Babu Lal vs State of U.P. and Another

Ravindra Singh, J.—Heard Sri Anoop Trivedi, counsel for the applicant, learned A.G.A. for the State of U.P. and Sri Anurag Khanna, learned counsel for the C.B.I. This application u/s 482, Cr. P.C. has been preferred by the applicant Babu Lal with a prayer to quash the proceedings of Special Case No. 53 of 2011 under Sections 120B and 420. I.P.C. and Section 13(2) read with Section 13(1)(d), Prevention of Corruption Act pending in the court of learned Special Judge (C.B.I.), court No. 2, Ghaziabad arising out of Regular Case No. R.C. 1202008-A-0005.

The facts in brief of this case are that the F.I.R. has been lodged on the basis of a Complaint No. V.I.G./4310/2008/C.B.I.-289 dated 3.10.2008 sent by Sri K.B. Jayaprakash, General Manager and Chief Vigilance Officer of Canara Bank, H.O., Bangalore addressed to Superintendent of Police, C.B.I., S.P.E., Dehradun against the applicant Babu Lal, Ashok Kumar and Satya Pal Singh. The main contents of the complaint are reproduced below :

The omissions and commissions committed by the above named suspects in collusion with several private persons are narrated in the following columns :

Sri S. Babulal was functioning as Manager at Kirthal branch from October, 2003 to December, 2005. He was authorized and empowered to sanction among others tractor loans upto a limit of Rs. 5.00 lakhs. As per the laid down procedures of the Bank, a Branch Manager prior to sanction of a loan has to exercise utmost caution and diligence to protect interest of the bank and to prevent any fraudulent availment/disbursal of the loans. Prior to sanction of loans, copies of land records owned by the borrowers and proforma invoice of the machinery proposed to be purchased are to be produced by the party. The true copy of the R.C. book, in which the lien of the Bank was noted should be obtained by the Bank within one month of the disbursement of the loan. He had to also ensure proper appraisal/identification of the borrower to assess the technical feasibility and economic viability of the proposal prior to sanction of the loan.

During the aforesaid period, Sri S. Babulal had sanctioned and disbursed 22 tractor loans amounting to Rs. 105 lakhs to various borrowers. The details of the borrowers and the loan particulars are given in the annexure enclosed with this complaint. Amongst others, Sri Babulal had disbursed the tractor loans in the name of unknown/deceased persons on the basis of fake and forged records. In most of the instances, the tractors in question were never purchased/delivered but forged documents were produced to make the transactions appear as genuine. Sri Babulal conducted fraudulent pre and post sanction inspections despite the fact that the persons whose names were mentioned in the loan papers had in fact not availed the loan facility and in several instances, then photographs on the loan documents do not match with the actual persons in whose names the loans have been sanctioned/mentioned in the loan papers in some cases, even territorial scrutiny report of the Bank'' empanelled advocate pertaining to the collateral security property was found to be forged. In most of the instances, the so called borrowers denied having availed the loans and not even aware of such loans sanctioned in their names. The tractors which were supposedly financed by the Bank were fraudulently shown to have been purchased by the borrowers Indicated in the loan documents, when in fact the so called borrowers were having no knowledge of any tractor loan sanctioned/disbursed in their names. The demand drafts for tractor loans had been allegedly handed over to the middleman instead of giving the same directly to the dealer and delivery of tractor/trailer to the borrower had not been ensured. In most of the loans, registration certification copy for the tractors are not obtained due to which identification/verification of the security is difficult, In some instances, M/s. Delta Farm Services, Roorkee Road, Muzaffar Nagar had received the demand drafts for releasing the tractors for the so called borrowers but the said firm did not supply the tractors for which it returned the consideration from the Bank.

Shri Ashok Kumar and Shri Satyapal Singh, officers of Kirthal branch have processed the loan papers without conducting pre/post-sanction visits which have resulted in improper Identification of borrowers/ guarantors/co-obligants, availing loan by way of impersonation, sanctioning of loan in the name of borrowers who are reportedly deceased and to borrowers who are not traceable.

The Bank has suffered a total loss of about Rs. 105 lakhs towards the fraudulent disbursement of the loan from Shri S. Babulal, the then Branch Manager, Sri Ashok Kumar and Shri Satyapal Singh officers, in collusion with Sri Bhushan Jain (alias) Baniya, Sri Satender (alias), Pappu r/o Chapprauli village, Sri Anand of Lahoori village and Sri Ravinder of Chapprauli village who had acted as middleman and the tractor agency M/s. Delta Farm Services, Muzaffarnagar, U.P., had by abusing their official position as public servant, dishonestly and fraudulently cheated the bank to the extent of Rs. 105 lakhs by showing disbursal of tractor loans to unknown persons on the basis of fake and forged records.

Thus, Shri S. Babulal and other officials by misusing their official position had extended/ derived huge pecuniary advantage to the tractor dealers/salves, unknown others and siphoned off the proceeds of the loans.

Through this complaint, we request you to register a case against Shri B. Babulal, the then Branch Manager, Kirthal Branch, Sri Ashok Kumar and Satyapal Singh, both officers, Sri Bhushan Jain (alias) Baniya, Sri Satender (alias) Pappu of Chapprauli village, Sri Anand of Lahorri Village and Sri Ravinder of Chapprauli village, who had acted as middleman and M/s. Delta Farm Services, Muzaffarnagar, U. P. for criminal offence committed by them resulting in substantial loss to the bank.

Thanking you.

Yours Faithfully Sd... K.B. JAYAPRAKASH GENERAL MANAGER & CHIEF VIGILANCE OFFICER

The above facts prima facie disclose the commission of offences punishable u/s 120B read with 420, 467, 468, 471, I.P.C. and 13(2) read with 13(1) (d) of P.C. Act, 1988 against S/Sh. S. Babulal, the Sr. Manager, Canara Bank, Kirthal Branch, Distt. Baghpat, (U.P.) Satpal Singh and Ashok Kumar both officers of Canara Bank, Kirthal Branch, Distt. Baghpat, (U.P.) and Shri Bhushan Jain (alias) Baniya, Sri Satender (alias) Pappu of Chapprauli village, Sri Anand of Lahoori village and Sri Ravinder of Chapprauli village and M/s. Delta Farm Services, Muzaffarnagar, U.P. (all private persons).

On the basis of the above mentioned complaint the F.I.R. was registered and after completing the investigation the charge-sheet dated 31.3.2010 has been submitted in the court of learned Special Judge (Anti Corruption), C.B.I., U.P. (E), Ghaziabad under Sections 120B read with Section 420. I.P.C. and Section 13(1) read with Section 13(1) (d), Prevention of Corruption Act against the applicant Babu Lal, co-accused Satya Pal Singh, co-accused Satendra @ Pappu, co-accused Naresh Kumar Tyagi and co-accused Mangal Sen Tyagi. The investigation revealed that the Case Crime No. 144 of 2006 dated 14.6.2006 was registered at P.S. Ramala against Jitendra and Ravindra on the complaint of Sri Rajendra son of Sri Teeka under Sections 420, 467, 468, 471 and 506, I.P.C. on the allegation that fraudulent tractors loan from Canara Bank, Kirthal Branch, subsequently during investigation of the said case twenty seven more instances pertaining to fraudulent tractor loans were detected by local police. Thereafter, the matter was referred to the State Government for transferring of the investigation of the said case alongwith other instances to economic offences wing. Out of the total instances investigated by E.O.W., Meerut, it was found that fifteen instances were the same as mentioned in case R.C. 1202008A0005 registered by C.B.I. Accordingly, the investigation of the case was limited to only 7 remaining instances as mentioned in the CBI case R.C. 1202008A0005. It also revealed that for sanctioning the tractor loans, some pre conditions were fixed by the Agricultural Finance Manual, Canara Bank. The details have been mentioned in the charge-sheet. During investigation it was found that the fraudulent loan A/c No. 7342 was sanctioned in the name of Ram Nath and Smt. Bhanwar Kali of Rs. 4.5 lacs, the loan A/c. No. 7410 was sanctioned in the name of Smt. Ram Pyari and Smt. Bala of Rs. 4.6 lacs, the loan A/c. No. 7419 was sanctioned in the name of Smt. Baljod and Banarasi for Rs. 4.8 lacs, the loan A/c No. 7421 was sanctioned in the name of Amni and Rajendra of Rs. 4.8 lacs, the loan A/c No. 7468 was sanctioned in the name of Sri Lal Singh, Sohan Pal and Ram Chander of Rs. 4.5 lacs, the loan A/c. No, 7496 was sanctioned in the name of Rami and Raju of Rs. 4.9 lacs and loan A/c. No. 7510 was sanctioned in the name of Pala of Rs. 4.9 lacs.

The investigation revealed that the applicant Babu Lal, the then Branch Manager and Sri Satpal Singh, the then officer, both of Canara Bank, Kirthal Branch, district Baghpat by abusing their official possession as public servant in criminal conspiracy with Sri Satendra @ Pappu (Middleman), Naresh Kumar Tyagi and Mangal Sain Tyagi partners M/s. Delta Farm Service, Muzaffar Nagar be prepared the appraisal report in respect of aforesaid seven instances of tractor loan without conducting any pre-sanction visit to assess the technical feasibility, economic viability and genuineness of the so called borrowers by violating the rules/regulations issued by Canara Bank in this regard. Further, the applicant Babu Lal in connivance with other accused persons fraudulently approved/sanctioned and disbursed the loan amount in respect of aforesaid seven instance of tractor loan by issuing demand drafts in favour of M/s. Delta Farm Service, Muzaffar Nagar. The said demand drafts were subsequently encashed by the M/s. Delta Farm Service. This act of the applicant Babu Lal, co-accused Satya Pal Singh had caused the loss of Rs. 33.44 lacs to the Canara Bank. Kirthal Branch.

The investigation also reveals that the applicant Babu Lal, the then Branch Manager, and the co-accused Satya Pal Singh, the then officer, both of Canara Bank, Kirthal Branch, district Baghpat in connivance with the co-accused Satyendra alias Pappu (middleman), Naresh Kumar Tyagi and Mangal Sain Tyagi, partner of M/s. Delta Farm Service, Muzaffarnagar had dishonestly and fraudulently abused their official position as public servants and they cheated Canara Bank. Kirthal Branch to the amount of Rs. 33,44,000. Sanction for launching of prosecution against the co-accused Satya Pal Singh, the then officer of the Canara Bank, Kirthal Branch, was sought from the department. The applicant Babu Lal, the then Branch Manager, Canara Bank, Kirthal Branch, has already been removed from service, no sanction was required for his prosecution.

The learned Special Judge, C.B.I., has taken cognizance on the charge-sheet dated 31.3.2010, being aggrieved from the above mentioned charge-sheet, the applicant has filed the present application u/s 482, Cr. P.C. with a prayer to quash the criminal proceedings arising out of Regular Case No. 1202008A0005 and the charge-sheet dated 31.3.2010.

It is contended by the learned counsel for the applicant that in respect of the same allegation regarding the sanctioning tractor loan, F.I.R. was also lodged in Case Crime No. 144 of 2006 at P.S. Ramala, the same was investigated by the E.O.W. and the charge-sheet was submitted in which the applicant has been released on bail, its trial is pending in the court of learned Magistrate concerned, the charge-sheet was submitted with regard to the sanctioning of the loan of 15 tractors, the same allegation was in respect of 7 tractors loan, in which F.I.R. was lodged by the C.B.I., after completing the investigation the charge-sheet has been submitted, the applicant may not be prosecuted twice for the offence, in such circumstances, the proceedings pending in the court of learned Special Judge, C.B.I., may be quashed.

It is also contended that the applicant had discharged his official duties and the loan was sanctioned after completing the formalities for which other persons were responsible but without any proper reason, the charge-sheet has been submitted against the applicant also, on which the learned Special Judge has taken the cognizance. In case the applicant is tried in the present case also, it is against the natural justice, therefore. the proceedings pending in the court of learned Special Judge, C.B.I., in Special Case No. 53 of 2011 under Sections 120B, 420, I.P.C. and Section 13(2) read with Section 13(1)(d) of the Prevention of Corruption Act may be quashed.

It has been alternatively argued that the proceedings pending in the court of Special Judge, C.B.I. court No. 2, Ghaziabad and the proceedings pending in the court of learned Magistrate, Baghpat may be clubbed together and the applicant may not be harassed and the applicant may be released on bail by furnishing fresh bail bonds.

In reply to the above contention it is submitted by Sri Anurag Khanna, learned counsel for the C.B.I., that on the basis of the material collected by the Investigating Officer applicant has actively participated in the commission of the offence by hatching conspiracy and by abusing his official position as public servant dishonestly and fraudulently cheated Canara Bank, Kirthal Branch to the amount of Rs. 33,44,000 as such prima facie offence u/s 120B read with Section 420, I.P.C. and Section 13(2) read with Section 13(1)(d) of Prevention of Corruption Act, 1988 is made out. The co-accused Naresh Kumar Tyagi, Mangal Sain Tyagi approached this Court by way of filing the Criminal Misc. Application No. 21245 of 2011 with a prayer to quash the charge-sheet dated 31.3.2010 u/s 120B read with Section 420, I.P.C. and Section 13(2) read with Section 13(1)(d) of Prevention of Corruption Act, 1988 pending in the court of learned Special Judge, C.B.I., court No. 2, Ghaziabad in which the prayer for quashing the charge-sheet has been refused by this Court on 8.7.2011. The present application is devoid of merits, the same may be dismissed.

Considering the submissions made by the learned counsel for the applicant, Sri Anurag Khanna, learned counsel for the C.B.I. and from the perusal of the charge-sheet it appears that the allegations made against the applicant are prima facie disclosing the commission of the offence punishable u/s 120B read with Section 420, I.P.C. and Section 13(2) read with Section 13(1)(d) of Prevention of Corruption Act, 1988, it is a case in which in a pre-planned manner in furtherance of criminal conspiracy by way of playing fraud cheating has been done and huge amount of money has been siphoned. There is no good ground to quash the proceedings of Special Case No. 53 of 2011 u/s 120B read with Section 420, I.P.C. and Section 13(2) read with Section 13(1)(d) of Prevention of Corruption Act, 1988 pending in the court of learned Special Judge, C.B.I., court No. 2, Ghaziabad, such prayer is refused.

However, considering the submission made by the learned counsel for the applicant that the applicant has been released on bail in Case Crime No. 144 of 2006, P.S. Ramala, it is directed that in case the applicant appears before the Court concerned within 30 days from today and applies for bail, the same shall be heard and disposed of in view of the case of Amarawati and Another (Smt.) Vs. State of U.P., which has been approved by the Hon''ble Apex Court in Lal Kamlendra Pratap Singh Vs. State of U.P. and Others, So far as the submission made by the learned counsel for the applicant with regard to the clubbing of this case with the case pending in the court of learned Magistrate concerned at district Baghpat arising out of the charge-sheet submitted in Case Crime No. 144 of 2006 P.S. Ramala district Baghpat is concerned. it may not be considered by this Court in the present application it shall be open to the applicant to move a separate application before the appropriate Bench of this Court.

Accordingly, this application is disposed of.