CRM-M-34998-2009 (O&M) [ 1 ] :::::::: IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH CRM-M-34998-2009 (O&M) Date of decision:21.09.2011. Punjab and Sind Bank ...Petitioner Versus State of Punjab and others ...Respondents CORAM: HON’BLE MR. JUSTICE RAKESH KUMAR JAIN Present: Mr. R.P.Goyal, Advocate, for the petitioner. Mr. R.S.Rawat, AAG, Punjab, for respondent Nos.1 to 3. Mr. Ashok Aggarwal, Advocate, for respondent No.4/CBI. None for respondent No.5. Mr. Sandeep Punchhi, Advocate, for respondent No.6. Mr. Shashikant Gupta, Advocate, for Mr. L.M. Gulati, Advocate, for respondent Nos.7 & 8. None for respondent Nos.9 to 14. Mr. D.S.Gurna, Advocate, for respondent No.15. Mr. Sukhraj Singh Brar, Advocate, for respondent No.16. ***** RAKESH KUMAR JAIN, J. This petition is filed by the Punjab & Sind Bank, Branch at Kotkapura, District Faridkot under Section 482 of the Code of Criminal Procedure, 1973 [for short “Cr.P.C.”] for transfer of the investigation of the case FIR No.80 dated 05.05.2009, registered under Sections 420, 465, 467, 468, 471, 477-A, 120-B/109 of the IPC at Police Station Kotkapura, CRM-M-34998-2009 (O&M) [ 2 ] :::::::: District Faridkot to the Central Bureau of Investigation [for short “CBI”] in terms of the Circular dated 30.03.2005 issued by the Central Vigilance Commission, Government of India [for short “CVC”] and the guidelines dated 01.07.2008 issued by the Reserve Bank of India [for short “RBI”]. The brief skeletal facts are that the petitioner-bank filed a complaint dated 28.04.2009 to the SSP, Faridkot for registration of a case against Surjit Singh son of Lal Singh, the then Rural Development Officer, posted at Kotkapura Branch, for committing a fraud of `10,58,000/-. The petitioner-bank further filed a supplementary complaint dated 04.05.2009 in continuation of the complaint dated 28.04.2009, after detecting fraud of `2,85,19,909/-, on the basis of which FIR No.80 dated 05.05.2009 was registered against Surjit Singh, Jagmohan Singh Kochhar, Sukhwinder Singh, Sulkhan Singh, Roshan Lal Gunman, Paramjit Singh Daftari, Mukhtiar Singh, Gurcharan Singh, Darshan Singh Booga, Arpinder Singh Sehgal, Amarjit Singh Chawla and Surjit Singh Randhawa. The petitioner-bank constituted a fact-finding committee, who scrutinized the bank records and submitted its report on 25.07.2009 as per which the aforesaid persons allegedly caused a loss to the bank to the tune of `4,60,50,542.08/-. As a matter of fact, the total loss caused to the bank was assessed at `4,87,57,342.08/-. According to the case of the prosecution, after investigation, Darshan Singh Booga was found innocent and the challan was presented on 02.09.2009 in terms of which charge was framed on 25.02.2010. In this case, out of 9 accused, one Paramjit Singh Daftari has already expired and three accused, namely, Jagmohan Singh Kochhar, A.S.Chawla and Gurcharan Singh are still absconding and are declared proclaimed offenders, whereas 5 accused, namely, Sukhwinder Singh, Sulkhan Singh, Roshan Lal Ghuman, Arpinder Singh Sehgal and Mukhtiar Singh are facing trial. One of the co-accused, namely Surjit Singh, the then Rural Development Officer, is on bail under Section 167(2) of the Cr.P.C. and is absconding. The present petition has been filed by the petitioner-bank during trial for transfer of investigation to the CBI in terms of the Circular dated 30.03.2005 (Annexure P-2) issued by the CVC, as in a case of fraud with the bank involving an amount of more than `1 Crore in which the staff of the bank is also involved, the said case has to be referred to CBI for investigation and not to the local police. It is the case of the petitioner- CRM-M-34998-2009 (O&M) [ 3 ] :::::::: bank that a representation dated 02.09.2009 (Annexure P-3) was also sent to the Government of Punjab for transferring investigation of the present case to the CBI but it had no effect. Hence, the present petition has been filed by invoking inherent jurisdiction of this Court. Notice of motion was issued in this petition on 21.12.2009 pursuant to which respondent Nos.1 to 3 had filed reply on 07.03.2010 by way of an affidavit of Bikramjit Singh, DSP, Kotkapura. Another reply was filed by the same officer on 18.04.2010. The CBI has filed its reply on 11.03.2010 and in terms of the order passed by this Court on 12.01.2011 as to why the representation (Annexure P-3) made to respondent No.2 with a request to transfer the investigation to respondent No.4 has not been decided till date, an affidavit/reply dated 07.02.2011 of Dilbag Singh Pannu, DSP, Kotkapura is also filed. No other reply has been filed by rest of the respondents. Learned counsel for the petitioner has submitted that at the time of initial complaint dated 28.04.2009 made to the local police, the bank could only detect a fraud of `10,58,000/- which rose upto `2,85,19,909/- in the supplementary complaint dated 04.05.2009 on the basis of which FIR No.80 dated 05.05.2009 was registered. It is submitted that there is an office order dated 30.03.2005 of the CVC (Annexure P-2) by which limit of the cases to be necessarily referred to the CBI was raised from `25 Lakh to `1 Crore. It is provided therein that where the amount involved is between `1 Crore to `5 Crore and involvement of the bank staff is prima facie evident, then the investigation should be referred to the CBI (Anti Corruption Wing) and where the involvement of the bank staff is not prima facie evident, then to the CBI (Economic Offences Wing) and all other cases where the amount involved is less than `1 Crore are to be referred to the local police for investigation. It is also submitted that similar guidelines have been issued by the RBI on 01.07.2008 to the Chief Executives of all the commercial banks (excluding RRBs) and financial institutions through its Master Circular regarding Frauds-Classification and reporting in which Clause 6.2 also provides that in case of fraud with the bank between `1 Crore to `5 Crore in which involvement of the bank staff is prima facie evident, the investigation should be conducted by the CBI (Anti Corruption Branch) and if the involvement of the bank staff is not prima facie evident, then by CRM-M-34998-2009 (O&M) [ 4 ] :::::::: the CBI (Economic Offences Wing). Learned counsel for the petitioner has further submitted that the petitioner had also made a representation dated 02.09.2009 (Annexure P-3) to respondent No.2 for transfer of the investigation to the CBI which has not been decided by the concerned quarters. In support of his submissions, learned counsel for the petitioner has relied upon a decision of the Constitution Bench of the Supreme Court in the case of State of West Bengal & Ors. v. The Committee for Protection of Democratic Rights, West Bengal & Ors., JT 2010 (2) SC 352 and a judgment of the Supreme Court in the case of Rubabbuddin Sheikh v. State of Gujarat & Ors., 2010(1) R.C.R. (Criminal) 738. Only respondent Nos.1 to 3 (State of Punjab) have contested this petition as private respondents had not filed any reply and the CBI has shown only one reservation that they would investigate this matter only under the same FIR. The stand taken by the State of Punjab is that after the investigation, challan has already been presented, charge has been framed and the prosecution evidence is being recorded, therefore, there is no need to transfer the case to CBI for further investigation. In reply to para no.9 of the petition, it is alleged that a letter from the office of Additional Director General of Police, Crime Branch, Punjab, Chandigarh has been received in the office of the SSP, Faridkot regarding which the necessary action is under process. It requires pertinent notice that this reply is to the representation dated 02.09.2009 (Annexure P-3) filed by the petitioner. It is also alleged by the State that the office order dated 30.03.2005 (Annexure P-2) is advisory in nature and it does not specifically debar the State from investigating the matter by the local police. In the reply filed by the CBI, it is alleged that there are guidelines of the CVC wherein it is mentioned that fraud in the public sector banks by its employees between `1 Crore to `5 Crore is to be investigated by the CBI but it cannot take any action in this regard because as per Delhi Special Police Establishment Act, 1946 [for short “the Act”], if an FIR is already registered by the local police, then the CBI can take up investigation only on the request of the concerned State or on the directions of the Court. In the affidavit of Dilbag Singh Pannu, DSP, Kotkapura filed in terms of the order dated 12.01.2011 passed by this Court during the CRM-M-34998-2009 (O&M) [ 5 ] :::::::: proceedings of this case, SSP, Faridkot constituted a Committee consisting of Vijay Kumar Sharma, S.P.(D), Faridkot, Bikramjeet Singh, DSP, Sub-Division, Kotkapura and Gurdarshan Singh, Inspector/SHO, Police Station Kotkapura for investigation of the matter. The challan was presented on 02.09.2009 and later on supplementary challans were also presented. It is also alleged that the trial is going on and the material witnesses have already been examined. The affidavit was filed in order to answer the query of the Court as to what has been done by the State to the representation dated 02.09.2009 (Annexure P-3) in which it is replied that it was received in the office of the SSP, Faridkot vide No.38/PC2/10 dated 25.02.2010 after the challan was presented, therefore, the request made therein could not have been considered at that time as the cognizance of offence had already been taken by the learned Trial Court. It was also alleged that an inquiry was conducted on the representation Annexure P-3 in which it was concluded that since the matter involved in the representation is now the subject matter of the present petition, therefore, no action is required to be taken as per the report sent to the ADGP, Punjab by the SSP, Faridkot on 31.03.2010 vide No.38/PC-2/10. It is also alleged that the local police has no jurisdiction or power to transfer any case suo motu to the CBI. I have heard learned counsel for the parties and perused the available records with their able assistance. The question involved in this case is as to “whether a direction can be issued by this Court for further investigation under Section 173(8) of the Cr.P.C. by CBI or any other independent investigating agency when the charge-sheet has already been submitted by the local police after investigation of the crime”. As per the case set up by the petitioner, complaint dated 28.04.2009 was made to the local police for registration of a case after detecting a fraud of `10,58,000/- by the employees of the bank, but a supplementary complaint was made on 04.05.2009 after detecting the fraud of `2,85,19,909/- on the basis of which the local police had registered the FIR on 05.05.2009. The bank had constituted a fact- finding committee which had submitted a preliminary report on 25.07.2009, according to which the net loss caused to the bank was assessed as `4,60,50,542.08/- which, on further investigation, rose upto CRM-M-34998-2009 (O&M) [ 6 ] :::::::: `4,87,57,342.08/-. The challan was presented immediately thereafter on 02.09.2009 apparently on the basis of the fact-finding committee's report of the bank in which there was hardly any contribution of the investigating agency. The key-player of the fraud is Surjit Singh, the then Rural Development Officer, against whom the challan was presented after 92 days who had got bail in terms of default clause of Section 167(2) of the Cr.P.C. and is absconding since then. The other officials of the bank, namely, Jagmohan Singh Kochhar (Branch Manager), A.S.Chawla (Branch Manager) and Gurcharan Singh (Manager) are absconding and have been declared proclaimed offenders, therefore, the challan has not been filed against them so far. The prosecution had filed multiple challans much-less 7 in number on the same date, i.e. 02.09.2009. It has not been argued by respondents that in terms of the order of the CVC dated 30.03.2005 (Annexure P-2) and the guidelines dated 01.07.2008 (Annexure P-5) issued by the RBI, in case of embezzlement between `1 Crore to `5 Crore by the bank staff, the investigation of the case got registered by the bank is to be carried out by the CBI. All that has been said is that since the prosecution evidence is being recorded, therefore, at this stage, there is no requirement of transferring investigation of this case to the CBI. Learned counsel for the CBI has conceded that the matter has to be necessarily referred to the CBI in terms of the aforesaid order (Annexure P-2) and guidelines (Annexure P-5) and they are obliged to further investigate the matter but they can do it under the same FIR as no fresh FIR can be registered. In State of West Bengal and others' case (supra), the issue before the Constitution Bench was as to whether the High Court (in exercise of its jurisdiction under Article 226 of the Constitution of India) can direct the CBI to investigate a cognizable offence which is alleged to have been committed within the territory of a State without the consent of the State Government. The answer to the question was that the High Court in exercise of its jurisdiction under Article 226 of the Constitution of India can direct the CBI to investigate a cognizable offence which is alleged to have been committed within the territory of a State without the consent of the State Government as it will neither impinge upon the federal structure of the Constitution nor violate the doctrine of separation of power and shall be valid in law. CRM-M-34998-2009 (O&M) [ 7 ] :::::::: The question posed in the present case has been squarely answered by the Supreme Court in Rubabbuddin Sheikh's case (supra) in which while relying upon various decisions of the Supreme Court, it was held that the Court can still order for further investigation in terms of Section 173(8) of Cr.P.C. of a crime by the CBI or any other independent investigating agency in which local police has already filed the charge sheet. In the present case, large number of entries in the books of accounts of the bank, which have been interpolated or maneuvered by the bank staff who are involved in this crime, are required to be detected which requires special expertise. The key-accused, namely, Surjit Singh has been allowed bail under Section 167(2) of the Cr.P.C. by default of the local police who had presented challan against him after expiry of the statutory period of 90 days and since then he is absconding. Moreover, in the face of order dated 30.03.2005 (Annexure P-2) of the CVC, guidelines dated 01.07.2008 (Annexure P-5) of the RBI and the fact that the representation was made by the petitioner on 02.09.2009, which is admittedly received by the respondent Nos.1 to 3 but still they have been proceeding in this case, in my view, the matter should have been stopped at the stage of moving representation dated 02.09.2009 (Annexure P-3) and should have been referred to the CBI for investigation by the State Government. In any case, keeping in view the facts and circumstances of the case, even at this stage the local police authorities of the State are directed to hand over the records of the present case to the CBI authorities within a fortnight from the date of receiving a certified copy of this order and thereafter the CBI authorities shall take up the investigation and complete the same within six months from the date of taking over the investigation from the State police authorities and act in accordance with law. The Registry is directed to send copies of this order to the Director, CBI, the Secretary, Ministry of Home Affairs, Government of India and the Secretary, Home Ministry, State of Punjab. September 21, 2011 (RAKESH KUMAR JAIN) vinod* JUDGE