HKSAR v. JETHWANEY AJIT MEWALSINGH

DCCC 379/2017

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CRIMINAL CASE NO 379 OF 2017

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REASONS FOR VERDICT

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The Charges

1.  The defendant faces one charge of theft, contrary to section 9 of the Theft Ordinance, Cap 210 Laws of Hong Kong [hereinafter referred to as “Charge (1)”].

2.  The particulars of offence of Charge (1) reveal that between the 1^st day of March 1994 and the 19^th day of September 1994, both dates inclusive, in Hong Kong, the defendant stole chose in action, namely a total sum of HK$5,689,842.36, being the property belonging to Jivan Industries Limited (hereinafter referred to as “JIVAN”).

3.  The defendant also faces another 10 charges of evasion of liability by deception, namely charges (2) to (11), all contrary to section 18B(1)(b) of the Theft Ordinance, Cap 210, Laws of Hong Kong [hereinafter referred to as “Charges (2) to (11)”].

4.  Save and except each of Charges (2) to (11) bears its respective amount of money, cheque number and date as written on the cheque in question, the particulars of offence of Charges (2) to (11) are all identical.  Each of Charges (2) to (11) alleges that on or about the 27^th day of September 1994, in Hong Kong, the defendant, with intent to make default in whole or in part on an existing liability by Lisun Enterprises Limited (hereinafter referred to as “LISUN”) to make payment of an amount of money in Hong Kong currency to Chan Lap Wai (hereinafter referred to as “PW5”) trading as Dynasty Development Enterprise (hereinafter referred to as “DYNASTY”), dishonestly induced PW5 to wait for payment by deception, that is, by falsely representing that a cheque [in each of Charges (2) to (11)] bearing a cheque number, dated on a specific date drawn on the account of LISUN with the International Bank of Asia Limited numbered 835-0-001512-5 would be good and valid order for payment if presented on or after the date specified thereon.

5.  The respective amount of money, cheque number and date as particularised in the particulars of offence of Charges (2) to (11) are listed herein-below:-

Charges	Amounts	Cheque Numbers	Dates
2	HK$100,000.00	647321	30th day of September 1994
3	HK$100,000.00	647322	10th day of December 1994
4	HK$100,000.00	647323	20th day of December 1994
5	HK$100,000.00	647324	30th day of December 1994
6	HK$100,000.00	647325	10th day of January 1995
7	HK$100,000.00	647326	20th day of January 1995
8	HK$100,000.00	647327	30th day of January 1995
9	HK$167,300.00	647328	10th day of February 1995
10	HK$100,000.00	647329	20th day of February 1995
11	HK$100,000.00	647330	28th day of February 1995

6.  The defendant pleaded not guilty to Charges (1) to (11).

The Prosecution Case

The Gist of the Prosecution Case re Charge (1)

7.  The prosecution alleges, in Charge (1), that a total of 24 sets of bills of lading and invoices were sold by the defendant to JIVAN between 1 March 1994 to 19 September 1994.

8.  Mr THAKUR OM PRAKASH JIWANDAS (hereinafter referred to as “PW1”), on behalf of JIVAN, consequently issued 24 corresponding cheques to the defendant totaling HK$5,689,842.36 (“the said 24 Cheques), in the belief that the said bills of lading and invoices were genuine instruments.

9.  The said 24 sets of bills of lading were all subsequently confirmed to be false instruments.

10.  Insofar as Charge (1) is concerned, the prosecution says that the defendant stole the chose in action resulted from the said 24 Cheques.

The Gist of the Prosecution Case re Charges (2) to (11)

11.  The central set of facts surrounded Charges (2) to (11) were that due to the inability on the part of LISUN to settle various payments on time, the defendant, inter alia, issued 10 post-dated cheques to PW5 on the 27^th day of September 1994. These cheques were subsequently dishonoured.

12.  Insofar as Charges (2) to (11) are concerned, the prosecution case against the defendant is essentially that, at the time of issuing the said 10 post-dated cheques, the defendant had no intention to settle the same.

Facts not in dispute

13.  With regard to Charge (1), the prosecution and the defence admitted, inter alia, the following:-

(1) Both JIVAN and LISUN were companies incorporated in Hong Kong in the year 1991. The initial directors of LISUN were the father of the defendant and one Kishore VAZIRANI.

(2) On the 10 November 1992, after the death of the said Kishore VAZIRANI, his directorship in LISUN was replaced by his son VAZIRANI Rajesh Kishore (hereinafter referred to as “RAJESH”).

(3) Between the 22^nd day of February 1994 and the 15^th day of September 1994, LISUN submitted to JIVAN 24 sets of Export Documents (hereinafter referred to as “the 24 sets of Export Documents”).

(4) Between 1 March 1994 and 19 September 1994, JIVAN provided LISUN with the said 24 cheques. These cheques have all been received and cashed-in by LISUN with the total amount being HK$5,689,842.36.

(5) The 24 bills of lading within the 24 sets of Export Documents were forged documents.

14.  With regard to Charges (2) to (11), the prosecution and the defence admitted, inter alia, the following:-

(1) That DYNASTY was established by PW5 in the year 1992. It was a company in the business of trading garment products.

(2) Between 21^st day of March 1994 to the 29^th day of April 1994, LISUN and DYNASTY entered into 5 trading agreements and as a result of which DYNASTY imported garment products into Hong Kong between the 27^th day of April 1994 and the 1^st day of June 1994 and provided LISUN with these garment products.

(3) On or about the 27^th day of September 1994, PW5 attended the office of LISUN and met the defendant and RAJESH. A guarantee letter (Exhibit P202) was signed by the three of them. The defendant gave 10 post-dated cheques of International Bank of Asia Limited bearing numbers 647321-647330 to DYNASTY with the total amount being HK$1,067,300.

(4) The said post-dated cheques bearing numbers 647321-647328 (Exhibits P203-P210) were signed by the defendant as one of the authorised signatories for LISUN and submitted to DYNASTY by the defendant by hand. The accuracy of the bank statement in relation to the said post-dated cheques bearing numbers 647329 and 647330 was not in dispute.

Prosecution witnesses

15.  A total of 5 witnesses were called by the prosecution in the present trial.

PW1

16.  PW1 came to Hong Kong in the year 1991.  He was residing in Thailand for a number of years prior to his arrival in Hong Kong.  It was through the introduction of his elder brother that PW1 came to know the defendant.

17.  Whilst in Hong Kong, PW1 was introduced to RAJESH by the defendant. PW1 was told that RAJESH was the nephew of the defendant.

18.  With the help of the defendant and RAJESH, the defendant acquired JIVAN in the year 1991.

19.  Between the years 1991 to 1992, JIVAN had business relationship with a company in the name of Lord (hereinafter referred to as “LORD”).  To PW1's understanding, LORD was a company operated by the defendant.

20.  A major part of the business between JIVAN and LORD were those of “discounting transactions”.  They essentially took the form of financing service provided by JIVAN to LORD.  The mechanism of such service revolved around JIVAN initially purchasing a set of export documents (including the respective invoice and bill of lading of the goods purported to be exported by LORD to its overseas buyers) [hereinafter referred to as “Export Documents”) at a discounted price (usually at 95% of the invoice value of the goods) from LORD.  JIVAN would then seek payment for the full invoice value of the goods in question from the overseas buyer of LORD by presenting the Export Documents via the banks and thereby earned the difference between the discounted price and the full invoice value as profit.

21.  In the year 1993, PW1 was told by the defendant that the business of LORD had been changed to that of LISUN.

22.  The subject matter of Charge (1) concerns 24 sets of Export Documents allegedly sold by the defendant to JIVAN between the 1^st day of March 1994 to the 19^th day of September 1994.

23.  In the course of PW1's examination-in-chief, PW1 described that in respect of the sale of the 24 sets of Export Documents, the defendant would contact PW1 by phone, informing the latter about the sale.  Then the defendant would either (a) come to the business premises of JIVAN in person (sometimes with a staff of his) and armed with the Export Documents or (b) sent a staff of his over to the business premises of JIVAN together with the Export Documents.

24.  PW1 also testified that due to some outstanding sums of money owed by LISUN to JIVAN, 14 out of the 24 sets of Export Documents were not fully paid up by JIVAN to LISUN as off-settings were taken place (namely transactions number 2, 11-20 and 22-24 as listed in the table in Exhibit P225).

25.  According to PW1, in around May to June 1994, he sensed that there was something wrong with the bills sold by the defendant.  He made enquiries with the defendant.  The defendant managed to convince PW1 to carry on with the discounting transactions.

26.  PW1 subsequently found out from shipping companies that no bill of lading was actually issued in relation to the 24 sets of Export Documents.

27.  PW1 tried to clarify the matter with the defendant but to no avail as the latter could not be found.

28.  In August 1995, PW1 reported the matter to the Hong Kong police.

PW2

29.  Mr. NATESH BAL MIRRALI (hereinafter referred to as “PW2”) was the accountant of JIVAN from the years 1993 to 1997.

30.  The defendant was introduced to PW2 by PW1.  PW2 learned from PW1 that the defendant was the boss of LISUN whilst RAJESH was its manager. PW2 himself, however, seldom talked to the defendant in the past.

31.  In relation to discount transactions between LISUN and JIVAN, PW2 testified that sometimes it was the defendant who brought along the Export Documents to JIVAN whilst other times it was RAJESH who brought them along.  Upon satisfying that the paper works were in order, PW1 would sign the corresponding cheques and the same would then be handed to either the defendant or the staff of LISUN.

PW3

32.  Ms Lo Fung Yee (hereinafter referred to as “PW3”) was the shipping clerk of LISUN from June 1992 to July 1994.

33.  PW3 was interviewed by one Ms Alison Lau when she applied for her post as shipping clerk at LISUN.  It was Ms Alison Lau who subsequently informed her that the defendant was the boss of LISUN.

34.  PW3 described that her colleagues in LISUN would seek the opinion of the defendant for a lot of matters and that the defendant would usually have the final say in relation to the business of LISUN.

35.  PW3, however, told this court that she had her maternity leave during the months of August to December 1993.  When she resumed her job, she seldom saw the defendant in the office of LISUN.

PW4

36.  Mr Lee Lui, Thomas (hereinafter referred to as “PW4”) was the merchandiser of LISUN from June 1994 to January 1995.

37.  PW4 said he was interviewed by a person with the name Ajit when he first applied his post at LISUN.  He assumed that that person was the boss of LISUN.

38.  As to other personnel in LISUN, PW4 seemed to recall a person with the name of RAJESH.  To him, RAJESH was a person responsible for the operation of the company.  He thought RAJESH was the manager of the company.

39.  PW4 described that if Ajit was in the office, the final say on business matters rested on him.  In Ajit's absence, such decision making was by RAJESH.

PW5

40.  PW5 was the founder of DYNASTY.  It was a trading company in garment products.

41.  There were business dealings between LISUN and DYNASTY starting from the 21^st day of March 1994.

42.  Subsequently LISUN felt behind with its payment of goods supplied by DYNASTY.

43.  By the 27^th September 1994, the outstanding amount owed by LISUN to DYNASTY accumulated to HK$1,867,382.  There was a meeting between the defendant together with RAJESH on the one part and PW5 on the other part on that very day (hereinafter referred to as “the Meeting on the 27 September 1994”).

44.  It was during the Meeting on the 27 September 1994 that the guarantee letter (Exhibit P202) was signed by various persons coupled with the issuing of 17 post-dated cheques (hereinafter referred to as the 17 post-date cheques) by the defendant to PW5.

45.  As far as PW5 was able to recall, none of these 17 post-dated cheques were in fact honoured upon presentation to the bank.  When these cheques were bounced, PW5 would approached the defendant and the latter would substitute some of those bounced cheques by way of cash payment.

The defence witness

46.  The defendant elected to testify.  He was the only witness called by the defence. 

47.  The defendant told this court that at the time when he was working at LISUN, he was responsible for finding overseas customers.  He was not the boss of LISUN.

48.  Further, the defendant said that he had no part to play in the selling of Export Documents to JIVAN.  Such was the job of RAJESH.  He also confirmed that none of the bills of lading in question was signed by him.

49.  The defendant also claimed that it was only until early 1995 that the defendant came to know the Export Documents related to Charge (1) were forged.

50.  The defendant further said that he hardly knew PW5, or dealt with him “one on one”, prior to the Meeting on the 27 of September 1994.

51.  The defendant did make enquiries with RAJESH as to the sufficiency of funds in LISUN’s bank account before he signed on the 17^th post-dated cheques.  The defendant said that he was told by RAJESH that LISUN would be receiving money from JIVAN.

Analysis and Findings

52.  The prosecution bears the burden to prove its case beyond all reasonable doubt in respect of each of the 11 charges in the present case.

53.  Insofar as Charge (1) is concerned, it is apparent that PW1 is the key witness, as without his testimony the prosecution case against the defendant cannot stand.

54.  It is with the quality of the evidence of PW1, however, that this court has reservation with.

55.  Amongst the evidence furnished by PW1, one piece stood out due to its paramount importance, namely that the defendant had allegedly made a face to face confession to PW1 with regard to the falsity of the bills of lading in question.

56.  According to PW1, this confession was made by the defendant in August to September 1994 and it was prior to the time when PW1 made his first complaint to the police. 

57.  PW1 agreed during his cross-examination that in none of his witness statement to the police did he mention about the said confession made by the defendant.

58.  Along this line came also PW1's assertion that there was a letter of apology sent by the defendant via facsimile.

59.  PW1 confirmed in his testimony that he previously told the police in one of his witness statement the following: “(the defendant) faxed a letter of apology to me and asked me to believe what he said was true ...”

60.  Judging from the fact that PW1 felt the need to tell the police that there was a letter of apology sent by the defendant, it is hard to imagine why PW1 failed to mention to the police a single word regarding the alleged confession made by the defendant.

61.  Further, with regard to the said apology letter, when PW1 was being pressed during cross-examination as to its where-about, PW1 shifted his version by suggesting that he himself in fact did not receive such letter.  His elder brother did.  He was merely informed by his elder brother that such a letter was received.  As to telling the police that it was him who had received the said apology letter, PW1 tried to explain the same by saying that he treated JIVAN as the family's business thus when he said “me” in his witness statement, what he actually meant was “the family”.

62.  This court finds this piece of explanation incredible. It is clear to the court that there is clear contradiction between what was stated in PW1's witness statement and what he asserted in court in this regard.  

63.  There is also another aspect of PW1’s testimony that has significant bearing on his reliability.

64.  During PW1’s cross-examination, he accepted that he did not mention in any of his witness statement about the defendant coming over to the office of JIVAN whilst, at the same time, armed with him the Export Documents.

65.  Further, it was also revealed during cross-examination that when PW1 was asked by the police as to whom did he receive the “shipping documents” from insofar as the discounting transactions between JIVAN and LISUN were concerned, he replied that there were 4 staffs of LISUN who were responsible for such task. The defendant, however, was not one of them.

66.  Further still, it was also revealed during cross-examination that PW1 once described to the police as to the manner in which discounting transactions were carried out in the following words: “Ajit (the defendant) would give me a call, telling me that he wanted to do discounting transaction.  If agreed, Ajit would send his staff and take the documents to me.  Then I would instruct my accountant Bobby (PW2) to issue a company cheque to LISUN”.

67.  When PW1 was later challenged by the defence as to why his version given during his evidence-in-chief, namely that the defendant went to JIVAN by himself (for the purpose of discounting transactions), contradicted that with the versions he furnished to the police, PW1 replied: “every time he (the defendant) came always with a staff, he never came alone”.

68.  Again, I do not find such explanation credible.

69.  This court fully appreciates that PW1 was endeavouring to relate matters that happened more than 20 years ago. 

70.  Having said that, however, one of the clear scenarios described by PW1during his evidence-in-chief was that the defendant used to bring the Export Documents to JIVAN’s office in person.  That assertion was in clear contradiction with what PW1 related to the police in his witness statement.

71.  Insofar as Charge (1) is concerned, one of the key aspect which the prosecution seek to demonstrate to this court is the involvement of the defendant in respect of the 24 sets of Export Documents.

72.  The essence of the prosecution case is that: the defendant was the boss of LISUN － albeit he was neither its shareholder nor director － and he was the very person who initiated, confirmed and finalised all the discounting transactions which stemmed from the 24 sets of Export Documents.

73.  To this end, the reliability of PW1’s testimony is therefore crucial to the prosecution case.  This is particularly so when it comes to his evidence concerning whether or not the defendant was present when a particular set of Export Documents were brought along to JIVAN.

74.  During PW1’s cross-examination, he initially said that he was “100% sure” that the defendant came to JIVAN’s office with the requisite Export Documents during the months of July, August and September in the year 1994.

75.  However, when it was revealed and put to him by Mr Beel that it was not possible for the defendant to have given some of the Export Documents to PW1personally as the defendant was not in Hong Kong at the relevant time, PW1 once again shifted his stance by suggesting that all the discounting transactions were done with the defendant’s consent; and when PW1 said “the defendant came to his office personally” in his witness statement, what he really meant was: (the transactions were carried out) with the defendant’s consent”.   

76.  Again, such shifting of stance on the part PW1 really tarnished the quality of his evidence, thus directly affected the reliability of his testimony.

77.  In order to decide which piece of evidence from PW1 can be relied upon, this court needs to be certain as to whether or not he was telling the truth.  And if there is any exaggeration on his part, this court needs to know what it is. 

78.  With the quality of PW1’s evidence, this court simply cannot safely rely on the testimony of this witness in general as the court cannot be sure which piece of PW1’s evidence had been tainted by his exaggeration.

79.  Without PW1’s evidence, the prosecution obviously would not be in a position to prove its case beyond doubt insofar as Charge (1) is concerned.

80.  For the above reasons and after considering Charge (1) separately, therefore, this court finds the defendant not guilty of Charge (1).

81.  As to Charges (2) to (11), the majority of the prosecution case was not in dispute.

82.  The crux of the prosecution case, as postulated by Mr Kong in his submissions, is that the only irresistible inference that one can draw from the evidence is that at the time when the defendant issued the 17 post-dated cheques, the defendant was dishonest and had no intention to settle all of the 17 post-dated cheques, including the 10 cheques particualrised in Charges (2) to (11).

83.  In order to see whether the defendant possessed the requisite mens rea of the crime as postulated in Charges (2) to (11), this court must assess what went on before and after the Meeting on the 27 September 1994.

84.  There is hardly any dispute that LISUN felt behind its payment to DYNASTY and that the former was in some sort of financial difficulty.

85.  Having said that, however, the defence was able to demonstrate to this court, and confirmed by PW5, that between the months of May to July 1994, a total of 5 cash cheques were issued by LISUN and subsequently cashed-in by PW5 with the aggregate sum exceeding HK$720,000.

86.  It was further confirmed by PW5 that another aggregate sum of around HK$700,000 was paid by LISUN to DYNASTY at various stages after the Meeting on the 27 September 1994 to the time PW5 made his report to the police in October 1995.

87.  Mr Beel, on behalf of the defendant, submitted to this court that such continual settlement of dishonoured cheques negates any suggestion of dishonest intent.

88.  Although this court is not entirely with Mr Beel’s submissions on this point, the acts of continual settlement are, nevertheless, indicative of a tendency, on the part of LISUN, to repay DYNASTY.

89.  Putting this tendency to repay DYNASTY into context with the defendant’s assertion that he was told by RAJESH that LISUN was expecting money from JIVAN and the same would then be used to facilitate the payment for the 17 post-dated cheques, this court cannot discard the possibility what the defendant said in this regard was true or may be true.

90.  Further, Mr Beel also drew the attention of this court to the fact that in January 1995, PW5 received from the defendant a sum HK$100,000 in cash for the purpose of exchanging one of the dishonoured cheques.  Such an act on the part of the defendant demonstrated his intention to repay DYNASTY.

91.  From the facts available, this court has reservation as to whether the defendant, at the time when he issued the 17 post-dated cheques, intended not to honour any one of them.

92.  This court therefore finds that the prosecution is not able to prove beyond doubt that the defendant has committed any of Charges (2) to (11).

93.  The court therefore finds the defendant not guilty of Charges (2) to (11).

Conclusion

94.  Defendant you are found not guilty of all charges (1) to (11) in this trial.  You are acquitted accordingly.