Karnataka High Court
Lakshmi Narayan Behal vs State By Central Bureau Of ... on 6 February, 2025
Author: V Srishananda
Bench: V Srishananda
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NC: 2025:KHC:5519
CRL.A No. 4 of 2012
C/W CRL.A No. 26 of 2012
CRL.A No. 125 of 2012
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 6TH DAY OF FEBRUARY, 2025
BEFORE
THE HON'BLE MR JUSTICE V SRISHANANDA
CRIMINAL APPEAL NO. 4 OF 2012
C/W
CRIMINAL APPEAL NO. 26 OF 2012
CRIMINAL APPEAL NO. 125 OF 2012
IN CRL.A No. 4/2012
BETWEEN:
R. SHIVAKUMAR
S/O. N. RAMASUBRAMANIAN,
AGED ABOUT 55 YEARS
OCC: MANAGER
UCO BANK,
INDIRANAGAR BRANCH,
BANGALORE(NOW UNDER TERMINATION)
Digitally
signed by R/O NO.17/1, MUDDAPPA ROAD,
MALATESH MARUTHI SEVANAGAR,
KC
Location: BANGALORE.
HIGH ...APPELLANT
COURT OF
KARNATAKA (BY SRI. S.P. KULKARNI, SENIOR COUNSEL A/W
SRI. VASANTH KUMAR K.M., ADVOCATE)
AND:
THE STATE OF KARNATAKA
REPRESENTED BY INSPECTOR OF POLICE,
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NC: 2025:KHC:5519
CRL.A No. 4 of 2012
C/W CRL.A No. 26 of 2012
CRL.A No. 125 of 2012
CBI/ACB,
BANGALORE-560 001
...RESPONDENT
(BY SRI. P. PRASANNA KUMAR, ADVOCATE)
THIS CRL.A. IS FILED U/S.374(2) OF CR.P.C PRAYING TO
SET ASIDE THE ORDER DATED: 9.12.11 PASSED BY THE XXXII
ADDL.C.C. AND S.J., AND SPL.JUDGE FOR CBI CASES,
BANGALORE IN SPL.C.C.NO.134/07 - CONVICTING THE
APPELLANT/ACCUSED FOR THE OFFENCE P/U/S 120(b) R/W
468, 471, 477A, 420 OF IPC AND U/S 13(1)(d) R/W 13(2) OF
PREVENTION OF CORRUPTION ACT 1988. AND THE
APPELLANT/ACCUSED IS SENTENCED TO UNDERGO S.I. FOR
ONE YEAR FOR THE OFFENCE P/U/S 120B OF IPC.
IN CRL.A NO. 26/2012
BETWEEN:
SRI. NAGESH V GOKARN
AGED ABOUT 58 YEARS,
S/O VINAYAK,
PRESENTLY WORKING AS
SENIOR MANAGER,
UCO BANK, PANJIM BRANCH,
GOA
...APPELLANT
(BY SRI. M. VINAYA KEERTHY, ADVOCATE)
AND:
STATE BY INSPECTOR OF POLICE
CENTRAL BUREAU OF INVESTIGATION,
ACB, BANGALORE
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NC: 2025:KHC:5519
CRL.A No. 4 of 2012
C/W CRL.A No. 26 of 2012
CRL.A No. 125 of 2012
...RESPONDENT
(BY SRI. P. PRASANNA KUMAR, ADVOCATE)
THIS CRL.A. IS FILED U/S.374(2) OF CR.P.C PRAYING
TO SET ASIDE THE ORDER DATED:9.12.11 PASSED BY THE
XXXII ADDL.C.C. AND S.J., AND SPL.JUDGE FOR CBI
CASES, BANGALORE IN SPL.C.C.NO.134/07 - CONVICTING
THE APPELLANT/ACCUSED FOR THE OFFENCE P/U/S 120(b)
R/W SEC.468, 471, 477A, 420 OF IPC. AND SEC.13(1)(d)
R/W 13(2) OF PREVENTION OF CORRUPTION ACT 1988.
IN CRL.A NO. 125/2012
BETWEEN:
1. LAKSHMI NARAYAN BEHAL,
S/O. LATE KISHAN GOPAL BEHAL,
AGED ABOUT YEARS,
OCC: DIRECTOR,
M/S. SRIRAM AUTO HOUSE,
PRIVATE LTD.,
P.B. ROAD, DAVANAGERE.
RESIDING AT NO.4226/1920,
SIDDAVEERAPPA LAYOUT,
DAVANAGERE.
2. SRI. G.B. DHANYA KUMAR,
S/O. L.G. BASAVARAJAPPA,
R/AT. BASACANALA POST,
LINGADAHALLI,
DAVANAGERE.
3. SRI. RAKESH BEHAL,
S/O. LATE KISHAN GOPAL,
BEHAL OCC: MANAGING
DIRECTOR,
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NC: 2025:KHC:5519
CRL.A No. 4 of 2012
C/W CRL.A No. 26 of 2012
CRL.A No. 125 of 2012
M/S. SRIRAM AUTO HOUSE
PRIVATE LTD.,
PARTNER
M/S. GAJANANAD MOTOR AND
CYCLE MART,
P.B. ROAD, DAVANAGERE.
R/AT. NO. 4226/1920
SIDDAVEERAPPA LAYOUT,
DAVANAGERE.
4. SRI. RADHA RANI BEHAL
W/O. LATE KISHAN GOPAL,
AGED ABOUT YEARS,
BEHAL,
R/O RESIDING AT. NO. 4226/1920,
SIDDAVEERAPPA LAYOUT,
DAVANAGERE.
5. SMT. SHALLU BEHAL
W/O. LAKSHMI NARAYANA BEHAL,
AGED ABOUT YEARS,
RESIDING AT. NO. 4226/1920,
SIDDAVEERAPPA LAYOUT,
DAVANAGERE.
6. SMT. SAPNA BEHAL
W/O.MURALIDHAR
AGED ABOUT YEARS,
RESIDING AT. NO. 4226/1920,
SIDDAVEERAPPA LAYOUT,
DAVANAGERE.
7. SRI. K.B. GIRISH
S/O. RAMACHANDRA NAIK
AGED ABOUT YEARS,
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CRL.A No. 4 of 2012
C/W CRL.A No. 26 of 2012
CRL.A No. 125 of 2012
R/AT. KABLA,
CHENNAGIRI TALUK,
DAVANAGERE DISTRICT.
8. SRI. SATISH S.,
S/O. SHANKAR NAIK,
AGED ABOUT YEARS,
R/AT. KABLA, CHENNAGIRI TALUK,
DAVANAGERE DISTRICT.
9. SRI. K.J. SATHISH
S/O. JAYANNA,
R/AT. 11TH MAIN ROAD,
12TH CROSS,
VINOBHANAGARA,
SHIVAMOGGA.
10. SRI. SANGAPPA B.P.,
S/O. PARAPPA,
7TH CROSS, BHAGAT SINGH NAGARA,
NEAR DEEPAK FLOUR MILL,
DAVANAGERE.
11. SRI. KHAJAPEER,
S/O. SHABBIR SAB,
OCC: PRIVATE PERSON,
R/AT. NO.10711, 2ND MAIN, 2ND CROSS,
JALINAGARA,
DAVANAGERE.
12. SRI. MOHD SHARIFF,
S/O. SYED AMEER SAB,
OCC: PRIVATE PERSON,
R/AT. IST MAIN, OLD ARLAPURA,
ANJANEYA BADAVANE,
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CRL.A No. 4 of 2012
C/W CRL.A No. 26 of 2012
CRL.A No. 125 of 2012
HARIHARA.
13. SRI. MURALIDHAR BEHAL
S/O. KISHAN GOPAL BEHAL,
OCC: MANAGING DIRECTOR,
M/S. SRIRAM AUTO HOUSE,
PVT., AND PARTNER,
M/S. GAJANAND MOTOR AND CYCLE MART,
P.B. ROAD,
DAVANAGERE.
R/AT.NO. 4226/1920,
SIDDAVEERAPPA LAYOUT,
DAVANAGERE.
14. SRI. SRIKANTH KULKARNI
S/O. LATE KISHAN GOPAL,
BEHAL, OCC: DIRECTOR,
M/S. SRIRAM AUTO HOUSE,
PVT LTD., P.B. ROAD, DAVANAGERE.
R/AT. NO. 4226/1920,
SIDDAVEERAPPA LAYOUT,
DAVANAGERE.
...APPELLANTS
(BY SRI. R. NAGENDRA NAIK, ADVOCATE)
AND:
STATE BY
CENTRAL BUREAU OF INVESTIGATION,
GANGANAGARA,
BELLARY ROAD,
BANGALORE
...RESPONDENT
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CRL.A No. 4 of 2012
C/W CRL.A No. 26 of 2012
CRL.A No. 125 of 2012
(BY SRI. P. PRASANNA KUMAR, ADVOCATE)
THIS CRL.A. IS FILED U/S.374(2) OF CR.P.C PRAYING
TO SET ASIDE THE ORDER DATED: 9.12.11 PASSED BY THE
XXXII ADDL.C.C AND S.J., AND SPL.JUDGE FOR CBI CASES,
BANGALORE IN SPL.C.C.NO.134/07 - CONVICTING THE
APPELLANTS/ACCUSED FOR THE OFFENCE P/U/S 120(b)
R/W 468, 471, 477A, 420 OF IPC.
THESE APPEALS, COMING ON FOR HEARING, THIS DAY,
JUDGMENT WAS DELIVERED THEREIN AS UNDER:
CORAM: HON'BLE MR JUSTICE V SRISHANANDA
ORAL JUDGMENT
Heard Sri S.P. Kulkarni, learned Senior Counsel appearing
on behalf of Sri Vasanth Kumar, counsel for the appellant in
Crl.A.No.04/2012, Sri M. Vinaya Keerthi, learned counsel for
the appellant in Crl.A.No.26/2012, Sri R. Nagendra Naik,
learned counsel for the appellant in Crl.A.No.125/2012 and Sri
P.Prasanna Kumar, learned counsel for the respondent.
2. The appellants are the accused in Special
C.C.No.134/2007 who have suffered an order of conviction
before the learned Single Judge for CBI cases, Bengaluru (CCH-
34) by judgment dated 09.12.2011 and sentenced as under:
NC: 2025:KHC:5519
"The accused Nos.1 to 7, 9 to 15, 17 to 19 are
convicted and sentenced to undergo simple
imprisonment for one year for the offence punishable
U/s 120B of IPC.
2) The accused Nos.1 to 7, 9 to 15, 17 to 19 are
convicted and sentenced to undergo SI for one year
for the offence punishable U/s 468 IPC and shall pay
fine of Rs.5,000/- each and in default of fine, they
shall under go simple imprisonment for 6 months.
convicted and sentenced to undergo SI for one year
are for the offence punishable U/s 471 IPC and shall
pay fine of Rs.5,000/- each and in default of fine they
shall under go simple imprisonment for 6 months.
4) The accused Nos.1 to 7, 9 to 15, 17 to 19 are
convicted and sentenced to undergo SI for one year
for the offence punishable U/s 477A IPC and shall pay
fine of Rs.5,000/- each and in default of fine, they
shall under go simple imprisonment for 6 months.
5) For the offence punishable U/s 420, the accused
Nos.1 to 7, 9 to 15, 17 to 19 are convicted and
sentenced to undergo SI for one year and shall also
pay fine of Rs.5,000/- each and in default of payment
of fine, they shall undergo SI for 6 months.
6) For the offence punishable U/s 13(2) r/w 13(1)(c)
and (d) of Prevention of Corruption Act, 1988, the
accused Nos.1 to 3 shall undergo SI for 1 year and
shall also pay fine of Rs.5,000/- and in default of
NC: 2025:KHC:5519
payment of fine, shall undergo simple imprisonment
for 6 months.
It is further ordered that the substantive
sentences shall run concurrently."
3. Rank of the appellants before the Trial Court and
before this Court and offences for which appellants have been
convicted and sentenced is tabulated herein for ready
reference:
Name of the Rank Spl. C.C. Criminal Conviction for Sentence
accused before No. Appeal the offence passed
Spl. No. p/u/s
Court.
before
this Court
Sri Accused 134/2007 04/2012 120B, SI for one
No.2 year
R. Shivakumar
468, 471, SI for one
477A, 420, year and
13(2) R/W shall pay
13(1)(c)(d) fine of
Rs.5,000/-
each o the
offences
and in
default of
fine, they
shall
undergo SI
for 6
months
Sri Nagesh V Accused 134/2007 26/2012 120B SI for one
Gokarn No.1 year
468, 471, SI for one
477A, 420, year and
13(2) R/W shall pay
13(1)(c)(d) fine of
Rs.5,000/-
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each of the
offences
and in
default of
fine, they
shall
undergo SI
for 6
months
Sri Muralidhar Accused 134/2007 125/2012 120B SI for one
Behal No.4 year
Sri Lakshmi Accused 468, 471, SI for one
Narayan Behal No.5 477A, 420, year and
shall pay
Sri Srikanth Accused fine of
Kulkarni No.6 Rs.5,000/-
each of the
Sri G.B.Dhanya Accused offences
Kumar No.7
and in
default of
Sri Rakesh Accused
fine, they
Behal No.9
shall
Accused
undergo SI
Sri Radha Rani
No.10 for 6
Behal
months
Smt.Shallu Accused
Behal No.11
Smt.Sapna Accused
Behal No.12
Sri K.B.Girish Accused
No.13
Sri Satish .S Accused
No.14
Sri K.J.Sathish Accused
No.15
Sri Acused
Sangappa.B.P No.17
Sri Khajapeer Accused
No.18
Sri Mohd. Accused
Shariff No.19
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4. Most essential facts which are necessary for
disposal of the present appeal are as under:
5. As per the prosecution papers, accused No.1 -
Nagesh V.Gokarna, Branch Manager of UCO Bank, between the
period 14.08.1998 to 14.05.2002, accused No.2 - R.
Shivakumar was the successor of the Branch of UCO Bank,
Indiranagar on and from 06.05.2002 to 2005, accused No.3-
S.H.Siddappa was the Assistant Manager of UCO Bank,
Davanagere and were all public servants.
6. As per prosecution case, accused Nos.1 to 3 said to
have conspired with Sri Muralidhar Behal (accused No.4), who
was the managing Director of M/s. Srirama Auto House Private
Limited, Davanagere. Said company was in the business of
sale of Bajaj Motor cycles and autorikshaws. Accused No.5
Lakshminarayan Behal was one of the Directors of Srirama Auto
House Private Limited. Srikanth Kulkarni, G.V.Dhanya Kumar,
deceased Krishnagopal Behal who are the accused Nos.6 to 8,
accused No.9 - Prakash Behal was the director of M/s. Srirama
Auto House, accused No.10 Smt. Radharani Behal was the
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proprietor of Lakshmi motors, accused No.11 - Smt. Shellu
Behal, accused No.12 - Sapna behal, accused No.13 - G.V.
Girish, accused No.15 - K.J. Sathish, accused No.16 - K.
Jayanna, accused No.17 Sangappa, accused No.18 Khwaja
Peer, accused No.19 - Mohammed Sharief are the employees.
Accused No.10 to 12 are the family members of accused No.4.
7. Prosecution case further reveals that between the
period 2002 to 2005 in furtherance of conspiracy, they indulged
in cheating and forging various documents like balance sheet,
financial statement, valuation report of immovable properties,
annual returns. Using such forged documents as genuine
documents accused have cheated the bank by falsifying the
accounts in connection with obtaining various loans.
8. On receipt of the complaint, CBI investigated the
matter and conducted detailed investigation and filed the
charge sheet.
9. According to the prosecution sum of
Rs.7,51,70,124/- is the amount that was cheated to the UCO
Bank, Davanagere. It is further alleged that the misdeeds of
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the accused persons resulted in wrongful loss to the UCO Bank
and on corresponding wrongful gain to the appellants.
10. On receipt of charge sheet, learned Trial Judge took
cognizance of offences mentioned in the charge sheet and
secured the presence of accused persons. Thereafter, learned
Special Judge framed the charges for the offences punishable
under Section 120B, 468, 471, 477A, 420 IPC and Section 13
(1) (d) r/w Section 13 (2) of Prevention of Corruption Act.
11. All the accused persons pleaded not guilty.
Therefore, trial was held.
12. In order to bring home the guilt of the accused, 31
witnesses were examined on behalf of the prosecution as
P.Ws.1 to 31 and as many as 782 documents were placed on
record which were exhibited and marked as Exs.P.1 to P.782.
13. On conclusion of recording of evidence, learned
Trial Judge recorded the accused statement, wherein accused
persons have denied all the incriminatory materials.
14. Accused Nos.5, 9, 10, 11, 12 filed their written
statement, placing their version about the incident. So also
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accused Nos.7, 15, 17, 18 and 19 filed their separate written
statement placing their version. Accused Nos.5, 9, 10, 11 and
12 denied the entire case of the prosecution by contending that
it is the accused No.4 who was looking after the family
business, but they admitted the financial assistance obtained
from the bank, but contended that in the guise of obtaining the
financial assistance, their signatures were obtained by accused
No.4 and believing the words of accused No.4, they subscribed
their signatures unintentionally and therefore, they cannot be
held liable for the alleged criminal offences and sought for
acquittal.
15. There was no defence evidence placed on record.
16. Thereafter, learned Special Judge heard the
arguments of the parties and by judgment dated 9th December,
2011 convicted the appellants and sentenced as referred to
supra.
17. Being aggrieved by the same, accused Nos.1 to 7, 9
to 15, 17 to 19, have preferred the above appeals.
18. On behalf of the appellants, it was tried to impress
upon this Court that allegations made against the appellants as
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to cheat the bank, causing financial loss, committing forgery
were all, only suspicions in the absence of proper proof thereof,
and as such, conviction of the appellants for the offences as
referred to supra has resulted in great miscarriage of justice
and sought for allowing the appeals.
19. Sri S.P. Kulkarni, learned Senior Counsel, while
addressing his arguments submitted that even though
voluminous documentary evidence is placed on record in the
form of Exs.P1 to P.782, the ingredients that is required to
attract the offences as against the appellants were not
established by placing necessary oral and documentary
evidence on record, which have been ignored by the learned
trial Judge while passing the impugned judgment.
20. Sri S.P. Kulkarni, also contended that appellants
never disputed obtaining of financial assistance from UCO Bank,
Davanagere Branch for the business purpose and repaid the
same.
21. He further contended that while granting the loan if
some small irregularities are committed at the Bank level,
either in not securing the loans in the proper form or improper
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appraisal of the documents are to be treated as irregularities
and not illegality, as there is no material evidence placed on
record on behalf of the prosecution to show the fraudulent
intension at the inception of obtaining the loans, which is sine
qua non to attract the allegation of fraud and cheating.
22. Since the entire loan amounts have been repaid to
the Bank and Bank has not suffered any loss, question of
wrongful loss to the Bank and on corresponding wrongful gain
to the appellants including the public servants would not arise
at all. Therefore, conviction of the appellants for the aforesaid
offences is per se illegal.
23. He also pointed out that insofar as the allegation of
falsification of accounts are concerned, borrowers did not have
any role in that and it is only the public servants, who are
responsible for the alleged offences. Even, insofar as the public
servants are concerned, if no proper entries are made and
ultimately the loan amount is recovered, then the very
ingredient of falsification of account would not arise. Therefore,
appellants ought not have been convicted for the offence of
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falsification of account as is contemplated under Sections 468,
471 and 477A of the Indian Penal Code.
24. It is also the argument of Sri S.P. Kulkarni, that if
the entire amount is repaid, and at the most, there is minor
deviation in sanctioning the loan to the business concern by
public servants, Court cannot presume that there was an illegal
gratification obtained by public servants from the appellants to
accede to their financial request and therefore, the conviction
of the public servants for the offences punishable under the
provisions of Prevention of Corruption Act would not also get
attracted.
25. It is his last submission that in the absence of any
material on record, which would attract IPC offences or the
offences under the provisions of Prevention of Corruption Act,
offence under 120B would loose its significance and thus,
sought for allowing the appeals.
26. Sri Vinaya Keerthi, learned counsel representing the
accused No.1 submitted that he initially sanctioned the financial
assistance to the business concern of Behal family and
subsequently, he had no role in the alleged deviations.
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Therefore, convicting accused No.1 also for the subsequent
mistakes in the accounts of M/s. Srirama Auto House Pvt. Ltd.,
Davanagere (for short 'Srirama') and thus, sought for acquittal
of accused No.1.
27. Sri R. Nagendra Naik, learned counsel while
adopting the arguments of Sri S.P. Kulkarni, learned Senior
Counsel, contended that his client is only accused No.5, who is
the beneficiary and she has signed at the behest of accused
No.4 and therefore, there is no independent contribution made
by accused No.5 in the incident and sought for allowing the
appeal.
28. Learned counsels for appellants alternatively
contended that in the event this Court upholding the conviction
of the appellants, insofar as public servants are concerned, in
the absence of proper proof to attract the offence of Provisions
of Prevention of Corruption Act, public servants are entitled for
an order of acquittal for the offence under Section 13(1)(d) r/w
Section 13(2) of the Prevention of Corruption Act.
29. They would also submit that public servants would
not claim any benefits, if an order of acquittal is recorded by
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this Court on re-appreciation of the materials on record for the
offences under Section 13(1)(d) r/w section 13(2) of the
Prevention of Corruption Act contending that there is no
disqualification.
30. In order to have certainty with regard to the said
submission, affidavits of accused Nos.1 and 2 are placed on
record. Contents of those affidavits are extracted hereunder
for ready reference:-
Affidavit of accused No.1
I, Nagesh V. Gokarn S/o. Vinayak, aged about 72
years, R/at No.8, Maragondanahalli, K.R Puram post,
Bengaluru-560036, do hereby solemnly affirm and state on
oath as follows:
1. I state that I am the Appellant in the above appeal, I
know the facts and circumstances of the case. Hence, I am
swearing to this affidavit.
2. I state that the CBI had registered a case against me in
Spl. C.C.No.134/2007 by alleging that I have committed
offences punishable U/Sec. 120B, 468, 471, 477A and 420
of IPC R/W. Sec. 13(1)(c) and 13(1)(d) and Sec. 13(2) of
the Prevention of Corruption Act 1988.
3. I state that I was arrayed as Accused No.1 in the above
case, I say that I am innocent throughout and I have not
committed any offence. The allegation against me was that
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in the capacity of public servant as Manager of UCO Bank I
have entered into criminal conspiracy with the customers
of the bank and was responsible for getting them loans
from the Bank and in the said regard there is loss caused
to the complainant Bank. I submit that despite all my
effective defence and cross examination of the witnesses
for prosecution in the trial, learned XXXII Addl. City Civil
and Sessions Judge, Special Judge for CBI, CCH-34,
Bengaluru has passed the order of conviction and sentence
on 9.12.2011 for the said offences and directed that I have
to undergo 3.1. and pay fine as below;
a) Sec. 120B IPC-Criminal Conspiracy 1 year S.I.
b) Sec. 468 IPC-Forgery for cheating - 1 year S.I. &
Rs.5,000/-fine.
c) Sec.471 IPC Using forged documents as genuine 1 year
S.I. & Rs.5,000/- fine.
d) Sec.477A IPC Rs.5,000/- fine. Falsification of Accounts 1
year S.I. &
e) Sec. 420 IPC - Cheating and dishonestly inducing
delivery of property 1 year S.I. & Rs.5,000/- fine.
f) Sec. 13(2) R/W. Sec. 13(1)(c) & (d) P.C. Act, 1988 1
year S.I. and Rs.5,000/- fine.
4. I state that this Hon'ble Court by the order dt:2.1.2012
admitted the above appeal and also granted suspension of
sentence on 5.1.2012 and the above appeal is pending
consideration till date.
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5. I state that I was not committed any offence as alleged
by the respondent, the major allegation are after may
2002 only till that time I was transferred from that place,
and there is no evidence to show that the criminal
conspiracy and also there is no evidence to show my
involvement in the alleged offence under sec 13(2) R/w
Sec. 13(1)(c) & (d) P.C. Act, 1988. The very complainant
himself admitted that I was not cheated the bank or
received any kick back, hence the appeal is required to be
allowed and the conviction and sentence passed by the
learned special judge required to be set aside.
6. I state that this in the event this hon'ble court dropped
the charges/sentence against me I am herewith
undertakes that I will not claim any monitory benefits from
the UCO Bank.
Wherefore, it is prayed that this Hon'ble Court be pleased
to allow the present Criminal Appeal and by considering
my undertaking be pleased to set aside the
Judgment/Order of Conviction of the Sentence dated
05.10.2010 made in Spl.C.C.No.134/2007, passed against
me, in the interest of justice and equity
Affidavit of accused No.2
I, R.Shivakumar S/o. N.Ramasubramanian, aged
about 70 years, R/at No.17/1, Muddappa Road, Maruthi
Seva Nagar, Bengaluru, do hereby solemnly affirm and
state on oath as follows:
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1. I state that I am the Appellant in the above appeal, I
know the facts and circumstances of the case. Hence I am
swearing to this affidavit.
2. I state that the CBI had registered a case against me in
Spl. C.C.No.134/2007 by alleging that I have committed
offences punishable U/Sec. 120B, 468, 471, 477A and 420
of IPC R/W. Sec.13(1)(c) and 13(1)(d) and Sec.13(2) of
the Prevention of Corruption Act 1988.
3. I say that I was arrayed as Accused No.2 in the above
case and despite all my effective defence and cross
examination of the witnesses for prosecution, the learned
XXIII City Civil & Sessions Judge and Special Judge for CBI
(CCH-35), Bengaluru has passed an order of conviction
and sentence on 9.12.2011 for the said offences and has
ordered me to undergo simple imprisonment and pay fine
as held therein.
4. I say that this Hon'ble Court by its order dtd: 2.1.2012
admitted the above appeal and suspension of sentence
was ordered on 5.1.2012 with conditions to remit the fine
amount. I say that I have complied with the order by
remitting the fine amount.
5. I say that I was dismissed from service in the post of
Manager as back as 2006 after registration of the case. I
say that I am not drawing any pension from the bank nor I
am seeking any monitory benefits from the bank. I submit
that I will also not claim any such benefit from the
complainant bank even in the future.
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Wherefore I pray that I may be acquitted of the said
offences and appropriate orders be passed in this appeal,
in the interest of justice and equity.
31. Sri S.P. Kulkarni, learned Senior counsel appearing
on behalf Sri Vasanth Kumar K.M., counsel for the accused
No.2 submits that the following decisions in support of his
arguments.
(i) Rajeevan Aswathy v. Superintendent of Police,
2011 SCC OnLine Ker 4024
17. It is an admitted fact that even before the
disbursal of the loan amounts in all the three cases, the
loans were fully secured by collateral security. If so, an
intention to cheat the bank cannot be readily inferred.
************
18. *********** This is a case in which P.W. 23 who
was a Scale I officer had with full authority
recommended all the loans. He was initially made the
2ndaccused in the case but was deleted from the array
of accused only on the date of filing the final report after
recording his statement under Sec. 161 Cr.P.C. on the
same day. If P.W. 23 was the senior officer who was in-
charge of loans and advances and if it was he who had
conducted the pre-sanction inspection and had also
prepared the CRs in all the three loans and if it was P.W.
23 who had recommended to sanction the loans, A1
cannot be blamed if he acting on such recommendation
in good faith had sanctioned the loans in question.
Absolutely no reasons have been given as to why P.W.
23 who had performed all the pre-sanction formalities in
all the three cases was exonerated by the investigating
officer.
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20. All the loans were granted on the strength of
collateral security after taking into account the valuation
made by the valuers namely one Asokan and one
Subrahmania Iyer (both of whom were not examined)
and also on the strength of confidential reports which
were suppressed. A1 had sanctioned the loans acting on
the recommendations of P.W. 23, the Senior Manager
who had conducted the pre-sanction inspection and who
had not made any report to the effect that any of the
firms including Distributors Quilon was fictitious. If so,
A1 the Branch Manager cannot be blamed at all in
sanctioning the loans. The Court below was not right in
accepting the prosecution case in this behalf.
23. ********** When the loan was sanctioned on
the strength of adequate collateral security and after
conducting proper enquiries and pre-sanction inspection
and on the strength of CRs. legal opinion etc. and on the
recommendation of P.W. 23, it was not open to the
prosecution to contend that A1 was sanctioning the loan
dishonestly and without proper verification.
32. This was an avoidable prosecution if P.W. 1 had
exercised due care and caution. P.W.s 2 and 3 also did
not take pains to personally verify whether the three
firms namely, Distributors Quilon, K.S. Agencies and
Deepak Industries were really existing or not. The C.B.I.
also had the opportunity to conduct a detailed probe into
the allegations in Ext. P1 complaint and find out the
truth. Instead, they also resorted to unjustifiable modes
of collection of evidence to eventually place the accused
persons for trial.
33. The amounts involved were also not large enough
to justify the investigation and prosecution. The trial
Judge also was not alive to the requirements of law
while conducting the trial. The appellants were the
unfortunate victims of a concatenation of all the above
adverse circumstances.
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34. The conviction entered and the sentence passed
against the appellants overlooking the above vital
aspects of the matter cannot be sustained and are
accordingly dislodged. The appellants are found not
guilty of the offences punishable under Sections 120B,
420 and 468 I.P.C. and Sec. 13(2) read with Sec.
13(1)(d) of the P.C. Act and are acquitted thereunder.
They are set at liberty forthwith. Their bail bonds shall
stand cancelled.
(ii) Ismail Khan Shah v. State,
2011 SCC OnLine Kar 3899
26. In order to attract Section 420 of the I.P.C., it is
incumbent on the part of the prosecution to establish
that the accused had deceived the bank while taking
loan or that they had acted dishonestly or fraudulently.
When the trial Court itself did not find any convincing
material being placed by the prosecution to show that
the accused had either given wrong addresses or that
the units in question were not in existence, the question
of the appellants deceiving the bank when they made
the applications for cash credit facility, therefore, does
not arise. The intention on the part of the appellants to
cheat the bank had to be established and the
prosecution falls in its attempt to prove this and
consequently, as rightly argued by learned senior
counsel C.V. Nagesh, mere non-payment of the loan
amount itself cannot be construed as satisfying the
ingredients of Section 420 of the I.P.C.
27. The learned trial Judge has also observed in the
course of his judgment that, even if the accused had
repaid the loan amount during the course of the trial,
that would have not attracted Section 420 of the I.P.C.
Merely because the accused had not repaid the loan
amount, the Court, therefore, inferred from this act that
the accused had committed the offence of cheating. The
said reasoning of the trial Court cannot be accepted as
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the essential ingredient of Section 420 of the I.P.C. viz.,
to cheat, was found missing in the instant case.
28. Apart from that, the learned senior counsel for the
appellant is also justified in pointing out that the trial
Court could not have convicted the appellants separately
under Sections 120-B and 420 of the I.P.C. as if the
accused were tried in respect of these two offences
separately when the charge against the accused was to
the effect that they had committed the offence under
Sections 120-B read with 420 of the I.P.C. Therefore,
point No. (ii) also stands answered accordingly.
30. For the aforesaid reasons, both the appeals are
allowed and the judgment of conviction and sentence
passed by the trial Court cannot be sustained in law and
accordingly it is set aside and all the appellants herein
are acquitted of the offences with which they were
charged. Their bail bonds shall stand cancelled. The fine
amount, if any deposited by the appellants herein, shall
be refunded to them.
(iii) Sherimon v. State of Kerala,
(2011) 10 SCC 768
16. It is undoubtedly true that PW 4 had not repaid
the entire loan to City Auto Finance. He was in arrears.
However, in our opinion, on the basis of the evidence on
record to which we have made a reference hereinabove,
it was wrong on the part of the trial court and the High
Court to come to the conclusion that the appellant was a
party to the alleged criminal conspiracy entered into by
the appellant and A-1 to A-3 to repossess the said
autorickshaw irrespective of the consequences and,
pursuant thereto, on 31-3-1999, A-1 to A-3 murdered
the driver of the said autorickshaw and repossessed it.
It was wrong to come to the conclusion that the
evidence referred to hereinabove indicates the existence
of a strong motive on the part of City Auto Finance to
repossess the said autorickshaw at any cost. When it is
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not the case of the prosecution that the appellant was
present when the murder took place and when no overt
act is attributed to him by any witness, to hold him
responsible for the offence under Section 324 IPC with
the aid of Section 120-B is clearly improper and illegal.
17. The gist of the offence of conspiracy is the
agreement between two and more persons to do or
cause to be done an illegal act or a legal act by illegal
means. There must be meeting of minds resulting in an
ultimate decision taken by the conspirators regarding
commission of the crime. In this case, no such evidence
has come on record. PW 5 Biju, the employee of City
Auto Finance at Moovattupuzha was the only witness
examined by the prosecution to prove the alleged
meeting between the appellant and the other accused.
He has turned hostile. Therefore, there is nothing on
record to establish meeting of minds between the
appellant and the other accused.
18. Assuming that the appellant had produced certain
documents pertaining to the said autorickshaw, it cannot
be concluded on the basis thereof that he had entered
into a conspiracy with A-1 to A-3 to repossess the said
autorickshaw because the loan amount was not repaid
and in pursuance thereof A-1 to A-3 murdered the driver
of the said autorickshaw. The evidence on record is
totally inadequate to come to such a conclusion. It is,
therefore, not possible to sustain the impugned
judgment.
(iv) Sujit Biswas v. State of Assam,
(2013) 12 SCC 406
13. Suspicion, however grave it may be, cannot take
the place of proof, and there is a large difference
between something that "may be" proved, and
something that "will be proved". In a criminal trial,
suspicion no matter how strong, cannot and must not be
permitted to take place of proof. This is for the reason
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that the mental distance between "may be" and "must
be" is quite large, and divides vague conjectures from
sure conclusions. In a criminal case, the court has a
duty to ensure that mere conjectures or suspicion do not
take the place of legal proof. The large distance between
"may be" true and "must be" true, must be covered by
way of clear, cogent and unimpeachable evidence
produced by the prosecution, before an accused is
condemned as a convict, and the basic and golden rule
must be applied. In such cases, while keeping in mind
the distance between "may be" true and "must be" true,
the court must maintain the vital distance between mere
conjectures and sure conclusions to be arrived at, on the
touchstone of dispassionate judicial scrutiny, based
upon a complete and comprehensive appreciation of all
features of the case, as well as the quality and
credibility of the evidence brought on record. The court
must ensure, that miscarriage of justice is avoided, and
if the facts and circumstances of a case so demand, then
the benefit of doubt must be given to the accused,
keeping in mind that a reasonable doubt is not an
imaginary, trivial or a merely probable doubt, but a fair
doubt that is based upon reason and common sense.
(Vide Hanumant Govind Nargundkar v. State of
M.P. [(1952) 2 SCC 71 : AIR 1952 SC 343 : 1953 Cri LJ
129] , State v. Mahender Singh Dahiya [(2011) 3 SCC
109 : (2011) 1 SCC (Cri) 821 : AIR 2011 SC 1017]
and Ramesh Harijan v. State of U.P. [(2012) 5 SCC 777
: (2012) 2 SCC (Cri) 905] )
14. In Kali Ram v. State of H.P. [(1973) 2 SCC 808 :
1973 SCC (Cri) 1048 : AIR 1973 SC 2773] this Court
observed as under : (SCC p. 820, para 25)
"25. Another golden thread which runs through
the web of the administration of justice in criminal
cases is that if two views are possible on the
evidence adduced in the case, one pointing to the
guilt of the accused and the other to his
innocence, the view which is favourable to the
accused should be adopted. This principle has a
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special relevance in cases wherein the guilt of the
accused is sought to be established by
circumstantial evidence."
(v) A. Ramanuja v. State by CBI,
Crl.A.No.1002/2010 C/w. Crl.A.No.1024/2010
dated 18.12.2020
105. The learned counsel appearing for accused No.1
relied upon several Judgments with regard to the
conspiracy as well as the involvement of the accused
and this Hon'ble Court in N.R.Bhat's case (supra), with
regard to non-production of the Vigilance report
categorically held that, much credence cannot be
attached and further held an adverse inference under
Section 114(g) of the Evidence Act will have to be drawn
for not producing a very vital report submitted by the
Vigilance Officer to the Investigating officer. In the case
on hand also PW.8 categorically admits that he gave the
report to the Head Office and the said report is not
produced before the Court. The very base document to
initiate the proceedings against accused No.1 has not
been placed before the Court.
106. The Kerala High Court also in Rajeevan Aswathy's
case (supra), held that when the loan was fully secured
by collateral security, the intention to cheat the Bank
cannot be inferred. In the case on hand also no dispute
with regard to the property of Venkataswamy is created
as collateral security. PW.8 also categorically admits
that it is a secured loan. Further he admits that the
subsequent Manager has not taken care of it. In the
case on hand, only he has made the recommendation
but PW.1 has sanctioned the loan. The said Judgment is
also aptly applicable to the case on hand.
107. The learned counsel also relied upon the judgment
of the Apex Court in Sujit Biswas's case (supra), the
Apex Court held that while convicting the accused, it
requires proof beyond reasonable doubt and there
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cannot be conviction based on mere conjectures or
suspicion and the said Judgment is applicable to the
case on hand.
108. The learned counsel relied upon the judgment of
the Apex Court in Subramanian Swamy's case (supra),
regarding conspiracy is concerned and in this Judgment
also, the Apex Court held that only based on surmise
and assertive intervention with regard to any official
position misusing, the offence under Section 120-B
cannot be invoked. In order to attract the provisions of
Section 120-B, no doubt, as rightly contended by the
learned counsel appearing for the State there cannot be
any direct evidence and there must be a circumstantial
evidence. In the case on hand, I did not find any
circumstantial evidence and no doubt accused No.1 sent
the proposal and also recommended with regard to the
existence of the Firm of accused No.2 and also sent the
report.
132. In view of the discussion made above, I pass the
following:
ORDER
(i) The appeals are allowed.
(ii) The judgment of conviction and order on
sentence dated 31.08.2010 passed in
Spl.CC.No.18/2000, on the file of XXI Additional
City Civil and Sessions Judge and Special Judge
for CBI Cases, Bengaluru (CCC4) is hereby set
aside.
(iii) Accused No.1 is acquitted for the offences
punishable under Sections 120B read with
Sections 420, 468 and 471 of I.P.C. and Section
13(2) read with 13(1)(d) of Prevention of
Corruption Act, 1988.
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(iv) Accused No.2 is acquitted for the offences
punishable under Sections 120B, 420, 468 and
471 of IPC.
(v) The fine amount, if any, deposited before the
Trial Court shall be refunded to the accused Nos.1
and 2 forthwith.
(vi) The Registry is directed to transmit the TCR
to the Trial Court forthwith.
(vi) Vijayee Singh v. State of U.P.,
(1990) 3 SCC 190
16. The phrase "burden of proof" is not defined in the
Act. In respect of criminal cases, it is an accepted
principle of criminal jurisprudence that the burden is
always on the prosecution and never shifts. This flows
from the cardinal principle that the accused is presumed
to be innocent unless proved guilty by the prosecution
and the accused is entitled to the benefit of every
reasonable doubt. Section 105 of the Evidence Act is in
the following terms:
"105. When a person is accused of any offence,
the burden of proving the existence of
circumstances bringing the case within any of the
General Exceptions in the Penal Code, 1860, or
within any special exception or proviso contained
in any other part of the same Code, or in any law
defining the offence, is upon him, and the court
shall presume the absence for such
circumstances."
The section to some extent places the onus of proving
any exception in a penal statute on the accused. The
burden of proving the existence of circumstances
bringing the case within the exceptions mentioned
therein is upon him. The section further lays down that
the court shall presume non-existence of circumstances
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bringing the case within an exception. The words
"burden of proving the existence of circumstances"
occurring in the section are very significant. It is well
settled that "this burden" which rests on the accused
does not absolve the prosecution from discharging its
initial burden of establishing the case beyond all
reasonable doubts. It is also well settled that the
accused need not set up a specific plea of his offence
and adduce evidence. That being so the questions is :
What is the nature of burden that lies on the accused
under Section 105 if benefit of the general exception of
private defence is claimed and how it can be
discharged? In Woolmington v. Director of Public
Prosecutions [1935 AC 462] , Viscount Sankey, L.C.
observed: (AC p. 482)
"When evidence of death and malice has been
given (this is a question for the jury) the prisoner
is entitled to show, by evidence or by examination
of the circumstances adduced by the Crown that
the act on his part which caused death was either
unintentional or provoked. If the jury are either
satisfied with his explanation or, upon a review of
all the evidence, are left in reasonable doubt
whether, even if his explanation be not accepted,
the act was unintentional or provoked, the
prisoner is entitled to be acquitted."
It is further observed: (AC pp. 481-82)
"Just as there is evidence on behalf of the
prosecution so there may be evidence on behalf
of the prisoner which may cause a doubt as to his
guilt. In either case, he is entitled to the benefit
of the doubt. But while the prosecution must
prove the guilt of the prisoner, there is no such
burden laid on the prisoner to prove his innocence
and it is sufficient for him to raise a doubt as to
his guilt; he is not bound to satisfy the jury of his
innocence...
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Throughout the web of the English criminal law
one golden thread is always to be seen, that it is
the duty of the prosecution to prove the prisoner's
guilt subject to what I have already said as to the
defence of insanity and subject also to any
stationary exception. If, at the end of and on the
whole of the case, there is reasonable doubt,
created by the evidence given by either the
prosecution or the prisoner, as to whether the
prisoner killed the deceased with a malicious
intention, the prosecution has not made out the
case and the prisoner is entitled to an acquittal.
No matter what the charge or where the trial, the
principle that the prosecution must prove the guilt
of the prisoner is part of the common law of
England and no attempt to whittle it down can be
entertained."
In Emperor v. U. Damapala [AIR 1937 Rang 83 : 14
Rang 666] , a Full Bench of the Rangoon High Court
following the Woolmington case [1935 AC 462] held that
the ratio therein is not in any way inconsistent with the
law in British India, and that indeed the principles there
laid down form valuable guide to the correct
interpretation of Section 105 of the Evidence Act and the
Full Bench laid down that even if the evidence adduced
by the accused fails to prove the existence of
circumstances bringing the case within the exception or
exceptions pleaded, the accused is entitled to be
acquitted if upon a consideration of the evidence as a
whole the court is left in a state of reasonable doubt as
to whether the accused is or is not entitled to the benefit
of the exception pleaded.
26. The maxim that the prosecution must prove its
case beyond reasonable doubt is a rule of caution laid
down by the courts of law in respect of assessing the
evidence in criminal cases. Section 105 places 'burden
of proof' on the accused in the first part and in the
second part we find a presumption which the court can
draw regarding the absence of the circumstances which
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NC: 2025:KHC:5519
presumption is always rebuttable. Therefore, taking the
section as a whole the 'burden of proof' and the
presumption have to be considered together. It is
axiomatic when the evidence is sufficient as to prove the
existence of a fact conclusively then no difficulty arises.
But where the accused introduces material to displace
the presumption which may affect the prosecution case
or create a reasonable doubt about the existence of one
or other ingredients of the offence, then it would
amount to a case where prosecution failed to prove its
own case beyond reasonable doubt. The initial obligatory
presumption that the court shall presume the absence of
such circumstances gets lifted when a plea of exception
is raised. More so when there are circumstances on the
record (gathered from the prosecution evidence, chief
and cross-examinations, probabilities and
circumstances, if any, introduced by the accused, either
by adducing evidence or otherwise) creating a
reasonable doubt about the existence of the ingredients
of the offence. In case of such a reasonable doubt, the
court has to give the benefit of the same to the accused.
The accused may also show on the basis of the material
a preponderance of probability in favour of his plea. If
there are absolutely no circumstances at all in favour of
the existence of such an exception then the rest of the
enquiry does not arise in spite of a mere plea being
raised. But if the accused succeeds in creating a
reasonable doubt or shows preponderance of probability
in favour of his plea, the obligation on his part under
Section 105 gets discharged and he would be entitled to
an acquittal.
33. ************ The general burden of establishing
the guilt of accused is always on the prosecution and it
never shifts. Even in respect of the cases covered by
Section 105 the prosecution is not absolved of its duty
of discharging the burden. The accused may raise a plea
of exception either by pleading the same specifically or
by relying on the probabilities and circumstances
obtaining in the case. He may adduce the evidence in
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support of his plea directly or rely on the prosecution
case itself or, as stated above, he can indirectly
introduce such circumstances by way of cross-
examination and also rely on the probabilities and the
other circumstances. Then the initial presumption
against the accused regarding the non-existence of the
circumstances in favour of his plea gets displaced and
on an examination of the material if a reasonable doubt
arises the benefit of it should go to the accused. The
accused can also discharge the burden under Section
105 by preponderance of probabilities in favour of his
plea. In case of general exceptions, special exceptions,
provisos contained in the Penal Code or in any law
defining the offence, the court, after due consideration
of the evidence in the light of the above principles, if
satisfied, would state, in the first instance, as to which
exception the accused is entitled to, then see whether
he would be entitled for a complete acquittal of the
offence charged or would be liable for a lesser offence
and convict him accordingly.
(vii) N.R. Bhat v. State,
2016 SCC OnLine Kar 1107
13. In the light of non-submission of the report said to
have been prepared by Shivaraman which is the basis
for the bank to suspect the role of accused Nos. 1 and 2,
much credence cannot be attached to the evidence of
Shivaraman. On the other hand, an adverse inference
under Section 114(g) of the Evidence Act will have to be
drawn for not producing a very vital report submitted by
Shivaraman, to the Investigating Officer. That report
must necessarily have contained all the details relating
to the documents verified by him and the statements or
information given to him by the staff of the branch.
15. Sri Amarsingh, handwriting expert has not spoken
anything about Ex. P-50 with reference to the
handwriting and signatures found thereon. This being
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the position, the Learned Judge could not have
considered Ex. P-50 as a proved document to connect
with this case i.e., loan of Dr. K. Srinivasan. When the
Trial Court has acquitted these accused in regard to the
loan availed on the fixed deposits of one customer, Dr.
Srinivasan in Crl. Appeal Nos. 2190/2006 c/w.
2185/2006 holding that evidence of handwriting expert
is not trustworthy, the Trial Court could not have laid
much emphasis on the same in this case.
32. Some more documents were submitted to the IO
long after investigation had commenced and statements
of material witnesses were recorded. A specific
reference is made to the letter addressed by M/s.
Deepam Silks International. Unless these materials were
kept with him, the IO could not have recorded the
statements of material witnesses and therefore, serious
contradictions have arisen in the evidence of material
witnesses. These aspects have not been considered by
the Trial Court while evaluating the evidence.
33. As rightly pointed out by Learned Senior Counsel,
Mr. P.S. Rajagopal, the genesis of the prosecution
appears to be doubtful. Mere seriousness of allegations
would be insufficient, unless they are established not by
mere preponderance of probabilities, but by adducing
proof beyond reasonable doubt. What is proof beyond all
reasonable doubt has been discussed and well
considered at length by the Hon'ble Apex Court in the
case of State of U.P. v. Krishna Gopal [AIR 1988 SC
2154].
34. Taking all these serious inconsistencies emanating
from the case of the prosecution and material witnesses
not supporting the prosecution case, the Trial Court is
not justified in convicting the accused. On the other
hand, the accused are entitled to be acquitted by giving
them the benefit of doubt. Accordingly point No.(1) is
answered in the negative.
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35. Point No.(2) : In view of the negative finding on
point No. (1), the appeal will have to be allowed in its
entirety and the accused will have to be acquitted of all
the offences alleged against him. In the result, the
following order is passed:
ORDER
The appeal filed under Section 374(2), Cr.PC. is allowed
in its entirety, by setting aside the judgment of
conviction and sentence passed in Spl. C.C. No. 131/00
by the XXI Additional City Civil and Sessions Judge, and
Special Judge for CBI Cases, Bengaluru. Accordingly the
accused is acquitted of all the charges leveled against
him. Bail bonds executed by the accused and the
sureties stand cancelled.
(viii) Lalita Kumari v. Govt. of U.P.,
(2014) 2 SCC 1
101. According to the Statement of Objects and
Reasons, protection of the interests of the poor is clearly
one of the main objects of the Code. Making registration
of information relating to commission of a cognizable
offence mandatory would help the society, especially,
the poor in rural and remote areas of the country.
102. The Committee on Reforms of Criminal Justice
System headed by Dr Justice V.S. Malimath also noticed
the plight faced by several people due to non-
registration of FIRs and recommended that action
should be taken against police officers who refuse to
register such information. The Committee observed:
"7.19.1. According to Section 154 of the Code of
Criminal Procedure, the officer in charge of a
police station is mandated to register every
information oral or written relating to the
commission of a cognizable offence. Non-
registration of cases is a serious complaint against
the police. The National Police Commission in its
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NC: 2025:KHC:5519
4th Report lamented that the police 'evade
registering cases for taking up investigation
where specific complaints are lodged at the police
stations'. It referred to a study conducted by the
Indian Institute of Public Opinion, New Delhi
regarding 'Image of the Police in India' which
observed that over 50% of the respondents
mention non-registration of complaints as a
common practice in police stations.
7.19.2. The Committee recommends that all
complaints should be registered promptly, failing
which appropriate action should be taken. This
would necessitate change in the mind-set of the
political executive and that of senior officers.
***
7.19.4. There are two more aspects relating to
registration. The first is minimisation of offences
by the police by way of not invoking appropriate
sections of law. We disapprove of this tendency.
Appropriate sections of law should be invoked in
each case unmindful of the gravity of offences
involved. The second issue is relating to the
registration of written complaints. There is an
increasing tendency amongst the police station
officers to advise the informants, who come to
give oral complaints, to bring written complaints.
This is wrong. Registration is delayed resulting in
valuable loss of time in launching the
investigation and apprehension of criminals.
Besides, the complainant gets an opportunity to
consult his friends, relatives and, sometimes even
lawyers and often tends to exaggerate the crime
and implicate innocent persons. This eventually
has adverse effect at the trial. The information
should be reduced in writing by the SHO, if given
orally, without any loss of time so that the first
version of the alleged crime comes on record.
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7.20.11. It has come to the notice of the
Committee that even in cognizable cases quite
often the police officers do not entertain the
complaint and send the complainant away saying
that the offence is not cognizable. Sometimes the
police twist facts to bring the case within the
cognizable category even though it is non-
cognizable, due to political or other pressures or
corruption. This menace can be stopped by
making it obligatory on the police officer to
register every complaint received by him. Breach
of this duty should become an offence punishable
in law to prevent misuse of the power by the
police officer."
103. It means that the number of FIRs not registered is
approximately equivalent to the number of FIRs actually
registered. Keeping in view the NCRB figures that show
that about 60 lakh cognizable offences were registered
in India during the year 2012, the burking of crime may
itself be in the range of about 60 lakhs every year. Thus,
it is seen that such a large number of FIRs are not
registered every year, which is a clear violation of the
rights of the victims of such a large number of crimes.
104. Burking of crime leads to dilution of the rule of
law in the short run; and also has a very negative
impact on the rule of law in the long run since people
stop having respect for the rule of law. Thus, non-
registration of such a large number of FIRs leads to a
definite lawlessness in the society.
105. Therefore, reading Section 154 in any other form
would not only be detrimental to the scheme of the
Code but also to the society as a whole. It is thus seen
that this Court has repeatedly held in various decided
cases that registration of FIR is mandatory if the
information given to the police under Section 154 of the
Code discloses the commission of a cognizable offence.
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115. Although, we, in unequivocal terms, hold that
Section 154 of the Code postulates the mandatory
registration of FIRs on receipt of all cognizable offences,
yet, there may be instances where preliminary inquiry
may be required owing to the change in genesis and
novelty of crimes with the passage of time. One such
instance is in the case of allegations relating to medical
negligence on the part of doctors. It will be unfair and
inequitable to prosecute a medical professional only on
the basis of the allegations in the complaint.
119. Therefore, in view of various counterclaims
regarding registration or non-registration, what is
necessary is only that the information given to the police
must disclose the commission of a cognizable offence. In
such a situation, registration of an FIR is mandatory.
However, if no cognizable offence is made out in the
information given, then the FIR need not be registered
immediately and perhaps the police can conduct a sort
of preliminary verification or inquiry for the limited
purpose of ascertaining as to whether a cognizable
offence has been committed. But, if the information
given clearly mentions the commission of a cognizable
offence, there is no other option but to register an FIR
forthwith. Other considerations are not relevant at the
stage of registration of FIR, such as, whether the
information is falsely given, whether the information is
genuine, whether the information is credible, etc. These
are the issues that have to be verified during the
investigation of the FIR. At the stage of registration of
FIR, what is to be seen is merely whether the
information given ex facie discloses the commission of a
cognizable offence. If, after investigation, the
information given is found to be false, there is always an
option to prosecute the complainant for filing a false
FIR.
Conclusion/Directions
120. In view of the aforesaid discussion, we hold:
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120.1. The registration of FIR is mandatory under
Section 154 of the Code, if the information discloses
commission of a cognizable offence and no preliminary
inquiry is permissible in such a situation.
120.2. If the information received does not
disclose a cognizable offence but indicates the necessity
for an inquiry, a preliminary inquiry may be conducted
only to ascertain whether cognizable offence is disclosed
or not.
120.3. If the inquiry discloses the commission of a
cognizable offence, the FIR must be registered. In cases
where preliminary inquiry ends in closing the complaint,
a copy of the entry of such closure must be supplied to
the first informant forthwith and not later than one
week. It must disclose reasons in brief for closing the
complaint and not proceeding further.
120.4. The police officer cannot avoid his duty of
registering offence if cognizable offence is disclosed.
Action must be taken against erring officers who do not
register the FIR if information received by him discloses
a cognizable offence.
120.5. The scope of preliminary inquiry is not to
verify the veracity or otherwise of the information
received but only to ascertain whether the information
reveals any cognizable offence.
120.6. As to what type and in which cases
preliminary inquiry is to be conducted will depend on the
facts and circumstances of each case. The category of
cases in which preliminary inquiry may be made are as
under:
(a) Matrimonial disputes/family disputes
(b) Commercial offences
(c) Medical negligence cases
(d) Corruption cases
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(e) Cases where there is abnormal delay/laches in
initiating criminal prosecution, for example, over 3
months' delay in reporting the matter without
satisfactorily explaining the reasons for delay.
The aforesaid are only illustrations and not exhaustive of
all conditions which may warrant preliminary inquiry.
120.7. While ensuring and protecting the rights of
the accused and the complainant, a preliminary inquiry
should be made time-bound and in any case it should
not exceed fifteen days generally and in exceptional
cases, by giving adequate reasons, six weeks' time is
provided. The fact of such delay and the causes of it
must be reflected in the General Diary entry.
120.8. Since the General Diary/Station Diary/Daily
Diary is the record of all information received in a police
station, we direct that all information relating to
cognizable offences, whether resulting in registration of
FIR or leading to an inquiry, must be mandatorily and
meticulously reflected in the said diary and the decision
to conduct a preliminary inquiry must also be reflected,
as mentioned above.
32. Per contra, Sri P. Prasanna Kumar, learned counsel
for the C.B.I., opposes the appeal grounds in toto. He would
further contend that even though there is a thin line of
difference between irregularity and illegality, but that thin line
is subtle in nature. It is well settled that every irregularity
cannot be treated as illegality, but whenever an action
attributed to the public servant resulting in pecuniary loss to
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the Institution would automatically turn out the irregularity into
illegality in a given case.
33. He would further contend that the irregularities
which were initially noticed in the UCO Bank, Davanagere
Branch were further focused upon and necessary documents
have been collected by the Investigating Agency, wherein it is
crystal clear that advancing to M/s. Srirama has been serviced
by the UCO Bank, Davanagere Branch, time and again by
throwing to wind all the banking norms in advancing such
financial assistance.
34. Sri P. Prasanna Kumar, learned counsel also pointed
out that good number of documentary evidence has been
collected by the Investigating Agency, which have been placed
on record and got exhibited would go to show that in majority
of the transactions, there is a deviation from the existing
banking rules which was mandatory in nature resulting in the
inferential deduction of the existence of conspiracy.
35. Learned counsel for the respondent further
emphasized that for the purpose of appreciating the material
evidence placed on record either for the offence under Section
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420 or for 120B or for that matter, the offence under Section
13(1)(d) r/w Section 13(2) of the Prevention of Corruption Act,
positive evidence in a given case is seldom available and the
Court has to infer the existence of criminal conspiracy and
obtainment of illegal gratification by cumulatively considering
the attendant facts and circumstances in a given case.
36. Learned counsel for the respondent also contended
that in a matter of this nature, very fact of advancing the loans
against the banking rules and norms, would automatically
result in inferring the existence of conspiracy, especially when
the branch has shown extra interest in a particular borrower.
37. He also contended that oral evidence of prosecution
witnesses coupled with the documentary evidences would
establish all ingredients to attract the offences arrived against
the accused persons-appellants and thus, sought for dismissal
of the appeal.
38. Insofar as alternate submissions canvassed on
behalf of the appellants are concerned, Sri P. Prasanna Kumar
would contend that if accused Nos.1 and 2 are shown any
leniency or mercy, the same would enjoy similarly placed public
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servants to indulge in such activities in future and therefore,
sought for dismissal of the appeals in toto.
39. In support of his arguments, learned counsel for the
respondent places reliance on the judgment of the Hon'ble
Apex Court in the case of Neeraj Dutta v. State
(Government of NCT of Delhi) reported in (2023) 4
Supreme Court Cases 731.
40. He invites the attention of this Court to the
judgment of the Hon'ble Apex Court in the case of Sita Soren
v. Union of India reported in (2024) 5 Supreme Court
Cases 629 wherein the constitution Bench judgment of
'Neeraj Dutta' is considered and upheld.
41. Having heard the learned counsel for parties in
detail, this Court perused the material on record meticulously.
42. On such perusal of the material on record, the
following points would arise for consideration:-
(i) Whether the material evidence on record would
be sufficient enough to maintain the conviction
of the appellants for the offences punishable
under section 120(b) r/w section 468, 471,
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477A, 420 IPC and under Section 13(1)(d) r/w
Section 13(2) of the Prevention of Corruption
Act insofar as accused Nos.1 and 2 are
concerned (appeal of accused No.3 is
disjuncted from the present case as he failed to
address the arguments and non-bailable
warrant is issued against accused No.3)?
(ii) Whether the appellants make out a case of
illegal infirmity or perversity in the impugned
judgment?
(iii) Whether the sentence needs modification?
(iv) What order?
43. Regarding point Nos.1&2: In the case on hand,
accused Nos.1 to 3 being the public servants of UCO bank,
Davanagere is not in dispute. This Court restricts its discussion
on the above points only with regard to the other accused
persons as appeal filed by accused No.3 is disjuncted from the
above cases as he did not choose to address the arguments
and remained absent and Non Bailable Warrant is issued
against him.
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44. Case of accused No.1 is that at the time of granting
the loan to Srirama, he was the Manager and there was no
irregularity or illegality committed at the time of granting loan
to Srirama at the inception.
45. Material on record would go to show that valuation
report furnished by the borrowers to secure the loan was
imperfect and before sanctioning the loan at the first instance,
the accused No.1 did not bestow his attention to the validity of
the documents especially the document that was furnished as
security to the loan. As such, arguments advanced on behalf of
accused No.1, that he is no way responsible for the alleged
offences cannot be countenanced in law.
46. Having said thus, Srirama and partnership firm M/s.
Gajananda Motors and Cycle Mart, Davanagere, (for short
'Gajananda'), the family members of Muralidhar Behal are the
directors of the firm. Not only the male members of the family
of Accused No.4 were involved in this business, but also the
women folk were involved in the firm.
47. The written statements filed at the time of
recording the accused statement by accused Nos. 5, 9, 10, 11
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and 12 would go to show that they have been falsely implicated
in the case as they were only subscribing their signatures at the
instance of accused No.4. In other words, there is no dispute
that they are signatories to the document but they tried to
impress upon the Trial Court that they were not having any
intention to cheat the bank.
48. By filing such written statements by none other
than the family members of accused no.4, it is crystal clear that
documents were given to the UCO Bank, Davanagere, which
were not in order. Therefore, majority of the documents placed
on record as exhibits by the prosecution is not in serious
dispute.
49. Further, even though prosecution has stated that
there is a huge loss to UCO Bank, Davangere Branch to the
tune of Rs.7,51,70,124/-, material on record would also
disclose that major portion of the loan is repaid. Likewise, the
credit facility limit which was enhanced resulted in the
monetary loss to the tune of Rs.5,00,00,000/- according to the
prosecution for want of proper security being furnished.
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50. Material on record did disclose to substantiate the
said allegation inasmuch as there was no inspection conducted
before sanctioning the loan. Encashment of cheques and failing
to take necessary steps in that regard by the Managers of UCO
bank who are accused Nos.1 to 3 is apparent on record which
would be sufficient enough to establish that their acts were not
mere irregular acts.
51. As rightly contended on behalf of the prosecution,
irregularity will turn itself into illegality when there is a
pecuniary loss occurred to the bank. Had the accounts being
regular and repayments had been made by Srirama and
Gajananda Motors in time, hardly there was any scope for the
bank to show in their books the outstanding amount insofar as
these two accounts are concerned.
52. It is pertinent to note that repayment of the civil
liability would not efface the criminal liability ipso facto. View of
this Court is fortified by principles of law enunciated by the
Hon'ble Apex Court in the case of Gian Singh v. State of
Punjab and Another reported in (2012) 10 Supreme Court
Cases 303.
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53. Likewise, the amounts which are granted to the two
accounts namely Srirama and Gajananda were not in
accordance with the banking rules and norms. Serious
deviations are noted and the materials in that regard is
collected by the prosecution and placed on record and
exhibited. Even though there is a detailed cross- examination
of the prosecution witnesses, hardly any contradiction or
favourable admission is elicited, in such cross-examination on
behalf of the appellants to establish that there was no illegality
at all in sanctioning the loan to Srirama and Gajananda.
54. Case of the prosecution thus, hinges predominantly
on the documentary evidence rather than the oral testimony of
the prosecution witnesses. Majority of the prosecution
witnesses have deposed in respect of the authority to produce
the documents and the contents of the document.
55. Likewise, it is to be observed that the documents
that have been collected by the prosecution are the documents
at an undisputed point of time and hardly there is any scope for
concocting those documents only with an intention to foist a
false case against the appellants herein.
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56. When the business was running properly, there
were repayments also made by Srirama and Gajananda, which
would act as a catalyst for the bank to advance the additional
loans. But it must be noted that running of a business is not
always profitable. Even though material on record would not
make out that the sanctioned loan was misutilised, why it could
not be repaid in time is to be established by accused. There is
no attempt either by way of suggestion to the prosecution
witnesses nor there was any explanation offered by accused
No.4 in particular and other accused persons in general in
regard to repayment of loan in time.
57. Further, as is rightly contended on behalf of
respondent by Sri P. Prasanna Kumar, expecting positive
evidence to establish the offence under Section 120-B IPC is
incorrect in every case.
58. Usually conspiracy is hatched in secrecy. Positive
evidence to establish the existence of conspiracy is seldom
available. Therefore, Courts are expected to infer the existence
of conspiracy by considering the circumstantial evidence placed
on record. View of this Court, fortified in the judgment of
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Hon'ble Apex Court in the case of Mohd. Khalid v. State of
West Bengal reported in (2002) 7 Supreme Court Cases
334, wherein their Lordships have reiterated the principles of
law with regard to the proof of existence of conspiracy as is
held in the Constitution Bench judgment in the case of Kehar
Singh v. State (Delhi Admn.) reported in (1988) 3 SCC
609.
59. Keeping the above principles of law in the
background when the material evidence placed on record is
analysed in the case on hand, accused Nos.1 to 3 have lent the
loan beyond their capacity to Srirama and Gajananda. Why
would a banker keep on lending the loan to a particular
borrower even though such borrower is defaulter unless there
is a corresponding favour received by a public servant is a
question that needs to be considered by this Court, in the light
of attendant facts and circumstances of the case.
60. Admittedly, Accused Nos.1 and 2 being the public
servants, were required to deal with the funds of the bank
more diligently as they were the trustees of the public fund and
they were accountable for each and every penny of the public
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fund. Even though offence under Section 409 IPC is not
alleged in the case on hand, the degree of responsibility to be
exercised by accused Nos.1 and 2 while dealing with the public
funds cannot be last sight of by this Court while appreciating
the arguments of the parties.
61. On record no material is available so as to hold that
accused Nos.1 and 2 did exercise such discretion in lending the
money to Srirama and Gajananda.
62. However, to prove the offence under Section
13(1)(d), following the principles of law enunciated in Neeraj
Dutta Supra, it is necessary for the prosecution to establish
demand and then payment by the bribe giver acceptance
thereof would result in what is called obtainment. Such a
degree of proof is not available in the case on hand even after
making the inferential deduction.
63. Therefore, insofar as accused Nos. 1 and 2 are
concerned, the material evidence on record is hardly sufficient
to maintain the conviction of the offences under sections
13(1)(d) r/w section 13(2) of Prevention of Corruption Act.
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64. Having said thus, since mere repayment would not
efface the criminal liability, and material documents also depict
that there are entries which were passed by the accused Nos.1
and 2 in the books of UCO Bank, Davanagere which are per se
incorrect, all ingredients to attract the offence punishable under
Section 420 and 120-B, 468, 471 and 477A of IPC are to be
maintained following the dictum of the Hon'ble Apex Court in
the case of Gian Singh v. State of Punjab and Another
reported in (2012) 10 Supreme Court Cases 303.
65. There cannot be any dispute in the principles of law
enunciated in the judgments relied on by the learned Senior
counsel appearing on behalf of the appellant Sri S.P.Kulkarni.
66. But, in the case on hand, the facts depict that even
at the time of sanctioning the first loan itself, there were
irregularities which ultimately affected the rights of the Bank,
the material evidence on record would be sufficient enough to
maintain the conviction for the offences under Section 120-B,
468, 471, 477A, 420 IPC. Each of the conspirator need not to
know the entire design but for the active role played by the
particular conspirator, if the act is not accomplished each one
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of the conspirator would be liable for the final act as is held in
the case of Mohd. Khalid Supra.
67. Therefore, the decisions that has been placed on
record by the appellant would be not of much away for
interfering with the impugned judgment convicting the
appellants for the aforesaid offences except offence under
Section 13(1)(d) r/w Section 13(2) of Prevention of Corruption
Act.
In view of the foregoing discussions, point Nos.1 and 2
are answered partly in the affirmative.
68. Regarding point No.3: While accused Nos.1 and 2
have filed the affidavits foregoing the benefits in the event of
recording an order of acquittal under Section 13(1)(d) r/w
section 13(2) of the Prevention of Corruption Act referred to
supra, the other appellants have also pleaded the age and
contended that the incident is an isolated incident and there are
no criminal antecedents.
69. Few of the appellants are also ladies viz., A10-
Radha Rani Behal, A11-Shallu Behal and A12-Sapna Behal.
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Some of the appellants are only employees of Srirama and
Gajanand.
70. Taking note of the above aspects which are peculiar
to the case on hand, upholding the sentence of imprisonment
would act harsh so far as the appellants are concerned as they
are all first time offenders and there is no compulsory
imprisonment provided for the aforesaid offences under IPC
71. Accordingly, by enhancing the fine amount
reasonably, taking note of the fact that the entire loan amount
is now repaid to UCO Bank and there is no pecuniary loss that
has occurred to UCO Bank, Davanagere Branch, setting aside
the imprisonment would meet the ends of justice.
72. Enhanced fine amount of Rs.25,000/- (in addition to
the fine amount already imposed and paid by the appellants)
for all the offences put together would meet the ends of justice
in the case on hand.
Accordingly, point No. 3 is answered partly in the
affirmative.
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73. Regarding point No.4: In view of finding of this
Court on points No.1 to 3, following order is passed:-
ORDER
(i) Criminal Appeals are allowed in-part.
(ii) While maintaining the conviction of the appellants
for the offences punishable under sections 120-B,
are acquitted for the offences punishable under
Section 13(1)(d) r/w Section 13(2) of Prevention of
Corruption Act.
(iii) Consequently, the sentence ordered by the learned
Trial Judge is modified as under:-
(iv) The order of imprisonment imposed on the
appellants are hereby set aside and each of the
appellants are directed to pay the enhanced fine of
Rs.25,000/- (Rupees Twenty Five thousand only)
for the aforesaid offences (put together fine amount
already imposed and paid by the appellants) on or
before 15th of March, 2025 before the trial Court,
failing which, they shall undergo Simple
Imprisonment for a period of one year.
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(v) Office is directed to return the trial Court records
with copy of this order forthwith.
Sd/-
(V SRISHANANDA)
JUDGE
MR/PSJ
