Rita Handa vs Cbi
2008 Latest Caselaw 1206 Del

*            IN THE HIGH COURT OF DELHI AT NEW DELHI


+                   CRL. REVISION PETITION NO. 965/2006


                                        Reserved on     : 11-07-2008
%                                       Date of decision : 01-08-2008

RITA HANDA                                              ... PETITIONER
                                 Through:    Mr. H.S. Phoolka, Sr. Adv.
                                             with Mr. M.S. Ahluwalia
                                             and Mr. K. Faisal,
                                             Advocates.
                                             Advocates.

                               -VERSUS-
CBI                                                   ... RESPONDENT

                                 Through:    Mr. Ashiesh Kumar, Adv.
                                             for CBI.

CORAM: HON'BLE MR. JUSTICE SANJAY KISHAN KAUL

1. Whether the Reporters of local papers may be allowed to see the judgment? No

2. To be referred to Reporter or not? Yes

3. Whether the judgment should be Yes reported in the Digest?

SANJAY KISHAN KAUL, J

1. The Ministry of Health and Family Welfare, Government of

India (GOI) selected M/s Rail India Technical and Economic

Services ("M/s RITES" for short) as a consultant for services

including procurement and supply of Vitamin 'A' solution to

various states of the country, finalizing of tenders and

other related activities during the year 1997-98. M/s RITES

invited bids and accepted the tender of M/s Reliance Bulk

Drugs and Formulations Ltd. (for short "M/s RBDFL") and

entered into a contract for the supply of 33136 units @ Rs.

419.64 per unit of a specified quality.

2. It is stated that at the initial stage itself M/s RBDFL

submitted forged bank guarantee B.G. No. BG/1219 dated

19-09-1997 along with forged BG extension covering

letters signed by one Shri V.K. Chawla, Managing Director,

M/s RBDFL (accused no. 3) and Atul Gupta, Assistant

General Manager, M/s RBDFL (accused no. 4) on behalf of

M/s RBDFL (accused no. 5) to the Ministry. The aforesaid

documents were marked to Ms. Rita Handa/ petitioner, the

then Joint General Manager, M/s RITES (accused no.1) and

Shri Rajesh Sehra, Accountant, M/s RITES (accused no. 2)

for proper verification which is alleged to have not been

carried out.

3. It is stated the Ministry issued inspection notes for 17362

units to be supplied to various consignees in Tamil Nadu

but M/s RBDFL supplied only 6666 inspected units and

supplied sub-standard uninspected units to 8 districts of

Tamil Nadu. For the said purpose, it got forged signatures

and stamps of the consignees on the inspection notes to

show that the supplies had been made and claimed

payment from M/s RITES on the basis of the same. It is

contended that the petitioner and accused no. 2 who were

responsible for processing the said documents on behalf of

M/s RITES, released the payment of Rs. 72, 85,790/-

without making any verification about the delivery of the

goods to the consignees and also released the balance

10% payment without prior confirmation from the Ministry.

4. Consequently, on 05-10-2000 on the basis of a source

information the respondent registered Case RC

2(A)/2000/CBI/ACU-VII against all the accused persons and

after the completion of the investigation, a charge sheet

was filed. The Learned Spl. Judge, CBI after taking note of

the factual matrix of the case and hearing the parties,

framed charges against the petitioner and other co-

accused vide order dated 28-03-2006 and 31-03-2006 u/s

420/ 120B of the Indian Penal Code (IPC) and section 13(2)

r/w 13(1)(d) of the Prevention of Corruption Act (the PC Act

for short). The petitioner assailed the aforesaid orders on

charge before this Court by way of a Revision Petition and

vide order dated 10-08-2006, this Court set aside the Trial

Court's order and remanded the matter back to the Trial

Court to consider the submissions made on behalf of the

petitioner afresh and directed that it shall be open to the

petitioner to raise all issues before the Trial Court hearing

the question on framing of charges.

5. In compliance with the direction by this Court, the Trial

Court after hearing the arguments afresh in respect of the

petitioner, found against the petitioner and passed an

order dated 05-12-2006 on charge and framed charges on

12-12-2006 u/s 420/ 120B IPC and section 13(2) r/w

13(1)(d) of the PC Act. The petitioner thus by way of this

present petition seeks to challenge the aforesaid orders on

charge.

6. It is stated that the case is at the stage of prosecution

evidence and 11 witnesses have been examined so far.

7. The learned counsel for the petitioner vehemently argued

that there is no evidence placed on record to prove the

case against the petitioner. The attention of this court was

brought to certain paragraphs of the sanction order dated

08-09-2003 relevant to the case of the petitioner which

show that it was one Shri A.K. Varshney, the then Addl. GM,

MSM division, RITES who was responsible to check the

genuineness of the bank guarantee but he did not check

the same in pursuance of the criminal conspiracy with

accused no. 3 and 4 and issued supply orders in favour of

M/S RBDFL and facilitated M/s RBDFL to obtain the said

contract.

8. It was contended that out of the 11 witnesses examined so

far, the testimony of only four witnesses relate to the

petitioner and all such witnesses have clearly stated that

the verification of the bank guarantee was the

responsibility of Shri A.K. Varshney and the role of the

accounts department in relation to the BG was only to keep

the same in safe custody.

9. Learned counsel for the petitioner relied on the statements

of PW 69, 70 and 71 to show that the verification of the

documents and co-ordination with consignees was the

exclusive role of the MSM Division and Shri A.K. Varshney

being the co-ordinator on behalf of RITES was solely

responsible for the same. In so far as clearance of

payments from the accounts department is concerned, the

statement of PW 70 shows that it was not mandatory to

take clearance of MSM division before releasing payments

which had to be made directly to the suppliers by the

accounts department. As for the inspection notes, they

were received by the MSM division and as per the practice

in RITES retained by MSM division itself, thus it was

contended that there was no question of verification of

these inspection notes by the accounts department.

10. The argument raised by the learned counsel for the

petitioner was that the petitioner was falsely implicated in

this case where as Shri A.K. Varshney, the overall in charge

of the procurement project who was identified as the main

accused has been left scot-free by the CBI. Learned

counsel further relied on a letter dated 01-03-2004 written

by RITES to CBI wherein it is stated that the petitioner was

caused gross injustice especially in view of the fact that

there has been no case made out by the CBI against A.K.

Varshney while the petitioner is being prosecuted even

though her role was limited to only providing logistic

support to A.K. Varshney.

11. It was stated that no mens rea can be imputed to the act of

the petitioner since the petitioner working in her official

capacity as Joint Accounts Manger, Accounts, RITES was

merely responsible for signing the cheques which had to be

duly processed by accused no. 2/accountant. In this regard,

the learned counsel for the petitioner placed reliance on

the judgment in Anil Kumar Bose v. State of Bihar (1974) 4

SCC 616 wherein it was held that a failure on the part of

the concerned employees to perform their duties or to

observe the rules of procedure laid down in the duty chart

in a proper manner may be an administrative lapse on their

part and may be at the highest, a case of error of judgment

or breach of performance of duty which per se, cannot be

equated with dishonest intention. It was observed that

mens rea is one of the essential ingredients of the offence

of cheating.

12. It was submitted that there has been no material placed on

record to show that the petitioner got any pecuniary

advantage to herself or to the supplier so as to bring her

within the ambit of section 13(2) of the PC Act.

13. It was also pointed out that the petitioner was exonerated

in a departmental preliminary enquiry conducted and that

she is maintaining consistent outstanding service records

and high integrity in the office whereby the department

has promoted her. In Surkhi Lal v. Union of India 2005 (3)

JCC 1788, the court held that if the departmental

proceedings end in a finding in favor of the accused in

respect of the allegations which also form the basis for the

criminal proceedings then the departmental adjudication

will remove the very basis of the criminal proceedings and

in such situation the continuance of the criminal

proceedings will be a futile exercise and an abuse of the

process of the court.

14. On the other hand, the allegations made by the

prosecution against the petitioner are two fold. The first

one being that the petitioner did not verify the said bank

guarantee alleged to be forged, submitted by accused no.

3 and 4 on behalf of accused no. 5 company purported to

have been issued by PNB, Chandigarh as a performance

guarantee. It is also contended that at the time of making

payment to accused no. 5 against the bills raised, the

petitioner released the said payment on the basis of forged

signatures and stamps of the consignees without verifying

the same from the consignees as also that the balance

10% of the payment was released without receiving a

confirmation from the Ministry. It was thus contented that

pursuant to a conspiracy hatched amongst the petitioner

and the other co-accused, the petitioner abused her

position as a public servant causing a wrongful loss of

Rs.72,85,790/- to the GOI and a wrongful gain to herself

and the other co-accused.

15. The learned counsel for the CBI in support of its

contentions submitted that the case is at the initial stage of

evidence as also that there is sufficient material on record

to sustain the charges framed against the petitioner. The

testimony of PW1 and PW 4 shows that the said Bank

Guarantee appeared to be forged and PW 2 in his

statement submitted that accused no. 3 or accused no. 5

did not have a bank account in the concerned PNB Branch.

It is contented that other than this, there is enough

documentary evidence to strengthen the case of the

prosecution. D-10 proves submission of fake bank

guarantee by RBDFL for seeking said contract. D-11 proves

the fake confirmation letter for the BG submitted by

RBDFL. D-12 to D17 proves the fake extension letters of

BG. D-18 to D-20 proves that the cheque submitted by

RBDFL in place of the BG was returned unpaid by the bank.

D-23 & D- 24 are files of the Ministry regarding complaints

from Tamil Nadu regarding non-supply of Vitamin A. D-26

proves claims of payment by RBDFL on the basis of fake

inspection notes. D-29 proves payment made to RBDFL by

RITES. D-31 proves that the BG was not issued by PNB,

Chandigarh. D-78 proves that the inspection notes issued

by accused no. 4 were forged.

16. It was submitted that the testimonies of PW 69, 70, 71 and

72 are of much relevance in order to make out a prima

facie case against the petitioner. PW 71, Shri N. Narayana

Swami working as DGM, RITES in his statement stated that

all the accounts matters pertaining to the procurement by

RITES, MSM Division on behalf of the Ministry were dealt

with by the petitioner and accused no. 2. It is stated that

the petitioner had not sought any kind of guidance from

him in this regard. It is further stated the alteration of the

date of issue of inspection notes, the impossible nature of

delivery to far of places in Tamil Nadu within a span of two

days (which should have raised a suspicion) were over

looked by the accounts department and the bills were

passed without any application of mind. The testimony of

PW 70 Shri Shivendar Kumar, Group General Manger MSM,

RITES shows that the accounts department in case of any

doubt was at a liberty to consult the MSM division before

releasing the payment as also that there was nothing on

record in the MSM file to show that such guidance was

sought for. Such payment was released by the accounts

department without seeking clearance from the MSM

division due to which it became difficult to realize the

performance guarantee amount from the account of

accused no 5 for unsatisfactory performance of the

contract for the bank guarantee submitted turned out to be

fake.

17. The statement produced in evidence of PW 69 Shri Rajnish

Gupta, Joint General Manger, MSM, RITES shows that it was

the duty of the accounts department to see that the

conditions of the contract have been met with by the

supplier and that some percentage of the payment against

the supply bills is withheld which portion is released only

after final acceptance of the goods by the consignees. PW

72 in his affidavit of evidence has stated that the logistic

support included the co-ordination with the consignees by

RITES as per the agreement with the Ministry.

18. The learned counsel to further substantiate its case

referred to the decision of the Apex Court in Soma

Chakravarty v. State through CBI (2007) 5 SCC 403 and the

relevant portion of the said decision is as under:

"13. In our opinion once a person signs on a document he or she is expected to make some enquiry before signing it. In fact, accused Soma Chakravarty was never assigned any duty in respect of processing or signing the bills for ad hoc advertisements, and she was assigned duty only of regular advertisements. Moreover, these bills were not sanctioned/approved by the competent authority i.e. the Chairman/Executive Director.

14. No doubt Soma Chakravarty contended that she signed these fake bills by negligence but without any mala fide intention, but this is a matter which in our opinion, is to be seen at the time of the trial. There are serious allegations of misappropriation of a huge amount of money belonging to the government, and it cannot be said at this stage that there is no material at all for framing the charge against her. Hence, we agree with the view taken by the High Court in this connection."

19. In so far as prosecuting Shri A.K. Varshney is concerned,

the learned counsel submitted that the law prohibits his

prosecution without sanction from the competent

authority. The learned counsel for the CBI referred to the

case of Prakash Singh Badal & Anr. v. State of Punjab &

Ors. 2007 (1) SCC 1 wherein it was held that the distinction

between the absence of sanction and the invalidity of

sanction on the ground of non application of mind is that

the former question can be agitated at the threshold but

the latter is a question which has to be raised during trial.

20. It was argued that there was no regular departmental

enquiry conducted against the petitioner and thus the plea

regarding exoneration from a charge has no bearing effect

on the trial of the accused/petitioner in the case. The

learned counsel relied on the judgment of Iqbal Singh

Marwah & Anr. v. Meenakshi Marwah & Anr. (2005) 4 SCC

370 to contend that even otherwise the mere fact that the

petitioner has been exonerated in the departmental

enquiry is of no consequence and will not effect the

criminal proceedings initiated against the petitioner. The

relevant portion of the above said judgment is re-produced

hereunder:-

"24. Coming to the last contention that an effort should be made to avoid conflict of findings between the civil and criminal Courts, it is necessary to point out that the standard of proof required in the two proceedings are entirely different. Civil cases are decided on the basis of preponderance of evidence while in a criminal case the entire burden lies on the prosecution and proof beyond reasonable doubt has to be given. There is neither any statutory provision nor any legal principle that the findings recorded in one proceeding may be treated as final or binding in the other, as both the cases have to be decided on the basis of the evidence adduced therein."

21. The plea raised by the learned counsel for the CBI was that

at the stage of framing of charges, the accused cannot rely

on any document to prove its case and thus the letter

dated 01-03-2004 and its subsequent correspondence

cannot be accepted or relied upon by the petitioner as a

material piece of evidence in its favour and in this regard

referred to the decision of the Apex court in Hem Chand v.

State of Jharkhand 2008 (5) SCC 113:

"12. The learned Special Judge, however, considering the documents on record opined; ...But at this stage I find that unless the documents filed by the defence are not formally proved no finding can be given, because it would amount to discussion the merit of the case before conclusion of trial. However, the materials collected in the case diary by the prosecution reveals that there are ground for framing charge under the aforesaid sections against the accused petitioner. Hence, the above petition stands rejected."

22. The Apex court on many occasions has had the

opportunity to reiterate the well settled principles on the

law governing framing of charges. In Niranjan Singh Karam

Singh Punjabi, Advocate v. Jitender Bhimraj Bijjaya & Ors.

(1990) 4 SCC 76; Union of India v. Prafulla Kumar Samal &

Anr. AIR 1979 SC 366; Dilawar Balu Kurane v. State of

Maharashta (2002) 2 SCC 135; Soma Chakravarty v. State

through CBI (2007) 5 SCC 403; Om Wati (Smt) & Anr. v.

State through Delhi Admin. And Ors. (2001) 4 SCC 333;

State of Orissa v. Debendra Nath Padhi (2005) 1 SCC 568;

Neeraj Gupta & Ors. v. CBI 2007 V Ad (Cri.) (DHC) 517 the

court has repeatedly held that the Court at the stage of

framing charges has undoubted power to sift and weigh the

evidence for the limited purpose of finding out whether or

not a prima facie case against the accused has been made

out. Where the materials placed before the Court disclose

grave suspicion against the accused which has not been

properly explained, the Court will be fully justified in

framing a charge and proceeding with the trial. The test to

determine a prima facie case would naturally depend upon

the facts of each case and it is difficult to lay down a rule of

universal application. By and large, however, if two views

are equally possible and the Judge is satisfied that the

evidence produced before him will give rise to some

suspicion but not grave suspicion against the accused, he

will be fully within his right to discharge the accused. In

exercising his jurisdiction under Section 227 of the Code

the Judge cannot act merely as a Post Office or a

mouthpiece of the prosecution, but has to consider the

broad probabilities of the case, the total effect of the

evidence and the documents produced before the Court,

any basic infirmities appearing in the case and so on. This

however does not mean that the Judge should make a

roving enquiry into the pros and cons of the matter and

weigh the evidence as if he was conducting a trial.

23. It cannot be lost sight of that Section 401 CrPC conferring

powers of an appellate court on the revisional court is with

the limited purpose. The provisions contained in Section

395 to Section 401 CrPC, read together, do not indicate

that the revisional power of the High Court can be

exercised as a second appellate power. Thus, the High

Court in revision while exercising supervisory jurisdiction of

a restricted nature is justified in refusing to re-appreciate

the evidence for the purposes of determining whether the

concurrent finding of fact reached by the Ld. Trial Court is

correct. The revisional power of the High Court merely

conserves the power of the High Court to see that justice is

done in accordance with the recognised rules of criminal

jurisprudence and that its subordinate courts do not

exceed the jurisdiction or abuse the power vested in them

under the Code or to prevent abuse of the process of the

inferior criminal courts or to prevent miscarriage of justice.

24. The aforesaid aspect have been emphasized to make it

clear that this Court shall not go into the detailed scrutiny

of this case so as to derive a different conclusion.

25. I have given my thoughtful consideration to the present

matter and in my considered view, the Ld. Trial Court has

failed to appreciate and examine the material and the

evidence placed on record so as to frame charges against

the petitioner. The petitioner was working as Joint General

Manager (Accounts) in RITES at the time of commission of

the alleged offence. A perusal of the evidence proved on

record shows that it was exclusively the duty of Shri A.K.

Varshney, MSM division to check/verify the genuineness of

the said bank guarantee and the role of the accounts

department was restricted to keep the same in safe

custody. The statement of PW 85 apart from the others

clearly shows that PW 85 working as a consultant in the

MSM division, as per the direction of Shri A.K. Varshney, in

course of discharge of his duty prepared a covering letter

dated 22-10-1997 signed by Shri A.K. Varshney vide which

the said bank guarantee and confirmation letter were sent

to the accounts department to be kept in safe custody.

Hence, the question of verification of the genuineness of

the bank guarantee by the petitioner does not arise.

26. The primary duty of the petitioner in respect of the said

contract was to release the payment after the receipt of

vouchers signed by the consignees with an official seal as

per the provisions of the agreement. However, it cannot be

lost sight of that the task of co-ordination with the

consignees to ensure receipt of the said supply and

verification of the documents/vouchers was to be

performed by Shri A.K. Varshney and not the accounts

department. The duty of the accounts department was

limited to the release of the payment after the receipt of

vouchers signed by the consignees. The processing of

these vouchers was the duty of accused no. 2 and the

petitioner was only required to release such payment on

receipt of such vouchers. It was only in case of any doubt

that the accounts department was at a liberty to consult

the MSM division before releasing the said payment which

means that it was not mandatory for the petitioner to seek

any kind of guidance/clearance from the MSM division

before releasing the said payment.

27. It may also be taken note of that the contract agreement

provided for the terms of making the payment as also the

lists of documents based on which such payment was to be

released but it no where specified that such documents

required verification to be done by the accounts

department which was solely the duty of the MSM division.

It is here that the case of Soma Chakravarty (Supra) can be

distinguished from the present case whereby it can be said

that it was Shri A.K. Varshney who was expected to

conduct an enquiry into the same and not the petitioner.

28. The petitioner is being put in the dock on the ground that

the impossibly of delivery to far off places in Tamil Nadu

within a span of two days should have raised her suspicion.

In my considered view, this is stretching the duty of care

on the part of the petitioner too far. If the converse was to

be taken as true, even then the statement of PW 70

clarifies that co-ordination with the consignees did not

mean independent verification of receipt of materials by

them against the supply contracts for the reason that there

were about 500 consignees in this case. Individual

verification therefore would have been substantial work. If

this was to be intended, it would have been included in the

items under logistic support of JPO (Joint procedure Order).

The JPO did not lay down independent verification of

receipts by the consignees as one of the items. Be that as

it may the same by no stretch of imagination can be

equated with the petitioner having a dishonest intention/

mens rea. The prosecution has failed to bring on record

any evidence so as to prove the same as also that the

petitioner in abuse of her official capacity as a public

servant got any pecuniary advantage for herself or the

supplier. I find myself in full agreement with the view taken

in Anil Bose's case (Supra) wherein it can be said that there

has been an administrative lapse (if at all) on the part of

the petitioner in performance of her duty. The worst that

can be imputed to the petitioner is an error of judgment

and that cannot give rise to a criminal liability. Thus even

after painting the worst scenario as set up by the

respondent for the petitioner, there is no criminal

culpability made out.

29. The extent of proof required in criminal proceedings is

distinct from departmental proceedings. The degree of

proof beyond reasonable doubt does not apply to a

departmental enquiry. Despite this, there is a finding in

favour of the petitioner in the departmental proceedings in

respect of the allegations which form the basis of the

criminal proceedings. No doubt, there was no regular

departmental enquiry but this aspect is being emphasized

to show that even the much lesser degree of proof in a

departmental enquiry was not met in the case of the

petitioner.

30. The settled legal position in law is that at the stage of

framing of charges, the documents filed by the defence

unless formally proved cannot be relied upon and no

finding can be given on the same because it would amount

to discussing the merit of the case before conclusion of

trial as was held in Hem Chand's case (Supra), therefore

the letter dated 01-03-2004 and its subsequent

correspondence produced before this court cannot be

accepted or used as a material piece of evidence in favour

of the petitioner. The whole approach of the prosecution

appears to be faulty as sanction has not been obtained for

prosecution of Shri A.K. Varshney who is responsible for the

acts but on the other hand his subordinate (the petitioner)

is sought to be prosecuted even though she hardly had any

role in respect of the fraudulent transaction.

31. In view of the aforesaid, the charges so framed against the

petitioner are not made out and there is no prima facie

case against her. Hence, the impugned orders on charge

dated 05-12-06 and 12-12-06 are set aside and the petition

is accordingly allowed. The petitioner stands discharged.

32. The Trial Court Record be sent back.

August 01, 2008                         SANJAY KISHAN KAUL, J.
'RA'