JUDGMENT AND ORDER
These 5(five) appeals against the common judgment and order dated 14.09.2010 and 29.09.2010 passed by the learned Special Judge, Shillong in Special Case (CBI) No. 3/1994 are jointly heard for disposal by this common judgment and order.
2. Heard Mr. R Kar, learned counsel for appellant/accused in Crl. Appl. No. 8/2010, Mr. SP Mahanta, learned counsel for the appellant/accused in Crl. Appl. No. 12, 13 and 14/2010 and Mr. R Choudhury, learned counsel for the appellant/accused in Crl. Appl. No. 10/2010 and Mr. VK Jindal, learned senior counsel assisted by Mr. S Dey, learned counsel for the CBI-respondents.
3. By the impugned judgment and order dated 14.09.2010, five appellants/accused are convicted for the offences punishable under different provisions of IPC as well as P.C Act, 1988 viz, Shri. V.K Rangacharyulu and appellant/accused Shri. H.N Wadhwa are convicted for the offences under Sections 120B, 465, 468, 471 IPC and 13(d)(i) r/w 13(2) of the P.C Act, 1988 and appellant/accused Shri. D.K Chakravary and Shri. Jaharlal Das @ Johal Lal Das are convicted for the offences under Sections 120B, 420, 468, 471 IPC and by the sentenced order dated 29.09.2010 the appellants/accused Shri. V.K Rangacharyulu and Shri. H.N Wadhwa were awarded sentence of 2 (two) years and a fine of Rs. 5000/- each and in default of payment of fine, they will have to undergo another 1 (one) month imprisonment each for the offence under Section 468 IPC and also awarded sentence of 6 (six) months under Sub-Section 2 of Section 120B IPC and also awarded sentence of 2 (two) years and a fine of Rs. 5000/- each and in default of payment of fine, they will have to undergo for another 1 (one) month imprisonment each for the offence under Section 465 IPC and also awarded sentence of 2 (two) years for the offence under Sub-Section 2 of Section 13 of the P.C Act, 1988 and also a fine of Rs. 10,000/- each and in default of payment of fine, they will have to undergo for another 2 (two) months and all the sentences shall run concurrently; the appellants/accused Shri. D.K Chakravarty and appellant/accused Shri. Shri. Jaharlal Das @ Johal Lal Das were awarded sentence of 2 (two) years and also a fine of Rs. 5000/- each under Section 471 r/w 465 IPC and in default of payment of fine, they will have to undergo for another 1 (one) month imprisonment and also awarded sentence of 2 (two) years under Section 120 IPC and fine of Rs. 5000/- each and in default of payment, they will have to undergo for another 1 (one) month imprisonment and all the sentences shall run concurrently and the appellant/accused Shri. A.D Purkayastha was awarded sentence of 6 (six) months and a fine of Rs. 5000/- under Section 120B and in default of payment of fine, he will have to undergo for another 1 (one) month imprisonment and the sentence of 2 (two) years and fine of Rs. 5000/- under Section 468 IPC and in default of payment of fine, he will have to undergo another 1(one) month imprisonment.
4. The prosecution story, in nutshell, spelled out in the charge sheet was that on the basis of the source information a case was 1 (A)/92 SHG was registered on 23.01.1992 against Shri. R.K Sabbarwal, the then Branch Manager of the erstwhile, New Bank of India, A-Block Connought Place, New Delhi and M/s Tricon Hotel Private Ltd., Thana Road, Shillong under Sections 120B, 420, 468, 471 and 477A IPC and Section 13(2) r/w 13(1)(d) of the P.C Act, 1988. The appellant/accused Shri. V.K Rangacharyulu was posted and functioning as Chief Credit in the Credit Department of the erstwhile New Bank of India H.Q New Delhi (now Punjab National Bank) during 1988-89. M/s Tricon Hotel Private Ltd. registered under the order of the Registrar of Companies, Shillong had applied for a term loan for construction and running a Three Star Hotel on a rented building at Thana Road, Shillong-793001. The loan proposal was forwarded to the Head Office through the Regional Office, New Delhi, A-Block Connought Place. The said bank sanctioned the loan on advances under five different heads amounting to Rs. 69.75 lakhs as under:
“NATURE OF FACILITY AMOUNT SECURITY
1. Term loan for completion Rs. 18.50 lacs Equitable Mortgage of Construction of Hotel leased building
2. Term loan for purchase of Rs. 24.00 lacs Hyp. of kitchen equipments Kitchen equipment fixtures fixtures etc.
3. Bridge Loan 10.75 lacs Against Central/State Govt. subsidy
4. Cash credit limit 2.50 lacs Hyp.of Book debts
5. Cash credit limit Rs. 3.50 lacs Hyp.of stocks of raw materials.
6. Addl. Term loan to meet Rs. 10.50 lacs As in item No. 1 & also the personal security of DK Chakraborty and SK Agarwal.
The loan and advances at item No. 1 to 5 above were sanctioned on 01.11.88 and the additional term loan at Sl. No. 6 above was sanctioned on 12.07.89 Out of the limits the facilities at Sl. No. 1 to 3 and 6 above were released and the advances at Sl. No. 4 & 5 above were not released. The mode of disbursement of the amount released is as under:-
LIMIT NO. 1
Cheque No. of disbursement & date Amount Mode of disbursement
-10-CH. No. 686414 dtd.25.3.99 Rs. 1000000.00 Cash
-11-CH. No. 686676 dtd.27.3.89 Rs. 282000.00 -do- through C/A
-12-CH. No. 686677 dtd.28.3.89 Rs. 207000.00 -do
-13-CH. No. 671605 dtd.12.4.89 Rs. 160000.00 -do
-14-Debit voucher dtd.3.5.89 Rs. 75000.00 -do-
-15-CH. No. 671635 dtd.4.5.89 Rs. 122000.00 cash Rs. 18,46,000
LIMIT NO. 2
-21-1.DD No. 076891 dtd.29.3.89 Rs. 720000.00 DD on Branch Office Guwahati favouring Meghalaya Enterprises.
-20-2.DD No. 07692 dtd.29.3.89 Rs. 1191000.00 DD on BO;Guwahati favouring Assam Electronics.
-22-3.Debit Transfer vr.dtd.12.4.89 Rs. 225000.00 Rajeev Motors by pay order.
-23-4.CH. No. 671640 dtd.9.5.89 Rs. 80000.00 Cash
-26-5.DD No. 291641 dtd.9.5.89 Rs. 85000.00 DD to Assam Electronics.
6. dtd.31.5.89 Rs. 124859.30 To Rajeev Motors by pay order. Rs. 2425589.30(-) Rs. 54000/- Deposited Rs. 2371589.30
LIMIT NO. 3
1. Dated 4.11.88 Rs. 500000.00 Transferred to L. Block Br. New Bank of India, New Delhi or sending the amount to Tricon Hotels (P) Ltd., Shillong (cash).
2. CH. No. 683278 dtd.4.11.88 Rs. 500000.00 Cash withdrawn
3. CH. No. 683283 dtd.7.1188 Rs. 70000.00 -do- Rs. 1070000.00
LIMIT NO. 6
1. CH. No. 628055 dtd.13.7.89 Rs. 450000.00 Cash withdrawn
2. DD No. 076936 dtd.13.7.89 Rs. 598000.00 DD to Tricon Hotels Shillong (Cash) Rs. 1048000.00”
5. During the investigation, it reveals that Shri. V.K Rangacharyulu, appellant/accused was the Chief Credit in the Credit Department of the said Bank i.e New Bank of India from 1988-89. M/s Tricon Hotel Private Ltd. was not entitled for State and Central subsidy. Some of the payments were made in the name of some firms which were non-existence and misappropriated by the appellant/accused and in some cases some false vouchers were obtained from a firm and payment released and then misappropriated the same. The appellant/accused Shri. V.K Rangacharyulu, the Chief Credit in the Credit Department H.Q in the erstwhile New Bank of India made a spot verification and submitted a false report thereby facilitating the other appellants/accused to receive the loan and the appellant/accused Shri. H.N Wadhwa, Loan In-charge of the said bank released the loan without verifying the terms and conditions of the sanction letter. The loan released in favour of M/s Tricon Hotel Private Ltd. was withdrawn by the appellants/accused Shri. D.K Chakravarty and Shri. Jaharlal Das @ Johal Lal Das and accused Shri. S.K Agarwal (absconder) and misappropriated the said loan amount. The appellant/accused Shri. A.D Prukayastha, also issued false certificates in favour of M/s Tricon Hotel Private Ltd. to facilitate the appellant/accused Shri. D.K Chakravarty, appellant/accused Shri. Shri. Jaharlal Das @ Johal Lal Das and accused Shri. S.K Agarwal to get the loan. Both the said officials i.e appellant/accused Shri. V.K Rangacharyulu, Chief Credit in the Credit Department of the said bank and Shri. H.N Wadhwa, In-charge Loan of the Branch Office of the said bank at A-Block Connought Place and non-officials appellant/accused i.e appellant/accused Shri. D.K Chakravarty, appellant/accused Shri. Jaharlal Das @Johar Das and accused Shri. S.K Agarwal entered into a conspiracy and as a result make a wrongful loss to the public exchequer at the tune of Rs. 57,04,700/- (Rupees fifty seven lakhs four thousand seven hundred) only. Accordingly, the CBI submitted charge sheet against the appellant/accused (1) Shri. V.K Rangacharyulu (2) appellant/accused Shri. Jaharlal Das Johar Das (3) appellant/accused Shri. A.D Purkayastha (4) appellant/accused Shri. D.K Chakravarty (5) accused Shri. S.K Agarwak (6) accused R. Mittal and appellant/accused Shri. H.N Wadhwa under Sections 120B, 420, 468, 471 and 477A IPC and Section 13(2) r/w 13(d)(i) of the P.C Act, 1988. The accused Shri. R Mittal had expired and accused Shri. S.K Agarwal is still absconding.
6. The Special Judge (Shri. E. Warjri) framed the charge against the appellants/accused in Special Case (CBI) No. 3/1994. The charges so framed by the Special Judge read as follows:
“CASE NO. 3/94
RC.1/92-SHG
FIRST CHARGE
I Shri. E Warjri, Special Judge, Meghalaya, Shillong hereby charge you (1) Shri. Vangala Kasturi Rangacharyulu, S/o V.L.N Acharyulu (2) Sh. Johar Lal Das alias Jahar Das S/o Late M.L Das (3) Aparesh Das Purkayastha, S/o Nripendra Bhusan Das Purkayastha (4) Dhiresh Kumar Chakraborty, S/o Late Dhirendra Kumar Chakraborty (5) Santosh Kumar Agarwal, S/o of Late Gauri Shankar Agarwak (6) Rakesh Mittal S/o Late Tilak Chand (7) Hari Narayan Wadhwa, S/o Late Tirth Das Wadhwa and (8) M/s Tricon Hotels (P) Ltd. Thana Road, Shillong, Meghalaya (Abolished) Registered with the Registrar of Companies, Shillong vide certificate of incorporation No. 13-02929 of 1980-89 dtd.4/4/88; as follows:
That you on or about during the period from 4/4/88 to 1989 at Shillong and New Delhi; agreed to do (Or caused to be done) illegal acts which were done in pursuance of the agreement as follows:You Shri Vengala Kastury Rangacharyulu were posted and functioning as Chief in the Credit Department of the erstwhile New Bank of India Head Quarter, New Delhi (Now Punjab National Bank) during 1988-89. You conducted inspection of M/S. Tricon Hotel Project on 15/16-3-89 and submitted report dated 18/3/89, showing spending of Rs. 24.64 lacs on Hotel Project inclusive of spending of Rs. 15.75 lacs for construction of 10, 080 Square feet (120 ft × 84 ft.) of ceiling (Roof) although the rent agreement shows, 8, 050. square feet only consisting of 7, 000 Sq.ft or first floor, 600 Sq.ft of Ground floor and 450 sq.ft on basement.
In your report dated 18/3/89 you justified the use of the fund of Rs. 27,00,000/- in addition to the bridge loan of Rs. 10,71,000/- on the grounds that (i) the party has raised share capital of Rs. 10 lacs and (ii) the party has introduced un-secured loans of Rs. 17 lacs; although the report is a false one as already pointed out above.
The disastrous results produced by your false report dtd. 10/3/89 are that basing on the report, the Head Office passed orders for release of term loan of Rs. 18,50,000/- and Rs. 24,00,000/- Your report dtd. 18/3/89 does not reflects the break up of the cost of construction of Rs. 15.75 lacs although on the earlier notes put up by the credit department, the Executive Director on three (3) occasions raised quarries seeking the showing of details of break up of cost of the same construction.
The credit Deptt. of which you the Chief had put up recommending the sanction to Executive Director for additional loan of Rs. 10.50 lacs for construction of the hotel and the same recommended loan got sanctioned on 11/7/1989 accordingly. On 12/7/89 you prepared a Sanction letter clubbing together the earlier sanctioned two term loans of Rs. 18.50 lacs and Rs. 24.00 lacs with Rs. 10.50 lacs which was sanctioned on 11/7/89; for a total of Rs. 53.00 lacs and this Sanction letter was conveyed to the Branch to take necessary actions accordingly.
Thus the overt and covert actions and willful concealment of facts by you have facilitated the Directors of the Co. for drawing Rs. 63,35,589.30 paise from the total sanctioned amount of Rs. 69.75 lacs.
Term loan of Rs. 53 lacs and Bridge loan of Rs. 10.75 lacs and Cash Credit limit of Rs. 2.80 lacs hypothecation of Book Debits and Cash credit limit of Rs. 3.50 lacs against hypothecation of Stock of Raw Materials. In view of the total available assets of the Company being worth only for Rs. 6,30,889.30 p the Bank is put to a total loss of Rs. 57,04,700/- from these transactions.
You Shri Jahar Das have opened Bank a/c No. 541 on 3/4/89 in the Indian Overseas Bank Shillong, but the account opening application form was filled up under the handwriting of Shri Santosh Kumar Agarwal. A demand draft for Rs. 11,91,000/- was deposited on 3/4/89 for crediting into your account No. 541 but the deposit pay-in-slip was filled up under the handwriting of Shri Santosh Kumar Agarwal on the same day i.e on 3/4/89, you have issued a cheque for Rs. 11,86,000/- withdrawing the amount. The reverse side of this cheque shows that the cheque amount was deposited a/c No. 542 which account was held in the joint name of Shri Dhiresh Kumar Chakraborty and Shri Santosh Kumar Agarwal, in the Indian Overseas Bank, Shillong. On 9/5/89 a DD for Rs. 85,000/- was deposited and was credited into your a/c No. 541 and on 9/5/89 itself the equal amount of Rs. 85,000/- was withdrawn by you vide a withdrawal cheque.
You Shri Hari Narayan Wadhwa was posted at the New Bank of India Branch Office at 9-A, Conaught Place, New Delhi and was functioning as the Officer-In-Charge Loans M/S, Tricon Hotel claimed that it was entitled for subsidy amount of Rs. 21.50 lacs because it was approved by the Government of Meghalaya State as an Industrial Unit and on the basis of such claim of M/S. Tricon Hoel that the New Bank of India sanctioned a Bridge Loan of Rs. 10.75 lacs. As an Officer Incharge Loans it was your duty to ascertain whether M/S. Tricon Hotel was entitled for such subsidy amount and further it was also your duty to obtain a sanction letter issued by the Authority of Industrial department of the Government of Meghalaya, sanctioning the subsidy with the written assurance that such subsidy amount against which the bridge loan was to be released shall be paid directly to the Bank.
On 4/11/88, you put up a note to the Branch Manager, Shri Ravi Kumar Sabharwal, seeking permission for release of the Bridge Loan. On this note the Branch Manager passed orders for releasing the same loan only after complying with all the terms and conditions of the sanction. Inspite of the clear instructions from the Branch Manager you permitted to release the bridge loan on 4/11/88 itself without complying with the terms and conditions of the sanction letter.
Subsequently, it was found that M/S. Tricon Hotel was not an Industrial Unit approved by the State Government of Meghalaya, therefore, M/S. Tricon Hotel was not entitled to the subsidy although it claimed to be so entitled. Thus, the claim of M/S. Tricon Hotel was found to be false and fraudulent. Therefore, the Bridge Loan of Rs. 10.75 lacs was rendered to be of the nature of un-secured, security less loan and at the same time rendered to be of the fresh and clean loan and this bridge loan of Rs. 10.75 lacs was disbursed and released at your initiative and permission.
Conscious mind with the guilty feelings subsequently you in an effort to shield your misdeeds obtained a Legal Opinion on the point of sequence of release of the facilities although it is not a subject matter of legal opinion. But you placed that obtained legal opinion on record for the clear objective of giving a better appearance of your mis-deeds (Something like a teenage Girl availing the facilities o a beauty-parlour, un-mindful of how-far might be the effectiveness in the efforts of beautification).
You have accepted additional rent agreement dtd. 6/1/89 for an addition area of 2, 000 Sq.ft You have also acception another rent agreement dtd. 6/1/89 replacing the earlier rent agreement dtd. 29/6/88 for an area of 6050 sq.ft In respect of the acceptance of the replacement rent agreement dtd. 6/1/89. You did not take permission for the same to H.O although there are some omissions and new insertion on materials points which are not favourable rather detrimental to the interest of the Bank.
You Shri Rakesh Mittal was maintaining your Bank A/C No. 6016 in the Indian Overseas Bank, Shillong. In the same Bank M/S Tricon Hotel was also maintaining its Bank a/c No. 542 on 19/7/89, Shri Dhiresh Kumar Chakraborty, Chairman-Cum-Director of M/S. Tricon Hotel (P) Ltd. issued a Cheque for Rs. 2,56,157.40 p in your name. This was deposited for crediting into your a/c No. 6016 on 19/7/89 itself and subsequently, during the period from 20/7/89 to 22/7/89 you have drawn the equal amount from you're a/c No. 6016. Thus you have co-operated with Sh. D.K Chakraborty in doing the mis-deeds.
Shri Dhiresh Kumar Chakraborty, you was Chairman-Cum-Director of M/S Tricon Hotel (P) Ltd. Thana Road Shillong. You was maintaining a Bank a/c No. 542 jointly with Sh. Santosh Kumar Agarwal in the Indian Overseas Bank, Shillong, took some building materials from M/S. Meghalaya Enterprises and from M/S Tricon Wood a sister concern of M/S. Tricon Hotel. You handed over a DD for Rs. 7.20 lacs to Shri Bimal Kumar Bajaj of M/S. Meghalaya Enterprises. On 19/7/89 you issued a Cheque of Rs. 2,56,157.40 from company's a/c No. 542 favouring Sh. Rakesh Mittal an a/c holder of a/c No. 6016 in the Indian Overseas Bank, Shillong.
You Shri Chakraborty have signed papers for the purpose of registration of M/S Tricon Hotel (P) Ltd. as a Pvt. Ltd. Co. Shillong for construction of 3 Star Hotel by M/S. Tricon Hotel you have signed papers applying for loans and got the loans sanctioned in total for Rs. 69.75 lacs from New Bank of India, New Delhi. From this loan sanctioned amount a total of Rs. 63,35,589.30 p was found to be already withdrawn. In the meantime M/S. Tricon Hotel (P) Ltd. got abolished. And it was found that M/S Tricon Hotel brought 3 Ambassadors Cars for a price of Rs. 3,49,589/- and Building works done for Hotel building for the value of Rs. 2,81,300/- making the grand total drawal of Rs. 63,35,589.30 p with the difference of Rs. 57,04,700/- which is a loss caused to the Bank.
M/S Tricon Hotel (P) Ltd. was found to be defaulted on the following counts - (1) Books of A/C was not maintained, (2) Annual Returns were not filed, (3) Balance Sheet were not filed, (4) Director's report was not filed and (5) Auditors report were not filed. In the capacity of being Chairman-Cum-Director you are responsible for all the defaults made by M/s Tricon Hotel as above mentioned.
You Shri Aparesh Das Purkayastha S/O Nripendra Bhusan Das Purkayastha, R/O Oakland Road, Shillong-I, an Architect has issued the certificates certifying the stage wise construction of the Hotel Building.
You have issued as many as six certificates in r/o completion of construction of M/S. Tricon Hotel. The 6th certificate was dtd. 2/7/89, inclusive all the cost till date for Rs. 37.00 lacs. The 4th certificate was dtd. 8/4/89 inclusive of all cost till date Rs. 33.00 lacs. The 3rd certificate was dtd. 27/3/89 inclusive all cost till date for Rs. 29.79 lacs. The 2nd certificate was dtd. 4/3/89, inclusive of all cost till dt. Rs. 25.64 lacs. The 1st certificate was dtd. 10/2/89, inclusive of all cost till date for Rs. 15.50 lacs.
The false and incorrect and non-genuine nature of all the six certificates, above said issued by you are appearing from the fact that the Executive Engineer, CPWD, Shillong vide his letter dtd. 14/10/93 has assured the cost/Value of Construction of M/s Tricon Hotel to be only worth Rs. 2,81,300/-. Whereas, you issued certificate for Rs. 41.50 lacs for the same work on 2/7/89. And further you vide your 2nd certificate dtd. 4/3/89 falsely certified the construction of 10, 080 Sq.ft (120 × 84) of roof but whereas as per rent agreement the Company took on rent for a total area of 8, 050 sq.ft only. All these betrays you in respect of certificates issued by you.
Thus, by falsely certifying the stage wise construction of the Hotel building facilitated the Director of the Co. to draw the loan amounts.
You Shri Santosh Kumar Agarwal S/O Late Guari Sankar Agarwal was Managing Director of M/s Tricon Hotel (P) Ltd. You prepared and submitted the Project supporting the loan proposals. As soon as the disbursement of Rs. 63,35,589.30 p of the total loan sanctioned amount of Rs. 69.75 lacs was over, you resigned from the Co.
You filled up in your handwriting the a/c opening application form of a/c No. 541 opened on 3/4/89 in the name of Sh. Jaharlal Das in the Indian Overseas Bank, Shillong Branch. You also filled up in your handwriting the deposit payin-slip depositing DD for Rs. 11,91,000/- for crediting into a/c No. 541 on 3/4/89 itself. You maintained a/c No. 542 jointly with Sh. Dhiresh Kumar Chakraborty in Indian Overseas Bank, Shillong Branch. Into this jointly held a/c No. 542 a Cheque amount of Rs. 11,86,000/- was credited on 3/4/89, which cheque was issued by Sh. Jaharlal Das from his a/c No. 541.
You have signed the papers for the purpose of registration of M/s Tricon Hotel (P) Ltd. As a Pvt. Ltd. Co. with the Registrar of Companies, Shillong. For construction of 3 Star Hotel by M/s Tricon Hotel you have signed papers applying for loans and got the loans sanctioned in total for Rs. 69.75 lacs; from New Bank of India, New Delhi. From the loan sanctioned amount a total of Rs. 63,35,589.30 p was found to be already withdrawn. In the meantime M/s Tricon Hotel (P) Ltd. got abolished and it was found that M/s Tricon Hotel brought 3 Ambassador Cars for a price of Rs. 2,81,300/- making the grand total of Rs. 6,30,889.30 p against total drawal of Rs. 63,35,589.30 p with a difference of Rs. 57,04,700/- which is a loss caused to the Bank.
M/s Tricon Hotel (P) Ltd. was found to be defaulted on the following counts:- (1) Books of accounts was not maintained, (2) Annual Returns were not filed, (3) Balance Sheet were not filed, (4) Directors report were not filed and (5) Auditors Report were not filed. In the capacity of being Managing Director you are responsible for the defaults made by M/s Tricon Hotel as above mentioned.
M/s Tricon Hotel (P) Ltd. A Pvt. Ltd. Co. was found to have come into existence vide Certificate of Incorporation No. 13-02929 of 1980-89 dtd. 4/4/88 due to the initiative taken by and due to the promotional activities done by Sh. Dhiresh Kumar Chakraborty and Shri Santosh Kumar Agarwal. It was due to the acts of commissions and omissions of Shri D.K Chakraborty and Shri S.K Agarwal and Shri V.K Rangacharayulu and Shri Jaharlal Das and Shri A.D Purkayastha and Shri R. Mittal and Sh. H.N Wadhwa that the Co. got a sanctioned loan for Rs. 69.75 lacs of which Rs. 63,35,589.30 p was found to be withdrawn of which Rs. 57,04,700/- was found to be misappropriated causing loss of equal amount to the New Bank of India, now merged with the Punjab National Bank. For all the defaults on the part of M/s Tricon Hotel (P) Ltd. Shri D.K Chakraborty and Sh. S.K Agarwal are responsible by now M/s Tricon Hotel has already ceased to existence and thereby committed an offence punishable U/S 120 B of the IPC and within my cognizance.
And I hereby direct that you be tried by this Court on the Charge.
SECOND CHARGE:
That, you Shri Vengala Kastury Ramacharyulu, Shri Hari Narayan Wadhwa being posted and functioning respectively as specified and detailed in the first Charge by corrupt or illegal means and also by abusing your official position as Public Servants obtained for yourself or for any other person pecuniary advantage to the tune of Rs. 63,35,589.30 p in the manner specified and given in details in the first charge above given and you thereby committed an offence punishable U/S 13(2) r/w Sec. 13(i)(d) of P.C Act, 1988 and within my cognizance.
THIRD CHARGE:
That, you Shri Jaharlal Das, Shri Aparesh Das Purkayastha, Shri Dhiresh Kumar Chakraborty, Shri Santosh Kumar Agarwal and Sh. Rakesh Mittal have aided and abetted Shri Vengala Kastury, Rangacharulu and Shri Hari Narayan Wadhwa in the manner specified and detailed in the first charge in respect of each of you; misconduct covered by U/S 13(2) r/w Sec. 13(i)(d) of P.C Act, 1988 r/w Sec. 109 of IPC and within my cognizance.
FOURTH CHARGE:
That, you Shri Dhiresh Kumar Chakraborty and Sh. Santosh Kumar Agarwal on or about during the period from 4/4/88 to 1989; at New Delhi; cheated the New Bank of India by dishonestly inducing the New Bank of India to deliver Rs. 63,35,589.30 p to you and which were the property of the said New Bank of India, New Delhi and that you thereby committed an offence punishable U/S 420 of IPC and within my cognizance.
And I hereby direct that you be tried by this Court on the said charge.
FIFTH CHARGE:
That, you Shri Aparesh Das Purkayastha, Shri Dhiresh Kumar Chakraborty and Shri Santosh Kumar Agarwal and Sh. Vengala Kastury Rangacharyulu on or about or during the time from 4/4/88 to 1989 at Shillong and at New Delhi forged certain documents to wit, six numbers of certificates in respect of completion of construction of M/s. Tricon Hotel dtd. 2/7/89 and 1/5/89 and 8/4/89 and 27/3/89 and 10/2/89 and inspection report dtd. 18/3/89 and the papers wherein it has been falsely shown that M/s Tricon Hotel (P) Ltd. is an Industrial Unit approved by the Industries Department of Government of Meghalaya and papers wherein it has been shown that M/s Tricon Hotel (P) Ltd. raised a share capital of Rs. 10 lacs and that it has introduced un-secured loans of Rs. 17 lacs intending that those shall be used for the purpose of cheating and that you thereby committed an offence punishable U/S 468 of the IPC and within my cognizance.
And I hereby direct that you be tried by this Court on the said charge.
SIXTH CHARGE:
That, you Shri Vangala kasturi Rangacharyulu, Shri Aparesh Das Purkayastha, Shri Dhiresh Kumar Chakraborty, Shri Santosh Kumar Agarwal and Shri Hari Narayan Wadhwa on or about or during 4/4/88 to 1989 at Shillong and at New Delhi, fraudulently used as genuine certain documents to wit Six numbers of certificates in respect of Stage-wise completion of construction of M/s Tricon Hotel (P) Ltd. and inspection report dtd. 18/3/89 and the papers wherein it has been falsely shown that M/s Tricon Hotel (P) Ltd. is an Industrial Unit approved by the Industrial Department of Govt. of Meghalaya and as such M/s Tricon Hotel (P) Ltd. is entitled for Govt. subsidy and the papers wherein it has been shown that M/s Tricon Hotel (P) Ltd. has raised a Share capital of Rs. 10 lacs and that it has introduced un-secured loans of Rs. 17 lacs; which you know or had reason to believe; at the time you used them; to be all forged documents and that you thereby committed an offence punishable U/S 465 and 471 of IPC and within my cognizance.
And I hereby direct that you be tried by this Court on the said charge.”
7. The charges were read over and explained to the appellants/accused, who denied and claimed for trial. The prosecution in order to bring home the charges examined as many as 39 prosecution witnesses, namely: (1) Shri. Shyamlal Dey, an employee of AG Office, Shillong (2) Shri. Rupak Ranjan Roy Choudhury, an employee of the O/O ROC, Shillong (3) Shri. Shitangshu R. Dey, Section Officer, AG Office, Shillong (4) Shri. S Chakraborty, Post Man in the o/o GPO, Shillong (5) Shri. R.L Chhugani, Special Assistant in Bank of Baroda, PB, Shillong (6) Shri. Bimal Kumar Bajaj (7) Shri. Subhir Kumar Das, Dy. Manager in Indian Overseas Bank, Shillong (seizure witness) (8) Shri. Swapan Kumar Mukherjee, Sr. Manager in IOB, Shillong (9) Shri. C.C.M Mihsil, CEO, Shillong Municipality (10) Mrs. J.R Geons, Director in M/s Tricon Wood Product Pvt. Ltd. (11) Shri. G.D Golani, General Manager PNB (12) Shri. V.K Chopra, manager PNB, Delhi Branch (13) Shri. Bhim Bahadur Chettri, Post Man, GPO, Shillong (14) Shri. Ashim Kumar Bose, Branch Manager, IOB, Shillong (15) Shri. S.P Dewan, Manager in Head Office, Credit Department, New Bank of India, New Delhi (16) Shri. Ragsekharan, Manager In D.B Department, H.Q Delhi (17) Shri. K.N Rao, Sr. Branch Manager, Bank of India, Shillong (18) Shri. D.N Pegu, ROC, Shillong (19) Shri. R.K Sarma, Manager, Vigilance Department, New Bank of India, New Delhi (20) Shri. C.S Sharma, Accountant New Bank of India, Personnel Division, Cannout Place Branch (21) Shri. I.P Mahendru, AGM, RO, New Bank of India, New Delhi (22) Shri. Stanley Rynjah, Secretary, Executive Committee, KHADC, Shillong (23) K.F Rngad, Director of Industries, Govt. of Meghalaya, Shillong (24) Shri. V.K Dora, Sr. Manager, New bank of India, Fancy Bazar, Guwahati (25) Smti. Vounty M. Shylla, AGM, MIDC, Shillong (26) Shri. Ravi Kumar Sabrawal, Branch Mamager. His statement was not allowed as his name was not included in the list of witness (27) Shri. A. P S Sareen, Accountant in the New Bank of India, Cannout Place Branch (28) Shri. Divyendru Chakraborty, Branch Manager Balayganj Branch, Kolkata of IOB (29) Shri. E.S Shynkon, General Manager of M/s Tricon Pvt. Ltd. (30) Shri. Ramesh Ch. Gandhi, Manager, M.R Section, Personnel Department, H.Q New Delhi (31) Shri. Arumesh Kumar Jan, Manager Vigilance Department, New Bank of India, New Delhi (32) Shri. A.K Jain (33) Shri. Balraj Chadha, Executive Engineer, Meghalaya Centre Division, CPWD, Shillong (34) Shri. V.K Raizada (35) Shri. A.P Gupta, Inspector CBI (36) Shri. N.S Khaarayat, Additional SP, CBI (37) Shri. S.C Gupta, Handwriting Expert (38) Shri. Hemengshu Bhukan Karmakar and (39) Shri. R. Nabirajan and also exhibited 199 documents i.e Ext.1 to Ext.199 and defence also produced one defence witness i.e appellant/accused Shri. H.N Wadhwa. The learned Special Judge, after careful appreciation of the statements of the PWs, Ext. documents and statement of DW and also documents marked as 1 & 2 produced by the defence, had convicted the appellants/accused by impugned judgment and order for the offences mentioned above and sentenced them to undergo for imprisonment under the sentenced order dated 29.09.2010 The learned Special Judge made findings vide paras 49, 50, 51, 52, 53, 54 and 55 of the impugned judgment and order which read as follows:-
“49. From the evidence as discussed above, it is understood and appears that the accused company M/s Tricon Hotel Pvt. Ltd. led by its Director, Managing Director applied for loan from Erstwhile New Bank of India situated at New Delhi, the proposes hotel suppose to be constructed at Thana Road, Shillong, and the question comes when the New Bank of India had no Branch at Shillong at the point of time, what prompted the accused company to apply for loan from a Bank situated at Delhi, and what prompted the Bank to consider such proposal really points fingers towards commission of offence. Now, from the evidence on record it is clearly understood that from the initial stage of the application of the loan till releasing of the amount on different phases and stages there was hurriedness, and there was no proper verification before releasing or sanctioning the loan, whether the loan is going to safe hand and will be recovered in near future. It is also evident that the lease agreement got changed whenever any discrepancies came, it has been covered up by subsequent certificates. It is also evident that money was received in the name of fictitious firm, or on the basis of some fictitious and false bills, then it got diverted and transferred for one account to another and this shows a clear case of criminal conspiracy between the private accused and officials; and result of such conspiracy they went up to the extend of procuring false documents in the form of bills and even shown some fictitious firm.
50. It is not correct to say that prompt FIR is the only criteria about the genuinety and authenticity of the offence. Even a late FIR, if it has got a basis cannot be simply ruled out, the test is whether by filing the FIR in late had given any opportunity to the complainant to manipulate the facts and circumstances of the case., in this instant case, I do not see any reason to record that late FIR is caused any manipulation or prejudiced the accused persons.
51. It is an admitted fact that the Erstwhile New Bank of India had merged with Punjab National Bank on 4th September 1993, though the offence had been committed during 1988-89.
52. on perusal of Sub-Section (1) of Section 19 of the P.C Act, 1988 it is understood that while taken the cognizance, Court will have to consider the previous sanction for prosecution; in this instant case, cognizance has been taken by the court sometime in 1996. Therefore, it cannot be said that there was no proper sanction when Court had taken the cognizance. Moreover, the sanctioning authority P.W No. 11, from his evidence it is clear that before according sanction he has applied his mind and being satisfied with the prima facie existence of the case he had accorded the sanction. Beside that P.W No. 11 was the competent authority at the time of according sanction for prosecution due to the merger of Erstwhile New Bank of India with Punjab National Bank.
53. I also could not satisfied myself supported by law that the sanction for prosecution was required in the case of Shri. J.L Das because, whatever the ingredients of offence has come on record, in my view he has done it in his personal capacity and not by abusing or misusing his official position. And Shri. J.L Das at this stage or at the stage of Section 313 Cr.P.C cannot come all of a sudden and say that he is not Shri. Johar Das, or otherwise Johar Das and J.L Das are not one person. Section 19 of P.C Act speaks about the sanction for prosecution for Government servant. Therefore, the sanction does not apply in the case of retired Government servant. So, not obtaining sanction in case of Shri. H.N Wadhwa does not affect the prosecution case as he has already retired at the time of taking ……….
54. On scanning of the evidence in its totality as discussed above, as well as after the examination of the provision of law, I am of the considered view that, prosecution has succeeded to establish the charge against the accused persons, and hence, I find Shri. V.K Rangacharyulu, Shri. H.N Wadhwa, Shri. J.L Das, Shri. A.D Purkayastha and Shri. D.K Chakravarty have conspired with each other and committed offence under Section 120B, 420, 468, 471 and 13 P.C Act, and cause huge loss to the Government.
55. Accordingly, accused V.K Rangacharyulu and H.N Wadhwa are found guilty of offence under Section 120B, 468, 471 IPC and 13(d)(i) r/w 13(2) of the P.C Act, 1988. And the accused D.K Chakravarty, Shri. J.L Das are found guilty under Section 120B, 420, 468, 471 IPC. And the accused A.D Purkayastha is found guilty under Section 120B and 468 IPC.”
8. This Court, being the first appellate court carefully considered the statements of the PWs, Ext. documents, statement of lone DW and defence documents which were marked as 1 & 2 respectively to see as to whether or not there are inherent infirmities in appreciation of the evidence by the learned Special Judge in coming to his findings as mentioned above in the judgment and order dated 14.09.2010 and after such appreciation, this Court is in complete agreement with the findings of the learned Special Judge. The Apex Court had discussed the nature and extent of power of the appellate Court in State of West Bengal v. Kailash Chandra Pandey reported in AIR 2005 SC 119 and held that as the trial court which has the occasion to see the demeanour of the witnesses is in a better position to appreciate it, the appellate court should not lightly brush aside the appreciation done by the trial court except for cogent reasons.
Para 13 of the AIR in Kailash Chandra Pandey case (Supra) is quoted hereunder:-
13. It is needless to reiterate that the appellate court should be slow in reappreciating the evidence. This Court time and again has emphasized that the trial court which has the occasion to see the demeanour of the witnesses and it is in a better position to appreciate it, the appellate court should not lightly brush aside the appreciation done by the trial court except for cogent reasons. In this connection, a reference may be made to a decision of this Court in the case of The State of Punjab v. Hari Singh reported in AIR 1974 SC 1168, wherein Their Lordships have observed as follows:
“Supreme Court's power of interference under Article 136 with judgments of acquittal is not exercised on principles which are different from those adopted by it in dealing with convictions. It is a principle, common to all criminal appeals by special leave, that the Supreme Court will refrain from substituting its own views about the appreciation of evidence if the judgment of the High Court is based on one of two alternative views each of which was reasonably open to the High Court to accept. If, however, the High Court's approach is vitiated by some basically erroneous apparent assumption or it adopts reasoning which, on the face of it, is unsound, it may become the duty of the Supreme Court, to prevent a miscarriage of justice, to interfere with an order whether it be of conviction or of acquittal.”
Similarly, in the case of Khem Karan v. The State of U.P reported in AIR 1974 SC 1567, it was observed as follows:
“Further, neither mere possibilities nor remote probabilities nor mere doubts which are not reasonable can, without danger to the administration of justice, be the foundation of the acquittal of an accused person, if there is otherwise fairly credible testimony. If a trial court's judgment verges on the perverse, the appellate court has a duty to set the evaluation right and pass a proper order.”
Similarly, in the case of State of Rajasthan v. Bhawani reported in (2003) 7 SCC 291, the appellate court reversed the finding of the trial court without considering and taking into account the testimony of eyewitnesses. Their Lordships after appreciation of the evidence reversed the order of the High Court and maintained the order of conviction of the trial court. Their Lordships observed that notwithstanding the inconsistencies, exaggerations or embellishments, the eyewitnesses account has to be accepted that clinches the case of the prosecution.”
9. The paramount duty of the Court is to ensure that miscarriage of justice is prevented. A miscarriage of justice which may rise from acquittal of guilt is not less than for the conviction of the innocence. The Supreme Court in Zahira Habullah v. State of Gujrat, reported in (2006) 3 SCC 374 though Mr. Justice Arijit Pasayat observed that “in a criminal case fate of the proceedings cannot always be left entirely in the hands of the parties, crime being public wrong in breach and violation of public rights and duties, which affects the whole community as a community and is harmful to society in general. Interest of society is not to be treated completely with disdain and as persona non grata. If a criminal court is to be an effective instrument in dispensing justice, the Presiding Judge must cease to be a spectator a mere recording machine by becoming a participant in the trial evincing intelligence, active interest and elicit all relevant materials necessary for reaching the correct conclusion, to find out the truth, and administer justice with fairness and impartially both to the parties and to the community it serves.
10. Justice B.N Agarwal (as then he was) observed that “these days when crime is looming large and humanity is suffering and the society is so much affected thereby, duties and responsibilities of the courts have become much more. Now the maxim “let hundred guilty persons be acquitted, but not a single innocent be convicted” is, in practice, changing the world over and courts have been compelled to accept that “society suffers by wrong convictions and it equally suffers by wrong acquittals.” Justice B.N Agarwal (as then he was) further observed that: “In a criminal trial a prosecutor is faced with so many odds. The court while appreciating the evidence should not lose sight of these realities of life and cannot afford to take an unrealistic approach by sitting in an ivory tower. I find that in recent times the tendency to acquit an accused easily is galloping fast. It is very east to pass an order of acquittal on the basis of minor points raised in the case by a short judgment so as to achieve the yardstick of disposal.” (Ref: Krishna Mochi v. State of Bihar: (2002) 6 SCC 81).
11. The learned counsel appearing for the appellants/accused had vehemently put up their submissions that there are discrepancies in the statements of the PWs which would fail the prosecution to prove guilt against the appellants/accused beyond reasonable doubt. It is trite law that the Court while appreciating the evidence must not attach undue importance to minor discrepancies. The Apex Court in Sukhdev Yadav v. State of Bihar reported in (2001) 8 SCC 86 (paras 3 and 15 of the SCC) held that:
“3. It is indeed necessary, however, to note that there would hardly be a witness whose evidence does not contain some amount of exaggeration or embellishment - sometimes there would be a deliberate attempt to offer the same and sometimes the witnesses in their over anxiety to do better from the witness box detail out an exaggerated account. In Appabhai v. State of Gujarat reported in 1988 Supp SCC 241: 1988 SCC (Cri) 559 this Court in par 13 of the report observed (SCC petitioner. 246-47)
“The Court while appreciating the evidence must not attach undue importance to minor discrepancies. The discrepancies which do not shake the basic version of the prosecution case may be discarded. The discrepancies which are due to normal errors of perception of observation should not be given importance. The errors due to lapse of memory may be given due allowance. The Court by calling into and its vast experience of men and matters in difference cases must evaluate the entire material on record by excluding the exaggerated version given by any witness. When a doubt arises in respect of certain facts alleged by such facts, the proper course is to ignore that fact only unless it goes into the root of the matter so as to demolish the entire prosecution story. The witnesses nowadays go on adding embellishments to their version perhaps for the fear of their testimony being rejected by the court. The Court, however, should not disbelieve the evidence of such witnesses altogether if they are otherwise trustworthy.”
15. True, as noticed above, there are lapses, but the question that arises for consideration is whether any prejudice has been caused by reason of such lapse; if the answer thereto is in the affirmative, obviously it have a serious impact on the trial but if in the event, however, it is in the negative, no prejudice can be said to have been caused and correspondingly question of the trial being vitiated would not arise. The eyewitnesses account as available on record cannot but be termed to be trustworthy and by reason thereof, the lapses stand overshadowed by the testimony of the eyewitnesses. The observation above obtain support from the decision of this Court in Baleshwar Mandal v. State of Bihar reported in (1997) 7 SCC 219: 1997 SCC (Cri) 1042: AIR 1997 SC 3471.”
12. The Apex Court in Krishna Mochi case (Supra) held that Falsus in uno, falsus in omnibus, even if a major portion of evidence is found to be deficient, in case residue is sufficient to prove the guilt of an accused notwithstanding acquittal of number of other co-accused persons, his conviction could be maintained. Para 51 of the SCC in Krishna Mochi case (Supra) reads as follows:-
“51. Stress was laid by the accused-appellants on the non-acceptance of evidence tendered by some witnesses to contend about desirability to throw out the entire prosecution case. In essence, prayer is to apply the principle of falsus in uno, falsus in omnibus. This plea is clearly untenable. Even if a major portion of evidence is found to be deficient, in case residue is sufficient to prove guilt of an accused, notwithstanding acquittal of a number of other co-accused persons, his conviction can be maintained. It is the duty of the court to separate the grain from the chaff. Where the chaff can be separated from the grain, it would be open to the court to convict an accused notwithstanding the fact that evidence has been found to be deficient to prove material particular would not ruin it from the beginning to end. The maxim falsus in uno, falsus in omnibus has no application in India and the witnesses cannot be branded as liars. The maxim falsus in uno, falsus in omnibus (false in one thing, false in everything) has not received general acceptance nor has this maxim come to occupy the status of rule of law. It is merely a rule of caution. All that it amount to is, that in such cases testimony may be disregarded, and not that it must be disregarded. The doctrine merely involves the question of weight of evidence which a court may apply in a given set of circumstances, but it is now what may be called “a mandatory rule of evidence”. (See Nisar Ali v. State of U.P: AIR 1957 SC 366: 1957 Cri. LJ 550.) Merely because some of the accused persons have been acquitted, though evidence against all of them, so far as direct testimony went, was the same does not lead as a necessary corollary that those who have been convicted must also be acquitted. It is always open to a court to differentiate the accused who had been acquitted from those who were convicted. (See Gurcharan Singh v. State of Punjab: AIR 1956 SC 460: 1956 Cri. LJ 827). The doctrine is a dangerous one, specially in India, for if a whole body of the testimony were to be rejected, because the witness was evidently speaking an untruth in some aspect, it is to be feared that administration of criminal justice would come to a dead stop. Witnesses just cannot help in giving embroidery to a story, however true in the main. Therefore, it has to be appraised in each case as to what extent the evidence is worthy of acceptance, and merely because in some respects the court considers the same to be insufficient for placing reliance on the testimony of a witness, it does not necessarily follow as a matter of law that it must be disregarded in all respects as well. The evidence has to be shifted with care. The aforesaid dictum is not a sound rule for the reason that one hardly comes across a exaggeration, embroideries or embellishment. (See Sohrab v. State of M.P: (1972) 3 SCC 751: 1972 SCC (Cri) 819 and Ugar Ahir v. State of Bihar: AIR 1965 SC 227: (1965) 1 Cri LJ 256.) An attempt has to be made to, as noted above, in terms of felicitous metaphor, separate the grain from the chaff, truth from falsehood. Where it is not feasible to separate the truth from falsehood, because the grain and the chaff are inextricably mixed up, and in the process of separation, an absolutely new case has to be reconstructed by divorcing essential details presented by the prosecution completely from the context and the background against which they are made, the only available course to be made is to discard the evidence in toto. (See Zwinglee Ariel v. State of M.P: AIR 1954 SC 15: 1954 Cri. LJ 230 and Balaka Singh v. State of Punjab (1975) 4 SCC 511: 1975 SCC (cri) 601: AIR 1975 SC 1962.) As observed by this Court in State of Rajasthan v. Kalki (1981) 2 SCC 752: 1981 SCC (Cri) 593: AIR 1981 SC 1390 normal discrepancies in evidence are those which are due to mental disposition such as shock and horror at the time of occurrence and those are always there, however hones and truthful a witness may be. Material discrepancies are those which are not normal, and not expected of a normal person. Courts have to label the category to which a discrepancy may be categorized. While normal discrepancies do not corrode the credibility of a party's case, material discrepancies do so. Accusations have been established against the accused-appellants in the case at hand.”
13. This Court is also considering with the respective parts played by the appellants/accused in committing the different offences for which they have been convicted by the common judgment and order dated 14.09.2010 passed in Special Case (CBI) No. 3/1994 in different paras of this judgment.
14. M/s Tricon Hotel Pvt. Ltd. was registered as a private company under the order of the Registrar of Companies of Assam, Meghalaya, Manipur, Tripura, Nagaland, Arunachal Pradesh and Mizoram and issued the Registration Certificate dated 04.04.1998 The Memorandum of Association of M/s Tricon Hotel Pvt. Ltd., clearly indicates that the registered office of the company will be situated in the State of Meghalaya but the clear address of the company in the State of Meghalaya is not indicated and under the Articles of Association and Memorandum of Association only two persons namely, Shri. S.K Agarwal, accused and Shri. D.K Chakravarty, appellant-accused subscribed only 10 equity shares each. Under the Articles of Association of M/s Tricon Hotel Pvt. Ltd., the authorized share capital of the company is Rs. 10,00,00/- (Rupees Ten Lakhs) only divided into 1,00,000/-(Rupees One Lakh) only equity shares of Rs. 10 each payable in the manner as may be determined by the Directors from time to time and Article 20(a) and (b) of M/s Tricon Hotel Pvt. Ltd. read as follows:-
“20. (a) The following shall be the First Directors of the Company:-
1. Shri. D.K Chakraborty (Crl. Appl. No. 14/2010)
2. Shri. Santosh Kumar Agarwal (absconder)
(b) Shri. D.K Chakraborty shall be the first and permanent Chairman and Mr. Santosh Kumar Agarwal shall be the Managing Director of the company till they retire or resign voluntarily.”
15. Article 19 of Association, clearly speaks that the business of the company shall be managed by the Directors who may pay all expenses incurred in getting up and registering the company and may exercise all such powers of the Company as are not restricted by the Act or any statutory modification thereof for the time being in force or by these Articles required to be exercised by the Company in general meeting such subject nevertheless, to any regulations of these Articles, to the provisions of the Act. From the Memorandum of Association and Articles of Association of private company i.e M/s Tricon Hotel Pvt. Ltd. and also the registration of it under the Companies Act, it is clear that M/s Tricon Hotel Pvt. Ltd. is not an industrial unit or the firm registered in the Office of the Director of Industries. Subsidy from the Central and State Govt. is available only to the industrial unit or a firm registered in the Office of the Director of Industries. M/s Tricon Hotel Pvt. Ltd. is not at all entitled to receive any subsidy either from the Central or from the State Govt. PW 23 Shri. K.F Rngad states that he was posted and functioning as Director of Industries, Govt. of Meghalaya, Shillong. Under his letter dated 12.01.1994 (Ext.123) informed the S.P CBI ACB, Shillong that M/s Tricon Hotel Pvt. Ltd. and Tricon Wood Products Ltd. were not the firms registered in the office of the Director of Industries. Ext.123 also enclosed the Industrial Policy, 1988 (Ext. 124) under which the private company for the hotel business is not entitled to receive subsidy.
16. Appellant-accused Shri. D.K Chakraborty (Crl. Appl. No. 14/2010), Shri. Jaharlal Das @ Johar Das, appellant-accused (Crl. Appl. No. 13/2010), appellant-accused Shri. V.K Rangacharyulu (Crl. Appl. No. 8/2010) and appellant-accused Shri. H.N Wadhwa (Crl. Appl. No. 10/2010) knew very well that M/s Tricon Hotel Pvt. Ltd. is not eligible to receive any subsidy from the Govt. Soon after the registration of M/s Tricon Hotel Pvt. Ltd. under the Companies Act filed a duly filled up loan application form for Small Scale Industrial Unit (Category B) to the Branch Manager, New Bank of India, A-Block Connought Place, New Delhi for granting loan. In that loan application form, the appellant/accused Shri. D.K Chakraborty and Shri. S.K Agarwal, accused are the only persons mentioned as Proprietors/Partners/Directors of M/s Tricon Hotel Pvt. Ltd. and also they made a declaration that the loan would be utilized for hotel business and will be abide by the rules and regulations of the bank. In that application form for loan i.e para 6.5, mentioned that sources from which margin will be made by the borrower (M/s Tricon Hotel Pvt. Ltd.) are:- (i) share capital 10.00 lacs (ii) loan from the Directors 6.00 lakhs and (iii) Govt. subsidy 14.75 lacs. The appellants/accused who filed the said loan application for M/s Tricon Hotel Pvt. Ltd. know very clearly that M/s Tricon Hotel Pvt. Ltd. is not going to get any amount as subsidy from the Govt. and share capital is less than Rs. 10 lacs. Inspite of that the appellants-accused Shri. D.K Chakraborty and accused Shri. S.K Agarwal had given the wrong information in the said loan application that M/s Tricon Hotel Pvt. Ltd. is getting Rs. 14.75 lakhs as subsidy from the Govt.
17. Under the sanction letter dated 01.11.1988 of the bank to M/s Tricon Hotel Pvt. Ltd. loan has to be released only after fulfillment of all the terms and conditions which read as follows:
“LIMIT NO. I
Nature & Extent of Facility: Term loan of Rs. 18.50 lacs (Rupees eighteen lacs fifty thousand only).
Rate of Interest: 15% p.a
Purpose: completion of construction of Hotel building and interior decoration having total cost of Rs. 38.65 lacs.
Margin: 50%
Security: Equitable Mortgage of leased Hotel building having total value of Rs. 38.65 lacs
Repayment: The loan shall be repaid in equal quarterly installments in 5 years with moratorium period of 9 months besides interest.
Note: The term loan for the construction shall be released in stages at any stage bank's borrowings shall not exceed 50% of the total amount spent on additional construction. The payment shall be made only after receipt of Architect's certificate in this connection.
LIMIT NO. II
Nature & Extent of Facility: Term Loan of Rs. 24.00 lac (Rupees twenty four lac only).
Purpose equipments, furniture, plant and: Purchase of kitchen fixture & machinery as mentioned in the Annexure
Rate of Interest: 15%
Security: Hypothecation of kitchen equipments, fixtures and furnitures and plant & machinery as mentioned in the Annexure.
Margin: 25%
Repayment The loan shall be repaid in equal quarterly installments in five yrs.
With a moratorium period of nine months besides interest.
NOTE: The payment shall be made directly to the supplier of equipments after recovering the requisite margin from the company.
LIMIT NO. III
Nature & Extent of Facility: Bridge loan of Rs. 10.75 lac (Rupees ten lac seventy five thousand only)
Margin: 50%
Rate of Interest: 16.5% p.a
Security: The bank shall be nominated to collect the Central/State Subsidy to the extent of Rs. 21.50 lac i.e eligible amount for setting up Service Industry in notified back-ward area - Category ‘C’ @ 35% on fixed investments. The party shall execute in irrevocable Power of Attorney in favour of the bank and get it registered with the concerned Government Agencies for collecting the State/Central Subsidy besides submission of regular sanction letter for State/Central subsidy on the completion of the project.
Repayment: The loan shall be repaid in full as soon as the Central/State subsidy is released by the concerned Agency, but not later than 6 months from the date of first availment.
NOTE: Before availment of this facility, the company will complete all the formalities and will submit the necessary authorization letter to the effect that the Central/State subsidy will be paid directly to the bank, being the lending institution. The balance amount left out of total eligible subsidy of Rs. 21.50 lac shall be utilized for liquidation of Term Loan Accounts.
LIMIT NO. IV
Nature & Extent of Facility: Cash Credit Limit of Rs. 2.50 lac (Rupees two lac fifty thousand only)
Rate of Interest: 16.5% p.a
Security: Hypothecation of book debts of Hotel pertaining to Public Ltd. Cos. Private Ltd. Cos./Credit Holders of reputed companies not more than 30 days old.
Margin: 50%
LIMIT NO. V
Nature & Extent of Facility: Cash Credit Limit of Rs. 3.50 lac (Rupees three lac fifty thousand only)
Rate of Interest: 16.5% p.a
Security: Hypothecation of stock comprising of all types of raw material, including food-stuff, breweries to be used in the Hotel.
Margin: 25% in bank's favour.
NOTE 1. The working capital facilities i.e facilities No. IV & V shall be released only after the installation of plant & machinery, other equipments, completion of building and completion of all formalities of concerned Central/State Government Departments for starting Three Star Hotel at Shillong. Book Debts facility shall be allowed only after satisfying that the Hotel gets good response.
2. Though the entire book debts of the company are charged to the bank, yet the book debts not older than 30 days shall qualify the Drawing Power.
3. Before release of Bridge loan, it should be ensured and confirmed that the party is entitled to Central/State Subsidy amounting to Rs. 21.50 lac and the company shall undertake that the entire amount of subsidy of Rs. 21.50 lac will not be allowed to be withdrawn by either the Directors or Creditors or for repayment of loan without prior consent of Head Office.
Insurance
The entire stocks and plant and machinery and equipments will be secured against the risks, riots, strike and burglary in the joint names of the bank and the applicant company at the cost of the borrower. The built-up portion of the building will be secured against fire risks.
Gurantee
The facilities shall be guaranteed by Shri D.K Chakraborty and Shri S.K Agarwal, Directors of the company having combined net means of Rs. 127.00 lac in their personal capacities.
Other Terms & Conditions
1. The party shall deal exclusively with us.
2. The company will submit necessary Registration Certificate under the Service Industry with DIC.
3. The company shall submit the Registration of the Unit to the concerned DIC as Unit is notified back-ward area.
4. The company shall maintain the equity to the extent of Rs. 10.00 lac and unsecured loans to the extent of Rs. 23.00 lac during the currency of the bank's facilities. Necessary Chartered Accountant's Certificate to this effect shall be submitted, before release of the facilities.
5. All payments for the purchase of equipments shall be made directly to the supplier after recovering the requisite margin.
6. Fresh agreement for covering additional area of 2000 sq.ft shall be executed by the company and shall be submitted to the branch before disbursement of the Term Loan.
7. The branch shall obtain the legal opinion for creation of valid equitable mortgage on leased land and building before release of credit facilities. If for any reason, as per rent agreement, the equitable mortgage by the company cannot be created, then the land-lady Smti. Hira Devi Budhiya will create the equitable mortgage/registered mortgage in bank's favour as a prime security for the Term Loan.
8. The party will make application for license to the Department of Tourism for the Hotel and a copy of the same will be submitted to the branch before availing the facilities.
9. The branch shall obtain Proforma Invoices for purchase of plant & machinery, kitchen equipments and other equipments as mentioned in the Annexure before release of the Term Loan.
10. Before release of Bridge Loan, the branch shall obtain documentary evidence that the entire State of Meghalaya is notified back-ward area and is entitled to Central Subsidy to the extent of 25% and State Subsidy to the extent of 10%.
11. The company shall undertake to bear all expenses in connection with monthly inspection of the securities by an official of the bank.
12. All other terms & conditions applicable to the above type of facilities mentioned in the Instructions Manual shall be strictly complied with.
13. The company is allowed to open current Account either in Indian Overseas Bank or State Bank of India, but the company shall give us an undertaking that no credit facility will be availed from any other bank. The party shall further undertake to transfer the funds periodically from above accounts to our A-Block branch.
ASSTT. GENERAL MANAGER (C & I)”
18. Limit No-III i.e Bridge loan of Rs. 10.75 lacs shall be repaid in full as and when Central and State Govt. subsidy is released by the concerned agency but not later than 6 months from the date of the first availment. Therefore, bridge loan of Rs. 10.75 lacs is against the State/Central subsidy to be released by the concerned agency i.e State or Central Govt. to M/s Tricon Hotel Pvt. Ltd. under the terms and conditions No. 10, before release of the bridge loan, the New Bank of India, A-Block Connought Place, New Delhi shall obtain documentary evidence that the entire State of Meghalaya is notified backward area and is entitled to Central subsidy to the extent of 25% and the State subsidy to the extent of 10%. The appellant/accused Shri. H.N Wadhwa, In-charge loan of the New bank of India, A-Block Connought Place, New Delh inspite of knowing very well that M/s Tricon Hotel Pvt. Ltd. is not entitled to receive any subsidy, had released the bridge loan of Rs. 10.75 lacs by making a note in the application dated 04.11.1988 filed by the appellant/accused Shri. D.K Chakravarty and accused Shri. S.K Agarwal of M/s Tricon Hotel Pvt. Ltd. (Ext.128) that “the party had completed the documentation of bridge loan and the documents are approved by the Legal Adviser Shri. J.R Goil and also that kindly advise should we release the bridge loan today”. The Branch Manager released the bridge loan subject to compliance with all the terms and conditions under the sanction letter. Shri. H.N Wadhwa, appellant-accused released Rs. 10.75 lakhs and opened a ledger account of the party for the bridge loan on 04.11.1988 against the security i.e Central and State Govt. subsidy of Rs. 25.5 lacs to be received by the party. Appellant/accused Shri. D.K Charkravarty and accused Shri. S.K Agarwal had received Rs. 5 lacs in cash. The appellant/accused Shri. D.K Chakravarty and accused Shri. S.K Agarwal again received another amount of Rs. 70,000/-.
19. The appellant/accused Shri. V.K Rangacharyulu (Crl. Appl. No. 8/2010) Chief Credit in the Credit Department of the New Bank of India, initially put up a note that the bridge loan was not proper and also pointed out further irregularities and stopped further released of the loan. Vide his office note dated 01.03.1989 (Ext.100) which reads as follows:
“NEW BANK OF INDIA
(A Govt. of India Undertaking) CENTRAL OFFICE
Office Note 1 March, 1989
THE EXECUTIVE DIRECTOR PLEASE:
Under the Discretionary Power of.: Executive Director.
Application Ltd.: M/s Tricon Hotels (P)
Branch Office: A-Block, New Delhi.
Category of Advance: General.
Constitution Company.: Private Limited
Principal Parties (since resigned) Chakraborty: Shri. S.K Agarwal Smt. G.R Jones. Smt. Manju (new Director)
Business: Hotel.
Subject: To apprise developments in the account.
The captioned company was sanctioned following credit facilities by your goodself vide our note dated 24-10-88 and 28-10-88 (placed below)
1. Term Loan of R. 18.50 lac against construction of building.
2. Term Loan of Rs. 24.00 lac for purchase of machinery and equipments.
3. Bridge Loan of Rs. 10.75 lac against central & State subsidy of Rs. 21.50 lac.
4. Cash Credit (Hyp) Stock Limit of Rs. 3.50 lac.
5. Cash Credit (Book Debts) Limit of Rs. 2.50 lac.
We have been informed by B/O A-block vide letter Dt. 22-12-88 that they have released Bridge Loan of Rs. 10.75 lac on 4-11-88, and copies of loan documents obtained in this regard were submitted. We have observed the following discrepancies in having released the Bridge loan:
1. The branch has released the Bridge Loan without conducting predisbursal inspection in contravention to the condition of our sanction letter.
2. As per sanction letter Bridge Loan is to be released after the company has completed all the formalities including execution of Power of Attorney in favour of bank and got it registered with the concerned Government agencies for collecting State/Central Subsidies besides submission of authorization letter from the concerned agencies to the effect that Central/State Subsidy will be paid directly to our bank being the lending institution, but the branch has released the Bridge loan without getting the Power of Attorney registered with concerned agencies and authorization letter from them.
3. The Certificate from competent authority to the effect that Hotel Industry in the State of Meghalaya is eligible for State/Central subsidy to the extent of 35% of capital investment not obtained by the branch.
4. Licence from Tourism Department not obtained.
5. Registration Certificate as Service Industry from Meghalaya Disst. Industries Centre not obtained.
6. The branch has not ascertained the enduse of Bridge loan before or after release of facilities.
Branch Manager, vide letter dated 23-12-88 has further informed that Shri S.K Aggarwal, managing Director of the company having net means of Rs. 49.80 las has vacated the office w.e.f 15-11-88. Mrs. Manju Chakraborty has been taken as new Director of the company.
Accordingly, we have called for the comments of the Branch Manager vide letter dated 18-1-89 as to how the Bridge Loan was released without complying with the terms and conditions of our sanction, besides advising him not to release further facilities without specific approval from Head Office. We have also advised that Shri S.K Aggarwal will continue as Guarantor to all the credit facilities sanctioned in favour of the captioned company.
In response to our above letter, the branch has submitted the following:
1. The pre-disbursal inspection was not conducted as the party has informed that there was no material change and construction is yet to be started.
2. The branch is enquiring from the party about the end use of the Bridge loan.
3. Shri A.K Aggarwal, managing Director of the company has resigned without taking prior permission from our Bank i.e the company should have taken prior permission before changing the management.
4. Branch will submit the consent letter and Assets and Liabilities statement of new-Director namely Mrs. Manju Chakraborty.
The branch vide letter dated 23-2-89 has submitted inspection report in respect of inspection conducted on 8-2-89. In the report, it is pointed out that the party has started the construction of partition walls of 10 to 12 rooms and walls upto the level of 3ft. to 4ft. were constructed at the time of inspection. It is also pointed out that the company has opened a Current Account with Indian Overseas Bank Shillong.
Branch Manager has sought our instructions for release of Term Loan of Rs. 18.50 lac and Rs. 24.00 lac against the construction of building and plant and machinery to be purchased respectively. The branch has submitted the Architect's certificate certifying that a sum of Rs. 15.50 lac has so far been incurred on construction of building. The Branch manager has not certified or verified that the company has incurred the above amount on construction.
Head Office Observations
We are of the opinion that before allowing the release of Term Loans we may advise the branch to rectify the irregularities persisting in the Bridge loan account of the company. The Branch Manager should also verify and certify the amount so far incurred on construction of Hotel building and also ensure that the capital of the company has been increased to the extent of Rs. 10.00 lac and unsecured loans to the extent of Rs. 23.00 lac. The Branch Manager should also submit a certificate to the effect that terms and conditions mentioned in our sanction letter have been complied with. Further, the branch should also submit us the Credit Report of Mrs. Manju Chakraborty alongwith the Assets and Liabilities statement and consent letter.
Submitted please.
Sd/- Sd/- CHIEF (CREDIT) ASST. GENERAL MANAGER (C&I)”
20. On the note submitted by Shri. V.K Rangacharyulu, appellant/accused (Ext.96) by making a margin note, the Chairman and Managing Director of the bank directed the appellant/accused Shri. R.V Rangacharyulu to inspect M/s Tricon Hotel Pvt. Ltd. at Shillong. Appellant/accused after spot inspection, submitted a report dated 18.03.1989 (Ext.95). The portion of his report dated 18.03.1989 reads as follows:-
“*** *** ***
The Hotel, Tricon Hotel (P) Ltd., is under construction at Thana Road, Police Bazar, Shillong. The Thana Road is a bylane of 20ft. width of the Police Bazar which is a very busy commercial centre of Shillong town. The Hotel under construction is on the first floor. Presently the work on 17 rooms is going on. The partition walls made of bricks in respect of 11 rooms is complete with plastering. In respect of other 6 rooms construction of the walls in two rooms is upto 5 ft. level and in one room is upto 8 ft. and in three rooms the brick wall construction is upto 3 ft. The party has also constructed two under-ground tanks of 30ft × 20ft. × 10 ft. for storage of water and severage. Two stair cases, one as the main stair-case connecting ground floor to the first and 2nd floors and the other one being a Service Staircase connecting the basement to the ground and first floor is also completed.
Fifteen photographs taken on the site are enclosed herewith as desired by your goodself which would show the front view of the building, interior view of some of the rooms and also the main corridor of the hotel measuring about 84 ft. × 5 ft. Rough sketch of the building is also enclosed.
Verification of Books
The party has submitted a Chartered Architect's Certificate confirming total construction carried out and its approx.value amounting to Rs. 25.64 lac. Architects Certificate enclosed.
From the Ledger maintained by the party, it has been seen that the party had raised their Share Capital to Rs. 10.00 lac and unsecured loans to the tune of Rs. 17.00 lac. The Building Account stands debited with the cost of construction incurred so far to the tune of Rs. 25,13,937/- apart from payment of Rs. 9.5 lacs to the Land lady towards consideration to lease Lease Agreement.
Banks funds Utilisation
The present outstanding is Rs. 11.03 lac under Bridge Loan account.
It is seen that out of Rs. 10.71 lac released by us so far, a sum of Rs. 5.00 lac has been paid in cash to the Contractor, M/S Kedarmal Bimal Kumar vide his receipt dated 15-11-88.
Further the following major sums have also been paid amounting to Rs. 4,92,388/-.
Payment to Contractor by Cheque Rs. 2,92,388.00
Payment to the Land-Lord Rs. 1,50,000.00
Payment to Architect Rs. 50,000.00
Thus, it appears the bank's funds released by way of Bridge Loan against Central & State Subsidy due to the company has been utilized as above in the construction of the Hotel. With the release of the remaining bank's facilities, the party hopes to complete the Hotel before May'89 so as to open the hotel during the coming Tourist Summer season.”
21. The appellant/accused under his note dated 18.03.1989 (Ext.97) even recommended for releasing of the term loan of Rs. 24.00 lacs and according to him, there is no serious irregularities. The portion of his note dated 18.03.1989 reads as follows:“18 March, 1989
THE GENERAL MANAGER (CREDIT) PLEASE:
Reg: M/s Tricon Hotels (P) Ltd.-B/O A-Block Connaught Place, New Delhi.
In compliance to the instructions of our worthy Chairman and Managing Director on our note placed below, Chief (Credit) has visited the Unit at Shillong, and has submitted his report. Copy of the report is placed below.
As there is no serious irregularity in the report, we may permit the branch to release Term Loans against the construction of building and interior decorations and for purchase kitchen equipments fixture and furniture, plant and machinery with a condition that the branch shall comply with all terms and conditions as mentioned in our sanction letter dated 1-11-88. Submitted please. Sd/
Sd/-
Chief Credit
Assistant General Manager (C&I)”
22. As there are no serious irregularities according to the report of the appellant/accused Shri. V.K Rangacharyulu, Assistant General Manager (C&I), the bank released the term loan against the construction of building, interior decorations and for purchase kitchen equipments, fixtures, furniture, plant and machinery with the condition that the Brach i.e New Bank of India (Branch) A-Block Connaught Place, New Delhi shall comply with all the terms and conditions mentioned in the sanction letter dated 01.11.1988 As a result, the term loan of Rs. 24.00 lacs had been released. Limit No. II of the sanction letter dated 01.11.1988 reads as follows:
“LIMIT NO. II
Nature & Extent of Facility: Term Loan of Rs. 24.00 lac (Rupees twenty four lac only).
Purpose: Purchase of kitchen equipments, fixture & furniture, plant and machinery as mentioned in the Annexure
Rate of Interest: 15%
Security: Hypothecation of kitchen equipments, fixtures and furnitures and plant & machinery as mentioned in the Annexure.
Margin: 25%
Repayment: The loan shall be repaid in equal quarterly installments in five yrs. With a moratorium period of nine months besides interest.
NOTE: The payment shall be made directly to the supplier of equipments after recovering the requisite margin from the company.”
23. As per the terms and conditions mentioned above, the term loan of Rs. 24.00 lacs shall be made directly to the supplier of the equipments after recovering the requisite margin from the company. For receiving the said marginal loan of Rs. 24.00 lacs, the appellant/accused Jaharlal Das @ Johar Das prepared three Firms, namely:- (1) Meghalaya Electronic Private Company (2) M/s Kedarmol Bimol Kumar and (3) Assam Electronic sole proprietorship firm of appellant/accused Jaharla Das @ Johar Das. Under condition No. 9 and other conditions of the sanction letter dated 01.11.1988 (Ext.91) Branch shall obtain proforma invoices for purchase of plant and machinery, kitchen equipments and other equipments as mentioned in the annexure before release of the term loan. The Assam Electronics run by the appellant/accused Jaharlal Das @ Johar Das submitted invoice dated 15.05.1989 (Ext.190) that a sum of Rs. 16.45 lacs as advance against the various equipments and also a sum of Rs. 3.40 lacs and Rs. 14.75 lacs had also received on 15.03.1989 For the term loan amount of Rs. 24.00 lacs ledger account was opened by the appellant/accused Shri. H.N Wadhwa.
24. PW 27 Shri. A.P.S Sareen, Accountant in the New Bank of India, Connaught Place A-Block, New Delhi stated that he knows the accused persons and the accused company i.e M/S Tricon Hotel (Pvt.) Ltd. He know that during the period 1988-89 while he was posted as Accountant at Conn Branch of New Bank of India, New Delhi a term loan amounting to Rs. 53 lacs and two cash credit facilities amounting to Rs. 2.5 lacs and 3.5 lacs were sanctioned to the accused company M/s Tricon Hotel Pvt. Ltd. and also a term loan of Rs. 10.75 lacs as bridged loan in addition to the term loan of Rs. 53 lakhs was processed and sanctioned. The term loan of Rs. 53 lakhs was processed, sanctioned and disbursed in 3 consecutives phases in the first phase a sum of Rs. 18.50 lakhs for construction of Hotel building and interior decoration was sanctioned and disbursed. In the second phase a sum of Rs. 24 lakhs was disbursed for purchase of Kitchen equipment, furnitures, fixtures, plant and machinery and the balance of Rs. 10.50 was disbursed as addl. loan for completion of the Hotel building. In other words, the accused company has availed a total term loan of Rs. 53 lakhs and besides an addl. bridge loan of Rs. 10.75 lakhs. But however, the accused company has not avail the cash credit facility of Rs. 2.50 and Rs. 3.50 lakhs which otherwise was sanctioned.
PW 27 further stated that he was working as a Banker in the Bank since 1971 and he joined as a Clerk and presently he was working as Manager. He awares of the procedure for processing, disbursing of term loan, cash credit limit and bridge loan. He was aware of the different stages for processing and disbursing the aforesaid facilities, which are hereunder:-
1. Oral enquiry - in oral enquiry the oral investigation is conducted regarding the business of the borrowed etc.
2. Introduction - in case borrower is not the existing account holder, his request is generally not entertained unless he is recommended by another client of the bank.
3. Loan application - After bank is satisfied after oral enquiry and introduction, the loan application in the prescribed form is issued by the Branch Manager. In case the facility falls under the discrenationary power of the Manager of the Bank only one copy of the loan application form and other papers are obtained but in case the credit facilities is higher than the limits of the Branch Manager and require sanction from higher authorities, addl. copy of the loan application is obtained depending upon whether it requires sanction by the Regional office or Head Office. In case the borrower is a limited Co., a certified true copy of the resolution passed by the Board of Directors of the Co., authorizing its director or other officials to approach the particular bank, the name of which is required to be mentioned in the regulation itself.
4. Financial statement and other papers - The bank in addition to loan application has to obtain the project fiscibility report giving information on the technical, economic and financial aspect of the project with projected profitability statement and flow of fund and projected balance sheet etc.
For large proposal the project report should be prepared by the expert and in the case of Co. report of the Directors together with Income Tax assessment order for the last 3 years etc. is also required.
5. Latest statement of accessed and liability of the Directors and Guarantors and certified true copies of latest income tax and wealth assessment order is also required.
6. Confidential Report from the previous banker - before entertaining the request for the facilities the branch is required to obtain confidential report copy of the applicant, guarantor and director to verify the creditianlity of the applicant.
7. Pre-sanction Inspection/verification - after the application form and the other required documents are obtained and furnished the bank in order to ensure that applicant has furnished correct information to the bank in regard to the assessment liability of the applicant and other necessary party if a physical inspection is required.
8. Interview the borrower - After the aforesaid formalities are complied and in case there is any doubt or discrepancies the borrower is called and interview to clarify the discrepancies.
9. Scrutiny of the loan proposal - At this stage the loan proposal is scrutinized and in case of proposal requiring sanction by regional office or head office, the same are routed after it is found to be fit for sanction. All the documents are analysed.
10. Loan proposal Form - After scrutinizing the loan application as stated above a loan proposal in the prescribed form is prepared and different forms are used for different facilities and for different information to be submitted to the sanctioning authority.
11. Recommendation - Then proposal is recommended for sanction to the higher authorities and some papers are forwarded justifying the basis of recommendation. In case the proposals falls within the power of the head office of the bank the same is forwarded to Regional office of the bank and the Regional office after scrutiny of the proposal and re-verification made by the Branch give their own recommendation and forward the proposal to the sanctioning authority.
After sanction of the loan a copy of the sanction letter is prepared in which the terms and conditions on which the loan has been sanctioned is mentioned. Usually among other condition in the sanction letter there are conditions relating to the amount of the loan, security, to be hypotheticated or mortgaged to the bank, margin money to be deposited, rate of interest and instructions for disbursement of loan. The copy of the sanction letter is forwarded to the concern branch for necessary compliance in accordance with the terms of the sanction letter.
Branch after receiving the sanction letter inform the party and start the post-sanction process in which the required documents are executed and are obtained as per the sanction letter.
The mode of disbursement is also contain in the sanction order and disbursement of loan, is made as per the sanction letter. For the purchase of machinery the payment is not made to the party but the same is made directly to the suppliers of the machinery or equipment by issuing account payee demand draft, or pay order, and on receipt of the machinery or equipment, the bank verified the same and put a board stating ‘Hypotheticated’ to the said bank that is the name of the bank which is incorporated as financer in the invoice to be issued by the supplier, for which the necessary instructions are given by the bank to the suppliers and further the payment is made to the supplier only then the bank is satisfied about the quotation in bonafide of the supply. In case of construction work the payment is to be made in stages depending upon the work in progress and the payment is made to the contractor and to the supplier who have supplied the construction material. After making the payment the bill and payment received from the supplier and receipt of payment thereof is obtained and kept with the loan document. It is also the usual practice to take insurance on the joint name including the name of the bank for all materials or equipment purchased by the bank. The Branch has to ensure the post sanction follow up strictly in accordance with the terms of the sanction and the periodical inspection of the security charge to the bank and from the books of the accounts of the party is done and the Branch must ensure that the banks fund finance by the bank are being utilized by the borrower for the purpose for which it was sanctioned.
In case of limited co. the bank has to obtain the charge registered with the Registrar of the Com. In favour of the bank on the security hypotheticated or mortgaged to the bank within 30 days from the date of disbursement of the fund. The existing facilities can also be enhanced only by the sanctioning authority after following the due procedure.
The aforesaid procedure as narrated by him is contained in the Inspection manual, Volume III issued by the Head Office of the bank.
His involvement in this case is only as an Accountant of the concern branch at the stage of the disbursement of the loan bearing he had passed certain vouchers, cheques, etc. relating to the accounts of the accused company and signatures of other accused appearing thereon. If he has shown those papers, records, writings, signatures etc. he will in a position to identify and verify the same.
‘Ext. 129 is the ledger sheet of current account 2543 on the name of the accused com. Tricon Hotel Pvt. Ltd. Ext. 129/1 is his signature in Ext. 129 there is an initial of H.N Wadwa of day to day entries which are known to him.
Ext. 130 is the ledger sheet of term loan (bridge-loan) of Rs. 10.75 lakhs in favour of accused Com. Tricon Hotel Pvt. Ltd. Under account No. 972 and Ext. 130/1 is his signature and Ext. 130/2 is the signature of accused Shri H.N Wadwa which are dated 4.11.1998 and the initial of the accused H.N Wadwa are also reflected in Ext. 130 in day to day transaction. Ext. 130/3 and 130/4 are the endorsement made by the accused H.N Wadwa in the red ink which are also known to him.
Ext. 131 is the debit transfer voucher dated 4.11.88 by which a sum of Rs. 501000 was debited from the accused com. for issuing a demand draft from SBI on Shillong favouring self, which is signed by the accused Mr. D.K Chakravarty, Mr. S.K Agarwal, Mr. R.K Sabharwal which also contained his signature, and the said signatures of the accused are exhibited as Ext. 131/1, 131/2, 131/3 and Ext. 131/4 is his signature.
In pursuance to the debit transfer voucher marked as Ext. 131 a cheque of Rs. 5,00,000 bearing No. 683278 dt. 4.11.1988 was issued by the accused com. through its Managing Director S.K Agarwal (accused). Shri D.K Chakravarty as Chairman of the accused com. for self from CC A/c No. 972, Ext. 132 is the said cheque and Ext. 132/1 and Ext. 132/2 are the signatures of accused S.K Agarwal and accused D.K Chakravarty respectively. It also bears his signature which is exhibited as Ext.132/3 and Ext. 132/4 is the endorsement made by the Manager (Routine) for passing the same. Ext. 132/5 and Ext. 132/6 at the back of the Ext.132 are the signatures of Shri D.K Chakravarty and Shri S.K Agarwal respectively signed on behalf of the accused com. The money was withdrawn by the said accused person S.K Agarwal from the cashier and he has signed which is exhibited as Ext. 132/7.
Ext. 133 is the cheque bearing No. 683283 dated 7.11.88 amounting to Rs. 70,000/- issued by the Managing Director and Chairman of the accused com. and Ext. 133/1 is a signature of S.K Agarwal (accused) and Ext. 133/2 is the signature of Shri D.K Chakravarty (accused) and Ext. 133/3 is the signature of accused H.N Wadwa, Ext. 133/4 is the authorization and initial of Mr. R.K Sabharwal Manager (Routine). The said signatures are known to him. Ext. 133/5 is the endorsement of the accused com. in respect of tendering the cheque to the branch and Ext. 133/6 is the signature of accused S.K Agarwal of having a receipt of payment of Rs. 70,000/- which is marked on the back of the Ext. 133.
Ext. 134 is the ledger sheet of the term loan of Rs. 18.50 lakhs being the term loan account of the accused Com. which was opened on 25.3.1989 it bears the signature of accused H.N Wadhwa which is exhibited as Ext. 134/1 showing the sanction limit in favour of the party i.e the accused company for the purpose of disbursement. Ext. 134/2 is his signature and Ext. 134 also carries the initials of Shri. R.K Subharwah and accused H.N Wadhwa in day to day transaction. The said account was merged into a new account for creating a term loan of Rs. 53 lakhs on 13 July. 1989.
Ext. 135 is the cheque No. 686414 dt. 25.3.1989 amounting to Rs. 10 lakhs issued by the accused company through its Managing Director Shri S.K Agarwal and Chairman D.K Chakravarty which are exhibited as Ext. 135/1 and Wxt.135/2. Ext. 135/3 is the writing and signature of Shri. R.K Sabharwal and it also bears his signature which is exhibited as Ext. 135/4. Ext. 135/5 and Ext.135/6 are the endorsement issued by the accused Company at the back of the cheque through its Managing Director S.K Agarwal and Chairman Shri. D.K Chakravarty whose signatures are recognized and exhibited as Ext. 135/7 and Ext. 135/8. Ext. 135/9 is the signature of the accused S.K Agarwal for receiving the payment of Rs. 10 lakhs which was taken from the bank.
Ext. 136 is the cheque No. 686676 dt. 27.3.89 for Rs. 2,82,000/- issued by the accused Company through its Managing Director S.K Agarwal and Chairman D.K Chakravarty whose signatures he knows and exhibited as Ext. 136/1 and Ext. 136/2 respectively. Ext. 136/3 and Ext.136/4 are the signatures of Shri. R.K Sabharwal and Ext. 136/5 is his signature. By Ext. 136 a sum of Rs. 2,82,000/- was transferred from the term loan account No. 1 to the current account of accused Com.
Ext. 137 is a cheque No. 686677 dt. 28.3.89 amounting to Rs. 2,07,000/- duly signed by the Managing Director S.K Agarwal and Chairman Shri. D.K Chakravarty whose signatures exhibited as Ext. 137/1 and 137/2. The said Ext. also bears the signature of R.K Sabharwal which is exhibited as Ext. 137/3 and Ext. 137/4. Ext. 137/5 is his signature. The said cheque was presented by the accused company through the accused person namely D.K Chakravarty a Chairman and Shri. S K. Agarwal as Managing Director on the back of Ext. 137 and their signatures are exhibited as Ext. 137/6 and 137/7 respectively. The payment was received by accused S.K Agarwal whose signature are exhibited as Ext. 137/8.
Ext. 138 is the cheque No. 671605 dt. 12.4.89 amounting to Rs. 1,60,000/- favouring self issued by the accused company under its seal through its Chairman Shri. D.K Chakravarty and Shri Santosh Agarwal as Managing Director whose signatures he has identified and marked as Ext. 138/1 and Ext. 138/2. Ext. 138/3 and Ext. 138/4 are the signatures of Shri R.K Sabharwal and Ext. 138/5 is his signature. The said cheque was presented by the accused company under its seal through its Managing Director Shri. S.K Agarwal and Shri D.K Chakravarty Chairman whose signatures he identified and marked as Ext. 138/6 and 138/7. The payment was received by accused S.K Agarwal who has signed on the back of the said cheque and he identified his signature and marked as Ext. 138/8.
Ext. 139 is the cheque No. 671635 dt. 4.5.89 for Rs. 1,22,000/- favouring self issued by the accused company through its Managing Director and Chairman whose signature he identified and marked as Ext. 139/1 and Ext. 139/2 respectively. Ext. 139/3 and Ext.139/4 are the signatures of Shri R.K Sabharwal and Ext. 139/5 is his signature. The said cheque was presented by the accused company through its Managing Director and Chairman by making endorsement at the back of the cheque and Ext. 139/6 and Ext. 139/7 are the signatures of the Managing Director and Chairman which are exhibited as Ext. 139/6 and 139/7 respectively. The payment was received by Shri. S.K Agarwal and whose signature was exhibited as Ext. 139/8.
Ext.140 is the debit transfer voucher dt.3.5.89 for Rs. 75,000/- by which the said sum was debited from the C.C TL1 of the accused company to the current account of the accused company to be credited to the Tricon Wood Products Pvt. Ltd. Ext. 140/1 and Ext. 140/2 are the signatures of Shri S.K Agarwal and Shri D.K Chakravarty and Ext. 140/3 is the signature of Shri. R.K Sabharwal and Ext. 140/4 is his signature.
Ext. 141 is the ledger sheet of term loan 2 for Rs. 24,00,000/- open on 25.3.89 in favour of the accused company and it contain his signature and writing of Shri. H.N Wadhwa which are marked as Ext. 141/1 and 141/2 respectively. The said ledger sheet contained also the signature of Mrs. Archina Saxena, Ashok Kapur, R.K Sabharwal and My initial in day today transaction. The said account was also closed on 13.7.89 and merged to some of loan of Rs. 53 lakhs.
Ext. 142 is the credit transfer voucher by dt. 29.3.89 by which a draft of Rs. 7,20,000/- was issued GD No. 076891/4/89 in favour of Meghalaya Enterprises Pvt. Ltd. Ext. 142/1 is the signature of Shri. R.K Sabharwal. Ext. 142/2 is a signature of another officer Shri. Dhar Prasad and Ext. 142/3 is his signature.
Ext. 143 is another transfer credit voucher dt. 29.3.89 for Rs. 11,91,000/- by which a demand draft No. 076892/5/89 in favour of M/s Assam Electronic was issued Ext. 143/1 is the signature of Shri R.K Sabharwal and Ext. 143/2 is the signature of Shri. Dhar Prasad and Ext. 143/3 is his signature. (Torn condition).
Ext.144 is the cheque No. 171640 dt. 9.5.89 for Rs. 80,000/- favouring self issued by the accused company through its chairman Shri. D.K Chakravarty and Managing Director Shri S.K Agarwal whose signature he knows and identify and marked as Ext. 144/1 and Ext. 144/2. Ext. 144/3 and Ext. 144/4 and Ext. 144/5 are the signatures of Shri R.K Sabharwal and the said cheque was presented by the accused company through its Chairman D.K Chakravarty and Managing Director Shri S.K Agarwal whose signatures he identified as Ext. 144/6 and Ext. 144/7 respectively. The payment was received by Shri S.K Agarwal whose signature is exhibited as Ext. 144/8.
Ext. 145 is the cheque No. 671641 dt. 9.5.89 amounting to Rs. 85,000/- favourting the bank for issuing a demand draft in favour of Assam Electronic on Guwahati issued by the accused company under its seal through its Managing Director shri S.K Agarwal and Chairman Shri D.K Chakravarty whose signatures are marked as Ext. 145/1 and 145/2. Ext. 145/3 is the signature of R.K Sabharwal and Ext. 145/4 is the signature of another officer namely Mrs. Archina Saxena which is also known to me. Ext. 145/5 is the endorsement made at the back of the cheque for issuing a demand draft under the signature of Shri S.K Agarwal and Shri D.K Chakravarty whose signature he identified and marked as Ext. 145/6 jointly.
Ext. 146 is the debit transfer voucher dt. 31.5.89 for Rs. 1,24,589.30 for issue of pay order for the purchase of car issued by the accused Shri. D.K Chakravarty whose signature is marked as Ext. 146/1. Ext. 146/2 is the signature of Shri. R.K Sabharwal and Ext. 146/3 is his signature.
Ext. 147 is the ledger sheet of term loan account of Rs. 53 lakhs which was opened on 13.7.89 consisting of 2 sheets in favour of the accused company. Ext. 147/1 is the signature of Shri H.N Wadhwa in the limit sanction column and Ext. 147/2 on the second running sheet is also a signature of accused Shri H.N Wadhwa. The said ledger sheet consisting of 2 pages contained also the initials of Shri Ashok Kapur as well as his signature/initials.
Ext. 148 is the cheque No. 628005 dt. 13.7.89 for Rs. 4,50,000/- favouring self issued by the accused company under its seal through its Managing Director Shri S.K Agarwal and Chairman Shri. D.K Chakravarty whose signatures are identified as Ext. 148/1 and Ext.148/2 respectively. Ext. 148/3 is the signature of accused H.N Wadhwa. The said cheque also contained my signature which is exhibited as Ext. 148/4. The said cheque was presented by the accused company under its seal through its Managing Directors Shri Santosh Kr. Agarwal and Shri D.K Chakravarty the Chairman whose signature are exhibited as Ext. 148/5 and Ext. 148/6 respectively at the back of the cheque. Ext. 148/7 at the back of the cheque is the signature of accused H.N Wadhwa confirming the amount of sanction limit and drawing power of the accused company. The payment was received by the accused S.K Agarwal whose signature are exhibited as Ext. 148/8.
Ext. 149 is the debit transfer voucher dt. 13.7.89 of Rs. 5,98,000/- for issue of one demand draft and Ext. 149/1 is the signature of accused S.K Chakravarty and Ext. 149/2 is the signature of Shri D.K Chakravarty. Ext. 149/3 is the signature and writing of Shri H.N Wadhwa instructing the release of addl. Term loan of Rs. 10.50 lakhs. Ext. 149/4 is the signature of Shri. Ashok Kapur and Ext. 149/5 is his signature. Ext. 149/6 is his writing.
Ext. 150 is the credit transfer voucher of Rs. 5,01,000/- dt. 4.11.88 for issuance demand draft of Rs. 5 lakhs favouring the accused com. On State Bank of India, Shillong. Ext. 150/1 is the signature of Shri R.K Sabharwal and Ext. 150/2 is his signature.
Ext. 151 dt. 13.7.89 of Rs. 5,98,000/- is the credit transfer voucher for issue of a demant draft No. 076936/10/89 favouring the accused company drawn on Branch on Guwahati Ext. 151/1 is the signature of Ashok Kapur. Ext. 151/2 is the signature of Shri. Dhar Prasad and Ext. 151/3 is his signature.
Ext. 152 is the application form dt. 20.3.89 submitted by Shri. Santosh Kr. Agarwal for opening a account in his personal name in the same branch and Ext. 152/1 is the signature of accused S.K Agarwal and Ext. 152/2 is the specimen signature of Shri S.K Agarwal which was verified by Shri. R.K Sabharwal whose signature is exhibited as 152/3 which dt. 20.3.89 and on the basis of the said application the current a/c No. 5331 was opened. The application form Ext. 152 is in the handwriting of accused S.K Agarwal which is exhibited as Ext. 152/4.
Ext. 153 is the letter dt. 23.3.89 issued by Chief (credit) of New Bank of India New Delhi addressed to the Branch Manager A Block regarding the release of the term loan to the accused company against the construction of the building and interior decoration. Ext. 153/1 is the signature of Shri. V.K Rangacharyulu the accused and it also bears the initials and writings of Shri. R.K Sabharwal which is exhibited as Ext. 153/2.
Ext. 154 is the account opening form dt. 9.4.90 of Shri S.K Agarwal and Shri. S.S Rastogi for opening a new account under the name and style of M/s Rainbow Fashion to the new bank of India, Tolestyle Branch. The cheque form was signed by Shri. S.K Agarwal and S.S Rastogi which are exhibited as Ext. 154/1 and 154/2. As per the endorsement and his signature marked as Ext. 154/3 the signature of Shri. S.K Agarwal marked as Ext. 154/4 were verified by him as per the record already available in our Branch.
He has also gone through to some extent the other related records for processing the loan to the accused company only after he joined the bank and the irregularity came into light. He can say that there was violation of the procedure for processing and sanctioning the term loan and other facilities to the accused company which was not in confirmative with the instructions, manual i.e volume III of the Bank.
In his cross examination, he stated that he was the accountant of the Branch concern at the material point of time. He inspected the Unit at Shillong in June 1989 and he submitted my report to the Branch. It was stipulated in the original sanction letter that all the terms and conditions applicable to the above type of facilities and it has to be in the sanction letter as a usual process but he is not sure whether the said terms and conditions were incorporated in the sanction letter. The Branch of the concern bank including sanctioning authority were required to comply with all the terms and conditions of the loan. The terms and conditions were not followed while making payment to the concern Co. (M/s Tricon Hotel Pvt. Ltd.) in respect to sanction of amount and marking the same as withdrawal limit in the concern ledger sheet.
Ext. 26 is a demand draft in favour of Meghalaya Enterprises Pvt. Ltd. For a sum of Rs. 7,20,000/- dt. 29.3.89 Ext. 51 is a demand draft in favour of Assam Electronics for Rs. 85,000/- dt. 9.5.89 Ext. 45 is a demand draft in favour of M/s Assam Electronics for Rs. 11,91,000/- dt. 29.3.89 Three documents were issued against the loan sanction to the party as a direct payment to the suppliers.
Ext. 132, 133, 135, 137, 138, 139, 144 and 148 are cheques being made in cash and they are all approved by Shri. R.K Sabharwal the then Senior Manager and Shri. H.N Wadhwa the then Manager loans. They were all in respect of Working capital term loan. It is a fact that the payment were not made against the terms of the loan. Ext. 132, 133, 135, 137, 139, 144 and 148 the payment were received by Shri. S.K Agarwal. The Branch Manager of the concern bank Erstwhile New Bank of India since merged with Punjab National Bank recommended the loan proposal.
25. Appellant/accused Shri. Jaharlal Das @ Johar Das opened an account in the Indian Overseas Bank being A/C No. 541 on the basis of application dated 03.04.1989 (Ext.42). The application was signed by appellant/accused Shri. Jaharlal Das @ Johar Das. In order to find out whether the appellant/accused i.e Crl. Appl.13/2010 is the one who signed the said application form as Johar Das signature appearing in the application form had been sent to the expert for comparing with the specimen signature of the present appellant/accused Shri. Jaharlal Das @ Johar Das and the handwriting expert is of the opinion that it is the signature of the present appellant/accused Shri. Jaharlal Das @ Johar Das. The said amount received as term loan had been deposited in the said A/C No. 541. The appellant/accused Shri. Jaharlal Das @ Johar Das was introduced by the appellant/accused Shri. D.K Chakravarty and accused Shri. S.K Agarwal for opening the said A/C No. 541. The appellant/accused Shri. D.K Chakravarty and accused Shri. S.K Agarwal also opened an account being A/C No. 542 in the Indian Overseas Bank on the same day i.e 03.04.1989 in their personal names. The amount deposited in A/C No. 541 had been transferred through Draft to the said A/C No. 542 and the money had been withdrawn by Shri. D.K Chakaravarty appellant/accused and accused Shri. S.K Agarwal. Appellant/accused Shri. D.K Chakravarty and accused Shri. S.K Agarwal issued a cheque of Rs. 85,000 (Ext.145) in favour of Assam Electronics owned by the appellant/accused Jaharlal Das @ Johar Das.
26. Under Limit No. I which reads as follows:-
“LIMIT NO. I
Nature & Extent of Facility: Term loan of Rs. 18.50 lacs (Rupees eighteen lacs fifty thousand only). Rate of Interest: 15% p.a
Purpose: completion of construction of Hotel building and interior decoration having total cost of Rs. 38.65 lacs. Margin: 50%
Security: Equitable Mortgage of leased Hotel building having total value of Rs. 38.65 lacs Repayment: The loan shall be repaid in equal quarterly installments in 5 years with moratorium period of 9 months besides interest.
Note: The term loan for the construction shall be released in stages at any stage bank's borrowings shall not exceed 50% of the total amount spent on additional construction. The payment shall be made only after receipt of Architect's certificate in this connection.”
The payment of the term loan of Rs. 18.50 lacs shall be made only after receipt of the Architect's certificate in this connection. For getting the said term loan, the appellant/accused Shri. D.K Chakravarty has to obtain the Architect certificate and the appellant/accused Shri. D.K Chakravarty managed to obtain 6(six) certificates from the appellant/accused Shri. A.D Purkayastha (Crl. Appl. No. 12/2010) (Ext.188/1, 188/2, 188/3, 184/4, 185/5 and 186/6) which reads as follows:-
“TO WHOM IT MAY CONCERN
I hereby certify that the value of total construction on the site of Hotel Project of Tricon Hotel Pvt. Ltd. at plot No. 9, 123, Thana Road, Police Bazar, Shillong as on 10th February, 1989 is approx. Rs. 15,50,000/- including structural construction and construction material lying on the site.
I further certify that the construction work at the above site is in progress.
Sd/- For Aparesh D. Purkhayastha
Shillong, 10th Feb., 1989.
TO WHOM IT MAY CONCERN
I hereby certify that total construction carried out at the site of Hotel Project of Tricon Hotels Pvt. Ltd. at Plot No. 9, 123, Thana Road, Police Bazar, Shillong as on 4.3.1989 is worth approximately Rs. 25.64 lacs.
I have verified the contractor's bills on the basis of measurement checked by us. The value has been assessed on the basis of current market rate of materials and labour charges applicable in the city of Shillong.
1. Cost of Construction of ceiling 120’ × 84 Rs. 15.75 lacs
2. Cost of main/service stair cases Rs. 1.75 lacs
3. Cost of water/sewerage, underground tanks Rs. 1.25 lacs
4. Cost of partition and plaster Rs. 2.61 lacs
5. Cost of construction good lying at site Rs. 3.18 lacs
6. Pee paid to us on account Rs. 0.50 lacs
7. Supervisior cost Rs. 0.60 lacs Rs. 25.64 lacs Appr Shillong
4.3.1989
Sd/
For Aparesh D Purkayastha
TO WHOM IT MAY CONCERN
I hereby certify that further to my certificate dated 4.3.1989 the following construction work has been carried out at the site of Hotel Project of Tricon Hotels Pvt. Ltd. till 26.3.1989
1. Partioning/Plastering/Plumbing work a) Completion of 17 rooms b) Completion of Reception/Lounge Area c) Completion of Restaurant d) Completion of Kitchen/Stores Rs. 6.32 lacs
2. Construction certified as earlier Rs. 22.46 lacs
3. Construction goods lying at sites a) As per last certificate Rs. 3.18 lacs b) Less consumed Rs. 2.18 lacs Rs. 1.00 lac Total Rs. 29.79 lacs
Shillong, Sd/
27.3.1989 For Aparesh D Purkayastha
TO WHOM IT MAY CONCERN
I hereby certify further to my certificate dated 8.4.1989 the following work has been carried out at the site of Hotel Project of Tricon Hotel (P) Ltd. till 30.04.1989
1. Completion of civil work on 2000 sq.ft Rs. 4.00 lacs
2. As certified earlier Rs. 33.00 lacs Rs. 37.00 lacs
Shillong, Sd/
4.3.1989 For Aparesh D Purkayastha
TO WHOM IT MAY CONCERN
I hereby certify that further to my certificate dated 27.2.1989 the following work has been carried out at the site and Hotel Project of Tricon Hotel (P) Ltd. till 8.4.1989
1. Completion of work on 5000 sq.ft as per Rs. 33.00lacs as per drawing attached a) As certified earlier Rs. 29.79 lacs b) During the period Rs. 3.21 lacs Rs. 33.00 lacs
2. Construction goods lying at site NIL Rs. 33.00 lacs
Shillong, Sd/
4.3.1989 For Aparesh D Purkayastha
TO WHOM IT MAY CONCERN
I hereby certify that further to my certificate dated 1.5.89 The following work has been carried out at the site of Hotel Project of Tricon Hotels (P) Ltd., bill on 30.06.89
1. Completion of Civil work as certified earlier Rs. 37.00 lacs
2. Plumbing, sanitary, works carried out Rs. 4.50 lacs Total Rs. 41.50 lacs
Shillong, Sd/
4.3.1989 For Aparesh D Purkayastha”
27. M/s Tricon Hotel Pvt. Ltd. did not utilize the loan obtained from the New Bank of India for carrying out the civil, plumbing, sanitary and other works. PW 33 Shri. Balraj Chadha, Executive Engineer, Centre Division, Meghalaya, CPWD, Shillong stated that during 1992 he was working as Executive Engineer, Meghalaya Central Division, CPWD, Shillong and he worked in that capacity till April/1995.
He, received a request from the Superintendent of Police, CBI, Shillong vide his letter dt.2.9.1993 being No. 6308/3/1(A)/92-SHG to evaluate a Three Star Hotel proposed to be constructed on a semi-constructed building situated at Ward No. 9, 123 Thana Road, Shillong and in pursuance to the aforesaid letter he along with one of his subordinate Assistant Engineer namely Shri. R.C Roy evaluated the semi-constructed building having the dimension stated in the letter dtd.2.9.93 and submitted the report to the Superintendent of Police vide his letter No. 1(2)/A/93-MGCD/98 dtd.14.10.93 along with the detail measurement and cost of the work done as prevailing during the year 1989.
The building was identified by the Inspector CBI Shri. G.K Das. He has no personal knowledge about the ownership of the building. He has not been examined by the CBI and he has not given his statement in this case. He has measured the building on the basis of items specified in the Ext.171 He has confined himself only to the requirement given by the CBI vide Ext.171 and besides that, he has not measured any other thing. He has evaluated the items on the basis of Calcutta Schedule of Rates of 1987 of CPWD and duly enhanced the rates to 1989 as per the Shillong cost index prevailing in 1989. Schedule rate is a standard book though he has mentioned all the references of rates in his report but he has not enclosed the schedule rate along with his report.
28. Ext.172 is the report submitted by him (PW 33). According to him, the costs of the work for all the rooms in the First floor and four rooms in the Ground floor and one on Basement would be around Rs. 2,81,300.00/-(Rupees two lacs eighty one thousand and three hundred) only. It would be very clear that certificates issued by the appellant/accused Shri. A.D Purkayastha (Crl. Appl. No. 12/2010) did not correctly speak civil and other contract works executed by the appellant/accused D.K Chakravarty and M/s Tricon Hotel Pvt. Ltd. On the basis of the said certificates issued by the appellant/accused Shri. A.D Purkayastha further loan had been released and misappropriated later on. The signature appearing on the said Architect certificates and the specimen signatures of appellant/accused Shri. A.D Purkayastha were sent to the handwriting expert for examination. The handwriting expert submitted opinion dated 21.05.1993 (Ext.193) that the signatures on the said Architect certificates are the signatures of the appellant/accused shri. A.D Purkayastha. The handwriting expert was examined as PW 37.
29. Learned counsel for the appellants/accused strenuously contented that in case the prosecution case is accepted, there shall be only civil action against the appellants/accused by filing the civil suit for recovery of the loan amount released to M/s Tricon Hotel Pvt. Ltd. It is trite law that merely because civil action is pursued, it does not render criminal action impermissible. Both civil and criminal action can be leveled. Both criminal and civil law can run simultaneously. For this point, it would be sufficed to refer to (1) CBI v. Duncans Agro Industries Ltd.: AIR 1996 SC 2452: (1996) 5 SCC 591 (2) Collector of Central & Custom v. Pradip Port Trust: (1990) 4 SCC 250 (3) M.S Sherrit v. State of Madras: AIR 1954 SC 397 (4) ALPIC Finance Ltd. v. P. Sadansivan, (2001) 3 SCC 513 (5) Medchl Chemical and Farma Ltd. v. Biological E. Ltd.: AIR 2000 SC 1869: (2000) 3 SCC 269 and (5) Joswant Rai v. State of Bombay: AIR 1956 SC 572.
The Apex Court in ALPHIC Finance Ltd. case (Supra) (Para 9 & 10 of the SCC) held that:-
“9. In Pratibha Rani v. Suraj Kumar: (1985) 2 SCC 370: 1985 SCC (Cri) 180, the question arose that when the civil as well as the criminal remedy is available to a party, can a criminal prosecution be completely barred. In this case, the matter related to the stridhan property. The complainant alleged that her husband, father-in-law and other relatives misappropriated her jewellery and other valuable articles entrusted to them by her parents at the time of marriage. The complainant alleged that these dowry articles were meant for her exclusive use and that the accused misbehaved and maltreated her and ultimately he turned her out without returning the dowry articles. The accused filed a criminal miscellaneous petition under Section 482 for quashing the criminal proceedings and High Court quashed the same. The accused contended that the dispute was of a civil nature and no criminal prosecution would lie. Under that circumstances, this Court held in para 21 at pp.382-83 as under:
“There are large number of cases where criminal law and civil law can run side by side. The two remedies are not mutually exclusive but clearly coextensive and essentially differ in their content and consequence. The object of the criminal law is to punish an offender who commits an offence against a person, property or the State for which the accused, on proof of the offence, is deprived of his liberty and in some cases even his life. This does not, however, affect the civil remedies at all for suing the wrongdoer in case like arson, accidents, etc. It is an anathema to suppose that when a civil remedy is available, a criminal prosecution is completely barred. The two types of actions are quite different in content, scope and import.”
10. The facts in the present case have to be appreciated in the light of the various decisions of this Court. When somebody suffers injury to his person, property or reputation, he may have remedies both under civil and criminal law. The injury alleged may form the basis of civil claim and may also constitute the ingredients of some crime punishable under criminal law. When there is dispute between the parties arising out of a transaction involving passing of valuable properties between them, the aggrieved person may have a right to sue for damages or compensation and at the same time, law permits the victim to proceed against the wrongdoer for having committed an offence of criminal breach of trust or cheating. Here the main offence alleged by the appellant is that the respondents committed the offence under Section 420 IPC and the case of the appellant is that the respondents have cheated him and thereby dishonestly induced him to deliver property. To deceive is to induce a man to believe that a thing is true which is false and which the person practicing the deceit knows or believes to be false. It must also be shown that there existed a fraudulent and dishonest intention at the time of commission of the offence. There is no allegation that the respondents made any willful misrepresentation. Even according to the appellant, the parties entered into a valid lease agreement and the grievance of the appellant is that the respondent failed to discharge their contractual obligations. In the complainant, there is no allegation that there was fraud or dishonest inducement on the part of the respondents and thereby the respondents parted with the property. It is trite law and common sense that an honest man entering into a contract is deemed to represent that he has the present intention of carrying it out but if, having accepted the pecuniary advantage involved in the transaction, he fails to pay his debt, he does not necessarily evade the debt by deception.”
The Apex Court in Medchl Chemical and Farma Ltd. case (Supra) (Para 17 of the SCC) held that:-
“17. On a careful reading of the complaint, in our view, it cannot be said that the complaint does not disclose the commission of an offence. The ingredients of the offences under Section 415, 418 and 420 cannot be said to be totally absent on the basis of the allegations in the complaint. We, however, hasten to add that whether or not the allegations in the complaint are otherwise correct has to be decided on the basis of the evidence to be led at the trial in the complaint case but simply because of the fact that there is a remedy provided for breach of contract, that does not by itself clothe the court to come to a conclusion that civil remedy is the only remedy available to the appellant herein. Both criminal law and civil law remedy can be pursued in diverse situations. As a matter of fact they
“are not mutually exclusive but clearly coextensive and essentially differ in their content and consequence. The object of criminal law is to punish an offender who commits an offence against a person, property or the State for which the accused, on proof of the offence, is deprived of his liberty and in some cases even his life. This does not, however, affect the civil remedies at all for suing the wrongdoer in case like arson, accidents, etc. It is an anathema to suppose that when a civil remedy is available, a criminal prosecution is completely barred. The two types of actions are quite different in content, scope and import”. (vide Pratibha Rani v. Suraj Kumar: (1985) 2 SCC 370: 1985 SCC (Cri) 180) (SCC p.747, para 3.)”
The Apex Court in Duncans Agro Industries Ltd.: case (Supra) (para 28 of the SCC) held that:-
“28. Although Mr. Tulsi, the learned Additional Solicitor General, is justified in his submission that a particular act may constitute both civil wrong as well as criminal wrong and merely because a civil action is also pursued, it does not render the criminal action impermissible. In the facts of the case, it appears to us that long after the completion of civil suits, the further investigation in connection with the complaints may not be expedient. It may be noted that the opinion given by the Senior Manager (Legal) that the credit facility which was given to DAIL for its tobacco division should be transferred to the newly formed Company, namely, New Tobacco Company Limited, it cannot be held to be per se mala fide or illegal in view of the provisions of Section 394 of the Companies Act. That apart, the legal opinion of the said Senior Manager (Legal) was placed for consideration by the highest administrative body of the Bank i.e the Board of Directors and the decision was taken by the Board that the credit liability which stood in favour of DAIL should be transferred in favour of the New Tobacco Company Limited. In the aforesaid circumstances, it appears to us that even if the Senior Manager (Legal) or any other officer of the Bank had not acted properly, in view of the fact that the ultimate decision was taken by the Board of Directors, it cannot be reasonably held that some of the officers of the Bank connived and misled the Board. It may be noted that no allegation has been made against the Member of the Board.”
30. For the foregoing reasons, this Court is of the considered view that these appeals are devoid of merit. However, taking into consideration of the age of the appellants/accused and also their behaviors during pendency of the trial as well as the present appeals, the term of sentence awarded by the learned Special Judge for the different offences are reduced to the extent that sentence of two years for the offences under Sections 468, 465 IPC and 13(2) of the P.C Act, 1988 which are to run concurrently awarded to appellant/accused Shri. V.K Rangacharyulu (appellant in Crl. Appl. No. (SH)8/2010) and appellant/accused Shri. H.N Wadhwa (appellant in Crl. Appl. No. (SH)10/2010) are reduced to one year and sentence of two years for the offence under Section 471 r/w Sections 465, 120 and 420 IPC which are to run concurrently awarded to the appellant/accused Shri. D.K Chakravarty (appellant in Crl. Appl. No. (SH)14/2010) and appellant/accused Shri. Jaharlal Das @ Johar Das (appellant in Crl. Appl. No. (SH)13/2010) are reduced to one year and sentence of two years for the offence under Section 468 IPC to the appellant/accused Shri. A.D Purkayastha (appellant in Crl. Appl. No. (SH)12/2010) is reduced to one year; and in other words, sentence of 2 (two) years for different offences mentioned above which are to run concurrently awarded to the appellants/accused are reduced to the sentence of one year only. The appellants/accused have to surrender before the trial court i.e Special Judge (CBI), Shillong for serving their sentences within a period of eight weeks' from today.
31. The appeals are dismissed with the above modifications.
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