CENTRAL BUREAU OF INVESTIGATION Vs. GURPAL SINGH

JUDGEMENT

(1.) The Central Bureau of Investigation (for short 'CBI') is aggrieved by the impugned order dated 12.4.2005 passed by the learned Special Judge discharging the accused/respondents for offences under Sections 120-B/409 of the IPC read with Section 13(2) and 13(1)(d) of the Prevention of Corruption Act 1988.

(2.) The case in question was registered on 27.7.1998 by the CBI in respect of transaction during the period of 1994-95. It was alleged that Shri K.S. Bains, the then Chairman and Managing Director of Punjab and Sind Bank (hereinafter referred to as the Bank) was a member of criminal conspiracy with Shri Gurpal Singh, the then General Manager (Operations) of the Bank, Shri H.S. Pall, the then Branch Manager of the Bank, Shri A.S. Roy, Managing Director of M/s. Jayanti Business Machines Limited, Mumbai (for short 'M/s. JBML'), M/s. Prasad and Company (share broker) and M/s. JBML to cheat the Bank in the matter of purchase and sales of shares of M/s. JBML and sanction of limits for the said company. Shri K.S. Bains was alleged to have passed an order dated 23.12.1994 after meeting with Shri A.S. Roy for purchase of shares worth Rs.2.00 crore on firm allotment basis and in pursuance to the said order a note was moved by the Funds Management Department of the Bank to the Investment Committee. The Investment Committee in its meeting held on 9.1.1995 rejected the proposal on the ground that it was not possible to book profits for the Bank for the financial year ending 31.3.1995. Shri Gurpal Singh was, however, alleged to have submitted a note dated 18.1.1995 without referring to the earlier decision of the Investment Committee in respect of purchase of shares to the extent of Rs.2.00 crore at a premium of Rs.70.00 per share. This note dated 18.1.1995 was placed before the Investment Committee, which approved the same on 20.1.1995 and the proposal was subsequently approved by the Board of the Bank on 2.3.1995.

(3.) It was also alleged that the Bank extended underwriting support of Rs.1.00 crore to the Company, which was sanctioned by Shri K.S. Bains and approved by the Management Committee on 17.2.1995. Shri Gurpal Singh, however extended the underwriting support by Rs.1.25 crore which was post facto approved by Shri K.S. Bains on 30.5.1995 and the enhancement of underwriting support by Rs.25.00 lakh to the Company was not reported to the Management Committee of the Bank. Shri Gurpal Singh also alleged to have made available bank funds by sanctioning limits to an associate company for purchase of shares and also sanctioned limits by arranging a proposal within his powers though the proposal for a higher limit which was beyond his powers was pending at the Headquarters.