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In the meanwhile in April, 1976 the Banking Licence of the Patna Urban Co-operative Bank was cancelled by the Reserve Bank of India and further at the instance of the Registrar, Co-operative Societies, the Bank was ordered to be liquidated. It appears that Shri T. Nand Kumar, I.A.S., Liquidator of the Bank addressed a communication to the Registrar, Co-operative Societies suggesting that besides the other office-bearers Sri Nawal Kishore Sinha, the ex- Chairman of the Bank also deserve to be prosecuted for offences of embezzlement, forfery, cheating, etc. but the matter was kept pending for report of the Superintendent of Police (Co-operative Vigilance Cell); the S.P. (Co-operative Vigilance Cell) after collecting facts and evidence got it examined by Deputy Secretary (Law) in C.I.D., obtained the opinion that a criminal case was fully made out against Shri Nawal Kishore Sinha and proposed that a fresh criminal case as per draft F.I.R. be filed and that Shri Nawal Kishore Sinha should also be made co-accused in a number of cases already under investigation, the S.P. (Co-operative Vigilance Cell) obtained the approval of D.I.G., C.I.D. on his said proposal and submitted the same to the Secretary, Co-operation, for obtaining Chief Minister's permission. In view of the Chief Minister's earlier order restricting the filing of criminal cases against some of the office-bearers and loanees only the S.P's noting categorically stated that the draft F.I.R. (against N.K. Sinha) had been vetted by D.I.G. C.I.D. as well as by I.G.. of Police. After examining the entire material carefully and obtaining clarifications on certain points Shri Vinod Kumar Secretary Co-operation put up a lengthy note dated 15-1-1977 to the Minister for Co-operation in which he specifically placed the proposal of S.P. (Co-operative Vigilance Cell) for lodging F.I.R. against Shri Nawal Kishore Sinha for his approval and also suggested that the Hon'ble Minister may also obtain the approval of the Chief Minister. The Minister for Co- operation in his turn endorsed the file on 20-1-1977 to the Chief Minister for the latter's approval. The file was received by the Chief Minister's Secretariat on 30-3-1977 and Respondent No. 2 as the Chief Minister on 9-4-1977 instead of indicating his mind either way merely marked the file to "I.G. of Police." which was meaningless as the prior noting had clearly indicated that a draft F.I.R. had been vetted by both, D.I.G., C.I.D. and I.G. of Police. Counsel for Respondent No. 2 submitted that the endorsement made by the Chief Minister meant that he had approved the action as proposed. It is impossible to accept the submission. Had the Chief Minister merely put his signature or initials without saying anything it might have been possible to suggest that he had approved the proposal, but to mark the file to "I.G. of Police" without saying 'as proposed' or something to that effect cannot mean that the Respondent No. 2 had approved the proposal. In fact, with the knowledge that the I.G. of Police had approved and vetted the draft F.I.R. against N.K. Sinha, merely marking the file to "I.G. of Police" amounted to putting off the matter Meanwhile Respondent No. 2's Government went out of power and under the President's Rule the matter was dealt with by the Governor Shri Jagan Nath Kaushal (the present Union Law Minister) who granted the approval on 16-5-1977 as a result whereof a criminal case (being F.I.R. Case No. 97 (5) 77) ultimately came to be filed at Kadam Kuan Police Station on 30-5-1977 against Nawal Kishore Sinha, for which Respondent No. 2 cannot take any credit whatsoever. On the other hand, the subsequent events show that so long at it lay within his power Respondents No. 2 made every effort to protect and save Nawal Kishore Sinha from criminal prosecution by abusing his official position-a criminal prosecution which had been proposed by independent bodies like the Reserve Bank of India and the Co-operative Department, agreed to by the Law Department, recommended by the Estimates Committee and ultimately approved by the Governor Shri Jagan Nath Kaushal.

On 1.9.1977, Joint Secretary, Shri D.N. Sahay, wrote to the Special Secretary regarding the charge No. 8 that related to the Bank that as a Commission of Enquiry had already been instituted, he doubted the desirability of a vigilance inquiry. The Chief Minister, Shri Karpoori Thakur, opined that the materials collected by the Vigilance Department would be used by the Commission. On 20.9.1977, the Joint Secretary, Shri D.N. Sahay, again referred to the Conduct Rules of 1964 for Ministers and Chief Ministers and suggested that necessary notes by Chief Minister should be sent to the Union Home Minister for necessary orders for inquiry. Then on 17.10.1977, Chief Minister, Shri Karpoori Thakur, who had written a D.O. letter to the Home Minister, Chaudhury Charan Singh, regarding the allegations with regard to the Bank again suggested that although a Commission of Enquiry had been appointed, the Vigilance inquiry might continue, as the materials collected by vigilance might be used by the Commission.

In October, 1977, Shri S.B. Sahay was posted as D.I.G. (Vigilance) by the Chief Minister, Shri Karpoori Thakur. On 7.11.1977, Shri S.B. Sahay ordered for inquiry on all points without obtaining consent of the Union Home Ministry and without waiting for further orders.

In November, 1977, one Shri D.P. Ojha was posted as S.P., Vigilance, by the Chief Minister, Shri Thakur and the inquiry was endorsed to Shri Ojha.

6. It has been alleged by the respondents that in January, 1978, some Inspectors of the CID like Raghubir Singh, Sharda Prasad Singh, Ram Dahin Sharma and others were transferred to Vigilance Department and they were responsible for the investigation of the major portions of the case in question, and that all the criminal cases investigated by D.S.Ps. (CID), Bihar, relating to the Bank were transferred to Vigilance Department and placed under the charge of the Inspector, Shri Raghubir Singh. Haidari, aforesaid, who had been an accused of Kadam Kuan P.S. case and arrested and who had made a confessional statement was rearrested by the investigating officer, Shri Raghubir Singh on 22.1.1978. Haidari made a second confession implicating Respondent No. 2 for the first time. On 26.1.1978, A.K. Sinha who was also rearrested made a confession. On 28.1.1978. D.P. Ojha, aforesaid, submitted his inquiry report recommending institution of criminal cases against Respondent No. 2 and others. Similar recommendations were also made by Shri S.B. Sahay, aforesaid, and also by the I.G. Vigilance. The file was then referred to the Advocate General, Shri K.D. Chatterjee, appointed by the Karpoori Thakur Government. On 31.1.1978, the Chief Minister, Shri Thakur, approved it with the direction to hand over the file to Shri S.B. Sahay, who in turn, endorsed it to Shri D.P. Ojha for investigation and institution of the case. On 1.2.1978, Shri Ojha directed Shri R.P. Singh, Additional S.P. to institute a case. After having obtained sanction of the Governor, a criminal case was instituted on 1.2.1978 by the Vigilance Police and on 19.2.1979 a charge-sheet was submitted against the respondents and others.

S.P. Vigilance submitted his inquiry report recommending institution of criminal cases against Dr. Mishra and others. On 29th of January 1978 Shri S.B. Sahay DIG Vigilance also recommended the institution of a criminal case. On 30th of January 1978, I.G.Vigilance also recommended the prosecution. On the same day the file was referred to Advocate General Shri K.D. Chattarjee appointed as Advocate General by Shri Karpoori Thakur. On 31st of January, 1978 the Chief Secretary sent the file to the Chief Minister of Bihar. On the same day the Chief Minister, Bihar approved it and handed over the file direct to Shri S.B. Sahay, DIG. On 1st of February, 1978 the file was endorsed by S.P. Vigilance, Shri D.P.Ojha to Addl. S.P., R.P. Singh for instituting the case. On 1st of February, 1978 a Vigilance Criminal case was instituted in Police Station at 0600 hrs. At 8.50 hrs. the Case was discussed by I.G.with DIG Shri S.B. Sahay and Shri D.P. Ojha and decision was taken to search houses of Dr. Mishra at Patna, Balua Bazar, and his relations. On the same day request to issue search warrants was made and search warrants were issued. On the same day Inspectors M/s. Sharda Nanda Singh, Raghubir Singh and Ramdehia Sharma were got transferred from CID to Vigilance.