High Court · 2007

IN THE HIGH COURT OF JUDICATURE AT MADRASDATED: 06.06.2007CORAM:THE HONOURABLE MR.JUSTICE A.C.ARUMUGAPERUMAL ADITYANCRL.R.C.Nos.168 & 169 of 2004andCrl.M.P.Nos.1079 &1081 of 2004S.Arunachalam.. Petitioner/A2 in Crl.R.C.No.168/2004 and A11 in Crl.R.C.No.169/2004-vs-State represented byInspector of PoliceCentral Bureau of InvestigationEconomic Offence Wing3rd Building, Shastri Bhavan26,Haddows Road,Chennai-600 006R.C.No.16/E/97 andRC.NO.4/E/98 respectively ..Respondent/complainant in both revisions These Revisions are filed under Section 397 r/w 401 Cr.P.C. againstthe order passed in Crl.M.P.No.429/2002 in C.C.No.17/2001 andCrl.M.P.No.443 of 2002 in C.C.No.15 of 2001 respectively dated 4.11.2003and 31.10.2003 respectively on the file of Principal Special Judge forCBI Cases(IX Additional Court)Chennai-104.For petitioner : : Mr.M.N.Padmanabhan Senior Counsel for Mr.K.S.Vamsidhar & Mr.S.KalyanaramanFor respondent : : Mr.N.Chandrasekaran Special Public Prosecutor for CBI Cases. C O M M O N O R D E R Crl.R.C.No.168 of 2004 arises out of an order passed by thePrincipal Special Judge for CBI Cases(IX Additional Court)Chennai inCrl.M.P.No.429 of 2002 in C.C.No.17 of 2001 which was filed under Section https://hcservices.ecourts.gov.in/hcservices/ 239 of Cr.P.C. In the said C.C. No.17 of 2001, the petitioner was arrayedas A2. Crl.R.C.No. 169 of 2004 had arisen against the order passed by thelearned Principal Special Judge for CBI Cases(IX Additional Court) Chennaiin Crl.M.P.No.443 of 2002 in C.C.No.15 of 2001 wherein the revisionpetitioner figures as A11. The above said petition was also filed underSection 239 of Cr.P.C.2. The relief asked for under the above said petitions before thetrial Court is that there was no prima facie case made out against thepetitioner to force him to face the ordeal of trial but to discharge himfrom the charges levelled against him. Apart from this petitioner, the coaccused have also filed similar petition under Crl.M.P.No.410 of 2001(byA12). Crl.M.P.No.309 of 2002(by A9). Crl.M.P.No.348 of 2002(by A8) inC.C.No.15 of 2001. The co accused in C.C.No.17 of 2001 have filedCrl.M.P.No.321 of 2002(by A1). Crl.M.P.No.22 of 2003(by A3),Crl.M.P.No.428of 2002(by A4).Crl.M.P.No. 332 of 2002 (by A5).Crl.M.P.No.526 of 2002(byA6). Crl.M.P.NO.608 of 2002 (by A7). Crl.M.P.No.322 of 2002(by A9) andCrl.M.P.No.323 of 2002 (by A10). 2a) In C.C.No.17 of 2001(Crl.R.C.No.168 of 2004), the specific chargeagainst the accused is that the accused have under conspiracy illegallysanctioned the credit facilities to M/s Sathiyam Foods(P) Limited. Allthe accused have been charged under Section 120-B of IPC and under Section420 of IPC. The specific allegation against A2 Thiru S.Arunachalam, thethen General Manager of the Indian Bank was that during the relevant pointof time, he was in charge of the Management Services and during 1992,when the loan was sanctioned to the accused company, he was one of theSecretaries to the Board and in 1993 , he had endorsed the recommendationfor sanctioning the additional loan to the above said Sathiyam Foods(P)Limited. It was contended on behalf of the petitioner before the trialCourt in the petition filed by him under Section 239 of Cr.P.C. fordischarge that he was in no way connected with the sanction of the loanand had not taken any decision of his own to recommend the above saidadditional loan to the said Company and that the sanction was not givenafter consulting with CVC and that there was no evidence for conspiracy.2b) In C.C.No.15 of 2001(Crl.R.C.No.169/2004) , the petitioner whowas arrayed as A11 would contend that at the relevant period ie., on24.5.1988, the petitioner was on deputation to Kuwait and not in any waydealt with the account of Indian Bank and that he was not involved in thesanction or release of the said credit facilities to M/s Kiran OverseasLtd (A1) to the tune of Rs.3.59 lakhs and disciplinary authority in thesanction letter itself has mentioned about the fresh proposal dated23.8.1994 forwarded on 10.10.1994 to the Managing Committee forconfirmation and that the credit Department prepared note on 10.10.1994 inrespect of the additional sanction of Rs.3.59 lakhs to M/s Kiran OverseasLimited(A1) and the same was considered by the Managing Committee and an https://hcservices.ecourts.gov.in/hcservices/ order of sanction was passed on 18.10.1994 and with regard to thediversion of Rs.50 lakhs from M/s Kiran Overseas Export Limited, theproposal was sent by a branch Office to the Regional Office on 8.10.1994and the note for approval was sent on 17.10.1994 to the head office andthe petitioner's department had submitted a note to ED/CMD on 10.11.1994for information and not for confirmation. It has been contended by thepetitioner/A11 Thiru S.Arunachalam that he had no knowledge about thetransaction which took place on 5.10.1994.3. The learned Senior counsel appearing for the petitioner wouldbrought to the notice of this Court that it has wrongly been mentioned inthe charge No.25 framed by the trial Court itself describing thepetitioner as a Zonal Manager along with A5 but actually A5 and A7 are theZonal Managers and not the petitioner(A11). Only on the above ground, thepetitioner sought for an order of discharge under Section 239 of Cr.P.C.before the trial Court, which after due deliberation to the submissionmade by the learned counsel appearing for the petitioner as well as thelearned Special Public Prosecutor has come to a conclusion that no reliefunder Section 239 of Cr.P.C. can be given to the petitioner andaccordingly dismissed both the petitions which necessitated the petitionerto come before this Court with these revisions.4. Now the point for determination in these revisions is that whetherthe petitioner is liable to be discharged from the charges levelledagainst him for the reasons stated in the memorandum of revisions?5. Heard Mr.M.N.Padmanabhan, Senior Counsel appearing for thepetitioner and Mr.N.Chandrasekaran, learned Special Public Prosecutor forCBI Cases and considered their rival submissions.6. The Point:The accused in a warrant case can be discharged only if the trialMagistrate considers that the charge levelled against the accused isgroundless.6a) In C.C.NO.15 of 2001, under Charge No.1, A11, ThiruS.Arunachalam has been charged under Sections 120-B r/w420,409,467,468,471 r/w 468 of IPC and Section 13(2)r/w13(1)(d) ofPrevention of Corruption Act 1988 and under Section 132 and 135 of CustomsAct,1962.6b) Under Charge No.13, A11 Thiru S.Arunachalam along with the coaccused said to have dishonestly abusing the position had facilitated todivert Rs.50 lakhs from the account of A1 company(M/s Kiran OverseasExport Limited, Chennai) and hence charged under Section 409 of IPC alongwith the co accused.6c) Under Charge Nos.14 and 16, A11 Thiru S.Arunachalam has beencharged under Section 13(2) r/w 13(1)(d) of Prevention of Corruption Act https://hcservices.ecourts.gov.in/hcservices/ 1988 in two counts.6d) Under Charge No.23, the charge against A11 along with A10is that they have negotiated a foreign bill to the tune of Rs.62 lakhs on16.8.1995 and allowed the same amount as new Packing Credit instead ofadjusting the same to earlier Packing Credit liabilities and furtherreleased Rs.3.59 lakhs TOD on three occasions with their consent and thesame has been neither confirmed nor ratified by the Management Committeeand the said amount is still outstanding . So a specific charge underSection 409 of IPC has been framed against A11.6e) Under Charge No.24 also, this petitioner(A11) has been chargedunder Section 13(2) r/w 13(1)(d) of Prevention of Corruption Act 1988.7.In C.C.No.17 of 2001, the charge against Thiru S.Arunachalam whohas been arrayed as A2 is that during the period from May 1992 to22.1.1996 along with other co accused conspired in order to get pecuniaryadvantage to themselves by availing packing facilities in the manner offoreign bill purchase. Foreign bill negotiated and other letter of credit,FDDBP facility under letter of credit by submitting forged/false documentsin the name of fictitious firm M/s Sathiyam Foods (A-13) circumventing,laid down procedures of Indian Bank and RBI guidelines and thereby causedwrongful loss to the tune of Rs.31.75 crores to the Indian Bank. Hence theaccused (A2) has been charged under Sections 120-B of IPC r/w 409 of IPC,420,467, 468,472 r/w 468 of IPC and under Section 13(2)r/w 13(1)(d) ofPrevention of Corruption Act ,1988.7a) Charge No.9 has been framed against A2 Thiru S.Arunachalam to theeffect that in pursuance of the conspiracy hatched between thepetitioner/A2 along with the co accused on 8.5.1992, A2 as GM(MS/Credit)of Indian Bank had dishonestly withheld the decision of the ManagementCommittee for watching the performance relating to the account of A13 fora period of three months and thereby dishonestly permitting the ChiefManager of Indian Bank,Muthialpet Branch(Late George Issac) to discount atotal of 20 FBP bills between 10.4.1992 and 28.5.1992 and 16 bills aftersanction and parted with a sum of Rs.986.75 lakhs and out of this 36 FBPbills only one was exported by firm M/s Sathiyam Foods(A13) but theamount was diverted to M/s MVR Exports and Maxwell Exim, who exported andalso none of the bills were realised within the stipulated period andhence A2 was charged under Section 13(2) r/w 13(1)(d) of Prevention ofCorruption Act 1988.7b) Under Charge No.10, A2 was charged under Section 409 of IPC underCharge No.11, along with other co accused , A2 was charged under Section13(2) r/w 13(1)(d) of Prevention of Corruption Act 1988.7c) Under Charge No.12, the petitioner was charged along with theother co accused under Section 409 of IPC and under Charge No.14 alongwith A6,A4 and A3 who was charged under Section 13(2)r/w 13(1)(d) of https://hcservices.ecourts.gov.in/hcservices/ Prevention of Corruption Act,1988 and under Charge No.15, along with A6,A4and A3, A2 was charged under Section 409 of IPC. 7d) Under charge No.18, A2 was charged under Section 13(2) r/w 13(1)(d) of Prevention of Corruption Act 1988 along with A1,A3,A4 and A6 andunder charge No.19 along with A1,A3,A4 and A6 and under charge No.19 alongwith A1, A3, A4 and A6, A2 was charged under Section 409 of IPC and underCharge No.24 along with A5 and A7, A2 was charged under Section 13(2)r/w13(1)(d) of Prevention of Corruption Act 1988 and under Charge No.25along with A5 and A7, A2 was charged under Section 409 of IPC. So thepetitioner who is A2 in C.C.No.17 of 2001 and A11 in C.C.No.15 of 2001 isfacing many charges both Indian Penal Code as well as under the Preventionof Corruption Act 1988.8. The learned Senior counsel appearing for the petitioner wouldpoint out a mistake crept in charge No.24 in C.C.No.17 of 2001 to theeffect that A2 has been described as a Zonal Manager but actually A5 andA7 are the Zonal Managers and not A2.9. The learned Special Public Prosecutor for CBI Cases would clarifythe position by pointing out Sub Section 2 of Section 465 of Cr.P.C. andwould contend that the above said error is in no way going to end infailure of justice. The learned Senior Counsel would contend that if atall anybody is responsible for the above said charges, it will be theChairman of Indian Bank and not this petitioner. To substantiate this, hewould rely on a letter written by Thiru T.P.Karunanandan, the then GeneralManager of Indian Bank. But at this juncture, we need not go into thedocuments produced before the trial Court to give a finding to whatextent, the present petitioner is liable to the charges levelled againsthim. At the time of trial, the above said defence is very well open tothe petitioner to shatter the case of the prosecution. The prosecutionhas filed the sanction order in both the cases against the accused whichalso shows about the irregularities committed by the petitioner whilesanctioning the additional loan amounting to crores. If the sanctionorder, according to the learned Senior Counsel for the petitioner is notproper, even then it is open to him to raise the same before the trialCourt to the effect that whether the sanctioning authority has applied hismind in a proper perspective while granting the sanction.10. The learned Special Public Prosecutor for CBI Cases relied on adecision reported in Amar Chand Agarwala-v-Shanti Bose (AIR 1973 SupremeCourt 790) and would contend that at this stage, this Court cannot comeits logical conclusion one way or the other and when the proceeding oftrial before the trial Court has commenced, it is not proper for thisCourt to interfere with the same. The relevant observation in the abovesaid dictum runs as follows: https://hcservices.ecourts.gov.in/hcservices/ " Where the accused moved the High Court at the timewhen the trial was almost coming to a close and whatremained to be done was the examination of twoprosecution and one Court witnesses and the High Courtquashed the charge and the entire proceedings on thegrounds that the complainant suppressed material factsand that the evidence on record did not establish thealleged offence, the order was liable to be set aside.The proper course at that stage to be adopted by theHigh Court was to allow the proceedings to go on and tocome to its logical conclusion, one way or the other,and decline to interfere with those proceedings. Thequestions whether there was suppression and whether theevidence established the alleged offence were mattersto be considered by the trial Court after an appraisalof the entire evidence".11. The learned Special Public Prosecutor would further contend thatall the materials relevant for the case have been placed before the TrialCourt by prosecution and that after the dismissal of the dischargepetitions, the trial Court has framed charges and the trial has alreadybegun. Under such circumstances, the trial Court alone can come to aconclusion, on the basis of the materials on record whether the chargelevelled against the accused has been proved to warrant conviction. Forthis proposition, the learned Special Public Prosecutor would rely onState of Maharashtra .v.Som Nath Thapa (1996 Supreme Court Cases(cri)820at 831) wherein the Honourable Apex Court has observed as follows:" The aforesaid shows that if on the basis of materialson record, a Court could come to the conclusion thatcommission of the offence is a probable consequence, acase for framing of charge exists. To put itdifferently, if the Court were to think that theaccused might have committed the offence it can framethe charge, though for conviction the conclusion isrequired to be that the accused has committed theoffence. It is apparent that at the stage of framingof a charge, probative value of the materials on recordcannot be gone into; the materials brought on record bythe prosecution has to be accepted as true at thatstage".12. The learned Special Public Prosecutor would further contend thateven if there is any irregularity or error or omission in the order ofsanction, unless the Court is of the opinion that the said error oromission or irregularity will ends in failure of justice, the order ofsanction under Section 19 of the Prevention of Corruption Act 1988 cannotbe brushed aside, relying on a ratio of the Apex Court in State by Police https://hcservices.ecourts.gov.in/hcservices/ Inspector-v-T.Venkatesh Murthy(2004 Supreme Court Cases(cri) 2140 whereinit has been held as follows:"A combined reading of Sub Sections(3) and (4) ofSection 19 of the Prevention of Corruption Act, 1988makes the position clear that notwithstanding anythingcontained in the Criminal Procedure Code 1973, nofinding, sentence, and order passed by a Special Judgeshall be reversed or altered by a Court in appeal,confirmation or revision on the ground of the absenceof , or any error, omission or irregularity in thesanction required under Sub Section (1) unless in theopinion of that Court a failure of justice has in factbeen occasioned thereby".13. Admittedly sanctioning authority is yet to be examined before theTrial Court. So it is open to the accused to challenge the sanction evenbefore the trial Court, if it contains any error or omission orirregularity.14. The learned trial Judge has elaborately discussed about the factas well as the part played by the petitioner(according to the prosecution)has come a definite conclusion in both the Crl.M.P.Nos 429 of 2002 inC.C.No.17 of 2001 and 443 of 2002 in C.C.No.15 of 2001 that there is aprima facie case against the accused to proceed with and that he cannot bedischarged from the charges levelled against him. Under suchcircumstances, I do not find any reason to interfere with the findings ofthe learned trial Judge in Crl.M.P.Nos 429 of 2002 in C.C.No.17 of 2001and 443 of 2002 in C.C.No.15 of 2001 which are neither illegal nor infirmto warrant any interference from this Court. Point is answered accordingly.15. In fine, both Crl.R.C.Nos.168 of 2004 and 169 of 2004 aredismissed confirming the orders passed by the learned Principal SpecialJudge for CBI Cases(IX Additional Court) Chennai in Crl.M.P.Nos 429 of2002 in C.C.No.17 of 2001 and 443 of 2002 in C.C.No.15 of 2001 dated4.11.2003 and 31.10.2003 respectively. Consequently, connectedCrl.M.P.Nos.1079 and 1081 of 2004 are also dismissed.16. Nodoubt, the cases are of the year 2001 which requires speedydisposal. Hence the learned trial Judge is directed to proceed with thetrial in C.C.No.17 of 2001 and C.C.No.15 of 2001 and dispose of the sameas expeditiously as possible.sgSd/Asst. Registrar/true copy/Sub Asst.Registrar https://hcservices.ecourts.gov.in/hcservices/ To1. The Principal Special Judge for CBI Cases(IX Additional Court) Chennai-1042.Inspector of Police, Central Bureau of Investigation Economic Offence Wing 3rd Building, Shastri Bhavan 26,Haddows Road, Chennai-600 006.3. The Special Public Prosecutor for CBI Cases, Chennai.+ One cc to Mr. K.S. Vamsidhar, Advocate sR 32212AKT (co)sg 9/6/07Crl.R.C.Nos.168 & 169 of 200406.06.2007