IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH. Criminal Appeal No.335-SB of 1997 Date of Decision: September 17, 2010 Banwar Lal Lodha .......Appellant Versus State of Punjab .......Respondent CORAM:- HON'BLE MR. JUSTICE JITENDRA CHAUHAN Present: Mr.Namit Sharma, Advocate as amicus curiae for the appellant (in Crl.A.No.335-SB of 1997). Mrs.Baljit K.Mann, Advocate for the appellant (in Crl.A.No.338-SB of 1997). Mr.Ajay Kaushik, Advocate for C.B.I. <><><> JITENDRA CHAUHAN, J. 1. This common judgment shall dispose of two criminal appeals, i.e. Crl.A.No.335-SB of 1997 and Crl.A.No.338-SB of 1997, both having arisen out of a single judgment dated 7.4.1997 passed by Special Judge, CBI, Patiala (Punjab) (hereinafter referred as “Trial Court”). However, the facts are being taken from Crl.A.No.335-SB of 1997. 2. There were two accused before the learned Trial Court i.e. the Special Judge, CBI, Patiala and they both were held guilty for the offences punishable under Section 120-B read with Section 420 and Section 420 of the Indian Penal Code. In addition, accused-appellant B.R.Sharma was also convicted under Section 13(i)(d) read with Section 13(2) of the Criminal Appeal No.335-SB of 1997 -2- Prevention of Corruption Act, 1988 (hereinafter referred as “the Act”). Both appellants were sentenced to undergo rigorous imprisonment for a period of six months and to pay a fine of Rs.1,000/- each under Section 120-B read with Section 420 of the Indian Penal Code, and in default of payment of fine, to further undergo rigorous imprisonment for one month. They were also sentenced to undergo rigorous imprisonment for a period of two years and to pay a fine of Rs.5,000/- under Section 420 of the Indian Penal Code and in default of payment of fine, to further undergo rigorous imprisonment for three months. Accused-appellant B.R.Sharma was also sentenced to undergo rigorous imprisonment for a period of two years and to pay a fine of Rs.2,000/-, and in default thereof, to further undergo rigorous imprisonment for three months under Section 13(i)(d) read with Section 13(2) of the Act. 3. Separate appeals were preferred by each of the accused- appellant. Crl.Appeal No.335-SB of 1997 was preferred by appellant Banwar Lal Lodha, whereas Crl.Appeal No.338-SB of 1997 was preferred by appellant B.R.Sharma. 4. The allegations appearing against both the appellants are briefly discussed below: Appellant-B.R.Sharma during his tenure as Branch Manager, State Bank of India, Kikkar Bazar Branch, Bathinda i.e. from 18.10.1986 to 28.12.1989, is alleged to have abused his official position by allowing the misuse of the facility of discounting of bills granted to M/s Oswal Cotton Company and M/s Oswal Enterprises in connivance with and through co- appellant Banwar Lal Lodha, who was the partner and Manager, respectively, of the aforementioned firms. It is alleged that the limit for Criminal Appeal No.335-SB of 1997 -3- availing the facility of discounting of bills was fixed at Rs.15 lacs each for both the firms which was exceeded by appellant-B.R.Sharma. Besides, exceeding the limit of Rs.15 lacs, appellant-B.R.Sharma also flouted procedure of the Bank by accepting the bills against truck receipts, instead of railway receipts, which was the prescribed condition. Also, appellant- B.R.Sharma did not involve the Field Officers, which exercise was required to be carried out as per the Bank rules. Against appellant-Banwar Lal Lodha, the allegations are that he submitted fake truck receipts, fake billities and in fact, never dispatched goods to the consignees qua which the bills were purchased by the Bank. Moreover, the consignee-firms itself were found to be fake. Thus, both the appellants entered into a criminal conspiracy to cheat and caused wrongful loss to the Bank. 5. The evidence appearing against appellant-B.R.Sharma, in support of the prosecution allegations, shall be taken up first and thereafter, this Court shall proceed to determine the culpability of appellant-Banwar Lal Lodha. The main allegations levelled against appellant-B.R.Sharma are that he wrongfully exceeded the limit of discounted bill facility which was extended to M/s Oswal Cotton Company and M/s Oswal Enterprises by his Branch; that he accepted truck receipts instead of railway receipts and that he did not involve the Field Officer to verify the bills and documents which were submitted by appellant – Banwar Lal Lodha. 6. Taking up the first allegation against appellant-B.R.Sharma that he exceeded the limit of Rs.15 lacs of the discounted bill facility without due authorization from the Regional Manager, it is relevant to highlight that appellant has nowhere denied that he exceeded the limit of Rs.15 lacs. However, he has very strongly defended his action on the ground that Criminal Appeal No.335-SB of 1997 -4- monetary limits are violated as a matter of routine. One of the main reasons for this is that there is too much pressure on the Branches to show good business/profits. Moreover, appellant - B.R.Sharma further deposed in his defence that monthly progress reports were sent to the Regional Office and this fact of violation of limit was all along in the knowledge of the Regional office. 7. The aforementioned contention of the appellant to the effect that limits set by the Bank are routinely exceeded, finds corroboration from the statement of DW1-Shri Parkash Chand, Field Officer, State Bank of India, Bathinda made before the Trial Court on 23.12.1996 wherein details were given regarding various other firms qua which the limit put by the Bank had been exceeded and this practice was in vogue, both prior and after the appellant B.R.Sharma had left the Bathinda Branch. This crucial defence evidence has been rejected by the learned Trial Court after observing that the accused-appellant cannot draw any benefit from mis- conduct of others. 8. In the opinion of this Court, the learned Trial Court could not appreciate the aforesaid defence plea in correct perspective. What was sought to be shown by referring to the statement of DW1-Parkash Chand, was the fact that the non-adherence of Bank limit is a normal practice, and hence, it cannot be termed as illegal as it is sought to be resorted to achieve the projected targets of business by the Bank. After examining the record of the Bank where the similar instances have been mentioned both prior and after the appellant left the Branch, I am of the view that it can at best be termed as an irregularity, especially, when viewed in the light of categoric statement of appellant – B.R.Sharma to the effect that monthly progress Criminal Appeal No.335-SB of 1997 -5- reports were sent to the Regional Office and they had the knowledge of the Bank limit having been exceeded. 9. The second allegation against appellant – B.R.Sharma is that he violated the Control Orders, vide which the discounted bills facility was extended and in lieu of railway receipts which was the stipulation, truck receipts were accepted while purchasing the discounted bills. In this regard also, DW1- Parkash Chand, Field Officer, State Bank of India, Bathinda, in his statement before the Trial Court produced the original liability register to show that qua various other firms also the Branch had been accepting truck receipts, in lieu of railway receipts, even prior to the posting of appellant-B.R.Sharma. In view of this testimony of DW1, it was not possible to conclude that appellant – B.R.Sharma had any dishonest intention or he abused his official position while accepting truck receipts in lieu of railway receipts. In this context, it would also be relevant to highlight the statement of Shri R.P.Pant, Regional Manager who also appeared as a prosecution witness. As per this witness, Bank Branches can permit the bank facility of bill purchase of documents accompanied by goods receipts issued by certain transport companies provided they are duly approved by the Indian Banks Association. This fact itself shows that stipulation of accepting railway receipts while purchasing discounted bills is not sacrosanct, which prima facie would show the genuineness of the truck receipts. 10. Apart from the aforementioned facts and finding thereon of this Court, other factor also points towards the innocence of appellant - B.R. Sharma. The confessional statement of appellant – Banwar Lal Lodha nowhere mentions about his connivance with appellant – B.R.Sharma. In Criminal Appeal No.335-SB of 1997 -6- fact, it has been recorded by the Trial Court that appellant-B.R.Sharma attested the confessional statement of Banwar Lal Lodha as a witness. Had there been any degree of conspiracy between the appellants, the same would have been reflected in the confession of appellant Banwar Lal Lodha. These apart, debit notes were also taken from Paras Mal for fake bills of M/s Oswal Cotton and from appellant – Banwar Lal Lodha for fake bills of M/s Oswal Enterprises. 11. The third allegation against appellant – B.R.Sharma is regarding not involving the Field Officers. This also loses its significance on the face of testimony of Shri Inder Chopra, Field Officer of the Bank who also appeared as prosecution witness, to the effect that from the year 1982 to 1985, Field Officers were not involved at the time of discounting D.D.P. bills. This statement was made by Shri Inder Chopra after perusing the vouchers of the aforesaid period i.e. 1982 to 1985. 12. Thus, viewed from any angle, this Court is unable to hold that appellant – B.R.Sharma misused his official position and caused wrongful loss to the Bank in conspiracy with the other appellant. 13. Adverting to the appeal filed by appellant - Banwar Lal Lodha, the allegations levelled against him and evidence in support of the same shall now be discussed. There is no doubt that truck receipts and accompanying documents like hundies, billities, insurance cover etc. were all fake. Even the so-called consignees, to whom the goods were allegedly sent, were also fake. This fact was duly proved by the prosecution. 14. The only defence raised by appellant-Banwar Lal Lodha is that he never submitted the bills in question for purchase by the Bank either for M/s Oswal Cotton or M/s Oswal Enterprises. Criminal Appeal No.335-SB of 1997 -7- 15. However, this plea of the appellant has been falsified by M.L.Sharma, Deputy G.E.Q.D., who appeared as PW19 as the signatures on all the documents were appended by appellant- Banwar Lal Lodha. 16. The third allegation against appellant – Banwar Lal Lodha is regarding not involving the Field Officer. This also loses its significance in the face of testimony of Shri Inder Chopra, Field Officer of the Bank who also appeared as prosecution witness, to the effect that from the year 1982 to 1985, Field Officers were not involved at the time of discounting D.D.P. bills. This statement was made by Shri Chopra after perusing the vouchers of the aforesaid period i.e. 1982 to 1985. 17. The allegation that truck receipts were fake and forged, is an allegation which can be validly tendered against appellant – Banwar Lal Lodha. The truck receipts were accompanied by insurance covers i.e. discounted bills, cheques, hundies etc. have been found to be of Banwar Lal Lodha. This crucial evidence has gone unrebutted. Coupled with this, his signatures have also been identified by Inder Raj Chopra, PW4, who was acquainted with the signatures of appellant- Banwar Lal Lodha. 18. It also stands proved that cheques vide which the money was withdrawn from the firms account bore the signatures of appellant- Banwar Lal Lodha. There is no gain in the appellants' plea that he had no knowledge that money was put in the account of the firms or that the bills were discounted without his knowledge. Confirmation of the fact that even the consignees were fake leaves no doubt about the intention of appellant- Banwar Lal Lodha to cheat the Bank. 19. In view of the above discussion, appellant – B.R.Sharma is acquitted of all the charges. Conviction of appellant- Banwar Lal Lodha Criminal Appeal No.335-SB of 1997 -8- under Section 420 of the Indian Penal Code is maintained. However, since no conspiracy is proved between the two appellants, his conviction under Section 120-B is set aside. 20. Both the appeals stand disposed of accordingly. 21. A photo copy of the order be placed on the file of connected case. ( JITENDRA CHAUHAN ) September 17, 2010 JUDGE SRM Note: Whether to be referred to reporter ? Yes/No