1 IN THE HIGH COURT OF JUDICATURE AT BOMBAY CRIMINAL APPELLATE JURISDICTION CRIMINAL REVISION APPLICATION NO. 137 OF 2010 Arvind Madan Mahajan ... Petitioners (Orig.Accused No.7) Vs. The State of Maharashtra ... Respondents (Orig. Complainant) Mr. Rajiv Patil i/b. Mr. Sachin Punde,Advocate, for the petitioners. Ms. A.T.Javeri, APP, for the respondent No.1 - State. Mr. Sandeep K.Shinde a/w. Mandar Goswami, Advocates, for the respondent No.2 - CBI. CORAM: J.H.BHATIA, J. DATE : 15th June, 2010. P.C. 1. The revision applicant is the original accused No.7 in CBI Special Case No. 63 of 2006 on the file of the Special Judge for CBI Cases for Greater Bombay. According to the prosecution, the petitioner had issued a valuation report dated 15.4.2002 in respect of six shops and seven flats situated at Malad wherein he had shown the exaggerated value of the property at Rs.2,72,50,000/-. On the basis of that valuation report, Central Bank of India, Andheri Branch, sanctioned 2 credit facility to the tune of Rs.1.15 crore in favour of M/s. Bharat Intfab. It is contended that J. Kangrajan, Branch Manager of the Bank used the forged documents and abused his official position as a public servant and helped accused Nos. 1 and 3, partners of M/s. Bharat Intfab in obtaining the loan and cash credit facility. Accused No.2 was a Chartered Accountant. Accused No.6 was an Advocate who had issued the title report and accused Nos. 4 and 5 were the guarantors for that loan. The Branch Manager, Kangrajan was accused No.8 and is no more alive. In the present matter,we are not concerned about the allegations against the other accused. 2. It is contended that as per the valuation of the said property made by the approved valuer, the valuation of the six shops and six flats was Rs. 81,53,000/-. The approved valuer had not given the valuation of one of the flats, being flat No.23. Admittedly, the area of that flat was also almost equal to the other flats. According to the prosecution, there was a criminal conspiracy among all the accused persons, including the present applicant and they wanted the Bank to advance loan to the partners of M/s. Bharat Intfab on the basis of the inflated value of the property and the Bank had advanced huge credit facility on the basis of that report and thus the Bank was cheated. After investigation, CBI filed charge-sheet under Sections 420, 468, 471 read with Section 120-B I.P.C. and 3 under section 13(2) read with Section 13(1)(d) of the Prevention of Corruption Act. 3. The present applicant/accused No.7 submitted Misc. Application No. 149/2008 seeking discharge on the ground that there was no material to implead him in this criminal case and to frame a charge. However, that application came to be rejected by the learned Special Judge. According to the learned Special Judge, the Bank had acted upon the valuation report submitted by this applicant and, therefore, he should also be treated to be party to the conspiracy. 4. Heard the learned Counsel for the parties. 5. Admittedly, whenever any application for loan against immovable property is sought, the Bank officers are expected not only to seek the title report, but also the valuation report about the same from the approved valuer of the Bank. Admittedly, the present applicant was not on the panel of the approved valuers nor he had issued the valuation report on the request made by any Bank officer. He had prepared and handed over the valuation report to accused Nos. 1 and 3 on their request.He had valued the property consisting of six shops and seven flats. According to the report, the value of the property was Rs.2,72,50,000/-. The 4 valuation report shows that he had calculated the value at the rate of Rs.8,000/- per sq. ft. in respect of the shops and at the rate of Rs.3,000/- per sq. ft. for the flats. The report reveals that he had taken the super built-up area for the purpose of calculation of the value of the property. The report also reveals that he had assessed the rate on the basis of market rate publication from the local estate agents, ready reckoner and publication from the "Accommodation Times". He has produced a copy of the Accommodation Times for the period 1st to 15th June, 2002 showing the property rates in different areas of Mumbai and Navi Mumbai. For Malad, for residential area, the rates were shown as Rs.1800 to Rs.2600/- while for commercial property, the rates were shown to be Rs.3,000/- to Rs. 4,500/-. In the note in the opening para of that publication, it was mentioned that rates may be more by 50 to 100% depending on the location, amenities, etc. From this, it appears that while the rates applied by the applicant for calculation of the valuation were slightly more than the maximum rate of the residential price and were substantially more than the maximum rate of commercial property, but if the note in the said Accommodation Times is looked into, the value could be 50 to 100% more than the rates shown in the list depending on the location, amenities, etc. and if that note is taken into consideration, the rate taken by the applicant for calculation of valuation could be possible. 5 3. The approved valuer has given valuation of the three shops and six flats at Rs.64,26,000/- and for remaining 3 shops he has given valuation at Rs. 17,71,000/-. The total valuation of the 6 shops and 6 flats comes to Rs. 81,33,000/-, He had not valued flat No.23, As the area of that flat was almost equal to other flats taking into consideration the valuation made by the approved valuer, the valuation of the said excluded flat No.23 could be slightly more than Rs.8 lakh. If the value of that property is included, the total value of the six shops and seven flats would be around Rs.90 lakh according to valuation by approved valuer. 4. It is material to note that the approved valuer has calculated the value of this property on the basis of the carpet area.It is the common knowledge that in Mumbai, the properties are sold on the basis of super built up area though the law expects that the properties should be sold on the basis of the carpet area. Recently, amendment was made in the MOFA to make it mandatory that the price should be charged on the basis of the carpet area, but the said amendment has not been brought into force as yet. This is the case of the year 2002 when there was no such provision.The learned Counsel for the applicant pointed out that the same valuer had submitted valuation report in respect of another property on the request of Punjab National Bank wherein he had calculated the value of the property on 6 the basis of super built up area which was about 40% more than the carpet area. In case of another property at Nashik, on request of State Bank of India, he had calculated the value on the basis of the saleable area which was about 35 to 40 per cent more than the carpet area. It shows that the approved valuer, while making the valuation of the property in dispute had not valued it as per the market norms and the practice. If the property would have been valued on the basis of super built up area or saleable area, the valuation could be around 40% more than what he had shown. It could be around Rs.1,26,00,000/-. 5. It is well settled position of law that the defence cannot be taken into consideration at the time of framing the charge. That can be looked into only at the time of trial and final decision of the matter. The charge has to be framed on the basis of the material before the Court produced by the prosecution. However, in this case, admittedly, the applicant was neither an approved valuer nor he had given valuation report on the request of the Bank. As per the standing instructions to the Bank, the Bank officers were expected to secure valuation report from the approved valuer which the Bank officer did not do. The Bank was not bound to accept the valuation report submitted by the present applicant, who was a private person and who was not responsible to the Bank in any manner. The applicant was not involved in the process of sanctioning the loan. He was not one of the 7 persons, who took the loan nor it is the case of the prosecution that he was beneficiary of the alleged conspiracy in obtaining the loan.There is absolutely no material to show that he was party to the alleged conspiracy. The only allegation against him is that the report was inflated and the Bank Manager had acted upon it without obtaining the report of the approved valuer. If the Bank Manager wrongly acted on such a report from a private person, he could be held guilty in a criminal case or in administrative action, but it is difficult to imagine how the present applicant could be prosecuted for a criminal charge including the charges under the Prevention of Corruption Act. In view of these facts and circumstances, I find that there is no material or substance on the basis of which the present application could be prosecuted for the alleged offence. Therefore, he is entitled to be discharged. 6. For the aforesaid reasons, the Revision Application is allowed. The impugned order is set aside and the applicant is hereby discharged of all the offences against him. (J.H.BHATIA,J.)