MADHU BAKSHI vs ANTI CORRUPTION BUREAU KASHMR AND ANOTHER
- Court
- Jammu and Kashmir High Court
HIGH COURT OF JAMMU &KASHMIR AND LADAKH AT
SRINAGAR
Reserved on: 14.05.2026
Pronounced on: 30.06.2026
Uploaded on: 01.07.2026
Whether the operative part or full
judgment is pronounced: Full
CRM(M) No.235/2023
c/w
CRM(M) Nos.504/2022, 234/2023,
236/2023, 555/2024, 556/2024,
557/2024 & 558/2024
MADHU BAKSHI
RAJ SINGH GEHLOT
SHEELA GEHLOT
MOHAN SINGH
M/S AMAN HOSPITALITY PVT. LTD.
M/S RAJ COMMERCIAL AND AGENCIES LTD.
NGR CONSULTANT PVT. LTD.
AMBIANCE PVT. LTD. ...PETITIONER(S)
Through: - Mr. Tanveer Ahmad Mir, Sr. Adv. With
Mr. Vaibhav Suri, Advocate,
Mr. Arfat Rashid, Advocate,
Mr. Taha Khalil, Advocate.
Vs.
ANTI-CORRUPTION BUREAU & ANR. …RESPONDENT(S)
Through: - Mr. Vikas Malik, CGC, with
Mr. Mushtaq Ahmad Dar, Advocate,
Mr. Syed Gowhar, Advocate.
CORAM:
HON’BLE MR. JUSTICE SANJAY DHAR, JUDGE
JUDGMENT
1) By this common judgment, the afore-titled eight
petitions bearing CRM(M) Nos.235/2023, 504/2022,
234/2023, 236/2023, 555/2024, 556/2024, 557/2024 &
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CRM(M) No.504/2022 & other connected petition Page 1 of 41
558/2024 filed under Section 482 Cr.P.C., challenging
charge sheets arising out of FIR No.15/2019 of Police Station
Anti-Corruption Bureau (Central), Srinagar, and Crime
No.RCBD12021E0004 dated 02.09.2021 registered by
Central Bureau of Investigation, BSFB, New Delhi, are
proposed to be decided. CRM(M) No.235/2023 has been filed
by Madhu Bakshi, CRM(M) No.504/2022 has been filed by
Raj Singh Gehlot, CRM(M) No.234/2023 has been filed by
Sheela Gehlot, CRM(M) No.236/2023 has been filed by
Mohan Singh, CRM(M) No.555/2024 has been filed by M/S
Aman Hospitality Private Limited, CRM(M) 556/2024 has
been filed by M/S Raj Commercial and Agencies Ltd, CRM(M)
No.557/2024 has been filed by M/S NGR Consultant Private
Limited whereas CRM(M) No.558/2024 has been filed by M/S
Ambience Private Limited.
2) Briefly stated, the facts giving rise to filing of the present
petitions are that on the basis of a source report, verification
was conducted by Anti-Corruption Bureau (Central),
Srinagar, to look into the allegations that the officers/officials
of the J&K Bank, Ansal Plaza Branch, New Delhi, had
advanced a loan worth crores of rupees to petitioner M/S
Aman Hospitality Pvt. Ltd. (for short “AHPL”) and that in
connivance with the said company, the loan amount has been
declared ‘NPA’ to facilitate One Time Settlement (OTS) with
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CRM(M) No.504/2022 & other connected petition Page 2 of 41
the purpose of extending undue advantage to the borrower
company.
3) During the course of verification, it surfaced that AHPL
had submitted feasibility study and development strategy
reports for setting up a ‘Twin Five Star Hotel’ project at
Shahdara, Delhi. The cost of project was estimated at
Rs.866.89 crores, with a further revised cost of the project
amounting to Rs.1275.71 crores. AHPL obtained a term loan
amounting to Rs.227 crores besides Rs.15 crores as bank
guarantee limit from J&K Bank Ltd. Branch Unit Ansal Plaza,
New Delhi, whereas rest of the loan was availed by the
company from other banks against the mortgage of project
land measuring 20,000 square meters, including building of
five-star Deluxe Hotel Complex constructed thereupon
situated at Shahdara, Delhi. Besides this, rentals accruing on
commercial area proposed to be leased out were also offered
as security and it was also provided that all other current
assets would be hypothecated and petitioner Raj Singh
Gehlot, Managing Director of the company, offered his
personal guarantee worth Rs.41.01 crores, favouring a
consortium of banks including J&K Bank as lead bank. It is
further alleged in the FIR that the term loan amounting to
Rs.227.01 crores was disbursed in favour of AHPL (Rs.70
crore was disbursed during the financial year 2009-10, Rs.30
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CRM(M) No.504/2022 & other connected petition Page 3 of 41
crores in 2010-11, Rs. 111.98 crores in 2011-12, and
Rs.15.03 crores in 2012-13 respectively).
4) It is alleged in the FIR that the borrower company turned
willful defaulter as it failed to repay the loan amount at
regular intervals and the Bank took a decision on 16.12.2014
for restructuring the loan account and an amount of
Rs.165.82 crores was sanctioned as funded interest term loan
by all the member banks in favour of the company out of
which J&K Bank sanctioned Rs.47.21 crores against interest
amount due from 01.04.2014 to 31.03.2016. Since the
company failed to repay the loan amount, the J&K Bank
authorities declared the loan account as ‘NPA’ on 30.06.2018
and at this stage, outstanding amount against the company
was Rs.261.47 crores as principal amount and the interest
component of Rs.27.8 crores till 30.04.2019. Thus, the total
outstanding amount against the borrower company in respect
of the Jammu and Kashmir Bank was Rs.289.28 crores. It is
alleged that J&K Bank officials illegally and with malafide
intention settled the loan account for an amount of Rs.128.94
crores only against total outstanding amount of Rs.289.28
crores, which was less than one half of the principal amount
of Rs.261.47 crores. It is further alleged in the FIR that the
J&K Bank, being the lead bank, through its management as
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well as its officers/officials, by abuse of their authority for
pecuniary considerations, in connivance with Raj Singh
Gehlot, Dayanand Singh and Aman Gehlot, Promoter
Directors of AHPL, illegally and through a dubious deal,
conferred huge pecuniary benefits of Rs.160.34 crores upon
the promoters without taking recourse to proceedings under
SARFAESI Act and straight away going for one-time
settlement. Thus, as per the allegations made in the FIR, the
Jammu and Kashmir Bank suffered huge monetary loss to
the tune of Rs.289.28 crores.
5) On the basis of aforesaid allegations, it has been noted
in the FIR that commission of criminal misconduct by the
management/officers/officials of the J&K Bank and the
Promoter/Directors of the beneficiary company and others, is
disclosed which constitute offences under Section 5(1)(d) read
with Section 5(2) of the J&K Prevention of Corruption Act and
Section 120-B of RPC.
6) After investigation of the case by ACB, it was revealed
that a term loan of Rs.100 crores along with bank guarantee
of Rs.5 crores was advanced by the J&K Bank to AHPL, which
was approved by the Board of Directors of the J&K Bank vide
Board Resolution No.24 dated 24.08.2009. After availing the
said term loan, the borrower company availed the second
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CRM(M) No.504/2022 & other connected petition Page 5 of 41
term loan of Rs.50 crores on 27.10.2011, third term loan of
Rs.77 crores on 30.01.2012, and funded interest term loan of
Rs.47.21 crores on 17.12.2014.
7) During the investigation conducted by ACB, the
allegations of criminal conspiracy, criminal breach of trust,
cheating and criminal misconduct by public servants were
established in respect of first disbursement of Rs.35 crores
out of first term loan of Rs.100 crores. It was revealed that
though funds were disbursed to AHPL through its designated
account bearing Current Account No.637 maintained at J&K
Bank, Ansal Plaza, New Delhi, yet from there the same were
transferred to the account of M/S APL. The amount from the
account of M/S APL was further transferred in favour of
various entities/accounts on different dates. The details in
this regard as mentioned in the charge sheet are given as
under:
“An amount of Rs. 4 crores was transferred in the CD account
no.03691010000881 of Raj. Commercial & Agencies maintained in OBC,
Safdarjung Enclave Branch New Delhi.
From the CD account of Raj Commercial & Agencies with OBC
Safdarjung Enclave Branch New Delhi ₹4 crore was further transferred
in the following accounts maintained in the same Bank of OBC
Safdarjung Enclave Branch, New Delhi:
29.09.2009 2.81 crore 03691010004680 NGR Consultant Pvt. Ltd.
29.09.2009 89 lakh 0369101007030 Sheela Gehlot
29.09.2009 12.55 lakh 03692010010780 Madhu Bakshi
29.09.2009 7 lakh 03691010004670 Ambience (P) Ltd.
29.09.2009 1 lakh 03691010004680 NGR Consultant (P) Ltd.
29.09.2009 10 lakh 03691010004680 NGR Consultant (P) Ltd.
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CRM(M) No.504/2022 & other connected petition Page 6 of 41
NGR Consultant (P) Ltd. is also a group concern of Ambience Group. The
Director of NGR Consultant (P) Ltd. is (A-1) Raj Singh Gehlot and has
same address i.e. L-4 Green Park Extension New Delhi. ₹ 2.92 crore
(2.81 cr+1 lac+10 lakh) transferred in the account of NGR Consultant (9)
Ltd. from M/s Raj Commercial and Agencies was utilized for making
online payments of seif-assessment taxes by (A-7) NGR Consultant Pvt.
Ltd. This amount was used contrary to the purpose of sanction
M/s Raj Commercial and Agencies transferred 89 lakh in the account no.
0369101007030 of Smt. Sheela Gehlot with the same Bank i.e OBC
Safdarjung Enclave New Delhi. Investigation further revealed that Smt.
Sheela Gehlot had utilized 85.04 lakhs for online payment of self
assessment taxes and returned 2 lakhs back to Raj Commercials and
Agencies.
M/S Raj Commercial and Agencies transferred ₹12.55 lakh in the
account no. 03692010010780 of Smt. Madhu Bakshi which was used by
Smt. Madhu Bakshi in making online payment of self assessment taxes.
On 29.09.2009, Ansal Plaza branch New Delhi transferred ₹4 crore from
the first disbursement of ₹35 crore in the account of Ambience Limited
in OBC Safdarjung Enclave Branch New Delhi. On the same day,
Ambience Ltd. transferred the same amount in the account of Raj
Commercial & Agencies. On the same day Raj Commercial and Agencies
transferred ₹7 lacs back in the account of Ambience Ltd. maintained at
the same bank i.e. OBC Safdarjung Enclave Branch New Delhi. This
amount was used as Bank Guarantee Commission charged by OBC Bank
for BG of ₹6.27 crore in favour of Director Town & Country Planning
Chandigarh Haryana.
₹26.35 crore was transferred from Designated a/c по.
0408010100000637 in the name of Aman Hospitality Pvt. Ltd. in Ansal
Plaza Branch New Delhi of J&K Bank through RTGS on 29.09.2009 in the
CC a/c no. 19450510000076 of Ambience Ltd. maintained at UCO Bank,
Parliament Street Branch, New Delhi. After the credit of 26.35 crore
from M/s AHPL in the account of M/s Ambience Ltd. with UCO Bank,
Parliament Street, New Delhi, Mohan Singh Director Ambience Ltd.
made 04 FDs of ₹2.60 crore, ₹2.60 crore, ₹1.30 crore and ₹19.40 crore
(Total₹ 25.90 cr).
The above four FDs were closed prematurely and the amount was
credited back in the Current/CC of Ambience Pvt. Ltd. which is
established from the statement of accounts of all the four FDs as well
as statement of CA and CC account of Ambience Pvt. Ltd. collected
during the course of investigation conducted.”
8) Thus, according to the charge sheet, the amount of loan
disbursed was diverted/misappropriated by petitioner Raj
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CRM(M) No.504/2022 & other connected petition Page 7 of 41
Singh Gehlot, Director AHPL, in connivance with other
accused persons for purposes other than those mentioned in
the sanction order.
9) After conducting part investigation in respect of first
disbursal of Rs.35 crores out of first term loan of Rs.100
crores, the J&K ACB filed charge sheet for offences under
Section 120-B read with 409, 420 RPC and Section 5(1)(c) and
5(1)(d) read with Section 5(2) of J&K PC Act against Raj Singh
Gehlot, Mohan Singh, Ms. Sheela Gehlot, Ms. Madhu Bakshi,
M/S Aman Hospitality Pvt. Ltd., M/S Ambiance Pvt. Ltd., M/S
NGR Consultants Pvt. Ltd., M/S Raj Commercial Land
Agencies, Rakesh Kumar Kharyal, the then Branch Head,
J&K Bank Limited, Ansal Plaza Branch, New Delhi, and
Kuldeep Kumar Gupta, the then Loan Manager, J&K Bank
Limited, Ansal Plaza Branch, New Delhi, before the Court of
Special Judge Anti-Corruption, Srinagar. Investigation of the
case was kept open in respect of other transactions pertaining
to the loan which was subject matter of the FIR as also with
regard to the role of other senior bank officers.
10) Pursuant to the request of the Government of J&K, vide
communication dated 23.06.2021, investigation of FIR
No.15/2019 of Police Station, ACB (Central), Srinagar, was
transferred to CBI. Accordingly, case No.RCBD12021E0004
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CRM(M) No.504/2022 & other connected petition Page 8 of 41
dated 02.09.2021 was registered at the Central Bureau of
Investigation, Bank Securities Fraud Branch, New Delhi, and
investigation of the case was conducted by the CBI.
11) While the initial charge sheet filed by ACB before the
Court of learned Special Judge Anti-Corruption, Srinagar,
was pending, the petitioners challenged the said charge sheet
by way of the present petitions. However, during the pendency
of these petitions, CBI completed further investigation of the
case and presented a supplementary charge sheet before the
special court.
12) Vide CrlM No.1423/2025 filed in CRM(M) No.504/2022,
petitioner Raj Singh Gehlot sought permission of this Court
to place on record supplementary charge sheet dated
31.12.2024 filed by the CBI on completion of investigation
and to amend the grounds in view of filing of the
supplementary charge sheet. The said application was
allowed by this Court in terms of order dated 12.02.2026.
13) ACB J&K had conducted investigation with regard to
diversion of funds to tune of Rs.35 crores out of first term loan
of Rs.100 crores. Thereafter, the investigation was taken up
by the CBI. As per the supplementary charge sheet filed by
the CBI, Raj Singh Gehlot, Director M/S AHPL approached
the J&K Bank for disbursement of further tranches of loan
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CRM(M) No.504/2022 & other connected petition Page 9 of 41
which were released by the Bank in the designated account
of M/S AHPL bearing current account No.637 maintained
with J&K Bank Ltd. Ansal Plaza Branch, New Delhi, and
thereafter, these funds were transferred to the account of M/S
Ambience Pvt. Ltd. (M/S APL). It was further found that the
said amounts were again transferred to different entities
which were owned and controlled by Raj Singh Gehlot,
thereby siphoning off the loan amount. The particulars of
these instances of diversion of funds have been mentioned in
the charge sheet. The relevant extracts of the charge sheet are
reproduced as under:
“The amount of Rs.10 crores was credited in the Current A/C
No.0408010100000637 of M/S AHPL maintained at J&K Bank
Ltd. Ansal Plaza Branch, New Delhi on 29.06.2010. The said
amount was further transferred to the following on 29.06.2010
itself:
SI.
No.
Name of the
Party
A/c No. and bank
Amount (in Rs.)
Name of
authorized
signatory
(i) M/s A-One
Trading Co
03691131001119
e-OBC Bank
3,26,95,450.00
Shamsher
Singh
(ii) Sidharth Sohu 601501011000642
e-Vijaya Bank
2,99,95,030.00
Siddharth
Shahu
(iii) M/s Buildwell
Mart
50007092062 e-
Allahabad Bank
3,68,95,800.00
Mohan Singh
The above loan funds were further transferred by S/Shri Shamsher Singh,
Prop. of M/s A-One Trading Co. Sidharth Shahu and Mohan Singh, Prop. of
M/s Buildwell Mart to the bank A/c No.03691011000881 of M/s Raj
Commercials and Agencies owned and controlled by Shri Raj Singh Gehlot,
Director of M/s AHPL on 29.06.2010. Shri Raj Singh Gehlot is the Proprietor
and Authorized Signatory in the Accounts of M/s Raj Commercial &
Agencies.
23. The amount of Rs.5 crores was credited in the Current A/c
No.0408010100000637 of M/s AHPL maintained at J&K Bank Ltd., Ansal
Plaza Branch, New Delhi on 30.07.2010. The said amount was further
transferred to the following entities on 31.07.2010:
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CRM(M) No.504/2022 & other connected petition Page 10 of 41
SI.
No.
Name of the Party
A/c No. and bank
Amount (in Rs.)
Name of
authorized
signatory
(i) M/s A. G.
Commercials
03691131001096
e-OBC
1,98,95,239.00
Amit Gehlot
(ii) M/s New Haryana
Traders
03691131001133
e-OBC
3,01,04,761.00
(Transaction
amount
3,01,57,653.00)
Pawan Singh
The above mentioned loan funds were further transferred by S/Shri Amit
Gehlot, authorized signatory of M/s A.G. Commercials and Pawan Singh,
authorized signatory of M/S New Haryana Traders to the bank A/c
No.03691011000881 of M/S Raj Commercials and Agencies owned and
controlled by Shri Raj Singh Gehlot, Director of M/s AHPL on 31.07.2010.
The amount of Rs.5 crores was credited in the Current A/c
No.0408010100000637 of M/s AHPL maintained at J&K Bank Ltd., Ansal
Plaza Branch, New Delhi on 27.08.2010. The said amount was further
transferred to the following entities on 28.08.2010:
SI.
No.
Name of the Party
A/c No. and bank
Amount (in Rs.)
Name of
authorized
signatory
(i) Bharat Building
Material Supplier
03691131001072
e-OBC
3,08,95,426.00
Shekhar
Singh
(ii) Buildwell Mart
50007092062 e-
Allahabad Bank
1,91,04,574.00
(Transaction
amount
3,86,00,274.00)
Mohan Singh
The above mentioned loan funds were further transferred by S/Shri Shekhar
Singh, authorized signatory of M/s Bharat Building Material Supplier and
Mohan Singh, authorized signatory of M/s Buildwell Mart to the bank A/c
No.03691011000881 of M/s Raj Commercials and Agencies owned and
controlled by Shri Raj Singh Gehlot, Director of M/s AHPL on 28.08.
The amount of Rs.5 crores was credited in the Current A/c
No.0408010100000637 of M/s AHPL maintained at J&K Bank Ltd., Ansal
Plaza Branch, New Delhi on 14.09.2010. The said amount was further
transferred to the following entities on 14.09.2010:
SI.
No.
Name of the Party
A/c No. and bank
Amount (in
Rs.)
Name of
authorized
signatory
(i) M/s A-One Trading
Co
03691131001119
e-OBC
3,06,12,893
Shamsher
Singh
(ii) M/s S.M.
Enterprises
03691131001089
e-OBC
1.90,32,686
Surender
Singh
The above mentioned loan funds were further transferred by S/Shri
Shamsher Singh, authorized signatory of M/s A-One Trading Co and
Surender Singh, authorized signatory of M/s S. M. Enterprises to the bank
A/c No.0369101 1000881 of M/s Raj Commercials and Agencies owned
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CRM(M) No.504/2022 & other connected petition Page 11 of 41
and controlled by Shri Raj Singh Gehlot, Director of M/s AHPL on
15.09.2010.
The amount of Rs.5 crores was credited in the Current A/c
No.0408010100000637 of M/s AHPL maintained at J&K Bank Ltd., Ansal
Plaza Branch, New Delhi on 29.11.2010. The said amount was further
transferred to the following entities on 29.11.2010 and 30.11.2010
respectively:
SI.
No.
Name of the Party
A/c No. and bank
Amount (in
Rs.)
(i) M/s Foster
Infrastructure Pvt. Ltd.
03691131001393
e-OBC
2,89,59,250.00
(ii) M/s Shlok
Infrastructure Pvt. Ltd.
03691131002192
e-OBC
2.09.68.700.00
The above mentioned loan funds were further transferred by M/s Foster
Infrastructure Pvt. Ltd. and M/s Shlok Infrastructure Pvt. Ltd. [Shri Raj Singh
Gehlot was the authorized signatory in both the companies] on 29.11.2010
and 30.11.2010 respectively to the bank A/c No.03691131002611 of M/s M
& N Commercials, whose affairs were managed by Shri Raj Singh Gehlot,
Director of M/s AHPL.”
14) The investigation further revealed that Shri Raj Singh
Gehlot, Director of M/S AHPL, submitted another loan
proposal/request dated 15.11.2010 at J&K Bank Ltd. Ansal
Plaza Branch, New Delhi, for additional term loan of Rs.50
crores to part finance additional term loan requirement of
Rs.270 crore for implementation of the project. The cost of the
project was revised to Rs.1275.72 crores. It is alleged that
Shri Rakesh Kumar Kharyal, the Branch Head, and Vinoji
Thathe, Manager Advances, J&K Bank, Ansal Plaza branch,
New Delhi, acted in furtherance of criminal conspiracy
hatched by Shri Raj Singh Gehlot and they recommended the
said additional term loan request of M/S AHPL in the absence
of any Project Appraisal Report or TEV Study for
enhancement of project cost by any expert company/agency.
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It was also revealed that the said proposal for sanction of
additional term loan of Rs.50 crores was sanctioned by the
Board in its meeting dated 28-02-2011 and the resolution was
signed by Shri Parvez Ahmad, the then President, in his
capacity as Secretary of the Board.
15)
During investigation, it was also revealed that
modifications in the terms and conditions of term loan of
Rs.100 crore and additional term loan of Rs.50 crores were
approved by Shri Mushtaq Ahmad, the then Chairman of the
Bank on 25.10.2011 and a condition was specifically
incorporated in relation to additional term loan of Rs.50
crores that Rs.30 crores out of the said additional term loan
would be utilized for repayment of short term loan of Rs.60
crore sanctioned and disbursed to M/S APL.
16)
It was revealed that Shri Raj Singh Gehlot tried his best
to get disbursal of funds out of additional term loan of Rs.50
crores already sanctioned for the project pending financial
closure but he failed to get the same released. However, he
got another short term loan of Rs.60 crore sanctioned from
J&K Bank, Ansal Plaza branch and Shri Rakesh Kumar
Kharyal, the Branch Head, disbursed the short term loan of
Rs.60 crores to M/S APL pending approval of Board of
Directors of the Bank. The said amount of Rs.60 crores was
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transferred through RTGS on 02.05.2011 to the Escrow
Account of M/S APL, whereafter the said amount was diverted
to the bank accounts of shell/dummy companies/ firms
incorporated in the names of relatives/employees of Shri Raj
Singh Gehlot. The details of these diversions have been
mentioned in the charge sheet and the same are reproduced
as under:
SI.
No.
Name of the
company/firm
Amount
(in Rs.)
Bank A/C No.
4,83,65,200 03691131001072
e-OBC
SM Enterprises 5,05,16,500 03691131001089
2.
e -OBC
3. A-One Trading Co. 4,89,14,450 03691131001119
e-OBC
4. New Haryana Traders 5,23,13,150
1. Bharat Building
Material Supplier
03691131001133
e-OBC
5. A G Commercials
5,25,10,219 50007059625
e-Allahabad Bank
6. Buildwell Mart 5,34,10,656 50007092062
e-Allahabad Bank
7. JP Corporation 4,41,09,425 50007438398
e-Allahabad Bank
Glaze Infradevelopers
8.
Pvt. Ltd.
4,87.58,350
601500301000388
e-Vijaya Bank
Inscence Developers
9.
Pvt. Ltd.
4,52,47,500
601500301000381
e-Vijaya Bank
Magnificient
10.
Infradevelopers Pvt.
Ltd.
5,17,01,520
601500301000380
e-Vijaya Bank
Infrastructure Pvt. Ltd.
11.
5,15,20,217
601500301000383
e-Vijaya Bank
Palmtree Infracon Pvt.
12.
Ltd.
5,26,32,813
601500301000387
e-Vijaya Bank
Total 60,00,00,000
17) It has been further revealed that Rs.30 crores out of
additional term loan of Rs.50 crores of M/S AHPL was utilized
to repay the short-term loan of M/S APL, which amounts to
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diversion and misutilization of the bank funds for the purpose
other than for which term loan of Rs.50 crores was sanctioned
to M/S AHPL.
18) Investigation further revealed that Shri Raj Singh
Gehlot, Director of M/S AHPL, submitted another loan
proposal dated 18.01.2012 for term loan of Rs.77 crores at
J&K Bank Ltd., Ansal Plaza, New Delhi. The proposal for
sanction of the said term loan of Rs.77 crores was passed and
sanctioned by Board in its meeting dated 28.01.2012 and the
Board Resolution was signed by Shri Abdul Majid Bhat, the
then Company Secretary. As per the investigation conducted
by the CBI, a request for disbursement of Rs.30 crores out of
the aforesaid loan amount was made by Shri Raj Singh Gehlot
and the said amount was transferred to as many as 12
entities, the details whereof are mentioned in the charge
sheet, which are reproduced as under:
S.No. Name of the
Party
A/C and bank Amount
(in Rs.)
Amount of
loan funds
(in Rs.)
Date of
transaction
I. Foster
Infrastructure
Pvt. Ltd.
601500301000383
e-Vijaya Bank
1,75,21,010
1,63,87,192
06.02 2012
II. Intime Realtech
Pvt. Ltd.
601500301000503
e-Vijaya Bank
1,76,95,020
1,76,95,020
06.02.2012
III. Littlevalley
Hospitality
Services Pvt.
Ltd.
03691131002369
e-OBC
1,68,95,050
1,68,95,050
06.02.2012
IV. Inscence
Developers Pvt.
Ltd.
601500301000381
e-Vijaya Bank
1,87,56,020
1,87,56,020
06.02.2012
CRM(M) No.235/2023 c/w
CRM(M) No.504/2022 & other connected petition Page 15 of 41
V. Magnificent
Infradevelopers
Pvt. Ltd.
601500301000380
e-Vijaya Bank
1,76,98,500
1,76,98,500
06.02.2012
VI. Veteran
Infradevelopers
Pvt. Ltd.
03691131001416
e-OBC
1,87,63,050
1,87,63,050
06.02.2012
VII. Glaze Pvt. Ltd.
Infradevelopers
601500301000388
e-Vijaya Bank
1,90,62,750
1,90,62,750
06.02.2012
VIII. Palmtree
Infracon Pvt
03691131001430
e-OBC
1,91,61,005
1,91,61,005
06.02.2012
IX. Magnificent
Infradevelopers
Pvt. Ltd.
03691131001386
e-OBC
1,85,00,690
1,85,00,690
11.02 2012
X. Palmtree
Infracon Pvt.
Ltd.
03691131001430
e-OBC
1,78,65,205
1,78,65,205
11.02.2012
XI. Moonstar
Hospitality
Services Pvt.
Ltd.
03691131002383
e-OBC
1,42,62,012
1,42,62,012
11.02.2012
1,79,85,030 1,69,94,903
XII. Shlok Infrastru-
cture Pvt. Ltd.
03691131002192
e-OBC
11.02.2012
TOTAL 21,41,65,342 21,20,41,397
It was revealed that Shri Raj Singh Gehlot was the
authorized signatory of 11 out of aforesaid12 entities in
favour of whom the funds were transferred.
19) Another amount of Rs.7 crores out of the term loan of
Rs.77 crores was transferred to the designated account of
M/S AHPL on 28.02.2012, which was later on further
transferred to different entities, the details whereof as given
in the charge sheet are extracted hereunder:
“After credit of Rs.7 crores in the Current A/c
No.0408010100000637 of M/s AHPL, an amount of
Rs.1,50,26,980/- was transferred to bank A/c
No.601500301000499 of M/s Fairland Hospitality Services
Pvt. Ltd. maintained with e-Vijaya Bank now Bank of Baroda,
Hauz Khas Branch, New Delhi and the said amount
included the loan funds of Rs.1,26,71,208/-. The
introduction in the account was given by Shri Raj Singh
Gehlot, Director of M/s Ambience Ltd. and he himself is the
Authorized Signatory in the said bank account of M/s
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CRM(M) No.504/2022 & other connected petition Page 16 of 41
Fairland Hospitality Services Pvt. Ltd. After receipt of Rs.
1,50,26,980/- in the bank A/c No.601500301000499 of M/s
Fairland Hospitality Services Pvt. Ltd., an amount of
Rs.1,50,27,000/- was further transferred to bank A/c
No.6015800301000517 of M/s M&N Commercials
maintained with e-Vijaya Bank now Bank of Baroda, Hauz
Khas New Delhi. Shri Raj Singh Gehlot is the Authorized
Signatory in the said bank account of the said firm and he
himself was the introducer to the said bank account and
had signed as introducer in the capacity of Authorized
Signatory of M/s Ambience Ltd.”
20) It was revealed that Shri Raj Singh Gehlot was the
authorized signatory in respect of these entities as well. It was
further revealed that out of the Rs.7 crores, an amount of
Rs.5,73,28,792/ was transferred to loan accounts of M/S
AHPL maintained with other lender banks for payment of
interest towards the respective loans sanctioned by the said
banks, whereas certain portion of the amount was utilized
through various cheques of petty amounts towards
miscellaneous charges and commission of the bank. The
relevant details of the same are mentioned in the charge
sheet. The same are reproduced as under:
S.No. Date of
transaction
Amount
(in Rs.)
Loan A/c No. Bank & Branch
1. 28.02.2012 6613669
862973570
Indian Bank, New Delhi
Mani Branch, Cannaught
Circus, New Delhi
2. 28.02.2012 1563681
6004066339
Indian Bank, New Delhi
Mani Branch, Cannaught
Circus, New Delhi
3. 28.02.2012 12842600
605965410000048
Indian Bank, New Delhi
Mani Branch, Cannaught
Circus, New Delhi
4. 28.02.2012 1439127 605965410000090 Bank of India, New Delhi
Large Corporate Branch,
New Delhi.
CRM(M) No.235/2023 c/w
CRM(M) No.504/2022 & other connected petition Page 17 of 41
5. 28.02.2012 5043894 497806390000786 Union Bank of India, IFB,
Cannaught Circus, New
Delhi.
6. 28.02.2012 2598328 497806390000847 Union Bank of India, IFB,
Cannaught Circus, New
Delhi.
7. 28.02.2012 9450186 0804300071734 United Bank, Ansal
Tower, Nehru Place,
New Delhi.
8. 28.02.2012 5970975 00131200913954 Punjab & Sindh Bank,
Cannaught Place, New
Delhi.
9. 28.02.2012 9389420 03697021000347 Oriental Bank of
Commerce, Safdarjung
Enclave, New Delhi.
TOTAL 54911880
21) It was further revealed that Shri Raj Singh Gehlot,
Director of M/S AHPL, submitted another request for
disbursement of Rs.30 crores on 21.03.2012 for making
urgent payments to suppliers and contractors. Accordingly,
an amount of Rs.29 crores was disbursed in favour of M/S
AHPL out of the sanctioned additional term loan of Rs.77
crores on 22.03.2012 and credited into the designated
account of M/S AHPL. The said amount of Rs.29 crores was
further transferred to as many as 16 entities on 23.03.2012
mentioned in the charge sheet, the details whereof are
reproduced as under:
Name of the Party A/C and bank Amount
(in Rs.)
S.
No.
Amount of loan
funds (in Rs.)
Date of
transaction
1. Aman Hospitality Pvt.
605965410000048
Bank of India
72,46,148
72,46,148
22.03.2012
2. Glaze Infradevelopers
Ltd.
22.03.2012
03691131001423
e-Vijaya Bank
2,20,52,690
2,20,52,690
Pvt. Ltd.
1.79,05,665 1.79,05,665 22.03.2012
3. Goodview Infratech
03691131002390
e-0BC
Pvt. Ltd.
2,10.59,680 2.10.59,680 22.03.2012
4. Foster Infrastructure
03691131001393
e-OBC
Pvt. Ltd.
CRM(M) No.235/2023 c/w
CRM(M) No.504/2022 & other connected petition Page 18 of 41
1.96.00.500 1.96.00.500 22.03.2012
5. Hillgrow Infoservices
03691131001263
e-OBC
Pvt. Ltd.
1,85,90,260 1,85,90,260 22.03.2012
6. Fairland Hospitality
03691131002376
e-OBC
Services Pvt. Ltd.
2,10,59,800 2,10,59,800 22.03.2012
7. Moonstar Hospitality
601500301000501
e-Vijaya Bank
Services Pvt. Ltd.
1,80,02,560 22.03.2012
8. Magnificent
601500301000380
e-Vijaya Bank
1,80,02,560
Infradevelopers Pvt.
Ltd.
2,21,00,590 22.03.2012
9. Inventure Properties
601500301000382
e-Vijaya Bank
2,21,00,590
Pvt. Ltd.
22.03.2012
10. Littlevalley Hospitality
601500301000500
e-Vijaya Bank
1,76,98,100 1,76,98,100
Services Pvt. Ltd.
1,98,00,025 1,98,00,025 22.03.2012
11. Intime Realtech Pvt.
601500301000503
e-Vijaya Bank
Ltd.
1,75,00,654 1,75,00,654 22.03.2012
12. Veteran
50011339266 e-
Allahabad Bank
Infradevelopers Pvt.
Ltd.
13. Palmtree Infracon Pvt.
50011511716
e-Allahabad Bank
2,13,36,950 2,13,36,950 22.03.2012
Ltd.
14. Intime Realtech Pvt.
50063826634
e-Allahabad Bank
2,02,05,980 2,02,05,980 22.03.2012
Ltd.
15. Inscence Developers
50010987740
e-Allahabad Bank
1,80,69,875 1,80,69,875 22.03.2012
Pvt. Ltd.
16. Inventure Properties
03691131001355
e-OBC
1,51,02,780 73,80,697 23.03.2012
Pvt. Ltd.
29,73,32,257
TOTAL
28,96,10,174
22)
It was further revealed that an amount of Rs.72,46,148/
was transferred to loan account of M/S AHPL maintained
with Bank of India for payment of interest toward the loan
sanctioned by the said Bank. The investigation also revealed
that an amount of Rs.28,23,55,697/ was transferred to M/S
M&N Commercials, whose affairs were being managed and
controlled by Raj Singh Gehlot. The investigation further
revealed that an amount of Rs.10,99,75,000/was utilized for
payment towards FLCs/ILCs/Export Bills out of term loan of
Rs.77 crores.
23) The investigation revealed that Shri Raj Singh Gehlot,
Director M/S AHPL vide his letter dated 18.04.2014 request
CRM(M) No.235/2023 c/w
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for rescheduling of instalments and permitting interest
moratorium for two years. Restructuring of the loan account
of M/S AHPL was approved by Chairman of the J&K Bank
Ltd. and funded interest term loan of Rs.47.21 crores was
sanctioned to service the interest of the bank loan for a period
of two years.
24) The investigation revealed that Shri Raj Singh Gehlot,
Director M/S AHPL submitted another request letter dated
nd
21.04.2017 seeking Corrective Action Plan under 2
restructuring which involved conversion of Rs.565 crores into
equity/debentures and to issue formal approval for sale of
commercial space. The matter relating to Strategic Debt
Restructuring was considered and after deliberations it was
decided by the lender banks that SDR was the best feasible
option for resolution of the account.
25) During investigation, it was revealed that RBI vide its
circular dated 12.02.2018, revised framework for stressed
assets and withdrew all schemes in the accounts where SDR
was invoked but not implemented.
26) The Joint Lenders Forum vide its meeting dated
09.10.2018, decided to get the forensic audit of M/S AHPL
Loan Account done from any of the IBA approved firms from
the date of disbursement of loan till 31.03.2018. Accordingly,
CRM(M) No.235/2023 c/w
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forensic audit was got conducted from M/S Anil Khandelwal
and Associates. It is the case of the investigating agency that
forensic audit was not conducted by the said company within
the stipulated time period.
27) During the investigation, it was found that M/S AHPL
was classified as ‘NPA’ on 30.06.2018, whereafter, Shri Raj
Singh Gehlot, Director of M/S AHPL, vide his letter dated
03.08.2018, proposed One Time Settlement and offered to pay
Rs.437 crores towards full and final settlement with all the
lending banks. The OTS offer was later on enhanced to Rs.470
crores and the timeline was fixed as 31.03.2019. The proposal
was approved by the Board vide resolution dated 16.10.2018
for an amount of Rs.128.94 crores in respect of Jammu and
Kashmir Bank. It has been alleged that Shri Raj Singh Gehlot
had very clandestinely managed the valuation of the hotel
property in order to settle the loan accounts of M/S AHPL to
OTS for a meager amount without taking recourse to recovery
process under NCLT and SARFAESI Act. According to the
investigating agency, Shri Haseeb Drabu, Shri Mushtaq
Ahmed, Shri Abdul Majid Mir and Shri Parvez Ahmed Nengroo
were in collusion with Shri Raj Singh Gehlot, as they had kept
on extending undue favours in his favor from time to time.
The investigating agency has, accordingly, found that offences
punishable under Section under 120-B, 420 and 409 of RPC
CRM(M) No.235/2023 c/w
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read with Section 5(1)(d) read with 5(2) of J&K PC Act are
established against as many as 17 accused persons,
including the petitioners herein.
28) The petitioners have challenged the impugned charge
sheets on the grounds that there is neither any oral nor any
documentary evidence to show that any conspiracy was
hatched between petitioner Raj Singh Gehlot and senior
management of the J&K Bank. It has been contended that
there is nothing on record to show that the loans sanctioned
in favour of the company M/S AHPL were appraised and
approved by sidelining the rules and regulations of the Bank.
It has been further contended that the allegations regarding
diversion of funds from term loans I, II and III are false.
According to the petitioners, the Turnkey contractor M/S APL
had already made construction upto three levels of the
basement and superstructure up to fourth level, which was
certified by the chartered accountant before the first tranche
was released in favour of M/S AHPL, therefore, it was only a
case of reimbursement of amount that had already been spent
by the Turnkey contractor APL in connection with
construction of the project. It has been contended that once
the disbursed loan was credited into the account of Turnkey
contractor, it was free to deal with the said amount in the
CRM(M) No.235/2023 c/w
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manner it desired, as such, there is no question of diversion
or siphoning of funds.
29) It has been submitted that, as per the material collected
by the investigating agency during further investigation of the
case, the Directors and Proprietors of the entities in whose
favour the funds were allegedly diverted, had refunded the
said amount to M/S AHPL, thus, there was no occasion for
diversion or misutilization of the funds. It has also been
contended that during forensic audit conducted by two
companies, namely, M/S Anil Khandelwal & Company and
Associates and R. Kabra & Associates, it has been found that
there has been no fraud and diversion of funds, thus there is
no evidence of diversion or siphoning of the loan amount, as
has been alleged in the charge sheet.
30)
Regarding the allegation that after diversion and
misutilization of the funds, the loan accounts were projected
to be distressed to gain further financial assistance from the
banks and to settle the loan accounts through OTS for a
meager amount, it has been contended that the loan account
got distressed on account of the reasons which were not
attributable to the borrower. It has been contended that there
was delay in development of the Barapullah Elevated Road
and widening of NH-24 to provide smooth connectivity to East
CRM(M) No.235/2023 c/w
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Delhi from the Airport and Central/South Delhi, as a result
of which the hotel could not achieve the projected revenue to
pay for interest and installments in the loan account of the
participating banks. It has been contended that most of the
lender banks have accepted the OTS proposal and, in fact,
M/S AHPL has already cleared the dues of those banks who
have accepted the OTS and have got no demand certificate
from the said banks. It has been contended even the Jammu
and Kashmir Bank had accepted the OTS offer, but due to the
registration of the FIR, the acceptance was withdrawn by the
Bank.
31) It has further been contended that M/S AHPL had made
an investment of Rs.280.01 crore for the hotel project and
only thereafter the loan amount was disbursed by J&K Bank
in its favor, therefore, it cannot be a case of cheating as no
cheater would invest such a huge amount of money for
inducing a bank to advance the loan. It has been further
contended that the project has been completed, inasmuch as
the hotel for construction of which the loan was advanced, is
functioning and the project has been completed. Thus, it
cannot be a case of cheating or misappropriation of funds. It
has also been contended that most of the prosecution
witnesses cited in the challan have, during the course of
investigation, made statements which are favourable to the
CRM(M) No.235/2023 c/w
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case of the petitioners, therefore, no offences are made out
against the petitioners.
32) I have heard the counsel for the parties and perused
record of the case including record of trial court.
33) Before dealing with the contentions raised by the
petitioners in these petitions, it would be necessary to notice
the legal position as regards the scope of power of the High
Court under Section 482 of the Cr. P. C to quash the criminal
proceedings.
34) In its celebrated judgment delivered in the case of State
of Haryana v. Bhajan Lal , 1992 Supp (1) SCC 335, the
Supreme Court has illustrated the circumstances in which
the High Court would be justified in quashing the criminal
proceedings. The same are reproduced as under:
i) Where the allegations made in the first information
report or the complaint, even if they are taken at their face
value and accepted in their entirety do not prima facie
constitute any offence or make out a case against the
accused;
ii) Where the allegations in the first information report and
other materials, if any, accompanying the FIR do not
disclose a cognizable offence, justifying an investigation
by police officers under Section 156(1) of the Code
except under an order of a Magistrate within the purview
of Section 155(2) of the Code;
iii) Where the uncontroverted allegations made in the FIR
or complaint and the evidence collected in support of the
same do not disclose the commission of any offence and
make out a case against the accused.
CRM(M) No.235/2023 c/w
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iv) Where the allegations in the FIR do not constitute a
cognizable offence but constitute only a non-cognizable
offence, no investigation is permitted by a police officer
without an order of a Magistrate as contemplated under
Section 155(2) of the Code;
v) Where the allegations made in the FIR or complaint are
so absurd and inherently improbable on the basis of
which no prudent person can ever reach a just
conclusion that there is sufficient ground for proceeding
against the accused;
vi) Where there is an express legal bar engrafted in any of
the provisions of the Code or the concerned Act (under
which a criminal proceeding is instituted) to the
institution and continuance of the proceedings and/or
where there is a specific provision in the Code or the
concerned Act, providing efficacious redress for the
grievance of the aggrieved party; and,
vii) Where a criminal proceeding is manifestly attended
with mala fide and/or where the proceeding is
maliciously instituted with an ulterior motive for wreaking
vengeance on the accused and with a view to spite him
due to private and personal grudge.
35) Again, in the case of Rajiv Thapar and others vs.
Madan Lal Kapoor, (2013) 3 SCC 330, the Supreme Court
has, after noticing the provisions contained in Section 482 of
Cr. P. C, held as under:
28. The High Court, in exercise of its jurisdiction
under Section 482 CrPC, must make a just and
rightful choice. This is not a stage of evaluating
the truthfulness or otherwise of the allegations
levelled by the prosecution /complainant
against the accused. Likewise, it is not a stage
for determining how weighty the defences raised
on behalf of the accused are. Even if the accused
is successful in showing some suspicion or
doubt, in the allegations levelled by the
prosecution/ complainant, it would be
impermissible to discharge the accused before
trial. This is so because it would result in giving
finality to the accusations levelled by the
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prosecution/ complainant, without allowing the
prosecution or the complainant to adduce
evidence to substantiate the same. The
converse is, however, not true, because even if
trial is proceeded with, the accused is not
subjected to any irreparable consequences. The
accused would still be in a position to succeed
by establishing his defences by producing
evidence in accordance with law. There is an
endless list of judgments rendered by this Court
declaring the legal position that in a case where
the prosecution/complainant has levelled
allegations bringing out all ingredients of the
charge(s) levelled, and have placed material
before the Court, prima facie evidencing the
truthfulness of the allegations levelled, trial
must be held.
29. The issue being examined in the instant case
is the jurisdiction of the High Court under
Section 482 CrPC, if it chooses to quash the
initiation of the prosecution against an accused
at the stage of issuing process, or at the stage of
committal, or even at the stage of framing of
charges. These are all stages before the
commencement of the actual trial. The same
parameters would naturally be available for later
stages as well. The power vested in the High
Court under Section 482 CrPC, at the stages
referred to hereinabove, would have far-
reaching consequences inasmuch as it would
negate the prosecution's/ complainant's case
without allowing the prosecution/ complainant
to lead evidence. Such a determination must
always be rendered with caution, care and
circumspection. To invoke its inherent
jurisdiction under Section 482 CrPC the High
Court has to be fully satisfied that the material
produced by the accused is such that would
lead to the conclusion that his/their defence is
based on sound, reasonable, and indubitable
facts; the material produced is such as would
rule out and displace the assertions contained in
the charges levelled against the accused; and
the material produced is such as would clearly
reject and overrule the veracity of the allegations
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contained in the accusations levelled by the
prosecution/complainant. It should be sufficient
to rule out, reject and discard the accusations
levelled by the prosecution/complainant,
without the necessity of recording any evidence.
For this the material relied upon by the defence
should not have been refuted, or alternatively,
cannot be justifiably refuted, being material of
sterling and impeccable quality. The material
relied upon by the accused should be such as
would persuade a reasonable person to dismiss
and condemn the actual basis of the
accusations as false. In such a situation, the
judicial conscience of the High Court would
persuade it to exercise its power under Section
482 CrPC to quash such criminal proceedings,
for that would prevent abuse of process of the
court, and secure the ends of justice.
30. Based on the factors canvassed in the
foregoing paragraphs, we would delineate the
following steps to determine the veracity of a
prayer for quashment raised by an accused by
invoking the power vested in the High Court
under Section 482 CrPC:
30.1. Step one: whether the material relied upon
by the accused is sound, reasonable, and
indubitable i.e. the material is of sterling and
impeccable quality?
30.2. Step two: whether the material relied upon
by the accused would rule out the assertions
contained in the charges levelled against the
accused i.e. the material is sufficient to reject
and overrule the factual assertions contained in
the complaint i.e. the material is such as would
persuade a reasonable person to dismiss and
condemn the factual basis of the accusations as
false?
30.3. Step three: whether the material relied
upon by the accused has not been refuted by the
prosecution/ complainant; and/or the material
is such that it cannot be justifiably refuted by the
prosecution/complainant?
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30.4. Step four: whether proceeding with the trial
would result in an abuse of process of the court,
and would not serve the ends of justice?
30.5. If the answer to all the steps is in the
affirmative, the judicial conscience of the High
Court should persuade it to quash such criminal
proceedings in exercise of power vested in it
under Section 482 CrPC. Such exercise of
power, besides doing justice to the accused,
would save precious court time, which would
otherwise be wasted in holding such a trial (as
well as proceedings arising therefrom) specially
when it is clear that the same would not
conclude in the conviction of the accused.
36) Recently, the Supreme Court has, in the case of Pradeep
Kumar Kesarwani v. State of Uttar Pradesh 2025 SCC
,
OnLine SC 1947, after noticing the legal position on the issue,
reiterated that the aforesaid steps ordinarily determine the
veracity of the prayer for quashing, raised by an accused by
invoking the power vested in the High Court under Section
482 of the Cr. P. C.
37) From the foregoing analysis of the legal position, it is
clear that if from the material placed on record by the
investigating agency along with the charge sheet, it is found
that the allegations made in the FIR are not substantiated
and even if the material is taken to be true at its face value,
no offence is made out against an accused, the High Court
would be within its jurisdiction to exercise its power under
Section 482 of the Cr. P. C to quash the criminal proceedings
against the accused. However, at this stage, truthfulness or
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otherwise of the allegations levelled by the prosecution is not
to be evaluated nor veracity of the defences raised on behalf
of the accused is to be ascertained. It is also to be noted that
the reliability of the material collected by the investigating
agency during investigation of the case is not to be gone into
nor a meticulous examination of the said material is
permissible at this stage.
38) With the aforesaid legal position in mind, let us now
proceed to analyze the facts of the present case. For the
present, this Court is consciously not going into the issue as
to whether or not there was any connivance or criminal
negligence on the part of the officers/officials of the J&K Bank
in dealing with the loan case of M/S AHPL. This is so because
none of these officers/officials of the Bank is before this
Court. So, any observation with regard to their role in the
entire affair may have a bearing upon their case and without
hearing them, it may not be appropriate for this Court to
render a finding on their role. This Court would, therefore,
confine itself to the allegations of diversion/siphoning off of
the tranches of loan released in favor of M/S AHPL from time
to time. If it is found that there has been no diversion or
siphoning off the funds, only then the other aspects of the
matter would fall for consideration.
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39) As is clear from the material collected by the
Investigating Agency during course of investigation, the
following three term loans were sanctioned by J&K Bank,
Ansal Plaza Branch, New Delhi, in favour of M/S AHPL:
a) Term Loan-I : Date: 29.09.2009.
(Original Amount) Amount ₹100 crore.
BG Limit 15 crore.
b) Term Loan-II : Date: 27.10.2011
(Subsequent Enhancement) Amount ₹50 crore.
c) Term Loan-III : Date: 30.01.2012:
(Subsequent Enhancement) Amount ₹77 crore.
d) FITL : Date: 17.12.2014.
Amount ₹47.21 crore.
40) The material on record shows that M/S APL was
appointed as a Turnkey Contractor by M/S AHPL, the
borrower. Though there is allegation in the charge sheet that
the borrower did not disclose to the Bank that M/S APL is the
Turnkey Contractor, nonetheless, the petitioners have placed
on record the documents which show that the lender Bank
was in the knowledge of the fact that M/S APL was engaged
as a Turnkey Contractor by the borrower. It is also an
admitted fact that the borrower had opened a designated
account with J&K Bank Ltd., Ansal Plaza branch, New Delhi,
which was bearing Current Account No.637. The record
further reveals that J&K Bank Ltd. was one of the several
financial institutions that had sanctioned financial facilities
in favour of M/S AHPL for the project of construction of hotel,
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which is subject matter of the present case. These included
Syndicate Bank, Punjab National Bank, Bank of India, United
Bank of India, Union Bank of India and Tourism Finance
Corporation of India. The initial term loan of Rs.100 crore was
sanctioned in favour of the borrower company on the
following terms and conditions:
12.13.1Primary Security:
(i) First pari passu charge on the project assets both
immovable including equitable mortgage of project land,
admeasuring 20,000 Sq. Mtrs. and building of Hotel
Complex thereupon situated at Plot No.1, Central
Business District (CBD), Surajmal Vihar, Near Yamuna
Sports Complex, Delhi
(ii) Assignment of future lease rentals of the property
proposed to be leased out,
(iii) Hypothecation of all other current assets including
credit balance in the Escrow Account maintained with
our bank during construction of the Hotel
12.13.2 Collateral Security: Personal Guarantee of Sh.
Raj Singh Gehlot, Promoter Director of the company
12.13.3
Disbursement:
The Term Loan of J&K Bank shall be released after the
complete tie up of term Loan requirement of 580 crore,
necessary documents are executed and release shall be
in proportion to the term loan sanctioned and released
by other participating banks/Fis after insuring that the
agreed debt equity ratio of 2:1 is being maintained.
12.13.4 The company M/S AHPL (A-5) shall maintain a
Designated Account with one of the term lending banks
and all the disbursement from J&K bank as well as other
term lenders and also the induction of funds by the
promoters on pro rata basis shall be deposited in the
said account. The company shall then make all project
payments and pay for other project expenses through
this designated account.
12.13.5
Tenure: Door-to-Door: 11 years and 9 months
12.13.6Re-Payment Schedule: The entire Term Loan of
580 crore Including 100 crore of J&K Bank shall be repaid
in 32 quarterly installments after a moratorium period of
two years from the date of commercial operation i.e First
installment of 13.59 crore (out of which J&K Bank share
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is 2.34 crore) would fall on 30-06-2013 and last (32")
installment of 22.66 crore (out of which J&K Bank share
is 3.91 crore) would fall on 31.03.2021.
12.13.7 Moratorium: Two years from the date of full
commercial operations of the Hotel projects, scheduled
to take place by May 2011. Interést during construction
period and up to partial opening of the project by. Sept
2010 has been taken as part of the project cost.
12.13.8 Tenure of Bank Guarantee: Maximuri 10 years
from the date of issue of BG
12.13.9 Pre disbursement Conditions: Only three pre
disbursement conditions have been mentioned in the
sanction.
12.13.10 Other terms and conditions:
(i) Bank's charge on the assets of the company should be
got registered with ROC within the stipulated period of
30 days
(ii) The promoters to undertake that cost escalation, if
any, shall be borne by them from their own sources.
ⅲ
( ) Branch to closely monitor the implementation of the
project and ensure that building construction is carried
out in accordance with the approved plans and for the
area envisaged in the project report
(iv) The company to undertake that funds, will not be
utilised for any purpose other than for implementation of
the project.
(v) The company to undertake that during the currency of
credit facilities it should not without the bank's prior
permission in writing:
•
Invest by way of share capital in or lend or
advance funds to or place deposits with any other
concern (including group companies)
• Undertake any guarantee obligation on behalf of
any other company (including group companies).
• Create any charge, lien or encumbrances over
the undertaking or any part thereof if any
financial institution, bank, company, firm or
person
• Sell, assign, mortgage or otherwise dispose off
any of the fixed assets charged to the bank
(vi) The company to maintain adequate books of
accounts, which should correctly reflect its financial
position and scale of operations
(vii) All other terms and conditions governing such type
of advances shall also apply.
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41) So far as the disbursement made out of term loan of
Rs.100 crores is concerned, the details thereof as given in the
charge sheet are as under:
Date of disbursement Amount
(₹ in crore)
1. 29.09.2009 35
2. 08.10.2009 05
3. 15.10.2009 05
4 28.10.2009 10
5. 06.11.2009 05
6. 22.02.2010 03
7. 23.02.2010 07
8. 29.06.2010 10
9. 30.07.2010 05
10. 27.08.2010 05
11. 14.09.2010 05
12. 29.11.2010 05
Total 100 crore
42) The material on record shows that disbursements of the
loan trenches were being credited to the designated account
of M/S AHPL bearing Current Account No.637, wherefrom the
said amounts were being transferred to the account of M/S
APL maintained in Vijaya Bank, which company was shown
as the Turnkey Contractor for the project. However, the
matter does not rest here. The record shows that these
amounts were being transferred from the account of M/S APL
to other entities like M/S A-One Trading Company, Sidharth
Sohu, M/S Buildwell Mart, M/S A.G. Commercials, M/S New
Haryana Traders, M/S Bharat Building Material Supplier,
M/S S.M. Enterprises, M/S Foster Infrastructure Pvt. Ltd.
and M/S Shlok Infrastructure Pvt. Ltd., immediately after
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credit of these amounts in the account of M/S APL. It was
also revealed that the affairs of all these entities were being
managed by Shri Raj Singh Gelhot, Director of M/S AHPL.
43) Similarly, the amounts disbursed in respect of
additional term loans of Rs.50 crore and Rs.77 crores were
also diverted to other entities which were under the direct
control of Shri Raj Singh Gehlot. The particulars of these
diversions are mentioned in the charge sheets. This has not
even been disputed by the accused/petitioners.
44) The defense put up by the accused/petitioners is that
M/S AHPL had already incurred expenses of more than
Rs.280 crore towards completion of the project and, therefore,
the loan disbursement was in the nature of reimbursement
and once the amount was released in favour of the Turnkey
Contractor, it could deal with the said amount in the manner
it desired.
45) I am afraid the defence put up by the petitioners in this
regard, prima facie , is not acceptable, for the reason that
under the terms and conditions of the loan, it is nowhere
mentioned that the loan would be released as reimbursement
for the amount already spent by the promoter/borrower. In
the conditions of sanction, it is clearly mentioned that the
loan should be utilized for construction and development of
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the hotel and that company shall make all project payments
and pay other project expenses through its designated
account. It was also a condition of the sanction that company
will not utilize the funds for any purpose other than for
implementation of the project. Thus, there was no condition
attached to the sanction that would authorize the borrower to
utilize the loan amount for reimbursement of expenses
already incurred by it on the project.
46) It has been contended by the petitioners that the entities
like M/S Raj Commercial and Agencies and M&N Commercial
are the in-house facilitators to provide funds for the projects
undertaken by the Ambience Group of Companies and these
concerns act as in-house bankers to Ambience Group and it
is for this reason, that the amount was transferred from the
account of M/S APL to these entities. In this regard, it is to
be noted that there is no material on record to support this
contention of the petitioners. According to the petitioners, the
documents in support of these facts were provided to the
investigating agency by the petitioners, but the same have not
been relied upon by the respondents and have not been
placed on record of the charge sheet. At this stage and in
these proceedings, it would not be permissible for this Court
to ascertain the veracity of the aforesaid contention of the
petitioners, as the documents or material in this regard does
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not form part of the charge sheets nor any material of sterling
quality has been placed on record by the petitioners to
support this contention.
47) As already stated, while narrating the facts alleged in the
charge sheet, the borrower company has spent the amount
out of the tranche of loan for the purpose of repayment of loan
of other lending banks, on fixed deposit receipts,
miscellaneous expenses and making pay orders etc. These are
all purposes which were alien to the project and conditions of
sanction. There is evidence on record to show that the loan
amount has been diverted to purposes other than the purpose
for which the said amount was sanctioned.
48) So far as the contention of the petitioners that forensic
audit did not reveal any fraud, as such, it is not a case of
cheating or misappropriation of amount, is concerned, the
said contention cannot be taken into account by this Court at
this stage of the proceedings, particularly when in the report
of forensic audit, it has been clearly mentioned that the
Auditor has relied upon limited explanations and information
provided by the accused company, which has been treated by
the Auditors as accurate and complete in all respects. The
forensic Auditors have, while rendering their reports, not
taken into account the aspects of the matter which have been
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gone into by the investigating agency during investigation of
the case. Thus, on the basis of the reports of the forensic
Auditors only, it cannot be stated that no criminal offence has
been committed in the present case.
49) It is true that the project has ultimately been completed
and the hotel is in existence and it is also a fact that the
petitioner company had invested a huge amount before
obtaining loan from the lending banks, including J&K Bank
Limited, but that by itself would not mean that it is not a case
of cheating. Had it been a case of simple acceptance of One
Time Settlement of dues and there being no dishonest
intention on the part of the borrower company at the time of
advancement of loans, it would have been a pure and simple
dispute of civil nature. But in the instant case, there is
material on record to show that the borrower company has
diverted the funds disbursed to it from the loan account for
the purposes for which the loan was not sanctioned. Prima
facie , this misutilization of funds has led to stress of the loan
account, which has induced the J&K Bank Ltd to advance
further loan and to restructure the loan account from time to
time and finally to enter into a One Time Settlement with the
borrower. Misutilization of funds coupled with diversion and
siphoning of funds by the borrower company, prima facie ,
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establishes the allegation relating to fraudulent procurement
and utilization of the loan amount.
50) There is material on record to show that petitioner Raj
Singh Gehlot made requests to the J&K Bank for release of
tranches of sanctioned loan from time to time making
representations that the loan amount upon its disbursement
is to be utilized for the purposes as mentioned in the
conditions of the sanction but actually the amount disbursed
has been utilized for the purposes which fall outside the
purview of the conditions of the sanction. Thus, there is
material on record to prima facie show that the Bank has been
dishonestly induced to release the tranches of loan in favour
of the borrower company and upon release, the loan amount
has been utilized for a purpose for which it was not
sanctioned. Thus, prima facie , offence of cheating is made out
against the petitioners.
51) Merely because the Bank has agreed to enter into a One-
Time Settlement with the borrower company, the criminal
liability of the borrower company and its Directors cannot be
wiped away once it is shown from the material annexed with
the charge sheet that there has been fraudulent conduct on
the part of the borrower company, inasmuch as it has used
the loan amount for a purpose other than the purpose for
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which it was sanctioned, which has led to the loan account
turning ‘NPA’.
52) Another aspect of the matter which is required to be
noticed is that in the instant case, J&K Bank Ltd. has entered
into One Time Settlement with the borrower company at a
figure which is less than the principal amount advanced to
the borrower company. This, prima facie, shows that the J&K
Bank Ltd. has suffered pecuniary loss on account of One Time
Settlement which it had entered into with the borrower
company. It is not a case where One Time Settlement was
entered into by the J&K Bank with the borrower company at
a figure higher than the principal amount. In that eventuality,
the situation may have been different. When the fact that the
borrower company has managed to settle the loan with the
lender bank at a figure which is less than the principal
amount, is taken together with the fact that there has been
diversion of funds, prima facie , it appears that the offence of
cheating is made out against the petitioners. Thus, it is not a
fit case for exercise of powers under Section 482 of Cr. P. C to
quash the impugned proceedings.
53) The issue as to whether the offences of criminal
misconduct and criminal breach of trust are made out in the
present case against the public servants who have been
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implicated as accused is not being gone into by this Court at
this stage, lest it may prejudice the case of co-accused who
are not before this Court. The said issue shall be dealt with
by the trial court at the appropriate stage of framing of
charges.
54)
For what has been discussed hereinbefore, I do not find
any merit in these petitions. The same are dismissed
accordingly. Interim direction(s), if any, shall cease to be in
operation.
55) It is, however, made clear that the observations made
herein are only for the purpose of deciding the present
petitions and shall not be construed as an expression of
opinion on the merits of the case. The learned trial court shall
proceed to consider the matter independently and
uninfluenced by any observation made in this judgment.
(Sanjay Dhar)
Judge
SRINAGAR
30.06.2026
“Bhat Altaf-Secretary”
Whether the judgment is reportable: YES/NO
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