Criminal Appeal No. 918 of 2011 · The High Court
Case Details
- 1 - NC: 2025:KHC:6422 CRL.A No. 918 of 2011 C/W CRL.A No. 950 of 2011 CRL.A No. 958 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.918 OF 2011 (C) C/W CRIMINAL APPEAL No.950 OF 2011 C/W CRIMINAL APPEAL No.958 OF 2011 IN CRL.A No.918/2011 BETWEEN: 1. SRI L S DINAMANI S/O SHRI L S SRINIVASAN AGED ABOUT 60 YEARS SRI RAGHAVENDRA NILAYA, 4TH CROSS, 1ST STAGE, 2ND PHASE, CHANDRA LAYOUT, BANGALORE-560 040 (BY SRI P.S.RAJAGOPAL, SENIOR COUNSEL ALONGWITH SRI R NAGENDRA NAIK, ADVOCATE) …APPELLANT AND: Digitally signed by MALATESH K C Location: HIGH COURT OF KARNATAKA 1. STATE BY INSPECTOR OF POLICE, CENTRAL BUREAU OF INVESTIGATION, ACB, BANGALORE (BY SRI P. PRASANNA KUMAR, ADVOCATE) …RESPONDENT THIS CRL.A IS FILED UNDER SECTION 374(2) CR.P.C PRAYING TO SET ASIDE THE ORDER DATED:23.08.2011 PASSED BY THE XXXII ADDL. CITY CIVIL AND SESSIONS JUDGE AND SPL. JUDGE FOR CBI CASES, BANGALORE IN SPL.C.C.No.36/2009 - CONVICTING THE APPELLANT/ACCUSED FOR THE OFFENCE PUNISHABLE UNDER SECTION 120B R/W - 2 - NC: 2025:KHC:6422 CRL.A No. 918 of 2011 C/W CRL.A No. 950 of 2011 CRL.A No. 958 of 2011 468, 471, 420 IPC AND PUNISHABLE UNDER SECTION 13(1)(d) R/W 13(2) OF PREVENTION OF CORRUPTION ACT 1988. IN CRL.A NO.950/2011 BETWEEN: 1. SHRI M MICHAEL FELIX S/O SHRI MARIYAPPA AGED 46 YEARS BUSINESS ( PARTNER OF M/S FATHIMA MARY RICE MILL, K R PET, MYSORE) R/AT NO.127, PUSHPAGIRI MAIN ROAD, RBI POST, MYSORE 2. SMT JYOTHI MICHAEL W/O SHRI M MICHAEL FELIX AGED ABOUT 43 YEARS BUSINESS, (PROPRIETRIX OF M/S ABHISHEK ENTERPRISES, MYSORE R/AT NO.127, PUSHPAGIRI MAIN ROAD, RBI POST, MYSORE (BY SRI LOKESH .K.S FOR SMT N PADMAVATHI, ADVOCATES) ...APPELLANTS AND: 1. STATE BY PI, CBI/ACB BANGALORE (BY SRI P.PRASANNA KUMAR, ADVOCATE) THIS CRL.A IS FILED UNDER SECTION 374(2) CR.P.C PRAYING TO SET ASIDE THE ORDER DATED 23.08.2011 ...RESPONDENT - 3 - NC: 2025:KHC:6422 CRL.A No. 918 of 2011 C/W CRL.A No. 950 of 2011 CRL.A No. 958 of 2011 PASSED BY THE XXXII ADDL. CITY CIVIL AND SESSIONS JUDGE AND SPL. JUDGE FOR CBI CASES, BANGALORE IN SPL.C.C.No.36/2009 - CONVICTING THE APPELLANTS/ ACCUSED FOR THE OFFENCE PUNISHABLE UNDER SECTION 120B R/W 468, 471, 420 IPC. IN CRL.A NO.958/2011 BETWEEN: 1. SRI GANESH D. HEGDE S/O LATE SRI H.N. HEGDE, AGED ABOUT 57 YEARS, WORKING AS MANAGER, CANARA BANK, CANTONMENT BRANCH M.G ROAD, BANGALORE RESIDING AT NO.835/11-12, "SHARANYA" 4TH "A" MAIN ROAD, 6TH CROSS, NAVODAYANAGARA, JP NAGAR, 7TH PHASE, BANGALORE – 560 076 ...APPELLANT (BY SRI P.S.RAJAGOPAL, SENIOR COUNSEL ALONGWITH SRI K.PUTTEGOWDA, ADVOCATE) AND: 1. STATE BY INSPECTOR OF POLICE CENTRAL BUREAU OF INVESTIGATION, ACB, BANGALORE ...RESPONDENT (BY SRI P.PRASANNA KUMAR, ADVOCATE) THIS CRL.A IS FILED UNDER SECTION 374(2) CR.P.C PRAYING TO SET ASIDE THE ORDER DATED 23.08.2011 PASSED BY THE XXXII ADDL. CITY CIVIL AND SESSIONS JUDGE AND SPL. JUDGE FOR CBI CASES, BANGALORE IN SPL.C.C.No.36/2009 - CONVICTING THE APPELLANT/ ACCUSED FOR THE OFFENCE PUNISHABLE UNDER SECTION 120B R/W 468, 471, 420 IPC AND PUNISHABLE UNDER SECTION 13(1)(d) R/W 13(2) OF PREVENTION OF CORRUPTION ACT, 1988. - 4 - NC: 2025:KHC:6422 CRL.A No. 918 of 2011 C/W CRL.A No. 950 of 2011 CRL.A No. 958 of 2011 THESE APPEALS, COMING ON FOR FURTHER DICTATION, THIS DAY, JUDGMENT WAS DELIVERED THEREIN AS UNDER:
Legal Reasoning
CORAM: HON'BLE MR JUSTICE V SRISHANANDA ORAL JUDGMENT Heard Sri. P.S.Rajagopal, learned Senior Advocate along with Sri K.Puttegowda and Sri N.Nagendra Naik, Sri. Lokesh K.S. for Smt.N.Padmavathi, learned counsel for the appellants and Sri. P.Prasanna Kumar, learned counsel representing Central Bureau of Investigation. 2. Accused Nos.1 and 2 being the public servants and accused Nos.3 to 5 who are the beneficiaries who have been convicted in Spl.C.C.No.36/2009 by the judgment dated 23.08.2011 on the file of the Addl. City Civil Judge and Special Judge for CBI Cases (CCH-34), Bengaluru, are the appellants. The appellants have been sentenced as under: 1. The accused No.1 to 5 are convicted and sentenced to undergo simple imprisonment for two years for the offence punishable U/s 120B of IPC. 2. The accused No.1 to 5 are convicted and sentenced to undergo SI for two years for the offence punishable U/s.420 IPC and shall pay fine of Rs.5,000/- each and in default of fine, they shall undergo simple imprisonment for 6 months. - 5 - NC: 2025:KHC:6422 CRL.A No. 918 of 2011 C/W CRL.A No. 950 of 2011 CRL.A No. 958 of 2011 3. The accused No.1 to 5 are convicted and sentenced to undergo SI for two years for the offence punishable U/s.468 IPC and shall pay fine of Rs.5,000/- each and in default of fine, they shall undergo simple imprisonment for 6 months. 4. The accused No.1 to 5 are convicted and sentenced to undergo SI for two years for the offence punishable U/s 471 IPC and shall pay fine of Rs.5,000/- each and in default of fine, they shall undergo simple imprisonment 6 months. 5. The accused No.1 and 2 are convicted and sentenced to undergo SI for two years each for the offence punishable U/s 13(1)(d) r/w 13(2) of P.C.Act and shall pay fine of Rs.5,000/- each and in default of fine, shall undergo simple imprisonment for 6 months.” 2. For the sake of convenience, appellants are referred to as per their original ranking before the Trial Court. 3. As there is no representation on behalf of said Vidyasagar-accused No.5 consistently and for non appearance of advocate on behalf of accused No.5 in Crl.A.No.1012/2011, disposal of these appeals is also hindered. As such, today, by separate order, Crl.A.No.1012/2011 filed by accused No.5- Vidyasagar is disjuncted from present appeals. - 6 - NC: 2025:KHC:6422 CRL.A No. 918 of 2011 C/W CRL.A No. 950 of 2011 CRL.A No. 958 of 2011 4. Facts of the case in brief which are utmost necessary for disposal of the present appeals is as under: The accused No.1 being the public servant in the capacity of AGM, Regional Office, Canara Bank, Hunasuru Branch, Mysuru, during 24.05.2004 to 29.04.2006 and accused No.2- Sri Ganesh D. Hegde being the Branch Manager of Canara Bank, Hunasur Branch from 29.06.2002 to 28.05.2005 along with Sri Rajashekar who later on turned out to be an approver for the prosecution and given the pardon, entered into criminal conspiracy with accused No.3-Michel Felix being the partner of M/s Fathima Marry Rice Mill, K.R.Pete, Mysuru, accused No.4- Smt.Jyothi Michel, Proprietor of M/s Abhisheka Enterprises, Mysuru and Accused No.5-Vidyasagara who used to forge the documents with an intention to cheat the bank and obtain loans from Canara Bank, Hunasuru Branch, which is detailed as under: Sl. No 1 1. Quantum and Nature of the financial Accommodation 2 Rs. 60 Lakhs, open cash credit (OCC) Name of the beneficiary, Date and A/c No. 3 A.S.MICHEL Felex, Partner, M/s.Fathima Marry Rice Mill, Name of the person accorded the financial accommodation Nature of attributions the 4 5 A.2 Sri Ganesh.D Hegde Primary a) Security of stock b) Taken collateral security of proper - 7 - NC: 2025:KHC:6422 CRL.A No. 918 of 2011 C/W CRL.A No. 950 of 2011 CRL.A No. 958 of 2011 2. Rs.15 lakhs temporary adhoc limit dtd:30.09.2003 Current A/c No.424 A.S.MICHEL Felex, Partner, M/s.Fathima Marry Rice Mill, dtd:27.11.2004 Current A/c No.424 ties No.31,31/1 at Bangalore of A.5, site No.9398 of A3 Michel Felex upon which charge was already created. a) It is beyond the period of three months, A.2 Sri Ganesh.D Hegde fails b) A.2 exceeds his delegated power. b)A2 obtain approval of competent authority. to the the 3. Rs.20 lakhs adhoc limit A.4 Smt.Jyothi Michel, Proprietorix, M/s.Abhishek Enterprises dtd:16.6.2004, C.A/c No.442 A.2 Sri Ganesh D.Hegade 4. Rs.50 Lakhs OCC open cash credit limit A.2 Sri Ganesh D.Hegade A.4 Smt.Jyothi Michael, Proprietrix, M/s.Abhishek Enterprises, dtd:20.12.2004 , C.A/c No.442 though c) A.2 credit prepared dtd: report 23.3.2005 for the ratification, he did not sent to A.1 AGM. a) A.2 allowed collateral security of the properties offered to the loans of A.3 referred to the loans of A.3 referred in Sl.No.1 and 2. fails b) A.2 to create additional the on charge building, land, and plant machinery of M/s.Fathima Marry Rice Mill. a) A.2 failed to the obtain the approval of competent authority b) The sanction is through the tele - 8 - NC: 2025:KHC:6422 CRL.A No. 918 of 2011 C/W CRL.A No. 950 of 2011 CRL.A No. 958 of 2011 5. Rs.50 lakhs OCC open cash credit limit A.2 Sri Ganesh D.Hegde A.3 Michel Felex, Proprietor, M/s.Amulya Enterprises, dtd:24.3.2005, C.A/c No.441 6 Rs.20 lakhs adhoc limit A.4 Smt.Jyothi Michel, Proprietrix, M/s.Abhishek Enterprises, C.A/c No.441 A.2 Sri Ganesh D.Hegde A.2 phonic message of A.1 AGM though he prepared credit report he fails to to A.1 forward AGM. a) taken collateral security of the properties were which the secured loan of M/s.Fathima Marry Rice Mill to b) A.2 fails to take additional collateral security c)He recorded that it was sanctioned on the telephonic approval of the A.1 AGM. fails d)A.2 to obtain income tax returns, sale tax returns lakhs e) A.2 ignored the existing liability off Rs.5 in of favour M/s.Fathima Marry Rice Mill. a) A.2 sanctioned limit without there being any oral formal request. b) He collect financial statement. c) He ignored the existing liability of M/s.Fathima Marry Rice Mill and M/s.Abhishek Enterprises. to audited fails - 9 - NC: 2025:KHC:6422 CRL.A No. 918 of 2011 C/W CRL.A No. 950 of 2011 CRL.A No. 958 of 2011 5. At the time of inception of loan account, it is one Sri Lingappa who was the Manager and accused Nos.1 and 2 were nowhere in the picture. After sanctioning of the loan, without proper security and without verifying stock statement periodically, the financial facility extended to M/s Fathima Marry Rice Mill and M/s Abhisheka Enterprises, Mysuru, were under the supervision of the higher officials and several irregularities were noted in the accounts of M/s Fathima Marry Rice Mill, M/s Abhisheka Enterprises and M/s Amulya Enterprises. 6. Inspection was conducted in the Branch at Hunasuru and several irregularities were noted, which, later on turned out to be illegal, inasmuch as, the financial facilities were extended to accused Nos.3 and 4 with the active conspiracy of remaining accused persons and by placing the forged documents as collateral security. 7. In this regard, a complaint came to be lodged with CBI. After registration of the case, CBI investigated the matter thoroughly, collected necessary oral and documentary evidence - 10 - NC: 2025:KHC:6422 CRL.A No. 918 of 2011 C/W CRL.A No. 950 of 2011 CRL.A No. 958 of 2011 and later on, filed the charge sheet against the appellants herein. 8. As stated earlier, one of the accused in the complaint viz., Rajashekar filed an application before the Trial Court and his application was accepted by the Trial Court to act as approver and his statement was recorded. He was also given pardon by the Trial Court. 9. Insofar as remaining accused are concerned, they did not plead guilty of the charges which were framed against them and therefore, trial was held. 10. Insofar as accused Nos.1 and 2 are concerned, based on the inspection report, departmental enquiries were also held. Noting the role of accused No.2, minor punishment of taking off two increments was ordered. But accused No.1 is removed from service. 11. In order to bring home the guilt of the accused persons, prosecution in all examined 26 witnesses as P.Ws.1 to 26 and placed on record voluminous documentary evidence which were exhibited and marked as Exs.P.1 to 216. During the course of - 11 - NC: 2025:KHC:6422 CRL.A No. 918 of 2011 C/W CRL.A No. 950 of 2011 CRL.A No. 958 of 2011 evidence, few of the documents were confronted to prosecution witnesses which have been admitted by them and therefore, they were marked as Exs.D.1 to D.17. 12. On conclusion of recording of evidence, accused statement as is contemplated under Section 313 of the Code of Criminal Procedure was recorded, wherein, accused persons denied the incriminatory circumstances and did not lead any defence evidence. 13. Later on, learned Trial Judge heard the arguments of the parties and by considered judgment dated 23.08.2011, convicted the appellants and sentenced them as referred to supra. 14. Being aggrieved by the same, appellants have preferred these appeals. 15. On behalf of the appellants, Sri P.S.Rajagopal, learned Senior Advocate, and Sri Nagendra Naik, learned counsel representing the public servants vehemently contended that the material on record is not properly appreciated by the learned Trial Judge and wrongly convicted the appellants for - 12 - NC: 2025:KHC:6422 CRL.A No. 918 of 2011 C/W CRL.A No. 950 of 2011 CRL.A No. 958 of 2011 the aforesaid offences resulting in miscarriage of justice and sought for allowing the appeals. 16. Sri P.S.Rajagopal would further contend that accused No.1 was the AGM and accused No.2 was the Branch Manager and when the loan was sanctioned at the inception on 30.09.2003, accused Nos.1 and 2 had no role to play whatsoever inasmuch as one Lingappa was the person who sanctioned the loan. 17. Sri P.S.Rajagopal would further contend that if the loan is sanctioned following the requisite procedure and if the higher authorities of the Canara Bank did not find any irregularity or illegality in sanctioning such loan at the inception, the offence under Section 420 of the Indian Penal Code would automatically gets extinguished and thus conviction of the appellants for the transaction which has been initiated by Lingappa needs a relook and appellants are to be acquitted for the said offence. 18. Sri P.S.Rajagopal, learned Senior Advocate and Sri Nagendra Naik, learned counsel would further contend that - 13 - NC: 2025:KHC:6422 CRL.A No. 918 of 2011 C/W CRL.A No. 950 of 2011 CRL.A No. 958 of 2011 there is no pecuniary loss caused to the bank and entire civil liability is sought to be recovered by the bank by filing necessary civil proceedings including proceedings against the security offered to the bank under the provisions of The Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002. Therefore, in the absence of any wrongful loss caused to the bank and corresponding gain to the accused persons, appellants are entitled for acquittal of all the charges. 19. They would further contend that material evidence placed on record at the most could be treated as irregularity as could be seen from the disciplinary enquiry report insofar as accused No.2 is concerned and insofar as accused No.1 is concerned, since he has come into picture after the loan has been sanctioned and recommendations have been made to proceed against defaulters for recovery of civil liability, there could not have been any illegality attributable to accused Nos.1 and 2 which is sine qua non to initiate the proceedings against accused Nos.1 and 2 especially when allegations under Section 120B of the Indian Penal Code. Therefore, the conviction of the appellants for the offence under Section 120B is baseless, - 14 - NC: 2025:KHC:6422 CRL.A No. 918 of 2011 C/W CRL.A No. 950 of 2011 CRL.A No. 958 of 2011 inasmuch as, when original loan was sanctioned it was not the accused Nos.1 and 2, but it was Lingappa who was responsible for sanctioning of the loan. 20. They would also contend that the material evidence placed on record is falling short for inferring as to when exactly conspiracy commenced and pursuant to such conspiracy what is the offence that has been committed by the public servants with the help of other accused persons is not forthcoming in the prosecution evidence and thus sought for allowing the appeal in toto. 21. Alternatively, Sri P.S.Rajagopal and Sri Nagendra Naik would contend that in the event this Court upholding the Order of conviction for want of necessary evidence placed on record by the prosecution to attract the offence under Section 13(1)(d) r/w 13(2) of Prevention of Corruption Act, the conviction of the appellants for the aforesaid offences may be set-aside by enhancing the fine amount reasonably and sought for allowing the appeals to that extent. - 15 - NC: 2025:KHC:6422 CRL.A No. 918 of 2011 C/W CRL.A No. 950 of 2011 CRL.A No. 958 of 2011 22. They would also submit that if such an order of acquittal is recorded insofar as the public servants are concerned for the offence punishable under Section 13(1)(d) r/w Section 13(2) of the Prevention of Corruption Act, they would not lay their claim for the consequential benefits, in view of the fact that disqualification gets extinguished. Accused Nos.1 and 2 have filed affidavits in that regard. Counsel for beneficiary while adopting the arguments of accused Nos.1 and 2 contended that they are no way responsible for alleged offences and sought for allowing their appeals. 23. Per contra, Sri P.Prasanna Kumar, learned counsel for the CBI supports the impugned judgment in toto. 24. He would further contend that the material evidence placed on record including the corroboratory evidence in the nature of the statement of approver would be sufficient enough to understand the existence of conspiracy among the appellants which ultimately resulted in suffering the interest of the bank resulting in not only pecuniary loss but also irregular operation of the accounts of accused Nos.3 and 4. - 16 - NC: 2025:KHC:6422 CRL.A No. 918 of 2011 C/W CRL.A No. 950 of 2011 CRL.A No. 958 of 2011 25. He would further contend that pecuniary loss caused to Bank is shared by appellants along with other accused persons illegally for which the positive evidence is hardly available to be placed on record by the prosecution and such things must be inferred from the attendant facts and circumstances of the case. 26. Sri P.Prasanna Kumar, learned counsel would invite the attention of this Court to the fact that even though the loan was sanctioned on 30.09.2003 by Lingappa, it is the duty of accused No.1 being the AGM and duty of accused No.2 being the Manager of the Bank to supervise the accounts and not to lend the money for sticky account which has been ignored and further advances have been made by them in their tenure. 27. Sri P.Prasanna Kumar would further contend that the stock statement given by the borrowers which was not properly verified by appellants would only result in an inference that knowingfully well there was no stock maintained in the stock yard, further advances have been made especially when already there is default in the accounts of accused Nos.3 and 4. - 17 - NC: 2025:KHC:6422 CRL.A No. 918 of 2011 C/W CRL.A No. 950 of 2011 CRL.A No. 958 of 2011 28. He would further contend that in the absence of any tacit understanding among the accused persons, why would accused Nos.1 and 2 go on lending further advances to accused Nos.3 and 4 especially when the account is irregular and the security offered is not sufficient to secure the outstanding amount of the Canara Bank, Hunasuru Branch. Therefore, prosecution is successful in establishing all the ingredients to attract the offences alleged against the appellants and sought for dismissal of the appeals. 29. Insofar as the alternate submission is concerned, Sri Prasanna Kumar would contend that material on record would be sufficient enough even to maintain the conviction for the offence punishable under Section 13(1)(d) r/w Section 13(2) of the Prevention of Corruption Act, and sought for dismissal of the appeals in toto. 30. Having heard the parties in detail, this Court perused the material on record meticulously. 31. On such perusal of the material on record, the following points would arise for consideration. - 18 - NC: 2025:KHC:6422 CRL.A No. 918 of 2011 C/W CRL.A No. 950 of 2011 CRL.A No. 958 of 2011 (i) Whether the material evidence placed on record on behalf of the prosecution would be sufficient enough to maintain the order of conviction of the appellants for the offence punishable under Section 13(1)(d) r/w Section 13(2) of the Prevention of Corruption Act? (ii) Whether the appellants make 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? (iii) Whether the sentence needs modification? (iv) What Order? 32. REGARDING POINT Nos.1 and 2: In the case on hand, fact of accused Nos.3 and 4 holding accounts in the names of M/s Fathima Marry Rice Mill and M/s Abhisheka Enterprises, Mysuru, in Canara Bank, Hunasuru Branch is not in dispute. So also, taking the loan from time to time from Canara Bank, Hunasuru Branch is not in dispute. 33. Admittedly, the first loan was sanctioned on 30.09.2003. At that point of time, one Lingappa was the AGM. Accused No.1-L.S.Dinamani assumed the charge of AGM on 24.05.2004 and got transferred on 29.04.2006. Accused No.2 was the Manager of Canara Bank, Hunasuru Branch on and from - 19 - NC: 2025:KHC:6422 CRL.A No. 918 of 2011 C/W CRL.A No. 950 of 2011 CRL.A No. 958 of 2011 29.06.2002 till 28.05.2005. The loan of accused Nos.3 and 4 was irregular as is found from the material evidence placed on record. However, despite the fact that loan was irregular, instead of taking effective steps to recover the irregular loan, further advances were made in respect of the business of accused Nos.3 and 4. 34. The security that was offered for the advances were the stock in trade. The material on record would indicate that the person who inspected the stock yard noted that stock of M/s Fathima Marry Rice Mill and M/s Abhisheka Enterprises, Mysuru, and M/s Amulya Enterprises were kept in same place and they were not separated nor stock was available for proper identification as to which stock belongs to which of the concerns. 35. No doubt, the person who inspected the spot has answered in the cross-examination that he did not carry stock register with him so as to identify the stock. At any rate, since three different entities have had the loan transaction with the Canara Bank, Hunasuru Branch, it was their duty to identify and show which stock belongs to which of the firms and as on - 20 - NC: 2025:KHC:6422 CRL.A No. 918 of 2011 C/W CRL.A No. 950 of 2011 CRL.A No. 958 of 2011 the date of inspection the stock that has been offered as security was available to be identified by the inspecting staff who had gone for inspection from Canara bank, Hunasuru Branch. 36. Therefore, contentions urged on behalf of the appellants that the loan was secured cannot be countenanced in law. Further, again the collateral security offered for the loan transactions were also not proper. 37. The material on record would depict that even though the original documents are given to Canara Bank, on the same set of documents there were other encumbrances earlier. Admittedly, those encumbrances were suppressed by the persons who gave collateral security. 38. All these factors, on cumulative analysis would establish that all was not well with the accounts of accused Nos.3 and 4 and, accused No.5 has lent his hand in forging the documents for and on behalf of accused Nos.3 and 4 for obtaining the financial assistance from Canara Bank for which accused Nos.1 and 2 were responsible at the relevant point of time. - 21 - NC: 2025:KHC:6422 CRL.A No. 918 of 2011 C/W CRL.A No. 950 of 2011 CRL.A No. 958 of 2011 39. There is some force in the argument put forth on behalf of the appellants that prosecution evidence do not clearly indicate as to when the conspiracy has actually taken birth, in the attendant facts and circumstances of the case. 40. It is settled principles of law and requires no emphasis that for establishing the existence of conspiracy, hardly any positive evidence could be placed on record, as such positive evidence is seldom available. 41. Therefore, Courts while appreciating the existence of conspiracy, is bound to infer from the material evidence on record about the existence of conspiracy. 42. In this regard, this Court gainfully places reliance on the judgment of the Hon’ble Apex Court in the case of Mohd. Khalid vs. State of West Bengal reported in (2002)7 SCC 334 wherein, Hon’ble Apex court has followed the judgment of the Constitution Bench of the Hon’ble Supreme Court in the case of Kehar Singh vs. State (Delhi Administration) reported in (1988)3 SCC 609. - 22 - NC: 2025:KHC:6422 CRL.A No. 918 of 2011 C/W CRL.A No. 950 of 2011 CRL.A No. 958 of 2011 43. Applying the test mentioned in the Constitution Bench which was reiterated in the case of Mohd. Khalid supra, accused Nos.1 and 2 being responsible public servants occupying the posts of AGM and Branch Manager, ‘why would they lend further amounts to the sticky accounts of accused Nos.3 and 4 without verifying the stock and proper security’, is a question that has to be answered by accused Nos.1 and 2. 44. Mere recommending for taking a civil action could only be at best inferred as a corrective measure or damage control mechanism. That itself would not be sufficient enough to ignore the existence of conspiracy among the accused persons. 45. If accused Nos.3 and 4 are total strangers and if accused No.5 has forged the documents for and on behalf of accused Nos.3 and 4 and sent the same as collateral security, as a responsible public servant what are the precautionary measures exercised by accused Nos.1 and 2 before lending further loan to accused Nos.3 and 4 is not explained by accused Nos.1 and 2 either in the form of suggesting the prosecution witnesses that the action attributable to accused Nos.1 and 2 is only an - 23 - NC: 2025:KHC:6422 CRL.A No. 918 of 2011 C/W CRL.A No. 950 of 2011 CRL.A No. 958 of 2011 irregularity and not illegality, nor any explanation is offered while recording the accused statement. 46. The material on record would definitely establish that without proper exercise of the responsibility of accused Nos.1 and 2 they have gone on lending the financial assistance to accused Nos.3 and 4 and therefore, existence of conspiracy and other ingredient to attract the remaining offences under the Indian Penal Code stands established in the case on hand. 47. Further, for attracting the offence under Section 13(1)(d) r/w 13(2) of the Prevention of Corruption Act, prosecution has not placed any positive materials. Again, insofar as the offence under Section 13(1)(d) is concerned, mere inaction or improper action on the part of the public servant would not ipso facto result in the offence punishable under Section 13(1)(d) of the Prevention of Corruption Act. Some more positive evidence is necessary, as presumption under Section 20 of the Prevention of Corruption Act would be applicable to Section 7 and not for Section 13(1)(d) of the Prevention of Corruption Act. 48. Therefore, there is sufficient force in the arguments put forth on behalf of the appellants that public servants viz., - 24 - NC: 2025:KHC:6422 CRL.A No. 918 of 2011 C/W CRL.A No. 950 of 2011 CRL.A No. 958 of 2011 accused Nos.1 and 2 are entitled for an order of acquittal for the offence punishable under Section 13(1)(d) r/w 13(2) of the Prevention of Corruption Act. 49. The apprehension expressed by the prosecution in this regard is that if the order of acquittal is recorded insofar as accused Nos.1 and 2 is concerned for the offence punishable under Sections 13(1)(d) r/w 13(2) of the Prevention of Corruption Act is concerned, the disqualification would extinguish and they would lay necessary claim. 50. Apprehension of the prosecution that the accused would lay necessary claim would get extinguished in view of the affidavits filed by accused Nos.1 and 2 to the effect that they would not claim any terminal benefit from the employer. 51. Contents of the affidavit of accused Nos.1 and 2 are extracted hereunder for ready reference: “Affidavit in Crl.A.No.918/2011 I, Shri. L.S Dinamani , late S/O L.S Srinivasan, Aged about 75 years Residing at Sri Raghavendra Nilaya, 4th Cross, 1st Stage, 2nd Phase Chandra layout, Bangalore-560040, do hereby solemnly affirm and state on oath as follows: - 25 - NC: 2025:KHC:6422 CRL.A No. 918 of 2011 C/W CRL.A No. 950 of 2011 CRL.A No. 958 of 2011 1. I submit that I am the Appellant in this case. I know the facts of the Case. Accordingly I swear this Affidavit. 2. I submit that the C.B.I Police has registered a FIR in R.C.No.10(A)/2007 against me and Accused No.1 and 4 others for the offences punishable under section 120-B, 420, 468 and 471 of IPC and under Section 13(1)(d) R/w. Sec 13(2) of Prevention of Corruption Act. 3. It is alleged by prosecution that while I was working as Assistant General Manager, Canara bank Regional office Mysore, during the period 2004-06 I and Accused No.2 was involved in a criminal conspiracy with Accused No.3 to 5 forged the documents with an intention to cheat the bank, making use of the forged document as genuine in connection with the current account No.424 held by the Accused No.3 in the name of Fathima Marry Rice Mill, current A/c No.442 in the name of M/s Abhishek enterprises and current A/c No.441 in the name of Amulya Enterprises permitting Accused No.3 and 4 various cash credit and cheque discount facilities by making use of forged document as genuine and thereby to cheat canara bank by causing monetary loss in connection with the various loans. 4. I submit that after the conclusion of the trial the Hon'ble trial court has convicted me and other accused for the offenses punishable u/s 120-B, 420, 468 and 471 of IPC and under Section 13(1)(d) R/w. Section 13(2) of Prevention of Corruption Act. Being aggrieved by the order of conviction dated 23.08.2011 passed by the XXXII Additional City Civil & Sessions Judge and Special Judge for C.B.I.Cases (CCH-34), - 26 - NC: 2025:KHC:6422 CRL.A No. 918 of 2011 C/W CRL.A No. 950 of 2011 CRL.A No. 958 of 2011 Bangalore in Special. C.C.No.36/2009 the present appeal was filled. 5. I submit that after conviction I was terminated from service and issued with an order of dismissal. Due to my old age I have decided to put an end to the litigation. If I am imposed with any punishment without imprisonment I undertake not to claim any terminal benefit from my employer. I submit that the averments made in Paragraph 1 to 5 of this Affidavit are true to the best of my knowledge, belief and information.” Affidavit in Crl.A.No.958/2011 I, Ganesh Hegde, S/o Late D.N. Hegde, aged about 71 years, residing at No.835/11-12, ‘Sharanye’, 4th A Main, 6th Cross, Navodaya Nagar, J.P. Nagar, 7th Phase, Bengaluru - 560 076, do hereby solemnly affirm and state on oath as follows: 1. That I am the appellant in the subject appeal and that I am aware of the facts of the case, that I am competent to swear to this affidavit and hence I am swearing to the affidavit. The averments in the Criminal Appeal may be treated as a part and parcel of the instant affidavit for the sake of brevity and to avoid repetition 2. That I have preferred the subject criminal appeal questioning the judgment and order dated 23.08.2011 in Special CC No.36 of 2009 passed by the XXXII Additional City Civil and Sessions Judge and Special Judge for CBI Cases, Bangalore (hereinafter referred to as `Trial Court' - 27 - NC: 2025:KHC:6422 CRL.A No. 918 of 2011 C/W CRL.A No. 950 of 2011 CRL.A No. 958 of 2011 for short). This Hon'ble Court by order dated 20.09.2011 suspended the conviction of the appellant. 3. That on the very same allegations, Canara Bank (hereinafter referred to as `the Bank' for short) initiated disciplinary proceedings against the appellant by Charge Sheet No. 22.07.2008. After conclusion of the disciplinary proceedings, the appellant was imposed with a minor penalty of 'reduction to a lower stage in time scale of pay by three stages for a period of three years during which he shall not earn increments of pay and on expiry of the said period, the reduction shall have the effect of postponing his future increments of pay.' This order has attained finality. 4. That I retired from the services of the Bank as Senior manager on reaching the age of superannuation on 31.10.2013. I have received the terminal benefits from the Bank and I am receiving monthly pension from 01.11.2013 onwards. 5. That I hereby undertake that I shall not claim any other benefit in respect of bank service in the future other than those I am already receiving. I declare that this is my name and signature and that the contents of this affidavit are true to the best of my knowledge." 52. Admittedly, role of accused No.2 was assessed by the higher authorities of the Canara Bank itself. Having known about the role played by accused No.2 in the departmental proceedings, minor punishment of cutting two increments has - 28 - NC: 2025:KHC:6422 CRL.A No. 918 of 2011 C/W CRL.A No. 950 of 2011 CRL.A No. 958 of 2011 been ordered insofar as accused No.2. Therefore, he was allowed to continue in the service and permitted to retire as any other employee. As such, he is entitled to necessary benefits which he has been taking all these years. 53. Therefore, in the absence of material evidence placed on record by the prosecution to maintain the offence under Section 13(1)(d) r/w Section 13(2) of the Prevention of Corruption Act, 1988, conviction of the appellants for the offence punishable under Section 13(1)(d) r/w Section 13(2) of the Prevention of Corruption Act, 1988, needs to be set aside. 54. Further, the consequences of setting aside the conviction for the offence punishable under Section 13(1)(d) r/w 13(2) of the Prevention of Corruption Act, 1988, will be subject to the contents of the affidavit as referred to supra. 55. In view of the foregoing discussions, point Nos.1 and 2 are answered partly in the affirmative. REG.POINT No.3: 56. This Court having set aside the conviction of the appellants for the offence punishable under Section 13(1)(d) - 29 - NC: 2025:KHC:6422 CRL.A No. 918 of 2011 C/W CRL.A No. 950 of 2011 CRL.A No. 958 of 2011 r/w Section 13(2) of the Prevention of Corruption Act, 1988, wherein the statute has prescribed minimum period of imprisonment as six months, upholding the conviction of the appellants for the remaining offence under Indian Penal Code, does not necessarily demand imposition of jail period. 57. Taking note of the fact that appellants are the first time offenders and they are in their advanced age, if the fine amount is enhanced reasonably and sentence of imprisonment is set aside for the remaining offences under the Indian Penal Code would meet the ends of justice. Accordingly, point No.3 is answered partly in the affirmative. REG.POINT No.4: 58. In view of the findings of this Court on point Nos.1 to 3 as above, following:
Decision
ORDER i. Criminal Appeals are allowed in part. ii. Accused Nos.1 and 2 who are the appellants in Crl.A.No.918/2011 and Crl.A.No.958/2011 respectively, are acquitted for the offence - 30 - NC: 2025:KHC:6422 CRL.A No. 918 of 2011 C/W CRL.A No. 950 of 2011 CRL.A No. 958 of 2011 punishable under Section 13(1)(d) r/w Section 13(2) of the Prevention of Corruption Act, 1988. iii. Conviction of the appellants including the appellant in Crl.A.No.950/2011 for the offences punishable under Section 120B read with Section 468, 471, 420 of IPC, is hereby maintained and sentence of imprisonment ordered by the learned Trial Judge is hereby set aside by enhancing the fine amount in a sum of Rs.1,00,000/- to each of the appellants payable on or before 15.03.2025 failing which they shall undergo imprisonment as ordered by the learned Trial Judge. iv. It is made clear that accused Nos.1 and 2 who are appellants in Crl.A.Nos.918/2011 and 958/2011, if already have deposited any fine amount for the offences under Section 13(1)(d) r/w 13(2) of Prevention of Corruption Act, same shall be adjusted towards the enhanced fine amount. - 31 - NC: 2025:KHC:6422 CRL.A No. 918 of 2011 C/W CRL.A No. 950 of 2011 CRL.A No. 958 of 2011 v. Office is directed to return the Trial Court Records with copy of this order forthwith for issuing modified conviction warrant. Sd/- (V SRISHANANDA) JUDGE kcm-paragraphs 1 to 49; KAV-paragraphs 50 till end. List No:2, Sl No:3