Delhi District Court
Cbi Vs. Udaipal Singh @ Udaipal Singh ... vs . on 8 October, 2021
IN THE COURT OF SH. SANJEEV AGGARWAL
SPECIAL JUDGE : (CBI)-02 : (PC ACT)
ROUSE AVENUE DISTRICT COURT, NEW DELHI
CNR No. DLCT11-000243-2019
Case No. 45/2019 (Old CC No. 532324/16 & 01/15)
RC No. 219/2012/E/0003
PS : EO-I/CBI/ND
u/S. : 120B r/w 420, 467, 468, 471 IPC &
13 (2) r/w 13 (1)(d) of PC Act &
substantive offences thereof.
Central Bureau of Investigation (CBI)
Vs.
1. Udaipal Singh @ Uday Pal Singh @ Udaipal Singh Chauhan
(Accused No. 1)
S/o. Late Sh. Arjun Singh
(i) R/o. C-1/66, Rohini Sector-16,
near Sardar Colony, New Delhi-110085
(ii) Permanent Address - Village & Post- Pavsara
Thana-Augata, Distt. Bulandshahar, UP
2. Baldev Raj Bhatia (Accused No. 2)
S/o. Late Sh. Manak Chand Bhatia
R/o. 52, Second Floor
Old Geeta Colony, Delhi-110031 (Expired and death verification report
filed vide order dated 22.11.2017, however, formal order regarding the
abatement of proceedings passed on 03.09.2021)
3. Bimlesh Devi (Accused No. 3)
W/o. Sh. Sarwan Kumar Garg
(i) R/o. 2252/171, Ganeshpura, Trinagar, Delhi-35
(ii) D-116, 1st Floor, Nangloi Extn.-II, Delhi-41 (Expired and death
verification report filed vide order dated 10.08.2017, however, formal
order regarding the abatement of proceedings passed on 03.09.2021)
RC No. 219/2012/E/0003/ EO-I/CBI/ND Page 1 of 158
CBI Vs. Udaipal Singh @ Udaipal Singh Chauhan & Ors.
4. Sarwan Kumar Garg (Accused No. 4)
S/o. Late Sh. Prithi Chand Garg
(i) R/o. 2252/171, Ganeshpura, Trinagar, Delhi-35
(ii) D-116, 1st Floor, Nangloi Extn.-II, Delhi-41 (Expired and
proceedings abated vide order dated 21.12.2020)
5. S. C. Pathak (Subhash Chander Pathak) (Accused No. 5)
S/o. Late Sh. Ram Das Pathak
R/o. 177, Mohalla-Purana Gurudwara
Nangal, Punjab
6. Ravi Kumar Bharti (Accused No. 6)
S/o. Late Sh. Gopi Chand
(i) R/o. C-101, Signature View Apartments
DDA Flats, Mukharji Nagar, Delhi-09
(ii) 12, Gandhi Ashram, Kingsway Camp, Delhi-09
7. Pyare Lal (Accused No. 7)
S/o. Late Sh. Charan Singh
R/o. Flat No. C-756, Delhi Admn. Flats
Timarpur-110054
Date of institution : 30.01.2015
Judgment reserved : 03.09.2021
Judgment delivered : 08.10.2021
JUDGMENT
1. This case RC-219-2012-E-0003 or FIR was registered on 25.04.2012 on the basis of a written complaint dated 21.12.2011 received from Sh. Sandeep V. Dabir, Assistant General Manager, Punjab National Bank, Asset Recovery Branch, New Delhi, against Sh. Satbir Sharma, Prop. M/s. Guruji Trading Co., Sh. Udai Pal Singh, Prop. M/s. Sivani Agro India RC No. 219/2012/E/0003/ EO-I/CBI/ND Page 2 of 158 CBI Vs. Udaipal Singh @ Udaipal Singh Chauhan & Ors.
and other unknown persons including bank officials u/S. 120B r/w. 420, 467, 468, 471 of IPC and 13(2) r/w. 13(1)(d) of PC Act, 1988. The complaint was verified and instant RC was registered. As per the FIR and chargesheet the key allegations are as follows :
It is alleged that M/s Guruji Trading, the sole proprietorship concern of Sh. Satbir Sharma is trading in foodgrains, the office/shop of the firm is situated at 11, Gali Raghunandan, Naya Bazaar, Delhi, was sanctioned a cash credit (Hypothecation) limit of Rs. 75 lacs by PNB Mall Road Branch on 01.12.2005. The loan limit was further enhanced to Rs. 91 lacs on 28.12.2006, was further enhanced to Rs. 220 lacs on 22.05.2007 and further enhanced to Rs. 300 lacs on 14.09.2007.
It is further alleged that M/s Sivani Agro India, the sole proprietorship concern of Sh. Udai Pal Singh trading in foodgrains, the office/shop of the firm is situated at 5 & 6, 2257, Gali Hingabegh, Naya Bazaar, Delhi, was sanctioned a cash credit (Hypothecation) limit of Rs. 110 lacs by PNB Mall Road Branch on 09.06.2006. The loan limit was further enhanced to Rs. 234 lacs on 27.12.2006 and was further enhanced to Rs. 300 lacs on 14.09.2007.
Investigation revealed that the accused persons Satbir Sharma, Prop. M/s Guruji Trading Co., Udaipal Singh, Prop. M/s Sivani Agro India, Baldev Raj, Guarantor in M/s Guruji Trading Co., Smt. Bimlesh Devi, Guarantor in M/s Sivani Agro India, Sarwan Kumar Garg, S.C. Pathak, the then Chief Manager, RC No. 219/2012/E/0003/ EO-I/CBI/ND Page 3 of 158 CBI Vs. Udaipal Singh @ Udaipal Singh Chauhan & Ors.
Mall Road Branch, Delhi, Ravi Kumar Bharti, the then Dy. Manager (Loans), Mall Road Branch, Delhi and Pyare Lal, the then Chief Manager, Mall Road Branch, Delhi (Precursor of S.C. Pathak) entered into criminal conspiracy during 2005-07 with the common intention to cheat Punjab National Bank for a huge sum of money.
Investigation revealed that M/s Guruji Trading Company having TIN 07670188041 is under jurisdiction of Ward-26, Department of Trade and Taxes, New Delhi. Said firm was registered at Department of Trade and Taxes, New Delhi for Central Sale Tax and Delhi Sale Tax during 1996 for dealing in Food Grain, Pulses and Rice. Registration Certificate of said firm has been cancelled w.e.f. 31.03.2008.
Investigation revealed that M/s Sivani Agro India @ M/s Siwani Agro India, 2257, 2nd Floor, Gali Hingabeg, Naya Bazar, Delhi-06 having TIN 07200280789 is under jurisdiction of Ward-28, Department of Trade and Taxes, New Delhi. Said firm was registered at Department of Trade and Taxes, New Delhi vide registration certificate dated 07.01.2005 w.e.f. 01.12.2004 under sole proprietorship of Udai Pal Singh. This firm was registered for dealing in Cereals and Pulses. On request of the firm, Registration Certificate of said firm has been cancelled w.e.f. 01.11.2009.
In pursuance of the said criminal conspiracy to cheat Bank, during December 2005, Satbir Sharma, Proprietor M/s Guruji RC No. 219/2012/E/0003/ EO-I/CBI/ND Page 4 of 158 CBI Vs. Udaipal Singh @ Udaipal Singh Chauhan & Ors.
Trading Co. approached PNB, Mall Road Branch, New Delhi for CC limit. After processing, limit of 75 lacs was sanctioned (Comprising of CC (BD) limit of 39 Lacs and OD limit of 36 Lacs).
Application of M/s Guruji Trading Co. for said limit of 75 lacs and process/sanction note of said limit of 75 lacs are not available in the records of bank as reported by the bank.
For enhancement of said limit from 75 lacs to 91 lacs application (MR. 3486/2012, page 79-80) along with annexures was submitted by Satbir Sharma, Proprietor M/s Guruji Trading Co. Same was processed / recommended by Sh. Ravi Kumar Bharti, Dy. Manager and was sanctioned by Sh. S.C. Pathak, Chief Manager, both posted at Mall Road Branch. (MR. 3486/2012, page 57-65). CC (BD) limit was enhanced from existing 39 lacs to 55 lacs and OD limit of 36 lacs remained the same. Thus, total limit was enhanced from 75 lacs to 91 lacs. Said limit of 91 lacs to M/s Guruji Trading Co. was against the primary security of book debts & hypothecation of stocks and collateral security of 3 immoveable properties viz. (i) Shop bearing No. 11, First Floor, 2650/2, Gali Raghunandan, Naya Bazar, Delhi in the name of Sh. Satbir Sharma, (ii) Three storied residential building at sector No. 23, plot number 1273, Sonepat (Haryana) in the name of Sh. Satbir Sharma and (iii) Single storey Residential House at 829/B-30, Gali no. 3, Malviya Nagar, Mehlana Road, Sonepat Haryana Areas 625 Sq yds RC No. 219/2012/E/0003/ EO-I/CBI/ND Page 5 of 158 CBI Vs. Udaipal Singh @ Udaipal Singh Chauhan & Ors.
owner Smt. Shakuntla Sharma.
Further for enhancement of said limit from 91 lacs to 220 lacs under Super Trade Scheme, application (MR. 3484/2012, page 140-141) (Photocopy) along with annexures was submitted by Satbir Sharma, Proprietor M/s Guruji Trading Co. Same was processed / recommended by Sh. Ravi Kumar Bharti, Dy. Manager and was sanctioned by Sh. S.C. Pathak, Chief Manager on 25.05.2007. (MR. 3484/2012, page 296-303) (Photocopy). Thus, limit was enhanced from 91 lacs to 220 lacs under Super Trade Scheme. Said limit of 220 lacs to M/s Guruji Trading Co. was against the primary security of book debts & hypothecation of stocks and collateral security of 4 immoveable properties (i.e. said 3 immoveable properties and 4th was Residential House bearing No. 6 on Plot No. 4, New Number 9/3304, village Seelampur, Gandhi Nagar, Gali Gurudwara Wali, Delhi, in the name of Sh. Baldev Raj.) Said application in Original and Original of said Process note of 25.05.2007 regarding enhanced from 91 lacs to 220 lacs under Super Trade Scheme were submitted by PNB in another CBI Case RC EOU-I 2009 E 0006. Chargesheet in this case was filed against accused persons Tara Chand Aggarwal, Satbir Sharma, Hari Shankar Sharma all partners of M/s Krishna & Krishna Enterprises, 3944, Lahori Gate Chowk, Naya Bazar, Delhi and Ravi Kumar Bharti the then Dy. Manager (Loans), PNB, Shalimar Bagh, New Delhi. In this case vide Judgement dtd.
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20.05.2013 and Order on sentence dtd. 21.05.2013 Hon'ble Court of Sh. Manoj Jain, Special Judge (CBI), Saket Courts, New Delhi convicted accused persons Tara Chand Aggarwal, Satbir Sharma and Ravi Kumar Bharti and Hari Shankar Sharma was acquitted. Presently, Appeals filed by accused persons Tara Chand Aggarwal (CRL.A. 840/2013) and Ravi Kumar Bharti (CRL.A. 892/2013) against said conviction are pending in Delhi High Court in this case.
Further for enhancement of said limit from 220 lacs under Super Trade Scheme to 300 lacs under CC (General), application (MR. 3484/2012, page 342) along with annexures was submitted by Satbir Sharma, Proprietor M/s Guruji Trading Co. on letter head of firm. Same was processed / recommended by Sh. Ravi Kumar Bharti, Dy. Manager and was sanctioned by Sh. Pyare Lal, Chief Manager on 14.09.2007. (MR. 3484/2012, page 351-358) (Photocopy). Thus, limit was enhanced from 91 lacs to 220 lacs and was converted to under Super Trade Scheme. (Original of said process note dtd. 14.09.2007 was also submitted by PNB in another CBI Case RC EOU-I 2009 E 0006.) Said limit of 300 lacs to M/s Guruji Trading Co. was against the primary security of book debts & hypothecation of stocks and collateral security of said 4 immoveable properties.
Thus, said limits to M/s Guruji Trading Co. were against the primary security of book debts & hypothecation of stocks and RC No. 219/2012/E/0003/ EO-I/CBI/ND Page 7 of 158 CBI Vs. Udaipal Singh @ Udaipal Singh Chauhan & Ors.
collateral security of following 4 immoveable properties :
(i) Shop bearing No. 11, First Floor, 2650/2, Gali Raghunandan, Naya Bazar, Delhi in the name of Sh. Satbir Sharma.
(ii) Three storied residential building at sector No. 23, plot number 1273, Sonepat (Haryana) in the name of Sh. Satbir Sharma.
(iii) Single storey Residential House at 829/B-30, Gali no. 3, Malviya Nagar, Mehlana Road, Sonepat Haryana Areas 625 Sq yds owner Smt. Shakuntla Sharma.
(iv) Residential House bearing No. 6 on Plot No. 4, New Number 9/3304, village Seelampur, Gandhi Nagar, Gali Gurudwara Wali, Delhi, in the name of Sh. Baldev Raj.
Smt. Sakuntala Sharma w/o Late Satbir Sharma, and Sh. Baldev Raj s/o Manak Chand also stood guarantor to secure the liability of borrower Satbir Sharma in respect to the said credit facilities and also executed guarantee agreements.
In furtherance to the said criminal conspiracy, during June 2006, Udai Pal Singh, Proprietor M/s Sivani Agro India approached PNB, Mall Road Branch, New Delhi for CC limit. For this purpose application for CC limit of Rs. 110 Lacs under Super Trade Scheme (MR. 1027/2014) along with annexures was submitted by him. Same was processed / recommended by Sh. Ravi Kumar Bharti, Dy. Manager and was sanctioned by Sh. S.C. Pathak, Chief Manager on 09.06.2006. (MR. 1028/2014).
Besides personal guarantees of Smt. Sarita Jain, Sh. Udai Pal Singh and Sh. Satbir Sharma, said limit was also collaterally secured against mortgage of the 2 properties- (i) Two commercial shops bearing nos. 5 & 6 measuring total area of RC No. 219/2012/E/0003/ EO-I/CBI/ND Page 8 of 158 CBI Vs. Udaipal Singh @ Udaipal Singh Chauhan & Ors.
171 sq.ft. situated at Ground Floor, Municipal No. 111/2257 (New), Gali Hingabeg, Naya Bazar, Delhi-6, owned by Sh. Udai Pal Singh having Market Value of Rs. 28.21 Lacs and realizable value of Rs. 23.98 Lacs, as per valuation report dt. 26.05.2006 of M/s Verma & Associates, approved valuers and (ii) Free hold property situated at Killa no. 49/17/1 and 49/17/2, Khewat no. 748/656 and 242/2056, Mehlana road, opp. Sector-23, Sonepat, Haryana, having area of 1000 sq.yds. with covered area of 6300 sq.ft. being used as Raju Palace, Banquet Hall, standing in the name of Smt. Sarita Jain w/o Sh. Vinod Jain. Market value and realizable value of the propery, as assessed by the approved valuers- M/s Verna & Associated vide their report dt. 26.05.2006, was at Rs. 159.92 lacs and Rs. 135.94 Lacs respectively. The aggregate market value and realizable value of both the properties, as also mentioned in the said sanction note, was Rs. 188.13 Lacs and Rs. 159.92 Lacs respectively. Investigation revealed that the facility of Rs. 110 Lac sanctioned against mortgage of Immovable Properties with aggregate realizable value of Rs. 159.92 Lacs is in violation of bank's guidelines in respect of facility sanctioned under Super Trade Scheme where minimum realizable value of the property mortgaged should be at least 150% of the facility sanctioned. Accordingly, the realizable value of properties should have been 165 lacs for the limit. In order to conceal the violation, Sh. Ravi Kumar Bharti, Dy. Manager wrote it as 105 lacs in the further enhancement proposal.
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In furtherance to the said criminal conspiracy on request of borrower (MR 3483/2012, Page 1) Ad-hoc facility of Rs. 35 lacs was also granted to M/s Sivani Agro India w.e.f. 30.12.06, without powers and without getting any loan documents executed. The ad-hoc facility requested by the party for a week only, was continued for a period of about two months. Moreover, the limit of the party was enhanced to Rs. 234 Lacs on 27.12.06 and ad-hoc facility of Rs. 35 lacs was allowed w.e.f. 30.12.06. There are no orders from any competent authority for allowing this ad-hoc facility.
For enhancement of said limit from 110 lacs (105 lacs : as mentioned by Sh. Ravi Kumar Bharti) to 234 lacs under Super Trade Scheme, application (MR. 1037/2014) alongwith annexures was submitted by Udai Pal Singh, Proprietor M/s Sivani Agro India. Same was processed / recommended by Sh. Ravi Kumar Bharti, Dy. Manager and was sanctioned by Sh. S.C. Pathak, Chief Manager on 26.12.2006 (MR. 1038/2014). Said limit of 234 lacs to M/s Shivani Agro India was against the primary security of book debts & hypothecation of stocks and collateral security of 4 immovable properties. (i.e. said 2 properties and 2 more properties viz. 3 Storey Building bearing Khasra No. 383, New Number 8421, Basti Achhut, Qadam Sharif, now known as Arya Nagar, Paharganj, New Delhi, in the name of Sh. Deen Dayal Saini. And 4 Storey Building bearing No. 2252/171, out of Khasra No. 620/552, Khewat No. 1, Plot No. 130, situated in the area of Choukri Mubarkabad, now known RC No. 219/2012/E/0003/ EO-I/CBI/ND Page 10 of 158 CBI Vs. Udaipal Singh @ Udaipal Singh Chauhan & Ors.
as Ganeshpura, Tri Nagar, Delhi, in the name of Smt. Bimlesh Devi.) Further for enhancement of said limit from 234 lacs under Super Trade Scheme to 300 lacs under CC (General), application on plain paper (MR. 3483/2012, page 32) alongwith annexures was submitted by Udai Pal Singh, Proprietor M/s Sivani Agro India. Same was processed / recommended by Sh. Ravi Kumar Bharti, Dy. Manager and was sanctioned by Sh. Pyare Lal, Chief Manager on 14.09.2007 (MR. 1051/2014). Said limit of 300 lacs to M/s Shivani Agro India was against the primary security of book debts & hypothecation of stocks and collateral security of said 4 immoveable properties.
Thus, Said limits to M/s Sivani Agro India were against the primary security of book debts & hypothecation of stocks and collateral security of following 4 immoveable properties :
1) Two commercial Shops bearing No. 5 & 6situated at Ground Floor, Municipal Number 111/2257 (New), Gali Hingabeg, Naya Bazar, Delhi- 110006, owned by Sh. Udai Pal Singh.
2) Property situated at Killa No. 49/17/1 and 49/17/2 of Khewat No. 748/656 and 242/205, Mahendra Road, Opposite Sector-23, Sonepat, Haryana, in the name of Smt. Sarita Jain.
3) 3 Storey Building bearing Khasra No. 383, New Number 8421, Basti Achhut, Qadam Sharif, now known as Arya Nagar, Paharganj, New Delhi, in the name of Sh. Deen Dayal Saini.
4) 4 Storey Building bearing No. 2252/171, out of Khasra No. 620/552, Khewat No. 1, Plot No. 130, situated in the area of Choukri Mubarkabad, now RC No. 219/2012/E/0003/ EO-I/CBI/ND Page 11 of 158 CBI Vs. Udaipal Singh @ Udaipal Singh Chauhan & Ors.
known as Ganeshpura, Tri Nagar, Delhi, in the name of Smt. Bimlesh Devi.
Smt. Sarita Jain w/o Sh. Vinod Kumar, Smt. Bimlesh Devi w/o Sh. Sarwan Kumar Garg, Sh. Deen Dayal Saini s/o Late Sh. Laxmi Narain (since expired on 04.03.2014) and Satbir Sharma s/o Shri Banwari Lal (since expired on 02.12.2013) also stood guarantor to secure the liability of borrower Udai Pal Singh in respect to the said credit facilities and also executed Guarantee Agreements.
Investigation revealed that Udai Pal Singh was employee of Satbir Sharma and business of M/s Sivani Agro India was being looked after by Satbir Sharma. Satbir Sharma is also guarantor in said limit of M/s Sivani Agro India.
Satbir Sharma proprietor M/s Guruji Trading Co. is surety of M/s Sivani Agro India in Department of Trade & Taxes, New Delhi. Sh. Satbir Sharma, proprietor M/s Guruji Trading Co. has also executed Central Surety Bond of Rs. 3 Lac and local surety bond of Rs. 1 lac at VAT office in favour of M/s Sivani Agro India on 28.06.2005 in Department of Trade & Taxes.
Investigation revealed that copies of fictitious Balance Sheets purportedly prepared by M/s Ashok Om & Company, D-1/4, Commercial Complex, Laxmi Nagar, New Delhi-110092 and bearing signature of Sh. Ashok Kumar Chartered Accountant of financial year 2003-04, 2004-05, 2005-06 and 2006-07 of RC No. 219/2012/E/0003/ EO-I/CBI/ND Page 12 of 158 CBI Vs. Udaipal Singh @ Udaipal Singh Chauhan & Ors.
M/s Guruji Trading Co. were submitted by Satbir Sharma, proprietor. Similarly, copies of fictitious Balance Sheets purportedly prepared by M/s Ashok Om & Company and of M/s S.K. Garg & Associates, F-211, Kirti Nagar, New Delhi- 110015 bearing signatures of Sh. S. K. Garg, Chartered Accountant of financial year 2003-04, 2004-05, 2005-06 and 2006-07 of M/s Sivani Agro India were submitted by Udai Pal Singh, proprietor to Punjab National Bank alongwith their said applications.
Sh. Ashok Bansal, proprietor, M/s Ashok Om & Company has stated that he had never prepared or signed any balance sheet of the firms M/s Guruji Trading Co. and M/s Sivani Agro India. He stated that he used to right his name as Ashok Bansal and not as Ashok Kumar. He stated that signatures on said balance sheet are different from his actual signature. The stamp appearing on Balance Sheets is also without registration no. He also provided copy of his Sale Tax Bar Association membership card bearing his actual signature. He further stated that he had never operated his office from address D-1/4, Commercial Complex, Laxmi Nagar, New Delhi-110092 as mentioned in said Balance Sheets.
Sh. Sunil Kumar@ Sunil Kumar Garg, proprietor M/s S.K. Garg & Associates has stated that he had never prepared or signed any balance sheet of the firm M/s Sivani Agro India. He stated that said firm was closed w.e.f. 31.03.1997. He RC No. 219/2012/E/0003/ EO-I/CBI/ND Page 13 of 158 CBI Vs. Udaipal Singh @ Udaipal Singh Chauhan & Ors.
stated that signatures on said balance sheet are different from his actual signature. He also provided copy of his PAN card bearing his actual signature. He further stated that he had never operated his office from address F-211, Kirti Nagar, New Delhi-110015 as mentioned in said balance sheet.
Investigation revealed that financial figures mentioned in said fictitious balance sheets of M/s Ashok Om & Company and M/s S.K. Garg & Associates were used in the process notes in respect of M/s Guruji Trading Co. as well as M/s Sivani Agro India in order to assess the viability of CC limits.
Investigation has revealed that accused Ravi Kumar Bharti had signed the copies of balance sheets and other attachments submitted by the borrower by affixing seal "Verified from original" in token of having verified the attachments. He authenticated the fictitious balance sheets & other documents in pursuance of the criminal conspiracy.
In furtherance of criminal conspiracy, bank officials had never visited go-downs of borrower firms for verification. They had not conducted any inspection of stocks as well as of books of accounts. In the records received from bank, there is no inspection report regarding inspection of stocks/books of accounts.
Under super trade scheme the borrower is required to submit stock statement at the time of sanction/renewal and RC No. 219/2012/E/0003/ EO-I/CBI/ND Page 14 of 158 CBI Vs. Udaipal Singh @ Udaipal Singh Chauhan & Ors.
once in a year for audit purposes, it is very much expressed that the stocks mentioned in the stock statement submitted are hypothecated to the bank and therefore, verification of the stocks and the godown was essential on the part of bank officials dealing with the account, which was not done in the present case due to said criminal conspiracy.
Accounts of M/s Guruji Trading Co. as well as M/s Sivani Agro India were converted from Super Trade Scheme to CC (Hypothecation) and limits were enhanced to Rs. 300 lacs in both said accounts. Under CC (Hypothecation) scheme the primary security is stocks, present and future & book debts, equitable mortgage of IPs by keeping title deeds of the properties as collateral security and personal guarantee of the guarantors. In this scheme the borrower has to submit monthly stock statements and the DP is calculated and allowed after verification of the stocks mentioned in the stock statements only and not otherwise. The insurance cover of the stocks and the collateral securities is required with bank clause. The bank has to watch end use of funds sanctioned to ensure whether the funds are being utilized for the purpose sanctioned and initiate remedial measure whenever such incidences are observed.
Accused Pyare Lal has allowed conversion of CC limit under Super Trade Scheme to CC general by making adjustment in the old account. By this act of accused Pyare Lal, accused RC No. 219/2012/E/0003/ EO-I/CBI/ND Page 15 of 158 CBI Vs. Udaipal Singh @ Udaipal Singh Chauhan & Ors.
borrowers were allowed enhanced limit equal to the value of collateral security where as under super trade scheme the value of collateral security was required to be 150%. He failed to ensure presence of godown and stocks therein and accepted the stock statements on the face value only and allowed the borrowers to siphon off the funds and use these funds for the purpose other than for which sanctioned.
In furtherance of said criminal conspiracy copy of fictitious rent receipts purportedly issued by M/s Aarti Agro Industries was submitted by Satbir Sharma, Prop. M/s Guruji Trading Co. to PNB showing go-down site as 99/16, Old G.T. Karnal Road near Sh. Ram Dharam Kanta, Alipur, Delhi (MR.
3484/2012, Page 4 & page 441). Sh. Sanjeev Aggarwal and Sh. Ankush Aggarwal both authorised signatories of M/s Aarti Agro Industries had stated that said firm had never been owner of said go-down site. They stated that said copy of fictitious rent receipt is signed by Sh. Bhagwan Das, the then employee of M/s. Aarti Agro Industries. But present whereabouts of Sh. Bhagwan Das could not be ascertained. Borrower had not submitted any document related to ownership of the godown and lease agreement executed between the owner of gown and the borrower.
Investigation has also revealed that M/s Aarti Agro Industries was owner of godown at 99/3, GT Karnal Road near Shriram Dharamkanta, Alipur, Delhi. But godown at 99/16 GT Karnal RC No. 219/2012/E/0003/ EO-I/CBI/ND Page 16 of 158 CBI Vs. Udaipal Singh @ Udaipal Singh Chauhan & Ors.
Road near Shriram Dharamkanta, Alipur Delhi had never belonged to M/s Aarti Agro Industries. Besides, cheque No. 511143 received by M/s Aarti Agro Industries, in liew of rent of godown from M/s Guruji Trading Co was received from the account of M/s Balaji for renting out godown 99/3 GT Karnal Road only for a period of 2 months i.e. from 01.03.2007 to 30.04.2007.
In furtherance of said criminal conspiracy location of go- down in account of M/s Sivani Agro India shown as shop No. 5 & 6, Ground Floor 111/2257, Gali Hingabeg, Naya Bazar, Delhi-6. Investigation revealed that in sale deed in r/o shop No. 5 size of the shop is (9'x10') (MR 3504/2012) and in sale deed in r/o shop No.6 size of shop is (9'x9') (MR No. 3503/2012). In Insurance Policy papers (MR 3482/2012 page 188-193) where in the sum assured Rs. 1,00,00,000 for the stocks of the firm lying at the said two shops. Stocks of food grains (rice) valuing of crores can not be stored in such small size shops and due to criminal conspiracy the bank officials turned blind eyes towards this aspect.
From the above it is clear that firms were not maintaining any stocks. The borrowers were dealing in business of commission agent/ jamakharchhi business. Due to said criminal conspiracy bank officials had not inspected the stocks and favoured the borrower by accepting the stock statements on the face value.
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In furtherance of said criminal conspiracy, forged documents of property in the name of Baldev Raj in village Seelampur, Gandhi Nagar, Gali Gurudwara Wali, Delhi was mortgaged in PNB for expansion of limits in account of M/s Guruji Trading Co. (Ref. Para 13(iv)). Investigation revealed that forged documents of property constructed on plot no. 4 measuring 164 sq. yds. out of Khasra No. 466/124/1/12 situated in the area of village seelampur, Abadi Gardhi Nagar, Gali Gurdwara Wali, Illaqa Shahdara, Delhi (No. 3304) (MR 3501/12) were mortgaged in PNB in account of M/s Guruji Trading Co. Sh. Manjeet Hooda, Sub-registrar-I, Kashmiri Gate, Delhi has also confirmed that said property documents are forged.
Investigation has also revealed that creation of equitable mortgage by the guarantor namely Baldev Raj has been got done by some impersonator and he had signed the relevant documents of bank and also affixed his photograph (MR 3484/12, Page. 185). Identity and present whereabouts of the person whose photo is in Bank documents and who purported as Baldev Raj in Bank could not be ascertained. However, actual Baldev Raj is appearing in photographs annexed with Valuation report of Sh. S.N. Bansal, Panel Valuer (MR. 3572/12, Page. 46).
Investigation revealed that in the same area two properties i.e. Property no. 3304 and Property No. 3301 belonged to Sh.
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Baldev Raj.
Valuation reports/photographs in the documents of PNB pertain to property No. 3304, which is two sides open. Vide sale deed dated 25.10.61 (Registration No. 8422 dated 26.10.61) S/Sh. Mulk Raj and Baldev Raj Sons of Sh. Manak Chand Bhatia became owners of this property No. 807/19A/15 on Khasra Nos. 464/362/2. Actual Baldev Raj is also appearing in photographs annexed with Valuation report of Sh. S.N. Bansal, Panel Valuer (MR. 3572/12, Page. 46).
Property no. 3301 is one side open. Vide sale deed dated 29.10.1964 (Registration no. 10121 dated 11.11.1964) Sh. Baldev Raj S/o Sh. Manak Chand became owner of this property. Legal Search Reports in documents of PNB are of this property. This property on Khasra No. 466/124/1/12 (Property no. 3301) was mortgaged in Punjab National Bank as property no. 3304 through impersonator of Baldev Raj.
In pursuance of said criminal conspiracy, in Proforma dated 24.05.2007 signed by Ravi Bharti, Dy. Manager and S.C. Pathak, Chief Manager tilted as "Proforma for recording the value of property assessed by incumbent incharge" placed in file MR 3572/2012 at page no. 37, it is stated that free hold property (167 sq. yds.) at plot no. 807/19 A-15, new no. 3304, out of Khasra No. 466/124/1/12 Seelampur, Gandhi Nagar, Delhi is in single name of Baldev Raj it is also mentioned that enquired from local people and property dealer and realizable RC No. 219/2012/E/0003/ EO-I/CBI/ND Page 19 of 158 CBI Vs. Udaipal Singh @ Udaipal Singh Chauhan & Ors.
value of the property as per valuation report of the property is Rs. 211 Lac.
Investigation revealed that the panel valuer Sh. S. N. Bansal had conducted valuation of property no. 3304 on the instruction of Sh. Ravi Kumar Bharti, Dy. Manager. Whereas the mortgage was kept for property no. 3301. Sh. Baldev Raj owner of the property had knowledge of the fact. The assisted in the valuation of the property no. 3304 in connivance with the borrower Sh. Satbir Sharma and Sh. Ravi Kumar Bharti, Dy. Manager.
Investigation revealed that Copy of Election Commission of India identity card and copy of PAN Card in name of Baldev Raj submitted to PNB are also fictitious (MR. 3484/12 Page. 183-184).
In furtherance of said criminal conspiracy, invalid documents of property i.e. 4 Storey Building bearing No. 2252/171, out of Khasra No. 620/552, Khewat No. 1, Plot No. 130, situated in the area of Choukri Mubarkabad, now known as Ganeshpura, Tri Nagar, Delhi in the name of Smt. Bimlesh Devi, was mortgaged in PNB for expansion of limits in account of M/s Sivani Agro India (Ref. Para 20(iv)). Investigation revealed that Sh. Sarwan Kumar Garg, who was attorney of said property executed two sale deeds, in respect of same property in favour of his wife Smt. Bimlesh Devi, once in the year 2003 (registered in Sub-registrar office vide RC No. 219/2012/E/0003/ EO-I/CBI/ND Page 20 of 158 CBI Vs. Udaipal Singh @ Udaipal Singh Chauhan & Ors.
registration no. 11353 dated 24.04.03 /24.05.03) and subsequently in the year 2005 (registered in Sub-registrar office vide registration no. 9163 dated 04.03.05/11.03.05). Against mortgage of said sale deed of 2003 loan was obtained by Smt. Bimlesh Devi, Prop. Shree Shyam Industries from SBI, GT Karnal Road Delhi Branch during 2010 and said subsequent invalid sale deed (of 2005) was mortgaged in the instant case.
Investigation revealed that no inspection/site visit of mortgaged properties was done by accused Bank officials. No inspection/site visit report is available in record regarding inspection of collateral securities.
Investigation revealed that borrowers alongwith their applications had submitted forged/fictitious documents and same were also not in the prescribed format despite the fact proposals were processed by accused bank officers without assessing the borrowers worth and without verifying the genuineness of documents and information submitted by borrowers to protect the financial interest of the bank. Had they verified the same, it could had easily detected that the documents are forged/ fictitious.
Investigation revealed that legal search reports submitted by penal advocate Ms. Simi Dua in respect of properties mortgaged in account of M/s Guruji Trading Co. and M/s Sivani Agro India were based on verification from concerned RC No. 219/2012/E/0003/ EO-I/CBI/ND Page 21 of 158 CBI Vs. Udaipal Singh @ Udaipal Singh Chauhan & Ors.
sub-registrar offices from Index Register which had details of Vendor, Vendee, details of property, Date/details of registration, stamp duty paid etc. and panel advocate had not compared the documents with copy of the same retained in Sub-Registrar Offices. Moreover, keeping in view the Hon'ble Supreme Court judgement in CBI V/s K. Narayan Rao (2012), she is not being prosecuted.
Investigation has revealed that accused A-5 to A-7 all bank officers did favour to accused borrower/s by abusing their official positions. The aforesaid bank officers flouted the bank's prevalent guidelines which facilitated the accused borrowers to siphon off the money by selling the hypothecated stocks and deposited forged/fabricated title deeds and cheated the bank.
Investigation revealed that Satbir Sharma Proprietor M/s Guruji Trading Co., expired on 02.12.2013. Sub-Registrar, Birth-Death, Sonepat vide letter dated 13.05.14 has verified the death of accused Satbir Sharma and also provided his Death Certificate.
As on 31.12.2008 outstanding amount in the account of M/s Guruji Trading Co. was Rs. 306.06 lacs. and as on 31.01.2009 outstanding amount in the account of M/s Sivani Agro India is Rs. 308.69 lacs. In the account of M/s Guruji Trading Co. bank has done OTS for Rs. 175 lacs with borrower Satbir Sharma and released its charge on three genuine properties RC No. 219/2012/E/0003/ EO-I/CBI/ND Page 22 of 158 CBI Vs. Udaipal Singh @ Udaipal Singh Chauhan & Ors.
(i.e. Sr. No. (i), (ii) and (iii) at Para 13) out of total four properties which were mortgaged in this account. In the account of M/s Sivani Agro India bank has done OTS for Rs. 115 lacs with Guarantor Smt. Sarita Jain and released its charge on her property (i.e. Sr. No. (ii) at Para 20) and further action for recovery is being taken by bank on other two genuine properties (i.e. Sr. No. (i) and (iii) at Para 20) out of total four properties which were mortgaged in this account.
In furtherance of said criminal conspiracy, copies of bills issued in favour of M/s Neki Ram Vijay Kumar and M/s Vijay Shree Enterprises were submitted by Satbir Sharma, Prop. M/s Guruji Trading Co. to PNB. Sh. Vijay Kumar, Prop. M/s Neki Ram Vijay Kumar and Sh. Ram Mehar Sharma, Proprietor, M/s Vijay Shree Enterprises stated that they had not purchased any Rice from M/s Guruji Trading Co.
Further investigation in respect of siphoning of funds by M/s Guruji Trading Co. and M/s Shivani Agro India is being conducted and after conclusion of the same, report will be filed in the Hon'ble Court.
Public Servants Ravi Bharti, the then Dy. Manager (Loans), Sh. S.C. Pathak, the then Chief Manager and Sh. Pyare Lal, the then Chief Manager all posted at PNB, Mall Road Branch, Delhi have also been prosecuted in present case. Vide letter dtd. 12.05.14 AGM, ARMB, PNB informed that Sh. S.C. Pathak, the then Chief Manager has been removed from RC No. 219/2012/E/0003/ EO-I/CBI/ND Page 23 of 158 CBI Vs. Udaipal Singh @ Udaipal Singh Chauhan & Ors.
services w.e.f. 31.01.13, Sh. Pyare Lal, the then Chief Manager is Compulsory Retired with Penalty w.e.f. 31.07.13 and Sh. Ravi Bharti, the then Dy. Manager (Loans) has been removed from services w.e.f. 25.09.13. Since said all three bank officials are already removed from services Sanction for prosecution against them is not required.
The aforesaid facts and circumstances constitute offences u/s 120-B r/w 420, 467, 468, 471 of IPC & Section 13(2) r/w 13 (1)(d) of PC act 1988 against Udai Pal Singh, Prop. M/s Sivani Agro India (A-1), Baldev Raj, Guarantor in M/s Guruji Trading Co. (A-2), Smt. Bimlesh Devi, Guarantor in M/s Sivani Agro India (A-3), Sarwan Kumar Garg (A-4), S.C. Pathak, the then Chief Manager, Mall Road Branch, Delhi (A-
5), Ravi Kumar Bharti, the then Dy. Manager (Loans), Mall Road Branch, Delhi (A-6) and Pyare Lal, the then Chief Manager, Mall Road Branch, Delhi (A-7) and substantive offences punishable u/s 420, 467, 468, 471 of IPC against Udai Pal Singh (A-1), Baldev Raj (A-2), Smt. Bimlesh Devi (A-3) & Sarwan Kumar Garg (A-4) and further substantive offences punishable u/s Section 13(2) r/w 13 (1)(d) of PC act 1988 against S.C. Pathak (A-5), Ravi Kumar Bharti (A-6) & Pyare Lal (A-7).
It is therefore, prayed that the cognizance of the above offences may be taken against the accused persons and they may be summoned, tried & punished in accordance with the RC No. 219/2012/E/0003/ EO-I/CBI/ND Page 24 of 158 CBI Vs. Udaipal Singh @ Udaipal Singh Chauhan & Ors.
law.
2. On the aforesaid allegations, the accused persons were charge sheeted under following offences i.e. u/S. 120-B r/w 420, 467, 468, 471 of IPC & Section 13(2) r/w 13 (1)(d) of PC act 1988 against Udai Pal Singh, Prop. M/s Sivani Agro India (A-1), Baldev Raj, Guarantor in M/s Guruji Trading Co. (A-2), Smt. Bimlesh Devi, Guarantor in M/s Sivani Agro India (A-3), Sarwan Kumar Garg (A-4), S.C. Pathak, the then Chief Manager, Mall Road Branch, Delhi (A-5), Ravi Kumar Bharti, the then Dy. Manager (Loans), Mall Road Branch, Delhi (A-6) and Pyare Lal, the then Chief Manager, Mall Road Branch, Delhi (A-7) and substantive offences punishable u/s 420, 467, 468, 471 of IPC against Udai Pal Singh (A-1), Baldev Raj (A-2), Smt. Bimlesh Devi (A-3) & Sarwan Kumar Garg (A-4) and further substantive offences punishable u/s Section 13(2) r/w 13 (1)(d) of PC act 1988 against S.C. Pathak (A-5), Ravi Kumar Bharti (A-6) & Pyare Lal (A-7).
3. On 02.01.2015 chargesheet was filed in the Court, cognizance was thereafter taken of the offence(s) vide order dated 28.04.2015. Thereafter, vide detailed order dated 27.01.2017, charges u/s 120B r/w 13(2) r/w. 13(1)(d) of the PC Act and Section 420, 467, 468, 471 IPC against all the accused persons i.e. A1 to A7 and charges for the substantive offences u/s 420, 467, 468, 471 IPC against accused Udaipal Singh @ Uday Pal Singh @ Udaipal Singh Chauhan (A-1), Smt Bimlesh Devi (A-3) (since expired) and Sh. Sarwan Kumar Garg (A-4) (since expired) and offences u/s 13(2) r/w 13(1)(d) of Prevention of Corruption Act 1988 (PC Act) against accused S. C. Pathak (Subash Chander Pathak) (A-5), Ravi Kumar Bharti (A-6) and Pyare Lal (A-
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7) were directed to be framed, whereafter, the formal charge(s) were framed accordingly on 07.02.2017, 16.02.2017 and 28.02.2017 against the accused persons, to which they plead not guilty and claimed trial.
4. Thereafter, admission / denial of relevant document(s) was also done by the accused persons / their Ld. Counsel(s) on various dates i.e. on 16.02.2017, 28.02.2017 and 08.03.2017.
5. Thereafter, prosecution has examined 54 witnesses in support of its case, the description of which is given as under :
PW-1 Sandeep Dabir, the then Asstt. General Manager, Assets Recovery Management Branch, PNB Rajinder Bhawan, Delhi is the complainant, who has deposed regarding the contents of his complaint Ex.PW1/A in the matter of borrower accounts of M/s Shivani Agro India and M/s Guruji Trading Company. He has also proved the relevant documents qua these two firms.
PW-2 Hemant Bhatia, the then Record Incharge, Office of Sub- Registrar-I, Kashmiri Gate Delhi has deposed that forwarding letter Ex.PW-2/A dated 30.01.2013 bears signatures of Sh. Manjeet Hooda vide which certified copy of sale deed Ex.PW-2/B (Colly) bearing registration no.10121 book no.1 volume no.1181, page 194 to 196 dated 11.11.1964 was provided to CBI. He further deposed that the document Ex.PW-2/B was transferred to department of Delhi Archives and copy of the same was obtained from the RC No. 219/2012/E/0003/ EO-I/CBI/ND Page 26 of 158 CBI Vs. Udaipal Singh @ Udaipal Singh Chauhan & Ors.
Department of Archives by then Sub-Registrar, vide letter Ex.PW- 2/C for submission to CBI. PW-2 Hemant Bhatia still further deposed that there is difference between certified copy of Sale Deed Ex.PW-2/B and Sale Deed Ex.PW-2/D (D-13) and elaborated some of the differences.
PW-3 Naresh Kumar, the then Tehsildar District Sonepat deposed that vide letter Ex.PW-3/A, he had handed over certified copies of three sale deeds Ex.PW-3/B, Ex.PW-3/C and Ex.PW-3/D to CBI and identified signatures of Sh. Fateh Singh, the then joint sub-registrar Sonepat. PW-3 Naresh Kumar has also deposed that as per procedure original sale deed after registration is given to the party and second original copy (without stamp paper) is kept in the sub-registrar office and is pasted in the register and both the copies are presented by the parties together at the time of execution by the parties concerned and registration before the sub-registrar.
PW-4 Om Prakash, the then Record Keeper Sub-Registrar office deposed that the letter Ex.PW-4/A bear the signatures of Sh. Sachinder Choudhary, the then Sub-Registrar and he was deputed by Sachinder Choudhary to handover the certified copies of sale deeds Ex.PW-4/B (Colly).
PW-5 Manjeet Hooda deposed that he was posted as Sub- Registrar-1, Kashmiri Gate Delhi from 01.08.2012 to 14.02.2015 and he explained the procedure of registration of sale deed. He RC No. 219/2012/E/0003/ EO-I/CBI/ND Page 27 of 158 CBI Vs. Udaipal Singh @ Udaipal Singh Chauhan & Ors.
deposed that vide letter Ex.PW-2/A, he had sent the certified copy of desired documents to Inspector CBI. He stated that the sale deed bearing registration no.3807 Ex.P-4 is genuine, but the map pasted at page no.8 on the sale deed is of sale deed bearing no.3808, which was also sold on the same date by the same parties. Both the maps/site plans got exchanged with each other. He also stated that sale deed bearing registration no. 3808 (Ex.P-5) is genuine but the map pasted at page no.7 in the sale deed is that of sale deed bearing registration no. 3807. PW-5 Manjeet Hooda further deposed that sale deed bearing registration no.9255 Ex.PW-5/C is genuine and matches with the certified copy and he also pointed out the differences in Ex.PW-2/B (D-64) and Ex.PW-2/D (D-13).
PW-6 Devender Kumar, the then Deputy Director (Systems), office of commissioner of income tax explained the procedure of issuance of PAN Card and he further deposed that he had sent reply Ex.PW-6/A in response of notice of IO. He also stated that the PAN Card of Baldev Raj Bhatia, copy of which is Ex.PW-6/C having PAN Number AAGBB5032 R was fake and invalid.
PW-7 Virender Dagar, then then sub-registrar-IV-A, Pitam Pura Delhi has deposed that in the year 2013-14 and he had been asked by the IO to compare and match the original sale deed Ex.PW-7/A and certified copy Ex.PW-4/B. PW-8 Sh. J.S. Rana, then then SDM Punjabi Bagh New Delhi RC No. 219/2012/E/0003/ EO-I/CBI/ND Page 28 of 158 CBI Vs. Udaipal Singh @ Udaipal Singh Chauhan & Ors.
deposed that Inspector S.S. Yadav had shown him certified copy of sale deed Ex.PW-4/B and original sale deed Ex.PW-7/A and he had compared them and on comparison he found that their contents were same except minor variations in the signatures of Reader Dharambir on both the documents at point B. PW-9 Raj Kumar, the then Sub-Registrar III, Asaf Ali Road, Delhi deposed that the forwarding letter Ex.PW-9/A bears the signatures of Sh. Gopal Aggarwal and vide this letter the certified copy of relinquishment deed Ex.PW-9/B (D-60) regarding registration no.818 book no.I, Volume no.10174, page no.179 to 181 was handed over to CBI. He also deposed that original sale deed Ex.PW-9/C and a relinquishment deed Ex.PW-9/B have the same contents and Ex.PW-9/C is a genuine document.
PW-10 Amit Gupta deposed that he was empaneled advocate of Punjab National Bank and he had verified documents and given legal opinion regarding four properties furnished by the borrower with PNB, Mall Road Branch. He further deposed that genuineness certificate Ex.PW-10/A, Ex.PW-10/B, Ex.PW-10/C and Ex.PW-10/D bear his initials and signatures and the said certificates were given after obtaining certified copy from Sub- Registrar office. He also deposed that he opined in his genuineness certificates that the documents pertaining to the properties mentioned in the above genuineness certificates were forged.
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PW-11 Ram Singh deposed that in the year 2007 he was panel valuer of Punjab National Bank and he gave the valuation report Ex.PW-11/A dated 23.05.2007 after visiting property i.e. plot no.807/19A-15, New No.3304, Gali No.6, Gurudwara Wali, Dharampura, Gandhi Nagar Delhi on 22.05.2007, where owner of the property Baldev Raj met him and shown him the property and he took measurement and photographs of the said property which were enclosed with Ex.PW-11/A. PW-12 Amarjeet Singh, the then Asstt. Manager, New India Assurance Company deposed that policy number 310700/11/08/11/00000080 (Ex.PW-12/A), policy number 310700/46/08/04/00000091 (Ex.PW-12/B), policy number 310700/11/08/11/00000115 (Ex.PW-12/C), policy number 310700/46/08/04/00000092 (Ex.PW-12/D), policy number 310700/11/08/11/00000116 (Ex.PW-12/E), policy number 310700/11/08/11/00000117 (Ex.PW-12/F) were issued by him and all of them were taken by Punjab national bank for M/s Guruji Trading Company and these policies were renewal policies and he did not go for inspection of the property/stocks at the time of renewal, because it was not required by the company as per norms of his company.
PW-13 Ram Naresh Sharma, LDC ward No.26, Trade and Tax Department deposed that the forwarding letter Ex.PW-13/A bears the signatures of Smt. Mithlesh Gupta, Commissioner and that he RC No. 219/2012/E/0003/ EO-I/CBI/ND Page 30 of 158 CBI Vs. Udaipal Singh @ Udaipal Singh Chauhan & Ors.
had handed over documents mentioned therein to Inspector M.R. Atrey, CBI. He further deposed that Ex.PW-13/B (colly) and Ex.PW-13/C were certified by him.
PW-14 Gaurav Jain deposed that his grand mother Premwati had sold shop no. 5 & 6, Naya Bazar, both bearing MPL No. 111/2257 to accused Udai Pal Singh and the sale deeds Ex.PW-4 and Ex.P-5 bear her signatures and photographs.
PW-15 J.L. Singhla deposed that he was working with PNB as panel lawyer and gave opinion Ex.PW15/A to branch manager PNB Branch, Mall Road, Delhi in respect of property house no.A- 29/B-30, Malviya Nagar, Earlier out of Quilla No. 49/17/2, Mehlana Road, Sonepat belonging to Smt. Shakuntala Devi and Opinion Ex.PW15/B regarding certified copy of sale deed in respect of plot no. 1273, Sector 23, Urban Estate, Sonepat, belonging to Satbir Sharma.
PW-16 Kanji Ram deposed that Deen Dayal Saini was his brother-in-law and during the course of investigation he handed over documents Mark PW-16/A1 to A9 to the CBI. He identified the photograph of late Sh. Deen Dayal Saini at point A, photograph of Smt. Dhanvantari at point B, Smt. Dulari at point C, late Smt. Taro at point D and of Smt. Kalawati at point E, on relinquishment deed Ex.PW-9/C. RC No. 219/2012/E/0003/ EO-I/CBI/ND Page 31 of 158 CBI Vs. Udaipal Singh @ Udaipal Singh Chauhan & Ors.
PW-17 Pradeep Kumar Pandey deposed that he was doing his business of property dealing and construction of properties from property No.3304, Gurudwara Wali Gali, Dharampura, Gandhi Nagar, Delhi and this property belonged to accused Baldev Raj Bhatia and he operated the said business from the above said property up to year 2005-2006. He identified the property in the photographs Ex.P-81 to 84 (D-23) and photographs PW-17 Mark A to Mark D. PW-18 Vijay Kumar Singhal deposed that 10-12 years back on the request of accused Uday Pal Singh, he became a witness to the execution of sale deed of property situated in Gali Hingabeg Phatak, Hawas khan Delhi and identified his signatures and photographs and the photograph of accused Uday Pal Singh on Sale Deed Ex.A-1/P-4 and Ex.A-1/P-5.
PW-19 Ankush Aggarwal deposed that in November 2013, he was working with M/s Aarti Agro Industries and had handed over some documents including rent receipts Ex. PW19/B and Ex.PW19/C issued on behalf of M/s. Aarti Agro in favour of Guruji Trading Company and computerized statement of account of M/s. Aarti Agro Industries with regard to business transaction with M/s. Guruji Trading Co. Ex.PW19/D and Ex.PW19/E, to CBI vide production memo Ex.PW19/A. PW-20 Vijay Kumar Sharma deposed that in December 2014 he RC No. 219/2012/E/0003/ EO-I/CBI/ND Page 32 of 158 CBI Vs. Udaipal Singh @ Udaipal Singh Chauhan & Ors.
was posted as AGM in SAMB Branch New Delhi and had handed over certain documents i.e. Ex.PW20/A-1 to Ex.PW20/A-12 to CBI vide Ex.PW20/A. He also deposed that the accounts of M/s. Sh. Shyam Industries turned NPA at G. T. Karnal Road branch of SBI which was thereafter transferred to SAMB branch SBI New Delhi and this account was sold to ARCIL in the year 2014 for the purpose of recovery from the defaulters.
PW-21 Neeraj Pal deposed that in July 2012, while he was posted in the department of trade and taxes, ITO, New Delhi and he had handed over documents regarding M/s. Shivani Agro India to CBI vide forwarding letter Ex.PW21/A. He further deposed that he handed over documents Ex.PW21/A-1 to Ex.PW21/A-34 from the available copy in his office file of M/s. Siwani Agro India.
PW-22 Rajesh Jain deposed that he was running his business of Sanmaika Plywood from 8421, Arya Nagar, Pahar Ganj, Delhi, whose landlord was Sh. Deen Dayal Saini and on his request, he accompanied him to the office of Sub-Registrar, Asaf Ali Road, Delhi to become a witness to the relinquishment deed Ex.PW9/C bearing the photograph of Deen Dayal Saini at point A and his sisters at point B, C and D. PW-23 Vijay Bhatia deposed that his father Baldev Raj Bhatia had possessed two properties i.e. property no. IX/3304, Dharampura, Gali no. 7, Gurudwara Gali, Gandhi Nagar Delhi and RC No. 219/2012/E/0003/ EO-I/CBI/ND Page 33 of 158 CBI Vs. Udaipal Singh @ Udaipal Singh Chauhan & Ors.
property no. IX/3301, Dharampura, Gali no. 7, Gurudwara Gali, Gandhi Nagar Delhi and document i.e. Sale deed Ex.PW2/D (colly) does not bear signature of his father at any place.
PW-24 Giriraj Singh deposed that in the year 2007, he was posted at Khari Baoli Branch of State Cooperative Bank, and he knew Deen Dayal Saini, Satbir Sharma and accused Uday Pal Singh, who were having account in his bank. He further deposed that he introduced Deen Dayal Saini to Satbir Sharma who had applied for loan from Punjab National Bank and Deen Dayal stood his guarantor. He further deposed that after taking the loan from the bank Satbir Sharma had given Rs.25 Lakhs to Deen Dayal Saini in his presence and he came to know that aforesaid loan amount was arranged to be taken in the name of Uday Pal Singh through firm M/s Shivani Agro India Ltd. and not in the name of Satbir Sharma and all this arrangements were made by Satbir Sharma.
PW-25 Smt. Sarita Jain deposed that her husband Sh. Vinod Kumar Jain had purchased a plot at Sonepat and the sale deed was executed in her name. She also deposed that on request of Satbir Sharma, she signed as a guarantor and Satbir Sharma arranged loan in the name of M/s. Shivani Agro India through accused Uday Pal Singh and the papers of the property were mortgaged in the said loan as collateral security. She further deposed that she had executed the sale deed in favour of Smt. Mukesh Sharma on the asking of son of Satbir Sharma and remaining amount of sale RC No. 219/2012/E/0003/ EO-I/CBI/ND Page 34 of 158 CBI Vs. Udaipal Singh @ Udaipal Singh Chauhan & Ors.
property of Rs.22 Lakhs was received by her in cash. PW-25 Sarita Jain further stated that by virtue of document Ex.PW25/A, she had purchased the property situated at Quila No. 49/17/1 and 49/17/2, Khewat 748/656 and 242/205, Mahalna Road, Sonepat.
PW-26 Ashok Bhatia deposed that his father Sh. Mulk Raj Bhatia had jointly purchased property bearing Municipal No. IX/3304, Gali No. 7, Dharampura, Gandhi Nagar, Delhi with his younger brother Baldev Raj and property Bearing No. IX/3515, Sundar Chowk, Mahaveer Gali, Gandhi Nagar, Delhi in his own name and the property bearing no. 3301, Gali No. 6, Dharampura, Gandhi Nagar was owned by his uncle Baldev Raj Bhatia who had mortgaged the said property with Syndicate Bank for availing the loan which was cleared by Baldev Raj Bhatia. He further deposed that there was an agreement/settlement between him and his uncle Baldev Raj Bhatia with regard to Properties No. IX/3304, Gali No. 7, Dharampura, Gandhi Nagar, Delhi and IX/3301, Gali No. 6, Dharampura, Gandhi Nagar, Delhi and he executed Relinquishment Deed in favour of Baldev Raj Bhatia regarding his share and Baldev Raj Bhatia made Gift Deed in favour of his wife Veena Bhatia with regard to the Property No. IX/3301, Gali No. 6, Dharampura, Gandhi Nagar, Delhi. He identified the photograph of Baldev Raj Bhatia on Exhibit PW-81, Exhibit PW-82, Exhibit PW- 83 and Exhibit PW-84.
PW-27 Ashok Bansal, Chartered Accountant deposed that he is in RC No. 219/2012/E/0003/ EO-I/CBI/ND Page 35 of 158 CBI Vs. Udaipal Singh @ Udaipal Singh Chauhan & Ors.
practice since 1992, but had not worked with any firm of M/s Shivani Agro India, 2257, Gali Hingabeg, IInd Floor, Naya Bazar, Delhi or accused Udai Pal Singh nor he knew accused Udai Pal Singh. He further deposed that document Exhibit PW-27A (Colly), Exhibit PW-27/B (Colly), Exhibit PW-27/C (Colly), Exhibit PW- 27/D (Colly), Exhibit PW-27/E (Colly), Exhibit PW-27/F (Colly), Exhibit PW-27/G (Colly) and Exhibit PW-27/H (Colly) have no concern with him or his firm and the signatures and seal appearing on these exhibits does not belong to him or his firm in any manner and he does not know any Satbir Sharma. He further deposed that he had handed over copy of his I.Card Ex.PW27/I to CBI.
PW-28 Rakesh deposed that property no. 446, Sector -23, Sonepat Haryana, belongs to his wife. He stated that he never joined business of his late father i.e accused Satbir Sharma, who expired in the year 2013 due to suicide. He also stated that a suicide note was found in his shirt pocket in which his father had written that one bank manager Ravi Bharti and other Sharvan Kumar had taken his father's signatures fraudulently on the loan document of M/s. Shyam Trading Company. He had handed over the death certificate of his father, Ex.PW28/A to CBI.
PW-29 Suresh Chand Lahoti deposed that he was posted at New India Assurance Co. and during tenure of his service, he had issued several insurance policies under his signature. He deposed that policy Exhibit PW-29/A, Exhibit PW-29/B, Exhibit PW-29/C, RC No. 219/2012/E/0003/ EO-I/CBI/ND Page 36 of 158 CBI Vs. Udaipal Singh @ Udaipal Singh Chauhan & Ors.
Exhibit PW-29/D, Exhibit PW-29/E, Exhibit PW-29/F, were issued under his signature and Exhibit PW-29/H, Exhibit PW-29/I, Exhibit PW-29/J, Exhibit PW-29/K were issued under the signatures of A.S. Ahuja, Authorized Signatory of the Co. and the premiums against the said policies were financed by Punjab National Bank.
PW-30 Sh. Vijay Kumar stated that he was running business under the name and style as M/s Neki Ram Vijay Kumar from the premises no. 2257, 2nd Floor, Naya Bazar, Delhi and the said firm was closed on 31.03.2014. He deposed that he knew Satbir Sharma and Udai Pal Singh and he never dealt or had any business with the firm M/s Guruji Trading Co. of Satbir Sharma and as such there was no question of issuing any bills in the name of his firm and bills Exhibit PW-30/A, Exhibit PW-30/B and Exhibit PW-30/C were forged and fake as he had never purchased any rice from M/s Guruji Trading Co.
PW-31 Ram Mehar Sharma deposed that he had opened his firm M/s Vijay Shree Enterprises from premises no. 2257, Second Floor, Gali Raghunandan, Naya Bazar, Delhi-6 and closed the same in the year 2014. He stated that he knew Satbir Sharma as his nephew Vijay Kumar used to work with him, but he had never dealt with Satbir Sharma regarding the sale purchase of rice or other food grains. He stated that the bills Ex.PW30/B and Ex.PW30/C issued in the name of Vijay Shree Enterprises are fake and he had no concern with him or with his firm M/s. Vijay Shree Enterprises.
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PW-31 Sunil Kumar Garg (inadvertently examined as PW31 again) deposed that he constituted his firm in the name of M/s. S. K. Garg and Associate after qualifying Chartered Accountant examination(s) in the year 1993 and closed the said firm in the year 1997. He stated that the audit report Ex.PW31/A purported to be given in the name of S. K. Garg and Associates is a fake one and had no concern with him at all and signatures/initials appearing on the report at point A on each page were not his signatures.
PW-32 Rajiv Kumar deposed that from November 2009 to 2011 and in December 2014, he was posted in Model Town Branch SBI and Smt. Bimlesh Devi was having CC Limit Account at G. T. Karnal Branch and at the time of opening the said CC Limit account, she had signed the documents Ex. PW32/A, PW32/B, Ex. PW32/C and Ex.PW32/D in his presence. He stated that copy of sale deed Ex.PW32/H was offered for equitable mortgage against CC Limit and he had obtained title investigation report and Valuation Report in respect of the said property from the bank empaneled Advocate.
PW-33 Shripal Singh deposed that he was posted as branch manager, State Bank of India, G. T. Karnal Road and knew Smt. Bimlesh Devi, proprietor of Sh. Shyam Industries who had applied for loan and he had processed the loan proposal to higher authorities which was sanctioned vide document D-86. He RC No. 219/2012/E/0003/ EO-I/CBI/ND Page 38 of 158 CBI Vs. Udaipal Singh @ Udaipal Singh Chauhan & Ors.
identified the signatures of Bimlesh Devi on Account Opening Form Ex. PW32/A and documents Ex.PW32/B and Ex.PW32/C. He stated that Smt. Bimlesh Devi had offered the title deed, Ex. PW32/H, of property no. 2252/1711 Ganesh Pura, Tri Nagar, Delhi for equitable mortgaged against the cash credit limit.
PW-34 Smt. Kanta Sharma deposed that she was posted in PNB, Mall Road Branch form 2003 to January 2011, where accused Ravi Kumar Bharti was posted as Dy. Manager and S. C. Pathak was posted as chief manager. She deposed that the loan file Ex.PW34/A of M/s. Guruji Trading Co. was maintained in her branch and bears her signature at page no. 960 as witness, signatures of accused S. C. Pathak at point B and B1 and Ex. PW34/A1 (agreement of guarantee) bear signatures of Baldev Raj at point C. She added that the agreement of guarantee (at page 968 to 971) was executed by Smt. Shakuntala Devi W/o Satbir Sharma regarding CC Limit sanctioned to M/s. Guruji Trading Co. and the same is Ex.PW34/A2 and documents Ex.PW34/A3, Ex.PW34/A1, Ex.PW34/A4, Ex.PW34/A5, Ex.PW34/A6, Ex.PW34/A7, Ex. PW34/A8, Ex.PW34/A10, Ex.PW34/A11, Ex.PW34/A12, Ex.PW34/A13 were executed in her presence and Ex.PW34/A9 is confidential report regarding Baldev Raj who stood as guarantor for M/s. Guruji Trading Co. She identified the photograph of Baldev Raj at point A on Ex.PW34/A1, who was introduced by accused Ravi Kumar Bharti to her and asked her to become witness with guarantee documents and Baldev Raj signed at point A on RC No. 219/2012/E/0003/ EO-I/CBI/ND Page 39 of 158 CBI Vs. Udaipal Singh @ Udaipal Singh Chauhan & Ors.
Ex.PW34/A6 and Ex.PW34/A8 bears the signature of co-accused S. C. Pathak at point A, Ex. PW34/A9 bears signature (of Ravi Kumar Bharti) at point A. PW-35 Kumar Chanchal deposed that he was working as Sub- Registrar, Birth and death department, Mandir Marg, New Delhi and the death certificate Ex.PW35/A of Sh. Deen Dayal Saini was issued from his office and under the signatures of Narender Kumar Bhardwaj, Sub-Registrar.
PW-36 H. K. Jain stated that he was working as Joint Secretary with Institute of Chartered Accountants of India, Northern Regional office, Vishwas Nagar, Delhi and had provided information with qua to Ashok Kumar, Chartered Accountant and Sunil Kumar, Chartered Accountant vide Ex.PW36/A and Ex.PW36/B respectively, to CBI from official record.
PW-37 Anil Ghildiyal deposed that during the period November 2005 to February 2007, he was posted as Sub-Registrar, Kashmiri Gate, Delhi the Sale deeds Ex.A-1/P-4 (D-15), Ex.A-1/P-5 (D-16) were registered by him and the same bear his signature at point A, B and C. He further deposed that in certified copy Ex.PW5/A (colly) (D-64) which is purported to be certified copy of the document Ex.A-1/P4 and certified copy Ex.PW5/B (colly) (D-64) which is purported to be certified copy of the document Ex.A-1/P5, there is change in description of properties.
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PW-38 Neha Ailawadi deposed that she was posted as clerk in branch office, Mall Road and during the said period accused S. C. Pathak was posted as branch Manager and accused Ravi Bharti was posted as Dy. Managar (loan). She stated that Ex.PW34/A-13, Ex.PW34/A-12, Ex.PW34/A-11, Ex.PW34/A-10, Ex.PW34/A-2, Ex.PW34/A-3, Ex.PW34/A-1, Ex.PW34/A-4, Ex.PW34/A-5, Ex.PW34/A-6, Ex.PW34/A-8 and Ex.PW34/A-9 were prepared/ filled up by her on the instruction of accused Ravi Bharti and were executed in her presence and Ex.PW34/A-1 bears signature of S. C. Pathak and guarantor Baldev Raj. She also deposed that Ex.PW34/A-5 bears signature of accused Ravi Bharti at point B and accused S. C. Pathak at point A. She deposed that guarantor Baldev Raj was introduced to her by accused Ravi Bharti.
PW-39 Anil Kumar Jain deposed that he was empaneled Advocate of PNB, Mall Road Branch and the report Ex.PW39/A in respect of property bearing no. 825, A/30, Malviya Nagar, Malwa Road, near Sector -23, Sonepat Haryana, report Ex.PW39/C in respect of property bearing khasra no. 683 and now new number 8421, Area measuring 68 sq. yds, situated at Basti Achhut, Qadam Sharif colony, known as Arya Nagar, Pahar Ganj, Delhi in the name of Deen Dayal Saini, report Ex.PW-39/E in respect of property shop no.5, part of property no.111/2257 (new), ground floor gali hingabeg phatak,Habash Khan, Delhi-06 in the name of Udai Pal Singh, report Ex.PW-39/G in respect of property shop no.6, part of RC No. 219/2012/E/0003/ EO-I/CBI/ND Page 41 of 158 CBI Vs. Udaipal Singh @ Udaipal Singh Chauhan & Ors.
property no.111/2257 (new), ground floor gali hingabeg phatak,Habash Khan, Delhi-06 in the name of Udai Pal Singh, report Ex.PW-39/I in respect of property bearing no.2252/171 area measuring 100 sq.yards out of Khasra No.620/552, Khevat No.1, built on plot no.130, situated in the area of village of Choukari, Mubarka Bad, Abadi Known as Ganesh Pura, Tri Nagar, Delhi in the name of Bimlesh Devi were submitted by him and receipts issued by office of sub-registrar for carrying the inspection of the record on the above subject matter of reports were at Ex.PW-39/B, Ex.PW-39/D, Ex.PW-39/F, Ex.PW-39/H, Ex.PW-39/J. PW-40 Ms. Simmi Dua deposed that she is an empaneled advocate on the panel of Punjab National Bank, Mall Road, Delhi and had given report Ex.PW-40/A in respect of property 1/5th share of Kila plot bearing quilla no.49/17/1 and 49/17/2 new allotment municipal bearing no 825, A/30, Malviya Nagar, Malva Road, Near Sector 23, Sonepat Haryana in the name of Smt. Sarita Jain report Ex.PW-40/C in respect of property bearing Khasra No. 683 and new no.8421 area measuring 68 sq. yards situated at basti Achoot Qadam Shareef, Arya Nagar, Pahar Ganj in the name of Deen Dayal Saini, Report Ex.PW-40/E in respect of shop no.5, property No.111/2257 Ground floor, Gali Hingabeg Phatak Habash Khan and Ex.PW-40/G in respect of shop no.6 of property No.111/2257 Ground floor, Gali Hingabeg, Phatak Habash Khan in the name of accused Udai Pal Singh, Report Ex.PW-40/H in respect of property bearing no.2252/171 area measuring 100 sq.yards out of Khasra RC No. 219/2012/E/0003/ EO-I/CBI/ND Page 42 of 158 CBI Vs. Udaipal Singh @ Udaipal Singh Chauhan & Ors.
No.620/552, Khevat No.1, built on plot no.130, situated in the area of village of Choukari, Mubarka Bad, Abadi Known as Ganesh Pura, Tri Nagar, Delhi in the name of Bimlesh Devi and Report Ex.PW-40/J in respect of property bearing no.9/3304 on plot no.4 area measuring 164 sq.yards out of Khasra No.466/124/1/12, situated in the area of village of Seelam Pur, Abadi Known as Gandhi Nagar, Shahdara Delhi in the name of Baldev Raj whereby she opined that all these properties were free from all sort of encumbrances.
PW-41 Sh. V. Balasubramaniam, Income Tax Officer, deposed that vide letter Ex.PW-41/A, he submitted printouts of income tax returns/acknowledgement in respect of Assessee Satbir Sharma having PAN No.ABJPS5193G, Ex.PW-41/B & Ex.PW-41/C from income tax department Data base and deposed that there is difference in amount of income shown in Ex.PW-41/D and Ex.PW- 41/D1.
PW-42 Madan Lal Trehan deposed that his father-in-law Baldev Raj Bhatia had purchased property no.IX/3304 and property no.IX/3301, Gali No.7, Dharampura, Gandhi Nagar, Delhi along with Sh. Mulk Raj Bhatia, in the year 1961 from Mrs. Ajeet Kaur and in family settlement share in the property no. IX/3304 was given to his father-in-law by the legal heirs of Sh. Mulk Raj Bhatia and share of property no. IX/3301 was given by his father-in-law to legal heirs of Sh.Mulk Raj Bhatia and both the properties are now RC No. 219/2012/E/0003/ EO-I/CBI/ND Page 43 of 158 CBI Vs. Udaipal Singh @ Udaipal Singh Chauhan & Ors.
sold out. He identified the signatures of his father in law Sh. Baldev Raj Bhatia on the sale deed Ex.PW42/A executed by Smt. Ajeet Kaur, at point B. He stated that the sale deed Ex.PW-2/B (D-13) in respect of property no.IX/3304, Gali No.7, Dharampura, Gandhi Nagar, Delhi does not bear signatrures of his father in law Baldev Raj Bhatia at point A. He stated that the photograph Ex. P-81 is of his father-in-law Baldev Raj Bhatia at internal page no.2192 of D-21, however, the photograph affixed on Ex.PW- 34/A6 shown to be in the name of Baldev Raj Bhatia is not the photograph of his father-in-law Baldev Raj Bhatia.
PW-43 Ram Chander Chopra deposed about the procedure of sanction of credit facilities and stated that he carried out inspection of the branch and submitted special reports and investigation reports in the account of M/s Shivani Agro India, Ex.PW-43/A and M/s Guruji Trading. He frurther deposed that he had submitted the investigation report Ex.PW-43/B to DGM, wherein he incorporated various lapses on the part of branch officials S.C. Pathak, Ravi Kumar Bharti, Pyare Lal, Smt. Rekha Srivastava and Rohit Bhatia. He stated that in his report he referred supporting documents Ex.P- 56, which were prepared by co-accused(s) Ravi Bharti and Pyare Lal, Inspection report Ex.PW-43/C, Balance Sheet and trading and profit and loss account Ex.PW-43/D and Ex.PW-43/E, house tax receipt Ex.PW-43/F, surety bond executed by accused Ravi Bharti Ex.PW-43/G, copy of drawing power register Ex.P-66, legal opinion Ex.PW-43/H and Deed of Conveyance Ex.PW-43/I. RC No. 219/2012/E/0003/ EO-I/CBI/ND Page 44 of 158 CBI Vs. Udaipal Singh @ Udaipal Singh Chauhan & Ors.
PW-44 Om Prakash deposed that he retired from Punjab National Bank, Mall Road, Delhi explained the process of applying for loan/CC limit and the verification of balance sheets prepared by CA. He identified the signatures of accused S. C. Pathak and Ravi Bharti on the proformas Ex.PW-44/A, Ex.PW-44/B and Ex.PW- 44/C. PW-45 Bhagirath Ram Choudhary deposed that he was posted as Assistant General Manager at Branch Office, Punjab National Bank, Mall Road, Delhi and during investigations he examined various documents and pointed out various lapses committed by the respective bank officials while granting credit facilities to M/s Guruji Trading Company and elaborated those lapses.
PW-46 Ishwar Saini deposed that his father Deen Dayal Saini was having ancestral property having house no.8421,Arya Nagar, Pahar Ganj, New Delhi, which was transferred in his name by way of relinquishment deed Ex.PW-9/7. He also deposed that his father had expired on 04.03.2014 and at the time of his death he used to live in the aforesaid property at Paharganj and during the investigation he had submitted documents Ex.PW-46/A to the IO.
PW-47 Kirpal Singh Budhraja, Senior Manager, Circle Office, Punjab National Bank, Rajindra Place, New Delhi deposed that he handed over certain documents to CBI in respect of the accounts in RC No. 219/2012/E/0003/ EO-I/CBI/ND Page 45 of 158 CBI Vs. Udaipal Singh @ Udaipal Singh Chauhan & Ors.
the name of M/s Guruji Trading Company and M/s Shivani Agro India maintained with the Punjab National Bank, Mall Road Branch Delhi vide seizure memo Ex.PW-47/A, Ex.PW-43/D1, Ex.PW-47/B, Ex.PW-47/C and Ex.PW-47/D. He stated that the confidential reports Ex.PW47/E, Ex.PW47/F and Ex.PW47/G, Ex.PW47/L, Ex.PW47/M, Ex.PW47/V bear signatures of accused S.C. Pathak and Ravi Bharti and declaration given by the guarantor is at Ex.PW47/H, Ex.PW47/I, Ex.PW47/J, Ex.PW47/K, Ex.PW47/N, Ex.PW47/O. He also deposed that the letter Ex.PW47/P, Ex.PW47/R bear signature of AGM Sh. Rajeev Azad and Ex.PW47/T & Ex.PW47/W are signed by Chief Manager Sh. Joseph Gomes.
He stated that the loan application Ex.PW47/X, letter of hypothecation Ex.PW47/Z, consent letter Ex.PW47/A1, hypothecation of movable asset Ex.PW47/A2, letter of confirmation of deposit of title deeds Ex.PW47/A5, loan application Ex.PW47/A7, letter of hypothecation Ex.PW47/A9, consent letter Ex.PW47/A10, hypothecation of movable asset Ex.PW47/A11, consent letter Ex.PW47/A15 bear signature of accused Udaipal Singh and loan proposal Ex.PW47/Y & loan proposal Ex.PW47/A8 bear signature of accused Ravi Kumar Bharti and S.C. Pathak. He further stated that the agreement of personal guarantee Ex.PW47/A3, consent letter Ex.PW47/A4, confirmation of deposit of title deed Ex.PW47/A6, agreement of personal guarantee Ex.PW47/A14, consent letter Ex.PW47/A15 bear signature of Sarita Jain and Satbir Sharma and agreement of RC No. 219/2012/E/0003/ EO-I/CBI/ND Page 46 of 158 CBI Vs. Udaipal Singh @ Udaipal Singh Chauhan & Ors.
personal guarantee Ex.PW47/A2, consent letter Ex.PW47/A13, letter of confirmation Ex.PW47/A18, agreement of personal continuing guarantee Ex.PW47/A26, consent letter Ex.PW47/A27, letter with regard to continuity against security Ex.PW47/A30 bear signatures of Accused Bimlesh Devi and also signature of Deen Dayal Saini.
He stated that letter with regard to continuity against security of enhanced credit sanction Ex.PW47/A16, letter of hypothecation Ex.PW47/A21, consent letter Ex.PW47/A22, hypothecation of movable asset Ex.PW47/A23, letter with regard to continuity against security Ex.PW47/A28, balance and security confirmation letter Ex.PW47/A32 were executed by Accused Udai Pal Singh and letter Ex.PW47/A17, agreement of personal continuing guarantee Ex.PW47/A24, consent letter Ex.PW47/A25, letter with regard to continuity against security Ex.PW47/A29 were executed by Smt. Sarita Jain, confirmation of deposit of title deed Ex.PW47/A19 was executed by Deen Dayal Saini. PW-47 Kirpal Singh Budhraja further stated that the loan proposal with sanction Ex.PW47/A20 bears signatures of accused Ravi Bharti and Pyare Lal and agreement of guarantee Ex.PW47/A16 was executed by Baldev Raj and the same also bear signature of accused Ravi Bharti. He further deposed that consent clause Ex.PW47/A18 was signed Accused Satbir Sharma and consent clause Ex.PW47/A19 was signed Accused Baldev Raj, consent clause Ex.PW47/A21 was executed by Smt. Shakuntala Devi.
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PW-48 Mukesh Saroha deposed that he was serving as Sub- Registrar Birth and Death, Municipal Corporation, Sonepat, Haryana and had provided the death certificate of accused Satbir alongwith his forwarding letter Ex.PW48/B to CBI and death certificate Ex.PW28/A. PW-49 Prem Prakash Mittal deposed that he was posted as Chief Concurrent Auditor at PNB Branch, Gujran Wala Town, Delhi and he was deputed to conduct Special investigation in the entire credit portfolio of branch office Mall Road, Delhi and after conducting the investigations he submitted his report alongwith annexures which is Ex. PW49/A and he also wrote letter Ex. PW49/B to Deputy General Manager, Zonal Office, Faridabad in reference to special investigation report.
PW-50 Suraj Juneja deposed that he was posted in VAT Department as AVATO and joined investigations with CBI and explained the procedure of becoming dealer of VAT Department. He stated that M/s Shivani Agro India and M/s Guruji Trading Co. were registered with the Department and both the firm were mainly dealing in non taxable items and both the firms had not paid any tax from the date of their registration till cancellation of their registration and he had handed over document Exhibit PW-50/A to CBI.
PW-51 S.M. Bansal deposed that he is a Govt. approved property RC No. 219/2012/E/0003/ EO-I/CBI/ND Page 48 of 158 CBI Vs. Udaipal Singh @ Udaipal Singh Chauhan & Ors.
valuer and he was empaneled property valuer with Punjab National Bank (PNB) and he inspected several properties and submitted valuation reports to PNB, Mall Road Branch, Delhi upon receiving the reference from accused Ravi Bharti and prepared and submitted valuation report Exhibit PW-51/A (D-24), valuation report Exhibit PW-51/B, valuation report Exhibit PW-45/32 (D-20), valuation report Exhibit PW-45/33 (D-20), valuation report Exhibit PW- 45/30, (D-21), valuation report Exhibit PW-51/C (D-6), valuation report Exhibit PW-51/D (D-6), valuation report Exhibit PW-51/E (D-4), valuation report Exhibit PW-51/F, (D-4), valuation report Exhibit PW-51/G, (D-22), valuation report Exhibit PW-45/31, (D-
22), valuation report Exhibit PW-51/H, (D-23), valuation report Exhibit PW-51/I, (D-25), valuation report Exhibit PW-51/J, (D-26), valuation report Exhibit PW-51/K, (D-27) and during the investigation he submitted documents Exhibit PW-51/L. PW- 52 Vijai Chettiar deposed that he was serving as Inspector in the office of EO-1, 3rd Floor, CBI, HQrs, New Delhi and the present case was registered on the basis of complaint Exhibit PW- 1/A received from Punjab National Bank (PNB) and FIR bears signature of Sh. Bhupinder Kumar at Exhibit PW-52/A. He stated that after registration of FIR, vide RC No. 3(E)/2012 investigation was entrusted to him and during the investigation he seized several documents vide Seizure/Production Memo Exhibit PW-52/B (Colly), Exhibit PW-52/C (Colly), Exhibit PW-47/A. RC No. 219/2012/E/0003/ EO-I/CBI/ND Page 49 of 158 CBI Vs. Udaipal Singh @ Udaipal Singh Chauhan & Ors.
PW-53 S.S. Yadav deposed that he was posted as Inspector in EO- 1, CBI, Hqrs., New Delhi and present case was transferred to him from Vijai Chettiar and during the investigation of the case he recorded the statement of various prosecution witnesses and also seized/collected several documents from various authorities including the banks. He stated that he received documents vide forwarding letter Exhibit PW-47/W, Exhibit PW-9/A, Exhibit PW- 6/A, Exhibit PW-36/A, Exhibit PW-3/A, Production Memo Exhibit PW-19/A, Letter Exhibit PW-52/A and after his retirement he handed over the further investigation with entire record to M.R. Attrey, Inspector.
PW-54 M.R. Attrey is the final investigating officer of the case and has deposed regarding the investigations, as were carried out by him during the course of this case. He stated that he received information in respect of accused S.C. Pathak, Pyare Lal, Ravi Bharti vide letter Exhibit PW-47/P and also received documents vie letter Exhibit PW-47/R, Exhibit PW-54/A, Exhibit PW-36/B, Exhibit PW-21/A, Exhibit PW-13/A, Exhibit PW-41/A, Exhibit PW-20/A and he also verified death of Satvir Sharma and Deen Dayal Saini the Death Certificate of whom are at Exhibit PW-28/A and Exhibit PW-35/A respectively and after completion of investigations he filed the charge sheet in the Court.
6. Thereafter, the statements of all the accused persons u/S. 313 CrPC were recorded in which the defence of all the accused persons was that RC No. 219/2012/E/0003/ EO-I/CBI/ND Page 50 of 158 CBI Vs. Udaipal Singh @ Udaipal Singh Chauhan & Ors.
they had been falsely implicated in this case, however, the accused Udaipal Singh, Sarwan Kumar Garg (since expired), S. C. Pathak and Ravi Kumar Bharti have examined themselves u/S. 315 CrPC as DW2, DW1, DW6 and DW7 respectively. In addition to them, (inadvertently examined as DW1 again) Sh. Vinod Kumar Singh, DW4 Sh. Mani Mattam Thomas, DW5 Noor Alam, DW5/A1 Sh. Hoshiar Singh, DW5/A2 Sh. Ajay Kumar Kapoor and DW5/A3 Ms. Pooja Bhatt have also been examined by the accused persons in support of their defence.
7. I have heard Sh. Suraj Prakash Sharma, Ld. Counsel for (A-1), Ms. Sima Gulati, Ld. Counsel for (A-5), Sh. Harsh K. Sharma, Ld. Counsel for (A-6), Sh. Rajesh Khanna, Ld. Counsel for (A-7) and Sh. V. K. Pathak, Ld. PP for CBI and also gone through the written submissions filed by Ld. PP for CBI and also by Ld. Counsel(s) for accused (A-1), (A-5), (A-6) and (A-7).
8. Ld. PP for CBI has relied upon the following judgments in support of his contentions:-
1. M. Soundarajan vs. State, Crl. A. (MD) No. 488 of 2018 and Crl. M. P. (MD) No. 8712 of 2018, judgment dated 30.10.2018 of Hon'ble Madurai Bench of Madras High Court.
2. Chittaranjan Shetty vs. State by CBI Bangalore, Crl. Appeal no.
884 of 2008, Order dated 16.09.2015 of Hon'ble Apex Court.
3. Sushil Suri vs. CBI and another, Crl. Appeal no. 1109 of 2011 (Arising out of S. L. P. (Criminal) no. 6113 of 2009), order dated 06.05.2011 of Hon'ble Apex Court.
4. Gopakumar B. Nair vs. CBI and another, Crl. Appeal no. 831 of 2014 (Arising Out of S. L. P. (Crl.) no. 8914 of 2013), order dated 07.04.2014 of Hon'ble Apex Court.RC No. 219/2012/E/0003/ EO-I/CBI/ND Page 51 of 158
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9. Ld. Counsel for (A-5) has relied upon the following judgments in support of her contentions:-
1. Ajay Mitra vs. State of Madhya Pradesh & Ors. (AIR 2003 SC 1069)
2. C. K. Jaffer Sharief vs. State (through CBI) (AIR 2013 SC 48)
3. Hridaya Ranjan Pd. Verma vs. State of Bihar and Ors. (AIR 2000 SC 2341)
4. S. K. Kale vs. State of Maharashtra (AIR 1977 SC 822)
5. S P Bhatnagar & Ors. vs. The State of Maharashtra (AIR 1979 SC 826)
6. Renu Ghosh vs. CBI (MANU/DE/6909/2011)
7. Madhu Koda vs. State Through CBI (269 (2020) DLT385) (2020 DHC)
8. Vinod Kumar Bhutani vs. State Through CBI (MANU/DE/1515/2013)
9. A Sivaprakash vs. State of Kerala (AIR 2016 SC 2287) She has also relied upon the following additional judgment :-
10. C. Chenga Reddy and Ors. vs. State of Andhra Pradesh, AIR 1996 SC 3390.
10. Ld. Counsel for (A-6) has relied upon the following judgments in support of his contentions:-
1. Sanjay Bhandari vs. CBI;RC No. 219/2012/E/0003/ EO-I/CBI/ND Page 52 of 158
CBI Vs. Udaipal Singh @ Udaipal Singh Chauhan & Ors.
(2015) SCC OnLine Del 10079; (2015) 3 DLT (Cri.) 699;
SLP (Crl.) ..... of 2015 CRLMP No. 20169/2015, DOD 27.11.2015
3. A. Sivaprakash v. State of Kerala;
(2016) 12 SCC 273;
4. CBI vs. Dr. Anup Kumar Srivastava (2017) 15 SCC 560;
5. CBI New Delhi vs. B. B. Aggarwal & Ors.
(2019) 15 SCC 522;
6. Parminder Kaur @ PP Kaur Alias Soni v. State of Punjab;
2020 SCC OnLine SC 605;
He has also relied upon the following additional judgments/rules/guidelines :-
7. Revised Guidelines for compromise settlement of chronic Non Performing Assets (NPAs) of public sector banks dt. 29.01.2003.
8. Gottumukkala Venkata Krishamraju vs. Union of India, 2018 SCC OnLine 1386
9. Shivaji Chintappa Patil vs. State of Maharashtra, Crl. Appeal no.
1348 of 2013 Order dated 02.03.2021 of Hon'ble Apex Court.
10. Madhu Koda vs. State through CBI, Crl. A. 1186/2017 judgment dated 22.05.2020 of Hon'ble High Court of Delhi.
11. R. vs. Vestry of St. Pancras. 1890 L. R. 24 QBD 371 CA
11. The Ld. PP for the CBI has filed written submissions and has orally argued that the present FIR was registered on 25.04.2021 on the basis of RC No. 219/2012/E/0003/ EO-I/CBI/ND Page 53 of 158 CBI Vs. Udaipal Singh @ Udaipal Singh Chauhan & Ors.
written complaint filed by PNB Asset Recovery Branch New Delhi against Satibir Sharma, Proprietor M/s. Guruji Trading Co., Udaipal Singh, Proprietor M/s. Shivani Agro India and other unknown persons including bank officials u/S. 120-B r/w. 420/467/468/471 of IPC and 13(2) r/w 13(1)(d) of PC Act, 1988. He has argued that the facts have already been mentioned in the charge sheet and he has alleged that M/s. Guruji Trading Co. was sole proprietorship concern of Satibir Sharma, who dealt in food grains. The firm was sanctioned a cash credit (Hypothecation) limit of Rs. 75 lakhs by PNB Mall Road branch on 01.12.2005, which was enhanced from time to time, lastly to Rs. 300 Lakhs on 14.09.2007.
Regarding M/s. Shivani Agro India, it has been argued that the same was proprietorship concern of Udaipal Singh, which was also dealing in food grains. It was also sanctioned cash credit (Hypothecation) limit of Rs. 110 lakhs by PNB, Mall Road branch on 27.12.2006, which was enhanced from time to time, lastly to Rs. 300 lakhs on 14.09.2007. He has alleged that the above accused persons in conspiracy with each other prepared and filed forged documents like balance sheets, rent receipts, property documents and invalid sale deed for availing the loan facility. The other accused persons namely Bimlesh Devi and Baldev Raj stood as guarantor and also deposited fake documents and another accused Sharvan Kumar Garg also prepared a fake sale deed in furtherance of the conspiracy.
He has also argued that the accused public servants in furtherance of the said conspiracy, sanctioned and enhanced the credit limit on the basis of forged documents and did not verify the properties mortgaged with the bank. They also did not inspect the books of account and stocks of the borrowers nor inspected the godowns of the borrower and thereby causing wrongful loss to RC No. 219/2012/E/0003/ EO-I/CBI/ND Page 54 of 158 CBI Vs. Udaipal Singh @ Udaipal Singh Chauhan & Ors.
the bank and wrongful gain to the accused borrowers. He has also argued that the prosecution has examined 54 witnesses in support of its case, to prove the above transactions and from the witnesses examined on the record and other documentary evidence placed on the record, it has been proved beyond reasonable doubt that the accused persons in conspiracy with each other cheated the bank by using forged and false documents and they were not doing any genuine business transactions, in which the public servants also conspired by facilitating the said loan on the basis of forged and false documents, thereby the prosecution has proved its case beyond any reasonable doubt.
12. On the other hand, Ld. Counsel for accused Udaipal Singh (A-1) has mainly argued that there is no CFSL report regarding the signatures on the alleged documents, without which it cannot be proved that the same were forged and false documents prepared by (A-1). It is further stated that no recovery has been made from the accused (A-1) and nor any money has been recovered at the instance of the accused. It is also stated that from the evidence on record, as mentioned in the written submissions and also from the testimony of DW1 Sarvan Kumar Garg and other prosecution witnesses itself, it has been proved that (A-1) had not committed any fraud with the PNB, Mall Road branch nor he was conspirator and he has orally argued that neither he had caused any wrongful loss to the bank or had himself wrongfully gained from the said transaction.
It is further argued that the bank had finally arrived at one time settlement (OTS) and the entire money has been paid to the bank before the DRT. Therefore, the prosecution has no case to stand. Therefore, the accused RC No. 219/2012/E/0003/ EO-I/CBI/ND Page 55 of 158 CBI Vs. Udaipal Singh @ Udaipal Singh Chauhan & Ors.
is liable to be acquitted.
13. Ld. Counsel for (A-5) has mainly argued that the entire case is false as all the Standard Operating Procedures (SOP's) as laid down by the bank from time to time through various circulars were followed while sanctioning the loans and enhancements thereof. There was no lapse on the part of (A-5). She has further argued that the prosecution has totally failed to produce any evidence as regards to connection of (A-5) with the other beneficiaries, as there is no evidence to support the allegation of conspiracy, knowledge or dishonest intention on the part of (A-5). It is further argued that the prosecution has also failed to produce any evidence with regard to the fact that any forged document had been authored or fabricated by (A-5).
It is also stated that the mens rea is an important ingredient of Section 13(1)(d) of PC Act, which has not been proved by the prosecution and it is also not the case of the prosecution that any kind of benefit whether financial or otherwise has been derived by (A-5). Therefore, it is submitted that the prosecution has failed to prove dishonest intention and knowledge on part of (A-5) for the purpose of Section 13(1)(d) of PC Act and (A-5) had acted in good faith, with due diligence, within delegated powers, ensuring compliance of bank guidelines and there is no question of conspiracy, as argued above, therefore, (A-5) deserves to be acquitted.
14. Further written submissions as well as oral arguments have been made on behalf of accused Ravi Kumar Bharti (A-6), in which it is stated that the prosecution case is full of material contradictions, severe infirmities and inherent improbabilities, which goes to the root of the matter and it is argued RC No. 219/2012/E/0003/ EO-I/CBI/ND Page 56 of 158 CBI Vs. Udaipal Singh @ Udaipal Singh Chauhan & Ors.
that the PNB had entered into one time settlement (OTS) with the borrowers and its guarantors by itself, which rules out any fraud on the part of the accused. It is stated that the alleged lapses pointed out by the prosecution qua (A-6) uptill 13.10.2007 cannot be construed to be an offence punishable u/S. 13(1)(d) of the PC Act. It is further argued that there was no criminal conspiracy between the other accused persons linking (A-6). It is further stated that in a case where the case is based on documentary evidence, the sanctity of documents to be brought and must be proved by the prosecution and on failure to do so, crucial documentary evidence fails.
It is further argued that since the accused has been able to tender a plausible explanation to the sequence of event from the deposition of the prosecution witnesses, contents of the documents of the prosecution itself and from the evidence of the defence witnesses and the statement of accused u/S. 313 CrPC, therefore, he has dispelled the presumption u/S. 20 of the PC Act. Therefore, he is entitled for acquittal.
15. Ld. Counsel for (A-7) has argued that (A-7) was only concerned with the last enhancement of both the transactions i.e. transactions qua M/s. Guruji Trading Company and M/s. Shivani Agro India. It is stated that after the transfer to (A-5) from the branch, it transpired that the borrowers had presented forged property documents, which were kept as collateral security. It is further argued that (A-7) was not remotely involved with those documents, therefore, he cannot be dragged into the conspiracy. It is also argued that once bank took recourse to OTS scheme, there was no question of fraud and malfeasance.
It is also argued that prosecution has failed to establish or produce RC No. 219/2012/E/0003/ EO-I/CBI/ND Page 57 of 158 CBI Vs. Udaipal Singh @ Udaipal Singh Chauhan & Ors.
any document to show that any unlawful gain or undue favour was ever obtained by (A-7) while discharging his official duties and as such provisions of PC Act are not applicable. It is also stated that (A-7) was sanctioning authority and not compliance or processing officer and the terms and conditions were to be complied with by loan incharge (A-6), who disbursed the loan after executing loan documents, as is evident from the sanction note(s).
16. I have gone through the rival contentions.
16A. At the very beginning, it is mentioned in para 54 of the charge sheet that public servants Ravi Bharti, the then Deputy Manager (Loans), S. C. Pathak, the then Chief Manager and Pyare Lal, the then Chief Manager, all posted at PNB, Mall Road Branch, Delhi had been removed from services prior to filing of the charge sheet, as it is stated that Ravi Bharti had been removed from service w.e.f. 25.09.2013, S.C. Pathak had been removed from services w.e.f. 31.01.2013 and finally Pyare Lal was also compulsory retired with penalty w.e.f. 31.07.2013. The said position has not been disputed during the course of arguments. The present charge sheet had been filed on 02.01.2015 and the cognizance of offence(s) had been taken on 28.04.2015. As all the public servants had already been removed from the service at the time of taking the cognizance and were not in service, therefore, no Sanction u/S. 19 of the PC Act, 1988 was necessary, when the cognizance of the offence(s) was taken by Court vide order dated 28.04.2015.
17. At the outset, the analysis of the evidence in this case will be done RC No. 219/2012/E/0003/ EO-I/CBI/ND Page 58 of 158 CBI Vs. Udaipal Singh @ Udaipal Singh Chauhan & Ors.
under two separate heads, one qua the sanction of loan to M/s. Guruji Trading Company and enhancement of the same from time to time, of which one Satbir Sharma was the proprietor and secondly there was another separate transaction regarding the loan advanced to Shivani Agro India under the proprietorship of the accused Udaipal Singh and its enhancement from time to time.
The transaction with regard to the advancement of loan to M/s. Guruji Trading Company will be referred to as Transaction (A) hereinafter for the sake of simplicity.
TRANSACTION (A) : WITH REGARD TO THE FIRST TRANSACTION I.E. THE SANCTION OF CC LIMIT OF RS. 75 LAKHS.
18. In this regard, the prosecution has relied upon the testimony of PW13 Sh. Ram Naresh Sharma and that of PW50 Sh. Suraj Juneja, both from the Trade and Taxes Department / VAT Department of Govt. of Delhi and they have proved the relevant documents i.e. PW13/A (D-81) and Ex. PW13/B (colly) (D-82) to prove the fact that the firm M/s. Guruji Trading Company was registered with the said department(s) having the address 532/5, First Floor, Lahori Gate, Naya Bazar, Delhi-110 006.
19. Another witness of the prosecution namely PW21 Sh. Neeraj Pal, who was also earlier working in the department of Trade & Taxes, Government of Delhi has proved one document Ex. PW21/A-16 (D-79) page no. 3642 top, which is a local surety bond executed by Satbir Sharma in RC No. 219/2012/E/0003/ EO-I/CBI/ND Page 59 of 158 CBI Vs. Udaipal Singh @ Udaipal Singh Chauhan & Ors.
favour of M/s. Siwani Agro (India) having address 2257, 2 nd Floor, Gali Hinga Beg, Naya Bazar, Delhi for Rs. 1 Lakh in which he has claimed that he is the proprietor of M/s. Guruji Trading Company, 532/5, Deep Palace, Lahori Gate, Delhi. This document categorically proves that Satbir Singh was the proprietor of the aforesaid M/s. Guruji Trading Company.
20. With regard to the sanction of CC Limit of Rs. 75 Lakhs, it is the case of the prosecution that the said loan was recommended by the accused Ravi Bharti and sanctioned by the accused S. C. Pathak on 01.12.2005 against the primary security of books debts and stocks and collateral of three properties which are :
(a) Shop bearing no. 11, First Floor, 2650/2, Gali Raghunandan, Naya Bazar, Delhi in the name of Satbir Sharma;
(b) Three Storey residential building at Sector 23, plot no. 1273, Sonepat, Haryana in the name of Satbir Sharma;
(c) Single Storey residential house at 829/B-30, Gali No. 3 Malviya Nagar, Mehlana Road, Sonepat, Haryana, area 625 sq. yds., owner Smt. Shakuntala Sharma.
21. However, at the same time it is the case of the prosecution that the loan application / sanction note and other documents in respect of the sanction of CC Limit of Rs. 75 Lakhs are not available in the records of the bank, however, they have relied upon agreement of guarantee with regard to this sanction PW45/12 (D-8) (Top page 1662) (colly). The said deed of guarantee was executed between Satbir Sharma and said Smt. Shakuntla Devi for the CC Limit of Rs. 75 Lakhs, sanctioned in the name of M/s. Guruji Trading RC No. 219/2012/E/0003/ EO-I/CBI/ND Page 60 of 158 CBI Vs. Udaipal Singh @ Udaipal Singh Chauhan & Ors.
Company. The same has also been signed by Satbir Sharma and Ravi Bharti and also bears the thumb impression of Smt. Shakuntala Devi. The said document has been proved by PW45 Sh. Bhagirath Ram Choudhary.
Though, the said witness was not working at the relevant time in the concerned branch, however, he was posted in April, 2013 as Assistant General Manager, Branch Head, and therefore he could not have proved the said document as he could not have seen Satbir Sharma signing the said document, but at the same time since the said documents had been produced from the bank record during the investigations and he identified the signatures of the bank officials at points C & D and the said documents have been produced from the lawful custody of the bank. In any case, the public servants i.e. the accused Ravi Bharti and S. C. Pathak have not denied the execution of the deed of guarantee in their statement(s) u/S. 313 CrPC and the co-accused Satbir Sharma had died during the investigations and Smt. Shakuntala Devi was not the accused. Therefore, the said document has been validly proved.
However, it has not been proved by the prosecution with regard to the sanction of CC Limit of Rs. 75 Lakhs that what were the terms of the loan sanction and the prosecution could not also prove that the sanction of the CC Limit of Rs. 75 Lakhs was sanctioned against the primary security of book debts and hypothecation of stocks and collateral of same three properties mentioned above. Though, it has been able to prove that the deed of guarantee was executed between the bank officials and accused Satbir Sharma for CC Limit of Rs. 75 lakhs in favour of M/s. Guruji Trading Company.
RC No. 219/2012/E/0003/ EO-I/CBI/ND Page 61 of 158CBI Vs. Udaipal Singh @ Udaipal Singh Chauhan & Ors.
WITH REGARD TO SANCTION OF CC LIMIT OF RS. 91 LAKHS.
22. It is the case of the prosecution that the CC Limit was thereafter enhanced from Rs. 75 Lakhs to Rs. 91 Lakhs on an application Ex.PW45/1 (D-8), page 1705 top. The same has also been proved by PW45 Sh. Bhagirath Ram Choudhary, who retired from the Punjab National Bank, Management, Audit and Review Division, Head Office, Rajendra Place, New Delhi and CBI had called him for joining the investigations and during investigations, various documents were shown to him pertaining to M/s. Guruji Trading Company, of which Satbir Sharma was the proprietor and he explained the nature and purpose of documents. In any case, the said document Ex. PW45/1 has not been disputed by the public servant i.e. accused Ravi Bharti and S. C. Pathak in their statement(s) u/S. 313 CrPC and Satbir Sharma had already died during the investigations.
23. The said loan application was appraised and recommended by the accused Ravi Kumar Bharti and was sanctioned by accused S. C. Pathak. Even otherwise, the said document had been proved by the said Bhagirath Ram Choudhary, who was the Senior Bank Officer and the said documents were obtained by the prosecution from the lawful custody of the bank and even otherwise, the same was also admitted by the accused S. C. Pathak vide endorsement dated 16.02.2017 during admission / denial of documents. The said sanction is Ex. PW45/7 (colly.) dated 28.12.2006, whereby the CC Limit was increased to Rs. 91 Lakhs in favour of M/s. Guruji Trading Company under the proprietorship of Satbir Sharma having working address i.e. 532/5, Deep Palace, Lahori Gate, Delhi for doing trading of rice.
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24. The said limit was sanctioned under the primary security of book debt as well as hypothecation of receivable present and future as well as the collateral of three properties mentioned above. As per the terms and condition of the said sanction note "the bank or its authorized officials or other representatives will have the right to carry out periodical inspection or examine the books of accounts of the borrower and to have their factories /offices/assets inspected from time to time by officers of the bank and/or outside consultants and the expenses incurred by the bank in this regard will be borne by the borrower."
After the sanction of the above CC Limit, agreement of guarantee Ex. PW45/3 was executed by Smt. Shakuntala Devi dated 26.12.2006 (D-8) page 1703 top, as also document i.e. hypothecation agreement between M/s. Guruji Trading Company and the bank Ex. PW45/20 (D-8), page 1686 top. It will be pertinent to mention here that the confidential note Ex. PW45/5 with regard to the inspection of the property of Smt. Shakuntala Devi i.e. the property no. Building no. 1273, Sector 23, Urban Estate, Sonepat, Haryana was also filled up done by the bank officials i.e. the accused S. C. Pathak and Ravi Bharti at points A & B respectively and in fact one of the accused S. C. Pathak has also admitted the said document vide endorsement dated 16.12.2017, during admission / denial.
25. One PW27 Sh. Ashok Bansal, who was working as Chartered Accountant running the firm in the name of Ashok Om & Co., after being shown the documents i.e. audit report along with the balance sheet as on 31.03.2004 as well as the profit and loss account for the year ended as on date of M/s. Guruji Trading Company, proprietorship Satbir Sharma stated that the RC No. 219/2012/E/0003/ EO-I/CBI/ND Page 63 of 158 CBI Vs. Udaipal Singh @ Udaipal Singh Chauhan & Ors.
same does not belong to him firm and the signatures on the said documents does not belong to his firm and the signatures at point A does not belong to him and the seal impression at point B does not belong to his firm and the address mentioned at point C is not his address and he does not know the company M/s. Guruji Trading Company, proprietorship Satbir Sharma in whose favour the audit report has been given along with the balance sheet as on 31.03.2004 as well as the profit and loss account for the year ended as on date of M/s. Guruji Trading Company and someone had misused his firm's name for his vested interest and he has also seen the seal impression at point D on each page no. 848 to 860, purported to be in the name of his firm, but the same does not belong to his firm. He has proved the relevant documents which are part of D-6 (colly) Ex.PW27/E and also the fake audit report, also part of the report (D-6) and Ex. PW27/F (colly.), Ex. PW27/G and Ex. PW27/H. Nothing has come out in his cross-examination, which could show that the testimony of the said witness was not credible. He has categorically stated that all the said documents i.e. the balance sheet, the Profit and Loss account and the other documents submitted with the bank were not given by him or his firm and they were forged and fabricated.
ENHANCEMENT OF CC LIMIT FROM RS. 91 LAKHS TO RS. 220 LAKHS.
26. The loan application submitted by the proprietor of M/s. Guruji Trading Company in this regard for enhancement of the limit to Rs. 220 Lakhs has been proved vide Ex. PW47/D. Ld. Counsel for the accused has argued RC No. 219/2012/E/0003/ EO-I/CBI/ND Page 64 of 158 CBI Vs. Udaipal Singh @ Udaipal Singh Chauhan & Ors.
that the said document has not been validly proved by the witness Sh. Kirpal Singh Budhiraja. The said argument is without any substance, as the said PW47 has stated in his examination in chief that he knew the person named as Satbir Sharma. He was the customer of his bank and he was having account at his bank at Mall Road branch. He also deposed that he also knows the persons Ravi Bharti, who was the Deputy Manager at Punjab National Bank branch Mall Road and he was also acquainted with the handwriting and signatures of accused Ravi Bharti.
27. In these circumstances, since he knew the accused Satbir Sharma, duly acquainted with him as a customer during the course of official business, therefore, the said document had been validly proved by him. Even otherwise the said document was put in the statements u/S. 313 CrPC of the accused Ravi Bharti and S.C. Pathak and they did not deny the existence of the said document. In fact it is not the case of the accused persons Ravi Bharti and S. C. Pathak or accused Pyare Lal that the loan was not enhanced from Rs. 91 Lakhs to Rs. 220 Lakhs vide the said application.
The said loan application was considered and it was mentioned on the sanction note Ex.PW45/34 dated 25.05.2007 that the CC Limit of Rs. 220 Lakhs against hypothecation of stock / book debts and value of collateral security having RV of Rs. 330.60 Lakhs under Super Trading Scheme. Therefore, it appears that the said sanction was done under the Super Trading Scheme. As per the sanction note, the work address of M/s. Guruji Trading Company was mentioned as 99/16, GTK Road, near Shri Ram Dharam Kanta, Alipur Delhi and it was also stated that they were trading in food grains including rice and pulses. The financial indicators were stated to have been RC No. 219/2012/E/0003/ EO-I/CBI/ND Page 65 of 158 CBI Vs. Udaipal Singh @ Udaipal Singh Chauhan & Ors.
improved in the said sanction note.
28. The loan was sanctioned against primary security i.e. hypothecation of entire stocks consisting of food grains and book debts and the loan was also secured by way of three collateral properties already mentioned in the previous discussion, besides fourth property i.e. one residential house bearing no. 9/3304, measuring 164 sq. yds, out of Khasra No. 466/124/1/12, Gali No. 7, Seelampur, Gandhi Nagar standing in the name of Baldev Raj. It has also been argued by Ld. Counsel(s) that the said document bearing Ex.PW45/34 has not been validly proved, as the said witness PW45 Bhagirath Ram Choudhary has admitted in his cross- examination that he was never the author of the said document nor he had worked with the public servant, who had signed on the same.
The said argument is without any substance, as during the admission / denial conducted on 16.02.2017, the said document has been admitted by A-5 i.e. S. C. Pathak and the same has also been exhibited as Ex. P-18 and even otherwise the above document was put to the above accused persons u/S. 313 CrPC in which they did not deny the existence of the same. In any case, it is not the case of the public servants that the said loan was never sanctioned, rather it is their case that the loan was duly sanctioned after exercising due diligence. Therefore, the said document has been validly proved.
29. The said loan was recommended by A-6 Ravi Bharti and sanctioned by A-5 S. C. Pathak, as per the terms of the said loan "the bank or its authorized officials or other representatives will have the right to carry out periodical inspection or examine the books of accounts of the borrower RC No. 219/2012/E/0003/ EO-I/CBI/ND Page 66 of 158 CBI Vs. Udaipal Singh @ Udaipal Singh Chauhan & Ors.
and to have their factories/offices/assets inspected from time to time by officers of the bank and/or outside consultants and the expenses incurred by the bank in this regard will be borne by the borrower."
30. Further as per the circular of the Retail Banking Division Advances bearing no. 05/2006 i.e. Super Trading Scheme which was the scheme for financing Traders & Service Sector (Super Trade) Ex. PW43/DB (colly.) (D-48) dated 18.03.2006, the salient features of the same are as under :
(i) The scheme will be covering a large number of activities and type of customers.
(ii) Minimum loan amount is Rs. 25000/- and maximum is Rs. 5crore.
(iii) Rate of interest is BPLR/BPLR - 0.5%, depending upon the value collateral of security.
(iv) Finance will be available for purchase of stocks and against receivables.
(v) Assessment of limit will be bases on the value of collateral security and / or on the basis of sales tax return.
(vi) Security will be hypothecation of stocks and book debts and collateral security will be mortgage of immovable property.
(vii) Stock statement will be obtained once a year i.e. first at the time of sanction and thereafter at the time of renewal / review of the limits.
(viii) Repayment of term loan will be upto 7 years.RC No. 219/2012/E/0003/ EO-I/CBI/ND Page 67 of 158
CBI Vs. Udaipal Singh @ Udaipal Singh Chauhan & Ors.
Further it was one of the condition of the said scheme as under:
Submission of stock statement & Only once at the time of sanction & Inspection thereafter at the time of renewal / review and in the month of February every year (for audit & insurance purposes). Drawing power will not be calculated on the basis of stock statement but on the basis of value of collateral security and sales tax return showing turn over level. This provision has been made to take care of long outstanding request of trader community for reducing the paper work. The branch official will give a half yearly certificate after carrying out the visit, that the business is running and the property is intact.
31. From the cumulative reading of the above sanction note, as also its terms and the terms of Super Trading Scheme, it is apparent that the bank or its authorized officials had the right to carry out periodic inspection or to examine the books of accounts of the borrower and to have the factories / offices / assets inspected from time to time, as also the branch officials have to give the half yearly certificate regarding the submission of stock statement and inspection after carrying out the visits that the business was running and the property was intact and the stock statement had to be submitted once at the time of sanction and thereafter at the time of renewal or in the month of February.
32. After the said sanction of loan, agreement of guarantee Ex. PW34/A-2 was executed by Smt. Shakuntla Devi and another document was RC No. 219/2012/E/0003/ EO-I/CBI/ND Page 68 of 158 CBI Vs. Udaipal Singh @ Udaipal Singh Chauhan & Ors.
also executed by the guarantor (A-2) Baldev Raj Bhatia (since expired) Ex. PW34/A-3 and also by the same person Ex. PW34/A1. The said Baldev Raj Bhatia had also executed one more document Ex. PW34/A-6 (D-6) (page 2339 bottom) for securing the said loan. Smt. Shakuntla Devi had also executed another document Ex. PW34/A-11 (D-6) (page 2301 bottom) and Satbir Singh executed another document for securing the said loan Ex. PW34/A-10 (D-6) (page 2305 bottom). The said Satbir Sharma had executed the document for hypothecation of goods and book debts to secure cash credit facility Ex.PW34/A-12 (D-6) (page 2281 bottom). One more document was executed in this series i.e. Ex. PW34/A-13 (D-6) (page 2263 bottom).
33. While submitting the said loan, Satbir Sharma had filed fictitious balance sheets Ex. PW 27/E (colly.), PW27/F (colly.) and Ex. PW27/G (colly.), which have been proved to be so by Sh. Ashok Bansal of Ashok Om & Co. that the said documents have been forged by someone for their vested interest, as PW27 has categorically deposed that he did not knew any firm M/s. Guruji Trading Company. Nothing has come out in his cross- examination in favour of the accused persons, which dilutes the credibility and veracity of this witness. He in his examination in chief after seeing the said documents and the impression seal on the said documents and address at the said document had also stated that the same were fake and he does not know anything about the said firm.
34. With regard to the forgery part qua the sale deed of the property at Seelampur bearing no. 9/3304, Village Seelampur, Gandhi Nagar, Delhi, the same will be discussed in detail while discussing the role of A-2 Baldev Raj RC No. 219/2012/E/0003/ EO-I/CBI/ND Page 69 of 158 CBI Vs. Udaipal Singh @ Udaipal Singh Chauhan & Ors.
Bhatia (since expired). Regarding the last transaction of this series i.e. enhancement of the loan of M/s. Guruji Trading Company i.e. enhancement of CC Limit from Rs. 220 Lakhs to Rs. 300 Lakhs (D-6) (page 342) and the conversion of the CC Limit from Super Trading Scheme to CC General, the same seems to have been done on bare handwritten application dated 12.09.2007 by Satbir Sharma and the endorsement regarding sanction part has been made on the back of the same dated 14.09.2007.
35. The same has also been admitted by accused (A-7) Pyare Lal during admission / denial dated 16.02.2017. The same had also been exhibited as Ex. P-36, however, it appears inadvertently the said exhibit mark was not put on the said document. In any case, the same was also put in the statement u/S. 313 CrPC of all the accused persons i.e. the public servants, therefore the authenticity of the said document has been duly proved. The said proposal was sanctioned vide sanction note Ex. PW43/D1 (colly.) part of (D-6) (page 1161 top), the same had also been admitted during admission / denial by (A-7) Pyare Lal on 16.02.2017 Ex. P-36. In any case, the said document was also put to all the accused persons i.e. public servants in their statements u/S. 313 CrPC, in which they did not deny the same, however, it appears that inadvertently the said exhibit mark P-36 was not put on the said document.
36. As discussed above, the said loan application was processed and recommended by A-6 Ravi Kumar Bharti and sanctioned by A-7 Pyare Lal. The accused Pyare Lal has a role in this last transaction only pertaining to M/s. Guruji Trading Company. In other three transactions discussed above, RC No. 219/2012/E/0003/ EO-I/CBI/ND Page 70 of 158 CBI Vs. Udaipal Singh @ Udaipal Singh Chauhan & Ors.
the loans were processed and recommended by A-6 Ravi Bharti and have been sanctioned by A-5 S. C. Pathak and only in this transaction, the loan has been processed by A-6 Ravi Bharti and sanctioned by A-7 Pyare Lal.
37. As discussed above, as per the terms of the said loan "the bank or its authorized officials or other representatives will have the right to carry out periodical inspection or examine the books of accounts of the borrower and to have their factories /offices/assets inspected from time to time by officers of the bank and/or outside consultants and the expenses incurred by the bank in this regard will be borne by the borrower" and the primary security for the loan was hypothecation of entire stock consisting of food grains including rice lying in the shop and all godowns of the parties and book debts (not older than 3 months) and the said loan of Rs. 300 Lakhs was also secured by collateral of 04 properties mentioned above. With regard to the allegations of forgery qua the property no. 9/3304, Village Seelampur, Gandhi Nagar, Delhi qua the guarantor Baldev Raj Bhatia (since expired), the same will be discussed while discussing the specific role of each accused hereinafter.
38. Thereafter, in furtherance of the said transaction, the agreement of guarantee Ex. PW47/A-16 (colly.) was also executed by A-2 Baldev Raj Bhatia (since expired) and one document Ex. PW47/A-17 was also executed by Satbir Sharma i.e. hypothecation of goods and book debts to secure cash credit facility was also done by accused Satbir Sharma, both part of (D-6) (page 1861 to 1897 bottom). It is also the case of the prosecution that the accused Satbir Sharma submitted fictitious rent receipts purportedly issued by M/s. Aarti Agro Industries, showing godown site at 99/16, Old G.T. Karnal RC No. 219/2012/E/0003/ EO-I/CBI/ND Page 71 of 158 CBI Vs. Udaipal Singh @ Udaipal Singh Chauhan & Ors.
Road, near Sh. Ram Dharam Kanta, Alipur, Delhi, whereas the said M/s. Aarti Agro Industries was having only one godown site at 99/3, G.T. Karnal Road, near Shriram Dharamkanta, Alipur, Delhi and the address in the insurance papers of stocks has also been shown as of 99/16, Old G.T. Karnal Raod, near Shri Ram Dharam Kanta, Alipur, Delhi. This aspect will also be discussed while discussing the specific role of each of the accused persons hereinafter.
ROLE OF (A-2) BALDEV RAJ BHATIA (SINCE EXPIRED)
39. Now the role of (A-2) Baldev Raj Bhatia (since expired), who allegedly as per the case of prosecution had submitted a forged sale deed as a collateral with regard to the property bearing no. 9/3304, Village Seelampur, Gandhi Nagar, Delhi. The accused no. 2 Baldev Raj Bhatia (since expired) created an equitable mortgage of the above property as a collateral by way of deposit of title deeds for enhancement of the CC Limit from Rs. 220 Lakhs to Rs. 300 Lakhs with the Punjab National Bank, Mall Road branch on 14.05.2008. The said document had been admitted by the said deceased Baldev Raj Bhatia (A-2) in admission / denial dated 28.02.2017. The same has been exhibited as Ex. P-53.
40. The sale deed submitted by the said accused with the bank as a collateral is Ex. PW2/D (colly.) (D-13). PW2 has also proved that he had handed over to the CBI the certified copy of the said sale deed with regard to the property no. 466/124/1/12 (new no. 9/3304, village Seelampur, Gandhi Nagar, Delhi) Ex. PW2/B (colly.) (D-64). He after comparing the two stated that the same was a forged as there are number of differences found in the RC No. 219/2012/E/0003/ EO-I/CBI/ND Page 72 of 158 CBI Vs. Udaipal Singh @ Udaipal Singh Chauhan & Ors.
same. He has elaborated the differences as under :
The differences between Ex.PW-2/B and Ex.PW-2/D were seen by me and pointed out to the IO Insp. S.S. Yadav and which I reiterate and are as under:
I) Original Stamp paper issued does not bear the stamp of the issuing stamp paper vendor and also it bears the writing in Urdu whereas in the certified copy the stamp of stamp paper vendor is visible and the entry is made in English. (II) Signatures of Sub-Registrar at the time of registration on the original and the certified copy are different. (III) The delivery seal on the original does not pertain to Sub-Registrar-I. (IV) The registration stamp impression in the original does not bear the designation of the Sub-Registrar whereas in the certified copy, it appears.
(V) In the original, thumb impressions and signatures of Vendor and Vendee are not available whereas in the certified copy thumb impressions and signatures are seen. (These differences have been marked by me today on Ex.PW-2/B and Ex.PW-2/D for ready reference).
41. Nothing has come out in cross-examination of PW2, which could help the case of the defence, therefore, the prosecution has been able to prove that a forged and fabricated sale deed had been submitted by the accused Baldev Raj Bhatia (since expired) as a collateral while enhancement of the CC Limit From Rs. 220 Lakhs to Rs. 300 Lakhs for M/s. Guruji Trading RC No. 219/2012/E/0003/ EO-I/CBI/ND Page 73 of 158 CBI Vs. Udaipal Singh @ Udaipal Singh Chauhan & Ors.
Company, proprietor Satbir Sharma.
42. Further the valuation of the said property having new no. 9/3304, village Seelampur, Gandhi Nagar, Delhi was also done by valuer Sh. S. N. Bansal, who has appeared as PW51. He has proved his valuation report with regard to the said property as PW51/H. He also stated that he can identify Baldev Raj Bhatia i.e. accused no. 2 (since expired) who met him at the time of inspection of the said property and he was also shown internal page no. 2192 of the valuation report Ex.PW51/H (D-23), wherein he identified Baldev Raj Bhatia i.e. accused no. 2 (since died) sitting in the left side of the photograph at point A of Ex. P-81.
Nothing has also come out in his cross-examination, which could dilute the credibility of this witness. Further an undertaking also purportedly submitted on behalf of Baldev Raj Bhatia (since expired) while submitting his said property as a collateral i.e. new no. 9/3304, village Seelampur, Gandhi Nagar, Delhi during the enhancement of the CC Limit of M/s. Guruji Trading Company Ex. PW34/A-6 (D-6) (page 956 top), has also been proved by the prosecution.
43. The perusal of the photograph pasted of one Baldev Raj on the said document i.e. Ex. PW34/A-6 and that proved by the valuer Ex. PW51/H as discussed above at point A of Ex. P-81, shows that both were not the same person and PW51 has categorically stated that he had met actual Baldev Raj Bhatia at the time of carrying out of inspection of the said property, therefore, it appears that some impersonator had appeared in the bank and had submitted a forged sale deed with respect to the said property and had also signed as an RC No. 219/2012/E/0003/ EO-I/CBI/ND Page 74 of 158 CBI Vs. Udaipal Singh @ Udaipal Singh Chauhan & Ors.
impersonator on behalf of the said Baldev Raj Bhatia, while submitting the documents of the said property as collateral.
44. PW38 Ms. Neha Ailawadi, who had worked in the said branch during the relevant period and in fact she was attached with Sh. Ravi Bharti and she had dealt with the loan proposal file of M/s. Guruji Trading Company as she was assisting Ravi Bharti i.e. (A-6) in the said proposal file. She has stated after being put the relevant documents that she had seen the relevant document Ex. PW34/A-6, as it was filled up and prepared in her own handwriting. It is the assets / liability statement of guarantor Baldev Raj i.e. A-2 (since expired). She identified the signatures of Baldev Raj, who signed in her presence on the said document and she also identified the photograph of Baldev Raj on the said document at point A i.e. Ex. PW34/A-6 and she was also shown another document Ex. P-81 (i.e. on Ex. PW51/H). She stated that she cannot identify the person shown in the photograph at point A on Ex. P-81, as he did not come before her and nothing material has come out in her cross-examination, which could show that she was not a truthful witness.
45. The case of the prosecution is based on the documentary evidence and the authenticity of the said document has been duly proved, as they have been produced from the lawful custody of the lender bank and rather the said documents were also filled up by this witness while dealing with the loan proposal of M/S. Guruji Trading Company. Therefore, it is proved beyond the realm of any doubt that one impersonator had appeared in the bank and had offered the collateral security with regard to the property bearing new no. 9/3304, village Seelampur, Gandhi Nagar, Delhi, purportedly of Baldev Raj by RC No. 219/2012/E/0003/ EO-I/CBI/ND Page 75 of 158 CBI Vs. Udaipal Singh @ Udaipal Singh Chauhan & Ors.
submitting forged and fabricated sale deed.
46. It would also be pertinent to mention herein that a spot inspection report was also submitted by S. C. Pathak (A-5) and Ravi Bharti (A-6), which is Ex. PW44/C, part of (D-23) which document has been proved by PW44 Sh. Om Prakash, who retired from Punjab National Bank, Mall Road branch as Manager and he has also deposed that he can identify the signatures of S. C. Pathak and Ravi Bharti. Though, he has admitted in his cross-examination that none of the documents were executed in his presence, but he had worked with Mr. Pathak, but not Ravi Bharti, but since he could identify the signatures of S. C. Pathak, therefore, he could identify his signatures on the said documents and the above document was also put during the statement u/S. 313 CrPC of the accused Ravi Bharti, in which he had not denied that he has not signed the said documents. Accordingly, the said document has also been duly proved.
The said document is the spot inspection report of property no. 9/3304, village Seelampur, Gandhi Nagar, Delhi, allegedly belonging to Baldev Raj stated to be free hold and it is mentioned in the column no. 8 as under :
8. Specify the method(s) adopted Enquired from Local people and for assessing the value of the property dealer M/s. Madaan property (i.e. personally inspecting Property, who informed that being the property, scrutinising the commercial cum residential area valuation certificate issued by local rates varies from Rs. 1.50 Lacs to Rs.
authority folr taxation purposes, 2.00 Lacs per sq. Yds. making enquiries through brokers, neighbours, net yield method. etc) Value of Land (Area x Rate) + RC No. 219/2012/E/0003/ EO-I/CBI/ND Page 76 of 158 CBI Vs. Udaipal Singh @ Udaipal Singh Chauhan & Ors.
Construction Cost Realisable Value of the property
47. It also shows that the bank officials had carried out the spot inspection of the said property and had carried out discreet inquiries, as they had even inquired from the local people and the property dealer, yet it is not clear how they could not found out that an imposter / impersonator had appeared in the bank and had executed the documents regarding the collateral of the said property by submitting forged and fabricated sale deed of the same, despite the fact that they were having the photograph of the real Baldev Raj, as per the report submitted by the valuer Ex. PW51/H (Ex. P-81), which they did not compare with the document of the assets and liability of the imposter Baldev Raj Ex. PW34/A-6.
48. Further with regard to the said property, confidential report was also submitted by (A-6) Ravi Bharti Ex. PW34/A-9, part of D-6 (page 2349 bottom). The said document had also been put to the said accused during admission / denial, however, he did not deny that the said confidential report was not filed by him. He has only given vague replies / explanation in his statement. In any case, the said document has been proved by PW34 Smt. Kanta Sharma, who had worked at the Punjab National Bank, Mall Road i.e. the branch in question as clerk and she stated that she can identify those officers, as she had worked with them. Therefore, the said document has been proved by her in her examination in chief and nothing has come out in her cross-examination to show that she was not working there or she did not know Ravi Bharti. Therefore, the said document has been validly proved.
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49. The role of A-2 Baldev Raj Bhatia (since expired) with regard to the last transaction of M/s. Guruji Trading of which Satbir Sharma was the proprietor i.e. offering of the collateral of new property no. 9/3304, village Seelampur, Gandhi Nagar, Delhi has been discussed in order to check, whether it had any nexus or link with the role of the other accused persons as co-conspirator with regard to the present Transaction (A), as accused no. 2 Baldev Raj had died during the trial, but in order to determine alleged role of all the co-conspirators with regard to the transaction in question, this has been discussed.
ROLE OF SATBIR SHARMA (SINCE DECEASED)
50. Satbir Sharma was the proprietor of M/s. Guruji Trading Company as already discussed at length above, who initially applied with the Mall Road branch with CC Limit of Rs. 75 Lakhs, which was enhanced later on to Rs. 91 Lakhs and thereafter from 91 Lakhs to Rs. 220 Lakhs under Super Trading Scheme and thereafter from Rs. 220 Lakhs to Rs. 300 Lakhs under CC Limit General. It is the contention of the Ld. PP for CBI that while submitting the loan application, the said accused initially and later on from time to time, appended forged and fabricated as well as fictitious balance sheets purportedly prepared by Ashok Om & Company with other relevant documents.
The said fact has already been proved by PW27 Sh. Ashok Bansal in his examination in chief, which has already been elaborately discussed above during the preceding paras, as the chartered accountant Sh. Ashok Bansal proved those fictitious reports / balance sheets / audit reports Ex. PW27/A to Ex. PW27/E and deposed that the said documents have been RC No. 219/2012/E/0003/ EO-I/CBI/ND Page 78 of 158 CBI Vs. Udaipal Singh @ Udaipal Singh Chauhan & Ors.
forged by someone for their vested interest. He did not have any dealing with M/s. Guruji Trading Company and in his cross-examination, nothing has come out which could dilute the credibility and veracity of the said witness. Therefore, in view of the above, it has been proved beyond shadow of doubt that accused Satbir Sharma had submitted forge and fabricated balance sheets for seeking loan for his proprietorship firm M/s. Guruji Trading Company.
51. Further as per the testimony of PW30 Sh. Vijay Kumar that he was the employee of Satbir Sharma, who was running a firm in the name of M/s. Guruji Trading Company, 2257, 2nd Floor, Naya Bazar, Delhi. He also deposed that Satbir Sharma also asked him to allow him to avail the CC Limit in the bank in the name of his firm M/s. Neki Ram Vijay Kumar by preparing forged documents, which he denied. He also knew Udaipal, employee of Sabir Sharma, who opened a firm in the name & style of M/s. Shivani Agro India in his name and actually he used to look after the business of the same.
He was shown a bill Ex. PW30/A (in the name of M/s. Neki Ram Vijay Kumar). He deposed that vide such bill, he never purchased any rice item from M/s. Guruji Trading Company for an amount of Rs. 9,79,056/-. The said bill is fake. Similarly, he was shown other bills for Rs. 2,29,823.55 p. and Rs. 10,40,757.55 p., Ex. PW30B and Ex. PW30/C and he stated that both of them were forged and fabricated. Nothing has come out in his cross- examination to suggest that the witness was not trustworthy. Therefore, it appears that the said Satbir Sharma had indulged in fake billing for showing actual business was being run by M/s. Guruji Trading Company, as also inflating its net worth fraudulently, whereas actually no legitimate business was being done by the said firm.
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52. Similarly, PW31 Sh. Ram Mehar Sharma deposed that he was running one firm in the name and style of M/s. Vijay Shree Enterprises at Naya Bazar. He further deposed that he knew Satbir Sharma, who was dealing in rice and food grains at Naya Bazar, running the firm in the name of M/s. Guruji Trading Company. He never had any dealing with him regarding sale and purchase of rice. He was also put documents already Ex. PW30/B and Ex. PW30/C and he stated after having a look at the said documents, it appears that bills have been issued by M/s. Guruji Trading Company in the name of Vijay Shree Enterprises, New Delhi. However, he had no business dealings with either of them i.e. the said firm M/s. Guruji Trading Company or with Satbir Sharma. Therefore, the question of issuance of the bills does not arise. The same are fake.
53. Nothing has come out in his cross-examination as well to show that the said witness was not trustworthy. Therefore, from the testimony of PW30 and PW31, it has been proved that the accused Satbir Sharma was indulging in accommodative entries by raising fake invoices regarding sale and purchase of rice, whereas actually no such business was being carried out by his firm M/s. Guruji Trading Company and it appears that the same had been done to secure loan from the bank as the loan had been secured by primary security of hypothecation of goods and book debts.
54. While discussing the role of Baldev Raj Bhatia elaborated above, it has been established that forged and fabricated sale deed pertaining to property new no. 9/3304 was submitted with the bank as a collateral and one imposter / impersonator had also signed on the documents i.e. deed of guarantee and other documents in the bank and deposit of title deed had also RC No. 219/2012/E/0003/ EO-I/CBI/ND Page 80 of 158 CBI Vs. Udaipal Singh @ Udaipal Singh Chauhan & Ors.
been done by same impersonator, the only conclusion which can be drawn from the above cumulative circumstance(s) is that the same was done at the instance of Satbir Sharma, as otherwise nobody else was going to gain anything by doing such an act as such collateral was required for securing the loan / enhancement of bank limit for the firm M/s. Guruji Trading Company.
55. It is also the case of the prosecution that accused Satbir Sharma filed fictitious rent receipts purportedly issued by M/s. Aarti Agro Industrites showing godown site at 99/16, Old GT Karnal Road, whereas M/s. Aarti Agro Industries was having only one godown at 99/3, Old GT Karnal Road. The address shown in the insurance papers i.e. stock address of godown is shown as 99/16, Old GT Karnal Road, Alipur, Delhi, which clearly shows that M/s. Guruji Trading Company was neither having any godown nor it was having any actual stocks, which were inspected by the bank officials. In this regard, prosecution has examined PW19 Sh. Ankush Aggarwal.
He has deposed that he was working with M/s. Aarti Agro Industries having its godown at 99/3, Old GT Karnal Road, Alipur and this was the only godown the said firm was having and he was working with the said firm since 2000 onwards. He stated after being shown the document (part of D-69), deposed that the same is rent receipt book of M/s. Aarti Agro Industries containing the counter foil and rent receipt from 146 to 170, which he had handed over to CBI vide Ex. PW19/A. He also identified the signatures on the counter foil and the rent receipts signed by Sh. Bhagwan Dass, who was the employee of M/s. Aarti Agro Industries for the period 01.03.2007 to 31.03.2007 and also for the period from 01.04.2007 to 30.04.2007 vide Ex. PW19/B and Ex. PW19/C respectively.
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56. He was also shown the document Ex. D-70, which was the computerized statement of account of M/s. Aarti Agro Industries for the period 19.01.2006 to 31.03.2007 with regard to the business transaction held with M/s. Guruji Trading Company for the said period running into two pages Ex. PW19/D. He was also shown another document, part of Ex. D-70 with regard to the computerized statement of the account of M/s. Aarti Agro Industries for the period 01.12.2006 to 31.03.2007, running into two pages with M/s. Balaji Agro Corporation, the same is Ex. PW19/E.
57. From the said counter foil, it appears that the said firm was only having one godown at the address 99/3, Old GT Karnal Road, Alipur, whereas in terms of the sanction note Ex. PW45/34 (colly) part of (D-6), the work address of M/s. Guruji Trading Company has been shown as 99/16, GT Karnal Road, which is contrary to the documentary evidence and the oral evidence of PW19, which shows that they had submitted wrong/false address of the godown and the rent receipts were only issued by the said firm for two months that too of premises / godown bearing no. 99/3, Old GT Karnal Road, Alipur, Delhi. Nothing has come out in his cross-examination at all to show that the said documentary evidence was false or unreliable.
58. Further an insurance document was also submitted with the bank by accused Satbir Sharma on behalf of M/s. Guruji Trading Company showing the address of the godown as 99/16, GT Karnal Road, near Shri Ram Dharam Kanta, Alipur, Delhi for the period 21.09.2007 to 25.07.2008, part of (D-6) Ex. PW29/E (page 1799 bottom), which is standard fire policy. The same has RC No. 219/2012/E/0003/ EO-I/CBI/ND Page 82 of 158 CBI Vs. Udaipal Singh @ Udaipal Singh Chauhan & Ors.
been proved by PW29 Sh. Suresh Chand, witness from New India Assurance Company, who has deposed that the said insurance policy was issued in the account of M/s. Guruji Trading Company, 99/16, GT Karnal Road, Alipur, Delhi against fire of stock for the period 21.09.2007 to 25.07.2008 with the increase of sum assured of Rs. 75 Lakhs. Initially the said policy was issued in the sum assured of Rs. 1.75 Crores and after the increase of sum assured, the total sum assured was Rs. 2.5 Crores. The said insurance policy was financed by Punjab National Bank, Mall Road branch. The premium was also collected from the said Punjab National Bank.
59. He has also proved another policy in the name of M/s. Guruji Trading Company, 99/16, GT Karnal Road against the burglary of stock for the period 21.09.2007 to 25.07.2008 for total sum of Rs. 2.5 Crores, financed by Punjab National Bank, Mall Road branch, the premium was also collected from the same Ex. PW29/F. Nothing has come out in his cross-examination. In fact none of the accused persons sought to cross-examine the said witness. His cross-examination has gone unrebutted and uncontested.
60. Therefore, the prosecution has been able to prove that Satbir Sharma had filled false godown address in the loan proposal, which was also mentioned even in the sanction note and the insurance was also done by the Punjab National Bank for the address 99/16, Old GT Karnal Road, whereas they had only taken the godown for two months from M/s. Aarti Agro Industries, which was at 99/3, Old GT Karnal Road that shows that in fact they were not having any godown and the entire insurance for stock from fire and burglary was an eye wash based on forged and fabricated documents. If RC No. 219/2012/E/0003/ EO-I/CBI/ND Page 83 of 158 CBI Vs. Udaipal Singh @ Udaipal Singh Chauhan & Ors.
there was no godown, then there was no question of stock, then it is not comprehensible, which stock had been hypothecated as primary security with the bank for securing the loan. This shows that the entire transaction(s) with regard to loan of Guruji Trading Company was based on forged and fabricated documents.
ROLE OF PUBLIC SERVANTS
61. Regarding Section 13(1)(d)(iii) of PC Act, the law has been laid down in the following judgments -
In a case decided by Hon'ble Supreme Court titled M.Narayanan Nambiar Vs State of Kerala 1963(2) Cri.L.J.186, it has been held as under:-
6. As the first contention turns upon the provisions of S.5(1), it will be convenient to read the same:
5.(1) A public servant is said to commit the offence of criminal misconduct in the discharge of his duty-
(a) if he habitually accepts or obtains or agrees to accept or attempts to obtain from any person for himself or for any other person, any gratification (other than legal remuneration) as a motive or reward such as is mentioned in S.161 of the Indian Penal Code, or
(b) if he habitually accepts or obtains or agrees to accept or attempts to obtain for himself or for any other person, any valuable things without consideration or for a consideration which he knows to be inadequate from any person whom he knows to have been, or to be, or to be likely to be concerned in any proceeding or business transacted or about to be transacted by him, or having any connection with the official functions of himself or of any public servant to whom he is subordinate, or from any person whom he knows to be interested in or related to the person so concerned, or
(c) if he dishonestly or fraudulently misappropriates or otherwise converts for his own use any property entrusted to him or under his control as a public servant or allows any other person so to do, or
(d) if he, by corrupt or illegal means or by otherwise abusing his position as public servant, obtains for himself or for any other person any valuable thing or pecuniary advantage.
We are concerned in this case with S.5(1) (d) of the Act. Under that clause if a public servant by corrupt or illegal means or by otherwise RC No. 219/2012/E/0003/ EO-I/CBI/ND Page 84 of 158 CBI Vs. Udaipal Singh @ Udaipal Singh Chauhan & Ors.
abusing his position as public servant obtains for himself or for any other person valuable thing or pecuniary advantage, he will be guilty of criminal misconduct, punishable under S.5(2) of the Act with imprisonment for a term which shall not be less than one year and which may extend to 7 years, and shall also be liable to fine. The learned counsel contends that clause (d) being a penal provision, shall be strictly construed; and that if so construed, it would only take in cases of direct benefit obtained by a public servant for himself or for any other person from a third party in the manner described therein and does not cover a case of a wrongful loss caused to the Government by abuse of his power.
10. ................ . First taking the phraseology used in the clause, the case of a public servant causing wrongful loss to the Government by benefiting a third party squarely falls within it. Let us look at the clause "by otherwise abusing the position of a public servant," for the argument mainly turns upon the said clause. The phraseology is very comprehensive. It covers acts done "otherwise" than by corrupt or illegal means by an officer abusing his position. The gist of the offence under this clause is, that a public officer abusing his position as a public servant obtains for himself or for any other person any valuable thing or pecuniary advantage. "Abuse" means mis-use i.e. using his position for something for which it is not intended. That abuse may be by corrupt or illegal means or otherwise than those means. The word 'otherwise' has wide connotation and if no limitation is placed on it, the words 'corrupt', 'illegal', and 'otherwise' mentioned in the clause become surplusage, for on that construction every abuse of position is gathered by the clause. So some limitation will have to be put on that word and that limitation is that it takes colour from the preceding words along with which it appears in the clause, that is to say, something savouring of dishonest act on his part. The contention of the learned counsel that if the clause is widely construed even a recommendation made by a public servant for securing a job for another may come within the clause and that could not have been the intention of the Legislature. But in our view such innocuous acts will not be covered by the said clause. The juxtaposition of the word 'otherwise' with the words 'corrupt or illegal means', and the dishonesty implicit in the word "abuse" indicate the necessity for a dishonest intention on his part to bring him within the meaning of the clause. Whether he abused his position or not depends upon the facts of each case; nor can the word 'obtains' be sought in aid to limit the express words of the section. 'Obtain' means acquire or get. If a corrupt officer by the said means obtains a valuable thing or a pecuniary advantage, he can certainly be said to obtain the said thing or a pecuniary advantage; but it is said that in clauses (a) and (c) the same word is used and in the context of those clauses it can only mean getting from a third party other than the Government and therefore the RC No. 219/2012/E/0003/ EO-I/CBI/ND Page 85 of 158 CBI Vs. Udaipal Singh @ Udaipal Singh Chauhan & Ors.
same meaning must be given to the said word in clause (d). 'Obtains' in clauses (a) and (b) in the context of those provisions may mean taking a bribe from a third party, but there is no reason why the same meaning shall be given to that word used in a different context when that word is comprehensive enough to fit in the scheme of that provision. Nor can we agree that as dishonest misappropriation has been provided for in clause (c), the other cases of wrongful loss caused to the Government by the deceit practised by a public officer should fall outside the section. There is no reason why when a comprehensive Statute was passed to prevent corruption this particular category of corruption should have been excluded therefrom because the consequences of such acts are equally harmful to the public as acts of bribery. On a plain reading of the express words used in the clause, we have no doubt that every benefit obtained by a public servant for himself, or for any other person by abusing his position as a public servant falls within the mischief of the said clause.
62. It has been further held in a case decided by Hon'ble High Court of Delhi titled Runu Ghosh Vs CBI Crl.A.482/2002, P.Rama Rao Vs CBI Crl.A.509/2002 and Sukh Ram Vs CBI Crl.A.536/2002 decided on 21.12.2011, as under:-
5) This question lies at the core of the reference to this Division Bench. The material portion of the reference, while adverting to Sections 13(1)(d) and then dealing with the phraseology of Section 13(1)(d)(iii) and other preceding sub-clauses, reads thus:
Whether the absence of adverbs like wilfully, fraudulently, dishonestly, corrupt or illegal means to qualify the verb obtains in this clause would mean that a public servant commits criminal misconduct if he while holding such office obtains for any person (and not for himself) any pecuniary advantage which is without any public interest? The statute appears to offer no guidance as to what can be said to be a decision or act that is without public interest.
Though the reference order elaborately lists out the salient facts in the Appeals, notes rival contentions, and even notices relevant case law, it is necessary to recapitulate the pre-existing law, i.e. Section 5(1)(d) of the 1947 Act, and juxtapose it with the 1988 Act. The controlling clauses, in both provisions, are in pari materia (a public servant is said to commit the offence of criminal misconduct if he ...). Section 5(1)(d) reads as follows:RC No. 219/2012/E/0003/ EO-I/CBI/ND Page 86 of 158
CBI Vs. Udaipal Singh @ Udaipal Singh Chauhan & Ors.
(d) if he, by corrupt or illegal means or by otherwise abusing his position as public servant, obtains for himself or for any other person any valuable thing or pecuniary advantage...Section 13(1)(d)(i), (ii) and (iii), on the other hand, read thus:
(i) by corrupt or illegal means, obtains for himself or for any other person any valuable thing or pecuniary advantage; or Crl.A.Nos. 482/02, 509/02 & 536/02 Page 45
(ii) by abusing his position as a public servant, obtains for himself or for any other person any valuable thing or pecuniary advantage; or
(iii) while holding office as servant, obtains for any person any valuable thing or pecuniary advantage without any public interest.... It is clear from the above comparison that in clause
(i), the reference to "corrupt or illegal" means, (of a public servant obtaining -for himself, or someone else-any valuable thing or pecuniary advantage) has been retained. However, the reference to doing of such an act "otherwise" (which was there in the previous law, i.e. Section 5(1)(d) has been omitted. The latter parts of Section 5(1)(d), i.e. the public servant obtaining for himself or for any one else any valuable thing or pecuniary advantage, by abusing his position as a public servant has been retained, in Section 13(1)(d)(ii).
A new offence (or sub-species, of the existing offence) has been carved out, in Section 13 (1)(d)(iii) which criminalizes, as "criminal misconduct" the act of a public servant, holding office, which results in someone else (any person) benefitting by getting a valuable thing or pecuniary advantage, without any public interest. There is no doubt that Parliament created this new offence of criminal misconduct, where abuse of office, or use of corrupt or illegal means by a public officer, is inessential to prove the crime. What the prosecution has to establish, in accordance with law, is that the public officer, obtained for someone else-not necessarily by abusing his office, or using corrupt or illegal means -pecuniary advantage or a valuable thing -without public interest.
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79. What then is the behaviour or act which attracts such opprobrium as to result in criminal responsibility? It is not every act which results in loss of public interest, or that is contrary to public interest, that is a prosecutable offence. There can be no doubt that all acts prejudicial to public RC No. 219/2012/E/0003/ EO-I/CBI/ND Page 87 of 158 CBI Vs. Udaipal Singh @ Udaipal Singh Chauhan & Ors.
interest, can be the subject matter of judicial review. In those cases, courts consider whether the decision maker transgressed the zone of reasonableness, or breached the law, in his action. However, it is only those acts done with complete and manifest disregard to the norms, and manifestly injurious to public interest, which were avoidable, but for the public servants overlooking or disregarding precautions and not heeding the safeguards he or she was expected to, and which result in pecuniary advantage to another that are prosecutabe under Section 13(1)(d)(iii). In other words, if the public servant is able to show that he followed all the safeguards, and exercised all reasonable precautions having regard to the circumstances, despite which there was loss of public interest, he would not be guilty of the offence. The provision aims at ensuring efficiency, and responsible behaviour, as much as it seeks to outlaw irresponsibility in public servants functioning which would otherwise go unpunished. The blameworthiness for a completely indefensible act of a public servant, is to be of such degree that it is something that no reasonable man would have done, if he were placed in that position, having regard to all the circumstances. It is not merely a case of making a wrong choice; the decision should be one such as no one would have taken.
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81. As noticed previously, the silence in the statute, about the state of mind, rules out applicability of the mens rea or intent standard (i.e. The prosecution does not have to prove that the accused intended the consequence, which occurred or was likely to occur). Having regard to the existing law Section 13(1)(e) (which does not require proof of criminal intent) as well as the strict liability standards prevailing our system of law, therefore, a decision is said to be without public interest, (if the other requirements of the provision, i.e. Section 13(1)(d)
(iii) are fulfilled) if that action of the public servant is the consequence of his or her manifest failure to observe those reasonable safeguards against detriment to the public interest, which having regard to all circumstances, it was his or her duty to have adopted.
63. Further, it has been held by the Hon'ble Delhi High in latest judgment titled 'Madhu Koda vs. State through CBI' (supra) in which the RC No. 219/2012/E/0003/ EO-I/CBI/ND Page 88 of 158 CBI Vs. Udaipal Singh @ Udaipal Singh Chauhan & Ors.
Hon'ble High Court has also relied upon the judgment of Hon'ble Supreme Court in Neera Yadav Vs. CBI (supra) as under :-
"30. Although the above proposition appears attractive, a closer examination of the aforesaid decisions clearly indicate that the same cannot be read as authorities for the proposition that demand of an illegal gratification is a necessary condition for convicting a public servant for an offence of misconduct, as contemplated under Section 13(1)(d) of the PC Act. This is for two reasons. First of all, the plain language of Section 13(1)(d) of the PC Act does not indicate that a demand of illegal gratification by the public servant is an essential ingredient of an offence of misconduct.
31. Secondly, a bare perusal of the judgments cited on behalf of the appellant indicates that in all those cases, charges against the accused were also framed under Section 7 of the PC Act. In terms of Section 7 of the PC Act, whoever being or expecting to be a public servant accepts or obtains or agrees to accept or attempts to obtain from any person for himself or for any other person any gratification whatever, other than the legal remuneration as a motive or reward for doing or forbearing to do any official act or for showing or forbearing to show in exercise of his official functions in favour or disfavour to any person or for rendering or attempting to render any service or disservice to any person, would be punishable for committing an offence under the said section. In other words, Section 7 of the PC Act refers to an offence of demanding or obtaining illegal gratification. In all the cases referred to on behalf of the appellant, the accused were charged with the offence of demanding/accepting illegal gratification. In addition, the accused were also charged with the offence under Section 13(1)(d) of the PC Act in conjunction with the offence under Section 7 of the PC Act. Clearly, in order to establish the offence in such cases, it would be necessary for the prosecution to establish that the accused had demanded or had obtained illegal gratification either himself or by any other person as the same is necessary for securing a conviction of an offence under Section 7 of the PC Act.
32. Apart from criminal misconduct being in conjunction of demand for illegal gratification, an offence under Section 13(1)(d) of the PC Act could also be established as a standalone offence. In Neera Yadav v. CBI (supra), the Supreme Court had examined the provisions of Section 13 of the PC Act as then in force and had explained the ingredients necessary for commission of the said offence. Paragraphs 16 and 17 of the said decision are relevant and are set out below:
"16. Section 13 of the PC Act in general lays down that if a RC No. 219/2012/E/0003/ EO-I/CBI/ND Page 89 of 158 CBI Vs. Udaipal Singh @ Udaipal Singh Chauhan & Ors.
public servant, by corrupt or illegal means or otherwise abusing his position as a public servant obtains for himself or for any other person any valuable thing or pecuniary advantage, he would be guilty of "criminal misconduct". Sub-section (2) of Section 13 speaks of the punishment for such misconduct. Section 13(1)(d) read with Section 13(2) of the PC Act lays down the essentials and punishment respectively for the offence of "criminal misconduct" by a public servant. Section 13(1)(d) reads as under:
"13. Criminal misconduct by a public servant.-- (1) A public servant is said to commit the offence of criminal misconduct-- ***
(d) if he--
(i) by corrupt or illegal means, obtains for himself or for any other person any valuable thing or pecuniary advantage; or
(ii) by abusing his position as a public servant, obtains for himself or for any other person any valuable thing or pecuniary advantage; or
(iii) while holding office as a public servant, obtains for any person any valuable thing or pecuniary advantage without any public interest; or"
17. A perusal of the above provision makes it clear that if the elements of any of the three sub- clauses are met, the same would be sufficient to constitute an offence of "criminal misconduct" under Section 13(1)(d). Undoubtedly, all the three wings of clause (d) of Section 13(1) are independent, alternative and disjunctive. Thus, under Section 13(1)(d)(i), obtaining any valuable thing or pecuniary advantage by corrupt or illegal means by a public servant in itself would amount to criminal misconduct. On the same reasoning "obtaining a valuable thing or pecuniary advantage" by abusing his official position as a public servant, either for himself or for any other person would amount to criminal misconduct."
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53. However, this Court is unable to accept that the PC (Amendment) Act, 2018 seeks to repeal the provisions of Section 13(1)(d) of the Act, as it existed prior to 26.07.2018 ab initio. Mens rea is an integral part of the offence under Sub-clause (ii) of Section 13(1)(d) of the PC Act. The use of the word 'abuse' in the said Sub- clause indicates so. Thus, there is no reason to assume that the legislative intent of repealing Section 13 of the PC Act was to exclude the said offence from the scope of PC Act with retrospective effect."
RC No. 219/2012/E/0003/ EO-I/CBI/ND Page 90 of 158CBI Vs. Udaipal Singh @ Udaipal Singh Chauhan & Ors.
64. Regarding the offence u/S 13(1)(d) of the PC Act 1988, in view of the law, as laid down by the Hon'ble Supreme Court in Neera Yadav Vs. CBI (supra) and the Hon'ble High Court of Delhi in Runu Ghosh Vs. CBI (supra) and Madhu Koda Vs. State through CBI (supra), it is to be seen whether the prosecution has been able to prove offence u/S 13(1)(d)(iii) of PC Act, which criminalizes criminal misconduct of a public servant holding public post which results in somebody else i.e. any person benefiting by getting a valuable thing or pecuniary advantage without any public interest and the prosecution has to establish to prove the said offence that the public officer obtained for someone else not necessarily by abusing his office or using corrupt or illegal means pecuniary advantage or a valuable thing without any public interest.
65. It has been further held in the said judgment that it is not every act which results in loss of public interest or that is contrary to public interest, which is prosecutable offence. It is only those acts done with complete and manifest disregard to the norms and manifestly injurious to public interest which is avoidable, but for the public servants overlooking or disregarding precautions and not heeding the safeguards he or she was expected to, which resulted in pecuniary advantage to another is prosecutable u/S 13(1)(d)(iii) of PC Act. In other words, if public servant is able to prove or show that he followed all the safeguards and exercised all reasonable precautions taking into account the circumstances, despite which there was loss of public interest, he would not be guilty of the offence.
66. Regarding the substantive charge(s) u/S. 13(1)(d) r/w. 13(2) of PC RC No. 219/2012/E/0003/ EO-I/CBI/ND Page 91 of 158 CBI Vs. Udaipal Singh @ Udaipal Singh Chauhan & Ors.
Act against the accused persons i.e. public servants S. C. Pathak (A-5), Ravi Bharti (A-6) and Pyare Lal (A-7), as already discussed in preceding paras, as per sanction note(s) for sanction of CC Limit of Rs. 91 Lakhs, thereafter enhancement from Rs. 91 Lakhs to Rs. 220 Lakhs and finally from Rs. 220 Lakhs to Rs. 300 Lakhs, which was done under Super Trading Scheme. The said loan had been secured against primary security of hypothecation of receivable of present and future as well as hypothecation of stocks and book debts. The periodical inspection / examination of book of account / factory inspection / assets inspection had to be done by the bank officials.
67. However, no such reports are there on the record to show that any actual stock inspection was done nor any actual verification of the book debts was done by the bank officials, as it was their primary duty that the book debts shown in the balance sheets submitted by the accused persons does actually exist by verifying the same from the debtors, whether they owed any money to the firm M/s. Guruji Trading Company and whether they had indulged in any bonafide transactions with the said firm.
68. As already discussed above in preceding paras, PW30 and PW31 have deposed that they had never dealt with the said firm M/s. Guruji Trading Company and the bills raised by the said Satbir Sharma in the name of their firm were fictitious / forged / fabricated and it appears that most of the entries in the account of M/s. Guruji Trading Company were accommodative entries. The said firm was not carrying out any genuine or bonafide business.
69. In fact PW45 Sh. Bhagirath Ram Choudhary, who had retired from Punjab National Bank, Management Audit and Review Division, Head RC No. 219/2012/E/0003/ EO-I/CBI/ND Page 92 of 158 CBI Vs. Udaipal Singh @ Udaipal Singh Chauhan & Ors.
Office Rajendra Place, has deposed that he was conversant with the rules and procedure to be followed for sanction of credit facilities to the borrowers / customers and has deposed after seeing the relevant documents that as per the statement of account of M/s. Guruji Trading Company from 18.01.2006 to 26.05.2007 Ex. PW45/24, from the entry at point A dated 19.01.2006, it appears that the amount of Rs.4.5 lakhs was transferred from account No. 0991008700001199 to account No.OD 9332844. This entry is accommodative in nature and amounts to diversion of funds. He has further deposed as under :
"The attention of the witness drawn at relevant entry at point A on Ex.PW-45/24. From this entry dated 19.01.2006, it appears that the amount of Rs.4.5 lakhs was transferred from account No. 0991008700001199 to account No.OD 9332844. This entry is accommodative in nature and amounts to diversion of funds.
The attention of the witness drawn at relevant entry at point B on Ex.PW-45/24. From this entry dated 21.01.2006, it appears that the amount of Rs.8 lakhs was transferred from account No. 0991008700001199 to account No.OD 9332844. This entry is accommodative in nature and amounts to diversion of funds.
The attention of the witness drawn at relevant entry at point C on Ex.PW-45/24. From this entry dated 23.03.2006, it appears that the amount of Rs.5 lakhs was transferred from account No. 0991008700001199 to Shrawan Kumar Garg by cheque no.511108. This entry is accommodative in nature and amounts to diversion of funds. It was not the genuine business transaction.
The attention of the witness drawn at relevant entry at point D on Ex.PW-45/24. From this entry dated 22.03.2007, it appears that the amount of Rs.2 lakhs was paid to self from the account No. 0991008700001199 by cheque no.511133. This entry is accommodative in nature and amounts to diversion of funds. It was not the genuine business transaction.
The attention of the witness drawn at relevant entry at RC No. 219/2012/E/0003/ EO-I/CBI/ND Page 93 of 158 CBI Vs. Udaipal Singh @ Udaipal Singh Chauhan & Ors.
point E on Ex.PW-45/24. From this entry dated 04.04.2007, it appears that the amount of Rs.9 lakhs was paid to self from the account No. 0991008700001199 by cheque no.511138. This entry is accommodative in nature and amounts to diversion of funds. It was not the genuine business transaction.
The attention of the witness drawn at relevant entry at point F on Ex.PW-45/24. From this entry dated 04.04.2007, it appears that the amount of Rs.8 lakhs was paid to self from the account No. 0991008700001199 by cheque no.511139. This entry is accommodative in nature and amounts to diversion of funds. It was not the genuine business transaction.
The attention of the witness drawn at relevant entry at point G on Ex.PW-45/24. From this entry dated 16.04.2007, it appears that the amount of Rs.8.50 lakhs was paid to Gobind from the account No. 0991008700001199 by cheque no.511146. This entry is accommodative in nature and amounts to diversion of funds. It was not the genuine business transaction.
The attention of the witness drawn at relevant entry at point H on Ex.PW-45/24. From this entry dated 19.04.2007, it appears that the amount of Rs.9 lakhs was paid to self from the account No. 0991008700001199 by cheque no.511149. This entry is accommodative in nature and amounts to diversion of funds. It was not the genuine business transaction.
The attention of the witness drawn at relevant entry at point I on Ex.PW-45/24. From this entry dated 25.05.2007, it appears that the amount of Rs.8 lakhs was paid to Parmod from the account No. 0991008700001199 by cheque no.72615. This entry is accommodative in nature and amounts to diversion of funds. It was not the genuine business transaction.
The attention of the witness drawn at relevant entry at point J on Ex.PW-45/24. From this entry dated 25.05.2007, it appears that the amount of Rs.8 lakhs was paid to Parmod from the account No. 0991008700001199 by cheque no.72616. This entry is accommodative in nature and amounts to diversion of funds. It was not the genuine business transaction.
In this way around Rs.70 lakhs were diverted by the party from this account"RC No. 219/2012/E/0003/ EO-I/CBI/ND Page 94 of 158
CBI Vs. Udaipal Singh @ Udaipal Singh Chauhan & Ors.
70. Nothing has come out in his cross-examination to demolish his testimony. Therefore, this fact regarding accommodative entries stated by this witness, who was well versed with the banking affairs regarding lending of the credit facility to the borrowers has gone unrebutted and in any case the same being based on documentary evidence, the authenticity of which has not been disputed, proves beyond any shadow of doubt that no actual business was being done by M/s. Guruji Trading Company, yet it was able to secure credit facilities from the Punjab National Bank, Mall Road branch.
71. As already discussed above, no stock statement has been placed on the record nor it is shown that the book debts as per the balance sheet / audit statement had been verified by the bank officials to secure the loan sanctioned by them to M/s. Guruji Trading Company, which was enhanced from time to time, which was the primary security, further one of the collateral immovable property for securing loan i.e. one pertaining to Baldev Raj Bhatia was forged and fabricated as elaborately discussed above shows that the following norms, as mentioned in the sanction note and that mentioned in the Super Trading Scheme Ex. PW43/DB (colly.) (D-48) (page 631) reproduced as under had been openly and blatantly flouted with disdain:
(i) The scheme will be covering a large number of activities and type of customers.
(ii) Minimum loan amount is Rs. 25000/- and maximum is Rs. 5crore.
(iii) Rate of interest is BPLR/BPLR - 0.5%, depending upon the value collateral of security.
(iv) Finance will be available for purchase of stocks and RC No. 219/2012/E/0003/ EO-I/CBI/ND Page 95 of 158 CBI Vs. Udaipal Singh @ Udaipal Singh Chauhan & Ors.
against receivables.
(v) Assessment of limit will be bases on the value of collateral security and / or on the basis of sales tax return.
(vi) Security will be hypothecation of stocks and book debts and collateral security will be mortgage of immovable property.
(vii) Stock statement will be obtained once a year i.e. first at the time of sanction and thereafter at the time of renewal / review of the limits.
(viii) Repayment of term loan will be upto 7 years.
Further it was one of the condition of the said scheme as under :
Submission of stock statement & Only once at the time of sanction & Inspection thereafter at the time of renewal / review and in the month of February every year (for audit & insurance purposes). Drawing power will not be calculated on the basis of stock statement but on the basis of value of collateral security and sales tax return showing turn over level. This provision has been made to take care of long outstanding request of trader community for reducing the paper work. The branch official will give a half yearly certificate after carrying out the visit, that the business is running and the property is intact.
72. Secondly while discussing the role of Baldev Raj Bhatia in the preceding paras, it has been categorically proved by the prosecution that RC No. 219/2012/E/0003/ EO-I/CBI/ND Page 96 of 158 CBI Vs. Udaipal Singh @ Udaipal Singh Chauhan & Ors.
forged sale deed of the property bearing new no. 9/3304 was submitted by Baldev Raj Bhatia and the same was submitted with the bank as collateral by deposit of title deeds vide Ex. P53 and further the photograph appearing of this witness on the valuation report dated 09.10.2007 Ex. PW51/H (D-23) (page 46) Ex. P81 was different from one submitted with the bank vide documents submitted by the said impersonator which is the document of assets and liability Ex. PW34/A-6 (page 956 top) part of (D-6).
As both the photographs are visibly different and it appears that the impersonator had appeared in the bank and had signed the guarantee documents and had done deposit of title deeds and in fact PW38 Ms. Neha Ailawadi, who had assisted accused Ravi Bharti in preparing the loan documents stated that the person shown in the photograph Ex. P81 had not appeared before her, shows that the impersonator was allowed to execute the guarantee documents and allowed to deposit the title deeds pertaining to the forged and fabricated property of Baldev Raj Bhatia bearing no. 9/3304, Gandhi Nagar, Delhi.
73. Further it does not end here, the spot inspection of the said property was done by accused S. C. Pathak and Ravi Bharti Ex. PW44/C (D-
23) (page 4489 bottom) wherein they had also inquired from the neighbours and the property dealers regarding the said property and if they had actually done discrete inquiries in a proper manner, they would have found out that the property documents submitted pertaining to the said property with their bank to secure the loan by Satbir Sharma were forged and fabricated and an impersonator had appeared in the bank and had signed at the said documents, thereby duping the bank by acting fraudulently.
RC No. 219/2012/E/0003/ EO-I/CBI/ND Page 97 of 158CBI Vs. Udaipal Singh @ Udaipal Singh Chauhan & Ors.
Further, there is a confidential report of the property submitted by accused Ravi Bharti, who was the appraising officer / recommending officer Ex. PW34/A9 (D-6) (page 2349 top), which also shows that the same must have been done by Ravi Bharti after due verification of all the facts, as the very fact that the confidential report was submitted by him casts a duty upon him to verify all the facts discretely from his own sources and from the facts, which he gathered by actual spot inspection, yet the said forged sale deed was submitted with the bank and an impersonator had signed on the guarantee documents as well as was able to deposit / create mortgage by way of title deeds shows that no due diligence had been done by the bank officials, as per established guidelines / norms of the bank.
74. Though, the Ld. Counsel for (A-5) and (A-6) have argued that from the testimony of PW1 and other circulars placed on the record, it was not their duty to check the title of the said property as the same had to be done by the panel lawyer and in fact the legal title search of the said property bearing no. 9/3304, on plot no.4, measuring 164 sq. yards, out of khasra no.466/124/1/12, Gali No.7, situated in the area of Village Seelampur, Abadi Gandhi Nagar, Gali Gurudware Wali, Illaqua Shahdara, Delhi-31 was carried out by an lawyer PW40 Ms. Simi Dua vide report Ex. PW40/J (colly.) (D-23) (page 4503 bottom) and further the valuation report of the same had also been done by the bank valuer Ex. PW51/H part of (D-23) dated 09.10.2007 and they have also argued that as per the admitted bank circulars, the bank officials were not required to contact the chartered accountant regarding the authenticity of the said balance sheets/income statements and the relevant circular to do so only came into existence in the year 2009.
RC No. 219/2012/E/0003/ EO-I/CBI/ND Page 98 of 158CBI Vs. Udaipal Singh @ Udaipal Singh Chauhan & Ors.
75. No doubt PW1 complainant Sandeep Dabir has admitted in his cross-examination that the title verification of the collateral had to be done by the advocate and the bank officials processing the loan were not expected to visit the office of Sub Registrar personally. He also admitted that there was no need to verify from the chartered accountant also qua the relevant documents. The valuation report of collateral secured used to be done by the approved valuer. He further deposed that there used to be confidential report in which conservative value used to be indicated by the bank incumbent, but he did not admit or deny the suggestion that both the account stood settled under One Time Settlement (OTS) Scheme during his tenure.
76. No doubt from the above admission by PW1, it appears that the bank officers appraising / sanctioning the said loan were not to go beyond the title collateral submitted for securing the said loan nor they were to verify the same from the sub registrar nor they were expected to verify from the chartered accountant regarding the balance sheets nor they were expected to value the property for which they have to rely upon the bank valuer, however, in this case, as already discussed above, the accused persons i.e. (A-5) and (A-6) had carried out a spot inspection of the property no. 9/3304 and confidential report of the said property was also filed by accused Ravi Bharti, therefore, they just cannot walk away from the fact that if they had exercised due diligence, then they would have known that the said property documents were forged and fabricated and some imposter / impersonator had appeared and signed the guarantee documents pertaining to the deposit of the title deeds. They just cannot run away from the fact in view of the overwhelming RC No. 219/2012/E/0003/ EO-I/CBI/ND Page 99 of 158 CBI Vs. Udaipal Singh @ Udaipal Singh Chauhan & Ors.
evidence proved against them as discussed above.
77. As already discussed above in the sanction note, the work address i.e. the address of the godown of the firm of accused Satbir Sharma has been shown to be 99/16, G. T. Karnal Road and it has been proved as discussed above in preceding paras that actually the said firm was not having any said one godown at the said address 99/16, G.T. Karnal Road and they were having godown at 99/3, G.T. Karnal Road, which they had taken on rent for two months only from M/s. Aarti Agro Industries and it also appears that the insurance papers showed huge over valuation of the stock and in fact the premium for the same was also paid by the Punjab National Bank for fire and burglary, whereas no actual spot inspection of the said godown was done by the bank officials i.e. A-5 and A-6 to verify, whether any actual stock was lying there, as the said insurance premium and the insurance policy showed that the same was insured for Rs. 2.5 Crores.
If they would had visited the said godown, they would have found that there was no such godown at the address 99/16, GT Karnal Road and as a corollary, no such stock was there and a false address and false insurance policy had been procured by the accused Satbir Sharma to jack up his financial capability to secure loan from the bank in a sinister manner.
78. Regarding the contention of the Ld. Counsel for the accused A-6 that the Punjab National Bank had entered into one time settlement (OTS) with the borrowers and guarantors, which itself rules out any existence of any fraud. No doubt, it has been admitted in the charge sheet and during the testimony of the relevant witnesses that the bank had entered into (OTS) with the borrowers and the guarantors. In this regard, he has also relied upon the RC No. 219/2012/E/0003/ EO-I/CBI/ND Page 100 of 158 CBI Vs. Udaipal Singh @ Udaipal Singh Chauhan & Ors.
judgment CBI Vs. B. B. Aggarwal & Co. and Sanjay Bhandari Vs. CBI (supra), however, the said argument of Ld. Counsel for A-6 is without any substance, as even if the bank had entered into (OTS) with the borrowers and the guarantors, then it does not ipso facto washes away the criminal liability of the borrowers and guarantors, which they had incurred by submitting forged and fabricated documents and thereby cheating the bank by doing the fraud in a dishonest manner.
If it was so, then what had stopped the accused persons asking the bank to go for quashing of the present RC / FIR before the Hon'ble Superior Courts, which option was never exercised, which shows that the bank had not purged the acts of forgery, cheating, dishonest inducement by doing fraudulent acts. In any case by mere entering into (OTS) does not pulls one out of the acts of cheating and forgery, as for same act or series of act, one may be liable for civil as well as criminal liability, therefore, in my respectful view, the aforesaid judgment(s) cited by Ld. Counsel for A-6 are not applicable to the peculiar facts and circumstances of the present case.
79. Regarding another contention of the Ld. Counsel for the accused that Section 13(1)(d) of PC Act, 1988 stands repealed by way of amendment in the new Act of 2018, therefore, it would have retrospective effect. The said contention has no force in view of the judgment of the Hon'ble Dehi High Court i.e. Madhu Koda Vs. State through CBI (supra) in which it has been held as under :
XXXX XXXX XXXX XXXX "53. However, this Court is unable to accept that the PC (Amendment) Act, 2018 seeks to repeal the provisions of Section 13(1)(d) of the Act, as it existed prior to 26.07.2018 ab initio. Mens rea is an integral part of the RC No. 219/2012/E/0003/ EO-I/CBI/ND Page 101 of 158 CBI Vs. Udaipal Singh @ Udaipal Singh Chauhan & Ors.
offence under Sub-clause (ii) of Section 13(1)(d) of the PC Act. The use of the word 'abuse' in the said Sub- clause indicates so. Thus, there is no reason to assume that the legislative intent of repealing Section 13 of the PC Act was to exclude the said offence from the scope of PC Act with retrospective effect."
Therefore, this argument does not hold any force.
80. Regarding the next argument that Section 13(1)(d) of the PC Act is not made out as the ingredient of the same have not been proved against the public servants. The main argument of accused Ravi Bharti (A-6) is that every norm laid down by the bank had been followed by the said accused as legal title search report, valuation report did not indicate any defect in the title of the property of Baldev Raj Bhatia nor there were any means available with (A-6) to find out that the sale deed of the said property was forged and fabricated.
81. He has further argued that admittedly, the chartered accountant was not to be asked regarding the balance sheet / audit report submitted with the loan proposal application. Since the loan had been sanctioned on the basis of the legal title search report, valuation report and the audit reports of the chartered accountant and it has also been admitted by the relevant witness that the relevant loan account of M/s. Guruji Trading Company was running till very last. In any case, the sanction order had to be appraised independent by the concurrent auditor, who did not find any deficiency / infirmity in the same and in fact the concurrent auditor PW43 Sh. Ram Chander Chopra has admitted that he was charge sheeted by the bank with regard to the loan transaction account of M/s. Guruji Trading Company and M/s. Shivani Agro India, shows that every norm prescribed by the bank for the sanction of the RC No. 219/2012/E/0003/ EO-I/CBI/ND Page 102 of 158 CBI Vs. Udaipal Singh @ Udaipal Singh Chauhan & Ors.
loan has been followed by (A-5), (A-6) and (A-7) and there is no violation of any norm, hence Section 13(1)(d) PC Act is not made out.
82. Further, the argument of A-5 S.C. Pathak has been that everything i.e. the initiation of the proposal for sanction of loan had to be done by (A-6), who had to do the ground work by carrying out spot inspection, confidential report and who had to vet all the relevant documents. He had to meet all the formalities for the proposal of the loan and after everything had been appraised and verified by him, then he had to sanction the loan on the basis of the documents and appraisal done by (A-6) and in any case, he was not required to go behind the title search report, valuation report, inquiry from the chartered accountant, as also during the post sanction audit by the concurrent auditor of the bank and by the chartered accountant, no infirmity was found. The accounts were running till very last. The (OTS) was also done by the bank which shows that every norm was duly followed by the bank, therefore, there is no question of Section 13(1)(d) PC Act being attracted in this very case.
83. On the other hand, Ld. Counsel for (A-7) Pyare Lal has argued as argued by Ld. Counsel for (A-5) that the appraisal and verification regarding the financial stability of the firm had to be done by the accused Ravi Bharti and who had to ensure that he had verified each and every document after carrying out discrete inquiries and the legal title search report, valuation report had been given by the bank panel lawyer / bank valuer and he was not required to go behind balance sheet / audit report originally submitted by accused Satbir Sharma at the time of submitting the initial loan proposal and RC No. 219/2012/E/0003/ EO-I/CBI/ND Page 103 of 158 CBI Vs. Udaipal Singh @ Udaipal Singh Chauhan & Ors.
when he has joined the bank loan was running satisfactorily and he was only instrumental in enhancing the CC Limit from Rs. 220 Lakhs to Rs. 300 Lakhs and for conversion for CC Limit from Super Trading Scheme to CC Limit General.
84. This was last transaction with regard to the loan of M/s. Guruji Trading Company vide sanction note Ex. PW43/D1 part of (D-6) (page 1161 top) and he had no means to find out that any forgery or impropriety had been done in the past by the previous incumbent S. C. Pathak and since the said loan was running satisfactorily and no infirmity and deficiency was pointed out by the concurrent bank auditor PW43 Sh. Ram Chander Chopra and further no deficiency was found in statutory audit conducted by independent chartered accountant, therefore, A-7 had bonafidely sanctioned this enhancement from Rs. 220 Lakhs to Rs. 300 Lakhs based upon the recommendation of the recommending officer Ravi Bharti and there is no criminality involved, therefore, he submits that no offence u/S. 13(1)(d) PC Act is made out.
85. I have examined the above contentions.
86. In view of the ratio of law laid down in the above judgment(s) Runu Ghosh, Madhu Koda and Neera Yadav (supra), it is not every act which results in loss of public interest or that is contrary to public interest that is a prosecutable offence. It is only those acts done with complete and manifest disregard to the norms and manifestly injurious to public health which were avoidable, but a public servant overlooking or disregarding RC No. 219/2012/E/0003/ EO-I/CBI/ND Page 104 of 158 CBI Vs. Udaipal Singh @ Udaipal Singh Chauhan & Ors.
precaution and not heeding the safeguards he or she was expected to and which results in pecuniary advantage to another that are prosecutable u/S. 13(1)(d)(iii) of PC Act.
In other words if the public servant is able to show that he followed all the safeguards and exercised all reasonable precautions having regard to the circumstances, despite which there was loss of public interest, he would not be guilty of the offence. The provision aims to ensure efficiency and responsible behaviour as much as it seeks to out law the irresponsibility in public servant functioning which would otherwise go unpunished. It is not merely the case of making a wrong choice, the decision should be one as no one would have taken.
87. As discussed above, in the present case as per the sanction note(s) discussed above, the bank or its authorized representative had the right to carry out periodical inspection for examination of book of accounts of the borrower and to have their factories / offices / assets inspected from time to time. Further, the primary security in this case was hypothecation of entire stocks contains food grains and book debts.
Therefore, it was the incumbent duty on behalf of the public servant i.e. (A-5), (A-6) and (A-7) to get the stock statement from the bank officials from time to time, as it was also one of the condition of the sanction note that the firm was to submit stock statement at the time of sanction and thereafter at the time of renewal / review and in the month of February every year for audit and insurance purposes.
88. As already discussed above, there is no stock statement on the RC No. 219/2012/E/0003/ EO-I/CBI/ND Page 105 of 158 CBI Vs. Udaipal Singh @ Udaipal Singh Chauhan & Ors.
record which shows any due diligence being exercised by the bank officials. Neither the book debts were got verified from the alleged borrowers of the said firm to find out whether they actually owned any money to the said firm or they were only dummy borrowers reflected in the balance sheet. As already discussed in the testimony of PW30 and PW31 number of accommodative entries were generated by the accused Satbir Sharma to show that they were having dealings with the firm of PW30 and PW31, whereas he was not having any dealing with them to inflate his balance sheet which was forged and fabricated, as the concerned chartered accountant has deposed so that he did not prepare those balance sheets / audit statements.
89. Since the primary security of the bank was secured hypothecation of entire stock and book debts, it was the incumbent duty of the bank officials to get the stock statement and to visit the work and offices of the borrower and to examine their book of account, but they did not, as discussed above. Further as per the terms of the Super Trading Scheme, the loan was also enhanced under the said scheme from Rs. 91 Lakhs to Rs. 220 Lakhs and thereafter from Rs. 220 Lakhs to Rs. 300 Lakhs, the stock statement had to be obtained once in a year, first at the time of sanction and thereafter at the time of renewal / review which was never done.
As per the said scheme bank officials were bound to obtain and the borrower was under obligation to submit their stock statement at the time of sanction and thereafter at the time of renewal / review and in the month of February every year for audit and insurance purposes and the investigation had to be done by the branch officials and the has to give the half yearly certificate after carrying out the visit that the business was running and RC No. 219/2012/E/0003/ EO-I/CBI/ND Page 106 of 158 CBI Vs. Udaipal Singh @ Udaipal Singh Chauhan & Ors.
property was intact. Despite that no such inspection was done.
90. Ld. Counsel(s) for (A-5), (A-6) and (A-7) have argued that no such deficiency could be digged out by the concurrent auditor of the bank PW43 Sh. Ram Chander Chopra, who was working as Chief Internal Auditor of the branch, Mall Road and his job was to do post audit for the branch and to secure all the loan transactions were carried out, as per the existing guidelines and lapses, if any were pointed out by him in his monthly and daily reports and in fact he was also charge sheeted by the bank, which he has admitted in the cross-examination. He also argued that in fact PW45 Sh. Bhagirath Ram Choudhary has admitted that there was a statutory audit conducted in every branch by an independent chartered accountant, who also did not find any violation of the bank norms.
91. No doubt, neither the chartered accountant nor the internal auditor could find out any deficiency or could not catch hold of this fake transaction nor statutory auditor could find out the same, but at the same time, this does not mean that no violation of any established norms were done by the accused merely because they were not caught by the internal auditor or the statutory auditor. It may be that the internal auditor was also charge sheeted by the bank, but it is not the case of the prosecution or the accused that he was also one who had sanctioned the loan, recommended the loan or was bound to obtain the due diligence from the borrower. Therefore, this arguments does not save the accused persons.
92. As already discussed above, the said inspection was carried out by RC No. 219/2012/E/0003/ EO-I/CBI/ND Page 107 of 158 CBI Vs. Udaipal Singh @ Udaipal Singh Chauhan & Ors.
accused Ravi Bharti (A-6) and S.C. Pathak (A-5) of the property 9/3304, Old Seelampur, Gandhi Nagar, Delhi of one Baldev Raj Bhatia, who had submitted a forged and fabricated sale deed and an impersonator had signed the same in the relevant bank documents, whereas in the valuation report already available with the bank, a different person was visible in the photograph annexed with the same. In fact the confidential report was also submitted by accused Ravi Bharti with the bank. It is not clear why the accused persons despite due visit to the spot and confidential report could not find out that the property transaction i.e. the collateral with regard to the said property was not genuine one and an imposter / impersonator had signed, delivered the title deeds and guarantee documents with the bank.
93. Further as already discussed above M/s. Guruji Trading Company was not having any godown at 99/16, Old G.T. Karnal Road, Alipur, Delhi whereas it was having godown at 99/3, Old G.T. Karnal Road, Alipur, Delhi, as per the deposition of the witnesses already discussed above, which they had taken on rent for two months. The said address was also mentioned in the works column of the sanction note Ex. PW45/34 (colly.) part of (D-6), (page 2401 bottom), therefore, it was their incumbent duty i.e. of public servants (A-5) and (A-6) to visit the said place/ godown to find out, whether any stock was kept there and for which it was also insured by payment of premium by the bank. If they had carried out the actual inspection at the said godown, they would have found out from the said godown that M/s. Guruji Trading Company was not having any godown nor they were having any stock and it seems that the insurance of the stock was got done and premium was paid for imaginary stock, which was never existing. This was sheer violation of all the RC No. 219/2012/E/0003/ EO-I/CBI/ND Page 108 of 158 CBI Vs. Udaipal Singh @ Udaipal Singh Chauhan & Ors.
established norms of the bank, delineated above. The criminal intend and knowledge to do these acts is also clearly discernible from the series of acts elaborated above, thereby proving necessary mens rea to commit the offence(s) with respect to (A-5) and (A-6).
94. Regarding the argument of (A-5) that as per the documents Ex. DW6/A, which he received being the certified copies in a pending suit titled as Subhash Chander Pathak @ S.C. Pathak Vs. PNB & Ors. bearing CA suit no. CS-1772/2017, in which certified documents have been supplied to him on his application moved under Order 11 Rule 12 & 14 CPC, which are Ex. DW6/A (Colly.), whereby the departmental enquiry proceedings in relation to inspection report and other irregularities bearing the departmental enquiry no. DE-121/35 were dropped, shows that no norms or those norms were not flouted or violated by him.
95. I have also examined the said contention. It also does not help the case of (A-5), as mere dropping of the some points of enquiry proceedings in the departmental enquiry ipso facto does not wash away the overall criminality of the accused, as there have been number of blatant violations of norms as discussed above, which have been done by (A-5). Therefore, prosecution has been able to make out a case u/S. 13(1)(d)(iii) r/w. 13(2) of PC Act 1988 qua this Transaction A with regard to public servants (A-5) and (A-6).
96. Regarding the role of public servant Pyare Lal (A-7) with regard to the transaction of loan of M/s. Guruji Trading Company, he was the sanctioning officer with regard to the enhancement of the CC Limit from Rs.
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220 Lakhs to Rs. 300 Lakhs against hypothecation of entire stocks consisting of food grains lying in the shop and godown of the party by way of conversation of limits from Super Trading Scheme vide Ex. PW43/D1 (colly.) (page 1161 top). The said document has already been admitted by the accused Pyare Lal during admission / denial conducted on 16.02.20217.
97. Ld. Counsel for the accused has argued that no doubt as per the terms of the said sanction, he was also bound to carry out periodical inspection of the book of accounts of the borrower and to visit the factories and the offices to inspect the same from time to time also to obtain stock statement, but he has argued that since the said loan was continuing and was running satisfactorily when the incumbent joined the bank, he solely relied upon the recommendation of the recommending officer Ravi Bharti, who recommended for the sanction of loan and he had no malafide, at the most he can be said to be negligent in the performance of his duties.
98. He has also argued that PW45 Sh. Bhagirath Ram Choudhary has admitted in his cross-examination that he does not know that Ravi Bharti was transferred from Punjab National Bank, Mall Road branch on 13.10.2007 and after seeing the document Ex. PW34/A (D-6), he stated that the CC Account of M/s. Guruji Trading Company was operational as mentioned in the corresponding documents i.e. statement of account. Similar was his answer with regard to M/s. Shivani Agro India, therefore, it appears from the testimony of PW45 Sh. Bhagirath Ram Choudhary that the said account was running smoothly/normally on 14.09.2007 and that the loan was sanction by Pyare Lal on the recommendation of Ravi Bharti.
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99. Ld. Counsel for (A-7) has further argued that at the time of enhancement of the last two limits qua the account of M/s. Guruji Trading Company and M/s. Shivani Agro India, there were sufficient debit / credit entries in the account, as reflected in the statement of account (D-29) and (D-32) and there were no serious irregularities in the same. The perusal of the sanction note Ex. PW47/A-20 shows that the loan was sanctioned by accused Pyare Lal on 14.09.2007 and as per the statement of account of M/s. Guruji Trading Company and M/s. Shivani Agro India Ex. PW45/28 and Ex. PW45/29, part of (D-29 to D-32), it appears that at that time, the account was running satisfactorily, therefore, it may be that the accused Pyare Lal had been misled by the accused Ravi Bharti (A-6), who had been associated with both the loans from the very beginning and its enhancement from time to time.
100. Ld. Counsel for (A-7) has also relied upon one Inspection & Control circular no. 23/99 dated 24.06.1999 issued by Punjab National Bank, Inspection and Control Division, Head Office Rajendra Bhawan, Rajendra Place, New Delhi, directing all officers of the bank to follow the directions as per the said circular with regard to "period for fixing responsibility for procedural irregularities", which is Ex. DW4/2. As per the said circular in certain cases, the serious irregularities may be such as may come to notice sometime later, in such cases, a period not exceeding six months has been fixed within which such irregularities should be detected by the successor and brought to the notice of higher authorities. However, the successor incumbent incharge will thereafter have to own responsibility for the proper working of the branch.
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101. I am not able to comprehend how this circular helps the case of (A-7), as the present RC was registered in 2012 with regard to the irregularities, which took place prior to the time when the present accused took over as an incumbent of the present branch.
Though, as discussed above, (A-7) was bound down to carry out spot inspection of the work and the godown of the borrower and to obtain the stock statement, as the primary security of the said loan was hypothecation of stocks. However, since no infirmity was brought to his notice by past incumbent or by internal or statutory auditor for this one off transaction, he can be said to have acted on the recommendation of Ravi Bharti, who had been instrumental in recommending all the loans of M/s. Guruji Trading Company, limits of which were enhanced from time to time, as already discussed above and in this regard, a departmental inquiry was also initiated against (A-7) and he was also compulsory retired with penalty on 31.07.2013 as mentioned in the charge sheet. Therefore, his one off act on the scale of probabilities can be said to be bordering on the point of negligence. The prosecution has not been able to prove beyond shadow of doubt that it was intentional criminal act having criminal knowledge of the act and the consequences thereof i.e. mens rea, as has been the case qua (A-5) and (A-6).
Therefore, it appears that his conduct falls under the realm of negligence and does not entail criminality u/S. 13(1)(d)(iii) r/w. 13(2) of PC Act qua this Transaction A. CONSPIRATORIAL ACTS OF ACCUSED PERSONS
102. With regard to the conspiratorial acts, as already discussed above RC No. 219/2012/E/0003/ EO-I/CBI/ND Page 112 of 158 CBI Vs. Udaipal Singh @ Udaipal Singh Chauhan & Ors.
in detail, A-5 and A-6 as per the established norms of the bank and as per the sanction note and the terms of the Super Trading Scheme were bound down to carry out periodical inspection, examination of book of accounts to inspect the factories / premises of the borrower to carry out the asset inspection offered by the borrower and to obtain stock statement from time to time, which was never done, despite the fact that it was their incumbent duty to secure the loan as the loan was secured by primary security of hypothication of stock and book debts and they also did not see that any actual business was being done in the firm M/s. Guruji Trading Company and only accommodative entries were being rotated from the said account without any actual business transaction being carried out from the loan given to the borrower.
103. Further despite carrying out spot inspection report Ex. PW44/C by (A-5) and (A-6) and confidential report of the property bearing no. 9/3304, Old Seelampur, Gandhi Nagar, Delhi carried out by A-6 only and despite the photograph of the said real Baldev Raj Bhatia available in the valuation report dated 09.10.2007, they allowed the execution of asset / liability document of the said Baldev Raj Bhatia having photograph of the impersonator on Ex. PW34/A6 (page 956 top) dated 25.05.2007.
Though, the valuation report dated 25.09.2007 was later in time than the execution of the document Ex. PW34/A-6 dated 25.05.2007 above, however, the deposition of title mortgage by way of title deeds was created in the bank on 14.05.2008 on which date, both the valuation reports on which a different photograph of Baldev Raj Bhatia appears and that mentioned on Ex. PW34/A6 were available with the bank officials to show that the deposit of title deed was being done by some impersonator, though this deposit of title RC No. 219/2012/E/0003/ EO-I/CBI/ND Page 113 of 158 CBI Vs. Udaipal Singh @ Udaipal Singh Chauhan & Ors.
deed Ex. P53 has been admitted by accused Pyare Lal with regard to the enhancement of CC Limit from Rs. 220 Lakhs to Rs. 300 Lakhs, but the accused Ravi Bharti was constant throughout in that he was the recommending officer in all the borrowing limits of M/s. Guruji Trading Company and in fact he and S. C. Pathak carried out the spot inspection of the property vide Ex. PW44/C (D-25) (page 2183 top) and it has been mentioned in the said spot report that they had inquired from the property dealers and the local people regarding the rate of the said property and when the property was again offered by way of further creation of the equitable mortgage already existing for enhancement of CC Limit from Rs. 220 Lakhs to Rs. 300 Lakhs, though the accused S. C. Pathak had been transferred by that time and Pyare Lal had taken over as incumbent of the bank, but Ravi Bharti was the same, as he was the recommending officer in the said loan vide sanction order Ex. PW43/D1 (colly.) (D-6).
104. Therefore, he should have known after seeing the photograph appearing on the valuation report dated 09.10.2007 that some other person had executed the document Ex. PW34/A6 dated 25.05.2007 during the enhancement of the limit from Rs. 91 Lakhs to Rs. 220 Lakhs. In fact, Ravi Bharti had also gave a confidential report with regard to the said property of Baldev Raj Bhatia Ex. PW34/A9 (page 951 top), therefore, it is hard to believe that both the accused persons i.e. S.C. Pathak and Ravi Bharti would not have met the original Baldev Raj Bhatia or would have, if they had exercised due diligence, otherwise was the need of spot inspection.
In fact the spot inspection was carried out and confidential report was given by Ravi Bharti shows that they were not sure about the valuation of RC No. 219/2012/E/0003/ EO-I/CBI/ND Page 114 of 158 CBI Vs. Udaipal Singh @ Udaipal Singh Chauhan & Ors.
the said property bearing no. 9/3304, Old Seelampur, Gandhi Nagar, Delhi of Baldev Raj Bhatia and they also wanted to find out who was the real guarantor offering the said property. Therefore, it appears was their incumbent duty to find out the true valuation of the said property for conservative valuation, as also the identity of the real person offering the said property as collateral property.
105. Further, as already discussed above the said M/s. Guruji Trading Company was not having any godown at 99/16, Old G.T. Karnal Road, Alipur, Delhi as mentioned in the sanction note and they were having only godown at 99/3, Old G.T. Karnal Road, Alipur, Delhi that for two months, yet without any stock inspection or actual inspection of the said godown, huge amount of insurance premium was paid by the bank for securing the stock to the tune of Rs. 2.5 Crores, which never existed, as neither the stock statement was obtained nor inspection of the said godown was done and the accused submitted wrong address of the said godown, whereas he has taken on rent one godown from M/s. Aarti Agro Industries at 99/3, Old G.T. Karnal Road, Alipur, Delhi for two months and never had any godown at 99/16, Old G.T. Karnal Road, Alipur, Delhi.
106. All these acts when taken as a whole show that the deceased Satbir Sharma as well as Baldev Raj Bhatia and the public servants Ravi Kumar Bharti and S. C. Pathak were conducting these acts in furtherance of their common objective or design i.e. there was conspiracy between the aforesaid borrowers, guarantor and the public servants to obtain / sanction loan on the basis of forged and fabricated balance sheets, non existing godown and forged RC No. 219/2012/E/0003/ EO-I/CBI/ND Page 115 of 158 CBI Vs. Udaipal Singh @ Udaipal Singh Chauhan & Ors.
and fabricated collateral property, while the said firm was not carrying out any business and it was only indulging in accommodative entries and it was not having any stock and the entire loan transactions were to siphon off the money in some other account fraudulently to cause wrongful gain to themselves and wrongful loss to the bank in dishonest manner and thereby accused persons in furtherance of their conspiracy dishonestly induced the bank to lend loan, which they would have never done, if they would not have been so deceived.
Since Satbir Sharma and Baldev Raj Bhatia are dead, therefore, the prosecution has been able to prove its case against the accused persons i.e. (A-5) and (A-6) for all the conspiratorial acts qua this Transaction A.
107. Whereas, the prosecution has not been able to prove that the accused Pyare Lal attached himself to the common objective of the said running conspiracy and was doing any act in furtherance of the acts of the said conspiracy. Accordingly, the prosecution has failed to prove that the accused Pyare Lal was a co-conspirator with regard to the conspiracy of getting loan sanctioned in favour of M/s. Guruji Trading Company or was liable to be convicted u/S. 13(1)(d)(iii) r/w. 13(2) PC Act 1988 or for the conspiracy part qua this Transaction A. TRANSACTION (B) : TRANSACTION WITH REGARD TO THE ADVANCEMENT OF LOAN TO M/S. SHIVANI AGRO INDIA WILL BE REFERRED TO AS TRANSACTION (B) HEREINAFTER FOR SAKE OF SIMPLICITY, AS ALSO ROLE OF ACCUSED UDAIPAL SINGH (A-1).
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108. The fact that accused Udaipal Singh was running the firm in the name of M/s. Shivani Agro India has been proved by PW21 Sh. Neeraj Pal, who was earlier posted in Trade & Taxes Department of the Delhi Government. He has proved the registration form of the said firm M/s. Shivani Agro India, proprietor Udaipal Singh vide document Ex. PW21/A6 (D-79) (page 7433 bottom), whereby the application was made for registration under Delhi Value Added Tax Act 2004. He has also proved registration certificate under the Central Sales Tax (Registration and Turnover) Rules 1957 Ex. PW21/A8 (D-79) (page 7439 bottom), which clearly proves that the said accused was running the said firm in the name and style of M/s. Shivani Agro India Limited.
109. Regarding the sanction of CC Limit of Rs. 110 Lakhs, the said accused Udaipal Singh being the proprietor of M/s. Shivani Agro India approached the Punjab National Bank, Mall Road branch and made an application for the sanction of CC Limit of Rs. 110 Lakhs vide loan application Ex. PW47/X dated NIL, which is Ex. D-54 (page 6569 bottom). This has also been admitted by the said accused during admission / denial u/S. 294 CrPC dated 28.02.2017 and has been exhibited as Ex. P-38. The same was sanctioned vide note Ex. PW47/Y dated 07.06.2006.
The CC Limit of Rs. 110 Lakh was sanctioned against hypothecation of stock, book debts and value of collateral security having RV of 159.92 Lakhs under Super Trading Scheme. The address of the said firm was mentioned as Ground Floor, Municipal No. 111/2257 (New), Gali Hingabeg Pathak, Habsah Khan, Naya Bazar, Delhi-110 006. The working address was also the same and it was mentioned that the said firm was dealing RC No. 219/2012/E/0003/ EO-I/CBI/ND Page 117 of 158 CBI Vs. Udaipal Singh @ Udaipal Singh Chauhan & Ors.
in the food grains including rice and pulses. The primary security as already discussed above was hypothecation of entire stock consisting of food grains and book debts not older than four months and the property was secured by way of collateral of following properties :
a) Commercial two shops bearing No. 5 and 6 measuring total area of shops 171 sq. fts. Situated at Ground floor, Municpal No. 111/2257 (New), Gali Hingabeg Phatak, Habsah Khan, Naya Bazaar, Delhi-110006, standing in the name of Sh. Uday Pal Singh, Prop. of the firm.
b) The free hold property situated at Killa No. 49/17/1 and 49/17/2, Khewat No. 748/656 and 242/2056, Khata No. 307, 991 under Haded Nagar, Mehlana Road, Opp. Sector-23, Sonipat, Haryana, having an area of 1000 sq. yds with covered area of 6300 sq. fts.
Approx. being use as Raju Palace Bandit Hall, standing in the name of Smt. Sarita Jain, W/o. Sh. Vinod Jain.
110. The said sanction letter (D-54) has been admitted by accused S. C. Pathak during admission / denial dated 08.03.2017. The said accused has also admitted his signatures on the said sanction letter actually signed on 09.06.2006 at point A which is Ex. P-75. As already discussed above while discussing the loan sanction to M/s. Guruji Trading Company that the said loan was sanctioned under Super Trading Scheme Ex. PW43/DB part of (D-
48) (page 6313 bottom) terms of which have already been reproduced above. One of the main term of the said scheme is :
Method for assessment of For Traders limit / Drawing power The limit will be calculated on the basis of actual sales declared in the sales tax return RC No. 219/2012/E/0003/ EO-I/CBI/ND Page 118 of 158 CBI Vs. Udaipal Singh @ Udaipal Singh Chauhan & Ors.
submitted by the trader. The limit will be 20% of the sales reported or 20% of the projected sales in case of new as well as old projects.
Or On the basis of value of collateral security, which should not be less than 150% of the limit / loan amount, whichever is less.
111. Though the said scheme was launched for decreasing the paper work and other formalities for small time traders, but at the same time, it was the main condition of the said scheme that the value of the collateral security should not be less than 150% of the limit / loan amount, whichever is less. As already discussed the RV value of the collateral(s) was mentioned in the sanction letter Ex. PW47/Y as Rs. 159.92 Lakhs for the sanction of CC Limit of Rs. 110 Lakhs. Therefore, as per the said essential term, the realization value of the property should have been Rs. 165 Lakhs for the sanction of CC Limit of Rs. 110 Lakhs. Therefore, the sanction of Rs. 110 Lakhs by way of CC Limit against the said collateral having only value of Rs. 159.92 Lakhs was against or in sheer violation of the basic requirement of the Super Trading Scheme vide circular mentioned above.
112. After the sanction, the other documents i.e. document pertaining to hypothecation of goods and book debts to secure cash credit facility Ex.
PW47/Z (D-54) (page 6589) which has also been admitted by accused Udaipal Singh in admission / denial carried out on 289.02.2017 Ex. P-39 (colly.) (from pages 11 to 31) were also executed with the bank. Further other documents in this regard Ex. PW47/A1 (part of D-54) (page 6609 bottom) and hypothecation of movable assets forming part of fixed / block assets Ex.
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PW47/A-2 (page 6613 bottom) were also executed.
113. The agreement of guarantee executed by Smt. Sarita Jain is Ex. PW47/A-3 (D-54) (page 6643). The said agreement of guarantee has also been admitted by accused S. C. Pathak in admission / denial conducted on 08.03.2017, however, it appears that the said document has been wrongly mentioned as specific endorsement regarding admission of the said document has been made by the accused S. C. Pathak on the document itself.
114. Surprisingly the accused Satbir Sharma has also appeared as first guarantor in the execution of the said deed of guarantee. The accused Udaipal Singh also deposited the title deeds with regard to the property bearing shop no. 5 & 6 situated at Ground Floor, Municipal No. 111/2257 (New), Gali Hingabeg, Naya Bazar, Delhi-110006, which has also been admitted by the said accused during admission / denial as Ex. P-40 & Ex. P-41 and the same is Ex. PW47/A-5 (two pages 6647 & 6648 bottom). Along with the said loan proposal, the said accused had also filed the audited balance sheets as well as trading and profit and loss account, which are Ex. PW27/A (colly). The said balance sheets etc. bear the stamp of M/s. Ashok Om & Company Chartered Accountants.
115. However, the witness PW27 Sh. Ashok Bansal has categorically deposed that he was running a firm in the name of M/s. Ashok Om & Company being a chartered accountant. He had not worked at any time for M/s. Shivani Agro India, 2257, Gali Hingabeg, 2nd Floor, Naya Bazar, Delhi and he does not know anything about this firm. He has never worked for any person named Udaipal Singh nor he knows him. He did not prepare the audit RC No. 219/2012/E/0003/ EO-I/CBI/ND Page 120 of 158 CBI Vs. Udaipal Singh @ Udaipal Singh Chauhan & Ors.
report. The documents Ex. PW27/A (colly.) were specifically shown to him and he stated that the stamp and seal impression does not belong to him firm and the same were forged and he never signed on the same.
He was also shown the documents (part of D-4) (page no. 232-249 except page no. 234) and he after seeing the documents stated that it is a fake audit report u/S. 44 AB of the Income Tax along with the balance sheet as on 31.03.2006 and profit and loss account in the year ended as of that date of M/s. Shivani Agro India, Naya Bazar, Delhi. He was also shown the documents page 249. He also stated that it is purportedly in the name of his firm M/s. Ashok Om & Co., but the same does not belong to him. The signature does not belong to him nor the address of the said firm and the seal is forged. The said document is Ex. PW27/B (colly.).
He was also shown internal page nos. 402-419 of (D-5) with regard to the same firm M/s. Shivani Agro India, however, his answer was same that the same does not belong to his firm and the same was forged and fabricated. The said documents are Ex. PW29/C (colly.) He was also shown exhibit Ex. PW27/D (page 420 to 422) of the said firm, after seeing them his answer was the same. Nothing has come out in his cross-examination, which could show that the credibility and veracity of the said witness has been diminished or diluted after his cross-examination.
116. However, surprisingly this accused Udaipal Singh had appeared as defence witness himself and examined himself as DW2. His examination in chief reads as under :
I am graduate in commerce and I was doing the work of accounts. In the year 2004, I came in contact with RC No. 219/2012/E/0003/ EO-I/CBI/ND Page 121 of 158 CBI Vs. Udaipal Singh @ Udaipal Singh Chauhan & Ors.
Satbir Sharma through my friend Giriraj Chaudhary. I was employed by Satbir Sharma at a monthly salary of Rs.5000/- in the year 2004. Satbir Sharma was the proprietor of M/s Guruji Trading Co.
I opened a firm as proprietor in the name of Shivani Agro India at the instance of Satbir Sharma wherein I was not getting anything except the salary fixed at Rs.5000/-. I signed all the documentation with respect to Shivani Agro India. In the year 2006, two shops were purchased in my name by Satbir Sharma (as he paid the sale consideration) at 2257, Gali Raghunandan, Naya Bazar, Delhi.
In the year 2006, Satbir Sharma applied for loan facility with PNB, Mall Road, Delhi wherein four properties were mortgaged including my shops 2257, Gali Raghunandan, Naya Bazar, Delhi. Rakesh Sharma was the son of Satbir Sharma and both of them used to operate the accounts of Shivani Agro India although I used to sign the documents and cheques on their instance. The entire loan facility was availed by Satbir Sharma. I have not obtained any benefit in this case. I signed all the papers at the instance of Satbir Sharma. At subsequent stage, the loan became NPA since there was default in repayment.
117. Ld. Counsel(s) for (A-5) and (A-7) have feebly raised an argument regarding the admissibility of the evidence of DW2 Udaipal Singh, RC No. 219/2012/E/0003/ EO-I/CBI/ND Page 122 of 158 CBI Vs. Udaipal Singh @ Udaipal Singh Chauhan & Ors.
as they have argued that DW2 Udaipal Singh was only cross-examined by accused (A-4) and (A-6) and no effective opportunity was given to the above accused persons to cross-examine the said accused DW2 Udaipal Singh, therefore, his testimony cannot be read in evidence.
118. I have gone through the record. The said argument is without any substance, as DW2 Udaipal Singh Chauhan, who is also A-1 in this case had moved an application u/S. 315 CrPC pursuant thereto he was examined in chief on 07.03.2019 and partly cross-examined by Ld. PP for CBI and his further cross-examination was deferred as reflected in order sheet dated 07.03.2019 and thereafter the matter was listed for further cross-examination of said accused / witness on 08.03.2019.
119. On 08.03.2019 DW2 was further cross-examined by Ld. PP for CBI and also cross-examined on behalf of A-4 and A-6. It is pertinent to mention here that on that day Ld. Counsel for accused S. C. Pathak (A-5) Sh. K. G. Mishra was very much present in the Court, as reflected in the order sheet, though, the Ld. Counsel for accused Pyare Lal was not present on that day, but the accused Pyare Lal was very much present on that day. No request was made by Ld. Counsel for A-5 and A-7 seeking an opportunity to cross- examine the said accused / DW2, who entered into the witness box by moving an application u/S. 315 CrPC.
Therefore, they had been given effective opportunity to cross- examine the said witness, which they did not avail for the reasons best known to them or due to the fact that they had nothing to ask from the said witness / accused. Further, if they wanted to cross-examine the said accused / witness, RC No. 219/2012/E/0003/ EO-I/CBI/ND Page 123 of 158 CBI Vs. Udaipal Singh @ Udaipal Singh Chauhan & Ors.
nothing stopped them from moving formal application in this regard, which was never done, even after the conclusion of the trial / evidence or till the final arguments were continuing.
120. This shows that they had nothing to ask from the said witness and they had already been given two opportunities to cross-examine the said witness, which they did not avail. This fact is further amplified from perusal of the order sheet dated 08.03./2019 as an application u/S. 311 CrPC had been moved on behalf of A-6 seeking to cross-examine (A-4) i.e. accused no. 4, who had also been examined as DW1, which request was allowed vide the same order dated 08.03.2019.
121. Further when the said DW2 was in the witness box an request was made by ld. Counsel for Sarwan Kumar Garg to cross-examine the said witness / accused A-1, overruling the objection raised by Ld. PP for CBI, the Ld. Predecessor of this Court had allowed the said Ld. Counsel to cross- examine the said accused / DW1 and Ld. Counsel for A-6 also availed the said opportunity, but neither A-5 nor A-7 asked for the opportunity to cross- examine despite their presence on that day or thereafter. This shows that they had been given effective opportunity to cross-examine the said witness, which they did not avail. Therefore, testimony of DW2 Udaipal Singh is very much admissible in evidence and can be read as such.
122. In his cross-examination with regard to the said statement of account, audit statement / balance sheet, he has admitted that the provisional balance sheet (pages 252-260) bears his signatures at point A for M/s. Shivani RC No. 219/2012/E/0003/ EO-I/CBI/ND Page 124 of 158 CBI Vs. Udaipal Singh @ Udaipal Singh Chauhan & Ors.
Agro India, the said document is Ex. DW2/A, part of (D-4) page (253 bottom). As already discussed during the testimony of PW27 Sh. Ashok Bansal, who has stated that the stamp and seal impression and signatures on the said balance sheet does not belong to him, thereby the said accused admits that he had prepared the said false documents dishonestly and fraudulently signing on the said document, which was never prepared by PW27 and which are purported to be projected as being prepared by PW27 on behalf of M/s. Shivani Agro India. Further he has also admitted that the audit report, as discussed above Ex. PW27/B (colly.) (D-4) (page 275 bottom) bears his signature at point A (internal pages 236-248). He has also admitted that copy of the income statement at page 174 part of (D-4) Ex. DW2/B also on his behalf bears his signatures at point A Ex. DW2/B (page 425 bottom) (internal page 174).
He also admitted that the audit report Ex. PW31/A (colly.) (page 457 bottom, internal pages 145-151) also bears his signatures at point A, thereby he again admitted that he had prepared false documents as discussed above by putting his signatures on the same by projecting it to have been prepared by the firm S.K. Garg &Associates, as the said witness as PW31 Sunil Kumar Garg has deposed with regard to the said document that the same is forged and fabricated. He was never having his office at F-211, Kirti Nagar, Delhi and the said audit report does not belong to him or any person of the firm S. K. Garg & Associates. He was having office at Sohna, Gurgaon. He was never having his office at Delhi. The seal also does not belong to his firm. The signature does not belong to him and the said audit report purportedly belong to him, does not belong to him and the same is fake one. From the testimony of said witness, it is apparent that only this accused had RC No. 219/2012/E/0003/ EO-I/CBI/ND Page 125 of 158 CBI Vs. Udaipal Singh @ Udaipal Singh Chauhan & Ors.
prepared the false documents as purported to have been prepared by PW31.
ENHANCEMENT OF CC LIMIT FROM RS. 110 LAKHS TO RS. 234 LAKHS
123. As already discussed above, the earlier cash credit limit was sanctioned under Super Trading Scheme. The application for enhancement from Rs. 110 Lakhs to Rs. 234 Lakhs is Ex. PW47/A7 (part of D-54) (page 6653 bottom), the accused Udaipal Singh during his admission / denial has admitted the signature on the said document Ex. P43 carried on 28.02.2017 during admission / denial. The sanction note regarding enhancement from Rs. 110 Lakhs to Rs. 234 Lakhs is Ex. PW47/A8 (D-54) (page 6657 bottom).
As already discussed above, the earlier CC Limit was Rs. 110 Lakhs, however, it was deliberately mentioned in the said sanction note that the existing CC limit was Rs. 105 Lakhs. Since as per the terms of the Super Trading Scheme, the value of the collateral security should not have been less than 150% of the limit / loan amount, this was deliberately done and wrongly mentioned as Rs. 105 Lakhs to bring it within the four corners of Super Trading Scheme, as earlier the total value of the collateral security should have been Rs. 165 Lakhs for the sanctioned limit of Rs. 110 Lakhs under Super Trading Scheme, as already elaborated above, therefore, to bring it within the four corners of the said scheme, it was deliberately and malafidely written as Rs. 105 Lakhs during the enhancement proposal note and two more collateral were added besides the property of Ms. Sarita Jain and that of Satbir Sharma of Naya Bazar. The two additional properties were as under :
1. Freehold 3 storey building bearing khasra no. 683 & new no.RC No. 219/2012/E/0003/ EO-I/CBI/ND Page 126 of 158
CBI Vs. Udaipal Singh @ Udaipal Singh Chauhan & Ors.
8421, Basti Achhut, Qadam Sharif, now known as Arya Nagar, pahar Ganj, New Delhi-55 having an area of 68 sq. yards standing in the name of Sh. Din Dayal Saini, S/o. Late Sh. Laxmi Narain.
2. Free hold 4 storey building bearing no. 2252/171 out of Khasra no. 620/552, Khewat no. 1, plot no. 130, situated in are of Vill. Choukri Mubrakabad, now known as Ganesh Pura, Tri Nagar, Delhi having an area of 100 sq. yards standing in the name of Smt. Bimlesh Devi w/o Sh. Sarwan Kumar Garg.
124. After the sanction of the limit documents, agreement of guarantee was executed by Smt. Bimlesh Devi Ex. PW47/A12 (D-54) (page 6717 bottom) and the accused S. C. Pathak during his admission / denial has specifically admitted the said document and signatures vide endorsement made thereon,but it appears that wrong exhibit mark has been put thereon. The said deed of guarantee has been executed by Smt. Bimlesh Devi for the enhancement of loan from Rs. 110 Lakhs to Rs. 234 lakhs. Further the hypothecation of movable assets has been done vide the document Ex. PW47/A11 part of (D-54) (page 6697 bottom) which has also been admitted during the admission / denial conducted on 28.02.2017, the same are collectively marked as P45 (pages 53 to 72).
125. Smt. Sarita Jain had also executed a guarantee agreement dated 27.12.2006 vide Ex. PW47/A4 (page 6725 bottom), which has also been admitted by accused Udaipal Singh during admission / denial vide Ex. P-46. The deposit of title deed by accused Udaipal Singh of his property at Naya Bazar has also been admitted by him in his admission / denial and the same RC No. 219/2012/E/0003/ EO-I/CBI/ND Page 127 of 158 CBI Vs. Udaipal Singh @ Udaipal Singh Chauhan & Ors.
has also been proved as Ex. PW47/A16 (page 6739). Further the deposit of title deed by Smt. Sarita Jain with regard to the enhancement of CC Limit has been proved as Ex. PW47/A17 (page 6743 bottom) and that of smt. Bimlesh Devi vide Ex. PW47/A-16 dated 28.12.2006 and also by Sh. Deen Dayal Saini as Ex. PW47/A-19 (page 6747 bottom).
126. It has been argued by the prosecution that Sh. S. K. Garg had submitted a forged sale deed with respect to property at Ganesh Pura, Tri Nagar in respect of Smt. Bimlesh Devi mentioned above. The prosecution has proved document Ex. PW7/A, part of (D-18) (page 3637 bottom) whereby one sale deed was executed by S.K. Garg as attorney of one Prithvi Chand with regard to the said property in favour of his wife Smt. Bimlesh Devi dated 04.03.2005. The date of registration is 04.03.2005.
127. Further the prosecution has proved one more document Ex. PW32/H, which has been proved by Sh. Rajiv Kumar, Manager of SBI, Model Town branch, who stated that he knew Smt. Bimlesh Devi, who was having CC Limit account with their bank at GT Karnal Road branch and she had opened the CC Limit account sometime in 2010. He also stated after seeing the copies of the title deed offered for equitable mortgage against the CC Limit sanctioned to Smt. Bimlesh Devi with regard to the property no. 2252/171, Ganesh Pura, Tri Nagar, Delhi having registration no. 11353 dated 24.04.2003 / 24.05.2003, which is Ex. PW32/H (part of D-86) (page 8119 bottom).
The said sale deed has also been executed by Sh. S. K. Garg as attorney of Sh. Prithvi Chand in favour of his wife Smt. Bimlesh Devi with RC No. 219/2012/E/0003/ EO-I/CBI/ND Page 128 of 158 CBI Vs. Udaipal Singh @ Udaipal Singh Chauhan & Ors.
regard to the same property. Therefore, it appears that the said S.K. Garg had sold the same property twice as attorney of said Prithvi Chand in favour of his wife and one sale deed was offered as collateral with the GT Karnal Road branch and other was offered as collateral with the Punjab National Bank, Mall Road branch. Therefore, it appears that deliberately a duplicate sale deed with respect to the said property was deposited as a collateral for sanctioning the loan.
ENHANCEMENT OF CC LIMIT FROM RS. 234 LAKHS TO RS. 300 LAKHS.
128. Regarding the enhancement of the CC Limit from Rs. 234 Lakhs to Rs. 300 Lakhs against hypothecation of stocks / book debts by way of conversion of limits from the Super Trading Scheme. Though the relevant application dated 14.09.2007 was not in the requisite proforma of the loan proposal / application, but it was on a simple application written on plain paper, but at the same time, the same has not been exhibited during the evidence nor put during the admission / denial of the documents to the said accused Udaipal Singh. Therefore, the same cannot be read in evidence. However, for reference it is part of (D-5) (page 1495 bottom).
The said loan application has been admitted by accused Pyare Lal during admission / denial on 08.03.2017 bearing his signatures at point A. Same is Ex. P-99. As already discussed above with regard to the loan sanction from time to time to M/s. Shivani Agro India, under the proprietorship of accused Udaipal Singh, the said CC Limit was also secured by primary security by way of hypothecation of entire stocks consisting of food grains RC No. 219/2012/E/0003/ EO-I/CBI/ND Page 129 of 158 CBI Vs. Udaipal Singh @ Udaipal Singh Chauhan & Ors.
including rice and other grains lying at the shop and godown of the parties and book debts (not later than three months). As also secured by collateral of four properties, as already discussed in the preceding heading.
Further the work address of the said proprietorship was also mentioned as that of Gali Hingabeg Pathak, Habsah Khan, Naya Bazar, Delhi, which was also the address of the said firm. The same was sanctioned vide sanction note Ex. PW47/A-20 part of (D-54) (page 6749 bottom).
129. After the sanction of the said CC Limit, the same was secured by agreement of hypothecation of goods and book debts Ex. PW47/A-21 (page 6767 bottom). The same has also been admitted by accused Udaipal Singh in his admission / denial dated 28.02.2017 as Ex. P-46 from (pages 78-86). The other documents in the series with regard to securing the said loan are Ex. PW47/A-22 (6793 bottom) and Ex. PW47/A-23 (6797 bottom), both part of (D-54). The agreement of guarantee executed by Smt. Sarita Jain with regard to the said enhancement is Ex. PW47/A-24 (page 6829 bottom), also the agreement of guarantee executed by other guarantors Smt. Bimlesh Devi and Sh. Din Dayal Saini are Ex. PW47/A26, part of (D-54) (page 6843 bottom) and also one more document i.e. Ex. PW47/A-27 also in the series of the above documents to secure the said CC Limit enhancement to Rs. 300 Lakhs (page 6853 bottom) part of (D-54).
The deposit of title deeds with regard to the property of Udaipal Singh is Ex. PW47/A-28, which was also admitted by him during his admission / denial consisting of two pages (6857 bottom) and (6859 bottom), same is also Ex. P-48. The deposit of title deeds by Smt. Sarita Jain, guarantor vide Ex. PW47/A-29 part of (D-58) (page 6861 bottom) and Smt. RC No. 219/2012/E/0003/ EO-I/CBI/ND Page 130 of 158 CBI Vs. Udaipal Singh @ Udaipal Singh Chauhan & Ors.
Bimlesh Devi vide Ex. PW47/A-30 part of (D-58) (page 6863 bottom) and that of Sh. Din Dayal Saini are Ex. PW47/A-31 part of (D-58).
130. As already discussed above, the terms of the sanction note of all the enhancement were same and the primary security was secured by hypothecation of entire stocks and book debts and by way of collateral. Further as per the terms of the said sanction note, the bank had authorized its officials the right to carry out periodical inspection and to examine the books of debts of the borrowers and their factories / offices / assets inspected from time to time. As per the terms of the Super Trading Scheme circular dated 08.02.2007 Ex. PW43/DB (colly.) part of (D-48), the bank officials had to give certificate on quarterly basis after carrying out the visit, that the business was running and the property was intact qualitatively and quantitatively.
131. As already discussed above, DW2 Udaipal Singh had stepped into evidence as a witness himself by exercising option u/S. 315 CrPC. During the cross-examination carried out by Ld. PP, he has made the following categorical admissions as under :
No actual business was carried out under the proprietorship firm Shivani Agro India and only false papers were prepared to show transactions of the firm. Similarly, M/s Guruji Trading Company was also not doing any actual business and only papers were prepared in the name of the firm and about the transactions.
He also stated in his cross-examination that he had no knowledge whether there was any godown of M/s. Shivani Agro India. No inspection RC No. 219/2012/E/0003/ EO-I/CBI/ND Page 131 of 158 CBI Vs. Udaipal Singh @ Udaipal Singh Chauhan & Ors. was conducted of any godown by any bank official in his presence in connection with the loan facility of M/s. Shivani Agro India. He also admitted that apart from his property i.e. Shop No. 2257, Gali Raghunandan, Naya Bazar, Delhi, the properties of Smt. Sarita Jain, Smt. Bimlesh Devi and Sh. Din Dayal Sharma were mortgaged with the bank.
132. In his examination in chief, he had earlier admitted that two shops were purchased in his name by Satbir Singh, as he had paid the consideration i.e. the property no. 2257, Gali Raghunandan, Naya Bazar, Delhi and he opened the firm as proprietor in the name of M/s. Shivani Agro India at the instance of Satbir Singh, whereas he was not getting anything except salary fixed at Rs. 5,000/- and he had signed all the documents with respect to M/s. Shivani Agro India. The size of the shop no. 5 & 6 of ground floor of property no. 2257, Gali Hingabeg was about 10 X 10 feet each. In any case, the size of the said shop is 10 X 10 feet i.e. very small, which is also found mentioned in the valuation report Ex. PW51/I given by the valuer Sh. S. N. Bansal. The size of the said shop thereunder is as follows :
Area of the shop : 10X9'=90 sft.
Area of the shop : 9'X9'=81 sft.
Total area of the shop 171 sft.app.
This also duly corroborates the prosecution story that size of the said shop was extremely small, which was shown as the work address of firm M/s. Shivani Agro India.
Nothing has come out in his cross-examination, which demolish his credibility, in any case the same is based entirely on documentary RC No. 219/2012/E/0003/ EO-I/CBI/ND Page 132 of 158 CBI Vs. Udaipal Singh @ Udaipal Singh Chauhan & Ors. evidence, which has been produced from the reliable custody of the bank.
133. Further the stock as per the insurance policy Ex. PW29/H with regard to the said shop was secured for Rs. 3 Crores (page 1325 bottom) part of (D-5). As per the said insurance policy, the said stock of Rs. 3 Crores consisting of rice and other food grains lying at the shop was secured from fire and earthquake. It is not clear how rice and other food grains amounting to Rs. 3 Crores could be stored in such a small area of 10 X 10 feet shop. The same could only be possible, if the stored goods are saffron or some other very costly kiryana items, which is not the case in hand.
The accused was never doing the business of rice and other food grains, which shows that the entire transaction was not genuine and was a sham one, as none other than the accused himself has admitted that no business was being carried out under the proprietorship of M/s. Shivani Agro India and only the forged papers were prepared to take the loan(s) from PNB, Mall Road.
134. The accused has also admitted his signatures on the provisional balance sheet and other income statement Ex. DW2/A and on audit report Ex. PW27/B, consequently the acts of the accused falls under the definition of making a false document u/S. 464 IPC, as the accused had dishonestly and fraudulently signed on the said audit report / provisional balance sheet with the intention of causing it to be believed that the said document or part of the said document was made, signed, sealed or executed by the authority of the chartered accountant, as already discussed above in the preceding paras, which he knew it was not so made.
RC No. 219/2012/E/0003/ EO-I/CBI/ND Page 133 of 158CBI Vs. Udaipal Singh @ Udaipal Singh Chauhan & Ors.
135. Regarding the argument of Ld. Counsel for (A-1) that there is no CFSL report in this case, therefore, (A-1) cannot be convicted u/S. 467/468 IPC, as prosecution has failed to prove that (A-1) had prepared false documents.
The said argument is without any substance, firstly DW1 had of his own by making an application u/S. 315 CrPC stepped into witness box and admitted that provisional balance sheets, other income statement etc., as above bears his signatures whereas, the chartered accountant(s) whose purported signatures the said documents so bear, have categorically deposed that these documents were not prepared by them, nor they bear their seal and signatures.
136. In view of this crystal clear evidence, nothing more was required to be proved qua this aspect. The CFSL report, if available would have been additional corroborative piece evidence, which would have made the prosecution case even more potent on this aspect, which has even otherwise been proved beyond reasonable doubt by the prosecution.
Therefore, the accused Udaipal Singh from his criminal acts is liable to be convicted substantively for the offence(s) u/S. 420/467/468/471 IPC r/w. 465 IPC, qua this Transaction B. ROLE OF ACCUSED SARWAN KUMAR GARG (SINCE DECEASED)
137. As already discussed in preceding paras, both the accused Sarwan Kumar Garg and Smt. Bimlesh Devi have died during the trial and the accused S. K. Garg had submitted a duplicate sale deed with respect to the property bearing no. 2252/171, Ganeshpura, Trinagar, Delhi. As already discussed RC No. 219/2012/E/0003/ EO-I/CBI/ND Page 134 of 158 CBI Vs. Udaipal Singh @ Udaipal Singh Chauhan & Ors.
above, the prosecution had proved one sale deed Ex. PW7/A (D-18) (page 3637 bottom) with respect to the said property executed by said Sarwan Kumar Garg as attorney of Sh. Prithvi Chand in favour of his wife Smt. Bimlesh Devi dated 04.03.2005.
138. Further as already discussed above, the prosecution had also proved one more document Ex. PW32/H (D-86) (page 8119 bottom) again executed by accused Sarwan Kumar Garg as attorney of Sh. Prithvi Chand in favour of his wife Smt. Bimlesh Devi dated 24.04.2003 / 24.05.2003, which he had offered for obtained CC Limit from SBI, G.T. Karnal Road branch prior to the present transaction. Therefore, it appears that Sarwan Kumar Garg in active connivance with his wife had created a false document i.e. sale deed Ex. PW7/A dishonestly and fraudulently. Since both of them are dead now, no further discussion is needed.
ROLE OF PUBLIC SERVANTS
139. The settled law with regard to the scope and preview of Section 13(1)(d)(iii) PC Act has already been elaborated while discussing the transaction qua M/s. Guruji Trading Company in preceding paras (nos. 61 to
65) as also the judgment(s) titled as M. Narayanan Nambiar Vs State of Kerala, Runu Ghosh Vs CBI, P. Rama Rao Vs CBI, Sukh Ram Vs CBI and Madhu Koda vs. State through CBI (supra).
As already discussed above, the original sanction of CC Limit of Rs. 110 Lakhs and thereafter enhancement from Rs. 110 Lakhs to Rs. 234 Lakhs was done under Super Trading Scheme, the terms of which are RC No. 219/2012/E/0003/ EO-I/CBI/ND Page 135 of 158 CBI Vs. Udaipal Singh @ Udaipal Singh Chauhan & Ors.
contained in Ex. PW43/DB (D-48) (page 6313 bottom) dated 18.03.2006 and as per the same, the collateral security of the loan should not be less than 150% of the limit / loan amount, whichever is less. Further stock statement was to be obtained once in a year i.e. first at the time of sanction and thereafter at the time of renewal / review and further in the month of February.
140. Further the bank officials had to give a half yearly certificate after carrying out the visit, that the business was running and the property was intact and as per the sanction note with regard to these two CC Limits Ex. PW47/X (D-54) and Ex. PW47/A8 (D-54), as discussed in preceding paras, the bank officials had also to conduct periodical inspection / examine the books of account of the borrowers and to have their factories / offices / assets inspected from time to time. As already discussed above, the total RV value of the collateral offered for sanctioning the CC Limit of Rs. 110 Lakhs was 159.92 Lakhs, whereas as per the terms of the Super Trading Scheme, the realization value of the property mortgaged should have been 150% of the facility sanctioned. Accordingly, the realization value of the said collateral should have been Rs. 165 Lakhs, yet the loan was sanctioned flouting the norms laid down by the Super Trading Scheme and no relaxation was sought by the bank officials from the superior officers, who may have had the power to relax the same.
141. Further this infirmity / flouting of the norm was concealed in the next sanction note Ex. PW47/A-7, whereby the CC Limit was enhanced from Rs. 110 Lakhs to Rs. 234 Lakhs under the Super Trading Scheme itself. Since the earlier sanction qua the realization value should have been Rs. 165 Lakhs, whereas the realization value was only Rs. 159.92 Lakhs, therefore, in order to RC No. 219/2012/E/0003/ EO-I/CBI/ND Page 136 of 158 CBI Vs. Udaipal Singh @ Udaipal Singh Chauhan & Ors.
conceal their follies, it was deliberately mentioned by the accused servants that the CC Limit in the said sanctioned loan was Rs. 105 Lakhs instead of Rs. 110 Lakhs to hoodwink the bank official / statutory auditor, later on the basis of the same concealment this was further perpetuated as the limit was enhanced to Rs. 234 Lakhs to bring it within the ambit of Super Trading Scheme.
This was not an inadvertent error on the part of accused Ravi Bharti and S. C. Pathak, but deliberate act to cause loss to the public exchequer and the said act cannot be said to be in public interest and can be said to be manifestly injurious to the public interest, for which no reasonable explanation has been offered by the accused persons / public servants Ravi Bharti and S. C. Pathak.
142. No doubt as argued and admitted by PW1 / complainant Sh. Sandeep Dabir, the title verification for collateral had to be done by the bank panel advocate and the bank officials processing the loan were not expected to visit the office of the Sub Registrar personally nor they were required to verify the audit statement / balance sheet from the chartered accountant, which norm came into force only after 2009, as per the admitted circular placed on the record during the trial and the valuation for collateral security offered used to be done by the approved valuer, but at the same time the bank officials could not have closed their eyes, to the blatant violation of the norms being done by the borrower.
143. Moreso, in this case, as the above named public servants had concealed that the earlier CC Limit was Rs. 110 Lakhs and they had deliberately written in the sanction note Ex. PW47/A8 that it was Rs. 105 RC No. 219/2012/E/0003/ EO-I/CBI/ND Page 137 of 158 CBI Vs. Udaipal Singh @ Udaipal Singh Chauhan & Ors.
Lakhs. Further, as per the sanction note already discussed, the godown work address of the borrower had been mentioned as same as the address of the firm i.e. Hingabeg Pathak, Habsah Khan, Naya Bazar, Delhi and as per the admission of DW2 in his cross-examination, the size of the two shops was 10 X 10 feet, which was also corroborated by the valuation report Ex. PW51/I par to (D-25) that it was so and in fact it is not that the bank officials were not aware of this fact that the godown shown by the accused Udaipal Singh was of very minuscule size, same is also reflected by the confidential report submitted by the bank officials S. C. Pathak and Ravi Bharti, which shows that they had visited the said property as in the column, whether the spot verification was done, it is stated in Yes.
144. The said document has also been admitted by accused S. C. Pathak during admission / denial conducted on 16.02.2017 (Ex. P-5), same is Ex. PW47/V. It is part of (D-5) (page 1551 bottom). DW2 in his cross- examination has admitted that no actual business was being carried under the proprietorship of M/s. Shivani Agro India and only false papers were prepared to show transactions of the firm.
Further as per the insurance papers Ex. PW29/H (D-5) (page 1325 bottom) stock lying and insured with respect to the said shop is shown to be of Rs. 3 Crores, which could not have been possible in such small sized shop where rice and food grains were stated to be kept, as discussed above, only very costly items i.e. saffron and other kiryana items could have been stored having such high value, which shows that the accused persons had flouted every possible norm of the bank to somehow give loan to the accused Udaipal Singh, who has himself admitted in his testimonial deposition u/S. 315 CrPC RC No. 219/2012/E/0003/ EO-I/CBI/ND Page 138 of 158 CBI Vs. Udaipal Singh @ Udaipal Singh Chauhan & Ors.
that no actual business was being carried out under the proprietorship firm M/s. Shivani Agro India and only false papers were prepared to show transactions of the firm. It is not comprehensible that accused persons i.e. (A-
5) and (A-6) being experienced bankers would not have been aware of said factum, or would have known after having a bare look at the bank account statements of M/s. Shivani Agro India Ex. PW45/29 part of (D-29 to D-32).
145. Therefore, it was incumbent duty of the bank officials to properly secure the loan of the bank given to the borrowers, which was openly breached and the acts done by the bank officials were completely and blatantly in disregard to all the banking norms and were manifestly injuries to the public interest, which was voidable, but for the public servants Ravi Bharti and S. C. Pathak did not pay any heed to the safeguards which they were expected to which resulted in pecuniary advantage to the borrowers and loss to the bank. Further no reasonable man could do so, if placed in their position. Therefore, the prosecution has been able to prove that the public servants obtained by their acts pecuniary advantage or valuable thing i.e. loan(s) to the borrowers against public interest. The criminal intention as well as knowledge is also clearly discernible from the aforesaid acts and circumstances of both the accused persons i.e. they can be said to have necessary mens rea to commit the offence(s) in question. Therefore, prosecution has been able to prove its case against accused persons S. C. Pathak (A-5) and Ravi Bharti (A-
6) u/S. 13(1)(d)(iii) r/w. 13(2) of PC Act 1988 qua this Transaction B.
146. With regard to the accused Pyare Lal, his role was only confined with respect to the last transaction of enhancement from Rs. 234 Lakhs to Rs. 300 Lakhs vide sanction note Ex. PW47/A-20 (D-54). Though at the same RC No. 219/2012/E/0003/ EO-I/CBI/ND Page 139 of 158 CBI Vs. Udaipal Singh @ Udaipal Singh Chauhan & Ors.
time, he was also expected to carry out periodical inspection and had to obtain stock statement and to inspect and to carry out inspection of the work / office / assets of the borrowers, however, as deposed by PW45 Sh. Bhagirath Ram Choudhary that both the accounts i.e. of M/s. Guruji Trading Company and M/s. Shivani Agro India were operational in nature on 13.10.2007 when the accused Ravi Bharti was transferred from the concerned branch.
147. Therefore, from the above deposition, it appears that since the said accounts were running properly when accused took over the charge as incumbent of bank, further though the accused Pyare Lal was negligent in not back checking the infirmities / flouting of the norms by the previous incumbent S. C. Pathak with Ravi Bharti, but at the same time, taking into account practical realities of banking business, it is not always possible for the new incumbent to wade back into all the previously running loan accounts to check, whether they were in violation of established norms, whether there was submission of forged documents as the same would be job of the statutory auditor and concurrent auditor of the bank, which did not find anything contradictory to the bank norms.
148. As already discussed above in preceding para(s), it had been argued by Ld. Counsel for (A-7) that at the time of enhancement of the last two limits qua the account of M/s. Guruji Trading Company and M/s. Shivani Agro India, there were sufficient debit / credit entries in the account, as reflected in the statement of account (D-29) and (D-32) and there were no serious irregularities in the same. The perusal of the sanction note Ex. PW47/A-20 shows that the loan was sanctioned by accused Pyare Lal on 14.09.2007 and as per the statement of account of M/s. Guruji Trading RC No. 219/2012/E/0003/ EO-I/CBI/ND Page 140 of 158 CBI Vs. Udaipal Singh @ Udaipal Singh Chauhan & Ors.
Company and M/s. Shivani Agro India Ex. PW45/28 and Ex. PW45/29, part of (D-29 to D-32), it appears that at that time, the account was running satisfactorily, therefore, it may be that the accused Pyare Lal had been misled by the accused Ravi Bharti (A-6), who had been associated with both the loans from the very beginning and its enhancement from time to time.
149. As already discussed in detail, merely the fact that the statutory auditor or the internal auditor of the bank did not find any infirmity in the running of these accounts does not absolve the accused persons Ravi Bharti and S. C. Pathak, who were neck deep in sanction of the loan and the enhancement of the same to the borrower Udaipal Singh by flouting every possible established norm(s) of the bank, especially when this fact had been proved from the documents and the admission of DW2 that no actual business was being carried out by the said firm and only forged documents had been submitted and paper transaction and accommodative entries were being done in the account of M/s. Shivani Agro India, therefore, the role of accused Ravi Bharti and S. C. Pathak, who were involved at the time of initiation of loan proposal and sanction of the same and thereafter of enhancement, is totally different from that of accused Pyare Lal, who had sanctioned the last transaction in the running loan account, that too on the recommendation of accused Ravi Bharti, though, he did not follow the bank norms, which also casted duty upon him to obtain stock statement, carry out periodical visits, but his act would fall within an ambit of carelessness or negligence, but not amounting to criminal misconduct so as to attract the provisions of Section 13(1)(d)(iii) of the PC Act, 1988 for which he has been specifically charged. But at the same time, the role of the accused persons Ravi Bharti and that of S. RC No. 219/2012/E/0003/ EO-I/CBI/ND Page 141 of 158 CBI Vs. Udaipal Singh @ Udaipal Singh Chauhan & Ors.
C. Pathak, who were neck deep in flouting every possible established norm, as discussed in preceding paras cannot be said to be so, therefore, to sum up, the prosecution has been able to prove its case u/S. 13(1)(d)(iii) r/w 13(2) of PC Act, 1988 against (A-5) and (A-6) qua this Transaction B, whereas the prosecution has failed to make out a case u/S. 13(1)(d)(iii) r/w. 13(2) of PC Act 1988 qua (A-7) with regard to this Transaction.
WITH REGARD TO THE CONSPIRATORIAL ACTS AS DISCUSSED ABOVE QUA THE TRANSACTIONS OF M/S. SHIVANI AGRO INDIA.
150. As already discussed above in detail in preceding para(s) while discussing the role of public servants that as per the sanction notes under the Super Trading Scheme, periodical inspection / examination of books of accounts / factories inspection / assets inspection had to be done, but the same was not done as no such reports are there. Further loan was sanctioned against primary security of book debts and hypothecation of entire stock and book debts, therefore, the stock had to be checked periodically and report had to be filed and stock statement had also to be obtained once a year, first at the time of sanction and thereafter at the time of review / renewal, which was never done and further, as per the Super Trading Scheme, the branch officials had to give half yearly certificate after carrying out the inspection of the stock that the business was running properly and is intact.
151. Further as per sanction notes already discussed above with regard to the sanction and enhancement of limits of M/s. Shivani Agro India from time to time, the address of godown had been mentioned as Ground Floor, RC No. 219/2012/E/0003/ EO-I/CBI/ND Page 142 of 158 CBI Vs. Udaipal Singh @ Udaipal Singh Chauhan & Ors.
bearing Municipal No. 111/2257, Gali Hingabeg, Naya Bazar, Delhi, which size was admitted by DW2 to be 10 x 10 feet. Further the same is also borne and corroborated by the valuation report Ex. PW51/I (D-25) (page 4869 bottom) and in fact confidential report / spot inspection was also done by both the accused persons i.e. Ravi Bharti and S. C. Pathak Ex.PW47/B (D-5) (page 1551 bottom), therefore, it cannot be said by them that they were not aware about the size of the said two shops and the same was also insured by the bank vide insurance policy Ex. PW29/H, also part of (D-5) (page 1325 bottom) for Rs. 3 Crores and as per said insurance policy, stock of all kind of rice and other goods were insured for Rs. 3 Crores.
152. Therefore, value of the said goods insured by the said insurance policy stocked in such a small place was Rs. 3 Crores, which was not possible since the rice and food grains are very heavy items and are not high value products, therefore, to be actual value of Rs. 3 Crores, a huge godown would have been required. As already discussed above even for the sake of repetition, that only very costly items like saffron and hing (asafoetida) etc. could have been stored in such a short area, which shows that every established norm was flouted by the bank officials in active connivance with the accused Udaipal Singh in furtherance of the common objective of the conspiracy i.e. to get the loan sanctioned in favour of accused Udaipal Singh on the basis of forged and fabricated documents without carrying any business whatsoever, nor having any stock to hypothecate with the bank and also using forged collateral property documents submitted by deceased Sarwan Kumar Garg and Smt. Bimlesh Devi.
153. Further in furtherance of the common objective of the conspiracy, RC No. 219/2012/E/0003/ EO-I/CBI/ND Page 143 of 158 CBI Vs. Udaipal Singh @ Udaipal Singh Chauhan & Ors.
as already discussed above, as per the terms of the Super Trading Scheme under which two loans of M/s. Shivani Agro India were sanctioned vide the terms of the Super Trading Scheme Ex. PW43/DB (colly.) (D-48) dated 18.03.2006 (page 6313 bottom), the value of the collateral security should not have been less than 150% of the limit/loan amount, whichever was less, but as already discussed in preceding paras in detail, as per the sanction note Ex. PW47/Y, part of (D-54) (page 6573 bottom), the realization value of the collateral security for the sanction limit of Rs. 110 Lakhs under Super Trading Scheme was for Rs. 159.92 Lakhs for the sanction of loan of Rs. 110 Lakhs, whereas as per the said norms, the realization value should have been Rs. 165 Lakhs, yet the said norm was blatantly flouted and the CC limit was sanction for Rs. 110 Lakhs.
154. Thereafter, not only this factual misrepresentation was made in the sanction note for enhancement limit from Rs. 110 Lakhs to Rs. 234 lakhs, as this fact that the earlier CC Limit was Rs. 110 Lakhs was concealed and was wrongly mentioned by the accused Udaipal Singh in the loan application Ex. PW47/A-7 (part of D-54) (page 6653 bottom) and also in the sanction note Ex.PW47/A-8 part of (D-54) (page 6657 bottom) wherein even in the title gist of the proposal it has been mentioned that the CC Limit is to be enhanced from RS. 105 Lakhs to Rs. 234 Lakhs, whereas, it was actually enhanced from Rs. 110 Lakhs to Rs. 234 Lakhs and even in the column no. 4 i.e. (Facilities Recommended) of the above sanction note, the CC limit was mentioned as Rs. 105 Lakhs (whereas it was actually Rs. 110 Lakhs). The same was to bring the loan within the ambit of Super Trading Scheme and to hide the earlier wrong doing of public servants A-5 and A-6. The same seems to have been RC No. 219/2012/E/0003/ EO-I/CBI/ND Page 144 of 158 CBI Vs. Udaipal Singh @ Udaipal Singh Chauhan & Ors.
done in active connivance and in furtherance of the common objective of the conspiracy delineated above.
155. Further though it was not the duty of the public servant to check the title of the property offered by Smt. Bimlesh Devi of Tri Nagar, however, after considering the aforesaid facts and circumstances as depicted above since the conspiracy was in currency, therefore, it appears or can be inferred from above mentioned series of acts that the said forged documents were submitted by Smt. Bimlesh Devi as a guarantor in furtherance of the common objective / common design of the conspiracy by attaching herself to the said common objective / common design of the conspiracy.
156. The same can be said to be the role of the deceased Sarwan Kumar Garg, who had twice executed the sale deed in respect of the same property as an attorney of one Sh. Prithvi Chand in favour of his wife Smt. Bimlesh Devi and therefore, the same cannot be said to be isolated act. Since both (A-5) and (A-6) were experienced bankers, therefore, it cannot be believed that they were not aware that the accused Udaipal Singh was not using the loan for the purpose it was sanctioned, but was rotating the money by using the loan amount for accommodative entries. It does not stand to reason that public servants, if they had exercised due diligence as per the norms laid down by the bank and had actually carried out the stock inspection and periodical checking of the books of accounts, they would have come to know the above mentioned improprieties / infraction of every possible norms of the bank.
157. In fact, DW2 in his cross-examination has admitted that no actual business was carried out under the proprietorship firm Shivani Agro India and RC No. 219/2012/E/0003/ EO-I/CBI/ND Page 145 of 158 CBI Vs. Udaipal Singh @ Udaipal Singh Chauhan & Ors.
only false papers were prepared to show transactions of the firm and he had no knowledge, whether there was any godown for the business of Shivani Agro India. No inspection was conducted of any godown by bank officials in his presence in connection with the loan facility of Shivani Agro India. He also admitted during cross-examination that provisional balance sheet Ex. DW2/A (colly.) and audit report Ex. PW27/B (colly) also bears his signatures at point A and copy of the income statement at page 174 of (D-4) also bears his signature at point A. Same is Ex.DW2/B.
158. The Income tax return Ex. PW41/D also bears his signature at point A on each page of M/s Shivani Agro India. As already discussed above, the concerned chartered accountants have deposed in the court that they were never associated with the firm M/s. Shivani Agro India and the seal and stamp as well as the address of the proprietorship firm was forged and fabricated, therefore, it appears that accused persons (A-5) and (A-6) as well as the accused Udaipal Singh and the deceased Smt. Bimlesh Devi and Sarwan Kumar Garg were neck deep in the conspiracy and were acting as agent of each other and were doing this in furtherance of common objective of the conspiracy i.e. to get the loan on the basis of forged and fabricated documents, on the basis of non existing stock, wherein no business was being carried out, as also the loan disbursal was used by them for accommodative entries for some ulterior purpose.
159. Therefore, all the above accused persons were party or were co- conspirators in furtherance of the common objective of their conspiracy in order to cause wrongful loss to the bank and wrongful gain to the accused Udaipal Singh, while acting in a dishonest manner, therefore, prosecution has RC No. 219/2012/E/0003/ EO-I/CBI/ND Page 146 of 158 CBI Vs. Udaipal Singh @ Udaipal Singh Chauhan & Ors.
been able to prove beyond any shadow of doubt all the offence(s) i.e. substantively as well as for conspiracy part, as charged with regard to this Transaction B qua (A-1), (A-5) and (A-6).
160. Now the question which arises for consideration is whether it was a very large single conspiracy encompassing the acts of M/s. Guruji Trading Company and M/s. Shivani Agro India or they were two separate and distinct conspiracies as argued by Ld. Defence Counsels.
161. In order to examine the said plea, it has to be seen, whether there was any common chord / theme running or connecting these two seemingly separate transaction or there was strong connection or nexus between the same.
In this regard DW2 in his testimonial deposition as DW2 has deposed that he in the year 2004 came in contact with Satbir Singh through his friend Giriraj Chaudhary. He was employed by Satbir Sharma at a monthly salary of Rs.5000/- in the year 2004. Satbir Sharma was the proprietor of M/s Guruji Trading Co.
He opened a firm as proprietor in the name of Shivani Agro India at the instance of Satbir Sharma, wherein he was not getting anything except the salary fixed at Rs.5000/-. He signed all the documentation with respect to Shivani Agro India. In the year 2006, two shops were purchased in his name by Satbir Sharma (as he paid the sale consideration) at 2257, Gali Raghunandan, Naya Bazar, Delhi.
In the year 2006, Satbir Sharma applied for loan facility with PNB, Mall Road, Delhi wherein four properties were mortgaged including RC No. 219/2012/E/0003/ EO-I/CBI/ND Page 147 of 158 CBI Vs. Udaipal Singh @ Udaipal Singh Chauhan & Ors.
his shops 2257, Gali Raghunandan, Naya Bazar, Delhi. Rakesh Sharma was the son of Satbir Sharma and both of them used to operate the accounts of Shivani Agro India although he used to sign the documents and cheques on their instance. The entire loan facility was availed by Satbir Sharma. He had not obtained any benefit in this case.
162. Even bereft of this evidence, accused Udaipal Singh in his statement u/S. 313 CrPC in response to question no. 153 stated that he is innocent and he is not beneficiary of single penny. Sh. Satbir Sharma has misused his documents and his signature and he was employee of the Satbir Sharma. PW30 Sh. Vijay Kumar, who was also an employee of Satbir Sharma has deposed that he also knew Udaipal Singh who was the employee of Satbir Sharma, who opened the firm M/s. Shivani Agro India in his name. Actually he looked after the business of the same.
163. Therefore, it appears from the testimony of independent witness that this accused Udaipal Singh was an employee of Satbir Sharma. This fact could not be rebutted during the cross-examination of PW30. In fact, during the cross-examination caried on behalf of Udaipal Singh, PW30 stated that it was correct that all activities of M/s. Shivani Agro India including sale, purchase and bank deals used to be done by Satbir Sharma.
Therefore, it has been proved beyond shadow of doubt that there was a direct or proximate connection between the accused Udaipal Singh, who was carrying out the business of the firm M/s. Shivani Agro and Satbir Sharma, who was running the firm in the name of M/s. Guruji Trading Company and both had applied loan for their respective firms with the Punjab RC No. 219/2012/E/0003/ EO-I/CBI/ND Page 148 of 158 CBI Vs. Udaipal Singh @ Udaipal Singh Chauhan & Ors.
National Bank, Mall Road branch, which was enhanced from time to time, as discussed above.
164. Further this fact is also corroborated from the document Ex. PW21/A-16 part of (D-79) (page 7463 bottom), which is the local surety bond and on the back of the said document Satbir Sharma as proprietor of M/s. Guruji Trading Company stood surety of Rs. 1 Lakh for the firm M/s. Shivani Agro India having address 2257, 2 nd Floor, Gali Raghunandan, Naya Bazar, Delhi with regard to the furnishing with Trade & Taxes Department, Government of NCT of Delhi for obtaining VAT / Sales Tax registration. Further the deceased Satbir Sharma had offered a surety bond for obtaining registration under Central Sales Tax (Registration and Turnover) Rules 1957 of Rs. 3 Lakhs in favour of M/s. Shivani Agri India vide document Ex. PW21/A-17 part of (D-79) (page 7467 bottom).
165. In fact there is one more document proved by this witness Ex. PW21/A-30 (part of D-79) (page 7507 bottom) which is a rent receipt issued by Satbir Sharma as owner of the shop no. 2257, 2nd floor, Gali Hingabeg for the period from 01.12.2004 to 31.03.2005 along with no objection certificate on the next page 7509 Ex. PW21/A31 in which he has stated that he is the absolute owner of the premises no. 2257, Naya Bazar, Lahori Gate, Delhi and he has no objection if Udaipal Singh get sales tax registration under the name of M/s. Shivani Agro. This also shows close proximate connection between these two accused persons. Therefore, it appears that Udaipal Singh was the main person behind both the firms M/s. Guruji Trading Company and M/s. Shivani Agro India.
RC No. 219/2012/E/0003/ EO-I/CBI/ND Page 149 of 158CBI Vs. Udaipal Singh @ Udaipal Singh Chauhan & Ors.
166. Further as per the sanction note with regard to the loan of M/s. Guruji Trading Company regarding the enhancement of the sanction limit to Rs. 91 Lakhs, the same was sanctioned vide sanction note Ex. PW45/7 dated 28.12.2006, part of (D-8) (page 3335 bottom) from Punjab National Bank, Mall Road branch. Further in this regard the sanction note for enhancement of the CC Limit from Rs. 105 Lakhs to Rs. 234 Lakhs qua the firm M/s. Shivani Agro India under Super Trading Scheme from the same branch of the Punjab National Bank vide sanction note Ex. PW47/A8 (D-54) (page 6657 bottom) was done on 26.12.2006, which shows close proximity of time between these two loans.
167. Further in the series of these acts of enhancement of CC Limit from Rs. 220 Lakhs to Rs. 300 Lakhs qua the firm M/s. Guruji Trading Company was done by the Punjab National Bank, Mall Road branch vide sanction note dated 14.09.2007 Ex. PW43/D1 (par of D-6) (page 1929 bottom) and coincidently the last enhancement of the CC Limit from Rs. 234 Lakhs to Rs. 300 Lakhs by way of conversion of CC Limit from Super Trading Scheme qua the firm M/s. Shivani Agro India was also done vide the sanction note dated 14.09.2007 by the same bank and branch Ex. PW47A20 (D-54) (page 649 bottom).
This could not have been a mere coincidence, but shows and gives inference that there was clear cut conspiracy between the bank officials i.e. Ravi Bharti and S. C. Pathak, who were instrumental in the initiation, sanction and appraisal of the loan as well as sanction of proposal of M/s. Guruji Trading Company and M/s. Shivani Agro India and enhancement of the same from time to time.
RC No. 219/2012/E/0003/ EO-I/CBI/ND Page 150 of 158CBI Vs. Udaipal Singh @ Udaipal Singh Chauhan & Ors.
168. Further with regard to the conspiracy angle, the collusion and conspiracy between the accused Udaipal Singh and Satbir Sharma is evident from the fact that the agreement of guarantee executed by Smt. Sarita Jain for the sanction of CC limit of Rs. 110 Lakhs for M/s. Shivani Agro India was witnessed by accused Satbir Sharma on Ex. PW47/A3 (back side of page no. 6641 bottom). Further the said accused Satbir Sharma who was running the firm M/s. Guruji Trading Company is also a witness with regard to another deed of guarantee executed by Smt. Sarita Jain for enhancement of loan from Rs. 234 Lakhs to Rs. 300 Lakhs qua the firm M/s. Shivani Agro India vide Ex. PW47/A24 (back side of page no. 6837 bottom) and Satbir Sharma has also signed thereon as witness.
169. With regard to this large and big conspiracy encompassing the acts of M/s. Guruji Trading Company and M/s. Shivani Agro India, I am fortified by the judgment of Hon'ble Supreme Court titled Banwari Lal Jhunjhunwala & Ors. Vs. Union of India and Another 1963 AIR 1620, wherein it was held as under :
The cheating was in pursuance of the conspiracy entered into between the various accused. The salient features of the conspiracy were that in pursuance of the contract for the supply of 1360-1/2 tons of specified wood, inferior wood be supplied and that for the success of the scheme false inspection certificates be obtained from the Inspecting Officers and that such false inspection notes should accompany the bills purporting to be for the supply of wood per specifications. The object of the conspiracy was to .obtain the full contract price from the Government on supplying material inferior in quality from that undertaken to be supplied under he contract. Naturally, the entire supply could not be made at the same time even if it was to be made at one place. Actually the supply was to be made at three places. The wood inspected at a particular place of inspection could be distributed to the various places of supply. The bills could be RC No. 219/2012/E/0003/ EO-I/CBI/ND Page 151 of 158 CBI Vs. Udaipal Singh @ Udaipal Singh Chauhan & Ors.
for the supply made at the particular time by the Firm to one place alone or to places more than one. It is therefore obvious that the conspiracy entered into by the appellants was not for obtaining diverse amounts by cheating but to obtain the entire contract money by cheating. This circumstance justifies the conclusion that the offence of cheating contemplated by the conspirators was one offence and that was of obtaining, by cheating, the full amount due under the contract for the material supplied. The charge framed for the offence under s. 420 does not contravene s. 233 of the Code.
There is another way of looking at the same question. The obtaining. of money for each bill supported by false inspection note, amounted to the offence of cheating in pursuance of the conspiracy. All such individual offences on the basis 'of the various bills, were of the same kind as the single offence of obtaining the total amount as a result of the presentation of the various bills and, in view of s.
71. I. P. C., the accused could not be punished for more than one of such offences it being provided that "where anything which is an offence is made up of parts any of which is itself an offence, the offender shall not be punished for more than one such offence unless it be so expressly provided'. Illustration (a) explains this provision and is :
"A gives Z fifty strokes with a stick. Here A may have committed the offence of voluntarily causing hurt to Z by the whole beating, and also by each of the blows which make up the whole beating. If A were liable to punishment for every blow, he might be imprisoned for fifty years, one for each blow. But he is liable only to one punishment for the whole beating".
It is to be noted that the whole beating is considered to constitute one offence while each of the blows also amounted to the offence of voluntarily causing hurt. It can be said, therefore, that while the obtaining of money by cheating on the presentation of an individual bill did constitute the offence of cheating, the obtaining of the entire money in pursuance of the terms of the single contract and the single conspiracy entered into also constituted the offence of cheating. When the accused could not be punished with the punishment for more than one such offence, it cannot be the intention of law that the accused be charged with each of the offences which were in a way included in the complete offence made up by the entire course of conduct of the accused in pursuance of the conspiracy.
Section 233 Cr. P.C. reads "For every distinct offence of which any per- son is accused there shall be a separat e charge, and every such charge shall be tried separately, except in the cases mentioned in RC No. 219/2012/E/0003/ EO-I/CBI/ND Page 152 of 158 CBI Vs. Udaipal Singh @ Udaipal Singh Chauhan & Ors.
sections 234, 235, 236, and 239."
The expression 'every distinct offence' must have a different content from the expression 'every offence' or "each offence'. A separate charge is required for every distinct offence and not necessarily' for each separate offence.
The question is, what is meant by 'every distinct offence' ? 'Distinct' means "not identical.' It stresses characteristics that distinguish while the word separate' would stress the 'two things not being the same.' Two offences would be distinct if they be not in any way inter-related. If there be some interrelation, there would be no distinctness and it would depend on the circumstances of the case in which the offences were committed whether there be separate charges for those offences or not. Such a view has been the basis of certain decisions by the High Courts and this Court.
In Chunnoo V. State (1) Kidwai J., said atop. 797:
"The use of the word "distinct' is great significance and the Legislature having inserted it, we must, so far as possible, give it a meaning and not treat it as redundant. "Every distinct offence' cannot be treated as having the same meaning as 'every offence' The only meaning that the word "distinct' can have in the context in which it occurs is to, indicate that there should be no connection between the various acts which give rise to criminal liability. If there is such a connection, one action is not "distinct' from other actions and each of them, even if it constitutes an offence, does not 'constitute a 'distinct' offence".
In Bhagat Singh v. The State (2 a person hit two others with a single shot from his gun. Fazl Ali, J., said at p. 375 :
"The word 'offence' has been defined in the Criminal Procedure Code as meaning "any act or omission made punishable by any law for the time being in force.' There seems to be nothing wrong in law to regard the single act of firing by the appellant as one offence only. On the other hand, we think that it would be taking an extremly narrow and artificial view to split it into two offences. There are several reported cases in which a similar view has been (1) A.I.R. 1954 All. 795.
(1) [1952] S.C.R. 371.
taken and, in our opinion, they have not been incorrectly decided." We refer to these cases later. It was further stated at p. 376 :
"'In Sudheendrakumar Ray V. Emperor (I.L.R. 60 Cal. 643) a person who was chased by two constables had fired at them several times, but it seems to have been rightly assumed that the firing did RC No. 219/2012/E/0003/ EO-I/CBI/ND Page 153 of 158 CBI Vs. Udaipal Singh @ Udaipal Singh Chauhan & Ors.
not constitute more than one offence, though the point was not specifically raised or decided."
In Empress v. Raghu Rai (1) the accused was convicted of stealing two bullocks by one act of theft. It was held that the offence committed was one. The rationale of the decision could be nothing but that the entire transaction of stealing or the entire action leading to the theft of the bullocks was one act and therefore constituted one offence irrespective of the fact that more than one bullock was stolen.
In Poonit Singh v. Madho Bhot (2) a person's furnishing the police with false information against two persons was held to result in one offence under s. 182 I. P. C., as the false statement he had made was one though the information conveyed by the statement related to two persons. In John Subarna v. King Emperor (3) a person, who asked the villagers to pay certain amount per head for signing their parchas was held to have committed one offence of cheating as he did not ask each individual villager, but spoke to them in a body and the contention that he had made as many attempts to obtain money as there were villagers from whom he had. sought remuneration was not accepted. In this case it is clear that the accused's act aimed at obtaining money from all the villagers whom he addressed and that act in its entirely was (1) (1881) A. W. N. 154 (2) (1886) I. L. R. 13 Cal. 270.
(3) (1905) 10 C. N. 520.
held to constitute one offence even though his asking the villagers in a body could be said to amount to his asking each individual villager for the money and thus to constitute as many offences as there were villagers whom he asked.
In Promotha Natha Ray v. King Emperor one charge was framed under s. 406 I. P. C., with respect to dealing with several books of accounts. It was held that the books formed one set of account books of the estate, were found together in two locked boxes the keys being with the appellant, and that therefore they may be fairly regarded as one item of property with which the appellant was dealing in one particular way. It was not accepted that a seperate offence was committed with respect to each of the books. We therefore hold that a single charge for the offence of cheating in the circumstances of the case, does not contravene the provisions of s. 233 of the Code. This view also disposes of the other objection with respect to charge no. 2, it being that with respect to the cheating constituted by the obtaining of money on each bill, only that partner should have been charged for that offence who had actually signed that bill. Both the partners RC No. 219/2012/E/0003/ EO-I/CBI/ND Page 154 of 158 CBI Vs. Udaipal Singh @ Udaipal Singh Chauhan & Ors.
conspired to cheat the Government. The bills were, as held by the High Court, presumably presented on behalf of the Firm and therefore both the partners would be responsible for the obtaining of the money on the presentation of each bill. The charge therefore does not suffer from any defect on this account.
170. The said judgment is squarely applicable to the facts of the present case. As already discussed above the above analysis of evidence clearly shows that there was close and proximate connection between the acts as well as series of acts of the two firms, which were acting in unison and Ravi Bharti (A-6), who was responsible for the appraisal of the loan documents and who had recommended over to the accused S. C. Pathak (A-5) that the said loan be sanctioned, were acting in conspiracy and collusion with each other in furtherance of common objective of the conspiracy i.e. to sanction the loan in favour of the said two firms M/s. Guruji Trading Company as well as M/s. Shivani Agro India, who were actually not carrying any business, but on the basis of forged and fabricated balance sheet, audit statement without any godown and who were indulging in accommodative entries from the loan disbursed to them by the said public persons, who did not conduct any inspection of the godown / factories nor obtained the stock statement of the said two firms, which important omission could not have been possible if the public persons were not working in tango with the above two accused persons Satbir Sharma as well as Udaipal Singh.
Therefore, the Transaction A and Transaction B subsumes or gets merged into each other so as to become one singular or large or continuing transaction or so as to say it was a single large chain conspiracy encompassing the acts of M/s. Guruji Trading Company and M/s. Shivani Agro India.
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171. With regard to argument raised by Ld. Counsel for D-6 that the said accused Ravi Bharti has appeared in the witness box as DW7 and he has proved one FIR No. 472/2013, PS Sonepat City, u/s 306 IPC read with Section 34 IPC, as also, the relevant documents Ex. DW7/A and Ex. DW7/B, which shows that the deceased Satbir Sharma had infact left a suicide note against Ravi Bharti naming him as an accused, who was till date facing trial in the said FIR. It is further argued that if he was the co-conspirator with the said Satbir Sharma, then he would not have named him in the said FIR.
172. This arguments is without any substance, as the FIR was lodged after the conspiracy was long over, as the conspiratorial acts were of the year 2006-07, whereas the FIR was lodged when the conspiracy and the objective(s) of the conspiracy were accomplished i.e. the year 2013. Therefore, the same does not absolve the accused or extricates said accused from the membership of the above large conspiracy.
173. Therefore, from the above discussion and overwhelming evidence, as also from the series of acts of the co-conspirators / accused persons in furtherance of the common object of the conspiracy as elaborated above, the prosecution has been able to prove beyond any shadow of doubt that it was a large conspiracy of which accused persons were the members / parties and they had all acted and had done acts in furtherance of the common objective of the conspiracy so as to say that they had boarded the bus, which was travelling to the same destination with each of them playing their own part in completion of the said journey.
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174. Therefore, it can be said that there was a conspiracy rather bigger conspiracy encompassing all the acts of the accused persons in applying for the sanction of loan qua M/s. Guruji Trading Company as well as M/s. Shivani Agro India, as all the said acts were in furtherance of the accomplishment of the objective of the said larger conspiracy. Therefore, the accused persons i.e. Udaipal Singh @ Udaipal Singh Chauhan (A-1), S. C. Pathak (A-5) and Ravi Kumar Bharti (A-6) are all liable to be convicted u/S. 120B r/w 420 r/w 467 r/w 468 r/w 471 IPC and 13(1)(d) r/w. 13(2) of PC Act.
TO SUM UP
175. In view of above detailed analysis of evidence and discussion, accused Udaipal Singh @ Udaipal Singh Chauhan (A-1) stand convicted substantively u/S. 420/467/468/471 IPC r/w Sec. 465 IPC, whereas, accused S. C. Pathak (Subhash Chand Pathak) (A-5) stand convicted substantively u/S. 13(1)(d)(iii) r/w. 13(2) of PC Act 1988, whereas, accused Ravi Kumar Bharti (A-6) stand convicted substantively u/S. 13(1)(d)(iii) r/w 13(2) of PC Act 1988.
Further, all the above accused persons i.e. (A-1), (A-5) and (A-6) also stand convicted u/S. 120B IPC r/w. 420 r/w. 467 r/w. 468 r/w. 471 IPC r/w Sec. 465 IPC r/w. 13(1)(d)(iii) r/w. 13(2) of PC Act 1988.
However, accused Pyare Lal (A-7) stand acquitted of the charge(s) u/S 120B r/w 13(2) r/w. 13(1)(d) of the PC Act r/w. Section 420, 467, 468, 471 IPC and also for the substantive offence(s) u/S 13(2) r/w RC No. 219/2012/E/0003/ EO-I/CBI/ND Page 157 of 158 CBI Vs. Udaipal Singh @ Udaipal Singh Chauhan & Ors.
13(1)(d) of Prevention of Corruption Act 1988 (PC Act). Previous bail bond(s) of accused Pyare Lal (A-7) stands cancelled. Previous surety stand discharged. Documents, if any be returned after cancelling the endorsement(s), if any, if the same are not resubmitted while furnishing bail bonds u/S. 437-A CrPC.
The said accused is stated to have already furnished his bail bond(s) in compliance of Section 437-A CrPC, which will remain valid for a period of six months from today, as per the provisions of Section 437-A CrPC.
Announced in the Open Court (Sanjeev Aggarwal) on this 8th day of October, 2021. Special Judge (PC Act) (CBI)-02 Rouse Avenue District Courts New Delhi/08.10.2021 RC No. 219/2012/E/0003/ EO-I/CBI/ND Page 158 of 158 CBI Vs. Udaipal Singh @ Udaipal Singh Chauhan & Ors.