T.P.Jindal vs State of Haryana

Harbans Singh Rai, J.—This judgment will dispose of three appeals Cr. A. Nos. 19SB/1987, 36B/1987 and 41SB/1987, as these arise out of one and the same judgment.

Sh. T.P. Jindal, appellant in Cr.A. 19SB/1987 was the Manager of the State Bank of India, Bahalgarh Branch, from 9th October, 1974 to 9th February, 1976. Sh. M.P. Mittal, appellant in Cr. A. No. 36SB/1987, was the Managing Director of M/s. Depro Foods Ltd., Rai District Sonepat. Sh. M.K. Saxena, Accountant of the said firm is the appellant in Cr. A. 41.SB/1987. They were tried by Sh. P.C. Nariala, Special Judge, Ambala. Vide his order dated 8th December, 1986, he convicted all the three appellants under sections 420 and 120B, Indian Penal Code. Sh. M. P. Mittal and M.K. Saxena were further convicted under section 204 Indian Penal Code. Sh. T.P. Jindal was further convicted under section 5(2) of the Prevention of Corruption Act. For the offence under section 420 IPC, each appellant was sentenced to rigorous imprisonment for three years with a fine of Rs. 5,000/ or in default of payment of fine to further undergo rigorous imprisonment for one year. All the three were further awarded rigorous imprisonment for two years, as also a fine of Rs. 1,000/ in default of payment of which they were ordered to undergo rigorous imprisonment for one month each for the offence under section, 120B, IPC. Sh. M.P. Mittal and M.K. Saxena were sentenced to rigorous imprisonment for six months each for the offence under, Section 204. IPC Sh. T.P. Jindal was further sentenced to a rigorous imprisonment for three years and to pay a fine of Rs. 5,000/ or in default of payment of fine to undergo rigorous imprisonment for one year under section 5(2) of the Prevention of Corruption Act. It was directed that all the substantive sentences would run concurrently. Feeling aggrieved the accused have filed these appeals.

The prosecution case is that Sh. T.P. Jindal was the Branch Manager of the State Bank of India, Bahalgarh Branch from 9101974 to 921976. M/s. Depro Foods Pvt. Ltd. had credit facility arrangement to the tune of Rs. one lac with that bank. During the period from March, 1975 to September, 1975. Sh. M.P. Mittal accused submitted fourteen bills to the said bank pertaining to the supplies of certain quantities of dehydrated food to Assistant Chief Director of Purchases. Ministry of Food and Agriculture, New Delhi, alleged to be made by the firm through its representative after filling in the pay in slips mentioning therein the bill numbers and the amount of the bills. The prosecution case is that, in fact, neither any goods were supplied by the firm to the Assistant Chief Director of Purchases above mentioned nor was it received, by the Governments. It is further alleged that it was the duty of Sh. T.P. Jindal accused to that inward bills of the firm were properly entertained and the bills of the value of more that Rs. 500/ after discounting were required to be sent to the drawe direct by registered post. Sh. T.P. Jindal had also the responsibility of ascertaining that the realisation of the bills was made within stipulated period and in case the payment was not received from the drawee department, the bills had to be marked off.

The case of the prosecution father is that Shri T.P. Jindal accused entered into a conspiracy with Shri. M.P. Mittal and Shri M.K. Saxena accused and he dishonestly entertained the abovementioned bills and allowed these to be credited in the account of the said firm although it had already exceeded the sanctioned limit of Rs. one lac. Shri T P. Jindal accused allowed the bills to be handed over to the representatives of the firm instead of sending the same direct by registered post to the Assistant Chief Director of Purchases, Ministry of Food and Agriculture Govt. of India, New Delhi. When no claim of these bills was made within the stipulated period of sixty days, Shri T.P. Jindal accused neither took any followup action with the Said Ministry for payment nor did he mark off these bills He also did not object to the withdrawal of the amount of the bills by Shri M. M. Mittal beyond the sanctioned limit as being enjoyed by the firm. According to the prosecution the said bills were destroyed by Shri M.P. Mittal and M.K. Saxena accused after they had it back from the Bank and the subsequently Shri M.P. Mittal withdrew the amount of these bills through various cheques and drafts under his signatures from time to time. As a result of the above conspiracy between the three accused, alleges the prosecution, the State Bank of India, Bahalgarh Branch was cheated to the tune of Rs. 11,88.745/, as the bills were drawn on the said bank and the amount was taken from there in respect of the goods manufactured by the said firm and allegedly sent to the Assistance Chief Director of Purchases Ministry of Food and Agriculture, Government of India New Delhi, which were, in fact never sent to the said department.

In support of its case, the prosecution examined a number of witnesses.

PW1 Shri S.N. Chopra. Staff Officer Grade III, Disciplinary Action Cell of the State Bank of India, New Delhi, proved the sanction order Ex. P1 passed by the Chief General Manager of the State Bank of India, New Delhi, permitting prosecution of Shri T. P. Jindal, appellant, as also circular Ex. P2 showing that the Chief General Manager was the punishing authority

PW2 Shri K. Dua, Manager, Commercial and Institutional Bank State Bank of India deposed that on 5th May, 1978, he had produced the documents mentioned in seizure memo Ex. P3, besides proving the appointment order dated 23rd July, 1974 (Ex. P 4) hereby Shri T.P. Jindal, accused was appointed the Branch Manager, State Bank of India, Bahalgarh. The witness also proved order Ex. P5 dated 9th February, 1976, vide which Shri T.P. Jindal was transferred from there to Uttar Kashi Branch of the bank.

PW3 Chamar Sain, Administrative Officer of the State Bank of India, deposed that while he was posted at the State Bank of India, G.T. Road, Bahalgarb Branch from 181977 to April, 1979, he had produced the documents before the investigating officer which were taken into possession vide seizure memos Ex. P9 and P10. The witness also stated that the documents produced before the investigating officer by Shri M.P. Mittal accused were seized vide memo Ex. P11. He further proved Exs. P13 to P24 being the specimen signatures and initials of M.P. Mittal accused, Exs. P25 to P48 to be the specimen handwriting and signatures of M.K. Saxena, Exs, P49 to P60 to be the specimen handwriting and signatures of Hem Raj Sharma & that the said writings were made by the said persons in his presence at the instance of the investigating officer. He also proved a number of documents pertaining to the procedure and the rules governing the working of the State Bank of India. He further proved general ledger entries of the State Bank of India, Bahalgarh Branch, for the period 1st March, 1975 to 30th April, 1976 (Ex. P64), extract from the ledger account of M/s Depro Foods Ltd., Rai and from the books of the State Bank of India, Bahalgarh (Ex. P65) extract from the liability ledger of the State Bank of India, Bahalgarh Branch in respect of M/s. Depro Foods Ltd. for the period Ist May, 1975 to 8th December, 1976 (Ex. P66). He deposed that on 7th January, 1977, a meeting was held at the head office of the State Bank of India; New Delhi and was attended by Sarvshri B.R. Chadha, Regional Manager, Nath Mal, Administrative Officer Loans, and in his presence Sh. M.P. Mittal accused and B.P. Singhal of Mis. Depro Foods Ltd. were asked about the outstanding bills amounting to Rs. 14,77,000/ in form of raising advances at which both of them had admitted that they had drawn the bills without making any supply of goods to the Government, besides admitting that they had taken the bills back through their representative, and that these bills were never remitted to the department. The witness further stated that after the meeting, a note was prepared which was Ex P67 to the effect that Sh. M.P. Mittal and B.P. Singhal had made an admission of the above facts.

PW4 P.S. Sabharwal, Cashier of the State Bank of India Branch Bahalgarh, stated that since March, 1974, he was posted in the said branch, and as per entries in the Dak Register Ex. P68, M/s. Depro Food Ltd. Rai had submitted the bills on the date and for the amount on the State Bank of India, Branch Bahalgarh, and the amount of these bills was credited to the account of the said firm. The witness testified to the fact that the said bills were collected by M.K. Saxena accused and Hem Rai, driver of the said firm and that they had affixed their signatures in the said dak register in token of receipt of these bills. It was further testified ay him that on 23rd June 1975, M.K. Saxena accused had also collected the bills of the value of Rs. 47,078/ which entry was Ex. P73. These bills were entered as Ex. P69 as per dak Register Ex. P68. It, was further deposed by the witness that all these bills were handed over to the accused M.K. Saxena and Hem Raj, driver, on directions of Sh. T.P. Jindal, accused it was further stated by the witness that Ex. PW4/1 was bill register of the State Bank of India, Bahalgarh Branch and that all the bills were passed for payment by Sh. T.P. Jindal the Branch Manager, whereafter these were credised to the account of M/s. Depro Foods Ltd.

Sh. P.K. Narang, ClerkcumCashier of the State Bank of India, Branch Bahalgarh (P.W. 5) proved entry Ex. P77 at page 17 of Bill No. 241 for Rs. 1, 16,605/ as per dak register Ex. P68, entry P78, for the bill of the value of Rs. 61,246/ and entry Ex. P79 in respect of the bill for Rs. 40,282/ page 19 of the dak register Ex. P68 to be in his hand and stated that the bills were collected by accused M.K. Saxena against his signatures which were at mark Q27 and Q28. PW6 Hem Raj deposed that he was employed as drive with M/s. Depro Foods Ltd., Rai and he admitted his signatures at entry Ex. P70 in dak register Ex. P68 in support of collection of the bills by him from the State Bank of India, Branch Bahalgarh.

PW 7 Pawan Kumar Jain, a clerk in the State of India Branch, G.T. Road, Bahalgarh, proved the writing and signatures on the payinslips as be deposed that payinslips Ex. PW7/1 to PW7/4, PW7/7 PW7/9, PW7/13, PW7/14 had been filled in by Sh. M.K. Saxena accused and passed by Sh. T.P. Jindal accused then Branch Manager, State Bank of India,Bahalghrh Branch. He further stated that the payinslips Ex. PW7/8, PW7/10, PW7/1, PW7/12 and Ex. PW7/15 had been filled in by Sh. R.C. Jain and passed by Sh. T.P. Jindal, accused. It was further deposed by the witness that the payinslip Ex. PW7/16 dated 18th June, 1975, had been filled in by Sh. R R. Bansal and passed by Sh. T.P. Jindal, accused It was also stated by the witness that payinslip Ex. PW7/5 dated 12th May, 1975 was filled in by Sh. R.R. Bansal and passed by Sh. M.L. Relan. He also proved that payinslip Ex. PW7/17 had been filled in by Sh. M.K. Saxena accused and passed by Sh. Jagdish Chander. He further deposed that bills entered vide Exs. P69 and P71 to P76 were collected by Sh. M.K. Saxena while bills entered at Ex. P70were collected by Sh. Hem Raj, driver. He also proved other entries connected with the case.

PW 8 K.L. Relan, Typist/Clerk in the State Bank of India, Bahalgarh Branch, deposed that the specimen signatur initials and writings Sh. M.P. Mittal, Sh. M.K. Saxena, Sh. Chander Sain, Sh. Hem Raj Sharma which were Exs. P13 to, P60 were taken in his presence that the bank record bearing Exs. PW8/1 to PW8/16 was produced by Sh. M.P. Mittal which was taken into possession by the investigating officer vide recovery memo Ex. P11. He also deposed that Ex. PW8/19 was cash verification and had been sent to the head office of the State Bank of India, New Delhi, by She T.P. Jindal, He also proved Ex. PW8/48, a copy of cash credit ledger account No. 2 of M/s. Depro Foods Ltd., and Ex. PW8/49, a comparative statement of the stock despatched as per stock statement of account No. 2 prepared on the basis of documents placed in file Ex. PW8/53. He further stated that Ex. PW8/50 was certified extract of entries of liability register in respect of M/s. Depro Foods Ltd., commencing from 151975 to 8121976, Ex. PW8/51 was cash credit extract of account No. 2 of the said firm while Ex. PW8/52 was a copy of general ledger of inland bills for the period 131975 to 3041976.

PW 9 Shri Naresh Chand Sood, Examiner of Questioned Documents, Simla deposed that he bad compared the specimen signatures, initials, writings with the admitted signatures, writings of Shri M.P. Mittal, Shri M.K. Saxena, Shri R.C Jain and Shri Hem Raj which he bad received from the office of CBI, Ambala Cantt. vide letter dated 381987 and on examination, he found the disputed writings, signatures and initials tallying with the admitted writings, signatures and initials etc. and his report was Ex. PW9/34 and reasons and grounds for that opinion were embodied in Ex PW9/36.

PW10 Shri Nath Mal, Manager Planning, State Bank of India stated that on 711977, a meeting was held in the office of Shri P. L. Chadha, Regional Manager, SBI, New Delhi and Shri M.P. Mittal, Maniging Director of M/s Depro Foods Ltd., Shri B.P. Sehgal, Chander Sain Branch Manager of the Bank at Bahalgarh and he were present in that meeting which pertained to the pendency of certain bills drawn by M/s Depro Foods Ltd. Shri M.P. Mittal admitted that the bill in question against which the advance payments were drawn from the Bank were not sent to the Department concerned. He also admitted that the balance sheet drawn by M/s Depro Foods was false to the extent of these tills which were outstanding. He further deposed that he bad got gist of the conversation typed and that was Ex P67. He prepared notes Ex. PW10,/A on behalf of Shri B.L. Chadha, Regional Manager. The marginal notes made by the Chief General Manager were Ex. PW10/Al and those by the General Manager Ex.PW10/A2. PW 11 Raja Ram Bansal remained posted as accountant of M/s. Depro Foods Ltd. He deposed that the payinslip Ex. PW7/5 dated 1251975 was filled in by him at the instance of Shri M. P. Mittal. It was deposed by Shri Sham Dass (PW12) a retired Accounts Officer from the Office of Controller of Accounts that he bad written letter Ex. PW12/A to the Superintendent of Police CBI] Ambala, and that he had prepared details of acceptance tender Ex. PW12/B to PW12/p dated 1871974. PW13 Shri R.C. Jain, remained posted in M/s. Depro Foods Ltd., from 431973 to 29111975 and deposed that the payinslips Ex. PW7/6, PW7/7, PW7/10 to PW7/11 and PW7/15 were filled in by him and were produced in the Bank and that he had done ail this at the instance of Shri M. P. Mittal, Managing Director and Shri M.K. Saxena and Shri Bansal, Accountants of the said company. He admitted his signatures at entry Ex. P77 in register Ex. P68.

PW 14 Shri B.L. Chadha corroborated the testimony of Shri Nath Mal PW 10 and stated that on 7111977 a meeting was held in his office at New Delhi and in which Shri M.P. Mittal, Managing Director, and Sh. O.P. Singal. Director of the said firm had made confession that they had drawn money from the bank without supplying the necessary bills to the Ministry of Food and Agriculture. This admission was made by them when they were confronted with letter received from the Ministry of Agriculture Ex. PW14/E, dated 611977. They had also admitted that a wrong balance sheet was furnished by them to the Branch office of the bank at Bahalgarh. The witness also identified his signatures on documents Ex. PW14/E, PW14/F, PW14/G, PW14/H and PW 14/J. He stated that the admission made by Shri M.P. Mittal on 711977 was incorporated vide Ex. P67 upon which he, Nath Mal, Administrative Officer and Shri Chander Sain appended their signatures. He also proved that memorandum Ex. PW14/A about the pendency of bills drawn in advance by the said company was prepared and presented to the bank which bears the signatures of Shri G.S. Srivastava, General Manager and Shri R. P. Goyal, Chief General Manager, whose initials were Ex. PW84/3 and further noting was Ex. PW14/C and the remarks Exs. PW14/C2 and C3 were recorded by Shri R.P. Goyal.

It was deposed by K. L. Bhatia (P.W. 15), Officer of the S.B.I. Bahalgarh Branch, that he banded over certain documents to the investigating officer which were seized vide memos Exhibit PW15/1 to PW 15/3, those documents beingExhibits PW15/4 to PW15/23.

P.W. 16 Vijay Kumar, Inspector, C.B.I., is the investigating officer. He deposed, inter alia, that he got permission Exhibit PW16/2 on 2421978 from the Special Judicial Magistrate to investigate the case and that Shri M.P. Mittal vide reply Exhibit PW1614 had informed that the intand bills shown at Serial No. 7 of the list were destroyed after taking the same from the bank.

In his statement under section 313, Cr.P.C. Shri M.P. Mittal did not deny that no bills were sent to the concerned department. He stated that since no such bills were received the question of sending them to Pay & Accounts office of the concerned department did not arise. He stated that so goods were sent to the concerned department and, therefore, there could be so question of any relevant entry in the excise register showing that the goods had gone out of the factory premises. He denied that he had destroyed the bills and subsequently withdrew the bill amount of Rs. 11,88,745/ from time to time but pleaded that the amount was withdrawn on the strength of payinslips. It was further pleaded by him that letter Exhibit PW 16/4 dated May 12, 1979, written by him to Vijay Kumar P.W. mentioning that the record asked for had been destroyed after taking the same back from the bank was the result of police threat.

Sh. M.P. Saxena accused denied the material prosecution allegations when examined under section 313, Cr.. P.C.,

Shri T.P. Jindal accused in his statement under section 313, Cr.P.C. admitted that he was the Manager of the Bahalgarh Branch of the State Bank of India at the crucial time. He admitted that he had passed over the payinslips and stated that the bills in question were not sent to consignee department but according to the practice prevailing then the same were returned to the representatives of M/s. Depro Foods Pvt. Ltd. He also admitted that the advances were made to the said firm in excess a( their cash credit limit. In defence, he examined Shri D.R. Arora (DW 1) Officer, WM G.S. II, of the State Bank of India, RegionII, (DW.2) M M. Lal, Branch Manager, SBI, Bahalgarh; DW3 Joginder Singh, Manager, SBI, C & 1, South Extn. Part 1, New Delhi and DW4 M. L, Reilan, Manager, Kaithal Branch of the SBI who stated that M/s. Depro Foods Ltd., were permitted by the head office of the bank to got the bills discounted in excess of the limit. Shri V. P. Chhabra DW5 also deposed to the same effect. DW6 Shri A.K. Bhattacharya, Chief General Manager of the Bank, stated that M/s. Depro Foods Ltd., had applied for enhancement of the cash credit limit and inward bills limit in the month of December, 1975, and the same was increased. He further deposed that Shri T.P. Jindal accused had been purchasing the inward bills and demand bills drawn by M/s. Depro Foods Ltd., in excess of the limit fixed for the said firm and that this action of his was never approved or confirmed by the bank. The witness further stated that Shri T.P. Jindal had been warned in writing for that. Returning bills to the drawers was not permitted under the rules and that it was the duty of Shri T.P. Jindal to have checked R/Rs and their genuineness, as also the genuineness of all other documents, besides conducting. periodical checks in respect of stock position of the firm.

The learned trial Court accepted the prosecution case and convicted and sentenced the accused, as mentioned in the earlier part of the judgment.

I have heard the learned counsel for the parties and gone through the evidence with their help.

Shri C.D. Dewan, learned Senior Advocate appearing for Shri T.P. Jindal and M. K. Saxena, appellants submitted that the allegations against T.P. Jindal are that he had been advancing the amount to the firm against the bills in excess of the sanctioned limit; that he had returned the bills to the said firm, in contravention of the rules and that he had initiated no followup action for the realization of the amount from the said firm. According to the learned counsel, the practice prevailing in the bank was that the bills had to be returned to the party and the excess payment made to the party was in the notice of the head office of the bank in respect of which he had written letter Exhibit DW/2 dated November 18, 1974, to the Regional Manager of the Bank at New Delhi, mentioning that the cash credit account of the said firm had become irregular due to a few bills returned unpaid, as also written a letter Ex. DW1/3 that the cash credit limit of the firm be increased to Rs. 15 lacs and that in anticipation of the sanction by the head office of the bank he allowed the firm to draw the amount within that limit. It was contended that Shri T.P. Jindal, appellant, had not committed any offence, as all the PWs have stated that it was a longstanding practice in the bank to return the bills to the party. If the appellant so returned the bills to the party, there was no mala fide on his part as he had just followed the past practice. Regarding the allegation against him that he had made payment to the party in excess of the permissible cash credit limit, the contention is that the bank being a commercial institution that kind of latitude to a party is a normal practice with the banks. It was further contended that the allegation that Sh. T.P Jindal had taken no followup action in the matter at the most amounted to negligence on his part for which he cannot be fastened with any criminal liability. It was then submitted that no conspiracy has been proved and Sh. T.P. Jindal, appellant, had been acting in the normal course of his duties and following the practice then prevalent in the bank according to which the bills were returned to the party.

Mr. Dewan then argued that there is no allegation against Shri M.K. Saxena that he had taken any monetary benefit out of the situation. Being an employee of the firm, he acted as per directions of his officers to have submitted the bills to the bank, and could not, therefore, be fixed with any criminal liability.

Mr. H.L. Sibal, Senior Advocate, appearing for Shri M.P. Mittal appellant, contended that on account of imposition of Emergency in the country in the year 1974, the prices had gone down considerably and there was a slump in the market as a result of which M/s. Depro Foods Pvt. Ltd., had suffered losses. The money was advanced to the company by the bank with a view to rejuvenate it, i e., to save it from the economic recession. He did not contest that the advances against the bills were taken without actually supplying the goods. But there was no intention to defraud the bank. However, as the firm had gone red afterwards, this case was registered against Shri M.P. Mittal. It was then submitted that no offence was made out against the appellant on the basis of the material placed before the Court by the prosecution.

I have considered the submissions and find no force in them qua Shri T.P. Jindal and Shri M.P. Mittal, appellants. It is not disputed, that the goods were neither manufactured nor reached the Ministry of Food and Agriculture, Department of Food but the money was credited to the account of the firm. It is also not in dispute that the bills instead of being sent to the concerned purchaser or drawee were returned to the firm. It is again not in issue that the firm was allowed to draw money in excess of the permissible, limit. It is also proved on the file that when the money was not received from the concerned department, no followup action was taken by Shri T.P. Jindal, appellant. The prosecution has established by leading an overwhelming evidence that fake bills were submitted to the bank and the amount was credited to the firm and then withdrawn by Shri M.P. Mittal, its Managing Director, from time to time, thereby defrauding the bank of a huge amount. In the face of the admitted facts that the goods were never manufactured or supplied and the bills instead of being sent to the department concerned were returned to the firm and so followup action was taken by Shri T. P. Jindal, appellant, it is for the defence to prove that all this was done with a bona fide intention to save the firm from economic disaster. Shri M.P. Mittal, appellant, by submitting fake bills very well knowing that no goods Were manufactured or supplied and the bank was being made to pay the amount against no consideration clearly committed the offences for which he has been booked. Tall contention of Mr. Sibal that everything was in the knowledge of the bank authorities that the cash credit facility was being given to the firm when ice it was an economic crisis does not absolve. Shri M.P: Mittal, appellant of the criminal action. He submitted fake bills, knowing these to be so; showing these to be genuine, creating a consideration for advance payment. The explanation that the things were in the knowledge of all concerned is meaningless. The banks deal with public money, and the knowledge or understanding of the sort as pleaded is of no avail to the defence. Shri M.P. Mittal, therefore, acted in league with Shri T.P. Jindal to defraud the bank of a huge sum of money.

For the above reasons I uphold the conviction of both Shri M.P. Mittal and T.P. Jindal.

On the question of sentence, taking a lenient view both in the case of Shri T. P. Jindal and M. P. Mittal, appellants, I am reducing their sentences, as these are on the higher side. Accordingly, the sentence of Shri T.P. Jindal for the offences under sections 420, 120B, Indian Penal Code, and 5(2) of the Prevention of Corruption Act is reduced to one year each. The sentences in the case of Shri M.P. Mittal for the offences under sections 420 and 120B, IPC, are also reduced to one year each except the sentence awarded to him under section 204 IPC which is maintained. The fine imposed in the case of both the appellants along with their default clauses is also maintained.

As for Shri M.K. Saxena, appellant, he was an employee of M/s. Depro Foods Pvt. Ltd. There is no allegation against him that he derived any pecuniary gain out of the transactions leading to this case. As an employee, he had to carry out the directions of his employers. The case against him is that he deposited the bills in the bank, got the money credited into the account of the company and took the bills back from the bank subsequently. There is no evidence to show that he was in any way responsible for the manufacture of the goods or their despatch to the concerned department of the government or that he had Any hand in preparation of fake bills. Nor is it the case of the prosecution that he derived any pecuniary benefit out of the conspiracy alleged against him. So, it can not be held that he was a party to the conspiracy. Accordingly his, conviction and sentence are set aside.

In the result, Cr. A. No. 41SB/1987 filed by M.K. Saxena stands allowed, whereas Cr. A. Nos. 19SB/1987 (filed by Shri T.P. Jindal) and 36SB/1987 (filed by M.P. Mittal) are rejected with partial modification in the sentence.