Delhi High Court
Vipin Jain vs Cbi on 22 May, 2012
Author: Suresh Kait
* IN THE HIGH COURT OF DELHI AT NEW DELHI
+ Crl. M.C. 1806/2011
% Judgment reserved on: 9th January, 2012
Judgment delivered on: 22nd May,2012
VIPIN JAIN ..... Petitioner
Through: Mr. Ajay Burman, Mr. Kunal
Malhora and Mr. Ramandeep Barua, Advs.
Versus
CBI ..... Respondent
Through: Ms. Sonia Mathur, Standing
Counsel for CBI with Mr. Ashok Kumar,
Inspr./CBI/EOI/New Delhi.
CORAM:
HON'BLE MR. JUSTICE SURESH KAIT
SURESH KAIT, J.
1. The instant petition being filed to quash the proceedings
including the summoning order and order on framing of charge and all
consequent proceedings pending against the petitioner in the court of
Special Judge, Rohini Delhi in R.C. NO. 1(e)/2002-EOW-1-New
Delhi under Section 120B IPC read with Section 420/467/468/471
The Indian Penal Code, 1860 and Section 13(2) read with Section
13(1)(d) and Section 13(2) read with Section 13(1)(d) of Prevention of
Corruption Act, 1988.
2. Vide order dated 14.09.2011, this Court has passed the
following order:
"During arguments, learned counsel for the petitioners
submits that the loan in question was sanctioned at the
level of regional head i.e. Mr.S.K. Khanna and thereafter,
all the documents were sent to Branch Manager, Mr.G.K.
Dhawan, who after receiving them, sent to petitioner.
Thereafter, the Branch Manager, found to be correct and
in proper form, who further forwarded the same
same to the petitioner/Mr.Vipin Jain, Manager, Loans.
Mr.Vipin Jain, thereafter, sent all the sanctioned document
through his Branch Manager to Legal Advisor, who is
attached to Regional office for vetting and opinion. After
vetting, all the documents were found to be in order. The
petitioner/Mr.Vipin Jain had received all the documents
through Branch Manager and thereafter, the petitioner
received the stock statement from the company duly
certified by the Charted Accountant.
Thereafter, drawing power was calculated and the money
disbursement as allowed by the Branch Manager.
Learned counsel for the petitioner has pointed out that
neither Mr.S.K. Khanna, who was heading the Regional
office of the entire region had initiated and sanctioned the
loan nor Mr. P. Sridhar, Assistant Manager and Mr. S.C.
Dutt, Manager attached to the regional office who
processed all the documents for loan nor Mr. P.C. Sood,
who has also disbursed the part of loan and also opened
the LC(Letter of Credit) of sister concerned, were made
accused in this case.
It is further submitted that the department has taken action
against Mr. P.C. Sood, Mr. S.K. Khanna and Mr. G.K.
Dhawan and punished them with major penalties. Despite,
all the above mentioned persons have been made witnesses
in the case. They are the main conspirators who initiated
the process and thereafter sanctioned the loan, against the
norms and policies. It is also not the case of the
prosecution that the above said persons were made
approvers in the case.
Whereas, in the case of the petitioner, the deptt. has
exonerated, thereafter, promoted to next scale. The CVC
has also given the clean chit.
It is further submitted that as per the policy, the sanction
papers should have been initiated from any of the Branch
and thereafter, they should have been processed as per the
sanctioning power of the concerned officers. But, in the
present case the situation is totally reverse."
3. In brief, the facts of the case are that in May, 1998 Mr. M.K.
Aggarwal of M/s. Rasiwaisa India Pvt. Ltd. approached the Oriental
Bank of Commerce along with PW-29 at Regional Office and met Shri
S.K. Khanna, the then Regional Head Shri S.K. Khanna directed him
to meet the then Chief Manager, Shri G.K. Dhawan, at the Branch
Office I.F.B. of the Oriental Bank of Commerce, Connaught Place,
New Delhi.
4. On 08.06.1998, as per the direction of Regional Head, loan
proposal was sent to Regional Office from the Chief Manager, I.F.B.
Branch, Oriental Bank of Commerce. Accordingly, on 30.06.1998,
Chief Manager of IFB Branch sent the reply of the borrower to the
queries raised by the Regional Office.
5. On 09.07.1998, the loan proposal was processed at the Regional
Office by the Officers of Regional Office, namely. Sh. S.C.Dutt,
Sh. J.C. Dhir and finally sanctioned by Sh. S.K. Khanna, Regional
Head.
6. Thereafter on 29.07.1998, loan documents were executed by
Sh. M.K. Aggarwal in the Bank. On 31.07.1998, vetting of documents
were done by „Legal Retainer" of the bank at Regional Office whereby
documents were found in order and hence approved and all the terms
and conditions of the sanction letter were complied by the Branch.
7. On 31.07.1998, the facility was disbursed after obtaining stock
statement duly certified by Chartered Accountant.
8. Petitioner verified the stock on 07.11.1998 as per direction of
Branch Head and pointed out irregularities committed by the Borrower
for the first time and suggested to initiate steps for recovery of bank
funds. The petitioner had submitted the report of irregularity.
9. Mr. Ajay Burman, Ld. Counsel appearing on behalf of the
petitioner submitted that up to 2001 RBI and Inspection & Control
Department carried out enquiry and reported gross negligence on the
part of the Regional Office and exonerated and did not point out
involvement of staff at Branch level. The petitioner was also one of
the Managers at Branch Level.
10. On 21.09.2011, a complaint was lodged in writing by CVO,
Oriental Bank of Commerce to the CBI for investigation. In his
complaint CVO named late Sh. J.C. Dhir, AGM Sh. S.K. Khanna, Dy.
General Manager, Account holders and staff at Regional Office who
processed the loan, to be the persons responsible for committing the
offence. Petitioner was also named as a person to be responsible for
any act. Therefore, on 20.06.2003, the Bank granted sanction to CBI
for prosecuting the petitioner at the behest of CBI and on the format /
draft sanction provided by CBI.
11. On 28.06.2003 Charge-sheet was filed by the CBI in the Court
and on 25.11.2003, Oriental Bank of Commerce sought explanation
from the petitioner on 9 points on the lines of sanction obtained by the
CBI. Accordingly, Petitioner filed the detailed reply on 9 points on
03.02.2004 as desired by the Bank.
12. On 15.07.2004, after receiving the copy of documents from the
ld. Trial Court, the petitioner submitted another detailed letter in his
defence along with copies of all the supporting documents.
13. On 06.09.2004, Disciplinary Authority of the Bank submitted to
the Chief Vigilance Officer a detailed letter and given his view that
minor penalty action will meet ends of justice. Disciplinary Authority
stated that out of 9 allegations, Reply on 6 points is satisfactory and
remaining 3 are small procedural gaps and are sustainable only.
14. The Chief Vigilance Officer sent detailed recommendations to
the Chief Vigilance Commissioner on 12.10.2004 seeking first stage
advice for minor penalty proceedings. Accordingly, the Chief
Vigilance Commission in its Observations opined that on the one
hand; the Bank has considered the irregularities extremely grave
warranting sanctioning of prosecution of petitioner in the court of law
and; on the other hand the bank is underlying the irregularities
committed by the petitioner by initiating minor penalty proceedings.
The Chief Vigilance sought reasons from the bank for taking such a
stance.
15. On 03.12.2004, Disciplinary Authority, based on fresh
evaluation of documentary evidence, brought into sharper focus by the
explanation submitted by the petitioner stating that there was no
attempt to underplay the lapses attributed to the petitioner. Again
requested to the Chief Vigilance Officer to taking up with the Chief
Vigilance Commission for first stage advice.
16. The Chief Vigilance Officer, in view of above observations,
again sought first stage advice from CVC on 27.01.2005.
17. Since the case was under CBI investigation, CVC advised the
bank to seek advice from CBI for simultaneous Department Action.
CBI concurred for simultaneous Departmental Action. DA kept the
matter in abeyance.
18. Meanwhile, formal charges framed by the ld. Special Judge
against the accused persons including the petitioner.
19. Being aggrieved, the petitioner challenged the same before
this Court. Charges framed were set aside in Crl. Rev. No. 77/2006
and the matter remanded back to the ld. Trial Court for re-
consideration.
20. Again an order passed by the ld. Special Judge for framing of
charge against the petitioner on the same grounds without even
considering the arguments advanced before the High Court earlier and
observations made by this Court.
21. Petitioner again filed a Crl. Rev. P. NO. 263/2007 against the
order of framing of charge and the same was admitted on 23.09.2009
for regular hearing.
22. Based on request of the Disciplinary Authority of the Oriental
Bank of Commerce, the Chief Vigilance officer again referred the
matter to CVC seeking first stage advise stating that out of 9
allegations, Reply to 6 allegations is satisfactory and remaining 3
allegations involving procedural lapses are sustainable only.
23. The Chief Vigilance Commission advised the bank to keep the
disciplinary proceedings in abeyance till the disposal of the court case.
24. In February, 2008 internal promotion procedure in the bank
took place and the petitioner being eligible was called for interview.
On 31.03.2008, the result of the internal promotion was declared
where the petitioner's result was kept in a sealed envelop. In fact, the
petitioner topped the successful candidates and stood first out of 184
successful candidates.
25. The petitioner obtained copies of all the correspondence,
exchanged between the Oriental Bank of Commerce and the Chief
Vigilance Commission alongwith internal notings thereon, under Right
to Information Act, 2005. Based upon the copies of above details,
received from the Chief Vigilance Commission, the petitioner
submitted a representation to the Bank seeking justice in the matter, as
the internal notings of CVC clearly and apparently exonerated the
petitioner of the allegations levelled by the CBI and the Bank in the
aforesaid case of M.K. Aggarwal & Ors. in bank account of M/s.
Rasiwala India Pvt. Ltd.
26. Based on the copies of above details, received from the Chief
Vigilance Commission, the petitioner submitted a representation to the
Bank seeking justice in the matter as the internal notings of CVC
clearly and apparently exonerated the petitioner of the allegations
levelled by the CBI and the Bank in the aforesaid case of M.K.
Aggarwal & Ors. in bank account of M/s. Rasiwaisa India Pvt. Ltd.
27. Thereafter, based on the representation submitted by the
petitioner, Human Resource Development Department of the Bank
placed a Memorandum before the Board of Directors of the Bank
stating all the details. The Board of Directors of the Bank directed for
releasing ad hoc promotion to the petitioner. The petitioner obtained
copy of the approved note of the Board of Directors of the Oriental
Bank of Commerce, under Right to Information.
28. While the Crl. R.P. No. 263/2007 was pending and admitted for
regular hearings, a petition under Section 482 Cr.P.C i.e. Crl. M.C.
3322/2010 was filed before this Court, on the ground of apparent
exoneration in disciplinary proceedings where the same was
withdrawn with a liberty to move appropriate application in Crl. Rev.
P. No. 263/2007 containing grounds taking up in Crl. M.C. NO.
3322/2010 and liberty was granted to the petitioner.
29. The Crl. Rev.P. No. 263/2007 was dismissed being not
maintainable in view of the decision of Division Bench of this Court in
Anuj Jain Vs. CBI in Writ Petition No. 80/2010.
30. Thereafter, the present petition has been filed incorporating all
the documents as annexures which were obtained under Right to
Information Act which include documents / correspondence / notings
of CVC, CVO and Bank officials, along with the petition annexure P-7
and Annexure P-8 from Page No. 69 to 167 contains the internal notes
and notings of CVC and notes approved by Board of Directors of
Oriental Bank of Commerce.
31. Additionally, the Bank note signed by General Manager, (HRD)
put up before the Chairman and duly signed by all of them including
Executive Director, RBI Nominee Director for approval is from page
127 to 153 in the paper book.
32. It is submitted that the same may be perused, note contains the
following:
"1. Remarks of Reserve Bank of India (Regulator of
Banking Industry of India).
Reserve Bank of India in its inspection report has
observed that "Gross negligence has been observed on the
part of the sanctioning authority".
It may be noted that the petitioner was posted in the
Branch and not at Regional Office, where the loan
proposal was processed and sanctioned.
2. Staff Accountability Report in the instant case
(Examined by the Inspection & Control Department of
the Bank.
The Bank conducted departmental inquiry and concurring
with the findings of the Inquiring Authority, the
Disciplinary Authority imposed the punishment of
dismissal from services of the Bank against Sh. S.K.
Khanna, Deputy General Manager and imposed major
penalties on Sh. G.K. Dhawan, Chief Manager of the
Branch and his successor, Sh. P.C. Sood, Chief Manager.
In the above cased even the comments of the present
petitioner were not at all called as he was not
implicated by Inspection & Control Department (Staff
Accountability Cell). However, on accounts of lapses
pointed out in SP's Report in November, 2003
comments of the petitioner were called by the Bank on
the same points on which the sanction for prosecution
was given. The petitioner submitted his detailed reply in
February, 2004 and July, 2004.
The matter was examined in detail by Disciplinary Action
Department and it was observed that out of 9 allegations
against the petitioner, his reply on 6 points was found to
be satisfactory. In respect of remaining 3 points, it was
observed that the lapses were procedural and no
malafide is attributed to the petitioner in the case."
3. Views of Central Vigilance Commission.
Remarks of Sh. A.K. Nagar, Advisor to CVC:
'Considering the lapses narrated and the explanation of
the CO (Sh. Vipin Kumar Jain), it can be observed that the
lapses are not of serious nature and therefore initiation of
minor p.p. would be just and reasonable and we may agree
with the DA/CVO'.
"Incidentally, this is a case where the bank accorded
sanction of prosecution based on the facts and documents
submitted by the CBI but proposed initiation of minor
penalty proceedings as certain new facts and evidence
were brought to the notice of the Bank by the CO Sh.Vipin
Kumar Jain (appellant herein). In our opinion, it was the
responsibility of the Disciplinary Authority to examine all
the documents thoroughly before giving sanction of
prosecution so that the officer would not have been
subjected to undue hardship as happened in this
case."
"In view of the details as given above, DA in this case should be
properly counselled"
Remarks of Vigilance Commissioner:
"Minor p.p. would not be desirable. Right Course would
have been simultaneous RDA for major penalty for
identical or near similar charge. However, since the role
of Sh. V.K. Jain does not appear to be too serious and
as three seems to be a realization that he may have
been unduly penalised through prosecution, we may keep
the disciplinary action on hold to be reviewed after
disposal of the court case"."
4. Bank's views
Bank while submitting justifications for the promotion of
the petitioner to next scale, has observed that:-
a. Proper examination of documents on record was not
done prior to giving sanction of prosecution to CBI.
b. The documents submitted by the petitioner reflect his
innocence from any malafide or criminal intentions to
unduly favour the borrower. It also speaks that he is
facing unjustifiable hardship through prosecution.
c. There is nothing in his past track record to suggest
any malafide on his part.
5. Besides above, given below is the detailed chart in
respect of the charges levelled against the petitioner,
clarifications submitted by him and Bank's
observation on the same.
Charges Clarifications Bank's Observation
1. He processed / The proposal was not Loan proposal dated
recommended and processed at Branch 30.05.1998 of M/s.
forwarded the loan Level and process not Rasiwaisa India (P)
application of M/s. was prepared at RO, Ltd. was received at
Rasiwaisa India (P) New Delhi. I only B/O Industrial Finance,
Ltd. to Regional prepared a forwarding Delhi and the same was
Office, New Delhi letter as directed by examined at branch
for sanction in the Branch Manager. level and recommended
isolation of any I complied with the and forwarded to
account or dealing instructions of the BM Regional Office, New
with the bank in in good faith as he Delhi vide letter dated
contravention to the was working under 08.06.1998 which is
guidelines the directions of the initialled by Sh. Jain.
contained in then Regional Head Important points of the
advance manual. proposal were
As per Para 1.4 It is incorrect that the discussed in the letter.
Page „4‟ of applicant was new to However, detailed
Advance Manual, the Bank as he was process note as per
Volume-I of the referred to the Branch bank‟s guidelines was
Bank, the selection by the Regional Head. prepared at the
of „Borrower‟ is of Regional level.
utmost importance
and applicant
should have a
properly introduced
/ satisfactory
conduct of account
or be the Bank but
apparently as the
account was not
opened or borrow
was not dealing in
any manner
whatsoever with the
bank with conduct /
dealing of the
borrower would not
have been known to
the branch.
2. He got the No process not was He has taken the
process note of the recorded at Branch figures from the
said loan of M/s. level. The Projections financial papers
Rasiwaisa India (P) as submitted by the submitted by the party
Ltd. favourably company were and put them in the
projected by giving forwarded to RO New forwarding letter.
false / inflated Delhi which were However, he has not
financial figures of changed at RO New given false / inflated
the firm and Delhi in consultation figures.
facilitated M/s. with the BM.
Rasiwaisa India (P)
Ltd. to enjoy the
credit facilities for
which the said firm
was not eligible.
3. He failed to The Regional Head Regarding
verify the referred the case. I recommending limit
credentials of the have not forwarded / without proper
firm and forwarded recommended the verification of
/ recommended the loan proposal. The borrower, he has
loan proposal of the BM probably under enclosed the statement
subject borrower instructions of of Sh. N.K. Garg
without following Regional Head recorded before
the credit Policy recommended the Investigating Officer of
Guidelines issued same. The proposal CBI wherein Sh. Garg
by Head Office was for trading of Iron has stated that he
which states that & Steel and not for introduced Sh. M.K.
finance to steel Industry. As per the Aggarwal of M/s.
sector be Loan Policy of the Rasiwaisa India (P)
discouraged. The Bank, trading was a Ltd. to Sh. S.K.
calculations of thrust area of lending. Khanna, Dy. General
Maximum Manager, Regional
Permissible Bank Office, New Delhi &
Finance (MPBF) Sh. Khanna directed
Process note was
made in the process him to submit his
prepared / recorded at
not has not been proposal to Sh. G.K.
Regional Office and
correctly Dhawan, Chief
not at Branch Level.
calculated. Had Manager, B/o,
Accordingly, MPBF
this been done Industrial Finance
was also calculated at
properly, the actual Branch, New Delhi.
RO. The RO after
Net Working As account was
preparing the process
Capital (NWC) referred to the branch
note and calculating
available with the by Regional Head, he
the MPBF, sanctioned
firm would have was not associated in
50% of the credit
been lower and selection of borrower.
limits in favour of the
MPBF would also
company, which in The credit policy
be less.
the opinion of RO was restict6ed finance to
in accordance with iron and steel industry.
available NWC. The proposal was
recommended for
trading of Iron and
steel. As per Credit
Policy, finance to
Conventional Sector
was a thrust areas,
which also covers
trading in iron and
steel. He calculated the
MPFB on the basis of
projected sale figures
furnished by the
borrower without
appreciation as to
whether the same was
achievable or not.
However, the MPFB
calculated by Sh. Jain
was not relied upon by
the Regional Office
which did its own
calculations and the
same was drastically
reduced at their level
after discussions with
the Chief Manager of
the Branch. Moreover,
the credit facilities
were sanctioned as per
the calculations done at
Regional Office.
4. He unautorizedly There are no He calculated the D.P.
accepted the stock guidelines in place, on the basis of stock
statement dated which even remotely statement certified by a
31.07.1998 of the suggest that drawing Chartered Accountant.
party in toto in a hypothecation However, the stocks
without physical account are to be were not physically
verification and permitted after verified by him at
allowed drawing physical verification irregular intervals as
power to the extent of stocks reported in per bank‟s guidelines.
of Rs.21.21 lacs on the stock statements.
31.07.1998 with the
object to release LC As per practice in the
no. 296/98 in branch, CA certified
favour of M/s. Hind stock statements were
Steel Sales for taken for allowing DP
Rs.50 Lacs on in the beginning. In
behalf of the the instant case also,
subject borrower. the stock statement
was duly certified by
a Chartered
Accountant. The BM
permitted the DP.
The branch was under
concurrent audit. HO
Officials also
inspected the branch
in October /
November, 1998 and
none of them
commented on
allowing DP in the
account or any lapse
in this respect. A
different department
opened L/C‟s. I was
nowhere in the picture
for opening of L/C.
Loans department had
no role in opening of
LC.
5. He failed to reply The detailed reply It is a fact that the letter
the queries raised was submitted by the of the party was
by Regional office party and the same forwarded to Regional
in respect of the was forwarded by the Office through Branch
said loans but BM. letter dated 30.06.1998
simply forwarded, without any comments
with the covering None of the / observations.
letter of the branch, inspection reports has However the letter was
the reply submitted stated any lapse at signed by the Chief
by the party and Branch level. Manager of the Branch
further and only the Office
recommended the copy of the same was
sanction of the also initialled by Sh.
credit facilities Jain.
obviously
confirming that he
was satisfied with
the reply of the
party which caused
heavy loss to the
bank.
6. He overlooked The audited Balance The credit facilities
the sanctioned Sheet as on were released on
conditions of R.O. 31.03.1998 was very 31.07.1998 after
for obtaining much obtained along obtaining the audited
Balance Sheet as on with the loaning Balance Sheet as
31.03.1998 and documents and 31.03.1998 as is
charging of entered in documents evident the coy of
securities before register at Page n. 141 relevant pages of
lease of the credit on 29.07.1998. document register sent
facilities and thus Thereafter original by him along with his
facilitated loaning documents letter supra. The charge
immediate release included audited was created within
of the facilities to balance sheet were ROC, on 27th & 29th
M/s. Raiwasia India got examined from August, 1998 i.e. after
(P) Ltd. without bank‟s legal advisor, release of facilities in
complying the vital who confirmed / favour of parties.
sanction condition approved that all However, as per rules
of obtaining audited terms of the sanction the application for
balance sheet of the have been complied Registration of charge
firm as on with. The Branch can be filed within 30
31.03.1998. The Manager thereafter days after the date of
Balance Sheet in released the credit creation of charge and
question was facilities on after registration of
obtained in Sept.‟ 31.07.1998. The charge with ROC it
98 by Sh. P.C. charge with ROC was takes effect from the
Sood, Branch filed / registered date of its creation.
Manager whereas within 30 days of the
the charge over M/s execution of
Upkar estates and documents and the
M/s. Rasiwaisa same was done in
India Pvt. Ltd. was time. Filing /
created with Registration of charge
Registrar of within 30 days of the
Companies on 27th documentation is very
and 28th, Aug.‟ much in order as per
1998 i.e. after bank / ROC
release of the guidelines.
facilities which
caused heavy loss
to the bank.
7. He without The DP was noted in D.P. Register was
verifying the stock the DP register and initialled by him but
of the company the same was marked was not signed by Sh.
allowed maximum in the computer Sood, Chief Manager
drawing power of system. It was under of the branch. Thus, in
Rs.50 Lacs on instructions from Mr. the absence of
31.08.1998 by P.C. Sood, the then signature of Branch
initialling the DP BM. It is evident Incumbent, allowing
register of the bank because once the D.P. is irregular.
on the basis of false concerned officer However he has
stock statement passed payment of enclosed copy of the
submitted by the Rs.29.00 lacs on computer generated
firm dated 31.08.1998 for pay statement for
30.08.1998 and order favouring SAIL, 31.08.1998 from which
deliberately did not Sh. P.C. Sood it is evident that DP
get the said DP authorized two other was marked in the
register cheques for Rs.4.00 computer system.
countersigned by lac on 31.08.1998
the Branch (same day) by writing
Manager, Sh. P.C. / signing "Pay" on the
Sood and allowed cheques itself.
the said DP suo-
motto. He also did As already stated
not make available above, I was not
the DP in the deputed by the BM
computer system of for verification of
the bank. stocks. It is also not
mandatory to verify
the stock prior to
permitting DP as per
bank‟s guidelines.
8. He failed to The borrower Considering the fact
subtract the submitted the stock that the 2nd L/C was
chargeable stock statement and there opened on 22.08.1998,
received under both were no reasons to the contention of Sh.
the LCs by M/s. believe that the stock Jain that the documents
Rasiwaisa India (P) statement does not under the 2nd L/C were
Ltd. from the stock depict a true and not received upto
statement dated correct position of 31.08.1998 appears to
31.08.1998 chargeable stocks be correct. Hence, Sh.
submitted by the with the company. In Jain cannot be held
firm and allowed view of foregoing, the liable for failing to
DP to M/s. DP was calculated subtract the chargeable
Rasiwaisa India (P) based on the stock stock received under
Ltd., and accepted statement given by the 2nd L/C and D.P. was
the stock statement Company. Here I not correctly
submitted by the would like to submit calculated.
firm in which the that in this particular
stocks received case, no documents
st
under 1 LC worth under LC for Rs.50.00
Rs.49,99,540/- was lacs were received at
subtracted only. the branch till
The stock allegedly 31.08.1998 and as
received from M/s. such the questions of
Rohini Strips Ltd. its subtraction from
worth Rs.50 Lacs the total stock value
under 2nd LC was does not arise at all.
not subtracted. In view of the
foregoing there is no
lapse on my part in
any manner.
9. Since no DP was I did not pass the D.P. was made
available in the cheque. The same available in the
computer system of was entered in the computer system as
the bank, he system by a clerk and stated above. Sh. Jain
deliberately passed by sh. has submitted that pay
initialled a cheque Mahinder Singh, the order in favour of M/s.
of Rs.29,00,500/- concerned officer at Steel Authority of India
and a pay order for the branch. The was issued on the
Rs.29 lacs of M/s. undersigned only put request of the borrower
Rasiwaisa India (P) his signatures on the and debit to C/C
Ltd. and allowed pay order favouring account was authorized
the firm to issue a SAIL as second by some other officer
pay order of signatory. and he signed only as
Rs.29.00 lacs second signatory on
favouring SAIL, Here it would be pay order. However,
New Delhi from the relevant to mention SAIL has allowed
CC account of the that it is very clearly payment of this pay
firm on 31.08.1998 written on the Pay order in the account of
and facilitated in Order of Rs.29.00 lacs M/s. Rohini Steel
siphoning Off the fvg. SAIL, that it is Strips.
loan amount. issued on account of
Rasiwaisa India (Pvt.)
Ltd. As the Pay Order
was issued to a Govt.
body, there is no
question of any
misuse / siphoning of
the bank‟s funds.
However, SAIL
dispatched the goods
to Rohini Strips Ltd.
and not to our client.
This fact is clearly
mentioned in SAIL
letter dated
02.05.2003 from DM
(Vigilance), Kolkata
to Sr. Dy. Director
(Vigilance), SAIL,
New Delhi. From the
above, it is amply
clear that siphoning
off bank‟s funds was
facilitated by SAIL
and not by bank‟s
officials including the
undersigned.
33. Ld. Counsel for the petitioner has argued that that material /
documents / statements produced by the prosecution with charge-sheet
do not disclose any offence prima facie against the petitioner, which
raising strong suspicion for framing charge against the petitioner.
Even if the entire material taken on its face value, at this stage and
allegations levelled in charge-sheet against the present petitioner
accepted as it is, the entire prosecution is liable to be quashed because
of subsequent events disclosing circumstances that very basis of
prosecution has been knocked off in view of the Disciplinary
authority, Chief Vigilance Officer and Chief Vigilance Commission
concurring and coming to a conclusion and recommended that there is
no criminality involved after considering all 9 allegations levelled by
CBI in charge-sheet and only procedural lapses in 3 of the allegations
and proposed to initiate minor penalty proceedings.
34. It is further submitted that CBI has been harping upon the
allegations levelled in the charge-sheet, but ignored the main ground
i.e. indirect exoneration / deemed exoneration by disciplinary
authority / CVO/CVC. He submitted that in fact this is an
independent ground which has nothing to do with the first ground as
to whether the charges framed were proper or legal. This ground taken
independently entitles the petitioner for quashing of the present
proceedings and entire prosecution even if the charges have been
framed.
35. To strengthen his arguments, ld. Counsel for the petitioner has
relied upon a case of PS Rajya vs. State of Bihar 1996 SCC (Crl.)
897 wherein it is held as under:-
"The standard of proof required to be established in a
criminal case is far higher than the standard of proof
required to establish the guilt in a departmental
proceedings. The charge in departmental proceedings
and in criminal proceedings was one and the same
could not be established in departmental proceedings,
there was lesser chance of the charge being
established in a criminal trial. The criminal
proceedings would only result in harassment and,
therefore, found it fit to quash the FIR against the
accused.
36. Ld. Counsel for the petitioner has relied upon the Stock
statement, wherein it is recorded as under:-
"The behaviour of Sh. M.K. Aggarwal and other points
such as no name plate of the company or notice
regarding hypothecation of stock to the bank was not
displayed, shows that the stock does not belongs to the
company and party is telling us wrong information. In
view of above and persisting irregularities in the
account, we may immediately write to R.O. and issue
legal notice for recoveries pls.
Further, the books of a/cs of the company were called
at the Branch on 06.11.1998 and on verification it has
been found that the statement of Drs. And Crs.
Submitted are incorrect. In the list of S. Drs. There are
debtors namely M/s. Nav Prabhat International and
M/s. Laxmi Iron & Steel Co. Who are also dealing with
our Branch. We discussed the matter with Sh. Pawan
Garg on 07.11.1998. In the presence of CM of the Br.
& CM (I & C) and requested him to deposit the amount
in this account so that liability in the account be
reduced. Sh. Pawan Garg told that he has nothing to do
with this company and they have not supplied goods to
M/s. Nav Prabhat Intt. This showns that the Co. Is
willful default and our funds have been diverted from
the company.
VIPIN JAIN
Manager (Loans)"
37. Further relied upon communication dated 08.06.1998 addressed
to the Deputy General Manager, Regional Office, Oriental Bank of
Commerce New Delhi by the Chief Manager wherein it is stated as
under:
"*******************************************
*********************************************
*********************************************
****************To cover the proposed limits, they
have offered property i.e. a farm house on plot
admeasuring 6 bighas at Khasra no. 938 Min. (0-5),
925 Min. (1-5) (2 Bighas), Khasra no. 924 Min (2
Bighas) and Khasra No. 1715 Min. (2 Bighas) situated
at village Rajokri, Tehsil-Mehrauli, New Delhi.
*********************************************
*********************************************
*********************************************
***************
Considering the foregoing and value of collaterals, we
recommend for a favourable consideration in the
matter and sanction of the desired limits please. We
may also mention that the company has though
requested for allowing non-fund based limit with 10%
cash margin yet we have insisted for 25% margin,
which may please be approved."
38. Ld. Counsel has further relied upon the letter dated 30.06.1998
written by Chief Manager, Oriental Bank of Commerce addressed to
its Deputy General Manager wherein it is stated as mentioned:
"Please refer your letter dated 22.06.1998 on the
captioned fresh proposal wherein certain queries have
been raised. In this respect, we are forwarding
herewith the detailed reply submitted the company vide
its letter of 25.06.1998.
You are requested for a favour consideration in the
matter pls."
39. Also relied upon the statement under Section 161 Cr.P.C. of
Mr. Narendra Garg, Mobile Introducer of M/s. Rasiwaisa India (P)
Ltd. wherein it is recorded as under:
"On being asked I am to state that Sh. Mahender
Kumar Aggarwal came in my contact since 1997-98
when my cousin brother in law's son married the
daughter of Sh. M.K. Aggarwal. During discussions
Sh. M.K. Aggarwal informed me that he is in need of
funds for running his factory, in general discussions.
Since he was in our relations, I readily agreed to
support him and asked him to accompany with me in
OBC, R.O., New Dew Delhi, where I introduced him
with the then DGM, Sh. S.K. Khanna. Sh. M.K.
Aggarwal discussed the position of his business of both
M/s. Rohini Fibers and M/s. Rasiwaisa India Pvt. Ltd.
On this Sh. S.K. Khanna directed him to submit all the
relevant documents with Branch Manager Sh. G.K.
Dhawan, IFB, OBC, New Delhi.
I had introduced the accounts of M/s. Rohini Strips Ltd.
and M/s. Rasiwaisa India Pvt. Ltd. in June / July, 1998
and had also introduced with G.K. Dhawan Branch
Manager, IFB, OBC, New Delhi. The limits sanctioned
to M/s. Rohini Strips Ld. and M/s. Rasiwaisa India Pvt.
Ltd. were not under my pressure."
40. Ms. Sonia Mathur, Ld. Counsel for the CBI / respondent, on the
other hand submitted that petitioner while working as a Manager
(Loans) at Industrial Finance Branch, Connaught Place, New Delhi,
during the year 1998, entered into a criminal conspiracy with the other
accused persons with the object to cheat the bank and to facilitate
M/s. Rasiwaisa India (P) Ltd. by processing / recommending various
credit facilities to the extent of Rs.2.50 Crores on the basis of false /
inflated financial figures by abusing his official position as public
servant and caused wrongful gain to M/s. Rasiwaisa India (P) Ltd. and
corresponding pecuniary wrongful loss to the Bank to the extent of
Rs.1.25 Crores.
41. At the time of seeking loan facilities from the bank,
M/s. Rasiwaisa India (P) Ltd. was not known to the bank in any
manner and had no account either current or Cash Credit account in
the Bank. Despite the clear guidelines of the Bank that the "Selection
of Borrower" is the utmost importance and applicant should have been
properly introduced / satisfactory conduct of account and otherwise be
known to the Bank.
42. Petitioner Vipin Jain, the then Manager (Loans) processed /
recommended and forwarded the loan application to Sh. S.K. Khana,
then Dy. General Manager, Regional Office, New Delhi for sanction
and concealed this fact deliberately.
43. The unrealistic projected turn over of Rs.1340.12 lacs for the
year 1998 - 99 was shown by the firm in "Form-II operating
statement" which was accepted both by Sh. G.K. Dhawan, Branch
Manager and Petitioner Vipin Jain Manager (Loans) without verifying
the facts, credibility, past business history and reputation of M/s.
Rasiwaisa India Pvt. Ltd. recommended the loan proposal for sanction
with the object to cause wrongful gain to the Company.
44. Petitioner in conspiracy with others and with pre-set mind got
the credit facilities sanctioned by suppressing / concealing the actual
facts and without following the credit policy guidelines issued by the
Head Office, which states that finance to steel sector be discouraged.
The calculations of Maximum Permissible Bank Finance (MPBF)
made in the process note had not been correctly calculated. Had this
been done properly, the actual Net Working Capital (NWC) available
with the firm would have been lower.
45. On the basis of false stock statement, accused G.K. Dhawan in
connivance with petitioner allowed Drawing Power to the extent of
Rs.21.21.122/- Lacs on 31.07.1998 without physically verifying the
stocks and made entries in the Drawing Power (DP) register of the
bank in this regard. Petitioner and accused G.K. Dhawan fardulently
and dishonestly made available the Drawing Power to the extent of
Rs.21,21,122/- in the said CC account on the basis of bogus and
unverified stock statement and debited the required margin money for
issue of Letter of Credit (LC). The aforesaid criminal acts of bank
officials facilitated accused M.K. Aggarwal to avail an LC for Rs.50
Lacs on 31.07.1998 itself. The Drawing Power (DP) allowed to M/s.
Rasiwaisa India (P) Ltd. by petitioner was further countersigned by
accused G.K. Dhawan in the DP Register on 31.07.1998. The queries
raised by Regional Office in respect of the said loans were not replied
by the branch, but with the covering letter of the bank the reply
submitted by M/s. Rasiwaisa India (P) Ltd. was enclosed which was
jointly signed by petitioner and accused G.K. Dhawan.
46. Petitioner deliberately overlooked the sanction conditions of
R.O. for obtaining Balance Sheet as on 31.03.1998 and charging of
securities before release of the credit facilities and thus facilitated
immediate release of the facilities to M/s. Rasiwaisa India (P) Ltd.
without complying the vital sanction condition of obtaining audited
balance sheet of the Company as on 31.03.1998. The balance sheet in
question was obtained in September, 1998 by Sh. P.C. Sood, Branch
Manager, whereas the charge over M/s. Upkar Estates and
M/s.Rasiwaisa India Pvt. Ltd. was created with Registrar of
Companies on 27th and 28th August, 1998 i.e. after release of the
facilities.
47. After availing the entire LC amount accused M.K. Aggarwal
submitted the stock statement of M/s.Rasiwaisa India (P) Ltd. as of
31.08.1998 showing closing stock as Rs.1,33,80,727.50 and purchases
of Rs.146.70 Lacs approx. during the month. This stock statement was
also not physically verified by petitioner who initialled it. Though
both the LCs of Rs.1 Crore had been negotiated by the respective
firms viz. M/s. Hind Steel Sales and M/s.Rohini Strips Ltd. by 25 th
August, 1998, the stock statement dated 31.08.1998 only reflects the
receipt of material under one LC i.e. the LC of M/s. Hind Steel Sales
and the amount of second LC which was already availed was not
deliberately shown in the said stock statement. The amount of said
second availed LC should have been deducted from the closing stock
which was not done with the sole intention to get further Drawing
Power in the Cash Credit (CC) account. Petitioner, considering the
chargeable stock of Rs.1,10,91,173/- shown in the said stock
statement made the D.P. available in the said CC account to the extent
of Rs.50 Lacs. Since the DP was made available by the petitioner on
31.08.1998 accused M. Aggarwal submitted a cheque bearing no.
879415 of Rs.29,00,500/- in the bank for issue of pay order for Rs.29
Lacs favouring SAIL. Petitioner, the then Manager (Loans) used his
exceptional power by initialling the said cheque of Rs.29,00,500/-
along with the draft application form and thus allowed the withdrawal.
On 31.08.1998, a draft for Rs.29 Lacs favouring SAIL was issued by
Oriental Bank of Commerce (OBC), IFB, New Delhi which was
fraudulently and dishonestly deposited in SAIL by accused M.K.
Aggarwal and his brother Sh. Alok Aggarwal to clear the overdues of
M/s. Rohini Strips Ltd. and in fact no material was purchased for M/s.
Rasiwaisa India (P) Ltd.
48. Ld. Counsel for the respondent has also relied upon some of the
statements and documentary evidence against the petitioner.
49. PW-11 Mr. Ani Sahi, AGM, OBC Mumbai has stated that the
forwarding letter of branch dated 08.06.1998 addressed to the DGM,
RO, New Delhi vide which the loan was recommended has been
counter signed / initialled by Vipin Jain and he identified his initials.
50. PW11 Mr. Anil Sahi and PW30 Mr. S.C. Madan, Chief
Manager, Regional Inspectorate, OBC, New Delhi have stated that at
the time of seeking loan facilities from the bank in question the firm
M/s. Rasiwaisa India (P) Ltd. was not known to the bank in any
manner and had no account either current or cash credit account in the
bank. Despite the clear guidelines of the Bank in Para 1.4 Page „4‟ of
Advance, Manual - Vol.I, that the "Selection of Borrower" is of
utmost importance and applicant should have a property introduced /
satisfactory conduct of account or be otherwise known to the Bank.
Mr. Vipin Jain, the then Manager (loans) and Sh. G.K. Dhawan, the
then Branch Manager recommended and forwarded the loan proposal
to Sh. S.K. Khurana, the they Dy. General Manager, Regional Office,
New Delhi for sanction and concealed this fact deliberately with the
intention to cause wrongful gain to the said firm and wrongful loss to
the Bank.
51. Letter dated 30.06.1998, issued by the Chief Manager, OBC,
New Delhi addressed to DGM, RO, New Delhi vide which the reply
received from M/s. Rasiwaisa India Pvt. Ltd. has been forwarded to
Regional Office which has also been counter signed / initialled by
Vipin Jain.
52. While sanctioning the credit facilities Sh. S.K. Khanna, DGM,
RO, New Delhi stipulated some conditions in the sanction note for
compliance by the branch before release of the facilities. However,
the following sanctioning conditions were not complied with before
release of the credit facilities:
"1. Audited Balance Sheet as on 31.03.1998 was not
obtained.
2. Charge of M/s. Rasiwaisa India (P) Ltd. and M/s.
Upkar Estate Pvt. Ltd. was not created in ROC
before release of the facilities."
53. PW22, Sh.P.C. Sood, Chief Manager, OBC, New Delhi, the
successor of Sh. G.K. Khanna has stated that after his joining only, the
audited balance sheet of M/s. Rasiwaisa Ltd. as on 31.03.1998 was
collected vide his letter dated 16.09.1998.
54. The audited balance sheet purported to have been shown in
Document Register of the Company M/s. Rasiwaisa India Pvt. Ltd.,
does not find mention in the list of documents in the main body of the
document, nine documents have been mentioned therein and this
document i.e. the balance sheet of the company has not been shown
anywhere. On the second page of D-29, the financial statement of the
company as on 31.03.1998 has been shown as a tenth document, the
financial statement is not the same as the balance sheet.
55. PW22 further stated that the stock statement submitted by
M/s. Rasiwaisa India Pvt. Ltd. dated 30.08.1998 was not put up before
him and it was the Sh. Vipin Jain, Manager (Loans) who dealt with it.
He verified the Stock Statement only on 07.11.1998 when the funds
had already stood disbursed to the firm in July, 1998.
56. Ld. Counsel for the respondent submitted that on 31.07.1998
and 31.08.1998 the petitioner Vipin Jain initialled the stock statements
of M/s. Rasiwaisa India Pvt. Ltd. and remarked "Noted Please"
without verifying the stocks and made available the Drawing Power in
the bank‟s Drawing Power Register to the extent of Rs.28.28 Lacs and
Rs.50 Lacs respectively on the said two dates. In the stock statement
dated 31.08.1998 besides showing closing stocks worth
Rs.1,33,80,727/-, stocks worth Rs.49.99 lacs allegedly received from
M/s. Hind Steel Sales was shown. Whereas the stocks received from
M/s. Rohini Strips Ltd. worth Rs.50 Lacs under second letter of credit
was not shown. On the basis of this stock statement petitioner Vipin
Jain dishonestly allowed drawing power in the DP Register
concealing these facts. The drawing power is allowed only on the
basis of chargeable stocks. The value of the stocks received under LC
is not considered for allowing further facilities.
57. Ld. Counsel further submitted that the petitioner was well
aware the fact that neither the stocks of the firm were inspected nor
the statement of stocks were signed by any of the bank officials,
deliberately made the drawing power available in the bank‟s DP
Register. In this context statement of PW22 Sh. P.C. Sood is again
relevant. He has stated that petitioner Vipin Jain Manager Loans had
allowed the maximum DP of Rs.50 Lacs in the CC Account of M/s.
Rasiwaisa India Pvt. Ltd. under his signatures and the said entries
have not been counter signed by him. He has further stated that
before making available the drawing power in the DP Register,
Petitioner Vipin Jain should have physically verified the stocks of the
firm.
58. PW30, S.C. Madan, Chief Manager, Regional Office, OBC,
New Delhi has stated that the branch officials had flouted the
condition of the inspection of the stocks. He has categorically stated
that the stocks in the godown of the company were never visited by
any officer of the branch prior to 07.11.1998 when the account
become NPA for recovery. He has further state the Stock Statement
as on 31.08.1998 of the company had been received by Vipin Jain on
31.08.1998 which incorporated debtors amounting to Rs.20,95,296.87
and no DP was to be allowed against unfinanced sundry debtors.
Statement of PW11 Sh. A.L. Sahi, AGM, OBC is also relevant in this
regard who has reiterated the versions of PW22 and PW30.
59. PW22, Sh. P.C. Sood has also stated that the cheque of
Rs.29,00,500/- issued by M/s. Rasiwaisa India Pvt. Ltd. dated
31.08.1998 was also not put up before him and the signature
appearing on it is of Sh. Vipin Jain, Manager (Loans). Vipin Jain
abused his official position by misusing his exceptional powers and
without his knowledge, allowed to pass a cheque of Rs.29 Lacs on
31.08.1998, issued by M/s. Rasiwaisa India Pvt. Ltd. favour SAIL
without mentioning any specific purpose. No particulars of this
transaction had also been submitted in the bank. This amount of
Rs.29 Lacs was paid to SIL to clear the outstanding of M/s. Rohini
Strips which was also controlled by accused Mahender Kumar
Aggarwal.
60. PW25, Sh. Mahender Singh, Manager, OBC, IFB, Connaught
Circus, New Delhi has stated that the he had passed this cheque of
Rs.29,00,500/- dated 31.08.1998 as the same had been initialed and
the draft application form was also initialled by Sh. Vipin Jain the
then Manager (Loans) which directed him to pass the cheque and Sh.
Vipin Jain had allowed the withdrawal through this cheque. Vipin
Jain had put his initials having ordered him to pass the said cheque
and had used his "exceptional powers" to pass this cheque. D-267 is
the said application form. D-280 is the original draft issued by OBC in
the sum of Rs.29 Lacs favouring SAIL on the account of M/s.
Rasiwaisa India Pvt. Ltd. D-295 is the original letter issued by Sh.
C.S. Sharma, Addl. Dir. (Vig.) Steel Authority of India enclosing
therewith the details of transactions held between SAIL & M/s.
Rohini Strips Ltd. during 1998.
61. It is further submitted that the charges in this case were re-
framed on 15.01.2007 against the petitioner by the ld. Trial Court,
New Delhi. There is no incorrectness, illegality, irregularity or
ambiguity in the order on charge dated 15.01.2007 passed by the ld.
Special Judge and the charges framed on 24.01.2007 against the
petitioner / accused herein.
62. Ld. Counsel for the respondent further submitted that the law is
very settled by a catena of judicial pronouncements that the stage of
framing of charge, the court, on perusal of evidence has only to find
out whether there exists sufficient ground so that a prima facie case is
made out to proceed against the accused and relied upon (i) Omwati
vs. State 2001 SCC (Cri) 685, (ii) State of M.P. vs. Ram Singh 2000
SCC (Cri) 386, (iii) State of Maharashtra vs. Som Nath Thapa
(1996) 4 SCC 659, (iv) Soma Chakraborty vs. State (CBI), AIR 2007
Supreme Court 2149 (2007) 5 SCC 403, (v) Sajjan Kumar Vs. CBI
(2010) 9 SCC 368.
63. On the issue, whether petitioner has been exonerated by the
department, ld. Counsel for the respondent has submitted that Sh.
A.K. Mishra, Chief Vigilance Officer has recommended minor
penalty proceedings against the petitioner which is contrary to the
submission that the petitioner has been exonerated. The department
concerned has not exonerated the petitioner. "In fact Mr Surjit Singh,
Deputy Secretary vide communication dated 18.02.1998 seems to
suggest the Bank that the minor penalty proceedings against Vipin
Jain may adversely effect against him in the court of law. The Bank
may therefore ask to await the decision of the court in respect of Sh.
Jain". The CVC has advised the Bank to keep the disciplinary
proceedings in abeyance till the disposal of the court case vide its
letter dated 04.01.2008.
64. The CVO has only suggested to Under Secretary, CVC to
consider the case of the petitioner and he may be exonerated. It may
be noted that there is no affirmation on the same by any authority
concerned.
65. It is further submitted that ld. Special Judge after the directions
issued by this court vide order dated 18.08.2006 has gone through the
documents and statements and found that there is prima facie evidence
against the petitioner and passed the following order:
"In the case of exoneration per se, if the allegations is
found to be not sustainable at all and the person held
innocent, criminal prosecution on the same facts and
circumstances may not be allowed to continue. It may
be noted that the petitioner has not been exonerated, in
fact from the documents annexed it reflects to the
contrary, because the department suggested minor
penalty against the petitioner. In fact, communication
from the CVC has also suggested the bank to keep
disciplinary proceedings in abeyance till the disposal of
the court cases.
66. I heard ld. Counsel appearing on behalf of the parties.
67. The case of the prosecution is that petitioner while working as
Manager (Loans) at Industrial Finance Branch, Connaught Place, New
Delhi during the year 1998 entered into a criminal conspiracy with the
other accused persons with the object to cheat the Bank and to
facilitate M/s. Rasiwaisa India (P) Ltd. by processing / recommending
various credit facilities to the extent of Rs.2.50 Crore on the basis of
false inflated financial figures by abusing his official position as
public servant and caused wrongful gain to M/s. Rasiwaisa India (P)
Ltd. and corresponding pecuniary wrongful loss to the Bank to the
extent of Rs.1.25 Crores.
68. At the time of seeking loan facilities from the bank the
aforesaid Company was not known to the Bank in any manner and
had no account either current or Cash Credit account in the Bank.
Despite the clear guidelines of the Bank "Selection of Borrower" is
the utmost importance and applicant should have been properly
introduced / satisfactory conduct of account and otherwise be known
to the Bank. The petitioner, the then Manager (Loans) processed /
recommended and forwarded the loan application to Sh. S.K. Khanna,
the then Dy. General Manager, Regional Office, New Delhi for
sanction and concealed this fact deliberately.
69. Further case of the prosecution is that unrealistic projected turn-
over of Rs.1340.12 lacs for the year 1998 - 99 was shown by the firm
in "Form-II operating statement" which was accepted both by
Sh. G.K. Dhawan, Branch Manager and Petitioner the then Manager
(Loans) without verifying the facts, credibility, past business history
and reputation of the company recommended the loan proposal for
sanction with the object to cause wrongful gain to the Company.
Therefore, the Petitioner in conspiracy with others and with pre-set
mind got the credit facilities sanctioned by suppressing / concealing
the actual facts and without following the credit policy guidelines
issued by the Head Office, which states that finance to steel sector be
discouraged. The calculations of Maximum Permissible Bank
Finance (MPBF) made in the process note had not been correctly
calculated. Had this been done properly, the actual Net Working
Capital (NWC) available with the firm would have been lower.
70. On the basis of false stock statement, accused G.K. Dhawan,
fraudulently and dishonestly made available the Drawing Power to the
extent of Rs.21,21,122/- in the said CC account on the basis of bogus
and unverified stock statement and debited the required margin money
for issue of Letter of Credit (CC).
71. Further case of the prosecution against the petitioner is that he
deliberately overlooked the sanctioned conditions of R.O. for
obtaining Balance Sheet as on 31.03.1998 and charging of securities
before release of the credit facilities and thus facilitated immediate
release of the facilities to the said Company without complying the
vital sanction condition of obtaining audited balance sheet of the
Company as on 31.03.1998. The balance sheet in question was
obtained in September, 1998 by Sh. P.C. Sood, Branch Manager
whereas the charge over M/s. Upkar Estates and M/s. Rasiwaisa India
Pvt. Ltd. was created with Registrar of Companies on 27th and 28th
August, 1998 i.e. after release of the facilities.
72. Further the case against the petitioner is that after availing the
entire LC amount accused M.K. Aggarwal submitted the stock
statement of M/s. Rasiwaisa India (P) Ltd. as on 31.08.1998 showing
closing stock as Rs.1,33,80,727.50 and purchases of Rs.146.70 lacs
approx during the month. This stock statement was also not physically
verified by petitioner who initialled it. Though both the LCs of Rs.1
Crore had been negotiated by the respective firms viz. M/s. Hind Steel
Sales and M/s.Rohini Strips Ltd. by 25th August, 1998, the stock
statement dated 31.08.1998 only reflects the receipt of material under
one LC i.e. the LC of M/s. Hind Steel Sales and the amount of second
LC which was already availed was not deliberately shown in the said
stock statement. The Petitioner considering the chargeable stock of
Rs.1,10,91,173/- shown in the said stock statement made the D.P.
available in the said CC account to the extent of Rs.50 Lacs. Since the
DP was made available by the petitioner on 31.08.1998 accused M. K.
Aggarwal submitted a cheque bearing no. 879415 of Rs.29,00,500/- in
the bank for issue of pay order for Rs.29 Lacs favouring SAIL.
Petitioner, the then Manager (Loans) used his exceptional power by
initialling the said cheque of Rs.29,00,500/- along with the draft
application form and thus allowed the withdrawal.
73. On 31.08.1998, a draft for Rs.29 Lacs favouring SAIL was
issued by Oriental Bank of Commerce (OBC), IFB, New Delhi which
was fraudulently and dishonestly deposited in SAIL by accused M.K.
Aggarwal and his brother Sh. Alok Aggarwal to clear the overdues of
M/s. Rohini Strips Ltd. and in fact no material was purchased for M/s.
Rasiwaisa India (P) Ltd.
74. While sanctioning the credit facilities Sh. S.K. Khanna, DGM,
RO, New Delhi stipulated some conditions in the sanction note for
compliance by the branch before release of the facilities. However,
the audited Balance Sheet as on 31.03.1998 was not obtained. The
Charge of M/s. Rasiwaisa India (P) Ltd. and M/s. Upkar Estate Pvt.
Ltd. was not created in ROC before release of the facilities.
75. The audited balance sheet purported to have been shown in
Document Register of the Company M/s. Rasiwaisa India Pvt. Ltd.,
does not find mention in the list of documents in the main body of the
document, nine documents have been mentioned therein and this
document i.e. the balance sheet of the company has not been shown
anywhere.
76. In view of the facts of the case against the petitioner, I am of
the considered opinion that petitioner was well aware the fact that
neither the stocks of the firm were inspected nor the statement of the
stocks were signed by any of the Bank officials, deliberately made the
Drawing Power available in the Banks DP Register.
77. I note the charges in this case were reframed against the
petitioner on 15.01.2007 by the ld. Trial Court, New Delhi. I find no
incorrectness, illegality, irregularity or ambiguity in the order on
charge dated 15.01.2007 passed by ld. Special Judge by framing the
charge against the petitioner.
78. At this stage, petitioner can be discharged only when there is no
evidence against him or whatever the evidence available on record if
goes unrebutted, the petitioner cannot be convicted.
79. In my opinion, the present case does not fall in any of the
category. I also do not find force in the submission of the petitioner
that he has been exonerated by the Department, whereas, in fact Chief
Vigilance Commissioner has recommended minor penalty
proceedings against the petitioner. Therefore, the case against the
petitioner requires full trial.
80. I find no merit in the instant petition.
81. Accordingly, instant petition is dismissed.
82. No order as to costs.
SURESH KAIT, J
MAY 22, 2012
jg
