
5. PW1 Gurbaksh Singh proved the debit vouchers Ex.PW1/15, Ex.PW1/17, Ex.PW1/19, Ex.PW1/21, Ex.PW1/23 vide which a sum of Rs. 2,00,000/- each was credited into the account of (A-4) company from the accounts of (A-3) (proceedings stands abated vide order dated 27.10.2016), Keval Chand, Anil Kumar, Vijay Kumar and Kamal K. Gupta respectively. He has also proved the cheque bearing no. 325535 dated 08.04.1988 (D-66) as Ex.PW1/24 for the sum of Rs. 5,00,000/- in favour of M/s Rohit Raj Potteries, cheque bearing no. 325534 dated 08.04.1988 (D-67) as Ex.PW1/25 for the sum of Rs. 5,00,000/- in favour of M/s Rohit Raj Potteries, cheque bearing no. 325536 dated 08.04.1988 (D-68) as Ex.PW1/26 for the sum of Rs. 5,00,000/- in favour of M/s Rohit Raj Potteries and cheque bearing no. 325537 dated 08.04.1988 (D-69) as Ex.PW1/27 for the sum of Rs. 2,60,000/- in favour of M/s Rohit Raj Potteries which were issued by the (A-4) company.
6. In his cross examination he admitted that the voucher Ex.PW1/14 to Ex.PW1/23 were not filled in his presence. He also admitted that there is no connection between cheques Ex.PW1/1 to Ex.PW1/8 and the vouchers Ex.PW1/14 to Ex.PW1/23. Digitally signed by DEEPAK DEEPAK KUMAR Date:
KUMAR 2024.03.27
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7. PW2 Sudhir Bhargava proved the sanction for
prosecution granted by competent authority as Ex.PW2/A (however vide order dated 28.08.2017 passed by Ld. Predecessor of this court, sanction Ex.PW2/A was held to be invalid).
8. Depositions of PW-3 Bhagwan Dass Taneja, PW-4 Pritpal Singh, PW-5 S.K. Saxena, PW-6 Vinod Kumar Duggal, PW-9 S.K. Manchanda, PW-11 Shashi Kant (deposed nothing) and PW- 12 Devender Kumar Gupta are not being discussed as they have not stated anything about the (A-4) company.
9. PW-7 Kumkum C. Singh deposed that she had received a call from his regional head to contact Mr. O.P. Bhatia as he has got some government deposit and the branch in which she was working was to get Rs. 1 crore as deposit for the period of one year on quarterly interest; the FD amount on maturity was to be delivered to the official of NDMC; cheque bearing no. 287522 dated 08.04.1988 amounting to Rs. 1 crore issued by NDMC, in favour of New Bank of India, Vasant Vihar, New Delhi is Ex.PW7/A; FDRs bearing no. 001542/66/88 and 001543/67/88 both dated 08.04.1988 are Ex.PW7/B and Ex.PW7/C respectively. Nothing material came on record during the cross examination of this PW.
10. PW-8 Vinod Kumar Khurana, deposed that two FDRs for the sum of Rs. 50,00,000/- each bearing no. 159601 and 159602 and both dated 08.04.1988 received from NDMC are Ex.PW8/A and Ex.PW8/B respectively; head office had received CC No.CBI/244/2019 RC-4/90-SIU(X), CBI CBI Vs. Om Prakash Bhatia & Ors Page no. 6 of 24 U/s 120B/420 IPC and substantive offences thereof Digitally signed by DEEPAK DEEPAK KUMAR KUMAR Date:
2024.03.27 16:41:58 +0530 a phone call from O.P. Bhatia for making the above-mentioned FDRs. This PW was not cross examined despite opportunity being afforded to the accused persons.
11. PW-10 K. Poornam deposed that he has dealt with the loan case of (A-4) company during his tenure and that the (A-4) company had initially applied for loan in Masjid Moth Branch, in the year 1987 and the said proposal was declined by Sh. S.K. Abrol, the then GM posed at Head Office; subsequently a fresh loan application was made to the East of Kailash Branch, by the (A-4) company and (A-2) and (A-3) were its directors; the loan application was processed and the sanction was given by the then GM Sh. J. Sethi; subsequently the (A-4) company was given first enhancement of the credit facility by Sh. R.C. Suneja, the then CMD and the second enhancement of the credit facility was supposedly given by Sh. R.C. Suneja the then CMD as per branch letter; loan was not repaid and account became NPA (non- performing asset). First loan proposal of M/s Dream City Builders Pvt Ltd is Ex.PW10/A; the fresh loan proposal of M/s Dream City Builders Pvt Ltd is Ex.PW10/B; letter dated 15.11.1987 sent by M/s Dream City Builders Pvt Ltd to East of Kailash Branch is Mark PW10/X2 as the witness could not identify the signatures of the person concerned; Ex/PW10/31 is the letter written by him to the DGM, Regional Office, Delhi requesting him to depute a concerned AGM to visit East of Kailash Branch and personally verify as to how the property at Gurgaon, which has been mortgaged by M/s Dream City Builders Pvt Ltd with their bank has already been mortgaged to Dena CC No.CBI/244/2019 RC-4/90-SIU(X), CBI CBI Vs. Om Prakash Bhatia & Ors Page no. 7 of 24 U/s 120B/420 IPC and Digitally signed substantive offences thereof by DEEPAK DEEPAK KUMAR Date:
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Bank and further to ascertain how the bank's legal advisor certified that the documents of the property mortgaged to the bank are in order.
12. He also deposed that he was asked to prepare a board note by GM (Credit) for sanction of enhanced facilities to M/s Dream City Builders without any reference to third credit sanction to the borrower; the K.K. Bindal has informed that the title deeds were taken away by the Income Tax Department; K.K. Bindal has not informed that Dena Bank has filed a suit for recovery for Rs. 35 lakhs against him; it was later on brought to his notice that title deeds with regard to Khasra No. 4257/1881, 4258/1881, 3873/1873 and 3874/1873 of Municipal House No. 2747/2, situated at Delhi Alwar Road were already mortgaged to Dena Bank; legal opinion with regard to loan documents pertaining to M/s Dream City Builders was obtained from Sh. R.K. Chaddha after the disbursement of loan; it transpired that Sh. Chaddha has not given correct legal opinion in regard to creation of mortgage; in view of the wrong opinion given by Sh. Chaddha, fresh legal opinion was sought from Sh. H.C. Dhall and he opined that the chain of documents have not been obtained and seen by Mr. Chaddha; Sh. Chaddha has given his opinion on the branch of his letter head instead of using his own letter head; his opinion was not as per the format given by the bank for obtaining legal opinion; Mr. Dhall could not give conclusive opinion in the absence of documents called for; O.P. Bhatia had sanctioned several loans to the different persons of the same group even after M/s Dream City Builder account turned sticky.
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13. In his cross-examination, he deposed that the first application for availing loan was declined by the Masjid Moth Branch, due to "funds constraint with the bank". He admitted that he had gone through all the documents submitted with the loan proposal by the applicant and sent by the branch; the loan proposal in question after recommendation from the branch manager and regional manager was routed to higher authority through him after his recommendation; after going through the document i.e. page no. 205 of D-27, he deposed that there is a condition "the party shall introduce deposits equivalent to double the amount of credit facilities through its sources". The loan amount in question was for Rs. 25 lakhs as on 17.09.1987 and that the property mortgaged with the Dena Bank was different part of the property then the property mortgaged with the New Bank of India measuring 9500 Sq. Yards; Ex.PW10/D2 is the letter dated 23.03.1989 written by Head Office to the Branch Manager, East of Kailash, New Bank of India mentioning therein that they have noted the help extended by the party in securing the deposits aggregating to Rs. 11 crores.
14. Thereafter, PE was closed on 30.01.2024. Statement of accused i.e. (A-4) company was recorded under section 313 CrPC on 13.03.2024. (A-4) company has opted to lead evidence in his defence. However on 16.03.2024 Ld. counsel/ Additional Standing counsel for official liquidator of (A-4) company has refused to lead defence evidence. Consequently, DE was closed. Final arguments in the matter were heard on 18.03.2024 and CC No.CBI/244/2019 RC-4/90-SIU(X), CBI CBI Vs. Om Prakash Bhatia & Ors Page no. 9 of 24 U/s 120B/420 IPC and substantive offences thereof Digitally signed by DEEPAK DEEPAK KUMAR KUMAR Date:
2024.03.27 16:42:53 +0530 matter was listed for pronouncement of judgment.
15. Ld. APP for the CBI has argued that the offences for which (A-4) company has been charged with have been proved against it beyond reasonable doubt and accordingly, it is liable to be convicted.
16. On the other hand, Ld. Counsel for (A-4) company has argued that this court may decide the matter in accordance with law on the basis of material available on record. It is also submitted that status report on behalf of (A-4) company has also been filed.
17. I have heard the Ld. APP for the CBI/ Prosecution, Ld. counsel for the accused and have also carefully gone through the record.
18. The cardinal principle of criminal law cannot be forgotten that the prosecution has to prove its case against accused beyond all reasonable doubts. The standard of proof is not the preponderance of probabilities but proof beyond reasonable doubt. Initial burden of proof as regards prosecution in criminal trial is upon the prosecution and it never shifts upon the accused. It is well settled legal proposition that any benefit of doubt goes in favour of the accused.
19. Charges for the commission of offence punishable under section 120B r/w 420 IPC and for substantive offences thereof were framed against the (A-4) company and it is necessary to CC No.CBI/244/2019 RC-4/90-SIU(X), CBI CBI Vs. Om Prakash Bhatia & Ors Page no. 10 of 24 U/s 120B/420 IPC and substantive offences thereof Digitally signed by DEEPAK DEEPAK KUMAR KUMAR Date:
2024.03.27 16:43:03 +0530 briefly discuss the existing provisions of law relating to the offences in question.
20. Section 420 IPC deals with cheating and dishonestly inducing delivery of property. It is reproduced as under :-
"420. Cheating and dishonestly inducing delivery of property.--Whoever cheats and thereby dishonestly induces the person deceived to deliver any property to any person, or to make, alter or destroy the whole or any part of a valuable security, or anything which is signed or sealed, and which is capable of being converted into a valuable security, shall be punished with imprisonment of either description for a term which may extend to seven years, and shall also be liable to fine."
21. In Prof. R.K. Vijayasarathy & Ors. Vs. Sudha Seetharam & Ors. Crl. App. No.238 of 2019 Hon'ble Supreme Court of India has held that :
"The ingredients to constitute an offence under Section 420 are as follows:
i. a person must commit the offence of cheating under Section 415; and ii. the person cheated must be dishonestly induced to (a) deliver property to any person; or (b) make, alter or destroy valuable security or anything signed or seal and capable of being converted into valuable security".
22. Cheating is an essential ingredient for an act to constitute an offence under Section 420 and is defined under Section 415 of Penal Code. Section 415 of Penal Code reads as:
"Section 415. Cheating - Whoever, by deceiving any person, fraudulently or dishonestly induces the person so deceived to deliver any property to any person, or to consent that any person shall retain any property or intentionally induces the persons so CC No.CBI/244/2019 RC-4/90-SIU(X), CBI CBI Vs. Om Prakash Bhatia & Ors Page no. 11 of 24 U/s 120B/420 IPC and substantive offences thereof Digitally signed by DEEPAK DEEPAK KUMAR KUMAR Date:
2024.03.27 16:43:15 +0530 deceived to do or omit to do anything which he would not do or omit if he were not so deceived, and which act or omission causes or is likely to cause damage or harm to that person in body, mind, reputation, property, is said to "cheat".
23. A fraudulent or dishonest inducement is an essential ingredient for the offence punishable under section 420 IPC. To constitute the offence of cheating, it is not necessary that the deception should be by express words, but it may be by conduct or implied in the nature of transactions itself.
24. Section 24 of the Penal Code defines "dishonestly" as whoever does anything with the intention of causing wrongful gain to one person or wrongful loss to another person, is said to do that thing dishonestly. Further, "Fraudulently" is defined in section 25 IPC. A person is said to do a thing fraudulently if he does that thing with intent to defraud but not otherwise. The word "defraud" includes an element of deceit. Deceit is not an ingredient of the definition of the word "dishonestly" while it is an important ingredient of the definition of the word "fraudulently". The former involves a pecuniary or economic gain or loss while the latter by construction excludes that element. Further, the juxtaposition of the two expressions "dishonestly" and "fraudulently" used in the various sections of the Code indicates their close affinity and therefore the definition of one may give colour to the other.
25. In Arun Bhandari vs State of UP, 2013 (2) SCC 801, it was held by the Hon'ble Apex Court that :-
"21 Before we proceed to scan and analyse the CC No.CBI/244/2019 RC-4/90-SIU(X), CBI CBI Vs. Om Prakash Bhatia & Ors Page no. 12 of 24 U/s 120B/420 IPC and substantive offences thereof Digitally signed DEEPAK by DEEPAK KUMAR KUMAR Date: 2024.03.27 16:43:27 +0530 material brought on record in the case at hand, it is seemly to refer to certain authorities wherein the ingredients of cheating have been highlighted. In State of Kerala v. A. Pareed Pillai and Another [8], a two-Judge Bench ruled that to hold a person guilty of the offence of cheating, it has to be shown that his intention was dishonest at the time of making the promise and such a dishonest intention cannot be inferred from a mere fact that he could not subsequently fulfil the promise.
22 In G.V. Rao v. L.H.V. Prasad and Others[9], this Court has held thus: "7. As mentioned above, Section 415 has two parts. While in the first part, the person must "dishonestly" or "fraudulently"
induce the complainant to deliver any property; in the second part, the person should intentionally induce the complainant to do or omit to do a thing. That is to say, in the first part, inducement must be dishonest or fraudulent. In the second part, the inducement should be intentional. As observed by this Court in Jaswantrai Manilal Akhaney v. State of Bombay[10] a guilty intention is an essential ingredient of the offence of cheating. In order, therefore, to secure conviction of a person for the offence of cheating, "mens rea" on the part of that person, must be established. It was also observed in Mahadeo Prasad v. State of W.B.[11] that in order to constitute the offence of cheating, the intention to deceive should be in existence at the time when the inducement was offered.
23. In S.N. Palanitkar and Others v. State of Bihar and Another[12], it has been laid down that in order to constitute an offence of cheating, the intention to deceive should be in existence at the time when the inducement was made. It is necessary to show that a person had fraudulent or dishonest intention at the time of making the promise, to say that he committed an act of cheating. A mere failure to keep up promise subsequently cannot be presumed as an act leading to cheating".
26. In Sushil Sethi vs. State of Arunachal Pradesh, AIR 2020 SC 765, it was held by the Hon'ble Supreme Court of India that :-
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2024.03.27 16:43:39 +0530 "7.2 In the case of Vesa Holdings Private Limited (supra), it is observed and held by this Court that every breach of contract would not give rise to an offence of cheating and only in those cases breach of contract would amount to cheating where there was any deception played at the very inception. It is further observed and held that for the purpose of constituting an offence of cheating, the complainant is required to show that the accused had fraudulent or dishonest intention at the time of making promise or representation. It is further observed and held that even in a case where allegations are made in regard to failure on the part of the accused to keep his promise, in the absence of a culpable intention at the time of making initial promise being absent, no offence under Section 420 IPC can be said to have been made out. It is further observed and held that the real test is whether the allegations in the complaint disclose the criminal offence of cheating or not.
7.3 In the case of Hira Lal Hari Lal Bhagwati (supra), in paragraph 40, this Court has observed and held as under: "40. It is settled law, by a catena of decisions, that for establishing the offence of cheating, the complainant is required to show that the accused had fraudulent or dishonest intention at the time of making promise or representation. From his making failure to keep promise subsequently, such a culpable intention right at the beginning that is at the time when the promise was made cannot be presumed. It is seen from the records that the exemption certificate contained necessary conditions which were required to be complied with after importation of the machine. Since the GCS could not comply with it , therefore, it rightly paid the necessary duties without taking advantage of the exemption certificate. The conduct of the GCS clearly indicates that there was no fraudulent or dishonest intention of either the GCS or the appellants in their capacities as officebearers right at the time of making application for exemption. As there was absence of dishonest and fraudulent intention, the question of committing offence under Section 420 of the Penal Code, 1860 does not arise.
We have read the chargesheet as a whole. There is no allegation in the first information report or the chargesheet indicating expressly or impliedly any intentional deception or fraudulent/dishonest CC No.CBI/244/2019 RC-4/90-SIU(X), CBI CBI Vs. Om Prakash Bhatia & Ors Page no. 14 of 24 U/s 120B/420 IPC and substantive offences thereof Digitally signed DEEPAK by DEEPAK KUMAR KUMAR Date: 2024.03.27 16:44:04 +0530 intention on the part of the appellants right from the time of making the promise or misrepresentation. Nothing has been said on what those misrepresentations were and how the Ministry of Health was duped and what were the roles played by the appellants in the alleged offence. The appellants, in our view, could not be attributed any mens rea of evasion of customs duty or cheating the Government of India as the Cancer Society is a nonprofit organisation and, therefore, the allegations against the appellants levelled by the prosecution are unsustainable. The Kar Vivad Samadhan Scheme certificate along with Duncan [(1996) 5 SCC 591 :
1996 SCC (Cri) 1045] and Sushila Rani [(2002) 2 SCC 697 : (2002) 2 Apex Decisions] judgments clearly absolve the appellants herein from all charges and allegations under any other law once the duty so demanded has been paid and the alleged offence has been compounded. It is also settled law that once a civil case has been compromised and the alleged offence has been compounded, to continue the criminal proceedings thereafter would be an abuse of the judicial process." It is further observed and held by this Court in the aforesaid decision that to bring home the charge of conspiracy within the ambit of Section 120B of the IPC, it is necessary to establish that there was an agreement between the parties for doing an unlawful act. It is further observed and held that it is difficult to establish conspiracy by direct evidence.
7.4 In the case of V.Y Jose (supra), it is observed and held by this Court that one of the ingredients of cheating is the existence of fraudulent or dishonest intention of making initial promise or existence thereof, from the very beginning of formation of contract. It is further observed and held that it is one thing to say that a case has been made out for trial and as such criminal proceedings should not be quashed, but it is another thing to say that a person should undergo a criminal trial despite the fact that no case has been made out at all".
27. Now, coming to the facts of the present case, PW-10 K. Poornam, who was posted as AGM, Credit and Institutional Credit (C & I) during the year 1998 at New Bank of India, HO, CC No.CBI/244/2019 RC-4/90-SIU(X), CBI CBI Vs. Om Prakash Bhatia & Ors Page no. 15 of 24 U/s 120B/420 IPC and substantive offences thereof Digitally signed by DEEPAK DEEPAK KUMAR KUMAR Date:
2024.03.27 16:44:14 +0530 New Delhi has deposed in his cross examination that he had gone through all the documents submitted with the loan proposal of the applicant sent by the branch and the loan proposal in question was routed to higher authority (through him) after his recommendations from the branch manager and regional manager. It clearly shows that the loan in question was granted/ approved to the (A-4) company after adhering all the formalities and no wrong doing on part of (A-4) company can be attributed. He further admitted that on page no. 205 of document D-27 there is a condition that the party shall introduce deposits equivalent to double the amount of credit facilities through its sources. The factum of deposit of the amount is reflected in the testimony of PW-7 Kumkum C. Singh wherein she deposed that she has received a call from (A-1) that he has got some government deposits of Rs. 1 crore for the period of one year on quarterly interest and that they received the deposit of Rs. 1 crore and two FDRs Ex.PW7/B and Ex.PW7/C were made in favour of NDMC. Again this fact also shows that (A-4) company was not having any intention to cheat the complainant since the very beginning and it can also be said that it was merely a breach of contract which has been given the colour of criminal prosecution.
28. PW-10 K. Poornam has further deposed that the property mortgaged with the Dena Bank was different part of the property then the property mortgaged with the New Bank of India measuring 9500 Sq. Yards. In view of this part of deposition of PW-10 during his cross examination it can be very safely be concluded that accused company was not having any intention to CC No.CBI/244/2019 RC-4/90-SIU(X), CBI CBI Vs. Om Prakash Bhatia & Ors Page no. 16 of 24 U/s 120B/420 IPC and substantive offences thereof Digitally signed by DEEPAK DEEPAK KUMAR KUMAR Date:
2024.03.27 16:44:23 +0530 cheat the complainant bank since the beginning which is a major requirement for an act to be called as an offence committed under section 420 IPC. To buttress their claim, no witness from the Dena Bank has been examined neither any title deed/s were produced by the CBI in the court so as to show that the property mortgaged by (A-4) company with the New Bank of India was the same that has already been mortgaged with the Dena Bank.
29. PW-10 K. Poornam has further deposed that vide Ex.PW10/D2 written by the head office to the branch manager they have noted the help extended by the party in securing the deposits aggregating to Rs. 11 crores. This fact also shows that the (A-4) company was not having any intention to cheat rather it was showing his bonafide by doing the needful i.e. by helping the bank in securing the deposits aggregating to Rs. 11 crores.
30. PW-10 K. Poornam has also went on to depose that as per document D-5 (page no. 1 to 7), i.e. a letter written by Pritpal Singh, Architect regarding the valuation report in this case as per which the value of property measuring 9500 Sq. Yards was Rs. 2.47 crores as on February 1988 and that loan amount in question as on 17.09.1987 was Rs. 25 Lakhs. This part of deposition again clearly shows that the (A-4) company has mortgaged the property having much larger value than the loan actually sanctioned by the bank and thus it shows bonafide on its part.
31. There is nothing on record to show that any act or omission was committed by the (A-2) (since deceased, CC No.CBI/244/2019 RC-4/90-SIU(X), CBI CBI Vs. Om Prakash Bhatia & Ors Page no. 17 of 24 U/s 120B/420 IPC and substantive offences thereof Digitally signed by DEEPAK DEEPAK KUMAR Date:
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proceedings abated vide order dated 10.02.2023) and (A-3) (since deceased, proceedings abated vide order dated 27.10.2016) being the Directors of (A-4) company so as to show the commission of offences in question by them which could have implicated the (A-4) company.
32. In the present case as per the deposition of PW-8 Vinod Kumar Khurana that two FDRs bearing no. 159601 and 159602 for the sum of Rs. 50,00,000/- each were made vide Ex.PW8/A and Ex.PW8/B respectively on a phone call received by the head office from the O.P. Bhatia for making the FDRs. This part of the testimony again goes on to corroborate the testimony of PW-10 K. Poornam vide which he has deposed that vide Ex.PW10/D2 the head office has informed the Branch Manager, New Bank of India, East of Kailash that they have noted the help extended by the parties in securing the deposits aggregating to Rs. 11 crores. Had there been an intention on part of the accused persons to cheat the complainant then in that case they won't have helped the bank in securing the deposit aggregating to Rs. 11 crores.
33. PW-1 has admitted the suggestion that vouchers Ex.PW1/14 to Ex.PW1/23 were not filled in his presence. Thus, it cannot be said conclusively that they were filled in at the instance of the directors of the (A-4) company or by the directors of the (A-4) company themselves as there is nothing on record to suggest that. Furthermore, as per the deposition of PW-10 K. Poornam, legal opinion with regard to loan documents pertaining to M/s Dream City Builders i.e. (A-4) company therein was CC No.CBI/244/2019 RC-4/90-SIU(X), CBI CBI Vs. Om Prakash Bhatia & Ors Page no. 18 of 24 U/s 120B/420 IPC and substantive offences thereof Digitally signed by DEEPAK DEEPAK KUMAR KUMAR Date:
2024.03.27 16:44:59 +0530 obtained from Sh. R.K. Chaddha after the disbursement of loan. It clearly shows that it is actually the bank who is at the fault and it appears that the bank is trying to take the benefit of the wrong committed by it.
34. It is settled law that in order to hold a person accountable for the offence of cheating, it is necessary that the person was deceiving from the very beginning and had an intention to cheat. It is also necessary to show that the intention while making the promise was dishonest. Mens rea cannot be proven by the mere fact that a promise could not be fulfilled as it is in the present case that the account was declared NPA because the loan was not repaid by the (A-4) company. The fact that dishonest intention was present at the time of making the promise is to be proved in order to hold the accused guilty for the offence of cheating. The intention to cheat must be present at the very inception of the act, and it cannot be inferred from subsequent conduct or a failure to fulfill the promise. Mere failure to keep a promise or irregular payments cannot be considered sufficient evidence of a dishonest or fraudulent intention. The complainant must show and prove that the accused had a fraudulent or dishonest intention at the time of making the promise in order to establish the offense of cheating. In the present case prosecution has failed to bring on record the factum of the (A-4) company having intention to cheat since the very beginning.
35. In the present case no investigation has been conducted qua the Dena Bank nor the sale deed as alleged were ever seized CC No.CBI/244/2019 RC-4/90-SIU(X), CBI CBI Vs. Om Prakash Bhatia & Ors Page no. 19 of 24 U/s 120B/420 IPC and substantive offences thereof Digitally signed by DEEPAK DEEPAK KUMAR Date:
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or recovered. This court is of the opinion that it is the duty of the Investigating Officer to do just and fair investigation. The investigation should be conducted in impartial manner and the only aim should be to unearth the truth and place it before the Court. The Investigating Agency cannot be the mouth piece of the complainant, wherein, the investigation is conducted with the presumption that the complaint is true and the accused is at fault, merely because a complaint has been filed against him. It is duty of the Investigating Agency to find out the veracity and truthfulness of the complaint and also to do the investigation on the issues as raised by the accused against the complaint during investigation.
36. In view of the aforesaid discussion it can very easily be concluded that no offence punishable under section 420 IPC seems to have been committed by the (A-4) company.
37. As regards the offence of criminal conspiracy, under section 120A IPC offence of criminal conspiracy is committed when two or more persons agree to do or cause to be done an illegal act or legal act by illegal means. Offence of criminal conspiracy is exception to the general law where intent alone does not constitute crime. It is intention to commit crime and joining hands with persons having the same intention. Not only the intention but there has to be agreement to carry out the object of intention, which is an offence. It would not be enough for the offence of conspiracy when some of the accused merely entertained a wish, howsoever, horrendous it may be, that offence CC No.CBI/244/2019 RC-4/90-SIU(X), CBI CBI Vs. Om Prakash Bhatia & Ors Page no. 20 of 24 U/s 120B/420 IPC and substantive offences thereof Digitally signed by DEEPAK DEEPAK KUMAR KUMAR Date:
2024.03.27 16:45:20 +0530 is committed. Conspiracy is hatched in private or in secrecy. It is rarely possible to establish a conspiracy by direct evidence. Usually, both the existence of the conspiracy and its objects have to be inferred from the circumstances and the conduct of the accused.
38. When two or more persons agree to commit a crime of conspiracy then regardless of making or considering any plans for its commission, and despite the fact that no step is taken by any such person to carry out their common purpose, a crime is committed by each and every one who joins in the agreement. To prove the charge of conspiracy it is not necessary that intended crime was committed or not. If committed it may further help prosecution to prove the charge of conspiracy. What part each conspirator is to play may not be known to everyone or the fact as to when a conspirator joined the conspiracy and when he left.
39. As stated above it is the unlawful agreement and not its accomplishment, which is the essence of the crime of conspiracy. Offence of criminal conspiracy is complete even though there is no agreement as to the means by which the purpose is to be accomplished. It is the unlawful agreement, which is the gravamen of the crime of conspiracy. The unlawful agreement which amounts to a conspiracy need not be formal or express, but may be inherent in and inferred from the circumstances, especially declarations, acts and conduct of the conspirators. It has been seen that a criminal conspiracy is a partnership in crime and that it is in each conspiracy a joint or mutual agency for the prosecution of a common plan. A man may join a conspiracy by CC No.CBI/244/2019 RC-4/90-SIU(X), CBI CBI Vs. Om Prakash Bhatia & Ors Page no. 21 of 24 U/s 120B/420 IPC and Digitally signed substantive offences thereof by DEEPAK DEEPAK KUMAR KUMAR Date:
2024.03.27 16:45:28 +0530 word or by deed.
40. A conspiracy thus is a continuing offence and continues to subsist and is committed wherever one of the conspirators does an act or series of acts. As long as its performance continues, it is a continuing offence till it is executed or rescinded or frustrated by choice or necessity. A crime is committed as soon as the agreement is made, but it is not a thing of the moment. This means that everything said, written or done by any of the conspirator in execution or any part of it is deemed to have been said, done and written by each of them.
41. In a case reported as V. R. Nedunchezhian Vs. State:
2000 Cr.L.J.976 Their Lordships observed in para 69 as under:
It is true that the conspiracy may be a chain; where each party performs even without the knowledge of the other, a role that aids or abets succeeding parties in accomplishing the criminal objectives of the conspiracy.
42. In the case of Ajay Aggarwal Vs. Union of India & Ors:
JT 1993 (3) SC 203 it has been observed that it is not necessary that each conspirator must know all the details of the scheme nor be a participant at every stage. It is necessary that they should agree for design or object of the conspiracy.
43. Applying the above principles of law to the facts of the present case, I may observe that there is no evidence on record to show that there was a prior meeting of minds of (A-2) (since deceased, proceedings abated vide order dated 10.02.2023) and CC No.CBI/244/2019 RC-4/90-SIU(X), CBI CBI Vs. Om Prakash Bhatia & Ors Page no. 22 of 24 U/s 120B/420 IPC and substantive offences thereof Digitally signed by DEEPAK DEEPAK KUMAR KUMAR Date:
2024.03.27 16:45:35 +0530 (A-3) (since deceased, proceedings abated vide order dated 27.10.2016) with (A-1) (declared PO vide order dated 12.04.2010) or with anyone. Furthermore, as deposed by PW-10 K. Poornam in his cross examination it is clear that first application for availing loan was declined by Masjid Moth Branch due to funds constraint with the bank. Nothing has been brought on record to show that the accused persons were not entitled to approach another bank or the same bank in the different branch for availing the loan facilities. Just because in the present case (A-4) company applied for credit facilities from the East of Kailash Branch after the first proposal was declined by the Masjid Moth Branch cannot be said that the(A-4) company has criminally conspired to commit the offences in question. An offence of criminal conspiracy cannot be deemed to have been established on the mere suspicion or inference which are not supported by any cogent evidence when was there a prior meeting of mind or an agreement to do an illegal act as alleged does not stand established at all [1994 (3) crimes 850 (SC). In view of the above, I hold that the aspect of criminal conspiracy has not been proved beyond reasonable doubt for which benefit of doubt is being given to the (A-4) company .
44. In view of the foregoing, a doubt has crepted in the prosecution story in favour of the (A-4) company and hence, its false implication cannot be completely ruled out. It is settled law that if two views are possible then the view favouring the accused is to be adopted and in case of doubt the benefit is to be given to the accused. Accused cannot be convicted on CC No.CBI/244/2019 RC-4/90-SIU(X), CBI CBI Vs. Om Prakash Bhatia & Ors Page no. 23 of 24 U/s 120B/420 IPC and substantive offences thereof Digitally signed by DEEPAK DEEPAK KUMAR KUMAR Date:
2024.03.27 16:45:43 +0530 presumptions or surmises, rather, all the ingredients of the offences punishable under section 120B r/w 420 IPC and substantive offences thereof are required to be established beyond reasonable doubt.
45. Considering the aforesaid discussion, given facts and circumstances, the evidence brought on record by the prosecution, this court is of the view that the prosecution has miserably failed to prove the offences for which charges were framed against (A-4) company i.e. M/s Dream City Builders Pvt Ltd. Accordingly, (A-4) company i.e. M/s Dream City Builders Pvt Ltd is acquitted of the offences punishable under section 120B/420 IPC and substantive offences thereof i.e. the offences Digitally signed for which it was charged with. DEEPAK by DEEPAK KUMAR KUMAR Date: 2024.03.27 16:45:50 +0530 Announced in the open Court (DEEPAK KUMAR-II) On 27.03.2024 ACMM-2-CUM-ACJ ROUSE AVENUE COURT COMPLEX, NEW DELHI CC No.CBI/244/2019 RC-4/90-SIU(X), CBI CBI Vs. Om Prakash Bhatia & Ors Page no. 24 of 24 U/s 120B/420 IPC and substantive offences thereof