Criminal Appeal No. 553 of 2011 · The High Court
Case Details
- 1 - NC: 2025:KHC:6327 CRL.A No. 553 of 2011 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 12TH DAY OF FEBRUARY, 2025 BEFORE THE HON'BLE MR JUSTICE V SRISHANANDA CRIMINAL APPEAL NO.553 OF 2011 (C) BETWEEN: SRI R KRISHNA MURTHY AGED ABOUT 56 YEARS S/O N RAMANI IYER EX. OFFICER, BANK OF MAHARASHTRA R/AT AT-5, "GURU PARADISE" NO. 27, 7TH CROSS, HINDU COLONY NANGANALLUR, CHENNAI-61 (BY SRI B C SEETHARAMA RAO, ADVOCATE) AND: 1. CENTRAL BUREAU OF INVESTIGATION SPE, BELLARY ROAD, HEBBAL BANGALORE-560024 (BY SRI P.PRASANNA KUMAR, ADVOCATE) …APPELLANT …RESPONDENT THIS CRL.A IS FILED UNDER SECTION 374 (2) CR.P.C PRAYING TO SET ASIDE THE ORDER DT:30.04.2011 PASSED BY THE XXI ADDL.C.C. AND S.J., AND SPL.JUDGE FOR CBI CASES, BANGALORE IN SPL.C.C.NO.135/2000 - CONVICTING THE APPELLANT/ACCUSED No.1 FOR THE OFFENCE P/U/S 120- B, 420, 471 OF IPC AND SECTION 13(2) R/W 13(1) (d) OF PREVENTION OF CORRUPTION ACT, 1988. THIS APPEAL, COMING ON FOR HEARING, THIS DAY, JUDGMENT WAS DELIVERED THEREIN AS UNDER: CORAM: HON'BLE MR JUSTICE V SRISHANANDA Digitally signed by MALATESH K C Location: HIGH COURT OF KARNATAKA - 2 - NC: 2025:KHC:6327 CRL.A No. 553 of 2011 ORAL JUDGMENT Heard Sri B.C. Seetharama Rao, learned counsel for the appellant and Sri P. Prasanna Kumar learned counsel for the respondent. 2. Appellant is the accused No.1 in Spl.C.C.No.135/2000 on the file of XXI Additional City Civil and Sessions Judge and Special Judge for CBI Cases, Bengaluru (CCH-4), who suffered an order of conviction for the offences punishable under Sections 120B, 420, 471 IPC and Section 13 (1) (d) r/w Section 13 (2) of Prevention of Corruption Act and ordered to undergo simple imprisonment for two years for the offence punishable under Section 120B IPC, two years for the offence under Section 120B, two years for the offence punishable under Section 420 IPC, two years for the offence punishable under Section 471 IPC and two years for the offence punishable under Section 13 (1) (d) r/w Section 13 (2) of Prevention of Corruption Act, apart from fine of Rs.85,000/- in all for the aforesaid offences. 3. Facts in nut shell which are utmost necessary for disposal of the present appeal are as under: - 3 - NC: 2025:KHC:6327 CRL.A No. 553 of 2011 4. Appellant was working as one of the credit officers in the Bank of Mahararastra, City Market Branch, Bengaluru between the period of 14.10.1999 to 31.08.1993. At relevant point time, P.W.12 R. Jayashankar was the Chief Manager. A proposal was sent to the Branch, wherein accused No.2 to 6 wanted financial facility for releasing the banking credit limits. 5. Based on the instructions of the higher authorities, appellant processed the said credit proposal by putting up the necessary note and after the loan was sanctioned, he has filled up the deposit of mortgage of title deeds vide Ex.P.31 and signed as a witness. 6. Later on, the said loan account became sticky and got unpaid. 7. Further, there was an additional loan facility sanctioned to the extent of Rs.3.25 lacks in all there was a due to the bank in a sum of Rs.13.25 lakhs with interest. 8. In the usual instruction, the loan pertaining to the accused Nos.2 to 6 was also scrutinized and inspection team noted that the property that was suffered as security was a fake property and the title deeds were not genuine documents. Therefore, action was initiated against all the concerned. - 4 - NC: 2025:KHC:6327 CRL.A No. 553 of 2011 9.
Legal Reasoning
this Court in this appeal. 21. Sri B.C. Seetharama Rao, learned counsel for the appellant reiterating the grounds urged in the appeal memorandum contended that the role of the present appellant is limited to the extent of putting up a credit appraisal note being one of the three credit officers of Bank of Maharashtra and after the loan came to be sanctioned, he has helped the bank in filling up the letter evidence of title deeds which is marked at Ex.P.31 and collected the documents. 22. Learned counsel for the appellant further contended that he being the credit officer, neither sanctioning authority nor recommending officer of the loan has been made as scapegoat for the misdeeds committed by Jayashankar and others who had been given clean chit by the management of bank of Maharashtra and penalized the credit officer only with an intention to escape from the rigors of law, taking note of the - 7 - NC: 2025:KHC:6327 CRL.A No. 553 of 2011 fact that appellant had resigned from the job and therefore, appellant is entitled for acquittal of all the charges. 23. Learned counsel for the appellant further contended that the material on record is hardly sufficient to establish that there existed criminal conspiracy between appellant and other remaining accused persons and he had actually involved in getting the imperfect documents as security for the credit package loan obtained by accused Nos.2 to 6. Therefore, conviction of the appellant for the offence punishable under Section 120B is per se not tenable and sought for allowing the appeal. 24. Learned counsel for the appellant would also contend that entire loan amount having been recovered by Bank of Maharashtra through ECGC scheme, no pecuniary loss has been caused to the bank much less the wrongful loss. In the absence of any wrongful loss, there is no corresponding wrongful gain either to the appellant or to the remaining accused persons which is a sign qua non to maintain the conviction of the offence under Section 420 IPC. Therefore, conviction of the appellant on the said count is per se incorrect and sought for allowing the appeal. - 8 - NC: 2025:KHC:6327 CRL.A No. 553 of 2011 25. Insofar as offence under Section 471 IPC is concerned, learned counsel for the appellant would contend that admittedly the documents which have been furnished to the bank as collateral security are genuine documents, but one Gangadhar has impersonated himself as the owner of the property and he has executed the document for which appellant is no way responsible and thus sought for acquitting the appellant for offence under Section 471 IPC as well. 26. Last limb of the arguments of learned counsel for the appellant is on the ingredients not being sufficient enough to record an order of conviction of the appellant for the offence punishable under Section 13 (1) (d) r/w Section 13 (2) of Prevention of Corruption Act. 27. He would further contend that since the appellant is not the sanctioning authority nor the recommending authority of the loan and in respect of Rs.3.25 lakhs, he had no role whatsoever to play, question of obtaining any illegal gratification by the appellant would not arise at all. Therefore, sought for allowing the appeal in toto. 28. Alternatively, learned counsel for the appellant would contend that in the event of this Court upholding the - 9 - NC: 2025:KHC:6327 CRL.A No. 553 of 2011 order of conviction for the offences under the provisions of IPC, Court may consider the age of the appellant being 70 years and he has resigned from the job voluntarily and not getting any pension and other benefits, the imprisonment ordered for the IPC offences may be set aside by acquitting the appellant for the offence under Section 13 (1) (d) r/w Section 13 (2) Prevention of Corruption Act by enhancing the fine amount reasonably. 29. Per contra, Sri P. Prasanna Kumar, learned counsel for the respondent supports the impugned judgment contending that in the case on hand, unless credit appraisal note is placed on record, the entire credit proposal could not have been processed by Bank of Maharashtra either by the Sri Jayashankar or by the regional office. Therefore, very basics for sanctioning of the loan in the credit appraisal which has been under the exclusive arena of appellant and nothing prevented the appellant to properly appraise the proposal and putting up a suitable note which has not been done by the appellant. 30. Therefore, the arguments put forth on behalf of the appellant that he is totally innocent and the higher authority - 10 - NC: 2025:KHC:6327 CRL.A No. 553 of 2011 including P.W.12 is responsible for the alleged fraud cannot be countenanced in law and sought for dismissal of the appeal. 31. Learned counsel for the respondent would further contend that it was the responsibility of the appellant to verify the documents and genuineness of the person who execute the letter evidencing in deposit of title deeds marked at Ex.P.31 and utterly failed to do so and therefore, the Court has rightly inferred in existence of conspiracy between appellant and the remaining accused and thus, conviction of the appellant for the aforesaid offences is perfectly justified and sought for dismissal of the appeal. 32. Insofar as the alternate submission is concerned learned counsel for the respondent contended that the very fact that the involvement of the appellant, he resigned from the job only with intention to escape away from the rigorous of law. Therefore, alternate submission of the appellant cannot be countenanced in law and sought for dismissal of the appeal in toto. 33. Having heard the parties in detail, the following points would arise for consideration: 1) Whether the material evidence placed on record would be sufficient enough to maintain the - 11 - NC: 2025:KHC:6327 CRL.A No. 553 of 2011 conviction of the appellant for the aforesaid offences? 2) Whether the appellant makes out a case that the impugned judgment of conviction and order of sentence is suffering from legal infirmity and perversity and thus calls for interference? 3) Whether the sentence needs modification? 4) What order? Regarding point Nos.1 and 2: 34. In the case on hand, appellant/accused No.1 being the public servant at relevant point of time being one of the credit officers of Bank of Maharashtra and P.W.2 being the Chief Manager of Bank of Maharashtra, City Market Branch and grant of loan for credit packaging by the bank of Maharashtra, City Market Branch in a sum of Rs.10,00,000/- is established by placing necessary material evidence on record. 35. According to the case of the appellant, the proposal was accepted by the Regional Office and thereafter forwarded to the City Market Branch and therefore, appellant was bound to put up a proper credit appraisal note cannot be countenanced in law inasmuch as there was always a scope for - 12 - NC: 2025:KHC:6327 CRL.A No. 553 of 2011 the appellant to put up a proper appraisal note for the proposal is concerned. 36. Further, the appellant had not followed the instructions of the higher authorities, the only consequence would have been that he would have been transferred from City Market Branch to some other Branch. Instead, why the appellant fell in line with the instructions of the higher authorities is the question that needs to be answered by the appellant and while explaining the incriminatory circumstances, no such answer is forthcoming by the accused. 37. Under such circumstances, being one of the credit officers, credit appraisal note acted as a basis for grant of loan assumes importance which has been highlighted on behalf of the prosecution and reiterated by learned counsel for the respondent/CBI. 38. Further, while taking the security there are lapses which are attributed to the appellant, it is not mere filling up the blanks in the letter evidencing title deeds, that has been done by the appellant herein. 39. Admittedly, the original owner of the property who had given collateral security, did not appear before the bank - 13 - NC: 2025:KHC:6327 CRL.A No. 553 of 2011 and executed Ex.P.31. It was the duty of the appellant to ensure that necessary identity proof should have been taken and he should identify the proper person who is entitled to execute the letter evidencing title deeds. He failed to do so. 40. Mere Sri Jayashankar – P.W.12 also signing and accepting the title deeds would not efface the responsibility and the criminality in getting the improper document executed which ultimately resulted detrimental to the interest of the bank cannot be last sight of while appreciating the material evidence on record. 41. Therefore, the material on record would indicate the dereliction of the duty on behalf of the appellant which is not mere irregular but would take him to the shape of illegality as the accounts became sticky. 42. Further insofar as the offence under Section 120B is concerned, following the dictum of Hon’ble Apex Court in the case of Mohd. Khalid vs. State of West Bengal, reported in (2002) 7 Supreme Court Cases 334, wherein the principles of law enunciated by the Hon’ble Apex Court in the case of Kehar Singh vs. State (Delhi Admn.), a judgment of constitutional Bench has been reiterated, this Court is of the - 14 - NC: 2025:KHC:6327 CRL.A No. 553 of 2011 considered opinion that expecting the prosecution to place positive evidence to prove the offence under Section 120B is impermissible as the positive evidence to prove the existence of conspiracy is seldom available. It is the duty of the Court to infer the existence of elements of criminal conspiracy based on the factual aspects of that particular case alone. 43. In the case on hand, not taking proper security document writing a credit appraisal note in respect of accused Nos.2 to 4 without adhering to the norms of the Bank, ultimately resulting in the account becoming sticky itself would be sufficient to hold that the prosecution is successful in establishing the ingredients to attract the offence under Section 120B IPC. 44. It is settled principles of law and require no emphasis that mere repayment of the money or recovery of the money due to the bank would not ipso facto efface the criminality of the act by following the principles of law enunciated in Gian Singh vs. State of Punjab reported in (2012) 10 SCC 303. - 15 - NC: 2025:KHC:6327 CRL.A No. 553 of 2011 45. In view of the foregoing discussion, the offences under the provisions of IPC is established by the prosecution by placing cogent evidence on record. 46. However, to attract the offence under Section 13 (1) (d) r/w Section 13 (2) of Prevention of Corruption Act, the material evidence placed on record by the prosecution is hardly sufficient. 47. There is no material on record which would go to show that the accused had obtained illegal gratification in neither processing the credit appraisal note nor taking the improper documents as security or allowing Gangadhara to impersonate the original note of the property. 48. Therefore, for want of necessary and cogent evidence on record, conviction of the appellant for the offence punishable under Section 13 (1) (d) r/w Section 13 (2) of Prevention of Corruption Act needs interference in this appeal. 49. For want of evidence, charge on the aforesaid provision needs to be held against the prosecution and whereby appellant would be entitled for an order of acquittal for the charges under the provisions of Prevention of Corruption Act. - 16 - NC: 2025:KHC:6327 CRL.A No. 553 of 2011 In view of the foregoing discussion point Nos.1 and 2 are answered partly in the affirmative. Regarding Point No.3: 50. In view of the finding of this Court on point Nos.1 and 2 with detailed discussion, sentence ordered by the learned Trial Judge needs a modification. 51. Admittedly, appellant has resigned from his service. Whereas, the Chief Manager, who sanctioned the loan for want of sanction order to prosecute, remained on the roles of the bank and he was also cited as a witness on behalf of the prosecution. 52. Taking note of the fact that appellant has resigned from the Bank of Maharashtra, claiming the future prospects including the arrears of salary etc., would not arise in the case on hand. As such, by setting aside the jail sentence and enhancing the fine amount reasonably, by accepting the alternate submission canvassed on behalf of the appellant by Sri B.C. Seetharama Rao, would meet the ends of justice in the attendant facts and circumstances of the case. Accordingly, point No.3 is answered partly in the affirmative. - 17 - NC: 2025:KHC:6327 CRL.A No. 553 of 2011 Regarding point No.4: 53. In view of the findings of this Court on point Nos.1 to 3 as above, following order is passed: (i) (ii)
Arguments
It is found from records that Sri Jayashankar and other senior officials of the bank were exonerated and sanction an order to prosecute the appellant, which resulted in appellant resigning from the bank of Maharashtra as a credit officer. 10. Despite such resignation, the CBI investigated the matter further and filed a charge sheet. 11. Incidentally, chief manager Jayashankar who had been exonerated by the bank of Maharashtra is shown as a witness and is examined as prosecution witness (P.W.12). 12. After receipt of charge sheet, learned Special Judge took cognizance and secured the presence of accused Nos. 1 to 6 and framed the charges. All the accused persons denied the charges and therefore, trial was held. 13. In order to prove the case of the prosecution, as many as 16 witnesses were examined as P.Ws.1 to 16, comprising of complainant, Sanctioning Authority, officials of the bank, including the chief manager - Sri Jayashankar and hand writing expert - Balasami. 14. Documentary evidence supporting the charge sheet materials were placed on record which were exhibited and marked as Ex.P.1 to 91, comprising of loan papers, appraisal - 5 - NC: 2025:KHC:6327 CRL.A No. 553 of 2011 note given by the accused No.1 (appellant), other connected necessary documents to support the case of the prosecution, title deeds, documents thereof, account opening form etc. 15. During the course of examination and cross- examination, defence is able to elicit certain contradictions and also produced the documents which were marked as Exs.D.1 to D.9. 16. On conclusion of recording of evidence, learned Trial Judge recorded the accused statement as is contemplated under Section 313 Cr.P.C. 17. Appellant has denied all the incriminatory materials and for question No.70, he has stated before the learned Trial Judge that he had no involvement in the case and he has visited Bengaluru and he has produced the documents which were marked as Exs.D.1 and D.2 which were translation version. 18. For question No.71 he has stated that he has given witness list and he would like to examine witnesses on his behalf, but no witnesses have been examined. 19. Thereafter, the learned Trial Judge heard the arguments of the parties in detail and on cumulative - 6 - NC: 2025:KHC:6327 CRL.A No. 553 of 2011 consideration of the material on record, has convicted the accused for the aforesaid offences and sentenced as referred to supra. 20. Being aggrieved by the same appellant is before
Decision
ORDER Appeal is allowed in part. While maintaining the conviction of the appellant for the offences punishable under Sections 120-B, 420, 471 IPC, accused is acquitted for the offence punishable under Section 13 (1) (d) r/w Section 13 (2) of the Prevention of Corruption Act. (iii) Consequently, the sentence of imprisonment of two years each for the offences punishable under Sections 120-B, 420, 471 IPC is hereby set aside by enhancing the fine amount in a sum of Rs.25,000/-. (iv) In view of the acquittal of the appellant for the offence punishable under Section 13 (1) (d) r/w Section 13 (2) Prevention of Corruption Act, fine amount, if any deposited - 18 - NC: 2025:KHC:6327 CRL.A No. 553 of 2011 by the appellant in respect of said charge, shall be adjusted towards the enhanced fine amount and balance fine amount, if any, is to be paid by the appellant on or before 15.03.2025, failing which the appellant shall undergo simple imprisonment for a period of six months. (v) Office is directed to return the trial Court records with copy of this order for issuance of modified order. Sd/- (V SRISHANANDA) JUDGE MR List No.: 2 Sl No.: 1