Y.K. Gupta Vs. State of U.P. - Court Judgment

Excerpt:
- motor vehicles act, 1988 [c.a. no. 59/1988]section 168; [s.b. sinha & h.s. bedi, jj ] determination of compensation meaning of income of victim held, the term income has different connotations for different purposes. a court of law, having regard to the change in societal conditions must consider the question not only having regard to pay packet the employee carries home at the end of the month but also other perks which are beneficial to the members of the entire family. loss caused to the family on a death of a near and dear one can hardly be compensated on monetary terms. section 168 uses the word just compensation which, in our opinion, should be assigned a broad meaning. it cannot be lost sight of the fact that the private sector companies in place of introducing a pension.....orderdev kant trivedi, j.1. the two appellants, namely, y.k. gupta and mohd. hanif were convicted under sections 420 & 471 i.p.c. while appellant y.k. gupta was also convicted under section 5(2) of prevention of corruption act by means of judgment dated 25-6-1995 delivered by sri raj veer singh, the then vii addl. district and sessions judge, meerut in criminal case no. 8/1988. both the appellants were sentenced to one year's r.i. each under section 420 i.p.c. and two years r.i. each under section 471 i.p.c. fine of rs. 5000/- each was also imposed on the two appellants under section 471 i.p.c. appellant y.k. gupta was further sentenced to two year's r.i. and a fine of rs. 5000/- under section 5(2) of prevention of corruption act. all sentences were directed to run concurrently. in case.....

Judgment:
ORDER

Dev Kant Trivedi, J.

1. The two appellants, namely, Y.K. Gupta and Mohd. Hanif were convicted Under Sections 420 & 471 I.P.C. while appellant Y.K. Gupta was also convicted Under Section 5(2) of prevention of Corruption Act by means of judgment dated 25-6-1995 delivered by Sri Raj Veer Singh, the then VII Addl. District and Sessions Judge, Meerut in Criminal Case No. 8/1988. Both the appellants were sentenced to one year's R.I. each under Section 420 I.P.C. and two years R.I. each under Section 471 I.P.C. Fine of Rs. 5000/- each was also imposed on the two appellants Under Section 471 I.P.C. Appellant Y.K. Gupta was further sentenced to two year's R.I. and a fine of Rs. 5000/- under Section 5(2) of Prevention of Corruption Act. All sentences were directed to run concurrently. In case of default of payment of fine, appellant Y.K. Gupta was directed to undergo R.I. for one year and appellant Mohd. Hanif was directed to undergo R.I. for six months.

2. Feeling aggrieved from the said order of conviction and sentences, the appellants preferred two criminal appeals separately which are being disposed of by this common judgment.

3. The case of prosecution, as it transpires from the record of the case, is set briefly as follows :-

Appellant Mohammed Hanif is the sole Proprietor of M/s Bright Hand Loom and Power Loom Works, Walipur Daulal, District Meerut while appellant Y.K. Gupta was employed as Asstt. Manager Technical in U.P. Financial Corporation at its regional office at Meerut. Appellant Mohd. Hanif applied for loan of Rs. 1.20 lac which was sanctioned by the U.P. Financial Corporation on 6-11-1980. Out of the said sanctioned amount of loan, a sum of Rs. 74,712.- was disbursed to appellant Mohd. Hanif by the Meerut Regional Office of the U.P. Financial Corporation. On the basis of some complaint an enquiry was conducted by the Vigilance Department. After the investigation, the charge-sheet were submitted against the two appellants. The gravamen of the charges against the two appellants is that there was a criminal conspiracy between the two appellants and in pursuance of the said conspiracy appellant Y.K. Gupta who was at the relevant time posted as Asstt. Manager Technical submitted incomplete, incorrect, ambiguous and misleading reports regarding the generating set PANA (wrapping Machine) and electric motors purchased by the appellant Mohd. Haneef which were old, and on the basis of the said reports a sum of Rs. 74712/- was disbursed as loan to appellant Mohd. Haneef.

4. Charges were framed against the appellants under different sections. The appellants pleaded not guilty and claimed to be tried.

5. As many as 15 witness were examined on behalf of the prosecution. No evidence was adduced on behalf of the appellants.

6. Both the appellants were convicted Under Section 420 and Section 471 I.P.C. while appellant Y.K. Gupta was also convicted Under Section 5(2) of Prevention of Corruption Act. They were sentenced to different terms of imprisonment and fine was also imposed as has been referred to at the very out set of the judgment. Appellant Y.K. Gupta was acquitted of the charges under Section 109 of the I.P.C.

7. Both the appellants have assailed the judgment in the present appeals.

8. A brief synopsis of the evidence is given as under :-

Sri I.B. Gupta P.W. 1 was the senior Manager Technical of the U.P. Finance Corporation at the relevant time who has said that Shri R.P. Kumar, was the regional Manager at the relevant time. Sri I.B. Gupta has admitted in his statement that he agreed with the proposal for change of the supplier subject to the approval of the Regional Manager. He also admitted that appellant Y.K. Gupta had also mentioned in the report that it was subject to the certificate of the Charted Accountant Sri I.B. Gupta has admitted in his statement that he made a recommendation that request for additional loan be considered accordingly. He has also stated that appellant Y.K. Gupta had started working in the office of U.P.F.C., Meerut from 19-5- 1981. He admitted in his cross examination that the disbursement was made to appellant Mohd. Hanif by the disbursement section without obtaining the report of the Chartered Accountant though, there was a specific report made by appellant Y.K. Gupta as a measure of precaution in this regard. Sri I.B. Gupta admitted in his cross examination that Sri R.P. Kumar was on leave and therefore, appellant Mohd. Hanif could not lift the machinery for want of funds and the 'Bilti' had to be returned and in the circumstances appellant Mohd. Hanif himself had to purchase machines from another supplier. He also admitted that he did not make any effort to find out whether the supplier named by the appellant Mohd. Hanif was in existence or not. According to him, since the machine was available at the spot and since the bills and vouchers were available, there was no need to check the existence of the supplier. He admitted that he agreed with the report of appellant Y.K. Gupta that the loan be disbursed and he, therefore, made a recommendation in this regard but the disbursement section did not act in accordance with the report of appellant Y.K. Gupta who had specifically mentioned that the Chartered Accountant's report be obtained before disbursement of the money. He also stated that if the certificate of the chartered Accountant would have been obtained it would have come to the notice whether any such firm on whose bills and receipt the payment was made, was in existence or not. It was also stated by Sri I.B. Gupta, P.W. 1 that it was appellant Y.K. Gupta himself who had for the first time reported that the firm from whom the supply was purported to have been taken, did not exist. According to Sri I.B. Gupta though Sri R.P. Kumar Regional Manager of U.P.F.C. Meerut had made an inspection of the Unit of appellant Mohd. Hanif on 1-9-1981 he had not expressed any suspicion regarding the age of the generating set, He also stated that Sri R. P. Kumar had gone with appellant Y.K. Gupta on 28-1-1981 and had inspected the Unit and found the report of appellant Y.K. Gupta correct Sri I.B. Gupta says that he himself had also inspected the unit of appellant Mohd. Hanif once along with V.P. Sinha, Manager Technical. He admitted that according to the rules of U.P.F.C. the supplier can be changed and that the request of Mohd. Hanif regarding change of supplier was found by him to be justified and, therefore, the supplier were changed with his consent. He admitted that though there was no approval of the Regional Manager for change of suppliers but the order regarding disbursement/payment of loan amount had the approval of the Regional Manager which in itself amounts to approval of the change of the suppliers.

9. P.W. 2 Sheo Nath Mishra, the then Chief Manager of U.P.F.C. stated that he had made a recommendation in his capacity of Senior Manager (Finance) for payment of a sum of Rs. 74712/- to Mohd. Hanif. He stated that in case the machine is old, the mention to that effect is made by the Technical Officer. He also admitted that change for suppliers was applied for by Mohd. Hanif and the recommendation by the Technical Officer, appellant Y.K. Gupta was made which was approved by the Regional Manager. He also admitted that the report of the chartered Accountant was required to be obtained in terms of the conditions laid down by appellant Y. K. Gupta in his report before disbursement of the loan.

10. P.W. 3 Sri R.P. Kumar, Dy. General Manager (U.P.F.C.) was the Regional Manager UPFC Meerut during the period 1980- 82. He admitted that he made inspection of the Unit on 1-9-1981 and found the machine in dismantled condition. He said that at the time of inspection he suspected that the generating set was old and that he had orally instructed appellant Y.K. Gupta to find out whether the generating set was old or not. In his cross examination he said that he could not say as to how much old was the generating set. He admitted in his cross examination that he had not passed any written order to appellant Y.K. Gupta to find out the age of the generating set. He stated that the disbursement report Ext. Ka-16 does not make any mention of the fact as to whether the generating set or other machines were new or old. He said that ordinarily the old machines are not purchased with the loan, of the corporation. According to Sri R.P. Kumar, there is no allegation against appellant Y.K. Gupta for taking bribe and that appellant Y.K. Gupta has been negligent.

11. P.W. 4 Saran Veer Singh was declared hostile by the prosecution. He stated that he had taken the machines in question in his supurdgi and the said machines are in his custody. As stated by him they were in his custody till the date of his statement. He stated that appellant Mohd. Hanif had purchased the generating set from Muzaffar Nagar.

12. P.W. 5 Harbansh Singh has stated that Mohd. Hanif (appellant) had obtained a sum of Rs. 6000/- from him as loan which was subsequently returned.

13. P.W. 6 Akhtar has stated that appellant Mohd. Hanif had obtained a sum of Rs. 9,100/- as loan from him. He did not support the case of the prosecution.

14. PW-7 Jagdish stated that he had made a complaint against appellant Mohd. Hanif and subsequently proceedings Under Sections 107/116 Cr.P.C. were initiated against both of them which ultimately resulted in compromise. He said that appellant Mohd. Hanif had constructed the building of the Unit of the land of Gaon Sabha and the Unit had run for about six months and thereafter the Unit was closed and is lying as such. He said that appellant Y.K. Gupta had asked for bribe from Mohd. Hanif for the purchase of good generating set and to get the enquiry finalized. In his cross examination, he said that he had made an enquiry at Muzaffar Nagar and come to know that earlier M/s. Bharat Mill Store was in existence at Court Road, Muzaffar Nagar but the same was closed down subsequently and now there is a shop of mechanic at the spot. In his cross examination, he said that he had seen the generator which was brought from Muzaffar Nagar by appellant Mohd. Hanif and that it looked to be new. He heard rumour in the village that it was an old generator. In his cross examination, he further said that no talk took place between the two appellants in his presence.

15. PW-8 K.K. Verma, is the then Asstt. Manager (Finance) of the UPFC. He deposed that since no papers regarding generating set were submitted by the Unit he made a recommendation to the higher authorities that the request regarding subsidy on the purchase of the generating set be closed.

16. PW-9 Dalel Singh the then Senior Asstt. of UPFC Meerut stated that the disbursement of the loan of Rs. 75,900/- was made to appellant Mohd. Hanif on the approval of the Regional Manager. In his cross examination he had admitted that no report of the Chartered Accountant was obtained though it was specifically reported by appellant Y.K. Gupta in his report. However since S.N. Mishra, the then Incharge Disbursement and Sri R.P. Kumar the then Regional Manager had ordered for disbursement, he had no option but to do so. He also stated that though no loan was sanctioned for the purpose of construction of building of the Unit of appellant Mohd. Hanif as there was no application on his behalf in this regard, the Regional Manager and the In-charge Disbursement had directed the disbursement of amount of Rs. 28000/- on the security of building as such. He also stated that the supplier was changed on the approval of the Regional Manager.

17. PW-10 Mahendra Singh Tyagi, Advocate is a formal witness. He proved Ext. Ka-24 and affidavit of appellant Mohd. Hanif.

18. PW-11 Anis is also formal witness who had identified Mohd. Hanif.

19. PW-12 O.P. Garg who was the Head Clerk in the office of the Sales Tax at the relevant time stated that M/s. Bharat Mills Store was not registered in Sales Tax Department and that he had submitted his report in that regard.

20. PW-13 Jitendra Pal Singh stated that there is no supplier of the name of M/s. Arjesh Mills Store at Sardhana though such a firm exists at Prahlad Nagar, Meerut. The cross examination of this witness was deferred to a subsequent date but he was not produced for cross-examination.

21. PW-14 Dharam Pal Singh retired Deputy Superintendent of Police had taken up the investigation of this case on 21-11-1983 under the orders of Superintendent of Police. He recorded the statements of Jagdish Singh, Jitendra Pal Singh, Ramesh Batra, Pawan Kumar Sharma. He also wrote a letter to Bharat Mill Store, Court Road Muzaffar Nagar which was received back as undelivered. He also recorded the statements of Shyam Lal. Sharan veer Singh. He seized the machinery on 31-5-1984 from the Unit of appellant Mohd. Hanif and he also recorded the statement of Harveer Singh, Harbansh Singh, Umar Akhtar, Shariff Ahmad, Sito Hasan, Krishna Kumar. He also recorded the statement of Sheonath Misra, Prahlad B. Shukla, Subhash Chand, Chandra Pal, Dalel Singh, Indra Bhusan Gupta, Om Prakash and Ramsir.

22. PW-15 Sri Jai Pal Singh Deputy Superintendent of Police had started the investigation of the case and obtained' the sanction for prosecution. He stated that he submitted charge sheet Ext. Ka-5 against both the appellants.

23. In all 35 paper Ext. Ka-1 to Ka-35 were produced by the prosecution which will be referred to at the relevant places.

24. In his statement Under Section 313 Cr.P.C. appellant Y.K. Gupta stated that M/s. Bright Handloom and Powerloom works was an existing and running unit. He said that he also inspected the Unit on 16-6-1981 and submitted a report on 20-6-1981. He said that generator set at the time of the inspection was new and that it was inspected by Higher Authorities as well. He denied that old generator set was reported to be new. He stated that cash memo bill, vouchers and account books were not shown by Mohd. Hanif and that he recommended that the amount of the loan be disbursed only after obtaining the report of the Chartered Accountant. He also stated that when he visited Muzaffar Nagar, M/s. Bharat Mill Store was not found in existence though it did exist prior to his visit. He said that he had made a recommendation regarding change of supplier according to rules. He stated that none of his superior officer made any report against him. He stated that the superior officers in order to save themselves have been speaking against him. In his written statement be stated that he had inspected the plant and machinery on 16-1-1981 and the inspection was also conducted by Regional Manager on 1-9-1981. He stated that on 18- 1-1982 when he again visited the unit he found its progress unsatisfactory and some doubt crept in. He said that the then Regional Manager went to the Unit on 20-1-1982 and thereafter he visited Muzaffarnagar but he could not trace Bharat Mills Store whereupon the application for additional loan and application for subsidy were rejected.

25. Appellant Mohd. Hanif stated in his examination Under Section 313 Cr.P.C. that he did not enter into any conspiracy with the appellant Y.K. Gupta. He purchased new plant and machinery and no papers were fabricated. He stated that he himself purchased the same from Bharat Mill Store Muzaffar Nagar.

26. Elaborate arguments have been advanced by the two sides in these appeals and the record of the trial Court has been scanned through in the light of arguments.

27. It has been urged on behalf of the appellants that in this case no report against either of the two appellants was lodged on behalf of the U.P. Financial Corporation which assertion seems to be correct. It appears that a preliminary enquiry was made on receipt of complaint made by one Jagdish who has been examined as PW-6. Subsequently, an open vigiliance enquiry was ordered which has resulted into the filing of the charge sheet against the two appellants. One Jagdish has been examined as PW-7 by the prosecution, who has stated that he made a complaint against Mohammad Hanif for committing fraud and that vigilance authority had made enquiries. He claims to have visited the unit of appellant Mohammad Hanif who was unable to say that the generating set or motors and other machinery was old or new. He also stated that he made enquiries about the existence of Bharat Mill Store at Muzaffar Nagar and came to know that no such firm was in existence. As has been observed earlier, he stated that the appellant Y.K. Gupta had demanded money from the other appellant Mohammad Hanif for managing the matter relating to the generator and also for getting the enquiry decided in his favour. He said that Hanif, the appellant had filed the forged papers in the office of U.P. Financial Corporation and Y.K. Gupta had said that he would get the papers rectified in case money was given. In his cross-examination, however, he stated that no conversation took place in his presence between Y.K. Gupta and Hanif appellants. In absence of any F.I.R. lodged in this case by any of the officers of the U.P. Financial Corporation at any point of time against either of the two appellants. The complaint as against the appellants is only that of Jagdish PW-7. Though the unit was inspected by Shri I.B. Gupta Sr. Technical Manager of the U.P. Financial Corporation and by Shri R.P. Kumar, Regional Manager of the U.P. Financial Corporation none of the two officers had made any complaint either to their superior officers as against Mohammad Hanif, the appellant who was the borrower nor against the Assistant Technical Officer Y.K. Gupta, appellant who had made the inspection of the unit. Neither Shri I.B. Gupta nor Shri R.P. Kumar made any report agianst the appellant Y.K. Gupta for initiating any departmental enquiry or criminal investigation. It was for the first time on 14th July, 1988 that Shri B.B. Sinha, I.A.S. Managing Director of the U.P. Financial Corporation while granting sanction for prosecution had accepted the version set-out before him by the Vigilance department.

28. Till 14th July, 1988, no report or complaint was made either to the Vigilance Department or to the police making any accusation against the appellant Y.K. Gupta of entering into criminal conspiracy with the borrower appellant Mohammad Hanif or demanding or obtaining any illegal gratification by the appellant Y.K. Gupta from Mohammad Hanif, proprietor of the borrower unit.

29. Shri R.P. Kumar, the then Regional Manager of Meerut region of U.P. Financial Corporation has rather stated in his statement as PW-3 that no charge was levelled against Shri Y.K. Gupta appellant of taking bribe. He rather stated in so many words that the appellant Y.K. Gupta is not accused by the Corporation of the offence of bribery. He has specifically stated in his statement that the appellant Shri Y.K. Gupta can be said to be negligent.

30. Shri Shiv Nath Mishra, Chief Manager and Dy. General Manager of U.P. Financial Corporation in his statement as PW-2 has stated in so many words but there has been no charge of bribery as against the appellant Y.K. Gupta.

31. Statement of PW-6 Jagdish on the very face of it appears to be that of a partisan person. On the one hand he says that money was demanded by the appellant Shri Y.K. Gupta from Mohammad Hanif, and on the other hand admitting that there was enmity between him and the appellant Mohammad Hanif. He went to the extent of saying that he has made his own enquiries by going to Muzaffarnagar whether supplier M/s. Bharat Mills Store was in existence or not. On the other hand, he admitted in the corss-examination that no conversation had taken place in his presence in between the appellant Mohammad Hanif and the appellant Y.K. Gupta which makes the earlier part of his statement in examination-in-chief false wherein he said that the bribe was demanded by the appellant Y.K. Gupta from the appellant Mohammad Hanif. The statement of PW-7 Jagdish, therefore, inspires no confidence and that is why the trial Court did not rely on his testimony while arriving at the conclusion that the charge under Section 5 of Prevention of Corruption Act was made out against the appellant Y.K. Gupta.

32. The Trial Court has however, convicted appellant Y.K. Gupta under Section 5(1)(d) which runs as under:-

Section 5(1)(d)If he by corrupt or illegal means or otherwise by abusing his position as a public servant, obtains for himself or for any other person any valuable thing or pecuniary advantage.

32-A. The learned Additional Sessions Judge has held the appellant Y.K. Gupta guilty of the offence under Section 5(1)(d) on the basis of the assumption that had he not made false recommendation regarding the purchase of the machines and the state of the machinery, the loan could not have been disbursed to appellant Mohammad Hanif and Y.K. Gupta thus abused his position as a public servant for providing pecuniary advantage to appellant Mohammad Hanif. The learned Additional Sessions Judge has merely stated that Y.K. Gupta provided financial advantage to appellant Mohammad Hanif by abusing his position as a public servant. The learned Additional Sessions Judge, has not indicated any grounds nor gave any reasons for arriving at this finding. His finding has been assailed by the learned counsel for the appellants on more than one point which will be considered at the relevant place.

33. Suffice it to say for the present that there is no evidence on behalf of the prosecution to show that any pecuniary advantage was obtained by the appellant Shri Y.K. Gupta for himself and that the statement of PW-6 Jagdish is of no avail to the prosecution to arrive at the guilt of the appellant Y.K. Gupta under Prevention of Corruption Act.

34. Before one can come to the counclusion that appellants Y.K. Gupta had abused his official position for providing pecuniary advantage to the appellant Mohammad Hanif, it will have to be proved beyond any doubt that there was any conspiracy between the two appellants in this regard, either by oral or documentary evidence or by circumstantial evidence. There is neither any oral or documentary evidence to indicate that there was any conspiracy between the two appellants and in fact there is no charge of criminal conspiracy between the two appellants. However, it has been urged that the two appellants colluded to cause loss to the U.P. Financial Corporation and in this regard circumstantial evidence has been sought to be relied on.

35. The main circumstance being pressed into service by the prosecution to prove the collusion between the two appellants is the recommendation of the appellant Y.K. Gupta for disbursement of loan against the security of the machinary purchased by Mohammad Hanif after the change of supplier. The role of the appellant Y.K. Gupta in the change of the supplier is limited to the making of recommendations. The said change was in fact approved by superior officers, namely, the Regional Manager on a further recommendation of Sr. Manager (Technical). Thus it cannot be said that the change of the supplier was permitted by the appellant Y.K. Gupta, rather it was done by the Regional Manager. Even otherwise, the change of the supplier was the result of inaction of the senior officers of the U.P. Financial Corporation in as much as earlier the machinery was purchased from the approved suppliers but since the money could not be made available by the U.P. Financial Corporation to appellant Mohammad Hanif the consignment had to be returned by the bankers of Mohammad Hanif. In the circumstances, it was not possible for appellant Mohammad Hanif to place the order on the same suppliers whose documents were dishonored by the banker on account of the default of the appellant Mohammad Hanif in making the payment which was the direct consequence of the default having been made by the officers of U.P. Financial Corporation in disbursing the amount.

36. In these circumstances, the appellant Y.K. Gupta was justified in recommending the change of suppliers and there was no nexus or collusion in between the two appellants when the recommendation was made by Y.K. Gupta for change of suppliers.

37. The only other circumstance being pressed into service to prove the conspiracy between the two appellants to cheat the U.P. Financial Corporation is the report of the appellant Y.K. Gupta regarding the plant and machinery which was old but was shown to be new by Mohammad Hanif and the omission of appellant in making the report that the plant and machinery was old. In this regard, it was the duty of the prosecution to establish that the U.P. Financial Corporation had sanctioned the loan for purchase of new plant and machinery and that the loan could not have been advanced on the old plant and machinery. It may be noted that copy of the order of sanction of loan to the appellant Mohammad Hanif was not filed by the prosecution. A copy of the mortgage deed dated 7th February, 1981 allegedly executed by Mohammad Hanif appellant does not indicate that the new plant and machinery was to be purchased and then mortgaged. The schedule goes to show that the lease hold plots khasara 255 situated in village Vallipur, District Meerut together with the construction then standing thereon and together with the constructions that may be made thereon and also together with the fixtures, fittings, tubewells and other things attached there to were mortgaged. There was no mention in the mortgage deed that new plant and machinery was required to be purchased. The covenant made by Mohammad Hanif was that the plant and other assets to be mortgaged were absolute property of the appellant free from any prior charge and having exclusive power to mortgage the plant and other assets. No part of the mortgage deed goes to suggest that the petitioner was required to purchase and mortgage new plant and machinery. The appellant Mohammad Hanif was thus not obliged to purchase new plant and machinery from out of the amount of loan sanctioned to him by U.P. Financial Corporation.

38. No doubt the appellant Mohammad Hanif said that he purchased the new plant and machinery. But that in itself does not absolve the prosecution from the liability to establish that the plant and machinery to be acquired from out of the funds disbursed to the appellant Mohammad Hanif were required to be new. Shri I.B. Gupta, PW-1 stated that loan is given for new machines and not for old machines but he did not say that the loan to the appellant Mohammad Hanif was sanctioned for purchasing new machines. Shri R.P. Kumar, PW-3 in his cross-examination stated that ordinarily the old machines are not financed by the Corporation. This statement does not go to ruleout the possibility of sanction of loan for purchase of old plant and machinery. The letter of Shri R.P. Kumar dated 20-10-1983 also shows that ordinarily the loan was not sanctioned by the U.P. Financial Corporation for purchase of old plant and machinery, but this letter also does not clearly rule- out the sanction for and disbursement of loan on the basis of old machines as is evident from paragraph-2 and 3 of this letter paper No. 42 Ka(1).

39. Thus on the one hand, there is nothing on behalf of the prosecution that Mohammad Hanif was required to purchase new machinery or the loan was sanctioned for the purchase of new plant and machinery and on the other hand there is nothing on record to show that the loan could not have been disbursed on the basis of old plant and machinery.

40. It may be seen that the prosecution has placed reliance on Exts Ka-30 and Ka-31 letters of M/s. Kirloskar Oil Engines Limited to show that the plant and machinery were old. No one from Kirloskar Oil Engines Limited was examined as the prosecution witness and as such these papers cannot be used as against the appellants. Moreover, exhibit Ka-30 has specifically mentioned that it was not possible for Kirloskars to verify from their old records to determine the name of the dealer to whom they had supplied the said engines. Exhibit Ka-31 also said that Kirloskers were sending the papers for further investigation. Thus Exhibit Ka-30 and Ka-31 were not sufficient to establish that the old plant and machinery was purchased by Mohammad Hanif who has stoutly maintained that he has purchased new machinery from the suppliers.

41. It is worthwhile to note that the prosecution has failed to bring on record any evidence, to show that the machinery purchased by Mohd. Hanif was old. The prosecution has also failed to bring on record the cash memos and the bill and other papers to show that the machinery which is claimed to have been purchased from unauthorized supplier was in fact not at all purchased. May be the machinery in question was not purchased from the supplier who was authorized by the corporation to supply such machine but in this regard Sri I.B. Gupta, Senior Manager of the Corporation has himself stated that the purchase of machinery from the supplier other than the authorized supplier was approved by the Regional Manager. That being so the purchase of the machinery by appellant Mohd. Hanif from the supplier other than the authorized supplier cannot be taken to be a circumstance sufficient to establish the criminal intent either of Mohd. Hanif or that of appellant Y.K. Gupta. The negligence if at all was on the part of the senior officers namely, Shri I.B. Gupta and Shri R.P. Kumar as it was for them to have stated at the very outset that the supplier cannot be changed and the machinery will have to be purchased from the authorized supplier. However, in fact it was not open to either of these two officers of the U.P.F.C. to have said so, as the circumstances were created by the officers of the U.P.F.C. which compelled the appellant Mohd. Hanif to purchase the machinery from the supplier other than the authorised supplier. It is in evidence that earlier the machinery was purchased from the authorized supplier since the money was not disbursed and the money was not made available to Mohd. Hanif appellant, the delivery of consignment could not be taken by appellant Mohd. Hanif and the same was returned by the Transporter to the consignee, the authorized supplier. In the circumstances, the senior officers had no option but to have approved the purchase of the machinery from the supplier other than those who was authorized by the U.P.F.C. The liability of purchase of machinery from the supplier other than the authorized supplier by the Corporation therefore cannot be fastened on appellant Mohd. Hanif. So far as the appellant Y.K. Gupta is concerned he has made it amply clear that the approval of the Regional Manager is required for change of supplier. It was open to the General Manager to with-hold the approval and to decline the disbursement of the loan on the basis of the machinery purchased from the unauthorized supplier.

42. The doubt that the plant and machinery were not new has been raised only because the supplier supplying unit was not available at its old address. A small scale entrepreneur who claims to have purchased the plant and machinery as new is not supposed to keep the watch on the suppliers. If the supplier closes down or shifts his unit to another place on which contingencies a purchaser has not control it cannot lead to the conclusion that the machines purchased by the purchasers from such a supplier were old and not new.

43. In the circumstances, there is nothing on record to establish that Mohammad Hanif had purchased old machinery and had thereby tried to cheat the U.P. Financial Corporation. Mohammad Hanif was a small scale entrepreneur. He had an existing unit. He had purchased machines, documents of which could not be retired by the U.P. Financial Corporation. He then applied for change of supplier and then again purchased the plant and machinery. A small scale entrepreneur living in a village cannot be presumed to have technical knowledge and in such circumstances it is difficult to say that he was cheating. Moreover, seeing the nature and value of security having been offered by Mohammad Hanif, cheating seems to be a far fetched preposition.

44. Much emphasis has been laid by the prosecution on the fact that the supplier when contacted could not be found at the address given in the cash-memo. No buyer can be held guilty of a crime if the supplier from whom he purchased the machinery had at a subsequent time chose to close down the business or to shift from the given address. The mere fact that the supplier was not found at the given address will not make the purchase of machinery by a buyer illegal, or unauthorized, nor any criminal liability can be fastened on account of shifting of premises or closure of the business by the seller of the machinery.

45. It is worth noting that U.P.F.C. was disbursing the loan on the basis of the property immovable or movable acquired prior to the disbursement of the loan. So far as the disbursement of the loan on the basis of immovable property is concerned, it is to be seen that even according to the prosecution witnesses, no loan was sanctioned by the U.P.F.C. for acquiring the land and the building. Yet the U.P.F.C. for the reasons known best to its officers, disbursed a sum of Rs. 28,000/- to appellant Mohd. Hanif and it is worth taking into account that this disbursement was not made on the report of appellant Y.K. Gupta rather some other officers of the corporation. So far as the disbursement made on the basis of the machinery is concerned, assuming that the machinery was old, the main question for consideration before the trial Court was whether the machinery was sufficient to protect the interest of the U.P.F.C. No effort seems to have been made by the prosecution to indicate that the machinery earlier acquired was not sufficient for the purpose of protecting the interest of the Corporation. Even if the machinery was old but if the value thereof was sufficient to meet the liability, it is not possible to say that the question of cheating is involved as the machinery was of much larger amount likely to fetch much more than the loan disbursed. Taking into totality, the security for the loan amount disbursed by the Corporation to Mohd. Hanif vis-vis the value of the immovable property including the construction of the building and the machinery appareatly seems more than sufficient to secure the interest of the Corporation.

46. This is the precise reason why Shri R.P. Kumar and Shri I.B. Gupta and Shri S.N. Misra have said that appellant Y.K. Gupta was not accused by the Corporation of any criminal act and he has not been accused by the U.P.F.C. of the corruption rather they said that appellant Y.K. Gupta has been negligent.

47. It may further be seen that appellant Y.K. Gupta was not responsible for disbursement of the loan for land and construction of the Unit and while recommending for disbursement for plant and machinery, he had taken the care that a report of the Chartered Accountant would have been insisted for before disbursing the amount it would have easily come to notice of the disbursing authority as to whether the new machinery was purchased or the old machinry was being shown as security. The negligence, therefore, is on the part of the several other officers as well who were involved in actual disbursement of the loan. The Unit was inspected by several officers including Sri R.P. Kumar, the then Regional Manager who tried to absolve himself from the liability by saying that he had asked the appellant, Y.K. Gupta, to find out whether the machines were new. It is really strange that no written order in this regard was ever passed either by Sri R.P. Kumar or by any other officer. If Sri R.P. Kumar had any suspicion about the machinery being new or old, it was open for him to have issued written directions in this regard but it was not so done. Appellant Y.K. Gupta, therefore can justifiably say that in fact no suspicion was lurking in the mind of any officer regarding the machinery being old and if the senior officers were not suspicious, appellant Y.K. Gupta's claim that he had only committed a mistake on account of the appearance of the machinery in ascertaining the fact whether the machinery purchased by appellant Mohd. Hanif was old or new.

48. It was only after quite a considerable delay that some doubts were raised regarding the plant and machinery being old and appellant Y.K. Gupta was asked by Shri R.P. Kumar to make certain enquiries. It is really strange that nothing in writting was given out either by Shri I.B. Gupta PW-1 Sr. Manager (Technical) or by Shri R.P. Kumar PW-3. It may be seen that appellant Y.K. Gupta himself visited Muzaffarnagar to ascertain the existence of the supplier and made a report which makes his conduct less vulnerable.

49. It is said on behalf of the prosecution that the subsidy was being given on the purchase of generating set and the scheme of subsidy was available only up to 30-6- 1981 and appellant Mohd. Hanif by purchasing an old generating set had tried to obtain the subsidy which was' available only on the purchase of new generating set. Again there is nothing on the record to show that the subsidy was not payable on the purchase of old generating set as no copy of the scheme has been filed by the Corporation or by the prosecution to show that old generating set was disqualified for grant of subsidy. At any rate appellant Mohd. Hanif did not produce any paper for grant of subsidy as were required by the Corporation and therefore, no subsidy was disbursed to him on the purchase of the generating set as is admitted to PW-8 K.K. Verma, Asstt. Manager (Finance). Thus, it may be seen that Mohd. Hanif did not obtain any subsidy and therefore the question of cheating as such is not involved in the present case. Prosecution, at the most, can say that an effort was made by appellant Mohd. Hanif to get subsidy by purchasing an old generating set. However, there is no assumption as such that the generating set was old or that appellant Mohd. Hanif had intention of defrauding the Corporation. There is no evidence on the record to show that appellant Y.K. Gupta even made a recommendation for grant of subsidy to appellant Mohd. Hanif on account of purchase of the generating set and thus, it may not be said that he has conspired with the appellant Mohd. Hanif for the offence of cheating the Corporation.

50. There is no evidence sufficient on record to establish that appellant Mohammad Hanif with a view to cheat the U.P. Financial Corporation tried to pass on the old plant and machinery as new.

51. The case of the prosecution is that valuable security was fabricated by appellant Mohd. Hanif and appellant Y.K. Gupta colluded with appellant Mohd. Hanif. The proof of this allegation is based on the cash memo of some allegedly non-existent supplier but there is nothing on record to show that the cash-memos in question were fabricated by appellant Mohd. Hanif with the aid of appellant Y.K. Gupta. The mere fact that the supplier firm could not located by PW-6 Jagdish or by Y.K. Gupta appellant at its given address or no sales tax registration could be found on a date much after the date of purchase cannot go to establish that the bill, vouchers and cash memos were fabricated by the appellant Mohammad Hanif. There is nothing on record to prove that the said documents were forged and as such prosecution miserably failed to prove any offence under Section 471 of I.P.C. agianst him.

52. Similarly, the appellant Y.K. Gupta made his report on the basis of the plant and machinery including the generating set which was inspected by him at the spot. There is no evidence to show that his report was in any way false or incorrect. He has nowhere stated in his inspection report that the plant and machinery was new. Even if it is assumed for the sake of argument that by implication he had led the U.P. Financial Corporation to believe that the plant and machinery purchased by the appellant was new, the possibility of his committing mistake relating to the plant and machinery being new or old cannot be ruled-out. The inspection report prepared by the appellant Y.K. Gupta, therefore, can not be said to be a false document. The prosecution has miserably failed to prove that he dischonestly or fraudulently prepared the inspection report or committed forgery. The prosecution could not lead any evidence to establish that Y.K. Gupta, appellant committed any offence under Section 471, I.P.C.

53. The learned Additional Sessions Judge has wrongly placed the burden of proving that the plant and machinery in the generating set were new on the appellants. It was rather the duty of the prosecution to establish that the plant and machinery including the generating set were in fact old. In this regard no evidence has been produced by the prosecution which could have easily been adduced by the prosecution by examining experts or specialists in this field.

54. Similarly, the learned Additional Sessions Judge has wrongly placed the burden on the appellant of proving that the bills, vourchers and cash memos were genuine. It was rather the duty of the prosecution to establish that the documents were forged and were used as genuine in order to establish the offence under Section 471, I.P.C.

55. From the evidence on record and of other connected circumstances the possibility of appellant Mohd. Hanif who has been a small scale entreprenuer of being defrauded by the suppliers, in case the plant and machinery were old, could not be ruled- out. He had a running unit and was out to expand his business. He was not a technical person who could have expert knowledge regarding the plant and machinery and therefore, benefit of doubt has to go to him. Similarly, Sri Y.K. Gupta, the other appellant might have been guilty of negligence in failing to detect the true nature of the plant and machinery including the generating set, but there is nothing on record to show that he had any criminal intent while submitting his report Exhibit Ka-16.

56. It is worthwhile to note that appellant Y.K. Gupta had taken sufficient precaution by making his report conditional saying that report of the Chartered Accountant be obained before disbursement of the loan.

57. It is to be noted that there is no evidence on record to show that the loan advanced to the appellant was ever recalled by the U.P. Financial Corporation or any action was taken the U.P.F.C. against Y.K. Gupta, appellant, not even any disciplinary action.

58. In the peculiar circumstances of this case in which the enquiry was ordred on the complaint of a person inimical to the appellant Mohd. Hanif and the investigating agency without taking due precautions and without properly investigating the case submitted the charge sheet on certain unfounded assumptions.

59. In view of the above discussions, it is evident that the prosecution has failed to establish that Mohammad Hanif, appellant had any intention of cheating U.P.F.C. or that be used any forged documents and thus committed any offence either under Section 420 or under Section 471 of the I.P.C. Similarly, the prosecution has failed to establish that the appellant Y.K. Gupta had any intention to cheat the U.P. Financial Corporation or had given false report to the U.P. Financial Corporation and thus it could not be established beyond doubt that the appellant Y.K. Gupta committed any offence under Sections 420 and 471 of the I.P.C. The prosecution also failed to establish that Y.K. Gupta committed any offence under Section 5 of the Prevention of Corruption Act.

60. The findings to the contrary recorded by the learned Additional Sessions Judge are based on no good grounds and are liable to be set aside.

61. Learned Additional Sessions Judge did not appreciate the evidence in correct perspective. The findings recorded by the learned Additional Sessions Judge are unsustainable at law and the findings of guilt as well as the conviction of the two appellants recorded by learned Additional Sessions Judge are liable to be set aside.

62. As has been observed above, the possibility of the appellant Y.K. Gupta having been negligent cannot be ruled out but that in itself does not make him guilty of offences which he was charged with Appellant Mohd. Hanif functioning a small scale entrepreneur has been completely ruined and has incurred huge liability as his running unit has stopped as much as the plant and machinery were given in the custody of Supardar a long time back though the liability of payment of instalments and interests will remain permanently attached to him for the whims and caprices of persons inimical to him and wholly faulty investigation.

63. The appellants Mohammad Hanif and Y.K. Gupta are held not guilty of any offence. Their conviction is liable to be set aside and so also the sentences awarded to them.

64. Both the appeals are, therefore, liable to be allowed and are hereby allowed.

65. The judgment of the trial Court dated 25th August, 1995 is hereby reversed.

66. The conviction of the appellants Mohammad Hanif and Y.K. Gupta under Sections 420 and 471 of the I.P.C. are set aside. The conviction of appellant Y.K. Gupta under Section 5 of Prevention of Corruption Act is also set-aside. The sentences awarded to the appellants are set-aside.

67. Both the appellants are acquitted of the charges levelled against them.

68. The appellants need not surrender. Their bail bonds and personal bonds are cancelled and sureties are discharged.

69. The fine, if deposited, will be refunded to the appellants by learned Trial Court.