an order of conviction in Special (Corruption) Case No.
Judge and Special Judge for CBI Cases, Bangalore.
2. An order of sentence passed against the
Further, accused Nos.1 and 2 are
hereby convicted for the offence punishable
under section 471 I.P.C. and sentenced to
undergo S.I. for a period of two years each
and A-1 has to pay fine of Rs.20,000/-
(Rupees Twenty thousand) and A-2 has to
pay fine of Rs.50,000/- (Rupees Fifty
thousand), IDSI for one year each.
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Further, accused Nos.1 is hereby
convicted for the offence under section
U/sec.13(1)(d) punishable U/s.13(2) of
Prevention of Corruption Act and sentenced
to undergo S.I. for a period of one year and
to pay fine of Rs.20,000/- (Rupees Twenty
thousand) IDSI for six months.
Accused Nos.1 and 2 shall pay total
fine of Rs.1-lakh and Rs.2-lakh,
respectively.
All the sentences of imprisonment
shall run concurrently.
The detention period undergone by
the accused Nos.1 and 2, if any, during the
investigation and trial is given set off
U/s.428 of Cr.P.C."
3. Facts in brief which led to convicting the
appellants and sentencing them in a nutshell are as under:
Sri.S.V. Malleswara Shastry, General Manager,
Andhra Bank, Head office-Hyderabad, lodged a complaint
with CBI which was registered in R.C.09(A)/98 against
G.S. Subramanyam(A1), M Ramesh Reddy(A2), K.S.
Vijayakumar (A3). K.S.VijayaKumar being the proprietor
of M/s.Shree Rayar Impex obtained financial assistance
from Andhra Bank of which accused No.1 was the
Manager. Offences alleged against the accused persons in
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the complaint are under Section 120(B) r/w Section 420,
468, 471 of IPC and insofar as accused Nos.1 and 2 are
concerned in addition to above, under Section 13(1)(d)
r/w. Section 13(2) of Prevention of Corruption Act. 1988.
4. Based on the said complaint, CBI conducted a
detailed investigation and filed the charge-sheet dropping
Sri Ramesh Reddy, who was an Officer of Foreign
Exchange Department, Andhra Bank.
5. On receipt of the charge sheet, the learned
Special Judge took cognizance. Charge-sheet materials
would reveal that accused No.1 while discharging his
function as the Chief Manager, Andhra Bank, N.R. Road
Branch, Bangalore, during the period of 1995-96 entered
into criminal conspiracy with accused No.2 being the
Proprietor of M/s. Shree Rayar Impex, Bangalore and they
cheated the Andhra Bank, N.R.Road Branch, in allowing
accused No.2 to have the credit facilities sanctioned by
accused No.1 to the tune of Rs. 25 lakhs as against the
fake export bills submitted by accused No.2.
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6. It is also found from the charge sheet materials
that in furtherance to the criminal conspiracy, a current
account bearing No.5564 was opened in Andhra Bank,
N.R.Road Branch, Bangalore on 28.09.1995 and on the
very same day, accused No.2 submitted fake and forged
export bill to the tune of $8,96,000/- in the name of
Marina International, Bangladesh. The export bill
consisted of several discrepancies but despite the same,
the accused No.1 based on the said export bill granted
financial assistance to Accused No.2.
7. Subsequently, three more fake export bills were
submitted on 20.10.1995 favouring various importers in
Bangladesh. Yet another fake bill was submitted on
24.10.1995. Without verifying the veracity of those
exports bills, accused No.1 went on sanctioning the facility
to accused No.2.
8. Per se, those bills were fake and forged as there
were no actual exports that have taken place under the
said export bills.
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9. Investigation revealed that the bills were fake
in nature, in as much as no goods were exported either
from the Ports or through the Air, under the export bills
and therefore, it was found that forged exports bills are
processed by accused No.1, to pass away the public funds
resulting in huge loss to the Bank and corresponding gain
to accused Nos.1 and 2.
10. On receipt of the charge sheet, learned Special
Judge took cognizance of the aforesaid offences and
secured the presence of accused Nos.1 and 2 and framed
charge after in compliance of Section 207 of Cr.P.C.
Accused persons pleaded not guilty and therefore, trial
was held.
11. In order to bring home the guilt of accused
persons, 20 witnesses were examined on behalf of the
prosecution as PWs.1 to 20 and as many as 98
documentary evidences were placed on record, which were
exhibited and marked as Exs.P.1 to P98 comprising of
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export bills and corresponding banking challans, invoices,
credit and debit slips.
12. On conclusion of recording of evidence, accused
statement as is contemplated under section 313 Cr.P.C.
was recorded.
13. Both the accused persons denied the
incriminating circumstances and did not choose to place
any defence evidence on record. However, during the
cross-examination of PWs.3, 5, 19, few documents were
confronted to those witnesses which were admitted by the
prosecution witnesses and therefore, they were marked as
Exs.D1 to D8.
14. Thereafter, learned trial Judge heard the parties
in detail and based on the oral and documentary evidence
placed on record, convicted the appellants and sentenced
as referred to Supra.
15. Being aggrieved by the same, the appellants
are before this Court.
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16. Sri.Nagendra Nayak, learned counsel
representing accused No.1, Sri.Vidyasagar, learned
counsel representing accused No.2-borrower have
reiterated the grounds urged in the appeal memorandum
and contended that the learned trial Judge has not
appreciated the material evidence on record properly and
has passed the impugned judgment based on surmises
and conjectures resulting in grave injustice and sought for
allowing the appeals.
17. They also contend that the material on record
would go to show that the documents furnished by
accused No. 2 for processing the credit facility, based on
which credit facilities was sanctioned by accused No.1
were in order and merely non-production of supporting
documents for the export bills itself, would not result in
fraud and thus, sought for allowing the appeal.
18. Alternatively, learned counsel for accused No.1
contended that in the event, this Court upholds the order
of conviction, for want of necessary evidence with regard
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to the demand and acceptance of illegal gratification,
offence under section 13(1)(d) r/w. Section 13(2) of the
Prevention of Corruption Act may be set-aside and in
which event, accused No.1 would not claim any retirement
and other consequential benefits from the Bank and
sought for setting aside the imprisonment period by
enhancing the fine amount reasonably.
19. Learned counsel for 2nd accused Sri Vidyasagar
would also contend that if the imprisonment period is set
aside in the impugned judgment by upholding the order of
conviction, the accused No.2 is prepared to pay enhanced
fine amount reasonably.
20. Per contra, Sri P.Prasanna Kumar, learned
counsel representing the CBI opposes the appeal grounds
vehemently.
21. He would further contend that the very fact that
no exports have taken place and corresponding documents
have been placed by accused No.2, the export bills
referred to supra are all fake and forged export bills and
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therefore, lending the public funds through the Bank by
accused No.1 to the account of accused No.2 on the basis
of fake export bill would contain all necessary ingredients
to attract the aforesaid offences including the offence
under Section 13(1)(d) r/w. Section 13(2) of the
Prevention of Corruption Act and hence expecting a
positive evidence for said offence is impermissible and
sought for dismissal of the appeal in toto.
22. He would further contend that showing any
lenience to the appellants would result in encouraging
similarly placed appellants of the crime and therefore, the
appeal needs to be dismissed in toto.
23. Having heard the parties in detail, this Court
perused the material on record meticulously. On such
perusal of the material on record, following points would
arise for consideration:-
(i) Whether the material evidence placed on
record would be sufficient to maintain the
conviction of the appellants for the offences
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punishable under Section-120(B), r/w
Sections-420, 468 and 471 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?
(ii) Whether the appellants make out a case of
illegality, infirmity or perversity in the
impugned judgment?
(iii) Whether the sentence needs modification?
(iv) What order?
24. Regarding points No.1 and 2:
In the case on hand, accused No.1 being the public
servant, who was working as a Chief Manager, Andhra
Bank, N.R. Road branch, Bengaluru in the year 1995-96 is
not in dispute. Likewise, accused No.2 opening a current
account bearing No. 5564 in Andhra Bank, N.R.Road
Branch is established by placing necessary evidence on
record.
25. It is pertinent to note that on the very day of
opening the current account, accused No.2 has submitted
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a export bill to the tune of $8,96,000/- in the name of
Marina International Bangladesh. Likewise, submitting
three more fake bills on 20.10.1995 and one more fake
export bill on 24.10.1995 which were all accepted and
necessary funds have been transferred to the account of
accused No.2 from Andhra Bank, N.R. Road Branch is
established by placing necessary material evidence on
record.
26. However, when the outstanding amounts in the
current account were not repaid, there arose a doubt to
higher authorities of Bank. Inspection has been conducted
in Andhra Bank and while so conducting investigation,
Ramesh Reddy was the officer of Foreign Exchange
Department in Andhra Bank was also enquired.
27. When there was no satisfactory material found,
the matter was reported to the Head Office. It is
thereafter, the then General Manager, Sri S.V.Malleswara
Shastry has filed a complaint with CBI against the
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appellants and Ramesh Reddy who was the officer in
Foreign Exchange Department in Andhra Bank initially.
28. However, the Investigation Officer of the CBI
after conducting a detailed investigation found that
Ramesh Reddy was not aware of the sanctioned financial
assistance to accused No.2 by accused No.1 and therefore,
he was dropped from the criminal case while filing the
charge-sheet.
29. CW.1 being complainant has been examined as
PW.1 and necessary material evidence on record has been
collected in the form of documentary evidence were all
examined by the prosecution as PWs.2 to 20. Sanction to
prosecute the accused No.1 was passed by the competent
authority and the sanction order is not in serious dispute.
30. Pursuant to the criminal case that has been
foisted against accused No.1, he was also removed from
the service. Documentary evidence predominantly
establishes that invoice dated 02.01.1995 and 28.01.1995,
which were marked as Exs.P5 and 6 shows that goods
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were being exported. Likewise, other invoices also show
that goods were exported. Cheques were drawn against
those export bills submitted by accused No.2 in his current
account and amount was transferred to current account of
accused No.2 by accused No.1. But other documents
collected by CBI would go to show that no goods had been
exported as per the export bills. Proceeds transferred
were also siphoned away and needless to emphasise that
there was a tacit understanding between accused Nos.1
and 2 in sharing the proceeds in the current account of
accused No.2.
31. In a matter of this nature, expecting the
positive evidence to prove the existence of conspiracy is
impermissible as rightly contended on behalf of the
prosecution, which is a settled principle of law which
requires no emphasis that conspiracy is hatched in
secrecy.
32. Expecting the positive evidence in such matters
is next to impossibility and Court has to draw inference
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from the attendant and circumstances as is held in the
case of Mohammed Khalid v. State of West Bengal
reported in (2002) 7 Supreme Court Cases 334.
33. Therefore, in the case on hand, in the absence
of material placed on record it would depict that the export
bills furnished by accused No.2 to accused No.1 to obtain
the financial assistance from Andhra Bank, N.R.Road
Branch, would be sufficient enough to hold that the
sanction of financial assistance by the Bank to accused
No.2 proceeds of which were transferred to current
account of accused No.2, is based on fake and forged
export bills. The same would conclude the offences under
Sections 420, 468, 471 of IPC.
34. Coming to the question of the proof of offence
under Section 13(1)(d) is concerned, since there is no
material on record which would conclusively establish
demand made by the public servant and such demand is
accepted by accused No.2 and he has paid the bribe
amount whereby the Court could infer that there is a
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obtainment of illegal gratification which is a sine qua non
to conclude the offence under section 13(1)(d) punishable
under Section-13(2) of Prevention of Corruption Act.
Since the necessary ingredients are not made out by the
prosecution following the principles of Neeraj Dutta v.
State (Government of NCT of Delhi) reported in
(2023) 4 Supreme Court Cases 731, this Court is of
considered opinion that accused No.1 is entitled to get an
order of acquittal for the charge under Section 13(1)(d)
r/w.Section13(2) of Prevention of Corruption Act.
35. The apprehension of the prosecution that by
acquitting the accused No.1 for the offence under Section
Section 13(1)(d) r/w section13(2) of Prevention of
Corruption Act the disqualification may extinguish insofar
as accused No.1 is concerned in claiming the retirement
benefit is concerned, is quelled by accused No.1 by filing
necessary affidavit before this Court as referred to supra.
Therefore, from the above discussion, the points No.1 and
2 are answered partly in the affirmative.
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36. Regarding point No.3:
Since this Court has set aside the order of conviction
of accused No.1 for the offence under section 13(1)(d) as
referred to supra, for the remaining IPC offences, there is
no minimum punishment prescribed under the statute.
Taking note of the fact that the incident is of the year
1995, much water has been flown under the bridge and
accused persons are also in advanced age in their life.
37. Thus, directing the appellants to undergo simple
imprisonment as ordered by the learned trial Judge in the
impugned judgment would act harsh on them. At the
same time, this Court also cannot loose sight of the fact
that while setting aside the imprisonment period, fine
amount needs to the enhanced reasonably.
38. Enhancing the fine amount in a sum of
Rs.1,00,000/- to each of the accused persons would meet
the ends of justice in the case on hand.
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39. Accordingly, point No.3 is answered partly in
the affirmative.
40. Regarding point No.4, in view of finding of this
Court on point Nos.1 to 3, the following order is passed:
ORDER
(i) Appeals are allowed in part.
(ii) The conviction of appellants in both the
appeals under Section 120(B) r/w. Section
420, 468 and 471 IPC is maintained and
conviction of the accused No.1 who is the
appellant in Crl.A.No.17/2013 for the
offences under Section 13(1)(d) r/w.
Section 13(2) of Prevention of Corruption
Act is hereby set aside.
(iii) Sentence of imprisonment ordered by the
XLVII Additional City Civil and Sessions
Judge and Special Judge for CBI Cases,
Bangalore in Special (Corruption) Case
No. 184/2000 by judgment dated 21st day
of November, 2012 insofar as both the
appellants are concerned are modified as
under:-
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Sentence of imprisonment is set
aside by enhancing the fine amount in a
sum of Rs.1,00,000/- (Rupees One lakh
only) (over and above fine amount
imposed and paid by the appellants) to be
payable on or before 15th of March, 2025.
Failing to pay the enhanced fine amount,
the appellants shall undergo
imprisonment as ordered by the trial
Court Judge.
(iv) Office is directed to return the trial court
records along with a copy of this order
forthwith.
Sd/-
(V SRISHANANDA)
JUDGE
PSJ
