Ajit R. Kyal vs Cbi
2015 Latest Caselaw 1656 Del

$ 4.
*      IN THE HIGH COURT OF DELHI AT NEW DELHI
+                                           Date of Decision: 26.02.2015
%      Crl.M.B. No.210/2015 in CRL.A. 131/2015
       AJIT R. KYAL                                          ..... Appellant
                            Through:       Mr. Yasobant Das, Senior Advocate
                                           along with Mr. Kailash Pandey and
                                           Mr. Ranjeet Singh, Advocates.
                            versus
       CBI                                                  ..... Respondent

                            Through:       Ms. Rajdipa Behura, SPP along with
                                           Ms. Monica Gupta, Advocate for
                                           CBI.
       CORAM:
       HON'BLE MR. JUSTICE VIPIN SANGHI

VIPIN SANGHI, J. (OPEN COURT)

1. This application has been preferred to seek suspension of the sentence awarded to the appellant Ajit R. Kyal (A-2). The sentence awarded in relation to the appellant is as follows:

"(i) Rigorous Imprisonment for one year for offence under Section 120B of IPC r/w Section 420 IPC r/w Section 13(1)(d) r/w Section 13(2) of Prevention of Corruption Act, 1988 and fine of Rs.2 lakhs in default thereof he would undergo Simple Imprisonment for a further period of six months;

(ii) Rigorous Imprisonment for four years for offence under Section 420 of IPC r/w Section 120B of IPC and fine of Rs.4 lakhs in default thereof he would undergo Simple Imprisonment for a further period of one year".

2. At the outset, I may note that the appellant has not paid the fine of Rs.6 Lakhs till date.

3. Mr. Das, learned senior counsel for the appellant has brought to the notice of this Court the order passed by the Supreme Court on 13.02.2015 in the Special Leave Petition (SLP) preferred by the appellant. By the said order, the Supreme Court dismissed the SLP. However, the Supreme Court has requested this Court to dispose of the present application of the appellant seeking suspension of sentence.

4. I may observe that in the two connected appeals, it has been directed that the hearing of the appeals be expedited. The connected appeals - along with which the present appeal would also have to be heard, have been directed to be listed for hearing in the first five cases in the category of Regular Matters in the week commencing on 18.05.2015 and, in the meantime, the Trial Court Record has been requisitioned through Special Messenger for scanning and preparation of the paper book. In view of the hearing of the said appeals being expedited, the appellant in the connected appeals have not pressed their applications for suspension of sentence in the meantime. However, their right to press for suspension of sentence has been preserved, if their appeals are not heard as scheduled.

5. The submission of Mr. Das, learned senior counsel for the appellant is that so far as the appellant is concerned, the only act attributable to him is that he had issued six cheques, which were used by the other accused, namely Vivek Sinha (A-1) in connivance with the bank officers (A-3 & A-4) for the purpose of discounting. The said cheques had been issued from the account of M/s Jian Pharmaceuticals, of which the appellant was the proprietor, in favour of accused No.6 M/s Nexus Remedies Private Limited, of which Vivek Sinha (A-1) was the Managing Director and the appellant

(A-2) was a Director. According to the appellant, the said cheques had been issued by way of security and that they were blank when so issued. According to the appellant, the said cheques were misused by A-1. Mr. Das submits that there was no evidence of criminal conspiracy. Merely on account of the fact that the said cheques had been issued in blank by the appellant, and subsequently misused by A-1, the Trial Court had concluded that a conspiracy existed between the appellant (A-2) and the other accused to commit the offences with which they were charged.

6. Mr. Das further submits that since the loan account of the bank qua A- 6 stood settled, it was, in fact, a fit case for quashing of the charge against all the accused. In this regard, he has sought to place reliance on the judgment of the Supreme Court in C.B.I. Vs. Narender Lal Jain & Others, (2014) 5 SCC 364, wherein in paragraph 14, the Supreme Court observed as follows:

"14. In the present case, having regard to the fact that the liability to make good the monetary loss suffered by the bank had been mutually settled between the parties and the accused had accepted the liability in this regard, the High Court had thought it fit to invoke its power under Section 482 Code of Criminal Procedure. We do not see how such exercise of power can be faulted or held to be erroneous. Section 482of the Code inheres in the High Court the power to make such order as may be considered necessary to, inter alia, prevent the abuse of the process of law or to serve the ends of justice. While it will be wholly unnecessary to revert or refer to the settled position in law with regard to the contours of the power available under Section 482 Code of Criminal Procedure. It must be remembered that continuance of a criminal proceeding which is likely to become oppressive or may partake the character of a lame prosecution would be good ground to invoke the

extraordinary power under Section 482 Code of Criminal Procedure."

7. Mr. Das has also referred to Exhibit DW-2/B dated 22.05.2013 issued by the Bank of India on the aspect of compromise settlement. The said bank agreed to accept Rs. 208.34 Lakhs in full & final settlement, inter alia, on the condition that the bank shall not pursue with the complaint filed by the bank with the CBI, and provide due cooperation to the borrowers in quashing the complaint.

8. Mr. Das submits that the appellant is only 33 years of age; his father is terminally ill, and; that he is the only bread earner of the family. He submits that the present is a fit case for suspension of sentence during the pendency of the appeal.

9. On the other hand, Ms. Behura submits that the role played by the appellant in the conspiracy has been elaborately discussed in the impugned judgment. She has taken the Court through the discussion as found in paragraphs 60 & 61 of the impugned judgment in this regard. She further submits that the bank was not able to realise the entire amount while entering into the compromise, and it sacrificed an amount of Rs.46.89 Lakhs

- which comprised the interest component of Rs.2.14 Lakhs and principal sum of Rs.44.75 Lakhs in the account of A-6 M/s Nexus Remedies Private Limited. She submits that the decision in Narender Lal Jain & Others (supra), therefore, has no application in the facts of this case.

10. It is also pointed out that, in fact, a quashing petition had been moved on the basis of the settlement of the loan account before this Court by Vivek

Sinha (A-1). However, the same had been dismissed since offences under the Prevention of Corruption Act had also been alleged. That dismissal has attained finality. In fact, the appellant herein did not even approach this Court for seeking quashing of the charges against him.

11. Ms. Behura further submits that since the appeals have been directed to be heard at an early date, there is no justification for suspending the sentence at this stage, considering the fact that the sentence awarded is four years Rigorous Imprisonment with fine, which has not been paid, and the appellant has been in custody only since 19.01.2015.

12. Having heard learned counsel, I am not inclined to suspend the sentence at this stage. It would not be appropriate to discuss the merits of the case, lest such discussion prejudices the case of either the appellant, or the prosecution. However, since the application has been pressed by Mr.Das, I consider it appropriate to refer to the impugned judgment itself qua the role played by the appellant in the conspiracy alleged against the appellant. In paragraphs 60 & 61, the Trial Court has observed as follows:

"60. In record of the bank, there was no application for request for purchase of the foreign cheque Ex PW2/M [D10(

2)] of US $ 18000 and any recommendation thereon and approval of any bank official. The credit voucher Ex PW1/KK (D62) dated 01/09/2009 was signed by A4. Also for aforesaid foreign cheque Ex PW2/M [D10( 2)], debit voucher Ex PW1/LL (D63) dated 01/09/2009 was signed by A4. Cheque purchase application Ex PW2/E [D10( 3)] dated 24/09/2009 for purchase of two cheques along with the two cheques (1) Ex PW2/C [part of D10 (6)] and (2) Ex. PW2/D [part of D10( 5)]; both dated 24/09/2009, for Rs. 25 lakhs each; which both cheques were issued by A2; was submitted by A1 to Bank of

India. There was no endorsement on the request regarding recommendation and sanction for purchase of the said cheques (1) Ex PW2/C [part of D10( 6)] and (2) Ex. PW2/D [part of D10( 5)] for credit in the account of A6 though related payinslip Ex PW1/Y (D51) dated 24/09/2009 and credit voucher/payinslip Ex PW1/W (D49) dated 24/09/2009 were signed by A4. Also cheque Ex. PW2/F [part of D10( 7)] dated 24/09/09 bearing number 168676 of Rs. 25,00,000/issued by A2 as proprietor of Jian Pharmaceuticals in favour of A6 was submitted by A1 in Bank of India with application Ex PW2/G [D10( 7) (2)], dated 03/10/2009 of A1 as Director of A6 to purchase said cheque and on said application Ex PW2/G [D10(

7)(2)], A4 initialed at portion encircled X having recommended the same for purchase and it was sanctioned by A3 vide endorsement at portion B for purchase of said cheque. A1 also submitted request letters Ex PW2/K [part of D10( 6)] dated 08/10/2009 and Ex PW2/L [part of D10 (6)] dated 09/10/2009 pertaining to requests for purchase of cheques bearing number (1) 168679 for Rs 33 lakhs and (2) 168680 for Rs 38 lakhs, which both cheques were issued by A2. These request letters Ex PW2/K [part of D10( 6)] dated 0809/ 10/2009 and Ex PW2/L [part of D10( 6)] dated 09/10/2009 did not bear the proper recommendation but were bearing initials of A4 in the request and were sanctioned by A3 vide endorsement at portion encircled B on both these request letters.

61. Afore elicited cheques (1) Ex PW2/C [part of D10( 6)] bearing number 168677 dated 24/09/2009 for Rs 25 lakhs ; (2) Ex. PW2/D [part of D10( 5)] bearing number 168678 dated 24/09/2009 for Rs 25 lakhs; (3) Ex. PW2/F [part of D10( 7)] bearing number 168676 dated 24/09/09 for Rs. 25,00,000/; (4) bearing number 168679 for Rs 33 lakhs; (5) bearing number 168680 for Rs 38 lakhs were issued by A2 as proprietor of M/s Jian Pharmaceuticals. A2 was also Director in A6 company as per Ex PW2/DA/A2 [D9( 3)], the Resolution dated 22/09/2009 preceded by Memorandum & Articles of Association of A6 [D9(

2)]. Ex PW2/DA/A2 [D9( 3)] also embodies the resolve that accounts of A6 were to be operated upon and cheques thereon be signed and all instructions regarding the accounts were to

be given by all/any two amongst A1, Sh Deepak Kumar and A3, the stated Directors. In any of the applications for purchase of cheques in question or for availing cash credit limit or loan facilities in question, there was no whisper of A1 being a citizen of United States of America whereas profiles of borrower, elicited in preceding paragraphs, simplicitor find mention of Gurgaon addresses of A1 in India and no where in any documents on record it was ever disclosed of A1 being a citizen of United States of America. A2 was not informed of purchase of any of the cheques in question, elicited herein above. Fact remains that A2 did not enter upon in the witness box to be examined as his own defence witness on oath under Section 315 Cr.P.C in respect of any Memorandum of Understanding (MoU) entered into between A2 and A1 or the terms thereof; nor A2 examined any other witness of said MoU nor A2 served upon any notice under Section 91 Cr.P.C to A1 for production of said MoU, if it was in the custody of A1, as presented by A2; nor A2 moved any application in this Court seeking aid of Court under Section 91 Cr.P.C for directions to A1 for production of said MoU, if it was in the custody of A1. A2 even did not lead any defence evidence to prove the fact of having given 6 cheques in blank as security to A1 at the time of entering of said MoU on date 10/08/2009, as was alleged by him in the course of his statement under Section 313 Cr.P.C. It is admitted case of A2 that the cheques in question (1) Ex PW2/C, (2) Ex PW2/D, (3) Ex PW2/F, (4) bearing no. 168679 for Rs 33 lakhs and (5) bearing no. 168680 for Rs 38 lakhs were bearing his signatures. No law provides that in case of any negotiable instrument entire body of said negotiable instrument has to be written by maker or drawer only. What is material is the signature of the drawer or maker and not the writing on instrument; hence, question of body writing of the negotiable instrument is almost of no significance. A2 alleged that these cheques were misused by A1. It was for A2 to prove such defence in terms of law for which he did not lead any defence evidence to prove that these cheques were given in security to A1 at the time of entering of said MoU on date 10/08/2009, or these cheques were misused by A1. Nothing of

the sort was done by A2 on this count. Such defence of A2 accordingly falls flat on the ground since the report Ex DW5/A (colly) of private handwriting expert DW5 is of no help to A2 as it revolved around the writings of body parts of photographs of cheques Ex PW2/C, Ex PW2/D and Ex PW2/F on comparison with the alleged specimen writings of A2 and for which specimen writings A2 even did not enter into witness box to claim them to be belonging to him. Purchase requests were accepted by A3 and afore elicited cheques (1) Ex PW2/C; (2) Ex PW2/D; (3) Ex PW2/F; (4) bearing no. 168679 for Rs 33 lakhs; (5) bearing no. 168680 for Rs 38 lakhs; (6) Ex PW2/M and (7) cheque D11 (5), part of Ex PW2/N (colly); were all purchased by A3 beyond his discretionary power of Scale IV Officer for purchase of cheques upto Rs 6 lakhs, as per Clause 8 of Table1 (B) of Master Circular Ex PW7A/A (colly) (D168) and in purchase of said cheques, role of A4 is elicited, document wise, in preceding paragraphs. Elicited manner in which the worths of borrowers and guarantors were assessed by A4 in grant of (1) cash credit limit of Rs 25 lakhs vide proposal Ex PW1/P [D6( 1)]; (2) cash credit limit of Rs 20 lakhs and term loan of Rs 30 lakhs for purchase of computers vide proposal Ex PW1/B [D7( 1)]; sanction of said cash credit limits and term loan, as was done by A3, reflects the complicity of A3 and A4 borne out from conduct of these accused persons and deduced from the circumstances of the case, elicited above. As per practice, borrower was required to lodge application for discounting/ purchase of cheques and the same was required to be processed. The related elicited debit/credit vouchers of the cheques in question purchased were bearing initials of A4 and sanction for purchase of cheques in question was accorded by A3 on the applications for purchase of cheques, elicited above; all which acts were done by A3, a Scale IV Officer beyond his delegated powers and these proved of the complicity of A3 and A4 for being party in the conspiracy for discounting/purchase of these cheques, without there being any sanctioned limit in the account and beyond discretionary powers of A3. A2 had the knowledge that the account of M/s Jian Pharmaceuticals bearing number 302001010033098 [as per statement Ex

PW6/F (part of D178)] at no point of time in year 2009 had any credit balance exceeding Rs 50,000/. Yet, cheques (1) Ex PW2/C; (2) Ex PW2/D; (3) Ex PW2/F; (4) bearing no. 168679 for Rs 33 lakhs; (5) bearing no. 168680 for Rs 38 lakhs; were issued by A2 and these all cheques were so presented by A1 for purchase before Bank of India, Malai Mandir Branch, New Delhi with or without applications and such purchase requests were acceded by A3 in complicity with A4".

13. From the above discussion, it would prima-facie appear that apart from the mere ipsi dixit of the appellant that he had issued the cheques in favour of M/s Nexus Remedies Private Limited (A-6) as advance security, absolutely no material was brought on record in support of the said defence. It is not the appellant's case that he was a complete stranger to either Mr.Vivek Sinha (A-1), or M/s Nexus Remedies Private Limited (A-6), since he was also a Director of A-6. Pertinently, the cheques issued by him were of very large amounts, i.e. Rs.33 Lakhs and Rs.38 Lakhs, even though at no point of time the balance in the account of M/s Jian Pharmaceuticals - proprietary firm of A-2, from whose account the cheques had been issued, exceeded Rs.50,000/-. Conspiracy is hatched in secrecy and is established through circumstantial evidence. Prima-facie, it appears that there is circumstantial evidence present in the present case in respect of the conspiracy alleged.

14. So far as submission of Mr. Das premised on Narender Lal Jain & Others (supra) is concerned, in my view, the said decision would have no application, considering the fact that the bank took a substantial hit of Rs.46.89 Lakhs, which included principal amount of Rs.44.75 Lakhs apart from the interest component of Rs.2.14 Lakhs. Merely because the bank

may have accepted a smaller amount than what was owed by the borrower with a view to settle the account and realise whatever could be salvaged, and that too during the pendency of criminal prosecution, is no ground to contend that the entire liability of the borrower was settled and that the bank did not suffer any unlawful loss.

15. Reliance has also been placed on the order passed by the Supreme Court in J. Jayalalitha Vs. State of Tamil Nadu, SLP(Crl.) Nos. 7900/2014 and 7906-7908/2014 on 17.10.2014. In my view, the said order does not in any way advance the case of the appellant as there is no ratio emerging from the said order of the Supreme Court.

16. Learned senior counsel for the appellant has not been able to point out any glaring illegality in the impugned judgment for the Court to draw the inference that the continued incarceration of the accused would not be justified, till the hearing of the appeal - which stands expedited.

17. For the aforesaid reasons, the present application is dismissed.

CRL.A. 131/2015

18. The appeal is directed to be heard along with CRL.A. 205/2015 on 18.05.2015. In case the appeal is not heard for any reason, it shall be open to the appellant to press for suspension of the sentence.

19. Dasti.

VIPIN SANGHI, J

FEBRUARY 26, 2015 B.S. Rohella