UNJAB & HARYANA v. C.B.I. Punjab, Pat

Judgment

1. The appellant-accused is challenging The a enging judgment of conviction and order of sentence tence both dated 16.01.2003 passed by ssed by learned Special Judge, C.B.I., Punjab, Pa jab, Patiala, whereby he was sentenced tenced as under:- s) u/s Offence(s) u/s Period of sentence(s) Fine imposed Period of sentence in default of payment of fine 420 120BN r/w 420 IPC RI for 01 year Rs.1,000/- RI for 01 months R 13(2) RI for 02 years 13(i)(d) r/w 13(2) of the PC Act, 1988 Rs.2,000/- RI for 02 months R 1(a). For the sake of convenience, the pa For t the parties are referred to with their original status bef tus before the learned Trial Court. PUSHPINDER SAINI 2024.06.01 06:15 I attest to the accuracy and integrity of this document CRA-S-273-SB SB-2003 - 2- The case of the prosecution, as per t The n the s per the allegations levelled in the FIR in question uestion may be summed up as thus s thus, co-accused V.K.Dhir while serving as Clerk/C Clerk/Cashier and appellant-B.R. Malh . Malhotra, the then Passing Officer of the State Bank Bank of India, Main Branch, Moga, Moga, abused their official position and conspired wit ed with each other to defraud the Bank e Bank. They made fictitious entries in dormant savin savings accounts without preparing aring credit vouchers. Co-accused V.K. Dhir forged orged withdrawal forms and the signa signatures of account holders while appellant-B.R. M .R. Malhotra in his role as Passing O sing Officer, approved 8 such forms without verifying rifying the signatures against the s - the specimen cards, allowing co- accused V.K. Dh .K. Dhir to withdraw funds fraudule d on audulently. They were charged on being sent up to f up to face trial both the co-accused V - sed V.K. Dhir as well as appellant- B.R. Malhotra we tra were charged under criminal cons l conspiracy, cheating, forgery and misuse of official fficial positions under Section 120- f the -B, 420, 468, 471, 477-A of the IPC read with Sec ith Section 13(1) (d) and 13(2) of the Act, of the Prevention of Corruption Act,

1988. On being c being charged both the accused denied denied the charges levelled against them and claimed laimed trial. The prosecution in support of its c The s 26 f its case, examined as many as 26 witnesses includi ncluding PW1- K.B Sharma, PW2- D.C -B.K. Chopra and PW-12 D.C Sharma, who veri o verified the handwriting of co-accu accused V.K. Dhir on the relevant documents. PW PW-18 Balwinder Singh Rakhra g of akhra testified about processing of various withdraw hdrawal forms by appellant-B.R. Malh . Malhotra. The appellant in support of his case examin examined one handwriting expert M.L rt M.L. Sharma. On the basis of the evidence led, th On t led, the trial Court held co-accused V.K. Dhir guilty guilty under Sections 120-B, 420, 46 20, 468, 471, 477-A of the IPC and Section 13(1) (d) 1) (d) and 13(2) of the Prevention of C on of Corruption Act, 1988 while the appellant was con as convicted for offences under Secti IPC r Sections 120-B and 420 of the IPC PUSHPINDER SAINI 2024.06.01 06:15 I attest to the accuracy and integrity of this document CRA-S-273-SB SB-2003 - 3- and Sections Sect s Section 13(1) (d) and 13(2) of the Act, f the Prevention of Corruption Act, 1988 They were were sentenced as already detaile etailed in the earlier part of this judgment. Submissions on on behalf of the counsel for the ac accused-appellant. Learned counsel has contended th Lear d to ded that the prosecution failed to establish the gui e guilt of the appellant beyond a a reasonable doubt. The key arguments presen

presented by the learned counsel are as l are as follows: a). Despite ex ite examining 26 witnesses, the pros e prosecution failed to present any convincing, much much less cogent evidence to link t link the appellant to the fraudulent activities orchestr rchestrated by co-accused/prime acc accused V.K.Dhir. The primary accusation agains against the appellant was that he had e had approved 8 withdrawal forms without verifying ifying signatures, lacked any substanti antive proof of criminal intent; b) That the p the prime accused V.K.Dhir, adm admitted to his fraudulent acts including in an e n an extra judicial confession statem statement Ex.PW25/1 made to one Ms. Kalra, the th the then Manager, SBI, Moga. How d he However, not even once did he implicate the appellant as being an accomplic The omplice in the alleged crime. The statements includ including the admission made by the p thus, y the prime accused V.K.Dhir, thus, did not suggest ev gest even remotely any collusion with n with the appellant; c). That the o t the only allegation against the app e appellant was of negligence and dereliction of dut of duty as a Passing Officer. Howeve owever, this allegation fell far short to constitute a c te a criminal offence. There was n was no evidence led whatsoever to suggest that the t the appellant acted with a malacio alacious intent or had fraudulently passed the withd withdrawal forms. Furthermore, de re, departmental proceedings were initiated against th ainst the appellant for failure to preven f the prevent and bring to the notice of the authorities conce concerned qua the misconduct of co ever, of co-accused V.K.Dhir, however, therein also no all allegations were leveled against th inst the appellant of conspiring with PUSHPINDER SAINI 2024.06.01 06:15 I attest to the accuracy and integrity of this document CRA-S-273-SB SB-2003 - 4- the co-accused. T sed. The absence of all these allegatio gations against the appellant in the departmental proc al proceedings further demolished th n as ed the case of the prosecution as also weakened th ned the accusations against him. T The findings of the learned trial Court while pas le passing the impugned judgment 2003 ment and order dated 16.01.2003 regarding the alle he alleged conspiracy were based on co d on conjectures and surmises; (d) That there here was no indication, even implic implicitly that the appellant forged documents or be or benefitted financially from the - the fraudulent activities of the co- accused V.K.Dhi .K.Dhir. Criminal conspiracy, require requires a demonstrable intent, and none of the actio actions of the appellant indicated thi , the this essential element. Thus, the trial Court gravely gravely erred in holding the appellant c ellant criminally liable by convicting him based on spe on speculations rather than on cogent - cogent evidence. Even in the worst- case scenario, tw two other employees also passed assed withdrawal forms-albeit fewer in number comp compared to the 08 passed by th by the appellant- yet they were exonerated. This . This selective prosecution rather lef a the left no manner of doubt qua the absence of a coh a coherent case against the appella o be appellant which also required to be appreciated in the in the light of there being no convinc t the nvincing evidence produced that the petitioner was a as a beneficiary of the fraudulent a lent activities more so, when the prosecution had n had not presented any evidence tracin tracing the money back to him. Hence, the trial Court had fallen into Henc into error in failing to appreciate that the allegation gations levelled against the appellant d did ellant including the evidence led did not constitute any te any criminal offence. Submissions mad s made by the Standing counsel for el for CBI. Learned Standing counsel for CBI w Lear r and CBI while opposing the prayer and submissions made s made by the counsel for the appella ppellant has at the outset argued that the conduct of th t of the appellant was suggestive of a e of active collusion with the prime PUSHPINDER SAINI 2024.06.01 06:15 I attest to the accuracy and integrity of this document CRA-S-273-SB SB-2003 - 5- accused V.K.Dh .K.Dhir. The Standing counsel f sel further made the following submissions: (i) Negligence and lack of Verification Negl cation (1) The appellan pellant approved 8 withdrawal form /9 to l forms Ex.PW5/4 & Ex.PW1/9 to Ex.PW1/15 witho without verifying signatures against ance, nst specimen cards. For instance, in one specific ca ific case, the specimen signature Ex Ex.PW8/1 was in Punjabi, while the correspondin onding withdrawal form Ex.PW1/9 bo This bore signature in English. This blatant disregard ard for verifying signatures clearly i early indicated a possible conspiracy with co-accused used V.K.Dhir. Furthermore, it was it was revealed that the withdrawals were made from from dormant accounts by co-ac t the accused V.K.Dhir, without the production of the of the relevant savings bank pass boo ss books. This action alone pointed to a deliberate a rate attempt to bypass the establish tablished banking protocols. It was contended by the by the Standing counsel that althoug although it was true that two other employees who h who had also passed withdrawal forms l forms in a similar negligent manner had not been pr en proceeded against however, it w t the r, it was crucial to note that the appellant was inv as involved in a significantly highe higher number of such withdrawal forms as compare mpared to the other two employees. yees. Since the appellant approved payments on 8 w 8 withdrawal forms, 7 of which w hich were associated with dormant accounts, it did hi did highlight a pattern of suspicious b ious behavior. (2) That no do no doubt there was no direct evidenc o the vidence linking the appellant to the money trail invo il involving fraudulent withdrawals , s amounting to Rs.4,53,000/-, however, the nat he nature of conspiracy, which typi h typically involves covert actions planned behind cl hind closed doors, cannot be ignored t ored thus, the absence of any direct evidence against gainst the appellant would not neg negate the strong circumstantial PUSHPINDER SAINI 2024.06.01 06:15 I attest to the accuracy and integrity of this document CRA-S-273-SB SB-2003 - 6- evidence indicat ndicating his involvement in the the conspiracy with co-accused V.K.Dhir. (ii) Exoneration of other employees Exon (1) Exoneration of two other employee Exon ployees S.K. Dua and Gurdip Singh who also passed passed withdrawal forms cannot be r the ot be seen as a precedent for the exoneration of th of the appellant. The CBI had pr had presented comprehensive and compelling evide evidence clearly implicating the app ; e appellant in a fraudulent scheme; the two other emp er employees being exonerated would would not thus, diminish the weight of the evidence ence against the appellant as the a the actions of the appellant when viewed in their their entirety clearly demonstrate h y to rate his role in the conspiracy to bank. defraud the bank. (2) The Standing counsel for CBI thus The ct of I thus, submitted that the conduct of the appellant in nt in approving multiple suspicious wi ous withdrawal forms without proper verification and th and the overall circumstantial eviden evidence of a covert conspiracy left no manner of do of doubt that he was actively involv involved in the fraudulent activities orchestrated by co d by co-accused V.K.Dhir. I have heard learned counsel for I ha l for the parties and perused the relevant material terial on record. Findings of the C f the Court

1. The appellant stands convicted u The f the ed under Section 13(1)(d) of the Prevention of Co of Corruption Act, 1988 and Section ad as ection 420 of the IPC which read as under: PUSHPINDER SAINI 2024.06.01 06:15 I attest to the accuracy and integrity of this document “Sect Section 13(1)(d) of the PC Act: "13. Criminal misconduct by a public serva "13. C c servant.- CRA-S-273-SB SB-2003 - 7- (1) XXX XXX XXX (1) X (d) if he,- (d) if (i) by corrupt or illegal means, obtains for (i) by ns for himself or for any other person any valuable or pecuniary advantage; or ii) by abusing his position as a public ser ii) by r any lic servant, obtains for himself or for any other person any valuable thing or pecunia ecuniary advantage; or (iii) while holding office as a public se (iii) w lic servant, obtains for any person any valuable thing or pecuniary advantage with e without any public interest; or XXX XXX XXX XXX Section 420 of the IPC Secti "420. Cheating and dishonestly inducing "420 ducing delivery of property.- Whoever cheats and thereby dishonestly Whoe d to onestly induces the person deceived to deliver any property to any person, or to delive le or or to make, alter or destroy the whole or any part of a valuable security or anythi any p nything which is signed or sealed, and which is capable of being converted into a into a valuable srcurity, shall be punished with imprisonment of either description fo tion for a term which may extend to seven years, and shall also be liable to fine. "

2. Before proceeding further, it would Befo would be apposite to refer to the observations mad s made by Hon’ble the Supreme Cour e Court in M. Narayanan Nambiar v. State of Keral Kerala, 1963 SCR Supl. (2) 724 whe wherein it observed that the abuse of position by a p by a public servant must involve dish e dishonest intent to cause wrongful loss or gain. Me . Mere negligence or violation of de ot by of departmental rules would not by itself suffice for c e for criminal misconduct. This posit n’ble s position was reiterated by Hon’ble the Apex Court i ourt in S.P. Bhatnagar V. State of SCC ate of Maharashtra, (1979)1 SCC 535 wherein it in it emphasised the necessity of pro of proving dishonest intention and pecuniary advant advantage gained by abusing one’s e’s position for establishing the offence under Se der Section 13(1) (d) of the PC Act. nt to Act. It would, thus, be relevant to PUSHPINDER SAINI 2024.06.01 06:15 I attest to the accuracy and integrity of this document CRA-S-273-SB SB-2003 - 8- reproduce the ob the observations of the Hon’ble Supre Supreme Court in M. Narayanan Nambiar’s case ( case (supra) “In our view this passage, if we f we may say so, restates the rule of construction of a penal provision sion from a correct perspective. As we will presently show the case of the f the appellant on the facts found clearly falls not only within the words of rit. s of clause (d) but also within its spirit. Indeed if his argument be accepted pted not only we will be doing violence to the language but also to the spir spirit of the enactment. First taking the pharaseology used in the clause, t se, the case of a public servant causing wrongful loss to the Government b ent by benefiting a third party squarely falls within it. Let us look at the t the clause "by otherwise abusing the position of a public servant," for t for the argument mainly turns upon the said clause. The phraseology is ver s very comprehensive. It covers act done "otherwise" than by corrupt or ille r illegal means by an officer abusing his position. The gist of the offence nce under this clause is, that a public officer abusing his position as a p a public servant obtains for himself or for any other person any valuab ge. luable thing or pecuniary advantage. "Abuse" means mis-use ie, using h ng his position for something for which it is not intended. That abuse may may be by corrupt or illegal means or otherwise those means. s. The word 'otherwise' has wide connotation and if no limitation i pt', on is placed on it, the words 'corrupt', 'illegal', and 'otherwise' mentioned ge, ioned in the clause become surplusage, for on that construction every ab y abuse of position is gathered by the clause. So some limitation will ha ll have to be put on that word and that limitation is that it takes colour fr ur from the preceding words along with which it appears in the clause, tha , that is to say, something savouring of dishonest act on his part. The cont t if contention of the learned counsel that if the clause is widely construed ev a d even a recommendation made by a public servant for securing a job job for another may come within the clause and that could not have be re. e been the intention of the Legislature. But in our view such innocuous a us acts will not be covered by the said clause. The juxtaposition of the the word 'otherwise' with the words 'corrupt or illegal means', and th nd the dishonesty implicit in the word "abuse" indicate the necessity for ty for a dishonest intention on his part to bring him within the meaning o ing of the clause. Whether he abused his position or not depends upon the f the facts of each case; nor can the word 'obtains' be sought in aid to limit on. limit the express words of the Section. Obtain' means acquire or get. If a . If a corrupt officer by the said means obtains a valuable thing or a pecun ecuniary advantage, he can certainly be PUSHPINDER SAINI 2024.06.01 06:15 I attest to the accuracy and integrity of this document CRA-S-273-SB SB-2003 - 9- said to obtain the said thing or a r a pecuniary advantage, but it is said that in clauses (a) and (c) the sam t of same word is used and in the context of those clauses it can only mean ge n getting from a third party other than the Government and therefore the the same meaning must be given to the said word in clause (d) 'Obtains' i ns' in clauses (a) and (6) in the context of those provisions may mean tak taking a bribe from a third party, but there is no reason why the same m me meaning shall be given to that word used in a different context when tha n that word is comprehensive enough to fit in the scheme of that provision. ion. Nor can we agree that as dishonest misappropriation has been provide ovided for in clause (c), the other cases of wrongful loss caused to the Gove y a Government by the deceit practiced by a public officer should fall outside t ide the Section. There is no reason why when a comprehensive Statute wa was passed to prevent corruption this particular category of corrupti ruption should have been excluded therefrom because the consequenc uences of such acts are equally harmful to the public as acts of bribery. ry. On a plain reading of the express words used in the clause, we have ave no doubt that every benefit obtained by a public servant for himself or f or for any other person by abusing his position as a public servant fall falls within the mischief of the said clause." “21. Following the decision in M in M. Narayanan Nambiar v. State of Kerala (supra), it was held by th y this Court in S. K. Kale v. State of Maharashtra (supra) that the ab e abuse of position in order to come within the mischief of the section ction must necessarily be dishonest so that it may be proved that the acc e accused caused deliberate loss to the department. It was further held held in this case that it is for the prosecution to prove affirmativel tively that the accused by corrupt or illegal means or by abusing his his position obtained any pecuniary advantage for some other person. on. It would, therefore, be necessary to find out in this case as to whether ether the accused abused their position and acted dishonestly or with a c a corrupt or oblique motive in having the contract in question entrusted t ted to A-4.”

3. Upon examining the facts of the pre Upon e led he present case and the evidence led as also the ratio o ratio of law laid down by the Supreme preme Court, it is clear that in order to prove charges arges against a public servant accus accused of offences under Section PUSHPINDER SAINI 2024.06.01 06:15 I attest to the accuracy and integrity of this document CRA-S-273-SB SB-2003 - 10- 13(1) (d) of the P f the P.C. Act as well as Section 420 420 IPC it is imperative to prove dishonest intentio tention on his part to cause deliberate berate losses to the department.

4. In the present case, however, on m In th f the , on meticulous examination of the evidence led there d there is a clear cut absence of mens n led ens rea. No evidence has been led to prove that the a at the appellant had a dishonest intenti intention to cause losses to the bank or gain any pecu y pecuniary advantage. The mere mere passing of withdrawal forms without signature nature verification, no doubt amoun er, it amounts to negligence, however, it would not consti constitute criminal misconduct under P.C. under Section 13(1)(d) of the P.C. Act.

5. Furthermore, the prosecution failed Furth failed to present any direct evidence of conspiracy or cy or collusion between the appellant s not pellant and accused V.K.Dhir as not disputed by the C the CBI also, no trail of money was f llant. was found leading to the appellant. Moreover, even even as per the various statements .Dhir ents made by accused V.K.Dhir including his ext extra judicial confession stateme tatement, he did not implicate the appellant as bein s being either a conspirator or in any in any manner having colluded with him.

6. Strangely two other employees w Stran ees who too had similarly passed withdrawal forms forms and had apparently being neg g negligent in the discharge of their official duties like the appellant were not prose f the t prosecuted. The contention of the counsel for the CB the CBI that they had not been prosec nly 2 prosecuted as they had passed only 2 withdrawal forms forms as compared to 8 withdrawal f , awal forms passed by the appellant, is clearly indicati dicative of selective prosecution. The n. The number of withdrawal forms passed by the app he appellant cannot be made the sole b sole basis for his conviction without any cogent and co and convincing evidence of criminal ds to iminal intent against him. It needs to be emphasized th zed that to attract an offence under the n has der the P.C. Act, the prosecution has to prove beyond yond reasonable doubt that the accu pt or accused by resorting to corrupt or PUSHPINDER SAINI 2024.06.01 06:15 I attest to the accuracy and integrity of this document CRA-S-273-SB SB-2003 - 11- illegal means and ns and by abusing his official positio position had gained some financial advantage. Howe However, in the present case, the pro le to the prosecution has not been able to prove the case of ase of the petitioner beyond reasonab asonable doubt. The allegations of negligence and d and dereliction of duty certainly d d of inly do not meet the threshold of criminal miscond isconduct under the P.C. Act or cheati cheating under Section 420 IPC and therefore, conside onsidering the absence of cogent evi ent evidence and proof of dishonest intent, the appella appellant deserves to be given the ben ed of he benefit of doubt and acquitted of the charges frame framed against him.

7. As a sequel to the above discussion, As a ed. ssion, the present appeal is allowed. 24 May 14, 2024 MANJARI NEHRU KAUL) (MA JUDGE Whether speaking/ reasoned Whether reportable : : Yes/No Yes/No PUSHPINDER SAINI 2024.06.01 06:15 I attest to the accuracy and integrity of this document