Delhi court holds 9 guilty for Rs 83 lakh EPFO defraud

The Special Judge CBI Atul Krishna Agrawal stated that the role of the accused persons was not that of a post event facilitator, but that of active participants.

‘The fraud’

• On April 12, 2004, an FIR was registered based on a complaint filed by the regional provident fund commissioner (pension) office of the EPFO, Delhi.
• The FIR stated that public money amounting to Rs 83 lakh (approximately) was cheated by way of false settlement of pension claims, paid to non-existent employees of one M/s Information Technologies India Ltd.
• The said establishment was an exempted establishment for the purpose of the Employees’ Provident Funds and Miscellaneous Provisions Act, 1952 (EPF & MP Act).
• Accordingly, the present FIR was registered on May 21, 2004, against one lower division clerk from the regional office, EPFO, Delhi, and some unknown officials of the regional office and other unknown private persons.
• During the investigation, allegations made in the FIR were found to be true.
• It was further revealed that the EPFO officials had entered into a conspiracy with certain other persons and abused their official position by processing claims in the names of fictitious employees.
• They also fabricated the required supporting documents, such as various forms, worksheet, and ledger cards, and got the claims passed from the competent authority.
• The cheques were prepared and sent directly to the banks concerned and the amounts were subsequently withdrawn and shared among themselves by the accused persons.
• Ultimately, the CBI filed a charge-sheet against all the accused persons.
• Charges were framed for offences punishable under Section 120 B (punishment for criminal conspiracy) IPC read with Section 13 (2) (punishment for public servants committing criminal misconduct) Prevention of Corruption Act.
• Additionally, Section 420 (cheating and dishonestly inducing delivery of property), 467 (forgery of valuable security, will, etc.), 468 (forgery for purpose of cheating), 471 (using as genuine a forged document or electronic record) IPC were also included.
• All the accused persons pleaded not guilty to the charges and claimed trial.

‘Frivolous pension claims’

The court observed that from the testimony of the witnesses (who fell victim to the fraud played by the accused) concerning all the accused persons, it could be seen that the same modus operandi (the way in which something operates) had been followed in each case.

It was noted by the court that the accused persons had approached the witnesses and asked for their bank account details, by falsely stating that they themselves did not have any bank account or took some other frivolous pleas.

Further, as understood by the court, for acquiring the above details, the accused persons used to falsely tell the witnesses that they or their associate had to receive money from somewhere, for which a bank account was required.

It was also noted that the accused persons actually did not require the bank account, as no such money was to be credited in those accounts, as the money which was credited was the amount of the cheque received by the bank, directly from EPFO, towards non-existent/frivolous pension claims.

The court further observed that after some time, the accused persons informed those witnesses about the credit of the money in their bank accounts, which was not possible unless the accused persons knew about the creation of fictitious pension accounts of the said people in EPFO, showing them as fictitious employees and the credit of the pension benefit amount in their accounts.

Additionally, it was also noted that the money was not credited in the bank account of those people immediately, but only after some time and the same was required to manipulate and forge various forms maintained at EPFO.

The forged forms were filled in the name of those people with their correct names and bank accounts, but other personal details were incorrect, since no such information was taken by the accused persons at the time of asking for the bank account details.

The court noticed that some of the accused persons even lured private persons with an offer of money, when they did not agree to the proposal of accused.

The accused persons then either used to get a blank cheque from the witnesses to withdraw the money or used to take the witnesses to the bank, for withdrawal of money to avoid any trace that money had been taken by them, as the bank documentation was in the name of those witnesses.

The court further came to the conclusion that the witnesses came to know about the fraud played with them only when the officials from EPFO visited them and told them that the amount was wrongly credited in their bank account.

These witnesses were also asked to return the amount to EPFO, which many times was arranged by the witnesses themselves from their own sources, since the accused persons refused to return the money or returned only some portion of it.

Lastly, as per the findings of the court, none of those witnesses/victim had worked with any firm or company by the name of M/s Information Technology (I) Ltd. (M/s ITIL) or M/s Indian Road Construction Corporation (M/s IRCC).

‘Falsely entitled to pension benefits’

The trial court held that the prosecution was able to prove its case “beyond a reasonable doubt” against the accused persons and that they, in criminal conspiracy with the primary accused, had cheated EPFO and obtained benefits for themselves up to Rs 50,000 (approximately) each for all such cases.

It was also held to be proved that the said benefits were obtained by deceiving innocent public persons, whereby they were shown as fictitious employees of M/s ITIL and M/s IRCC and falsely entitled to pension benefits.

At the same time, the court stated that “delay in criminal cases naturally favours the accused and not the prosecution” and believed that the evidence was not sufficient to convict the accused persons for the offences of ‘forgery and related offences’.

Hence, the trial court convicted the accused persons only for offences punishable under Section 420 and Section 120B IPC, along with Section 13 (1) (d) and Section 13 (2) of the Prevention of Corruption Act.

The accused were acquitted of the other offences that they were charged with.