M/S Prakash Industries Ltd & Anr vs Directorate Of Enforcement & Anr on 28 March, 2025

April 2, 2025

Delhi High Court

M/S Prakash Industries Ltd & Anr vs Directorate Of Enforcement & Anr on 28 March, 2025

1. At the outset, it is stated that by way of both the captioned
petitions, the petitioners have sought for common reliefs and have made
similar submissions before this Court. Therefore, for the purpose of
adjudication, this Court has culled out the facts and submissions from
Crl.M.C. 2526/2019 for convenience.

FACTUAL MATRIX

1. The instant petition, CRL.M.C.2526/2019, under Section 482 of
the Code of Criminal Procedure, 1973 (hereinafter “CrPC“) [now Section
528 of the Bharatiya Nagarik Suraksha Sanhita, 2023 (hereinafter
“BNSS”) has been filed on behalf of the petitioner seeking supply and
quashing of ECIR no. 07-DLZO-01/2018; quashing of RC no. – AC-
1/2014/A-0005/CBI/AC-I dated 1st August, 2014; quashing of final report
dated 27th September, 2017 filed in CC No. 30/2017, arising out of RC
no. – AC-1/2014/A-0005/CBI/AC-I as well as quashing of the order of
cognizance dated 9th March, 2018 passed by the learned Special Judge,
CBI-05, Patiala House Courts, New Delhi district, New Delhi.

2. It is pertinent to note that vide order dated 16th August, 2023, in
CRL. M.C. 2526/2019, in view of the request made by the petitioner, the
Directorate of Enforcement was deleted from the array of parties. It was
further recorded that no relief was being pressed against the Directorate
of Enforcement, and thus, this Court shall not be delving into prayer „a‟,
„b‟ and „f‟ in CRL. M.C. 2526/2019.

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Digitally Signed By:PRAVEEN
KUMAR BABBAR
Signing Date:01.04.2025
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3. Petitioner no. 1 in CRL. M.C. 2526/2019, i.e., M/s Prakash
Industries Ltd. (hereinafter “PIL”) is a company incorporated and is
engaged in the business of coal mines, iron and steel, power and wind
energy. Petitioner no. 2, i.e., Mr. Ved Prakash Agarwal is the Chairman
and Managing Director (hereinafter “CMD”) of PIL. The petitioner, in
CRL. M.C. 7396/2023, namely Mr. Vipul Agarwal, is a Chartered
Accountant and has been working as a Financial Consultant in PIL since
2013. He has been associated with the company for a considerable period
of time and was a Director (Finance and Accounts) prior to the year 2013.

4. PIL, vide letter dated 14th October, 2009, addressed to the State
Bank of India, submitted Form 83 for the allotment of loan registration
number of their Foreign Currency Convertible Bonds (hereinafter
“FCCB”) amounting to USD 50 Million in light of the External
Commercial Borrowing (hereinafter “ECB”)/FCCB guidelines of the
Reserve Bank of India (hereinafter “RBI”).

5. In furtherance of the aforesaid letter, PIL submitted the details of
the transaction pertaining to the issuance of FCCB, which were required
to be forwarded to RBI. Subsequently, on 15th October 2009, RBI, in
response to PIL‟s request, allotted Loan Registration Number 2009538
under the applicable, ECB/FCCB guidelines. It is stated that the entire
process was handled by one Mr. Pawan Bansal, accused in the aforesaid
FIR, who is also a Director in M/s Altis Finserve.

6. Thereafter on 6th March 2014, PIL applied to the Syndicate Bank
for ECB of USD 45 million to buyback/refinancing of its outstanding
FCCB. It is stated that a copy of Information of Memorandum of PIL was
filed along with the said application. Since, the transaction was related to

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KUMAR BABBAR
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the time period between 2009-2010, Mr. Pawan Bansal was appointed to
pursue the said loan application.

7. Accordingly, on 10th April 2014, CMD of Syndicate Bank was
informed regarding the use of ECB of USD 45 Million and it was
informed that the said loan would be exclusively utilized for
buyback/redemption of outstanding FCCB of PIL. Following the same on
23rd April 2014, information was sought by the authorized representative
Syndicate Bank, London branch with regard to proposal for ECB term
loan from PIL. The requisite details, as sought on 23rd April, 2014, were
duly furnished by PIL on 25th April, 2014.

8. On 21st May, 2014, Syndicate Bank sent a communication to PIL
and informed that the competent authorities have accorded an “in
principal clearance”, for considering proposal for term loan of USD 20
Million on bilateral basis, subject to certain terms and conditions.
Subsequently, on 23rd May, 2014, additional information was sought by
the authorized representatives of Syndicate Bank, London branch with
regard to proposal for ECB term loan from PIL, for which information
was provided by PIL vide letter dated 26th May, 2014. Thereafter on 2nd
June, 2014, as per the prescribed format, a processed note was forwarded
to Syndicate Bank, by the officials of PIL, following which on 3rd June,
2014, the authorized representative of PIL, via email dated 3rd June, 2014,
acknowledged the “in-principal clearance” for USD 20 Million ECB.

9. Following the aforesaid chain of events, on 6 th June, 2014, as per
clarifications sought by Syndicate Bank, for „in-principal clearance‟ of
term loan of USD 20 million, PIL wrote a letter providing a detailed reply
to all the queries raised by the bank. Thereafter, on 11th June, 2014, PIL,

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KUMAR BABBAR
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in furtherance of the loan application dated 6th March, 2014, and the
pending loan from Syndicate Bank, PIL submitted additional documents
to Syndicate Bank, including „balance confirmation with existing lenders
of PIL, net worth statements of the promoter directors etc.‟.

10. On 12th June, 2014, PIL further supplied the information regarding
the „mining plan of Chota mines‟ to Syndicate Bank, for which the loan
was sought.

11. Pursuant to the above, on 20th June, 2014, PIL, through its
authorized representative, submitted a response to the queries raised by
the bank in connection with their “in-principal letter”, to immediately
arrange the balance amount of USD 25 Million as the bank only
sanctioned USD 20 Million against the original loan request of USD 45
Million. In furtherance to the same, on 9th July, 2012 and 20th July, 2014,
PIL further submitted their reply to the queries raised by the syndicate
bank with regard to the sanctioned loan. In the meanwhile, on 12th July,
2014 and 16th July, 2014, Syndicate Bank, posed certain queries to PIL
with regard to the approval of term loan.

12. In reply to the same, on 14th July, 2014, the Credit Approval
Committee of Syndicate Bank, in its meeting dated 14th July, 2014,
approved term loan of USD 20 Million as against the original request of
USD 40 Million. The Credit Approval Committee of Syndicate Bank,
London branch recommended the above mentioned proposed loan before
the sanctioning authority on 15th July, 2014 and on 23rd July, 2014,
Syndicate Bank, London Ranch, in connection with the loan application
proposal confirmed the approval of ECB term loan of USD 20 Million

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Digitally Signed By:PRAVEEN
KUMAR BABBAR
Signing Date:01.04.2025
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granted to PIL on bilateral basis for the purpose of buyback/redemption
of FCCB issued by the company subject to certain terms and conditions.

13. Consequently on 1st August 2014, criminal law was set into motion
with the registration of the instant FIR, under Sections 9 and 13(2) read
with 13(1)(d) of the Prevention of Corruption Act, 1988 (hereinafter “PC
Act“) and Section 120B of the Indian Penal Code, 1860 (hereinafter
“IPC“) against the petitioner and other co-accused persons.

14. After the registration of the FIR by the CBI, on 4 th August, 2014,
5th August, 2014, 22nd August, 2014, 9th April, 2014 and 19th August,
2016, statements of Mr. Uday Shankar Majumdar was recorded under
Section 161 of the CrPC. It is to be noted that Mr. Uday Shankar
Majumdar worked as a General Manager, Treasury, and International
Banking Department, Syndicate Bank. He stated that the department was
responsible for assessing the proposals for loans which were received
from foreign branches of Syndicate Bank.

15. It is stated by the petitioners that the case put up by the prosecution
against the petitioners is based on the intercepted conversation dated 17th
May, 2014, 22nd May, 2014, 9th June, 2014 and 15th July, 2014, which are
not admissible under the law. Further, the said conversations were
recorded prior to the registration of the instant FIR.

16. Thereafter, on 5th August, 2014, the statement of Mr. Ghanshyam
Mudgal was recorded under Section 161 of the CrPC pursuant to which,
on 27th September, 2017, the CBI filed its final report/chargesheet under
Section 173 of the CrPC in the aforesaid FIR, under Sections 9, 10, 11, 12
and 13(2) read with 13(1)(d) of the PC Act and Section 120B of the IPC

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Digitally Signed By:PRAVEEN
KUMAR BABBAR
Signing Date:01.04.2025
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against the petitioners and the other co-accused persons. The said
chargesheet has been challenged by the petitioners before this court.

17. Pursuant to the filing of the chargesheet, on 9th March, 2018,
learned Special Judge took cognizance of the aforesaid charge sheet and
summoned the petitioners as well as the other co-accused persons to
appear on 26th March, 2018 to face trial for the alleged offences as
mentioned herein above.

18. Now the petitioners are aggrieved by the aforesaid summoning
order and proceedings arising out of the same and has sought for
quashing of the FIR, chargesheet as well as the summoning order.
PLEADINGS BEFORE THIS COURT

19. The instant petition has been filed on the following grounds:

“A. Because from the bare perusal of the Final Report dated
27.09.2017 and the documents filed along therewith, do not
disclose commission of any offence, muchless offences under
Section 9 of The Prevention of Corruption Act or Section.
120 B of the Indian Penal Code;

B. Because, the prosecution has not placed on record a
single legal evidence or document on record which
substantiates, even prime-facie, involvement of the
Petitioners in commission of any offence;

C. Because, there is no legal evidence to show the
culpability of the Petitioners and to establish that there was
any agreement between the Petitioners and one Mr. Pawan
Bansal, who has been alleged to have obtained for the
Public Servant an alleged gratification;

D. Because, the prosecution of the Petitioners for an offence
of Conspiracy under Section. 120 B of the Indian Penal
Code is totally and completely without jurisdiction as there
is not even a single averment in the charge sheet that there
was any agreement between the Petitioners and the other
accused namely Mr. Pawan Bansal to commit any illegal act

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Digitally Signed By:PRAVEEN
KUMAR BABBAR
Signing Date:01.04.2025
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and the whole case of the prosecution is based on
conjuctures and inferences, which is impermissible in law.
That, the prosecution of the Petitioners is in teeth of law laid
down by the Hon’ble Supreme Court in the case of “Baldev
Singh verses State of Punjab” reported in “(2009) 6 SCC
564” wherein the Hon’ble Supreme Court has held as
Under….

…..

E. Because, there is no averment or an allegation in the
charge sheet that there was prior meeting of mind between
the accused and there are only assertions that the Petitioners
were aware of the alleged conspiracy. It is submitted that not
a single instance of any action of the Petitioners has been
made in the charge sheet which action would constitute an
offence. That the prosecution of the Petitioners is contrary to
the dicta laid down by the Hon’ble Supreme Court in the
case of “Central Bureau of Investigation verses K. Naravan
Rao” reported in “(2012) 9 SCC 512” wherein it has been
held as under:

F. Because, there is no provision in the Prevention of Money
Laundering Act, 2002, which authorizes officers of
Respondent No.1 to register “Enforcement Case Information
Report” and initiate penal proceedings on the basis of an
action which has no basis in any statutory proceedings

“B. BECAUSE THE PETITIONERS HAVE BEEN
ARRAIGNED IN AS AN ACCUSED MERELY ON THE
PRETEXT THAT HE WAS FAMILIAR WITH A CO-

ACCUSED PERSONS. WITHOUT THERE BEING ANY
ALLEGATION OF ANY OVERT ACT ON THE PART OF
THE PETITIONERS AND AS SUCH. THE
PETITIONERS IS BEING PROSECUTED ON THE
BASIS OF PRESUMPTIONS AND SURMISES:

B.1. A perusal of the entire Charge-sheet, statements of
witnesses and the documents relied upon by the
prosecution do not make out the requisite allegations

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Digitally Signed By:PRAVEEN
KUMAR BABBAR
Signing Date:01.04.2025
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against the Petitioners for commission of the offences
alleged.

B.2. In fact, the allegation levelled against the
Petitioner no 2 of being familiar with one of the co-
accused (@ Para No. 17.6). The relevant portion of the
Charge-sheet in this regard is as under…….
B.3. M/s Prakash Industries Ltd had engaged the
services of Sh. Pawan Bansai for pursuing its loan
proposal with Syndicate Bank and with respect to the
same, the Petitioner no 2 was being updated the status
of the Application (@ Para No. 17.17 and 17.19).
However, the same does not imply any conspiracy on
the part of the Petitioner.

B.4. It is submitted that from the above, it is clear that
the Petitioner no 2 is victim of being familiar with a
person, though there is no iota of evidence of the
Petitioner no 2 being familiar of the conspiracy, much
less, being part of the same.

B.5. Merely knowing an accused would not lead to the
assumption that the Petitioners were involved in the
alleged offence, as it is trite that even knowledge of
conspiracy is irrelevant.

B.6. The Hon’ble Supreme Court of India in K. R,
Purshothaman Versus State of Kerala, 2005 (12) see
631 has held that….

B.7. Hence, it is submitted that the impugned Final
Report and proceedings arising out of the same are
liable to be quashed and set-aside.

C. BECAUSE THE ENTIRE CASE IS BASED ON CDRS.

WHICH IN NO MANNER CONNECT THE
PETITIONERS WITH THE OFFENCE AND FURTHER.

DESPITE THE FACT THAT CDRS ARE ONLY
CORROBORATIVE WEAK PIECE OF EVIDENCE. NO
independent EVIDENCE TO CORROBORATE
ALLEGATIONS AGAINST THE PETITIONERS ARE
ON RECORD:

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Digitally Signed By:PRAVEEN
KUMAR BABBAR
Signing Date:01.04.2025
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C.1. To prove the Allegation there is no direct evidence
against the Petitioners, much less, any other
independent evidence. The only evidence on which the
prosecution is relying is CDR’s. It is submitted that the
Transcripts of the CDR’s are attached in and as D-59,
D-84, D-85, D-86, D-87, and D-137.

C.2. In Para No. 17.10 of the Charge-sheet, it has been
alleged that various mobile/ landline numbers were put
under surveillance by the Special Unit, CBI, New Delhi
after obtaining the approval of competent authority,
including that of the Petitioner.

C.3. Thereafter, from Para No. 17.22 to 17.23 of the
chargesheet dated 27.09.2017, there is only allegations
viz. the said alleged conversations. However, in the
entire CDRs, there is nothing to point out that the
Petitioner no 2 was involved in the alleged offence or
that the Petitioner had required Sh. Pawan Bansal to
make payment of any illegal gratification to Accused –
S. K. Jain.

C.4. Even if the entire CDRs are taken to be true on the
face value, the maximum that can be alleged against
the Petitioner is that he was being updated about the
status of the loan proposal of Petitioner No 1/ M/s
Prakash Industries Ltd. However, the same is both in
routine and normal, without there being anything
unusual about the same.

C.5. As such, the prosecution was required to produce
some independent evidence against the Petitioners to
corroborate the allegations levelled by the prosecution
against the Petitioner, as the CDRs are a very weak
piece of evidence, which can be used only for the
purposes of corroboration. C.6. That in the absence of
primary evidence, the CDRs cannot be used, being
irrelevant and ought not to be relied upon, even at the
stage of summoning.

C.7. It is submitted that the Hon’ble Supreme Court of
India in the matter titled as Mahabir Prasad Verma Vs.
Dr. Surinder Kaur AIR 1982 SO 1043 has held that

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KUMAR BABBAR
Signing Date:01.04.2025
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tape recorded conversations can only be relied upon as
corroborated evidence of conversation deposed by any
of the parties to the conversation and in the absence of
evidence of any such conversation, the tape-recorded
conversation is indeed no proper evidence and cannot
be relied upon.

E. BECAUSE THE ENTIRE CASE OF THE
PROSECUTION IS UNSUSTAINABLE IN THE EYES
OF LAW. AS THERE ARE CONTRADITORY
ALLEGATIONS IN THE MATTER. WHICH CLEARLY
MAKE THE ALLEGATIONS IMPROBABLE:

E.1. That the entire case of the prosecution is itself
unsustainable in the eyes of law, as the allegations
levelled by the prosecution are themselves
contradictory and do not, at all, point out towards the
alleged offence.

E.2. In this regard, it would be important to note that
services of M/s Altuis Finserve Pvt. Ltd, the Company
in which Sh. Pawan Bansal was a Director, were
availed of by M/s Prakash Industries Ltd. And as such,
any payment made to Sh. Pawan Bansal were in
routine.

E.3. The same is more so in view of the fact that Sh.
Pawan Bansal is alleged to have been in touch with
Accused – S. K. Jain for various clients of his and as
such, mere factum of payment of alleged illegal
gratification to Accused – S. K. Jain, even if assumed to
be correct, does not automatically connect the same
with M/s Prakash Industries Ltd.

E.4. Hence, the prosecution was required to connect the
very payment made by Petitioner No 1/ M/s Prakash
Industries Ltd with Accused – S. K. Jain, which it has
failed to do.

E.5. Rather, the allegations levelled in the Charge-
sheet are contradictory and improbable, as is clear
from the following……”

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Digitally Signed By:PRAVEEN
KUMAR BABBAR
Signing Date:01.04.2025
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20. The CBI has opposed the present petition on the following
contentions:

“I. That the averments made in para 1 of the petition are
admitted to the extent the same is matter of record.
II. That the contents made in Para 2A & 2B are wrong
and misleading whereas it submitted that the Ld. Trial Court
has instituted the process against the Petitioners while
observing all legal and codal formalities and the Ld. Trial
Court has categorically mentioned in its order dated
09.03.2018 while taking cognizance against the accused
petitioner that “this court has gone through the charge-
sheet, statements of witnesses recorded under Section 161
of Cr.PC and attached documents” and also mentioned that
this court is satisfied that there is sufficient material on
record to take cognizance of offence and thereby took
cognizance against the accused persons including the
accused petitioner under the relevant sections of law. The
Ld. Special Judge has followed all the regulatory provisions
as well as law laid down by this Hon’ble Court and Hon’ble
Supreme Court at the time of taking cognizance and the
impugned order was passed after due application of facts
and circumstances of the case. Hon’ble Delhi High Court in
Vikas Thakur vs. State of NCT of Delhi CRL
M.C.6619/2023 observed that “at the time of taking
cognizance a magistrate is required to judicially apply the
mind be satisfied on the basis of facts what are borne out
from the statement of the complainant as made in the
complaint or what are borne out from the report of the
investigation officer or what are the surrounding facts and
circumstances based on the prima facie documents and
material in existences or what are the contents of the FIR.
In effect it is the satisfaction of the Magistrate which plays
a pre dominant role while taking cognizance coupled with
fact that there are enough material to convince him or her
for taking such cognizance”. The impugned order was

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KUMAR BABBAR
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passed after due appreciation of facts and circumstances of
the case and after due application of judicial mind.
III. That the contents made in Para no. 2C, 2D and 2E are
false, misleading and hence denied. It is submitted that when
the facts stated by the prosecution prima-facie disclose the
commission of cognizable offences and necessary
ingredients to constitute the offence, the order of cognizance
passed by the Ld. Trial Court cannot be quashed. The
accused-petitioner has been charge-sheeted for his active
criminal involvement in commission of instant offence. The
Petitioner has been charge-sheeted on the basis of evidence
on record which can be established in the Court of Law
beyond reasonable doubt neither on the basis of presumption
and surmises nor of familiarity with other accused persons.
The accused petitioner played an active role in the chain of
commission of instant offence and the Judicial process
initiated against him is as per the provisions stipulated in the
law and the sufficiency, reliability and admissibility of
evidence is to be tested in course of trial and not at this
stage. Recently Hon’ble Supreme Court in Captain Manjit
Singh Virdi (Retd.) vs. Hussain Mohammed Shattaf & Ors.
2023 Live law (SC) 462 observed and held that
“truthfulness, sufficiency and acceptability of the material
produced can be done only at the stage of trial”.

IV. That the averments made in Para no. 2F to 2L are false,
misleading and hence denied. It is most humbly submitted
that there are evidences on record to establish the active
involvement and complicity of the accused petitioner as well
as act of commission made by the accused petitioner in this
conspiracy. The accused petitioner played a pivotal role for
getting favorable approval for loan to Mis Prakash
Industries. Limited and paying the kickbacks of Rs. 3.25
Crores to the accused public servant through illegal
channel. There are evidence on record to substantiate the
allegation against the accused petitioner.

V. That the averments made in Para no. 2M to 2X are in
repetition on behalf of the Accused Petitioner and already ·

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KUMAR BABBAR
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been replied in Para 16 (II) & (III) and hence is not
repeated.

VI. The averments made in Para 3(1) & 3(II) are admitted to
the extent the same is matter of record. However, it is denied
that the accused petitioner has been falsely implicated. It is
also submitted that the evidences against the petitioner shall
be proved in course of trial of accused petitioner no. 2 being
working with M/s PIL but it is humbly submitted that, it is
submitted that the accused petitioners have been charge
sheeted for his criminal deeds and not falsely implicated.
VII. That, the averments made in Para 3 (III) to (XXIV) are
the chronological developments of the different stages of
applying the loan by M/s PIL from Syndicate Bank to
buyback of Foreign Currency Convertible Bonds (FCCB)
and requires no reply. However, it is submitted that there
was no written authorization from M/s PIL to Syndicate
Bank with respect to persuasion of its loan proposal by
Pawan Bansal or his firm with the bank.

VIII. That, the averments made in Para 3 (XXV), (XXVI) &
(XXVII) are matter of record and hence requires no reply. It
is submitted that apart from the dates provided by Accused/
Petitioner regarding recording of the statement of Sh. Uday
Shankar Majumdar, his statement was also recorded on
20.08.2016 and the same is available on record.
IX That the averments .made in Para 3 (XXVIII), (XXIX)
& (XXX) are ambiguous as the Accused/Petitioner is
discussing about two different aspects viz. the expert
opinion, voice identification memo and letter of State Bank
of India wherein Annexure P-24 is of SBI letter dated
16.10.2014.

X. That the averments made in Para 3 (XXXI) to L are
matter of record and is part of charge sheet, hence need no
reply.

XI. That the averments made in Para 3 (LI) & (LII) are
related to the provisions of the Prevention of Money
Laundering Act, 2002 which are being looked after by the
Enforcement Directorate and hence needs no reply. XII.

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KUMAR BABBAR
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That the averments made in Para 3 (LUI) to (LXIV) are
matter of record and hence, need no reply.

XIII. That the averments made in Para 4 A, B & C are false,
misleading and hence denied. In this regard it is submitted
that there are evidence to establish the complicity and
involvement of the accused petitioner. The accused-
petitioner played/acted as an important link in the chain
commission of the offence by facilitating the transaction of
bribe amount from one accused to another accused public
servant. There are material on record in the form of oral and
documentary evidence to invoke penal provisions of section
13 of Prevention of Corruption Act, 1988 and other offences
against the accused public servants and the accused
petitioner which shall be proved in course of trial.
XIV. That the averments made in Para 4 D & E are admitted
to the extent the same is reproduction of the statutory
enactment and the law laid down by Hon’ble Supreme Court.
However, it is submitted that there is evidence to establish
that the accused petitioner was in criminal conspiracy and
complicity with other co-accused persons to commit the
alleged offence.

XV. That the averments made in Para 4 F, G & Hare related
to the provisions of the Prevention of Money Laundering
Act, 2002 which· are being looked after by the Enforcement
Directorate and the accused petitioner has withdrawn the
averments submitted by him which were related to the ECIR
registered by Enforcement Directorate, hence, needs no
reply.

XVI. That the averments made in Para 4 (I) & (J) are false
misleading and hence denied. It is humbly submitted that the
Ld. Trial Court has fairly considered all material on record
for taking cognizance into this matter. It is also relevant to
mention here that the Ld. Trial Court has taken cognizance
on the basis of prima-facie material on record and accused-
petitioner has been charge-sheeted for his active criminal
involvement in commission of alleged offence.
XVII. That the averments made in Para 4 K (A.l) & (A.2) are
admitted to the extent the same is matter of record. However,

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KUMAR BABBAR
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it is submitted that the transaction of bribe was initiated
through M/s PIL and and Sh. Vipul Agarwal, Chartered
Account, PIL facilitated the bribe to public servant by using
the services of Sh. Pawan Bansal. There are evidence to
establish the criminal involvement and complicity of accused
petitioner in commission of the alleged offence. In addition
to the intercepted conversation, there are evidences on
record in the form of oral statement of witness to reveal the
criminal involvement of accused petitioner for facilitating
the transaction of bribe amount to the accused public
servant.

XVIII. That the averments made in Para 4 K (A.3) is matter
of record, hence need no reply.

XIX. That the averments made in Para 4 K (A.4), (A.5),
(A.6), (A.7), (A.8), (A.9), (A.10), (A.11), (A.12), (A.13) &
(A.14) are admitted to the extent the same refers the judicial
decisions however it is submitted that from Para no. 17.17,
17.18 & 17.19 of the chargesheet relevant portion of the
same is reproduced as under……”

SUBMISSIONS
(on behalf of the petitioner)

21. Mr. Vikas Pahwa, learned senior counsel appearing on behalf of
the petitioners submitted that a bare perusal of the charge sheet dated 27th
September, 2017, along with the documents filed there with, does not
disclose commission of any offence, let alone offence under Section 9 of
the PC Act or Section 120B of the IPC.

22. It is submitted that the prosecution has not placed on record a
single piece of legal evidence or document to substantiate, even prima
facie, the involvement of the petitioners in commission of any offence as
alleged.

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23. It is submitted that there is no legal evidence to establish the
culpability of the petitioners or to demonstrate the existence of any
agreement between the petitioners and one Mr. Pawan Bansal, who is
alleged to have obtained gratification for a public servant, i.e., Mr. SK
Jain.

24. It is submitted that the prosecution of the petitioners for the offence
of criminal conspiracy under Section 120B of the IPC is wholly without
jurisdiction, as there is not even a single averment in the chargesheet
alleging any agreement between the petitioners and the co-accused,
namely, Mr. Pawan Bansal, to commit an illegal act. The entire case of
prosecution is based on conjectures and inferences, which is
impermissible in law.

25. It is submitted that there is no averment or allegation in the charge
sheet of any prior meeting of minds between the accused. The only
assertion made is that the petitioners were allegedly aware of the
purported conspiracy. However, not a single event or a specific allegation
to the petitioners has been cited in the charge sheet as constituting an
offence. It is submitted that the prosecution of the petitioners is contrary
to the law laid down by the Hon‟ble Supreme Court in CBI v. K.
Naryaan Rao1 wherein it was held that the essential ingredients of the
offence of criminal conspiracy include an agreement between two or
more persons to do an illegal act, or to a legal act by illegal means. It was
further held that even if certain acts are proved to have been committed, it
must be clear that they were committed in pursuance of an agreement

1
(2012) 9 SCC 512

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made between the accused persons, who were parties to the alleged
conspiracy.

26. It is submitted that petitioner no. 2 cannot be made vicariously
liable for a criminal offence merely by virtue of his designation as the
CMD of petitioner no. 1, in the absence of specific allegations against
him in the charge sheet.

27. It submitted that the allegations levelled by the prosecution in the
charge sheet are to the effect that the accused, Mr. Pawan Bansal, paid
illegal gratification to accused, namely Mr. Sudhir Kumar Jain @ Mr. SK
Jain (CMD of Syndicate Bank) for allegedly favoring PIL. It is submitted
that the charge sheet does not contain any allegations against the
petitioners regarding the commission of any act which could be said to
form part of the alleged offence. The only reference against the petitioner
no. 2 is that he was apprised of the proposal of petitioner no. 1, i.e., PIL.
It is submitted that the same was informed to the petitioner solely in his
official capacity and there is nothing on record to attach any criminality
to the same.

28. It is submitted that the petitioners have been arraigned as accused
solely on the basis of their designation, which is evident from the perusal
of paragraphs 16.5, 17.6 and 17.19 of the charge sheet. It is also
submitted that even assuming, without admitting that the entire set of
allegations levelled by the prosecution in the present matter are correct,
they still do not disclose the commission of any offence committed by the
petitioners as vicarious liability cannot be imposed on petitioner no. 2 for
any alleged act of petitioner no. 1 company, in the absence of specific
statutory provision.

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29. It is submitted that the Hon‟ble Supreme Court in Sunil Bharti
Mittal v. CBI2, held that there is no concept of vicarious liability in
criminal law, until the statute specifically provides for the same. In the
instant matter, petitioner no. 2 has been summoned solely on the basis of
his designation as CMD of the accused company. It is also submitted that
in Avnish Bajaj v. State3, a Coordinate Bench of this Court held that a
Managing Director cannot be summoned merely on the basis of his post
and designation.

30. It is submitted that a perusal of the entire charge sheet, including
the statements of witnesses and documents relied upon by the prosecution
does not disclose the essential ingredients necessary to establish
commission of the offenses alleged against the petitioners for alleged
against them. In fact, the only allegation levelled against petitioner no. 2
is that he was acquainted with the co-accused, Mr. Pawan Bansal. It is
submitted that PIL had engaged the services of Mr. Pawan Bansal to
pursue its loan proposal with Syndicate Bank, and with respect the same
petitioner no. 2 was being updated about the status of the loan application
of PIL in his official capacity. However, such updates do not imply any
conspiracy on the part of the petitioner no. 2.

31. It is submitted that it is clear that the petitioner no. 2 is being
targeted merely due to his familiarity with a person who is alleged to be a
part of the conspiracy. There is no iota of evidence to suggest that
petitioner no. 2 had knowledge of, the conspiracy, much less, being part
of the same. Merely knowing an accused person does not lead to the

2
(2015) 4 SCC 109
3
2008 (3) JCC 1726

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presumption that the petitioners were involved in the alleged offence, In
this regard, reliance is placed on K.R. Purshothaman v. State of Kerala4,
wherein the Hon‟ble Supreme Court held, that mere knowledge or even
discussion of a plan would not per se constitute conspiracy.

32. It is submitted that there is no direct evidence against the
petitioners, much less, any other independent evidence, to support the
allegations against the petitioners. The only evidence relied upon by the
prosecution is Call Data Records (hereinafter “CDRs”). The charge sheet
contains allegations based solely on the purported conversations reflected
in the CDRs. However, the CDRs do not indicate any involvement of
petitioner no. 2 in the alleged offence nor do they reflect that he ever
instructed Mr. Pawan Bansal to make any illegal gratification to the
accused Mr. S.K Jain.

33. It is submitted that even if the CDRs are taken at face value, the
most that can be inferred is that petitioner no. 2 was being updated about
the status of the loan proposal of PIL. Such communication is routine and
standard in the ordinary course of business and nothing unusual can be
inferred from the same. In the absence of any independent corroborative
evidence, the CDRs cannot be used as a piece of primary evidence
against the petitioner. Without such corroboration, the CDRs are
irrelevant and ought not to be relied upon, even at the stage of
summoning.

34. It is submitted that the Hon‟ble Supreme Court in the matter titled
as Mahabir Prasad Verma Vs. Dr. Surinder Kaur5 held that tape

4
2005 (12) SCC 631
5
AIR 1982 SC 1043

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recorded conversations can only be relied upon as corroborated evidence
of conversation deposed by one of the parties to the conversation. In the
absence of evidence of any such conversation, the tape-recorded
conversation is not proper evidence and cannot be relied upon.

35. It is further submitted that it was essential for the prosecution to
place on record some corroborative evidence connecting the petitioners
with the alleged offence, however, from the perusal of the entire record, it
is clear that there is no evidence whatsoever against the petitioners, either
documentary or oral, which points outs that the petitioners had
participated in the commission of the alleged offence.

36. It is submitted that to the contrary, the CBI, during the course of
investigation, interrogated LW-2, Mr. Ghanshyam Das Mudgal, who was
specifically interrogated in order to implicate the petitioners in the alleged
offence, however, the witness clearly stated that the petitioners had not
directed payment of any bribe to accused – Mr. S.K. Jain. Hence, it is
clear that there was no evidence on record to even prima facie justify the
summoning of the petitioners to face a criminal trial.

37. Therefore, in view of the foregoing submissions, it is prayed that
the instant petition may be allowed and the reliefs be granted as prayed
for.

(on behalf of the respondent-CBI)

38. Per Contra, the learned SPP appearing on behalf of the respondent
CBI vehemently opposed the instant petition submitting to the effect that
the same is liable to be dismissed being devoid of any merit.

39. It is submitted that investigation revealed that PIL is engaged in the
business of coal mining, iron and steel, power and wind energy sectors.

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PIL applied for the loan from Punjabi Bagh branch of Syndicate Bank.
However, the said loan proposal was rejected by the office of Deputy
General Manager, Regional Office – II, Bhagwan Das Road, New Delhi,
and this rejection was also conveyed to the Corporate Office of the
Syndicate Bank, Bangalore.

40. It is submitted that the investigation further revealed that Mr.
Pawan Bansal, who is Accused no. 2 in the charge sheet, is the Director
of M/s Altius Finserve Pvt. Ltd. The basic function of the said company
is investment, including syndication of loan, ECB and Non-Convertible
Debentures (NCDs), mergers and acquisitions, etc. Mr. Pawan Bansal,
through the aforementioned company, was pursuing the ECB term loan
proposal of PIL with London branch of Syndicate Bank and the Bank of
Maharashtra. Further, Mr. Pawan Bansal was claiming a huge amount
from his clients in the name of consultancy services.

41. It is submitted that the investigation revealed Mr. Pawan Bansal
was pursuing the loan proposal of PIL, even though there was no written
authorization/mandate from PIL for pursuing the ECB term loan proposal
from Syndicate Bank.

42. It is submitted that the investigation disclosed that petitioner no. 2
was in regular touch with Mr. SK Jain, CMD of Syndicate Bank through
Mr. Pawan Bansal and that they allegedly conspired to expedite the
approval of proposal of ECB term loan of PIL. The said proposal was
approved by Mr. S.K. Jain, even after certain queries.

43. It is submitted that Mr. Uday Shankar Majumdar, the-then General
Manager, treasury and international banking division, Syndicate Bank,
Mumbai, stated that due to pressure from Mr. S.K. Jain, he sent the

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proposal of PIL to Syndicate‟s Corporate Office without obtaining
necessary clarifications on certain issues from the company and without
confirmation of the internal rating of the company.

44. It is submitted that the investigation revealed that Mr. Vipul
Agarwal also facilitated transaction of cash amounting to Rs. 3.25 crores
approximately from PIL to Mr. Pawan Bansal through illegal channels,
using the services of Mr. Ghanshyam Mudgal and Mr. Ashok Sharma,
both employees of PIL., The said amount was received in Delhi by Mr.
Ajay Bansal, a relative of Mr. Pawan Bansal.

45. It is further submitted that the investigation revealed that Mr.
Pawan Bansal delivered gratification of Rs. 125 lakhs in cash to Mr. S.K.
Jain through Mr. Mukesh Jindal (A – 7). This amount of gratification was
received by one Mr. Vineet Godha (A-3) on behalf of Mr. S.K. Jain
through Purshottam Totlani (A-4) in Bhopal.

46. It is submitted that the investigation revealed that gratification of
Rs. 125 lakhs was facilitated by Mr. Naresh Chandni, an angadia of
Bhopal on the directions of Mr. Tolani, from Mumbai to Bhopal in the
month of July 2014 through Mr. Ashish Parekh, an angadia from
Mumbai.

47. It is submitted that after considering the material on record and
hearing arguments on behalf of the parties, and after due application of
the legal mind, the learned Special Judge rightly concluded that a prima
facie case is made out against accused persons, including the petitioners
herein. Consequently, the learned Special Judge, vide order dated 9th
March 2018, was pleased to take cognizance of the instant offence against
the petitioners.

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48. It is submitted that the learned Special Judge, while taking
cognizance against the petitioners, held that „this court has gone through
the charge-sheet, statements of witnesses recorded under Section 161 of
the CrPC and attached documents.‟. It is submitted that the petitioners
have been charge-sheeted for their active criminal involvement and
commission of alleged offences, which can be established in the court of
law beyond reasonable doubt. The cognizance is not based merely on
presumption on the petitioner‟s association with other accused persons.

49. It is submitted that there is sufficient evidence to establish the
involvement of the petitioners and the petitioner no. 2 as well as Mr.
Vipul Agarwal, who played an active role in the chain of events leading
to the commission of the offence by facilitating the transfer of the bribe
amount from one accused to another accused public servant. The material
on record, both oral and documentary, is adequate to invoke penal
provisions against the petitioners.

50. It is submitted that the transaction of bribe was initiated through
PIL and Mr. Vipul Agarwal facilitated the said bribe to public servant
through Mr. Pawan Bansal. There is evidence on record to establish the
criminal involvement and complicity of the petitioners in commission of
the alleged offence. In addition to the intercepted communication, there is
oral testimony of witnesses which reveals the criminal involvement of
petitioners in facilitating, the transaction of bribe amount to the accused
public servant.

51. Therefore, in view of the foregoing submissions, it is prayed that
the instant petition may be dismissed.

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ANALYSIS AND FINDINGS

52. Heard the learned counsel appearing on behalf of the parties at
length and perused the material on record.

53. The petitioners fundamentally challenge the legality of the
chargesheet, arguing that it fails to establish a prima facie case against
them. Their primary contention revolves around the absence of
substantive legal evidence demonstrating their involvement in the alleged
criminal conspiracy. Specifically, the petitioners contend that the
prosecution has not produced any credible evidence, other than the
transcripts of conversations among the accused persons, to substantiate
even a prima facie connection to the alleged offences under the PC Act
and Section 120B of the IPC.

54. The present petition primarily focuses on the lack of concrete
evidence to support the charge of a criminal conspiracy, emphasizing that
the prosecution‟s case is built entirely on conjectures and inferences. The
petitioners argue that there is no documented evidence of a prior meeting
of minds between the accused, and no specific actions attributable to
them that would constitute an offense. Learned senior counsel has
challenged the vicarious liability of the petitioner no. 2 (CMD of the
petitioner no. 1 company), arguing that mere designation cannot form the
basis for criminal prosecution, relying on various precedents of the
Hon‟ble Supreme Court.

55. Petitioners have also challenged the evidentiary value of the CDRs,
asserting that these cannot be used as standalone evidence without
independent corroboration. They argue that even if the CDRs are taken at

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face value, they merely demonstrate routine communication about a loan
proposal and do not establish criminal intent.

56. The legal submission culminates in a comprehensive argument that
the entire prosecution is fundamentally flawed, lacking any direct or
independent evidence, and therefore fails to meet the legal threshold
required for summoning the petitioners to face a criminal trial.

57. At this stage, this Court finds it prudent to peruse the chargesheet
and the impugned order dated 9th March, 2018. Relevant paras of the
same are reproduced below:

“Allegation in brief:

16.1 That, Shri Pawan Bansal, one of the Directors of M/s
Altius Finserv Pvt; Ltd. having his offices at (i) 124, 21st
floor, Freepress House, Nariman Point, Mumbai and (ii)
1205/1206, 12th Floor, Hallmark, Business Plaza, Sant
Dyaneshwar Marg, Near Guru Nanak Hospital, Bandra
East, Mumbai- 51 and also at 501, S”‘ Floor, Barakhamba
Road, New Delhi had been acting as middleman between
senior level functionaries of PSU banks and the private
firms, who had submitted their loan proposals, through his
firm on the pretext of providing various financial services
like credit solutions, debt capital market investment banking
etc.
16.2 That Shri Pawan Bansal regularly used to meet these
bank officials to pursue the loan proposals prepared and
processed by his firm on behalf of his clients. Source
informed that Pawan Bansal pursued the cases of his clients
by exercising his personal influence over the bank officials
and used corrupt and illegal means to influence them.
16.3 Sh. Pawan Bansal was in regular contact with Sh.

Sudhir Kumar Jain, GMD, Syndicate Bank and was acting
as his middleman in the corporate loans related matters
pending with Syndicate Bank. Further. It is also informed
that Sh. Pawan Bansal regularly obtains the official
information from Sh. Sudhir Kumar Jain pertaining to the

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present status of all such proposals and utilizes the same for
impressing upon the various private firms.

16.4 That Shri Vineet Godha and Shri Puneet Godha are
close relatives of Shri Sudhir Kumar Jain. Shri Vineet
Godha is a practicing advocate and Shri Puneet Godha is in
the business of real estate. The source has further informed
that Shri Vijay Pahuja @ Soni, a businessman, residing at
97, Sant Kanwar Ram Nagar Colony, Bersiya Road, Bhopal
acts as an agent on behalf of Shri Sudhir Kumar Jain and
Shri Vineet Godha for receiving the ill gotten money of Shri
Sudhir Kumar Jain through illegal channels and delivering
the same to Shri Vineet Godha. It has also been learnt that
another person Shri Purushottam Lai Totlani r/o 102, Ridge
Road, Idgah Hills, Bhopal, who is in the business of Hotels
and farm houses, also acts as an agent for such transactions
on behalf of Shri Vineet Godha,
16.5 The source also revealed that M/s. Prakash Industries
(hereinafter referred as PIL) is in the business of Coal
Mines, Iron & Steel, Power and Wind Energy Sectors also
hired the services of M/s. Altius Finserve Pvt. Ltd. for
sanction of External Commercial Borrowing (ECB) of 20
million US Dollars for buyback of Foreign Currency
Convertible Bonds (FCCB). Shri Ved Prakash Aganwal,
Chairman, M/s Prakash Industries and Shri Vipul Agarwal,
Director of M/s. Prakash Industries were in regular contact
with Shri Pawan Bansal in connection with the approval of
their proposal at Syndicate Bank. Further, they had also
conspired to
approach Shri Sudhir Kumar Jain, CMD, Syndicate Bank,
for expediting the approval of said proposal of M/s. Prakash
Industries. Accordingly, several rounds of personal meetings
have taken place between Sh. Pawan Bansal and Shri Sudhir
Kumar Jain, CMD, Syndicate bank in this regard. It is also
alleged that, in furtherance of the above said conspiracy
Shri Pawan Bansal contacted Shri Sudhir Kumar Jain,
CMD, Syndicate bank on 14.07.2014 and requested for
expediting the approval to the proposal of M/s. Prakash
Industries mentioning that acceptance of proposal by him at

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this stage would benefit the company and thereafter the said
proposal of M/s Prakash industries was approved on
15.07.2014
and conveyed by Shri Sudhir Kumar Jain to Shri Pawan
Bansal. Source has also revealed that this proposal was
approved by Shri Sudhir Kumar Jain, CMD, Syndicate Bank
even when certain queries made by Shri U.S. Majumdar,
General Manager, Syndicate Bank (Mumbai) in respect of
the proposal submitted by M/s. Prakash Industries were still
pending.

16.6 The source has also revealed that in order to get the
expeditious results M/s Prakash Industries had earlier
agreed to pay huge sums of money to. Shri Pawan Bansal for
availing his services. It was also agreed upon that Shri
Pawan Bansal will take care of the payments of illegal
money to Shri Sudhir Kumar Jain and the same was also
conveyed to Shri Sudhir Kumar Jain during the several
rounds of personal meetings between them. As per their
understanding the major portion of the agreed upon amount
has already been provided to Shri Pawan Bansal by M/s.
Prakash Industries through their employee Shri Ghanshyam.
Further, the illegal gratification meant for Shri Sudhir
Kumar Jain has been
delivered in recent past to Shri Soni/Purushottam for
onward delivery to Shri Vineet Godha to be received by him
on behalf of Shri Sudhir Kumar Jain.

17. Result of Investigation: Investigation has revealed that;
17.1 Shri Sudhir Kumar Jain (A-1) s/o Late PC
Palliwal had joined Syndicate Bank. Corporate Office,
Gandhi Nagar, Bangalore, on 08.07.2013, as Chairman
and Managing Director. On 01.08.2014, a regular case
RC AC 1 2014 A0004 was also registered against him
and others in CBI, AC-I, New Delhi wherein he has
been charge sheeted under the relevant provisions of
IPC and IPC Act, 1988 and that case is pending under
trial in the court of Hon’ble Spl Judge, CBI cases,
Patiala House New Delhi.

17.2 Shri Pawan Bansai (A-2) s/o Shri Kundal Lai

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Bansal is a Director in M/s Altuis Finserve Pvt. Ltd.
124, Free Press House. Nariman Point, Mumbai which
is registered with Security and Exchange Board of
India (SEBI) and all other statutory bodies as Merchant
Banker and facilitates its clients in consultancy services
and raising funds from financial institutions. The basic
function of the company is investment including
syndication of loan, ECBs, NCDs etc, merger and
acquisition etc. The company was also operating its
business from another office in Mumbai i.e. 1205-1206,
Hallmark Business Plaza, Sant Dyaneshwar Marg,
Bandra (E), Mumbai and a Delhi based office i.e. 501-
508, 5″” Floor, New
Delhi House, Barakhamba Road, New Delhi-01. Shri
Bansal through his above noted company was pursuing
ECB term loan proposal of M/s Prakash Industries Ltd
(hereinafter mentioned as PIL) with London branch of
Syndicate Bank and Bank of Maharashtra. He was
providing consultancy services to various companies
and claiming huge amount from his clients in the name
of consultancy services.

17.3 Shri Vineet Godha (A-3) s/o Shri S C Godha is a
lawyer practicing in the District Court at Bhopal and a
resident of E-3/18, Arera Colony, Bhopal. His brother
Puneet Godha and wife Sangeeta Godha are engaged
in the business of real estate in Bhopal. His younger
sister Mrs. Kamini Jain, is married with Sh. Sudhir
Kumar Jain, the then CMD, Syndicate Bank (now
terminated from service). Shri Godha is charge sheeted
in another CBI cases RC AC 12014 A0004 registered
against Shri Sudhir Kumar Jain and others.

17.4 Shri Vijay Pahuja @ Soni s/o Shri Fateh Chand
Pahuja is a businessman in Bhopal and also the
partner with Vineet Godha’s family members in the
business of real estate and familiar with Vineet Godha
from last 20 years. He is also partner in various real
estate projects with brother and wife of Shri Vineet
Godha at Bhopal. He is also operating his business in

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the name and style of M/s Akruti Dig! Sales, G-47,
Vardhmaan City Plaza, Dawa Bazar, Bhopal. He is
charge sheeted in another CBI case RC AC1 2014
A0004 registered against Sudhir Kumar Jain and
others.

17.5 Shri Purshottam Lai Totlani (A-4) s/o Shri
Gurmukhdas Totlani is a Bhopal based businessman
in Bhopal and engaged in the business of real estate.
Hotel (in the name of Sri Palace), Sweet Shop (in the
name of Raja Sweet House) in Bhopal and also
managing a marriage garden in the name of Landmark
Garden. He is also a business partner in the real estate
business of Puneet Godha and Mrs. Sangeeta Godha
w/o Shri Vineet Godha. He was facilitating the
transaction of ill gotten money of Shri Sudhir Kumar
Jain to Vineet Godha through illegal channels.
17.6 Shri Ved Prakash Aggarwal (A-5) s/o Shri
Basudev Agarwal is a Delhi based businessman and
Chairman & Managing Director of M/s PIL, having
production Units at Raipur and Champa in
Chhattisgarh. The registered office of the company is at
Srivan, near IOC petrol pump, Bijwasan Road, New
Delhi and company is engaged in the production of
Steel, PVC pipes and Power Generation through Wind
Mills. He is familiar with Pawan Bansal and he is
resident of House No. 36 road no. 78 Punjabi Bagh
(West), New Delhi.

17.7 Shri Vipul Agarwal (A-6) s/o Late MS Gupta is a
Chartered Accountant and working as Financial
Consultant in M/s Prakash Industries Ltd from 2013
and getting monthly remuneration in lieu of his
services. He is associated with Shri Ved Prakash
Aggarwal from long back and before 2013 he was
Director (Finance and Accounts) in M/s PIL. He was
pursuing the proposal of ECB term loan of USD 20 Mio
of M/s PIL with Syndicate Bank through Pawan Bansal
and the employees of his company.

17.8 Mukesh Jindal (A-7) s/o Sh. Dharam Chand

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Jindal, a cousin of accused Pawan Bansal is residing
in Mumbai and he is associated in the business
activities of Pawan Bansal through M/s Altius Finserve
Pvt. Ltd, Mumbai. He was dealing with the accounts of
M/s Altius Finserv Pvt. Ltd and actively involved with
Pawan Bansal in accounting and managing his
unaccounted money and payment of illegal gratification
to Sudhir Kumar Jain, the then CMD, Syndicate Bank.
17.9 Pankaj Bansal s/o Shri s/o Sh. Govind Ram is a
relative of Pawan Bansal as well as an employee of M/s
Altius Finserve Pvt Ltd, a company managed by Pawan
Bansal. He was deployed in Delhi based office of the
company. He has dealt the loan proposals of M/s PIL
with London branch of Syndicate Bank and Bank of
Maharashtra, Raipur in the year 2013-14.

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17.11 M/s. PIL is engaged in the business of Coal
Mines. Iron & Steel, Power and Wind Energy Sectors
having its registered corporate office near IOCL Depot,
Najafgarh- Bijwasan Road, Bijwasan, New Delhi-
110061. In the year 2013, M/s PIL applied for the loan

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from Punjabi Bagh branch of Syndicate Bank and this
loan proposal was pursued by Shri Nandi Vardhan Jain
with Syndicate Bank, After obtaining NBG clearance
the fornnal loan proposal of M/s PIL was rejected by
the Office of the DGM, Region Office-II, Bhagwan Das
Road, New Delhi and conveyed the same to the
Corporate Office of the Syndicate bank at Bangalore.
17.12 In the month of October, 2009 and April, 2010,
M/s PIL had issued Foreign Currency Convertible
Bonds (FCCBs) in two tranches in the international
market of value USD 50 and 60 Mio respectively. These
FCCBs were valid for a period of 05 years and going to
matured in the month of October, 2014 and April, 2010
respectively. From the first tranche, the bonds of value
USD 32.9 Mio had already been converted into the
equity shares of the company whereas the amount of
USD 17.1 Mio was due for maturity and the total
amount of FCCBs of second tranche i.e. USD 60 Mio
was due for maturity In the Month of April, 2010.
17.13 In order to redeem/buyback of these FCCBs, M/s
PIL vide its letter dated 06.03.2014 addressed to Chief
Executive Officer, Syndicate Bank, London, M/s PIL
had applied for the sanction of External Commercial
Borrowings (ECB term loan) of USD 45 Mio, Hard
copy of this ECB term loan proposal of M/s PIL of USD
45 Mio for buyback/redemption of FCCBs was
submitted by M/s PIL to London branch of Syndicate
bank, duly signed by Shri Vikram Agarwal of M/s PIL,
Whereas, soft copy of this loan proposal was forwarded
to London branch by the representatives of
M/s Altius Finserv Pvt. Ltd.

17.14 This loan proposal was being pursued with
Syndicate Bank by Pawan Bansal and the
representatives of M/s Altius Finserv Pvt. Ltd, whereas
there was no written authorization/mandate by M/s PIL
for pursuance of ECB term loan proposal by M/s Altius
Finserv Ltd with Syndicate Bank. Investigation has
revealed that during processing of this loan proposal,

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intimation copies of some of its communication (e-
mails) addressed to M/s PIL were also sent by the bank
to the representatives of M/s Altius Finserv Pvt. Ltd.
17.15 After processing by various committees at the
branch level. T&IBD, Mumbai and Corporate level, the
ECB term loan proposal of M/s PIL was forwarded by
Shri US Majumdar, the then GM. T&IBD, Mumbai on
14.07.2014 to the Corporate Office, Bangalore for
approval of Credit Approval Committee (Tier-I) who
was competent authority for approving this loan
proposal,
17.16 On 15.07.2014, Credit Approval Committee
(Tier-I) of Syndicate Bank, headed by Shri Sudhir
Kumar Jain, the then CMD sanctioned the ECB term
loan of USD 20 Mio of M/s PIL, for the purpose of
buyback/redemption of FCCBs. floated by M/s PIL in
the international market, in the year 2009 and 2010,
subject to the condition that prior to release of the loan
amount M/s PIL has to obtain the approval of RBI.
17.17 Shri Sudhir Kumar Jain, the then CMD,
Syndicate Bank and Pawan Bansal were familiar to
each other and Pawan Bansal was in regular touch
with Shri Sudhir Kumar Jain over phone and regularly
pursuing the ECB term loan proposal of M/s PIL with
him. Even after the fact, that there was no written
authorization from M/s PIL to Syndicate Bank with
respect to pursuation of its loan proposal by Pawan
Bansal or his firm with the bank, Sudhir Kumar Jain
was discussing the development of this loan proposal of
M/s PIL with Pawan Bansal and was sharing official
information regarding this loan proposal and Pawan
Bansal in order to create an impression on the party
was sharing the same with Ved Prakash Agarwal and
Vipul Agarwai of M/s PIL. Recorded conversation
revealed that on the insistence of Shri Pawan Bansal,
Sudhir Kumar Jain, talked 3-4 times with Shri US
Majumdar, the then General Manager, Treasury and
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Bank, Mumbai who was processing this ECB term loan
proposal and asked him about the status of loan
proposal of M/s PIL and to expedite the same. In his
statement recorded u/s 164 Cr. PC Shri US Majumdar
has stated that due to the pressure from Sudhir Kumar
Jain he sent the proposal of M/s PIL to Corporate
Office without getting the clarification on some issues
from the company and without confirmation of the
internal rating of the company.

17.18 Further, Vipul Agarwal, Consultant, M/s PIL was
pursuing the ECB term loan proposal on behalf of M/s
PIL with Syndicate Bank through Pawan Bansal. In this
regard, he was in regular touch with Pawan Bansal
over phone and getting updates of the status of the ECB
term loan proposal from him which was pending with
Syndicate Bank, London. On various occasions, Shri
Vipul Agarwal also facilitated transaction of cash
amount of Rs 3.25 crores approx from M/s PIL to
Pawan Bansal, through illegal channel by using the
services of Shri Ghanshyam Mudgal and Ashok Sharma
both employees of M/s PIL and this amount was
received by Shri Ajay Bansal a relative of Pawan
Bansal in Delhi.

17.19 In connection with pursuing the ECB term loan
proposal of M/s PIL with Syndicate Bank, Pawan
Bansal was also in touch with Shri Ved Prakash
Agarwal, CMD of M/s PIL over phone and time to time
conveying the status of ECB term loan proposal, after
obtaining the same from Shri Sudhir Kumar Jain.
Investigation reveals that Pawan Bansal was providing
the information to Shri Vipul Agarwal and Ved Prakash
Agarwal regarding ECB term loan proposal of M/s PIL
right from giving in principle clearance by the bank to
the sanction of ECB term loan proposal and
conveyance thereof by the bank to M/s PIL.

17.20 On 16.07.2014, Sudhir Kumar Jain conveyed
Pawan Bansal about sanction of ECB term loan
proposal of M/s/ PIL who on the same day conveyed it

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to Shri Ved Prakash Agarwal and Vipul Agarwal of M/s
PIL.

17.21 In between 14.07.2014 to 16.07.2014, during
pendency of the ECB term loan proposal of M/s PIL in
the Corporate Office of the Syndicate Bank, Shri Pawan
Bansal delivered gratification of Rs 125 lakhs in the
form of cash to Shri Sudhir Kumar Jain, through Shri
Mukesh Jindal (cousin of Pawan Bansal). This amount
of gratification was received by Vineet Godha (brother-
in-law of Sudhir Kumar Jain) on behalf of Sudhir
Kumar Jain through Purshottam Totlani (facilitator of
transaction of gratification) in Bhopal.

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“1. RC AC-I 2014 A0005 was registered on 01.08.2014
under Sections 9 & 13 (2) readwith Section 13(1) (d) of PC
Act, 1988 and Section 120-B
of IPC.

2. After completion of investigation, the charge-sheet was
filed on 27.09.2017.

3. While the Ahlmad was scrutinizing the documents, several
applications were filed on behalf of A-5 Sh. V. P. Aggarwal
and A-8 M/s Parkash Industries Ltd.

4. The first application was filed on behalf of A-5 Sh. V. P.
Aggarwal for immediate disposal of the application under
Section 156 (3) of Cr.PC pending since August, 2014 which
was filed on behalf of this accused for processing and
consideration of various relevant and crucial documents
attached with the application and also for passing necessary
orders and directions to the concerned Investigating Officer
for proper investigation.

5. Vide separate order this application has been allowed.

6. Vide separate orders, the application under Section 156
(3) of Cr.PC has been dismissed.

7. The second application was filed under Section 190
readwith Section 193 of Cr.PC on behalf of A-8 M/s Parkash
Industries Ltd. for taking into consideration relevant facts at
the stage of consideration on the aspect of cognizance
against Sh. U. S. Majumdar, Sh. Naresh Chandani, Sh.
Ashish Parekh and Sh. Prashant Jain who have though not

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been charge-sheeted but against whom according to the
applicant there are material available for prima-facie
proceeding as additional accused.

8. Vide separate order, this application under Section 190
readwith Section 193 of Cr.PC has been dismissed.

9. The third application was filed under Section 340 of
Cr.PC readwith Section 195(1)(b) of Cr.PC by accused A-5
Sh. V. P. Aggarwal.

10. The fourth application was also filed under Section 340
of Cr.PC readwith Section 195(1)(b) of Cr.PC on behalf of
A-8 M/s Parkash Industries Ltd..

11. Lastly, another application was filed under Section 340
of Cr.PC readwith Section 195(1)(b) of Cr.PC by accused A-
5 Sh. V. P. Aggarwal which was treated as part of
application earlier filed by him under Section 340 of Cr.PC.

12. In applications under Section 340 of Cr.PC readwith
Section 195 (1) (b) of Cr.PC against unknown officers filed
by A-8 M/s Parkash Industries Ltd., it is mentioned that no
notice is to be given to the non-applicant as per amended
Delhi High Court Rules vide notification no.127/Rules/Delhi
High Court dated 14.03.2011.

13. A perusal of the said notification shows that it is not
mandatory that person concerned should be called upon to
give explanation before ordering his prosecution. It does not
say that in no case, notice is to be issued to the person
concerned.

14. In the opinion of this court, the prosecuting agency is
entitled to a notice of these applications.

15. Let a copy of these applications filed under Section 340
of Cr.PC readwith Section 195(1)(b) of Cr.PC be given by
the ld. counsel for the applicants during the course of the
day to the Ld. Sr. PR for CBI who will file the replies thereof
on the next date of hearing.

16. Cognizance:- Charge-sheet was filed on 27.09.2017 and
the Ahlmad could finally scrutinize the documents by
10.01.2018. However, no cognizance order could be passed
earlier due to filing of aforementioned applications. Now,

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arguments addressed by Sh. Pankaj Gupta, Ld. Sr. PP for
CBI on cognizance have been considered.

17. This court has gone through the charge-sheet, statements
of witnesses recorded under Section 161 of Cr.PC and
attached documents.

18. This court is satisfied that there is sufficient material on
record to take cognizance of offences punishable under
Section 120-B IPC readwith
Sections 10, 11 &13(2) readwith Section 13(1) (d) of PC Act,
1988 against A-1 Sh. S. K. Jain, under Section 120-B IPC
readwith Sections 9 and 12 of PC Act, 1988 against A-2 Sh.
Pawan Bansal, Section 120-B IPC readwith Section 9 of PC
Act, 1988 against A-5 Sh. V P Aggarwal, A-6 Sh. Vipul
Aggarwal and A-8 M/S Prakash Industries Ltd. through its
CMD Sh. Ved Prakash Aggarwal and under Section 120-B
IPC readwith Section 12 of PC Act, 1988 against A-4 Sh.
Purshottam Lal Totlani, A-7 Sh. Mukesh Jindal and A-3 Sh.
Vineet Godha.

19. Let the accused be summoned for 26.03.2018.”

58. In the aforesaid extracts of the chargesheet, it is stated that Mr.
Pawan Bansal (co-accused) is one of the Directors of M/s Altius Finserve
Pvt. Ltd., a company engaged in providing financial services to private
firms including credit solutions, debt capital, market investment banking,
etc., and is duly registered with the Security and Exchange Board of India
and other statutory bodies. Mr. S.K. Jain (co-accused), CMD, Syndicate
Bank, is alleged to be involved in the conspiracy of the said offence.

59. Mr. Ved Prakash Agarwal (co-accused) is the CMD of PIL,
whereas Mr. Vipul Agarwal (co-accused) is a Chartered Accountant and
was working as Financial Consultant in PIL from 2013. He also acted as
Director (Finance and Accounts) of PIL and is alleged to be involved in
the perusal of the loan application qua Mr. Pawan Bansal (co-accused)

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and his employees. M/s PIL is in the business of Coal Mines, Iron and
Steel, and Power and Wind Energy.

60. Mr. Vineet Godha (co-accused) is an advocate practicing in Bhopal
District Court. His younger sister is married to Mr. SK Jain and he is
charge sheeted in another CBI case bearing no. RC/AC1/2014/A/004.

61. Mr. Vijay Pahuja (co-accused) is also a businessman based in
Bhopal and a partner in various real estate projects along with his brother
Vineet Godha and is also charge sheeted in another CBI case bearing no.
RC/AC1/2014/A/004.

62. Mr. Purshottam Lal Totlani (co-accused) is also Bhopal-based
businessman and alleged to be involved in facilitating illegal transaction
of Mr. SK Jain to Mr. Vineet Godha (co-accused).

63. Mr. Mukesh Jindal (co-accused),a cousin of Mr. Pawan Bansal, is
stated to be handling the accounts of M/s Altius Finserve. He is alleged to
be involved in managing unaccounted money and facilitating illegal
gratification to Mr. S.K. Jain.

64. As per the chargesheet, the CBI has alleged that in the year 2013,
PIL had issued FCCB in two tranches of value USD 50 and 60 Million in
the international market. These FCCBs had a maturity period of five
years and were set to expire in October, 2014 and April, 2014
respectively. The equity share value of USD 32.9 million from first
tranche was already converted but USD 17.1 Million from the first
tranche and USD 60 Million from second tranche was due for maturity.

65. M/s Altius, qua PIL, applied to the Chief Executive Officer,
Syndicate Bank, London for ECB of USD 45 Million for
buyback/redemption of FCCB. It is stated that there was no written

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agreement or authorization from the PIL to M/s Altius for availing its
services but it was observed that the bank officials have also sent e-mail
to the representatives of M/s Altius during the processing of the loan
proposal.

66. It is stated that after various committees processed the loan
proposal at the branch level and later on 14 th July, 2014, Mr. U.S.
Majumdar, erstwhile GM, T&IBD, Mumbai, forwarded the loan proposal
to the Credit Approval Committee (Tier-I) for further approval.

67. On 15th July, 2014, the Credit Approval Committee (Tier I) headed
by Mr. SK Jain, approved and sanctioned the term loan of USD 20
Million subject to the prior approval of RBI by PIL.

68. It is stated that the phone conversation has revealed that Mr. Pawan
Bansal was in regular contact with the Mr. SK Jain for the perusal of the
ECB term loan proposal of ECB. It also revealed in the conversation that
the Mr. SK Jain had shared some official sensitive information with Mr.
Pawan Bansal, which Mr. Bansal later shared it with the Mr. Ved Prakash
Agarwal and Mr. Vipul Agarwal.

69. It is stated that Mr. SK Jain have also contacted Mr. US Majumdar
regarding the loan proposal and inquire him about the status of the loan
proposal. It is also alleged that Mr. US Majumdar, in his statement
recorded under Section 164 of the CrPC, clearly stated that he had
expedited the loan proposal due to pressure from Mr. Pawan Bansal and
Mr. SK Jain and sent the loan proposal to the Bank‟s corporate office,
when the clarification from PIL and confirmation of internal rating of the
company was still pending.

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70. It is further alleged that Mr. Vipul Agarwal, who was handling the
ECB term loan with Syndicate Bank through Pawan Bansal, has given
Rs. 3.25 Crores approx. to Mr. Pawan Bansal for the approval of loan
application. The alleged transaction was proceeded via Mr. Ghanshyam
Mudgal and one Mr. Ashok Sharma, both employees of PIL to Mr. Ajay
Bansal, relative of Mr. Pawan Bansal.

71. It is further stated that on 16th July, 2014, Mr. SK Jain conveyed
Mr. Pawan Bansal about the sanction of ECB Term Loan, who later
conveyed it to Mr. Ved Prakash Agarwal and Mr. Vipul Agarwal.

72. It is alleged that the Mr. Pawan Bansal has bribed Rs. 125 Lakhs
cash to Mr. SK Jain for the loan proposal. It is also alleged that the
money was given by Mr. Mukesh Jindal (cousin of Mr. Pawan Bansal) to
Mr. Vineet Godha (brother-in-law of Mr. SK Jain) through Mr.
Purshottam Totlani, who facilitated the alleged transaction.

73. It is also stated that the Mr. Naresh Chandnani, an angadia of
Bhopal, facilitated this transaction on the direction of Mr. Purshottam
Totlani, from Mumbai to Bhopal in July, 2014 qua Mr. Ashish Parekh, an
angadia from Mumbai. This alleged transaction was corroborated by both
of them in their statement recorded under Section 164 of the CrPC.
Further, it is also alleged that the cash was arranged by Mr. Mukesh
Jindal and Mr. Pawan Bansal, which corroborated by their CDR as on
14th July, 2014. This above statement is allegedly also supported by the
telephonic conversation of Mr. Mukesh Jindal, Mr. Ashish Parekh, Mr.
Naresh Chandnani and Mr. Purshottam Totlani.

74. It is stated that the Mr. Pawan Bansal was pursuing another loan on
behalf of PIL with Bank of Maharastra, Raipur and LIC of India, which

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got rejected after registration of CBI cases against the promoters and
director of PIL.

75. It is also alleged that Mr. Pawan Bansal was also pursuing the loan
proposal of M/s Monnet Ispat and Energy Ltd with the help of Mr. SK
Jain, but no written agreement/authorization was present for the same
transaction. It is revealed from the phone conversation that allegedly Mr.
SK Jain was asking from Mr. Pawan Bansal about interest rate to be
applied in M/s Monnet‟s loan proposal. It is also revealed that the Mr. SK
Jain headed the Credit Approval Committee of the bank and later
sanctioned the said proposal.

76. It is submitted by the agency in the charge sheet that involvement
of Mr. Vijay Pahuja and Mr. Pankaj Bansal has not been substantiated
and hence not been charge sheeted.

77. It is further stated in the chargesheet that the above series of event
have concluded as commission of offence and hence offence under
Section 120B of the IPC read with Sections 10,11 & 13(2) read with
13(1)(d) of the PC Act is alleged to be proved against Mr. SK Jain,
erstwhile CMD, Syndicate Bank; and Section 120B of the IPC read with
Section 9 and 12 of the PC Act against Mr. Pawan Bansal; Section 120B
of the IPC read with Section 9 of the PC Act against Mr. Ved Prakash
Agarwal, Mr. Vipul Agarwal and PIL through its CMD Mr. Ved Prakash
Agarwal and Section 120B of the IPC read with Section 12 of the PC Act
against Mr. Purshottam Totlani, Mr. Mukesh Jindal and Mr. Vineet
Godha.

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78. Before adverting to the merits of the instant petition, this Court
shall first discuss the settled position of law qua the issues which are to
be adjudicated.

79. The first issue for consideration before this Court pertains to the
„maintainability of a prosecution case based purely on alleged transcripts
of conversation and CDRs, when such CDRs do not connect the accused
to the alleged offence directly, and in absence of any other independent
evidence to corroborate aforementioned evidence‟.

80. With regards to the same, it is pertinent to note judgment of a
Coordinate Bench of this Court passed in Azad v. State of GNCTD &
Anr.6 wherein, it was held that although CDR can be effective in assisting
the Court to ascertain the presence of the accused with respect to the
place of occurrence, but they can only serve as a corroborative piece of
evidence, and that conviction cannot be made solely on the basis of CDR
data. The Court held as under:

“35. The counsel for the appellant Azad @ Gaurav argued
that impugned judgment was passed without proper
appreciation of material brought on record. The testimony of
the complainant Manish Aggarwal PW 1 is self
contradictory in material aspects and cannot be relied upon
and did not support the case of the prosecution. The
complainant Manish Aggarwal PW 1 failed to identify the
appellant Azad @ Gaurav as the person who was present at
the spot and as such his testimony has no value. The
testimony of the complainant Manish Aggarwal PW 1 is not
corroborated by any other evidence. The alleged recoveries
alleged to be made at the instance of the appellant Azad @
Gaurav are planted and such recoveries are highly
improbable. No public witness was included at time of
6
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alleged recovery. The convicting court committed gross
error while placing reliance on CDR and mere alleged
presence in the close vicinity of place of occurrence cannot
be a ground of conviction. The counsel for the appellant
Azad @ Gaurav argued that the conviction cannot be
sustained….

….44. The convicting court also relied on CDR Ext. PW 17-
B in respect of SIM No. 9958081077 which as per CAF Ext.
PW 17-A was issued in name of the appellant Azad @
Gaurav to establish his presence at the spot. The convicting
court also relied on CDR Ext. PW 17-E in respect of SIM
No. 9599541224 which as per CAF Ext. PW 17-D was
issued in name of convict Kanhaie Jha to establish his
presence at the spot. CDR data may be an important and
effective piece of evidence which may facilitate and assists
courts in ascertaining the presence of different participants
in commission of an offence including the complainant and
proposed accused at one particular place or location which
may be their presence at or near the place of occurrence.
However, CDR data can only be taken as supporting or
corroborative piece of evidence and conviction cannot be
made solely on basis of CDR data. CDRs proved and relied
on by the prosecution only proved that the appellants
Jitender @ Jitu and Azad @ Gaurav, on day of incident,
were present near place of occurrence/incident but it is not
proved that they have actually participated in commission of
offence as per complaint Ext. PW 1-A. The respective
counsels for the appellants Jitender @ Jitu and Azad @
Gaurav rightly argued that CDR data cannot be safely relied
on to establish their criminality for the offence punishable
under Section 395IPC. The argument advanced by the
Additional Public Prosecutor regarding reliance on CDR
data is without much force.”

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81. Similar view was taken in Harsh Chhabra v. State of NCTD7,
relevant paragraphs of which are as under:

“33. The CDRs shows calls between the petitioner, as well
as, coaccused Rishi Rajpal Singh Chauhan in the month of
August, 2019 and the calls between petitioner and co-
accused Hitesh Chauhan are in the month of October, 2019,
whereas the incident is of 15.11.2019. In any case, the CDR
data is not a substantive piece of evidence and can only be
used as support or for corroboration and cannot form the
sole basis of conviction. Reference may also advantageously
be had to the decision of the Supreme Court in State (By
NCB) Bengaluru v. Pallulabid Ahmad Arimutta, (2022) 12
SCC 633, the relevant paragraph of which reads as under:–

“12. …The CDR details of some of the accused or the
allegations of tampering of evidence on the part of one
of the respondents is an aspect that will be examined at
the stage trial.”

34. No other incriminating circumstance has been pressed
against the petitioner. Further, as per the first chargesheet
mobile phone of all five accused persons arraigned therein
were recovered but prima facie it appears that nothing
incriminating in the form of SMS or WhatsApp chats were
found against the petitioner.”

82. In light of the foregoing discussions, this Court is of the opinion
that CDRs or the transcripts cannot be the sole basis for a prosecution‟s
case, especially when there is no independent evidence corroborating the
alleged CDRs, and in the absence of any connection being established
between the accused and the alleged offence on the basis of such CDR
data.

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83. With regards to the issue of „vicarious liability under criminal law‟,
for an offence committed by a company, it is apposite to refer to the
Hon‟ble Supreme Court‟s judgment passed in Maharashtra State
Electricity Distribution Company Limited & Anr. v. Datar Switchgear
Limited & Ors.8. The Hon‟ble Court therein held as under:

“30. It is trite law that wherever by a legal fiction the
principle of vicarious liability is attracted and a person who
is otherwise not personally involved in the commission of an
offence is made liable for the same, it has to be specifically
provided in the statute concerned. In our opinion, neither
Section 192 IPC nor Section 199 IPC incorporate the
principle of vicarious liability, and therefore, it was
incumbent on the complainant to specifically aver the role of
each of the accused in the complaint. It would be profitable
to extract the following observations made in S.K. Alagh
[(2008) 5 SCC 662 : (2008) 2 SCC (Cri) 686] : (SCC p. 667,
para 19)
“19. As, admittedly, drafts were drawn in the name of
the company, even if the appellant was its Managing
Director, he cannot be said to have committed an
offence under Section 406 of the Penal Code. If and
when a statute contemplates creation of such a legal
fiction, it provides specifically therefor. In absence of
any provision laid down under the statute, a Director of
a company or an employee cannot be held to be
vicariously liable for any offence committed by the
company itself.”

31. Therefore, we are of the view that even the Board
resolution, adduced by the complainant, does not establish
that Appellant 2 was involved in the alleged fabrication of
false evidence or adducing the same in evidence before the
Arbitral Tribunal. In the absence of any such specific
averment demonstrating the role of Appellant 2 in the

8
(2010) 10 SCC 479

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commission of the offence, we find it difficult to hold that the
complaint, even assuming it to be correct in its entirety,
discloses the commission of an offence by Appellant 2 under
Sections 192 and 199 IPC.”

84. Another Division Bench of the Hon‟ble Supreme Court in Pooja
Ravinder Devidasani v. State of Maharashtra & Anr.9 reiterated the
aforesaid dicta and held as under:

“17. There is no dispute that the appellant, who was wife of
the Managing Director, was appointed as a Director of the
Company–M/s Elite International (P) Ltd. on 1-7-2004 and
had also executed a letter of guarantee on 19-1-2005. The
cheques in question were issued during April 2008 to
September 2008. So far as the dishonour of cheques is
concerned, admittedly the cheques were not signed by the
appellant. There is also no dispute that the appellant was not
the Managing Director but only a non-executive Director of
the Company. Non-executive Director is no doubt a
custodian of the governance of the company but is not
involved in the day-to-day affairs of the running of its
business and only monitors the executive activity. To fasten
vicarious liability under Section 141 of the Act on a person,
at the material time that person shall have been at the helm
of affairs of the company, one who actively looks after the
day-to-day activities of the company and is particularly
responsible for the conduct of its business. Simply because a
person is a Director of a company, does not make him liable
under the NI Act. Every person connected with the Company
will not fall into the ambit of the provision. Time and again,
it has been asserted by this Court that only those persons
who were in charge of and responsible for the conduct of the
business of the Company at the time of commission of an
offence will be liable for criminal action. A Director, who
was not in charge of and was not responsible for the conduct
of the business of the Company at the relevant time, will not
9
(2014) 16 SCC 1

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be liable for an offence under Section 141 of the NI Act. In
National Small Industries Corpn. [National Small Industries
Corpn. Ltd. v. Harmeet Singh Paintal, (2010) 3 SCC 330 :

(2010) 1 SCC (Civ) 677 : (2010) 2 SCC (Cri) 1113] this
Court observed: (SCC p. 336, paras 13-14)
“13. Section 141 is a penal provision creating vicarious
liability, and which, as per settled law, must be strictly
construed. It is therefore, not sufficient to make a bald
cursory statement in a complaint that the Director
(arrayed as an accused) is in charge of and responsible
to the company for the conduct of the business of the
company without anything more as to the role of the
Director. But the complaint should spell out as to how
and in what manner Respondent 1 was in charge of or
was responsible to the accused Company for the
conduct of its business. This is in consonance with strict
interpretation of penal statutes, especially, where such
statutes create vicarious liability.

14. A company may have a number of Directors and to
make any or all the Directors as accused in a complaint
merely on the basis of a statement that they are in
charge of and responsible for the conduct of the
business of the company without anything more is not a
sufficient or adequate fulfilment of the requirements
under Section 141.”

(emphasis in original)

18. In Girdhari Lal Gupta v. D.H. Mehta [Girdhari Lal
Gupta v. D.H. Mehta, (1971) 3 SCC 189 : 1971 SCC (Cri)
279 : AIR 1971 SC 2162] , this Court observed that a person
“in charge of a business” means that the person should be in
overall control of the day-to-day business of the Company.

19. A Director of a company is liable to be convicted for an
offence committed by the company if he/she was in charge of
and was responsible to the company for the conduct of its
business or if it is proved that the offence was committed
with the consent or connivance of, or was attributable to any

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negligence on the part of the Director concerned (see State
of Karnataka v. Pratap Chand [State of Karnataka v. Pratap
Chand, (1981) 2 SCC 335 : 1981 SCC (Cri) 453] ).

20. In other words, the law laid down by this Court is that
for making a Director of a company liable for the offences
committed by the company under Section 141 of the NI Act,
there must be specific averments against the Director
showing as to how and in what manner the Director was
responsible for the conduct of the business of the company.”

85. Further, in Sanjay Dutt & Ors. v. State of Haryana & Anr.10 , the
Hon‟ble Supreme Court held that vicarious liability is attracted by a legal
fiction, and criminal liability by vicarious extension cannot be made out
unless the concerned statue for the offence specifically provides for the
same. The Hon‟ble Court further clarified that vicarious liability needs to
be supported by way of specific and substantiated allegations attributing a
particular role to a company‟s director. The Hon‟ble Court held as under:

“11. It appears that the Courts below proceeded on
the erroneous assumption that the three appellants herein
being responsible officers of the company are liable for the
alleged offence. While a company may be held liable for the
wrongful acts of its employees, the liability of its directors is
not automatic. It depends on specific circumstances,
particularly the interplay between the director’s personal
actions and the company’s responsibilities. A director may
be vicariously liable only if the company itself is liable in the
first place and if such director personally acted in a manner
that directly connects their conduct to the company’s
liability. Mere authorization of an act at the behest of the
company or the exercise of a supervisory role over certain
actions or activities of the company is not enough to render
a director vicariously liable. There must exist something to
show that such actions of the director stemmed from their
10
2025 SCC OnLine SC 32

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personal involvement and arose from actions or conduct
falling outside the scope of its routine corporate duties.
Thus, where the company is the offender, vicarious liability
of the Directors cannot be imputed automatically, in the
absence of any statutory provision to this effect. There has to
be a specific act attributed to the director or any other
person allegedly in control and management of the company,
to the effect that such a person was responsible for the acts
committed by or on behalf of the company.

12. At the same time, wherever by a legal fiction the
principle of vicarious liability is attracted and a person who
is otherwise not personally involved in the commission of an
offence is made liable for the same, it has to be specifically
provided in the statute concerned. When it comes to penal
provisions, vicarious liability of the managing director and
director would arise provided any provision exists in that
behalf in the statute. Even where such provision for
fastening vicarious liability exists, it does not mean that any
and all directors of the company would be automatically
liable for any contravention of such statute. Vicarious
Liability would arise only if there are specific and
substantiated allegations attributing a particular role or
conduct to such director, sufficient enough to attract the
provisions constituting vicarious liability and by extension
the offence itself.

13. It is the cardinal principle of criminal jurisprudence that
there is no vicarious liability unless the statute specifically
provides so. Thus, an individual who has perpetrated the
commission of an offence on behalf of a company can be
made an accused, if the statute provides for such liability
and if there is sufficient evidence of his active role coupled
with criminal intent. The primary responsibility is on the
complainant to make specific averments as are required
under the law in the complaint so as to make the accused
vicariously liable. For fastening criminal liability on an
officer of a company, there is no presumption that every
officer of a company knows about the transaction in
question.

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14. The allegations which find place against the appellants
herein in their personal capacity seem to be absolutely
vague. When a complainant intends to rope in a Managing
Director or any officer of a company, it is essential to make
requisite allegations to constitute the various liability.”

86. In light of the judicial precedent discussed hereinabove, it is clear
that vicarious liability is a principle that finds relevance with respect to a
particular offence only when the concerned statue provides for such
liability. Especially in circumstances involving an offence being
committed at the instance of a company, its executive or managing
directors or any other officer cannot be held vicariously liable unless
there are specific averments in the complaint, in addition to the statue
providing for establishing such vicarious liability.

87. Now adverting to the other issue which is with respect to the
„maintainability of an offence of conspiracy under Section 120B of the
IPC in the absence of any allegation of prior meeting of mind, or an
agreement to commit an illegal, and absence of any specific allegation in
the chargesheet about the action of the accused constituting an illegal
act‟.

88. There are various judgments of the Hon‟ble Supreme Court
elaborating on the necessary ingredients to establish criminal conspiracy
under Section 120 B of the IPC. In State (Govt. of NCT of Delhi) v. Nitin
Gunwant Shah11, the Hon‟ble Supreme Court held as under:

“17. The prosecution relies upon the existence of criminal
conspiracy, which resulted into the death of Lalit Suneja.
This Court has time and again laid down the ingredients to

11
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be made out by the prosecution to prove criminal
conspiracy. It is now, however, well settled that a conspiracy
ordinarily is hatched in secrecy. The court for the purpose of
arriving at a finding as to whether the said offence has been
committed or not may take into consideration the
circumstantial evidence. However, while doing so, it must be
borne in mind that meeting of mind is essential; mere
knowledge or discussion would not be sufficient. Yet, the
prosecution has failed to prove the evidence which
establishes any prior meeting of minds of the accused. The
prosecution merely proved that all the accused were present
in Delhi on the date of occurrence, and that the alleged
motorbike and the car used in the incident belonged to
Respondent 2 Om Prakash Srivastava alias Babloo. The
High Court rightly dismissed this argument, as the
involvement of the said vehicles in commission of the crime
was never proved. Neither was any prior meeting of minds of
the accused proved, nor was any action, individually or in
concert, proved against any of the accused. Needless to say
that the entire foundation of the prosecution story was never
established.”

89. Similarly, the Hon‟ble Supreme Court in Bilal Hajar v. State12,
held:

“31. The expression “criminal conspiracy” was aptly
explained by this Court in E.G. Barsay v. State of Bombay
[E.G. Barsay v. State of Bombay, (1962) 2 SCR 195 : AIR
1961 SC 1762 : (1961) 2 Cri LJ 828] . The learned Judge
Subba Rao, J. (as his Lordship then was and later became
CJI) speaking for the Bench in his distinctive style of writing
said : (AIR p. 1778, para 31)
“31. … The gist of the offence is an agreement to break
the law. The parties to such an agreement will be guilty
of criminal conspiracy, though the illegal act agreed to
be done has not been done. So too, it is not an

12
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ingredient of the offence that all the parties should
agree to do a single illegal act. It may comprise the
commission of a number of acts.”

32. Therefore, in order to constitute a conspiracy, meeting of
minds of two or more persons to do an illegal act or an act
by illegal means is a must. In other words, it is sine qua non
for invoking the plea of conspiracy against the accused.
However, it is not necessary that all the conspirators must
know each and every detail of the conspiracy which is being
hatched and nor is it necessary to prove their active
part/role in such meeting.

33. In other words, their presence and participation in such
meeting alone is sufficient. It is well known that a criminal
conspiracy is always hatched in secrecy and is never an
open affair to anyone much less to the public at large.”

90. Further, in Surendra Kumar v. State of UP13, it was held that in
order to infer a case of criminal conspiracy, the prosecution has to adduce
solid evidence to prove meeting of minds. The Hon‟ble Supreme Court
observed as follows:

“14. The appellant Ramveer was married with Kamla Rani
and no criminal act is attributed to him. His conviction is
entirely based on the theory that he hatched a conspiracy
with his brother and father to eliminate Kamla Rani as he
was unhappy with her looks. This appears to be far-fetched
because the prosecution failed to adduce any evidence to
prove the meeting of minds of the two brother or with the
other two accused Shiv Kumar and Rajveer to eliminate
Kamla Rani. The unhappiness attributed to the husband
cannot reasonably implicate his brother Surendra Kumar or
the two unrelated accused. In any event the additional
charge against Shiv Kumar alias Pappu and Rajveer was
under Section 394IPC but no such charge of robbery is
attributed to the present two appellants. Most significantly

13
(2021) 20 SCC 430

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there is no common conspiracy theory connecting all the
accused in the case. The prosecution as can be noted, failed
to establish any criminal conspiracy between Surendra and
Ramveer on one hand and the accused Shiv Kumar and
Rajveer who additionally were charged with robbery, on the
other hand. Therefore, the theory of common intention or
meeting of mind between the appellants and the two
acquitted accused Shiv Kumar and Rajveer, must be
discarded as implausible.

…25. Similarly for the husband Ramveer, there is no direct
evidence to establish his role in the incident. As his
conviction is entirely based on a conspiracy theory, it is
essential to determine whether there was an agreement
between the parties for doing an unlawful act and it must
emerge clearly from evidence that there was meeting of mind
towards a common goal between Ramveer and his brother
and also between Ramveer and the two armed robbers. The
case evidence on record does not however establish any such
agreement between Ramveer and the other accused.
Conspiracy is a matter of inference and inference must be
based on solid evidence. In case of any doubt the benefit
must inevitably go to the accused. The second appellant’s
conviction simply because of his dislike for the deceased,
even if accepted to be correct, would not in our opinion be
justified in the absence of any evidence either direct or of
conspiracy, to link him with the crime.

26. The conspiracy theory to kill Kamla Rani, only because
she was not liked by her husband is far too improbable to
accept since the prosecution failed to present any evidence
to show meeting of minds and common intention of all the
accused. Ramveer may not have been happy with his wife but
this by itself does not establish that he hatched a conspiracy
with his brother Surendra and his father Om Prakash (who
died during trial), to kill Kamla Rani. The simple fact of
being unhappy with a person even if accepted, do not
provide a strong enough motive to hatch a conspiracy to
eliminate the person. But this aspect was ignored by the
courts below to attribute motive for the murder. In our

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assessment the motive element in the chain of circumstances
is not acceptable and the benefit of the broken link must be
made available to the appellants.”

91. The Hon‟ble Supreme Court in Praveen v. State of Haryana14 held
that in the absence of any evidence to establish meeting of minds for the
common objective of committing an illegal act, a case for conspiracy
under Section 120B of the IPC cannot be made out. It was held as under:

“12. It is fairly well settled, to prove the charge of
conspiracy, within the ambit of Section 120-B, it is necessary
to establish that there was an agreement between the parties
for doing an unlawful act. At the same time, it is to be noted
that it is difficult to establish conspiracy by direct evidence
at all, but at the same time, in absence of any evidence to
show meeting of minds between the conspirators for the
intended object of committing an illegal act, it is not safe to
hold a person guilty for offences under Section 120-B of
IPC. A few bits here and a few bits there on which
prosecution relies, cannot be held to be adequate for
connecting the accused with the commission of crime of
criminal conspiracy. Even the alleged confessional
statements of the co-accused, in absence of other acceptable
corroborative evidence, is not safe to convict the
accused….”

92. Therefore, it is a settled position of law that in order to prosecute
an offence of conspiracy under Section 120B of the IPC, the ingredients
required to be established are meeting of minds, particularly to further a
common objective of committing an offence

93. Now adverting to the facts of the matter in hand.

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94. In paragraph no. 17.10 of the chargesheet, it is noted that CBI had
placed certain mobile and landline numbers under surveillance after
obtaining the required approval from the competent authority. The CBI
has relied upon the authorization granted by the competent authority vide
order no. 14/3/97-CBI to intercept and monitor these phone numbers and
claims that the surveillance was conducted in accordance with due
procedure. The details of the intercepted conversations and CDRs
obtained through this surveillance have been included as part of the
prosecution‟s evidence to establish a link between the accused persons
including the petitioners and the alleged conspiracy.

95. The intercepted conversations purportedly reveal multiple
telephonic communications between the accused persons, including
conversations between Mr. Pawan Bansal, Mr. S.K. Jain, Mr. Ved
Prakash Agarwal and other individuals involved in the matter. These
conversations allegedly pertain to the ECB term loan proposal of PIL and
discussions surrounding the approval process of the said proposal at
Syndicate Bank. The prosecution has placed reliance on these
communications to indicate a pattern of regular interaction between the
accused, suggesting that these conversations were indicative of their
involvement in the alleged conspiracy.

96. It has further been alleged in the paragraph no. 17.17 of
chargesheet that the intercepted conversations point towards an
understanding between Mr. Pawan Bansal and Mr. S.K. Jain to expedite
the approval of the loan proposal of PIL and that certain directions were
issued to Mr. Majumdar, the then General Manager of Syndicate Bank, to
facilitate the same. The prosecution based on the communication dated 8 th

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July 2014, 12th July, 2014, and 14th July, 2014 has emphasized that the
regular communication between the parties and the discussions
surrounding the ECB loan proposal demonstrate a concerted effort to
ensure the swift processing and approval of the said proposal, allegedly
motivated by illegal gratification.

97. The CBI has also claimed that the surveillance data and CDRs
reflect not only telephonic conversations but also a continuous exchange
of information between the accused vide communication dated 17th May,
2014 and 18th May, 2014, which, according to the prosecution, points to a
deliberate attempt to influence the decision-making process at Syndicate
Bank. These intercepted communications have been presented as a key
component of the evidence to establish a meeting of minds between the
accused and substantiate the charge of conspiracy. Furthermore, the
intercepted conversations allegedly say that Mr. Pawan Bansal, despite
having no formal authorization from PIL to represent or pursue its loan
proposal with Syndicate Bank, was actively engaging with Mr. Sudhir
Kumar Jain and regularly updating Mr. Ved Prakash Agarwal and Mr.
Vipul Agarwal of PIL about the progress of the proposal. It is contended
by the investigating agency that such interactions and exchanges of
information, coupled with the alleged transfer of illegal gratification, are
indicative of a larger conspiracy to ensure favorable treatment for PIL in
securing the ECB term loan.

98. In light of the above, the surveillance data and the associated CDRs
obtained through the interception of the identified mobile and landline
numbers form a significant part of the evidence relied upon by the
prosecution to substantiate the charges framed against the accused. The

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prosecution contends that these intercepted communications demonstrate
the existence of a common understanding and coordinated effort among
the accused to influence the decision-making process in favor of PIL,
which, according to the prosecution, amounts to a conspiracy under the
relevant provisions of the law.

99. Upon examining the material placed before this Court and in terms
of the settled lawß, it is evident that the chargesheet filed by the
investigation agency is solely based on the conversation between the
accused persons and the CDRs.

100. The agency has not produced any corroborative evidence to
substantiate the allegations made against the petitioner, which renders the
transcript and the CDRs insufficient to establish a prima facie case.

101. It is a settled position of law that mere allegation and the transcripts
along with the CDRs and statements of witnesses, by themselves, cannot
be relied upon exclusively to implicate an accused in the absence of
corroborative evidence that validates the authenticity and relevance of the
recorded conversations.

102. The law is well-settled that a CDR report, being a secondary piece
of evidence, must be corroborated by independent evidence to establish
the existence of any criminal conspiracy.

103. In the absence of corroborative material, reliance on CDR data
alone would be insufficient to sustain the prosecution‟s case herein. The
Hon‟ble Supreme Court, in several landmark decisions, has consistently
reiterated that mere telephonic conversations without corroboration do
not establish the guilt of the accused beyond a reasonable doubt.

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104. Upon a careful perusal of the statements of witnesses, transcripts
and CDRs report relied upon by the investigating agency, it is noted that
the same merely reflects telephonic conversations among Mr. Ved
Prakash Agarwal, Mr. Vipul Agarwal, Mr. SK Jain and Mr. Pawan
Bansal. However, these conversations do not reveal or establish any
element of criminal conspiracy or wrongdoing, as alleged by the
prosecution with respect to the present petitioners insofar the allegation
made is with regard to the alleged bribing of Mr. SK Jain in pursuant to
PIL‟s proposal. The statements of witnesses, CDRs and the recorded
conversation only demonstrates that these individuals were in
communication, which, by itself, does not point to any corrupt or illegal
activity „on the face value of the record‟.

105. Furthermore, it is an admitted position in this petition that Mr. Ved
Prakash Agarwal availed the services of M/s Altius for the processing of
his loan proposal. However, this fact, in isolation, does not imply any
corrupt practice or criminal conspiracy. Engaging a consultancy firm for
loan-related assistance is a routine commercial transaction and does not
indicate any culpability on the part of the petitioner.

106. Additionally, the charges framed against the petitioners include
allegations of corruption, however, it is pertinent to note that Mr. Ved
Prakash Agarwal is not a public servant, and as such, the provisions
relating to corruption under the PC Act cannot be invoked against him
without any direct evidence to link him to the alleged fact of bribing a
public servant under Section 8 of the PC Act. Since corruption charges
can only be attributed to public servants or those aiding and abetting them
in committing corrupt acts, such charges cannot be sustained against the

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petitioners in the present case in the absence of any specific material on
record such as bank statements, any oral or written communication, or
any material to indicate exchange of monies etc.

107. It is also noted that Mr. Pawan Bansal, one of the co-accused, has
admitted that he was assisting in loan proposals for several other
companies as well. Mr. Pawan Bansal was engaged in business dealings
not only with Mr. Ved Prakash Agarwal‟s company but also with various
other entities such as M/s Monnet Ispat and Energy Limited and the same
is a crucial factor to determine the veracity of the allegations made in the
chargesheet.

108. This fact raises a presumption of doubt in favor of the petitioners,
as the existence of multiple business transactions weakens the inference
of any exclusive or specific conspiracy between the parties involved from
the CDR. Given the lack of direct and conclusive evidence to establish
the alleged conspiracy or corruption, the benefit of doubt must accrue in
favor of the petitioners. Therefore, considering the aforesaid admission
by Mr. Bansal, it becomes impossible to conclusively trace or attribute
any alleged transaction to the present petitioners. In the absence of any
specific evidence linking the petitioners to any corrupt practice or
conspiracy, a mere association or business relationship cannot form the
basis of criminal liability.

109. Moving further, the statement of Mr. U.S. Majumdar, recorded
under Section 164 of the CrPC has also been carefully scrutinized. In his
statement, Mr. Majumdar mentioned that he was under pressure from his
superior authorities, particularly Mr. S.K. Jain, who was serving as the

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CMD, Syndicate Bank. It is alleged that Mr. S.K. Jain was exerting
pressure to ensure the completion of the loan proposal.

110. However, upon a closer examination of Mr. Majumdar‟s statement,
it is observed that the nature and extent of the pressure exerted by Mr.
S.K. Jain have not been clearly articulated. The statement does not
specify whether this pressure was related to the urgency of completing
the work, the magnitude of the loan amount, or any undue influence to
favor a particular party especially the petitioners. Since the loan amount
in question was substantial, any apprehension or caution exercised by
bank officials could have arisen due to the high financial risk associated
with such transactions, rather than any illegal influence.

111. Moreover, Mr. Majumdar‟s statement does not directly or ex facie
implicate Mr. Ved Prakash Agarwal in any manner and there is no
mention of any undue pressure exerted by the petitioners directly or any
specific conduct that could be construed as coercive or improper on the
part of the petitioners. The statement remains vague, ambiguous, and
lacks any prima facie evidence to support the allegations leveled by the
investigating agency.

112. In the absence of any clear, specific, and incriminating details in
Mr. Majumdar‟s statement, reliance on such vague and unsubstantiated
assertions cannot form the basis of criminal liability. It is a settled
principle of law that uncorroborated statements cannot be the sole
foundation for drawing adverse inferences against an accused.

113. Therefore, the allegations made by the investigation agency against
the petitioner, based on Mr. Majumdar‟s statement, remain
uncorroborated by any substantial or reliable evidence. Such unsupported

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assertions cannot be treated as conclusive proof of any criminal
conspiracy or misconduct. Consequently, this Court finds that the
material relied upon by the agency is insufficient to establish a prima
facie case against the petitioners.

114. In his statement made under Section 164 of the CrPC, Mr.
Ghanshyam Mudgal, an employee of PIL, has stated that he has delivered
Rs. 1.5 Crore to Mr. Pawan Bansal, but again, he gave contradictory
statement by deposing that that he has not delivered the said money as a
bribe to anyone. Further, he also specifically mentioned that he has never
delivered the money „directly to Mr. Pawan Bansal‟.

115. It is pertinent to note that Mr. Mugdal categorically denied having
paid any bribe to anyone and further clarified that he never delivered the
said amount directly to Mr. Pawan Bansal. This inconsistency in his
statement raises serious doubts regarding the veracity and reliability of
his version. Therefore, it is drawn that upon further inquiry, the said
witness provided a contradictory version, and hence his statement cannot
be relied, as it is unclear.

116. Such self-contradictory statements, where the witness oscillates
between different versions, lack the degree of certainty required to
establish any incriminating fact. It is trite law that when a witness
provides inconsistent and contradictory statements, such testimony cannot
be relied upon as credible evidence for drawing adverse inferences
against the accused. Therefore, Mr. Mugdal‟s statement does not offer
any clear, credible, or conclusive evidence to support the prosecution‟s
case. Consequently, this Court finds that no prima facie case can be

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established against the petitioners based on the unsubstantiated and
contradictory assertions made by Mr. Ghanshyam Mugdal.

117. Moving further, the prosecution has placed reliance on information
sourced during the investigation, suggesting PIL, engaged in the sectors
of Coal Mines, Iron and Steel, Power, and Wind Energy, hired the
services of M/s Altius Finserve Pvt. Ltd. to facilitate the sanction of ECB
amounting to USD 20 Million for the buyback of FCCB.

118. It is alleged that Mr. Ved Prakash Agarwal and Mr. Vipul Agarwal,
were in constant touch with Mr. Pawan Bansal for obtaining approval of
their loan proposal by Syndicate Bank. Furthermore, the investigating
agency has contended that Mr. Ved Prakash Agarwal and Mr. Vipul
Agarwal conspired to approach Mr. SK Jain, CMD, Syndicate Bank, to
expedite the said approval. The investigation alleges that multiple
personal meetings occurred between Mr. Pawan Bansal and Mr. SK Jain,
allegedly for this purpose.

119. The prosecution further claims that on 14th July, 2014, Mr. Pawan
Bansal contacted Mr. SK Jain and requested him to expedite the approval
of the said proposal. The approval was allegedly granted on 15 th July,
2014, and the decision was conveyed to Mr. Pawan Bansal by Mr. SK
Jain. It is also alleged that the said proposal was approved despite certain
queries raised by Mr. U.S. Majumdar, General Manager, Syndicate Bank
(Mumbai), concerning the proposal submitted by PIL, which were still
pending.

120. However, no direct or substantive evidence has been presented to
establish any criminal conspiracy between the parties. The mere act of
requesting for expediting the approval process of a legitimate business

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proposal does not, by itself, amount to a conspiracy. A request to expedite
a proposal, even if made through personal channels or professional
intermediaries, cannot be presumed to be an unlawful act, unless
supported by evidence demonstrating a quid pro quo or corrupt intent.

121. Conspiracy requires the existence of a prior agreement or meeting
of minds to commit an illegal act, and in the absence of any tangible
evidence indicating any coercion, undue influence, or gratification, the
allegations appear to be based on mere conjecture and suspicion. There is
no credible evidence to suggest that the proposal‟s approval was
contingent upon any unlawful favour or that the alleged meetings
between Mr. Pawan Bansal and Mr. SK Jain involved any discussion
beyond the professional realm.

122. It is further observed that even if certain queries raised by Mr. U.S.
Majumdar, General Manager, Syndicate Bank (Mumbai), remained
pending, it cannot be conclusively inferred that the approval was granted
with any mala fide intention. The authority to approve or reject a proposal
lies within the discretion of the approving authority, and in the absence of
any clear evidence suggesting coercion, inducement, or malice, the
exercise of such discretion cannot automatically be deemed to be corrupt
or collusive.

123. Moreover, it is pertinent to note that the allegations regarding a
conspiracy between the parties are not corroborated by any
contemporaneous records or documentary evidence. The mere fact that
PIL engaged the services of M/s Altius Finserve Pvt. Ltd. and that
meetings took place between Mr. Pawan Bansal and Mr. SK Jain does not
inherently point towards a conspiracy, as such interactions are

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commonplace in corporate and financial dealings. Without corroborative
evidence, assumptions of criminality cannot be drawn from routine
business interactions.

124. Mere suspicion or a speculative inference, without supporting
material, cannot be the basis for a finding of conspiracy. The Hon‟ble
Supreme Court has consistently held that a charge of conspiracy must be
backed by cogent and convincing evidence establishing the meeting of
minds and a shared intention to commit an illegal act. In the present case,
however, the prosecution has failed to establish any direct link between
the parties with regard to the bribe that could justify invoking the charge
of criminal conspiracy.

125. Consequently, in the absence of substantial, credible, and
corroborative evidence supporting the allegations, the claims raised by
the investigation agency remain unsubstantiated and speculative. This
Court, therefore, finds that the alleged conspiracy is not established
beyond reasonable doubt, and the allegations levelled by the prosecution,
based on unverified sources and presumptions, do not withstand judicial
scrutiny.

126. The prosecution has further alleged that PIL had agreed to pay a
substantial amount of money to Mr. Pawan Bansal in exchange for his
services to expedite the approval process. It is claimed that Mr. Pawan
Bansal was entrusted with ensuring the payment of illegal gratification to
Mr. S.K. Jain, CMD, Syndicate Bank, and that this arrangement was
purportedly communicated to Mr. S.K. Jain during several rounds of
personal meetings.

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127. The prosecution further contends that, pursuant to this
understanding, a major portion of the agreed amount was allegedly
delivered to Mr. Pawan Bansal by PIL through their employee, Mr.
Ghanshyam. Additionally, it is claimed that the illegal gratification
intended for Mr. SK Jain was subsequently delivered to Mr. Purushottam
for onward transfer to Mr. Vineet Godha, who was purportedly acting on
behalf of Mr. SK Jain.

128. Upon a careful examination of the allegations, this Court is unable
to accept the claims made by the prosecution as the same lack
corroborative evidence and remain unsubstantiated.

129. The entire premise of the alleged conspiracy and illegal
gratification is based solely on the statements of witnesses, recorded
conversation and CDRs, which merely indicate telephonic contact
between the parties. It is a settled legal principle that CDR data alone,
without any corroborative evidence, is insufficient to establish criminal
intent or conspiracy.

130. CDR records may, at best, demonstrate communication between
individuals but cannot, in isolation, be relied upon to draw an inference of
conspiracy or the exchange of illegal gratification. The Hon‟ble Supreme
Court has consistently held that mere communication between
individuals, without any substantive corroborative material, cannot form
the basis of a finding of conspiracy or corruption.

131. Furthermore, the allegations pertaining to the delivery of money by
Mr. Ghanshyam to Mr. Pawan Bansal and subsequently for the benefit of
Mr. SK Jain lack any credible evidence or documentary proof. The
prosecution has failed to establish the necessary meeting of minds or a

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common intention required to substantiate the claim of conspiracy. For a
conspiracy to be established, there must be a clear and conscious
agreement between the parties to commit an illegal act, accompanied by
overt acts in furtherance of that agreement. However, in the present case,
there is no evidence indicating any such agreement or intention to provide
or accept illegal gratification.

132. Moreover, the statement of Mr. Ghanshyam, which forms the basis
of the allegation, is contradictory and inconsistent. While he initially
claimed to have delivered the money, he later denied having given any
bribe. His statements are vague, lack specificity, and do not provide any
conclusive proof of the alleged delivery of money or the existence of any
illegal agreement between the parties.

133. It is also pertinent to note that there is no direct evidence
establishing that Mr. S.K. Jain was aware of or consented to receiving
any illegal gratification through Mr. Vineet Godha. In the absence of any
admissible evidence or corroboration, the prosecution‟s narrative remains
speculative on the face of it.

134. Consequently, the allegations regarding the payment of illegal
gratification and conspiracy between the accused persons are unsupported
by credible evidence. The prosecution‟s case, being primarily based on
unverified statements and CDR records, fails to establish the essential
ingredients of conspiracy or corruption beyond reasonable doubt.

135. At this stage, this Court finds it pertinent to note that the pendency
of a separate criminal case (RC AC 1 2014 A 0004) against Mr. S.K. Jain
does not automatically imply his culpability in the present matter. It is a
well-established principle that criminal liability is personal and cannot be

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imputed merely based on the association or designation of the accused.
Furthermore, the allegations against Mr. SK Jain in the present case must
be evaluated independently and cannot be influenced by the pendency of
RC AC 1 2014 A 0004. The prosecution is obligated to establish the guilt
of the accused in the present matter beyond reasonable doubt, without
drawing presumptions based on the existence of another criminal case
against him.

136. It is pertinent to highlight that the allegations in RC AC 1 2014 A
0004 pertain to a distinct set of facts, transactions, and offences which are
independent of the facts and circumstances of the present case. The
prosecution has failed to establish any direct nexus or connection between
the two cases, and no cogent evidence has been placed on record to show
that the allegations in the current matter are a continuation or
consequence of the previous case. Mere pendency of another case against
the accused cannot be used as a presumption of guilt or propensity to
commit offences in the present case. Consequently, any attempt by the
prosecution to draw an inference of guilt based on the pendency of
another case is legally untenable and cannot be sustained.

137. Summarily stated, the prosecution has alleged that Mr. S.K. Jain,
the then CMD of Syndicate Bank, and Mr. Pawan Bansal were well
acquainted and in regular contact regarding the ECB term loan proposal
of PIL. It is asserted that although there was no formal written
authorization granted by PIL to Syndicate Bank permitting Mr. Pawan
Bansal or his firm to pursue the loan proposal on its behalf, Mr. S.K. Jain
was allegedly discussing the developments of the proposal with Mr.
Pawan Bansal and sharing official information. The prosecution further

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contends that Shri Pawan Bansal, in turn, shared the said information
with Mr. Ved Prakash Agarwal and Mr. Vipul Agarwal of PIL to create
an impression of influence.

138. Mr. Majumdar, the then General Manager, Treasury and
International Banking Division (T&IBD), Syndicate Bank, Mumbai, lack
substantive corroboration. While Mr. Majumdar in his statement recorded
under Section 164 of the CrPC stated that he forwarded the proposal of
PIL to the Corporate Office under pressure from Mr. SK Jain, it is
pertinent to note that his statement does not clearly define the nature,
type, or intensity of the alleged pressure. Mr. Majumdar merely stated
that there was pressure from senior officials, without specifying whether
it was work-related pressure, urgency of a high-value proposal, or any
undue coercion. Such vague and ambiguous statements cannot be relied
upon to draw an adverse inference against the petitioners or to establish
the existence of any criminal conspiracy.

139. Furthermore, the prosecution has not presented any concrete
evidence to establish that Mr. Vipul Agarwal, Consultant, PIL, was
involved in any unlawful activity. The allegations that Mr. Vipul Agarwal
was pursuing the ECB term loan proposal through Mr. Pawan Bansal and
was regularly in touch with him over the phone do not, in themselves,
establish any culpability or conspiracy. Mere telephonic conversations
between parties involved in a business proposal cannot be construed as
evidence of a criminal act, unless accompanied by substantial proof
indicating any mens rea. The law is well settled that suspicion, no matter
how strong, cannot take the place of proof.

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140. It is also alleged that Mr. Vipul Agarwal facilitated the transfer of
an amount of Rs. 3.25 Crores through illegal channels using the services
of Mr. Ghanshyam Mudgal and Mr. Ashok Sharma, employees of PIL,
which was allegedly received by Mr. Ajay Bansal, a relative of Mr.
Pawan Bansal, in Delhi. However, this Court observes that no cogent
evidence has been placed on record to substantiate this serious allegation.
No documentary or independent proof has been adduced to establish the
alleged transaction of Rs. 3.25 Crores. The mere mentioning of a figure in
the allegations without any bank records, financial trail, or independent
corroboration does not meet the standard of proof required in criminal
cases.

141. In view of the aforesaid discussions of facts and law, this Court is
of the considered view that the learned Special Judge has failed to
consider that the proposal submitted by Mr. Majumdar was forwarded
without obtaining the requisite clarifications and internal rating
confirmation from the company. This procedural lapse, if any, should
have been thoroughly examined by it, but the same was overlooked. The
absence of any concrete evidence to establish the existence of a
conspiracy or collusion between Mr. Sudhir Kumar Jain, Mr. Pawan
Bansal, Mr. Vipul Agarwal, and others, further weakens the case of the
prosecution.

142. In view of the above analysis, this Court finds that the allegations
against the petitioners are based on telephonic conversations, vague
statements, and uncorroborated allegations which are insufficient to
establish a criminal conspiracy or wrongful conduct. Mr. Majumdar‟s
statement under Section 164 of the CrPC does not contain any specific

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details or corroborative evidence to support the claims made by the
prosecution. Moreover, the allegation of cash transfer of Rs. 3.25 crores
is unsupported by any independent evidence or financial records, making
it legally unsustainable.

143. It is further an admitted fact of the CBI in the chargesheet as
mentioned in paragraph no. 17.26 that PIL was not solely pursuing the
ECB term loan proposal with Syndicate Bank, but was simultaneously
pursuing loan proposals with multiple financial institutions, including the
Bank of Maharashtra, Raipur, and LIC of India. The recorded
conversations indicate that Mr. Pawan Bansal was actively pursuing the
loan proposal of PIL with these institutions as well. However, it is
pertinent to mention that the loan proposal submitted to Bank of
Maharashtra, Raipur, was rejected by the bank after the registration of the
CBI case against the promoter directors of PIL.

144. This fact highlights that the loan proposal of PIL was being
independently assessed by various financial institutions and not
exclusively influenced or expedited by any alleged conspiracy involving
Syndicate Bank. The simultaneous pursuit of loan proposals with multiple
financial institutions indicates a legitimate and routine business practice
of seeking financial assistance from various sources, which is a standard
industry practice for large corporate entities.

145. Moreover, the rejection of the loan proposal by Bank of
Maharashtra, Raipur, despite any alleged involvement of Mr. Pawan
Bansal or any other individual, further weakens the CBI‟s claim of a
larger conspiracy. The recorded conversations, while indicating that Mr.
Pawan Bansal was pursuing the proposal, do not provide any

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corroborative evidence that such pursuits were part of an orchestrated
conspiracy to unduly influence the decision-making process of the banks.

146. Therefore, the mere act of pursuing multiple loan proposals with
different banks and financial institutions, which is a common and
legitimate business practice, cannot be construed as an act of conspiracy.
In the absence of any tangible evidence to demonstrate that the approvals
or rejections of these proposals were influenced by illegal gratification or
undue pressure, the allegations leveled by the CBI cannot be relied upon
to substantiate the charge of conspiracy.

147. Consequently, the prosecution has failed to discharge its burden of
proof and establish the allegations prima facie, which is a sine qua non
for conviction in criminal cases. Hence, no adverse inference can be
drawn against the petitioners solely on the basis of assumptions,
conjectures, or suspicion and it is held that the learned Special Judge
erred in passing the impugned order, thereby, summoning the petitioners
and further erred in accepting the charges framed against the petitioners
in the chargesheet.

CONCLUSION

148. In view of the aforesaid facts and circumstances, the following
directions are passed by this Court:

a. It is held that the learned Special Judge erred in passing the
impugned order dated 9th March, 2018, thereby, summoning the
petitioners namely M/s Prakash Industries Ltd. (through Mr. Ved
Prakash Agarwal), Mr. Ved Prakash Agarwal and Mr. Vipul
Agarwal. The same is erroneous and legally unfounded as there is
no substantial material to show that the said petitioners have

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committed any offence on a prima facie perusal of the record.
Accordingly, the impugned order dated 9th March, 2018 passed by
the learned Special Judge, CBI-05, Patiala House Courts, New
Delhi district, New Delhi is, hereby, quashed qua M/s Prakash
Industries Ltd., Mr. Ved Prakash Agarwal and Mr. Vipul Agarwal.
b. Further, RC no. – AC-1/2014/A-0005/CBI/AC-I dated 1st August,
2014 as well as the final report dated 27th September, 2017 filed in
CC No. 30/2017, and all the other consequential proceedings
arising out of the said FIR are also quashed qua the petitioners M/s
Prakash Industries Ltd., Mr. Ved Prakash Agarwal and Mr. Vipul
Agarwal.

149. In view of the aforesaid terms, the captioned petitions are allowed
and stands disposed of. Pending application(s), if any, also stand disposed
of.

150. It is made clear that the observations made hereinabove shall not be
construed as an expression of this Court on the merits of the case pending
before the Court concerned.

151. It is also made clear that this Court has not gone into the veracity
of allegations qua the other accused persons.

152. The judgment be uploaded on the website forthwith.

(CHANDRA DHARI SINGH)
JUDGE
MARCH, 28, 2025
rt/ryp/kj Click here to check corrigendum, if any

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Delhi High Court

M/S Prakash Industries Ltd & Anr vs Directorate Of Enforcement & Anr on 28 March, 2025

Author: Chandra Dhari Singh

Bench: Chandra Dhari Singh

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