TMI Blog2009 (8) TMI 694X X X X Extracts X X X X X X X X Extracts X X X X ..... f the funds of Andhra Bank to the account of A3. Thus it must be noted in this respect that Banking norms and established practices and procedures would contain directions of law prescribing the mode in which the trust is to be discharged. The expression direction of law in the context of sections 405 and 409 would include not only legislations pure and simple but also directions, instruments and circulars issued by an authority entitled therefor. Thus the prosecution has sufficiently been able to prove the involvement of A1, A2 and A4 as regards the offence of criminal breach of trust. However in the present case the principal offender, i.e., A1, A2 and A4 have been held guilty of a ‘criminal breach of trust’ therefore the conviction of A3 would be even more clearly established from the facts and circumstances of the present case. Thus affirm the sentence imposed by the learned Special Judge with regard to the offence under the Prevention of Corruption Act. - CRL. APPEAL NOS. 1477, 1525 AND 1526 OF 2004, 5 AND 121 OF 2005 - - - Dated:- 7-8-2009 - S.B. SINHA AND CYRIAC JOSEPH, JJ. JUDGMENT S.B. Sinha, J. - These five appeals, arising out of a judgment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s account one working day prior to the day on which the instruments were sent for clearing, with a view to avoiding overdrawings in the account on these days. The funds so credited have been utilized by the broker either for purchase of securities or making some other payments. Instances noticed are given in the annexure. It will be seen therefrom that in the case of item No. ( i ) the branch had afforded the credit even before the actual date of the instrument." (Emphasis added) It was also pointed out how Accused No. 3 had received financial benefit out of the said transactions. First Information Report 6. Relying on, or on the basis of, the Jankiraman Committee Report, a First Information Report was lodged by PW-25 Sitaram Premaram Paladia on or about 2-6-1993 (Exhibit 333), initially against the accused Nos. 1, 2 and 3. 7. No further preliminary inquiry was conducted before lodging the said First Information Report. Ten instances of grant of credit to Accused No. 3 were detailed therein, in respect of the cheques received or those yet to be received from four banks, namely Bank of Karad, ANZ Grindlays Bank, Canara Bank and Standard Chartered Bank (hereinafter ref ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was working as Chief Manager in Fort Branch, Andhra Bank, Mumbai. PW-24 C. Raja Rao was working as General Manager (Personnel) at the Head Office, Andhra Bank, Hyderabad. PW-20 Anand Sinha and PW-21 M. Mahajan were officers working in the Reserve Bank of India. Judgment of the special court 14. In respect of transaction No. 1, the Special Court noted that the account of A3 was credited on 18-5-1991, whereas the cheque is dated 20-5-1991. As Accused Nos. 1 and 2 authorized the credit vouchers to the Current Accounts Department, allowing it to credit an amount of Rs. 2 crores indicated therein to the account of Accused No. 3, without having in their possession the cheque for the said amount, A1 and A2 were guilty of criminal breach of trust as also for creating false documents. 15. In respect of transaction Nos. 2 and 3, the Special Court held that though the cheque dated 5-7-1991 was received on 6-7-1991, the credit therefor had been given on 5-7-1991; the cheque amount was realized only on 6-7-1991. As A1 and A2 prepared debit and credit vouchers and ensured credit to the account of A3, even without having in their possession the corresponding cheque and, thus, they we ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ay, A1 and A2 were guilty of criminal breach of trust and making of false documents in furtherance thereof. 21. In respect of transaction No. 10, the Special Court held that the cheque dated 7-4-1992 was received on 8-4-1992, and the credit was given on 7-4-1992 even though the cheque was realized only on 8-4-1992. As on the day on which the credit was given, the cheque was not in the hands of A2, by issuing the credit voucher on 7-4-1992, A2 was guilty of criminal breach of trust and also guilty of making false documents in furtherance of this transaction. 22. It was also recorded by the Special Court that the pecuniary advantage had illegally been given to A3, and thereby A2 and A4 have committed an offence under section 13(2) read with section 13(1)( c ) and 13(1)( d ) of the Prevention of Corruption Act. It was also held that since the credit was illegally given to A3, they have committed criminal breach of trust, and that by issuing a credit voucher without the cheque having been realized, A2 and A4 have prepared false documents and thereby committed forgery. It was also held that A2 and A4 entered into criminal conspiracy with A3 and other accused persons for the purp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t 322) have no force of law, no offence of criminal breach of trust can be said to have been committed in terms of section 405, read with section 43 of the Indian Penal Code. ( v )Further, the guidelines purportedly issued by the Bank, in any event, have no nexus with the functioning of the Funds Department being applicable in respect of securities transactions; the impugned judgment of the Special Court is wholly unsustainable. ( vi )Appellants, having scrupulously followed the prevailing bank practices and furthermore having complied with all the procedures laid down therefor, cannot be said to have committed any offence. ( vii )The job of the Funds Department was only to prepare credit and debit vouchers on receipt of the Banker s Cheque and to forward the same to the Current Accounts Department and it was the officers of the Current Accounts Department have both a duty, as well as the authority to scrutinize, verify and process these vouchers resulting in ultimate clearance thereof and in that view of the matter, no offence can be said to have been committed by the appellants alone. ( viii )Even assuming that the appellants are party to any conspiracy but the same by i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... redit vouchers were released by the accused persons in discharge of their official duties, the allegation that they had prepared any false document and, thus, committed acts of forgery, must fail. ( xvi )The banker s cheques having been admittedly 100 per cent guaranteed and the bank having not suffered any monetary loss and having also not filed any complaint, the impugned judgment cannot be sustained. ( xvii )Appellants having followed the established and longstanding banking practices, deviation therefrom would only amount to misconduct, as no mens rea can be attributed to them. ( xviii )The transactions in question being exceptional in nature, which according to PW-17, Katta Hari Babu, would mean "it involves large credits and large debits"; some priority was required to be given thereto. ( xix )When cheques are posted (which means the amount is credited into the account), the customer becomes entitled to utilize the same, which is not subject to the clearance of the banker s cheque wherewith the accused had no role to play; and hence the impugned judgment is wholly unsustainable. ( xx )In view of the fact that Sh. Ramesh G. Ramteke, PW-18, both had the authority to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eeting or any conversation having been brought on record, the question of holding him guilty of commission of an offence of conspiracy does not arise. ( ii )The bankers cheques having been issued by the banks for utilization of the amounts thereof by accused No. 3 and he being beneficiary thereof, there was no question of his being benefited by entering into any conspiracy with anyone. ( iii )Charges allegedly made by the prosecution being confined to non-realization of the bankers cheques from the Reserve Bank of India at the end of the day, although credit thereof had been given in the account of accused No. 3, the irregularity in respect thereof was to be dealt with by different branches of the banks wherewith accused No. 3 was not concerned and, thus, he cannot be said to have committed any offence. ( iv )Even assuming that irregularity had been committed in the matter of realization of the amount under the bankers cheques from the Reserve Bank of India, the same by itself would not lead to an inference of commission of an illegal act and consequently, an offence of conspiracy. 26. Mr. A. Mariarputham, learned counsel appearing on behalf of the Central Bureau of Inv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... respect of transaction No. 10, although the account of accused No. 3 was credited on 7-4-1992 for an amount of Rs. 4 crores, the materials on record clearly show that although the cheque was dated 7-4-1992, it was issued/forwarded only on 8-4-1992 which is clearly demonstrative of the fact that the accused had dealt with the said cheque without there any forwarding letter having been issued by the transferee bank stating that accused No. 3 was the beneficiary thereof, the criminal misconduct on the part of the accused must be informed. ( viii )So far as transaction Nos. 2, 3, 4, 7 and 8 are concerned, it is borne out from the record that the cheques had not been received by the Andhra Bank and in any event the same having not been sent for clearance on the dates they were purported to have been received, wherefor the bank did not receive any credit from the Reserve Bank of India, the findings in the impugned judgment in this behalf are unassailable. ( ix )So far as transaction No. 7 is concerned, it is established that a credit of Rs. 1.5 crores had been given although the actual figure mentioned in the cheque was Rs. 2,37,29,750 which is beyond anybody s comprehension as a pa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... are of one date and the forwarding letters of the next date, the credit and debit vouchers in the name of accused No. 3 could not have been prepared in absence of the forwarding letters; ( c ) the requirements of accused No. 3 must be held to be known to the officers of the bank, as against the cheque amount of Rs. 2,37,29,750 credit for a sum of Rs. 1.5 crores could not have been granted, which clearly goes to show that even if cheques were received later the amounts were credited to the account of accused No. 3 so as to enable him to meet his other obligations and in the process, money belonging to the bank was being used by Accused No. 3 facilitated by officers of the bank using their authority. ( xvi )Appellants have not offered any explanation as to why details had not been entered in such a large number of documents, although the register must show as to who is the beneficiary of the cheques and the amount therefor, hence the impugned judgment should not be interfered with. ( xvii )Banking norms, for the purpose of attracting ingredients of section 405 of the Indian Penal Code, are binding on its officers and for giving any undue facility given to accused No. 3, the appel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re deposited with the Funds Department, and the amount of the Cheque in relation to sale in securities. It is the undisputed position that the Funds Department of the Andhra Bank was the only branch exclusively dealing with securities. 34.1 Furthermore it must be noted in this respect, that Exhibit 322 Notification of the Andhra Bank dated 5-12-1990 authorized the Fort Branch of Andhra Bank to deal with A3 in regard to securities transactions. 35. Besides, as we have already noted, there is ample evidence of the officers and the staff members working in the Bank of Karad, Standard Chartered Bank, Canara Bank and ANZ Grindlays Bank that they had issued these Bankers Cheque in regard to security transactions, especially in respect of Mr. AD Narottam, who was dealing in securities. 36. Officers who are accused in the present case A1, A2, A4 and A5 are officers in the Funds Department of the Andhra Bank at its Fort Branch. As stated earlier, the said branch was the only one dealing with security transactions on behalf of the entire Andhra Bank. 37. The submission of the learned counsel for the appellants that the trial of offences by the Special Court is without jurisdi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the details of the debit voucher are entered on the debit side. The entries in the transfer scroll used to be made on the same day on which the Cheque was received. 43. On the credit side, the particulars of the person in favour of whom the Cheque was received was entered along with the amount of the cheque. On the debit side, debit voucher entries were made by debiting the BCR account with the amount of the cheque. Thereafter, the credit voucher used to be sent to the Current Account Department for posting, i.e., giving credit equal to the amount of the cheque directly to the account of the beneficiary. The debit voucher was however retained in the Funds Department. 44. All these vouchers were required to be signed, which in effect authorizes the credit to be given to the beneficiary of the cheque. 45. As per the procedure followed by the department, a consolidated credit voucher and a consolidated debit voucher used to be prepared on the basis of the entries made in the BCR Register by about 2.30 to 2.45 pm. Accordingly the voucher contained the total of all the cheques received until then. 46. The consolidated credit voucher was prepared, along with a slip bea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e a cheque was dishonoured, it used to come back to the Clearing Department through the service centre. If no Cheque was received back by the Clearing Department from the service centre by 4.00 pm, then it meant that all the cheques had been cleared. 52. Subsequently, the consolidated credit voucher would be sent from the clearing department to the Day Book Department. Day book department 53. Day Book Department used to ultimately receive both the consolidated credit voucher as well as the consolidated debit voucher. Though it used to receive the credit voucher from the Clearing Department, the debit voucher used to be directly received by it from the Funds Departments. Since both the vouchers were prepared from the BCR Register they would both tally with each other. Accordingly, it was in this department that all the transactions of the day of Fort Branch of Andhra Bank used to be consolidated. Mr. Mukesh [PW 16] used to handle the consolidation. 54. It was his duty to consolidate the data in the Day Book Register. It must be noted that a day book register is like a balance sheet showing the assets and liabilities of the bank on that day. Accordingly a Bankers Cheq ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... persons who were working in the Funds Department. These guidelines were exclusively meant for the Funds Department for handling securities transactions, and there was no other department or branch of Andhra Bank anywhere in India which was handling such securities transactions. As such, they were binding on the accused persons. The present case 64. In the aforementioned backdrop of events, let us now analyse the transactions involved herein. Ten transactions relating to drawer s cheques are in question, the details whereof are as under : Tran. No. Date of Credit Amt. Credited to a/c of A3 Date of realisation of cheque Actual date of cheque 1. 18-5-1991 2 crore 20-5-1991 20-5-1991 2. 5-7-1991 29 lakhs 6-7-1991 5-7-1991 3. 5-7-1991 71 lakhs 6-7-1991 5-7-1991 4. 17-9-1991 61,84,925.59 18-9-1991 17-9-1991 5. 6-11-1991 86,62,500 8-11-1991 6-11-1991 6. 6-11-1991 75 lakhs 8-11-1991 6-11-1991 7. 13-11-1991 1,50,00,000 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3, Sunil Pore that any cheque received up to 3.00 p.m. is also entertained wherefor a separate voucher is prepared, and the same is sent to the Current Account Department. This voucher may not he sent on that date, but must be sent on the day after. 71. It is also contended that in regard to the processing of the cheque for giving credit or making entries, the Funds Department evidently had no access. It is also admitted that the Funds Department personnel have no access to the ALPM machine. It also appears from the evidence of PW-7, K. Hari Babu, that the crucial function of operating the machine is of the Current Account Department. Before signing the document relating to the posting of the cheque, an officer of the Current Department only would verify the entries made in the computer on the basis of which a print out would be taken out which is considered to be a document authorization in respect thereof. 72. The said witness further states that the credit granted are of two types, namely cleared credits and uncleared credits. This would be known from the vouchers received from the Funds Department. 73. Before us, the aforementioned procedural aspect is not at all in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e credited and upon verification thereof, it would be sent to the Clearing Department. The cheques used to be received by the officer of the Funds Department and on the instructions of these officers that the credit vouchers were to be prepared. After preparation, the vouchers were to be handed over to the officers who, by signing them, used to authorise the transaction. 80. As per PW 23, Mr. G.H. Bhalla, the cheques used to be sent to the Clearing Department, which in turn was responsible for sending them to the service centre. 81. Similarly, according to PW 12, Mr. Rajinderkumar, the debit vouchers were retained in the Funds Department and credit vouchers were sent to the Operational Department. It was on the basis of credit vouchers that entries were made in the Current Account of the Customer. 82. Mr. Katta Hari Babu s (PW 17) responsibility was to verify the signature of the officer on the credit vouchers after they were received by him whereafter he used to give it to his operator with an instruction for posting. 83. During daily proceedings, the Bank Schedules were made ready by 2.30 p.m everyday. Separate vouchers were made for cheques that were received aft ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of criminal conspiracy must, therefore, be considered on the anvil of the fact which must be established by the prosecution, viz., meeting of minds of two or more persons for doing or causing to be done an illegal act or an act by illegal means. 90. The courts, however, while drawing an inference from the materials brought on record to arrive at a finding as to whether the charges of the criminal conspiracy have been proved or not, must always bear in mind that a conspiracy is hatched in secrecy and it is difficult, if not impossible, to obtain direct evidence to establish the same. The manner and circum-stances in which the offences have been committed and the accused persons took part are relevant. For the said purpose, it is necessary to prove that the propounders had expressly agreed to it or caused it to be done, and it may also be proved by adduction of circumstantial evidence and/or by necessary implication. [ See Mohammad Usman Mohammad Hussain Maniyar v. State of Maharashtra [1981] 2 SCC 443]. 91. The following passage from Russell on Crimes (12th Edn. Vol. 1) cited by Jagannatha Shetty, J. in Kehar Singh v. State (Delhi Administration) [1988] 3 SCC 60 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... shnan s case ( supra ) we need not deal with it here at once again. 95. We may however notice that this court most recently in Mohmed Amin v. CBI 2008 (14) SCALE 240 after taking recourse to law governing the field noted thus : "55. The principles which can be deduced from the above noted judgments are that for proving a charge of conspiracy, it is not necessary that all the conspirators know each and every details of the conspiracy so long as they are co-participators in the main object of conspiracy. It is also not necessary that all the conspirators should participate from the inception of conspiracy to its end. If there is unity of object or purpose, all participating at different stages of the crime will be guilty of conspiracy." Transactions 96. To properly appreciate the prosecution s case, we must deal with all the ten transactions in some details hereinafter. First Transaction 97. The first transaction relates to a bankers cheque bearing No. 56643 dated 20-5-1991 for a sum of Rs. 2 crores issued by the Bank of Karad in favour of Andhra Bank. Admittedly, the account of Accused No. 3 was credited with the said amount on 18-5-1991 itself even thoug ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the BCR Register for 20-5-1991 (Exhibit 139) does not show receipt of the cheque. 104. Appellants, however, contend that although the cheque was dated 20-5-1991, the same had been received on 18-5-1991 on the basis of which the credit voucher was prepared and sent for the purpose of posting, as per the practice of giving instant credit which, in our opinion, is not worth any credence. It is not in dispute that the normal banking practice is that an entry of each cheque would be made immediately in the BCR Register. Had, thus, the cheque been received on 18-5-1991, mention of it should have been found therein. There are no details in the entry as to whom the credit should be given to or the name of the drawer bank, the cheque number or the date of the cheque, which admittedly are required to be entered into the register on receipt of a Bankers Cheque. Such details were furnished only in the BCR Register dated 20-5-1991. The credit and debit vouchers, thus, should have contained the details of the cheque. Credit Voucher (Exhibit 136) and Debit Voucher (Exhibit 137), however, do not contain such details, and even the name of the drawer bank does not find mention. The only thing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bearing Nos. 664786 dated 5-7-1991 amounting to Rs. 29 lakhs and 664785 dated 5-7-1991 for Rs. 71 lakhs issued by the Bank of Karad in favour of Andhra Bank. 111. Indisputably a single credit voucher for Rs. 1 crore authorising the crediting of the said amount into the account of accused No. 3 was issued by accused No. 2. The corresponding debit voucher dated 5-7-1991 was also for Rs. 1 crore and it was in the handwriting of Accused No. 2 and signed by both accused Nos. 1 and 2. This transaction was also included in the list of exceptional transactions for 5-7-1991. Therefore, it is clear that on 5-7-1991 Accused No. 2 authorised the current a/c department to give credit of the amount of Rs. 1 crore to the account of Accused No. 3. 112. The finding of the learned Special Judge, relying on or on the basis of the evidence of PW-2, Sampada S. Amre, that the said cheques were received on only 6-7-1991 in the clearing department and sent for clearance on that day, even though the amount had been credited with A3 on the 5th itself, cannot be sustained. 113. The question before the judge was whether the said cheque had really been received by the Funds department on 7-7-1991. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ement to the Funds Department for receiving cheques from them or vice versa. 117. According to him the Clearing Department does not accept cheque from the Funds Department once the bank schedule is sent to the Service Centre. He furthermore stated : "Functioning of the clearing department was to send for clearing whatever cheques are received from the Funds and Investment Department or from other department. No department can get the cheque cleared by sending them directly to the service centre by-passing the Clearing Department." 118. The Learned Special Judge should have given proper attention to the evidence of Mr. Kher (PW 1) an agent, Mr. Raju (PW 3) who was working as the Manager, and Sudhakar Ali (PW 4) the clerk working with the Bank of Karad which show that both these cheques had been prepared and issued as per the instructions of AD Narottam on 5-5-1991. The learned Special Judge placed unnecessary reliance on the entries in the BCR Register of Andhra Bank to prove the fact that the cheques had not been received on 5-5-1991. 119. Only because the total amount of the cheques and the name of the drawer bank had been entered without the cheque numbers, this ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... made the said entry. According to him it came within the purview of the bank practice. He further stated that as the Clearing Department refused to accept the cheques on 5-7-1991 they were returned to the Funds Department where they were separately recorded and a separate BCR was prepared and sent to the Clearing Department. According to the said witness it was a practice of the bank to send refused cheque through a separate voucher so as to make it distinct. 125. It is furthermore important to note that because of the urgency, details, such as the cheque number, date and beneficiary remained to be entered in the BCR Register. 126. The learned Special Judge has also ignored the documents on record which demonstrate that in respect of several other transactions the authenticity and bona fides of which are not in dispute, the details of the RBI cheque were not to be found in the BCR Register. This is apparent from Exhibits [141, 144 and 146] and hence, absence of certain details by itself may not give rise to an inference that the cheque had not been received. 127. Moreover if mere absence of details in the current account credit voucher was enough to give rise to an in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... power and to sign the exceptional transactions list after proper scrutiny. 133. The Special Court, in our opinion, committed an error in opining that the cheques were not received on 5-7-1991. Furthermore the Current Account Department, could not have given credit for the two cheques since the computer system had an inbuilt mechanism which would not allow credit therefor before the clearance. It was, thus, for the Current Account Department to take necessary steps either for obtaining proper authorisation or to deny mutual operation in respect thereof. 134. It is, therefore, evident that the prosecution has merely shown some irregularities. The learned Special Judge has drawn inference, although there exists a missing link as regards the date of receipt of the cheques and the date of preparation of the vouchers. It must be borne in mind that we are dealing with a case where conspiracy is alleged. 135. There is no direct evidence of conspiracy, there are only circumstantial evidence. The approach of this court for recording an order of guilt against an accused on the basis of circumstantial evidence is well known. 136. In C. Chenga Reddy v. State of A.P. [1996] 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd has not taken into account the documentary evidence on record, which shows that the cheques in respect of transaction Nos. 2 and 3, were received on the dates on which the transaction was made. We are therefore of the opinion of giving the benefit of doubt should be given to all the accused as regards transaction Nos. 2 and 3. Fourth Transaction 141. The fourth transaction relates to bankers cheque No. 078398 dated 17-9-1991 amounting to Rs. 61,84,925.59 ps. which was issued by Canbank Financial Services Limited, a sister concern of Canara Bank in favour of Andhra Bank. As per the evidence of PW 10 Vernekar on 17-9-1991 Canbank Financial Services Limited of Bangalore purchased 11 per cent Bihar Loan for a total amount of Rs. 61,84,925.59 from the Andhra Bank, Fort Branch, Mumbai. A3 was the broker for this transaction. CANFIN had issued Bankers Cheque dated 17-9-1991 for the aforesaid amount in favour of Andhra Bank; A3 being the beneficiary thereof. 142. The credit voucher for the said sum for the purpose of crediting the amount in the account of accused No. 3 was signed by accused No. 2. The amount was credited in his account on the basis thereof. Bankers cheque, h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gh value clearing, i.e., at 12 O clock on 18-9-1991, i.e., before 2.45 pm. The clearing schedule of the high value clearing is at [Exhibit 163]. Therefore, with respect, the learned Judge wrongly held that the cheque dated 17-9-1991 was received on 18-9-1991 at 2.45 pm. The learned judge had also ignored the material brought on record that on 18-9-1991 there was no entry of the said cheque in the BCR Register, and therefore it stands established that the cheque was sent to clearing department on 17-9-1991. The clearing department could not present the said cheque on 17-9-1991 but had presented it on 18-9-1991 in the high value clearing. Hence, the single BCR credit voucher was resubmitted on 18-9-1991 upon intimation by clearing department of presentation of the said cheque in high value clearing. 148. We have noticed in some details hereto before the functioning of the departments of the bank and the banking practice on the basis thereof the learned judge should have given benefit of doubt to the accused with respect to this transaction too. Fifth and sixth transactions 149. These two transactions relate to the cheques for Rs. 75 lakhs from the Bank of Karad and Rs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t 7-11-1991 was a bank holiday and accordingly the credit voucher could only have been sent on 8-11-1991. 158. In our opinion, the learned Special Judge was, with respect, wrong in concluding that even though the two cheques were probably received on 6-11-1991, they were not sent for clearing on 6-11-1991. 159. In our considered opinion, despite evidence leading to the effect that cheques were received on 6-11-1991, the finding to the contrary was clearly erroneous. We are, therefore, of the opinion that the prosecution has not been successful in establishing the involvement of the accused as regards these transactions. Seventh transaction 160. So far as the seventh transaction is concerned, a bankers cheque bearing No. 22687 dated 13-11-1991 for a sum of Rs. 2,37,29,750 was issued by the Standard Chartered Bank in favour of Andhra Bank. Although a credit voucher for the entire sum should have been prepared, a credit voucher only for a sum of Rs. 1.50 crores authorizing the amount to be credited in the account of Accused No. 3 was prepared. It was signed by Accused No. 4 Ramesh Vardraya Shenoy. The Current Account of the Accused No. 3 was credited on the same day on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... details have also been mentioned therein. The credit voucher, according to Hemlata Nair (PW-11) was sent to the Current Account Department under the signature of the Accused No. 4. Ordinarily, it should have contained the details, but, as noticed hereinbefore, it was only for a sum of Rs. 1.50 crores. A debit voucher (Exhibit 75) was issued wherein it was stated : "To receive Rs. 1.50 crores cheque, but received cheque for Rs. 2,39,29,750 erroneously not presented in the clearing. Presented on 14-11-1991." Mention of both the credit and debit vouchers finds place in Scroll Register [Exhibits 76(1) and 76(2)]. The Transfer Scroll entries [Exhibits 76(3) and 76(4)] also show that the credit as against the cheque at Exhibit 40, that was given to the account of Accused No. 3, was only Rs. 1.50 crores although the cheque was for a sum of Rs. 2,37,29,750. Although the cheque was not sent to the clearing department for clearance on 13-11-1991, a pay order/cheque (Exhibit 82) was issued in favour of Standard Chartered Bank for and on behalf of Accused No. 3 upon debiting the amount mentioned therein. 165.1 In the aforementioned state of affair, the learned Special Judge rightly ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... who was working in Bank of Karad during the time of the transaction, in her evidence, affirms that she had prepared the said Cheque and that was signed by PW-5, Mr. Sarmalkar. 170. It is being claimed on behalf of the Petitioners that the said Cheque was received by Andhra Bank on 4-12-1991. 171. A perusal of the record reveals that the Cheque was dated 4-12-1991. The amount for the same was credited to the Account of Accused on 4-12-1991 but the Cheque was presented for clearing only on 5-12-1991. However the irregularities in the records should have been subjected to close scrutiny to determine collusion, if any, between the Accused persons for the purpose of serving a common object. 172. In her deposition, Mrs. Hemlata Nair, (PW-11) Clerk, Funds Department of Andhra Bank, Fort Branch, states that she had prepared the Credit Voucher [Ext. 85] dated 4-12-1991 for Rs. 7 crore favouring CD. No. 4819 and the Debit Voucher [Ext. 86] dated 4-12-1991 for the same amount on being instructed by her officer. 173. Curiously, both the entries only mention of a Cheque received from Bank of Karad, without any reference to its number or date. She also deposed that the vouchers w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Voucher for a lesser amount even when it was not tallying with the total amount of the cheques recorded in the BCR Register on 5-12-1991. 181. Accused No. 5, contended that he had done so because the amounts were not tallying with and was less by seven crores. His further contention was that the Consolidated Credit Voucher was prepared by Ms. Hemalatha Nair and put up to him for his signature, and he signed it keeping with the requirements of double entry system and to avoid double debit as the same had already been debited on 4-12-1991. 182. We may also notice that accused No. 5 was acquitted by the Trial Court in respect of transaction dated 16-12-1991 despite the Consolidated Debit Voucher not tallying with the total as reflected in the BCR Register. Thus, being only involved in these two transactions having similar facts, and being acquitted in one, he is, in our view, entitled to the same benefit in the other transaction too. Benefit of doubt given in respect of one transaction would apply on all fours to the other, as both of them are of similar nature. Further, it also needs to be considered that the prosecution has not been able to produce any evidence to prove Acc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 91 on the grounds that even if it was true, it was the duty of the accused No. 1 and Accused No. 2 to immediately intimate the Current Accounts department to withhold posting of the credit voucher for giving credit in the Accused No. 3 s account. 186. In relation to this transaction also, it appears to us that the learned Special Judge failed to consider the practice of "Clear" and "Unclear Credit" to which we have already made reference hereinbefore and for the sake of brevity, we restrain ourselves from elaborating thereon once again. 187. However, we are constrained to mention that is difficult to accept that a mere failure to intimate the current accounts department to withhold posting when there existed a mechanism of clear and unclear credits, would be sufficient to establish conspiracy. We do not, therefore, agree with the learned special judge s finding with respect to this transaction also and, therefore, of the opinion that benefit of doubt should be given to all the accused herein. Tenth transaction 188. The tenth transaction related to a banker s cheque bearing No. 102956 dated 7-4-1992 for a sum of Rs. 4.00 crore drawn on Bank of Karad Ltd. in favour of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bank was wrongly mentioned as the Standard Chartered Bank instead and place of Bank of Karad cannot be accepted. Even the BCR Register does not show that a cheque for the aforementioned amount has been received. The bank schedule dated 7-4-1992 also does not indicate receipt of such a cheque from either of the said banks on 7-4-1992. The consolidated credit voucher also does not bear any entry. It, therefore, appears that the said credit voucher was wrongly prepared for a sum of Rs. 4.00 crores mentioning the name of the drawer bank as Standard Chartered Bank. False entry was also made in the Transfer Scroll (Exhibit 102) showing the name of the drawer bank as Reserve Bank of India. Even in the BCR Register of 8-4-1992, no entry is found as regards the said cheque (Exhibit 12). The amount of the said cheque was, however, included in the consolidated voucher dated 8-4-1992 (exhibit 106) which was sent to the Clearing Department. The bank schedule dated 8-4-1992 also shows the receipt of the cheque which was forwarded for clearance on the same day. 195. It is, therefore, evident that the concerned accused were not aware about exactly where the money came from. It is wholly unlik ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s must be taken to prevent a fraud or deceit on the part of a customer. 201. Therefore, the fact that, credit and debit vouchers were prepared and other registers were filled up, although the cheques were not in physical possession of the bank, in our opinion, clearly establishes the existence of a criminal conspiracy between the ultimate beneficiary, on the one hand, and some of the officers of the bank, on the other. 202. A debit or credit voucher furthermore is not prepared in piecemeal or in instalments. Bank officers are not supposed to know the immediate requirement of an account holder. 203. An analysis of the facts of the case clearly demonstrates that a conspiracy had been hatched between the accused Nos. 1, 2, 3 and 4 its object being that accused Nos. 1, 2 and 4 who were the manager and officers working in the Funds Department and had dominion over the funds of Andhra Bank connived with A3 to prepare credit and debit vouchers authorising the Current Account department to credit those cheques to the account of Accused No. 3 and, thus, affording him to take pecuniary advantage of the public money of the Bank, without some of the cheques in question having even ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . (1) A public servant is said to commit the offence of criminal misconduct, : ( c )if he dishonestly or fraudulently misappropriates or otherwise converts for his own use any property entrusted to him or under his control as a public servant or allows any other person so to do; or ( d )if he, ( ii )By abusing his position as a public servant, obtains for himself or for any other person any valuable thing or pecuniary advantage; or (2) Any public servant who commits criminal misconduct shall be punishable with imprisonment for a term which shall be not less than one year but which may extend to seven years and shall also be liable to fine." Section 13 in general lays down that if a public servant obtain for himself or for any other person, any valuable thing or pecuniary advantage he would be guilty of criminal misconduct and sub-section (2) thereof prescribes of the punishment for such misconduct. 210. The ingredients of clause ( c ) of the said section are that the public servant must dishonestly or fraudulently misappropriate or otherwise convert to his own use or allow any other person to misappropriate or otherwise convert for his own use any property. Such ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 67, 471 and 477A of the IPC. Section 467 deals with the forgery of valuable securities and Wills etc., and is reproduced below : "467. Forgery of valuable security, Will, etc., Whoever forges a document which purports to be a valuable security or a will, or an authority to adopt a son, or which purports to give authority to any person to make or transfer any valuable security, or to receive the principal, interest or dividends thereon, or to receive or deliver any money, movable property, or valuable security, or any document purporting to be an acquittance or receipt acknowledging the payment of money, or an acquittance or receipt for the delivery of any movable property or valuable security, shall be punished with imprisonment for life, or with imprisonment of either description for a term which may extend to ten years, and shall also be liable to fine." 217. Section 471 which deals with using as genuine a forged document has been reproduced below : "471. Using as genuine a forged document or electronic record. Whoever fraudulently or dishonestly uses as genuine any document or electronic record which he knows or has reason to believe to be a forged document or elect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erwise, alters a document or an electronic record in any material part thereof, after it has been made, executed or affixed with digital signature either by himself or by any other person, whether such person be living or dead at the time of such alteration; or Thirdly - Who dishonestly or fraudulently causes any person to sign, seal, execute or alter a document or an electronic record or to affix his digital signature on any electronic record knowing that such person by reason of unsoundness of mind or intoxication cannot, or that by reason of deception practised upon him, he does not know the contents of the document or electronic record or the nature of the alterations. . . ." 220. A person is said to make a false document or record if he satisfies one of the three conditions as noticed hereinbefore and provided for under the said section. The first condition being that the document has been falsified with the intention of causing it to be believed that such document has been made by a person, by whom the person falsifying the document knows that it was not made. Clearly the documents in question in the present case, even if it be assumed to have been made dishonestly or f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 227. The next charge we shall deal with is one arising under section 409 of the IPC with which the accused herein have also been convicted of by the special judge. The punishment for criminal breach of trust by a public servant is provided under section 409. However we must herein make reference of definition of criminal breach of trust simplicitor which reads as under section 405 : "405. Criminal breach of trust. Whoever, being in any manner entrusted with property, or with any dominion over property, dishonestly misappropriates or converts to his own use that property, or dishonestly uses or disposes of that property in violation of any direction of law prescribing the mode in which such trust is to be discharged, or of any legal contract, express or implied, which he has made touching the discharge of such trust, or wilfully suffers any other person so to do, commits criminal breach of trust ." The punishment for criminal breach of trust is provided in section 406. Punishment for aggravated forms of criminal breach of trust is provided in section 407 to section 409. 228. The terms of the section are very wide. It applies to one who is in any manner entrusted with ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n entrusted ( a ) dishonestly misappropriated or converted to his own use the property or ( b ) dishonestly used or disposed of the property or wilfully suffered any other person so to do in violation ( i ) of any direction of law prescribing mode in which such mode is to be discharged or ( ii ) of any legal contract made touching the discharge of trust." 233. Further, more the court in Sharon Michael v. State of Tamil Nadu 2009 (1) SCALE 627 noted thus : "Ingredients of section 409 of IPC read as under : ( i )The accused must be a public servant; ( ii )He must have been entrusted, in such capacity, with property; ( iii )He must have committed breach of trust in respect of such property." 234. Therefore, in view of the principles of law extracted above in our opinion there is no doubt that the offences relating to criminal breach of trust stands established against the accused. They were the officers in the Funds Department of Andhra Bank. In the said capacity they had been entrusted with the funds of the Bank. In that sense they had dominion over a thing. The money which was transferred to the account of A3 was the money belonging to the Bank. Only the said a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ith imprisonment of either description for a term which may extend to three years, or with fine, or with both." 242. Stolen property as used in this section has been defined in section 410: "410. Stolen property. Property, the possession whereof has been transferred by theft, or by extortion, or by robbery, and property which has been criminally misappropriated or in respect of which criminal breach of trust has been committed, is designed as "stolen property", whether the transfer has been made, or the misappropriation or breach of trust has been committed, within or without India. But, if such property subsequently comes into the possession of a person legally entitled to the possession thereof, it then ceases to be stolen property." Section 410 accordingly defines stolen property. A property is stolen for the purpose of this section when its possession is transferred by theft, extortion, robbery, dacoity or criminal breach of trust or which was obtained under misappropriation committed whether in India or outside. 243. An extended meaning is given to the words stolen property which are used in the four subsequent sections. Not only things which have been stolen, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the property was stolen. 251. It has therefore in our opinion been conclusively established by the prosecution that the A3 was guilty of an offence under section 411, since he had dishonestly received stolen property. Sentencing and conclusion 252. We may also place on record that as the CBI has not preferred any appeal against the quantum of sentence, this Court cannot impose a higher sentence. 253. Since we have acquitted accused No. 5 Mir Nagvi Askari of all the charges against him the order of sentence passed against him is hereby quashed. 254. Since we have acquitted all the accused of offences under section 467 read with sections 120, 471 read with section 120B as well as section 477A read with section 120B of the Indian Penal Code, the sentence passed by the learned Special Judge against all the accused as regards the said offences is hereby quashed. 255. The Main accused herein A3, Hiten P. Dalal has been found guilty of offences punishable under sections 120B and 411 read with section 120B. He is hereby sentenced to suffer rigorous imprisonment for 6 months and to pay a fine of Rs. 50,000 and in default to suffer rigorous imprisonment for one month ..... X X X X Extracts X X X X X X X X Extracts X X X X
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