Karnataka High Court

Sri R Krishnamurthy vs Central Bureau Of Investigation on 12 February, 2025

Author: V Srishananda

Bench: V Srishananda

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                                                    NC: 2025:KHC:6327
                                               CRL.A No. 553 of 2011




                 IN THE HIGH COURT OF KARNATAKA AT BENGALURU

                   DATED THIS THE 12TH DAY OF FEBRUARY, 2025

                                    BEFORE
                    THE HON'BLE MR JUSTICE V SRISHANANDA
                      CRIMINAL APPEAL NO.553 OF 2011 (C)
            BETWEEN:
             SRI R KRISHNA MURTHY
            AGED ABOUT 56 YEARS
            S/O N RAMANI IYER
            EX. OFFICER, BANK OF MAHARASHTRA
            R/AT AT-5, "GURU PARADISE"
            NO. 27, 7TH CROSS, HINDU COLONY
            NANGANALLUR, CHENNAI-61
                                                         ...APPELLANT
            (BY SRI B C SEETHARAMA RAO, ADVOCATE)
            AND:

            1.    CENTRAL BUREAU OF INVESTIGATION
                  SPE, BELLARY ROAD, HEBBAL
                  BANGALORE-560024
                                                       ...RESPONDENT
            (BY SRI P.PRASANNA KUMAR, ADVOCATE)
Digitally
signed by
MALATESH         THIS CRL.A IS FILED UNDER SECTION 374 (2) CR.P.C
KC
            PRAYING TO SET ASIDE THE ORDER DT:30.04.2011 PASSED
Location:   BY THE XXI ADDL.C.C. AND S.J., AND SPL.JUDGE FOR CBI
HIGH
COURT OF    CASES, BANGALORE IN SPL.C.C.NO.135/2000 - CONVICTING
KARNATAKA   THE APPELLANT/ACCUSED No.1 FOR THE OFFENCE P/U/S 120-
            B, 420, 471 OF IPC AND SECTION 13(2) R/W 13(1) (d) OF
            PREVENTION OF CORRUPTION ACT, 1988.

                THIS APPEAL, COMING ON FOR HEARING, THIS DAY,
            JUDGMENT WAS DELIVERED THEREIN AS UNDER:
            CORAM:    HON'BLE MR JUSTICE V SRISHANANDA
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                                                 NC: 2025:KHC:6327
                                             CRL.A No. 553 of 2011




                        ORAL JUDGMENT

Heard Sri B.C. Seetharama Rao, learned counsel for the

appellant and Sri P. Prasanna Kumar learned counsel for the

respondent.

2. Appellant is the accused No.1 in

Spl.C.C.No.135/2000 on the file of XXI Additional City Civil and

Sessions Judge and Special Judge for CBI Cases, Bengaluru

(CCH-4), who suffered an order of conviction for the offences

punishable under Sections 120B, 420, 471 IPC and Section 13

(1) (d) r/w Section 13 (2) of Prevention of Corruption Act and

ordered to undergo simple imprisonment for two years for the

offence punishable under Section 120B IPC, two years for the

offence under Section 120B, two years for the offence

punishable under Section 420 IPC, two years for the offence

punishable under Section 471 IPC and two years for the offence

punishable under Section 13 (1) (d) r/w Section 13 (2) of

Prevention of Corruption Act, apart from fine of Rs.85,000/- in

all for the aforesaid offences.

3. Facts in nut shell which are utmost necessary for

disposal of the present appeal are as under:

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4. Appellant was working as one of the credit officers

in the Bank of Mahararastra, City Market Branch, Bengaluru

between the period of 14.10.1999 to 31.08.1993. At relevant

point time, P.W.12 R. Jayashankar was the Chief Manager. A

proposal was sent to the Branch, wherein accused No.2 to 6

wanted financial facility for releasing the banking credit limits.

5. Based on the instructions of the higher authorities,

appellant processed the said credit proposal by putting up the

necessary note and after the loan was sanctioned, he has filled

up the deposit of mortgage of title deeds vide Ex.P.31 and

signed as a witness.

6. Later on, the said loan account became sticky and

got unpaid.

7. Further, there was an additional loan facility

sanctioned to the extent of Rs.3.25 lacks in all there was a due

to the bank in a sum of Rs.13.25 lakhs with interest.

8. In the usual instruction, the loan pertaining to the

accused Nos.2 to 6 was also scrutinized and inspection team

noted that the property that was suffered as security was a

fake property and the title deeds were not genuine documents.

Therefore, action was initiated against all the concerned.

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9. It is found from records that Sri Jayashankar and

other senior officials of the bank were exonerated and sanction

an order to prosecute the appellant, which resulted in appellant

resigning from the bank of Maharashtra as a credit officer.

10. Despite such resignation, the CBI investigated the

matter further and filed a charge sheet.

11. Incidentally, chief manager Jayashankar who had

been exonerated by the bank of Maharashtra is shown as a

witness and is examined as prosecution witness (P.W.12).

12. After receipt of charge sheet, learned Special Judge

took cognizance and secured the presence of accused Nos. 1 to

6 and framed the charges. All the accused persons denied the

charges and therefore, trial was held.

13. In order to prove the case of the prosecution, as

many as 16 witnesses were examined as P.Ws.1 to 16,

comprising of complainant, Sanctioning Authority, officials of

the bank, including the chief manager - Sri Jayashankar and

hand writing expert - Balasami.

14. Documentary evidence supporting the charge sheet

materials were placed on record which were exhibited and

marked as Ex.P.1 to 91, comprising of loan papers, appraisal

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note given by the accused No.1 (appellant), other connected

necessary documents to support the case of the prosecution,

title deeds, documents thereof, account opening form etc.

15. During the course of examination and cross-

examination, defence is able to elicit certain contradictions and

also produced the documents which were marked as Exs.D.1 to

D.9.

16. On conclusion of recording of evidence, learned

Trial Judge recorded the accused statement as is contemplated

under Section 313 Cr.P.C.

17. Appellant has denied all the incriminatory materials

and for question No.70, he has stated before the learned Trial

Judge that he had no involvement in the case and he has

visited Bengaluru and he has produced the documents which

were marked as Exs.D.1 and D.2 which were translation

version.

18. For question No.71 he has stated that he has given

witness list and he would like to examine witnesses on his

behalf, but no witnesses have been examined.

19. Thereafter, the learned Trial Judge heard the

arguments of the parties in detail and on cumulative

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consideration of the material on record, has convicted the

accused for the aforesaid offences and sentenced as referred to

supra.

20. Being aggrieved by the same appellant is before

this Court in this appeal.

21. Sri B.C. Seetharama Rao, learned counsel for the

appellant reiterating the grounds urged in the appeal

memorandum contended that the role of the present appellant

is limited to the extent of putting up a credit appraisal note

being one of the three credit officers of Bank of Maharashtra

and after the loan came to be sanctioned, he has helped the

bank in filling up the letter evidence of title deeds which is

marked at Ex.P.31 and collected the documents.

22. Learned counsel for the appellant further contended

that he being the credit officer, neither sanctioning authority

nor recommending officer of the loan has been made as

scapegoat for the misdeeds committed by Jayashankar and

others who had been given clean chit by the management of

bank of Maharashtra and penalized the credit officer only with

an intention to escape from the rigors of law, taking note of the

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fact that appellant had resigned from the job and therefore,

appellant is entitled for acquittal of all the charges.

23. Learned counsel for the appellant further contended

that the material on record is hardly sufficient to establish that

there existed criminal conspiracy between appellant and other

remaining accused persons and he had actually involved in

getting the imperfect documents as security for the credit

package loan obtained by accused Nos.2 to 6. Therefore,

conviction of the appellant for the offence punishable under

Section 120B is per se not tenable and sought for allowing the

appeal.

24. Learned counsel for the appellant would also

contend that entire loan amount having been recovered by

Bank of Maharashtra through ECGC scheme, no pecuniary loss

has been caused to the bank much less the wrongful loss. In

the absence of any wrongful loss, there is no corresponding

wrongful gain either to the appellant or to the remaining

accused persons which is a sign qua non to maintain the

conviction of the offence under Section 420 IPC. Therefore,

conviction of the appellant on the said count is per se incorrect

and sought for allowing the appeal.

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25. Insofar as offence under Section 471 IPC is

concerned, learned counsel for the appellant would contend

that admittedly the documents which have been furnished to

the bank as collateral security are genuine documents, but one

Gangadhar has impersonated himself as the owner of the

property and he has executed the document for which appellant

is no way responsible and thus sought for acquitting the

appellant for offence under Section 471 IPC as well.

26. Last limb of the arguments of learned counsel for

the appellant is on the ingredients not being sufficient enough

to record an order of conviction of the appellant for the offence

punishable under Section 13 (1) (d) r/w Section 13 (2) of

Prevention of Corruption Act.

27. He would further contend that since the appellant is

not the sanctioning authority nor the recommending authority

of the loan and in respect of Rs.3.25 lakhs, he had no role

whatsoever to play, question of obtaining any illegal

gratification by the appellant would not arise at all. Therefore,

sought for allowing the appeal in toto.

28. Alternatively, learned counsel for the appellant

would contend that in the event of this Court upholding the

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order of conviction for the offences under the provisions of IPC,

Court may consider the age of the appellant being 70 years and

he has resigned from the job voluntarily and not getting any

pension and other benefits, the imprisonment ordered for the

IPC offences may be set aside by acquitting the appellant for

the offence under Section 13 (1) (d) r/w Section 13 (2)

Prevention of Corruption Act by enhancing the fine amount

reasonably.

29. Per contra, Sri P. Prasanna Kumar, learned counsel

for the respondent supports the impugned judgment

contending that in the case on hand, unless credit appraisal

note is placed on record, the entire credit proposal could not

have been processed by Bank of Maharashtra either by the Sri

Jayashankar or by the regional office. Therefore, very basics

for sanctioning of the loan in the credit appraisal which has

been under the exclusive arena of appellant and nothing

prevented the appellant to properly appraise the proposal and

putting up a suitable note which has not been done by the

appellant.

30. Therefore, the arguments put forth on behalf of the

appellant that he is totally innocent and the higher authority

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including P.W.12 is responsible for the alleged fraud cannot be

countenanced in law and sought for dismissal of the appeal.

31. Learned counsel for the respondent would further

contend that it was the responsibility of the appellant to verify

the documents and genuineness of the person who execute the

letter evidencing in deposit of title deeds marked at Ex.P.31

and utterly failed to do so and therefore, the Court has rightly

inferred in existence of conspiracy between appellant and the

remaining accused and thus, conviction of the appellant for the

aforesaid offences is perfectly justified and sought for dismissal

of the appeal.

32. Insofar as the alternate submission is concerned

learned counsel for the respondent contended that the very fact

that the involvement of the appellant, he resigned from the job

only with intention to escape away from the rigorous of law.

Therefore, alternate submission of the appellant cannot be

countenanced in law and sought for dismissal of the appeal in

toto.

33. Having heard the parties in detail, the following

points would arise for consideration:

1) Whether the material evidence placed on record would be sufficient enough to maintain the

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conviction of the appellant for the aforesaid offences?

2) Whether the appellant makes out a case that the impugned judgment of conviction and order of sentence is suffering from legal infirmity and perversity and thus calls for interference?

3) Whether the sentence needs modification?

4) What order?

Regarding point Nos.1 and 2:

34. In the case on hand, appellant/accused No.1 being

the public servant at relevant point of time being one of the

credit officers of Bank of Maharashtra and P.W.2 being the

Chief Manager of Bank of Maharashtra, City Market Branch and

grant of loan for credit packaging by the bank of Maharashtra,

City Market Branch in a sum of Rs.10,00,000/- is established by

placing necessary material evidence on record.

35. According to the case of the appellant, the proposal

was accepted by the Regional Office and thereafter forwarded

to the City Market Branch and therefore, appellant was bound

to put up a proper credit appraisal note cannot be

countenanced in law inasmuch as there was always a scope for

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the appellant to put up a proper appraisal note for the proposal

is concerned.

36. Further, the appellant had not followed the

instructions of the higher authorities, the only consequence

would have been that he would have been transferred from City

Market Branch to some other Branch. Instead, why the

appellant fell in line with the instructions of the higher

authorities is the question that needs to be answered by the

appellant and while explaining the incriminatory circumstances,

no such answer is forthcoming by the accused.

37. Under such circumstances, being one of the credit

officers, credit appraisal note acted as a basis for grant of loan

assumes importance which has been highlighted on behalf of

the prosecution and reiterated by learned counsel for the

respondent/CBI.

38. Further, while taking the security there are lapses

which are attributed to the appellant, it is not mere filling up

the blanks in the letter evidencing title deeds, that has been

done by the appellant herein.

39. Admittedly, the original owner of the property who

had given collateral security, did not appear before the bank

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and executed Ex.P.31. It was the duty of the appellant to

ensure that necessary identity proof should have been taken

and he should identify the proper person who is entitled to

execute the letter evidencing title deeds. He failed to do so.

40. Mere Sri Jayashankar - P.W.12 also signing and

accepting the title deeds would not efface the responsibility and

the criminality in getting the improper document executed

which ultimately resulted detrimental to the interest of the

bank cannot be last sight of while appreciating the material

evidence on record.

41. Therefore, the material on record would indicate the

dereliction of the duty on behalf of the appellant which is not

mere irregular but would take him to the shape of illegality as

the accounts became sticky.

42. Further insofar as the offence under Section 120B is

concerned, following the dictum of Hon'ble Apex Court in the

case of Mohd. Khalid vs. State of West Bengal, reported in

(2002) 7 Supreme Court Cases 334, wherein the principles

of law enunciated by the Hon'ble Apex Court in the case of

Kehar Singh vs. State (Delhi Admn.), a judgment of

constitutional Bench has been reiterated, this Court is of the

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considered opinion that expecting the prosecution to place

positive evidence to prove the offence under Section 120B is

impermissible as the positive evidence to prove the existence of

conspiracy is seldom available. It is the duty of the Court to

infer the existence of elements of criminal conspiracy based on

the factual aspects of that particular case alone.

43. In the case on hand, not taking proper security

document writing a credit appraisal note in respect of accused

Nos.2 to 4 without adhering to the norms of the Bank,

ultimately resulting in the account becoming sticky itself would

be sufficient to hold that the prosecution is successful in

establishing the ingredients to attract the offence under Section

120B IPC.

44. It is settled principles of law and require no

emphasis that mere repayment of the money or recovery of the

money due to the bank would not ipso facto efface the

criminality of the act by following the principles of law

enunciated in Gian Singh vs. State of Punjab reported in

(2012) 10 SCC 303.

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45. In view of the foregoing discussion, the offences

under the provisions of IPC is established by the prosecution by

placing cogent evidence on record.

46. However, to attract the offence under Section 13

(1) (d) r/w Section 13 (2) of Prevention of Corruption Act, the

material evidence placed on record by the prosecution is hardly

sufficient.

47. There is no material on record which would go to

show that the accused had obtained illegal gratification in

neither processing the credit appraisal note nor taking the

improper documents as security or allowing Gangadhara to

impersonate the original note of the property.

48. Therefore, for want of necessary and cogent

evidence on record, conviction of the appellant for the offence

punishable under Section 13 (1) (d) r/w Section 13 (2) of

Prevention of Corruption Act needs interference in this appeal.

49. For want of evidence, charge on the aforesaid

provision needs to be held against the prosecution and whereby

appellant would be entitled for an order of acquittal for the

charges under the provisions of Prevention of Corruption Act.

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In view of the foregoing discussion point Nos.1 and 2 are

answered partly in the affirmative.

Regarding Point No.3:

50. In view of the finding of this Court on point Nos.1

and 2 with detailed discussion, sentence ordered by the learned

Trial Judge needs a modification.

51. Admittedly, appellant has resigned from his service.

Whereas, the Chief Manager, who sanctioned the loan for want

of sanction order to prosecute, remained on the roles of the

bank and he was also cited as a witness on behalf of the

prosecution.

52. Taking note of the fact that appellant has resigned

from the Bank of Maharashtra, claiming the future prospects

including the arrears of salary etc., would not arise in the case

on hand. As such, by setting aside the jail sentence and

enhancing the fine amount reasonably, by accepting the

alternate submission canvassed on behalf of the appellant by

Sri B.C. Seetharama Rao, would meet the ends of justice in the

attendant facts and circumstances of the case. Accordingly,

point No.3 is answered partly in the affirmative.

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Regarding point No.4:

53. In view of the findings of this Court on point Nos.1

to 3 as above, following order is passed:

ORDER

(i) Appeal is allowed in part.

(ii) While maintaining the conviction of the

appellant for the offences punishable under

Sections 120-B, 420, 471 IPC, accused is

acquitted for the offence punishable under

Section 13 (1) (d) r/w Section 13 (2) of the

Prevention of Corruption Act.

(iii) Consequently, the sentence of imprisonment

of two years each for the offences punishable

under Sections 120-B, 420, 471 IPC is

hereby set aside by enhancing the fine

amount in a sum of Rs.25,000/-.