Delhi High Court

Cbi vs Shri Arun Kumar Goenka & Anr. on 23 January, 2009

Author: Aruna Suresh

                "REPORTABLE"
*     HIGH COURT OF DELHI AT NEW DELHI

+                      Crl. Rev. (P). 164/2005

                             Date of decision: January 23, 2009


#     CBI                                  ..... Petitioner
!                      Through : Mr. Ashish Kumar, Adv.


                                Versus


$     SHRI ARUN KUAMR GOENKA & ANR.
                                    ..... Respondents
^             Through : Mr. Sidharth Luthra, Sr. Adv.
                        with Ms. Smriti Sinha, Adv.
                        for R-1
                        Mr. P.S. Singhal, Adv. for R-2.

%
      CORAM:
      HON'BLE MS. JUSTICE ARUNA SURESH

     (1) Whether reporters of local paper may be
         allowed to see the judgment?

     (2) To be referred to the reporter or not?               Yes

     (3) Whether the judgment should be reported
         in the Digest ?                                      Yes

                             JUDGMENT

ARUNA SURESH, J.

1. Impugning the order of learned Special Judge

dated 7.12.2004 whereby he discharged the

accused persons/respondents in complaint case No.

15/1999 titled as CBI v. Arun Kumar Goenka and

others, this petition has been filed.

2. Succinctly, case of the prosecution is that accused

Arun Kumar Goenka and other directors of M/s

Premier Vinyl Flooring Limited (hereinafter

referred to M/s. PVFL) in criminal conspiracy with

accused K.M. Udupa, bank officer, cheated Canara

Bank, Sadarjung Development Area, New Delhi to

the tune of Rs. 1,41,81,277/- in respect of two

import bills namely FIBC 13/97 for US$ 243250.02

and FISC 51/97 for US$ 113040/- in favour of M/s.

PVFL received by Canara Bank on 22.1.1997 and

26.3.1997 respectively. Foreign Department

(South) of the Canara Bank received foreign import

bill for collection on 20.1.1997 from Overseas

Chinese Bank, Taoyuan (Taiwan) No. 288, San

Ming Road, Sector-3, vide their covering letter No.

7AMMRDA00012/246 dated 14.1.1997 on behalf of

M/s. Hi-Lingos Co. Ltd., Taiwan drawn on M/s.

PVFL amounting to Rs 2,43,250.02 along with

necessary documents. The delivery of documents

was to be made against payment/acceptance in two

installments i.e. first delivery against payment (DP)

for US$ 168640/- and second delivery against

acceptance (DA) for US$ 74,610.02 and the

payment was to be made within 45 days from

26.12.1996. The other import bill for collection

was received by the said branch on 22.3.1997 from

Overseas Chinese Bank, Taiwan vide covering

letter 7AMMRDP00035/246 dated 18.3.1997 on

behalf of M/s. Hi-Lingos Co. Ltd., Taiwan drawn on

M/s. PVFL amounting to Rs.1,13,040 along with

necessary documents. The instructions from the

Overseas Chinese Bank in this case was delivery

against payment (DP) basis. However, accused

K.M. Udupa, officer, posted in the foreign

department of the branch handed over original bills

of lading, invoices, packing list, certificate of origin

etc. to M/s. PVFL without fulfilling the stipulated

conditions. This resulted into the company taking

delivery of the consignment from Custom

Authorities without making the payment to the

Overseas Chinese bank as per instructions. The

Canara Bank had, therefore, to make payment

amounting to Rs. 1,41,81,277/- to the Overseas

Chinese Bank as per instructions to M/s Hi-Lingos

Company, Taiwan resulting into consequential loss.

3. Chargesheet was filed. M/s. PVFL was discharged

vide order dated 18.11.2003. By the impugned

order dated 7.12.2004, the remaining two accused

persons namely Arun Kumar Goenka and K.M.

Udupa (respondents) were also discharged.

4. Learned counsel for the petitioner, Mr. Ashish

Kumar, has argued that accused K.M. Udupa in

criminal conspiracy with Arun Kumar Goenka

parted with the documents pertaining to the said

import bills without obtaining the payment against

the documents and facilitated accused Arun Kumar

Goenka to obtain the goods from Customs authority

by using the said documents. The bank was

cheated of Rs. 1,41,81,277/-, which it had to pay to

Overseas Chinese Bank on 16.4.1998 for onward

payment to exporter M/s Hi-Lingos Company,

Taiwan because M/s PVFL did not pay the dues to

the bank in respect of the said two bills. It is

submitted that the Special Judge failed to

appreciate the facts and circumstances of the case

and took an erroneous view while discharging the

said two accused persons observing that proper

procedure was followed by K.M. Udupa while

delivering the documents to accused Arun Kumar

Goenka pertaining to both bills as delivery was

against acceptance basis wherein he could have

delivered the documents only against payment.

5. Ms. Smriti Sinha, learned counsel for respondent

No. 1 refuted the submissions of the learned

counsel for the petitioner and have argued that

FIBC 13/97 for US$ 2,43,250.02 was on delivery

against acceptance basis and the payment was to

be paid within 45 days after receipt of bill of lading

and there is no evidence whatsoever to show that

when the documents of this transaction were

delivered by K.M. Udupa to accused Arun Kumar

Goenka, M/s PVFL had not accepted its liability to

pay the amount. They have further argued that as

against bill FISC 51/97 for US$ 1,13,040/- which

was a case of delivery against payment, a letter of

request was made by M/s. PVFL to the Overseas

Chinese Bank for splitting the payment and

therefore, this transaction was converted into a

transaction of delivery against acceptance. They

further argued that letters were issued by M/s.

PVFL to Canara Bank, SD Area for accepting the

payment in two instalments within 45 days. Hence,

according to them, there was no criminal

conspiracy between the accused persons with a

view to cheat the Canara Bank to the tune of Rs.

1,41,81,277/-.

6. Mr. P.S. Singhal, learned counsel for respondent

No.2 has also made identical submissions.

7. I do not find any merits in the submissions of the

learned counsel for the petitioner. Perusal of the

first bill FBC 6043/97 (FIBC 13/97) on the face of it

indicates that the documents were to be delivered

to the importer M/s. PVFL against acceptance and

the payment was to be made within 45 days from

26.12.1996.

8. Thus, it is clear that the import against this bill was

on delivery against acceptance basis from its

inception itself and therefore, to say that accused

K.M. Udupa conspired with Arun Kumar Goenka

and released the documents without obtaining

payment against the advice of Overseas Chinese

Bank, Taiwan, would not be in the correct

perspective of the transaction. It in no manner

indicate any criminal conspiracy having been

hatched between the accused persons.

9. As regards second instrument FSC1802/2192/97,

initially the delivery of documents was against

payment but subsequently a request was made by

M/s PVFL to the Overseas Chinese Bank to receive

the amount of the bill in two installments of US

$50,000 and US $ 63040 which was accepted by

the said bank vide their swift message dated

18.9.1997 and the information was accordingly

conveyed to Manager, Canara Bank, S.D. Area,

New Delhi vide letter dated 24.9.1997. This letter

resulted into conversion of bill FISC 51/97

(FSC1802/2192/97) from delivery against payment

to delivery against acceptance. It is pertinent to

mention here that certain documents find mention

in the statement of the witnesses examined by the

prosecution under Section 161 Cr.P.C. but those

documents though collected by the CBI but were

not filed in the court with the chargesheet. Some

of these documents were correspondence which

took place between M/s. PVFL and Overseas

Chinese Bank pertaining to the second FISC 51/97

were not relied upon nor filed on the record by the

CBI. They were so placed on the orders of the

court passed in an application filed by the

respondent.

10. In a business transaction of imports there are

generally three procedures which are being

followed by the parties and bankers. In the first

procedure imports are allowed against letter of

credits where payment is granted by the bank by

opening the letter of credit in the name of the

importer in favour of the exporter. The second

procedure is the procedure of delivery of

documents against payment where documents of

import are sent by the customer to the bank with

instructions that the documents would be delivered

to the importer only after the payment was made

and the third procedure which can be followed is

delivery of documents against acceptance of

liability by the importer subject to payment being

made after given number of days or even without

specifying the number of days for making payment.

11. In the present case, the exporter had followed the

third procedure for processing the documents i.e.

the procedure of delivery of documents against

acceptance of liability by the importer. Admittedly

the second bill FISC 51/97 was initially on delivery

against payment basis and later it was converted

into delivery against acceptance basis.

12. Under these circumstances, it would be a fallacy to

say that both the accused persons criminally

conspired together to cheat the bank by accused

K.M. Udupa releasing the documents in favour of

Arun Kumar Goenka, the director of M/s PVFL

treating it as a transaction of delivery of documents

against acceptance of liability whereas transaction

was delivery of documents against payment.

13. The trial court took into consideration the

statement of the witnesses recorded by the

prosecution and the documents relied upon and

unrelied upon by the CBI before considering if

prima facie any charges were made out against the

accused persons. The relevant observations of the

trial court on the said two bills are contained in

paras 42, 44 and 45:

"42. The recital of the entire evidence collected during investigation was necessary to show that the entire investigation has persisted on the basis that the two transactions were done on delivery against payment basis. The documents, however, show that the import against FIBC 13/97 was on delivery against acceptance basis from the very beginning, while the second import of FISC 51/97 was initially on delivery against payment basis, but was later on converted to delivery against acceptance basis.

44. FIBC 13/97 (FBC 1802/643/97) for US $ 243250.02 was on delivery against acceptance basis and the payment was to be made 45 days after B/L where B/L stands for the date of bill of lading. There is no evidence whatsoever to show that when the documents on this transaction were delivered by

accused KM Udupa to accused Arun Kumar Goenka, M/s. PVFL had not accepted the liability to pay the amount. No witness has stated anything about this fact.

45. The second instance of FISC 51/97 (1802/2492/97) was a case of delivery against payment. Admittedly a request was made by M/s. PVFL to the Overseas Chinese Bank for splitting the payment. The Overseas Chinese Bank agreed to receive the payment in two installments of US $ 50000 and US $ 63040. This transaction was, therefore converted to a transaction of delivery against acceptance. There are letters from M/s. PVFL dated 12.1.98 addressed to Canara Bank, S.D. Area, New Delhi accepting the liability of both the payments within 45 days. The acceptance of liability by the company is, therefore, available in the records of the bank."

14. The trial court, therefore, was right in its approach.

It observed that prima facie it was apparent that

the import transactions were on the basis of

delivery against acceptance and company M/s.

PVFL had accepted its liability and that therefore,

it cannot be said that there was any cheating done

by the company or by the accused persons. Even

no offence for breach of trust is made out against

K.M. Udupa. The approach of the trial court in

discharging the accused persons vide its order

dated 7.12.2004 was just and rationale. I do not

find any reason to interfere in the same. Hence,