Karnataka High Court
Sri Ganesh D Hegde vs State By Inspector Of Police on 12 February, 2025
Author: V Srishananda
Bench: V Srishananda
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NC: 2025:KHC:6422
CRL.A No. 918 of 2011
C/W CRL.A No. 950 of 2011
CRL.A No. 958 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.918 OF 2011 (C)
C/W CRIMINAL APPEAL No.950 OF 2011
C/W CRIMINAL APPEAL No.958 OF 2011
IN CRL.A No.918/2011
BETWEEN:
1. SRI L S DINAMANI
S/O SHRI L S SRINIVASAN
AGED ABOUT 60 YEARS
SRI RAGHAVENDRA NILAYA,
4TH CROSS, 1ST STAGE,
2ND PHASE, CHANDRA LAYOUT,
BANGALORE-560 040
...APPELLANT
(BY SRI P.S.RAJAGOPAL, SENIOR COUNSEL ALONGWITH
SRI R NAGENDRA NAIK, ADVOCATE)
AND:
Digitally
signed by 1. STATE BY INSPECTOR OF POLICE,
MALATESH CENTRAL BUREAU OF INVESTIGATION,
KC ACB, BANGALORE
Location: ...RESPONDENT
HIGH
COURT OF (BY SRI P. PRASANNA KUMAR, ADVOCATE)
KARNATAKA
THIS CRL.A IS FILED UNDER SECTION 374(2) CR.P.C
PRAYING TO SET ASIDE THE ORDER DATED:23.08.2011
PASSED BY THE XXXII ADDL. CITY CIVIL AND SESSIONS
JUDGE AND SPL. JUDGE FOR CBI CASES, BANGALORE IN
SPL.C.C.No.36/2009 - CONVICTING THE APPELLANT/ACCUSED
FOR THE OFFENCE PUNISHABLE UNDER SECTION 120B R/W
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CRL.A No. 918 of 2011
C/W CRL.A No. 950 of 2011
CRL.A No. 958 of 2011
468, 471, 420 IPC AND PUNISHABLE UNDER SECTION 13(1)(d)
R/W 13(2) OF PREVENTION OF CORRUPTION ACT 1988.
IN CRL.A NO.950/2011
BETWEEN:
1. SHRI M MICHAEL FELIX
S/O SHRI MARIYAPPA
AGED 46 YEARS
BUSINESS ( PARTNER OF M/S FATHIMA
MARY RICE MILL, K R PET, MYSORE)
R/AT NO.127,
PUSHPAGIRI MAIN ROAD,
RBI POST, MYSORE
2. SMT JYOTHI MICHAEL
W/O SHRI M MICHAEL FELIX
AGED ABOUT 43 YEARS
BUSINESS, (PROPRIETRIX OF
M/S ABHISHEK ENTERPRISES,
MYSORE
R/AT NO.127,
PUSHPAGIRI MAIN ROAD,
RBI POST, MYSORE
...APPELLANTS
(BY SRI LOKESH .K.S FOR SMT N PADMAVATHI,
ADVOCATES)
AND:
1. STATE BY PI, CBI/ACB
BANGALORE
...RESPONDENT
(BY SRI P.PRASANNA KUMAR, ADVOCATE)
THIS CRL.A IS FILED UNDER SECTION 374(2) CR.P.C
PRAYING TO SET ASIDE THE ORDER DATED 23.08.2011
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CRL.A No. 918 of 2011
C/W CRL.A No. 950 of 2011
CRL.A No. 958 of 2011
PASSED BY THE XXXII ADDL. CITY CIVIL AND SESSIONS
JUDGE AND SPL. JUDGE FOR CBI CASES, BANGALORE IN
SPL.C.C.No.36/2009 - CONVICTING THE APPELLANTS/
ACCUSED FOR THE OFFENCE PUNISHABLE UNDER
SECTION 120B R/W 468, 471, 420 IPC.
IN CRL.A NO.958/2011
BETWEEN:
1. SRI GANESH D. HEGDE
S/O LATE SRI H.N. HEGDE,
AGED ABOUT 57 YEARS,
WORKING AS MANAGER, CANARA BANK,
CANTONMENT BRANCH
M.G ROAD, BANGALORE
RESIDING AT NO.835/11-12, "SHARANYA"
4TH "A" MAIN ROAD, 6TH CROSS,
NAVODAYANAGARA, JP NAGAR,
7TH PHASE, BANGALORE - 560 076
...APPELLANT
(BY SRI P.S.RAJAGOPAL, SENIOR COUNSEL ALONGWITH
SRI K.PUTTEGOWDA, ADVOCATE)
AND:
1. STATE BY INSPECTOR OF POLICE
CENTRAL BUREAU OF INVESTIGATION,
ACB, BANGALORE
...RESPONDENT
(BY SRI P.PRASANNA KUMAR, ADVOCATE)
THIS CRL.A IS FILED UNDER SECTION 374(2) CR.P.C
PRAYING TO SET ASIDE THE ORDER DATED 23.08.2011
PASSED BY THE XXXII ADDL. CITY CIVIL AND SESSIONS
JUDGE AND SPL. JUDGE FOR CBI CASES, BANGALORE IN
SPL.C.C.No.36/2009 - CONVICTING THE APPELLANT/
ACCUSED FOR THE OFFENCE PUNISHABLE UNDER
SECTION 120B R/W 468, 471, 420 IPC AND PUNISHABLE
UNDER SECTION 13(1)(d) R/W 13(2) OF PREVENTION OF
CORRUPTION ACT, 1988.
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CRL.A No. 918 of 2011
C/W CRL.A No. 950 of 2011
CRL.A No. 958 of 2011
THESE APPEALS, COMING ON FOR FURTHER DICTATION,
THIS DAY, JUDGMENT WAS DELIVERED THEREIN AS UNDER:
CORAM: HON'BLE MR JUSTICE V SRISHANANDA
ORAL JUDGMENT
Heard Sri. P.S.Rajagopal, learned Senior Advocate along
with Sri K.Puttegowda and Sri N.Nagendra Naik, Sri. Lokesh
K.S. for Smt.N.Padmavathi, learned counsel for the appellants
and Sri. P.Prasanna Kumar, learned counsel representing
Central Bureau of Investigation.
2. Accused Nos.1 and 2 being the public servants and
accused Nos.3 to 5 who are the beneficiaries who have been
convicted in Spl.C.C.No.36/2009 by the judgment dated
23.08.2011 on the file of the Addl. City Civil Judge and Special
Judge for CBI Cases (CCH-34), Bengaluru, are the appellants.
The appellants have been sentenced as under:
1. The accused No.1 to 5 are convicted and sentenced to
undergo simple imprisonment for two years for the
offence punishable U/s 120B of IPC.
2. The accused No.1 to 5 are convicted and sentenced to
undergo SI for two years for the offence punishable
U/s.420 IPC and shall pay fine of Rs.5,000/- each and
in default of fine, they shall undergo simple
imprisonment for 6 months.
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3. The accused No.1 to 5 are convicted and sentenced to
undergo SI for two years for the offence punishable
U/s.468 IPC and shall pay fine of Rs.5,000/- each and
in default of fine, they shall undergo simple
imprisonment for 6 months.
4. The accused No.1 to 5 are convicted and sentenced to
undergo SI for two years for the offence punishable U/s
471 IPC and shall pay fine of Rs.5,000/- each and in
default of fine, they shall undergo simple imprisonment
6 months.
5. The accused No.1 and 2 are convicted and sentenced
to undergo SI for two years each for the offence
punishable U/s 13(1)(d) r/w 13(2) of P.C.Act and shall
pay fine of Rs.5,000/- each and in default of fine, shall
undergo simple imprisonment for 6 months."
2. For the sake of convenience, appellants are referred to as
per their original ranking before the Trial Court.
3. As there is no representation on behalf of said
Vidyasagar-accused No.5 consistently and for non appearance
of advocate on behalf of accused No.5 in Crl.A.No.1012/2011,
disposal of these appeals is also hindered. As such, today, by
separate order, Crl.A.No.1012/2011 filed by accused No.5-
Vidyasagar is disjuncted from present appeals.
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4. Facts of the case in brief which are utmost necessary for
disposal of the present appeals is as under:
The accused No.1 being the public servant in the capacity
of AGM, Regional Office, Canara Bank, Hunasuru Branch,
Mysuru, during 24.05.2004 to 29.04.2006 and accused No.2-
Sri Ganesh D. Hegde being the Branch Manager of Canara
Bank, Hunasur Branch from 29.06.2002 to 28.05.2005 along
with Sri Rajashekar who later on turned out to be an approver
for the prosecution and given the pardon, entered into criminal
conspiracy with accused No.3-Michel Felix being the partner of
M/s Fathima Marry Rice Mill, K.R.Pete, Mysuru, accused No.4-
Smt.Jyothi Michel, Proprietor of M/s Abhisheka Enterprises,
Mysuru and Accused No.5-Vidyasagara who used to forge the
documents with an intention to cheat the bank and obtain loans
from Canara Bank, Hunasuru Branch, which is detailed as
under:
Sl. Quantum and Nature of Name of the Name of the Nature of the
No the financial beneficiary, person accorded attributions
Accommodation Date and A/c the financial
No. accommodation
1 2 3 4 5
1. Rs. 60 Lakhs, open cash A.S.MICHEL A.2 Sri Ganesh.D a) Primary
credit (OCC) Felex, Partner, Hegde Security of stock
M/s.Fathima b) Taken collateral
Marry Rice Mill, security of proper
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dtd:30.09.2003 ties No.31,31/1 at
Current A/c Bangalore of A.5,
No.424 site No.9398 of A3
Michel Felex upon
which charge was
already created.
2. Rs.15 lakhs temporary A.S.MICHEL A.2 Sri Ganesh.D a) It is beyond the
adhoc limit Felex, Partner, Hegde period of three
M/s.Fathima months,
Marry Rice Mill,
dtd:27.11.2004 b) A.2 exceeds his
Current A/c delegated power.
No.424 b)A2 fails to
obtain the
approval of the
competent
authority.
c) A.2 though
prepared credit
report dtd:
23.3.2005 for the
ratification, he did
not sent to A.1
AGM.
3. Rs.20 lakhs adhoc limit A.4 Smt.Jyothi A.2 Sri Ganesh a) A.2 allowed
Michel, D.Hegade collateral security
Proprietorix, of the properties
M/s.Abhishek offered to the loans
Enterprises of A.3 referred to
dtd:16.6.2004, the loans of A.3
C.A/c No.442 referred in Sl.No.1
and 2.
b) A.2 fails to
create additional
charge on the
land, building,
plant and
machinery of
M/s.Fathima Marry
Rice Mill.
4. Rs.50 Lakhs OCC open A.4 Smt.Jyothi A.2 Sri Ganesh a) A.2 failed to
cash credit limit Michael, D.Hegade obtain the
Proprietrix, approval of the
M/s.Abhishek competent
Enterprises, authority
dtd:20.12.2004 b) The sanction is
, C.A/c No.442 through the tele
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phonic message of
A.1 AGM though
he prepared credit
report he fails to
forward to A.1
AGM.
5. Rs.50 lakhs OCC open A.3 Michel A.2 Sri Ganesh a) A.2 taken
cash credit limit Felex, D.Hegde collateral security
Proprietor, of the properties
M/s.Amulya which were
Enterprises, secured to the
dtd:24.3.2005, loan of
C.A/c No.441 M/s.Fathima Marry
Rice Mill
b) A.2 fails to take
additional
collateral security
c)He recorded that
it was sanctioned
on the telephonic
approval of the
A.1 AGM.
d)A.2 fails to
obtain income tax
returns, sale tax
returns
e) A.2 ignored the
existing liability off
Rs.5 lakhs in
favour of
M/s.Fathima Marry
Rice Mill.
6 Rs.20 lakhs adhoc limit A.4 Smt.Jyothi A.2 Sri Ganesh a) A.2 sanctioned
Michel, D.Hegde limit without there
Proprietrix, being any oral
M/s.Abhishek formal request.
Enterprises, b) He fails to
C.A/c No.441 collect audited
financial
statement.
c) He ignored the
existing liability of
M/s.Fathima Marry
Rice Mill and
M/s.Abhishek
Enterprises.
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5. At the time of inception of loan account, it is one Sri
Lingappa who was the Manager and accused Nos.1 and 2 were
nowhere in the picture. After sanctioning of the loan, without
proper security and without verifying stock statement
periodically, the financial facility extended to M/s Fathima Marry
Rice Mill and M/s Abhisheka Enterprises, Mysuru, were under
the supervision of the higher officials and several irregularities
were noted in the accounts of M/s Fathima Marry Rice Mill, M/s
Abhisheka Enterprises and M/s Amulya Enterprises.
6. Inspection was conducted in the Branch at Hunasuru and
several irregularities were noted, which, later on turned out to
be illegal, inasmuch as, the financial facilities were extended to
accused Nos.3 and 4 with the active conspiracy of remaining
accused persons and by placing the forged documents as
collateral security.
7. In this regard, a complaint came to be lodged with CBI.
After registration of the case, CBI investigated the matter
thoroughly, collected necessary oral and documentary evidence
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and later on, filed the charge sheet against the appellants
herein.
8. As stated earlier, one of the accused in the complaint viz.,
Rajashekar filed an application before the Trial Court and his
application was accepted by the Trial Court to act as approver
and his statement was recorded. He was also given pardon by
the Trial Court.
9. Insofar as remaining accused are concerned, they did not
plead guilty of the charges which were framed against them
and therefore, trial was held.
10. Insofar as accused Nos.1 and 2 are concerned, based on
the inspection report, departmental enquiries were also held.
Noting the role of accused No.2, minor punishment of taking off
two increments was ordered. But accused No.1 is removed
from service.
11. In order to bring home the guilt of the accused persons,
prosecution in all examined 26 witnesses as P.Ws.1 to 26 and
placed on record voluminous documentary evidence which were
exhibited and marked as Exs.P.1 to 216. During the course of
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evidence, few of the documents were confronted to prosecution
witnesses which have been admitted by them and therefore,
they were marked as Exs.D.1 to D.17.
12. On conclusion of recording of evidence, accused
statement as is contemplated under Section 313 of the Code of
Criminal Procedure was recorded, wherein, accused persons
denied the incriminatory circumstances and did not lead any
defence evidence.
13. Later on, learned Trial Judge heard the arguments of the
parties and by considered judgment dated 23.08.2011,
convicted the appellants and sentenced them as referred to
supra.
14. Being aggrieved by the same, appellants have preferred
these appeals.
15. On behalf of the appellants, Sri P.S.Rajagopal, learned
Senior Advocate, and Sri Nagendra Naik, learned counsel
representing the public servants vehemently contended that
the material on record is not properly appreciated by the
learned Trial Judge and wrongly convicted the appellants for
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the aforesaid offences resulting in miscarriage of justice and
sought for allowing the appeals.
16. Sri P.S.Rajagopal would further contend that accused
No.1 was the AGM and accused No.2 was the Branch Manager
and when the loan was sanctioned at the inception on
30.09.2003, accused Nos.1 and 2 had no role to play
whatsoever inasmuch as one Lingappa was the person who
sanctioned the loan.
17. Sri P.S.Rajagopal would further contend that if the loan is
sanctioned following the requisite procedure and if the higher
authorities of the Canara Bank did not find any irregularity or
illegality in sanctioning such loan at the inception, the offence
under Section 420 of the Indian Penal Code would
automatically gets extinguished and thus conviction of the
appellants for the transaction which has been initiated by
Lingappa needs a relook and appellants are to be acquitted for
the said offence.
18. Sri P.S.Rajagopal, learned Senior Advocate and Sri
Nagendra Naik, learned counsel would further contend that
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there is no pecuniary loss caused to the bank and entire civil
liability is sought to be recovered by the bank by filing
necessary civil proceedings including proceedings against the
security offered to the bank under the provisions of The
Securitisation and Reconstruction of Financial Assets and
Enforcement of Security Interest Act, 2002. Therefore, in the
absence of any wrongful loss caused to the bank and
corresponding gain to the accused persons, appellants are
entitled for acquittal of all the charges.
19. They would further contend that material evidence placed
on record at the most could be treated as irregularity as could
be seen from the disciplinary enquiry report insofar as accused
No.2 is concerned and insofar as accused No.1 is concerned,
since he has come into picture after the loan has been
sanctioned and recommendations have been made to proceed
against defaulters for recovery of civil liability, there could not
have been any illegality attributable to accused Nos.1 and 2
which is sine qua non to initiate the proceedings against
accused Nos.1 and 2 especially when allegations under Section
120B of the Indian Penal Code. Therefore, the conviction of the
appellants for the offence under Section 120B is baseless,
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inasmuch as, when original loan was sanctioned it was not the
accused Nos.1 and 2, but it was Lingappa who was responsible
for sanctioning of the loan.
20. They would also contend that the material evidence
placed on record is falling short for inferring as to when exactly
conspiracy commenced and pursuant to such conspiracy what
is the offence that has been committed by the public servants
with the help of other accused persons is not forthcoming in the
prosecution evidence and thus sought for allowing the appeal in
toto.
21. Alternatively, Sri P.S.Rajagopal and Sri Nagendra Naik
would contend that in the event this Court upholding the Order
of conviction for want of necessary evidence placed on record
by the prosecution to attract the offence under Section
13(1)(d) r/w 13(2) of Prevention of Corruption Act, the
conviction of the appellants for the aforesaid offences may be
set-aside by enhancing the fine amount reasonably and sought
for allowing the appeals to that extent.
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22. They would also submit that if such an order of acquittal
is recorded insofar as the public servants are concerned for the
offence punishable under Section 13(1)(d) r/w Section 13(2) of
the Prevention of Corruption Act, they would not lay their claim
for the consequential benefits, in view of the fact that
disqualification gets extinguished. Accused Nos.1 and 2 have
filed affidavits in that regard. Counsel for beneficiary while
adopting the arguments of accused Nos.1 and 2 contended that
they are no way responsible for alleged offences and sought for
allowing their appeals.
23. Per contra, Sri P.Prasanna Kumar, learned counsel for the
CBI supports the impugned judgment in toto.
24. He would further contend that the material evidence
placed on record including the corroboratory evidence in the
nature of the statement of approver would be sufficient enough
to understand the existence of conspiracy among the appellants
which ultimately resulted in suffering the interest of the bank
resulting in not only pecuniary loss but also irregular operation
of the accounts of accused Nos.3 and 4.
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25. He would further contend that pecuniary loss caused to
Bank is shared by appellants along with other accused persons
illegally for which the positive evidence is hardly available to be
placed on record by the prosecution and such things must be
inferred from the attendant facts and circumstances of the
case.
26. Sri P.Prasanna Kumar, learned counsel would invite the
attention of this Court to the fact that even though the loan
was sanctioned on 30.09.2003 by Lingappa, it is the duty of
accused No.1 being the AGM and duty of accused No.2 being
the Manager of the Bank to supervise the accounts and not to
lend the money for sticky account which has been ignored and
further advances have been made by them in their tenure.
27. Sri P.Prasanna Kumar would further contend that the
stock statement given by the borrowers which was not properly
verified by appellants would only result in an inference that
knowingfully well there was no stock maintained in the stock
yard, further advances have been made especially when
already there is default in the accounts of accused Nos.3 and 4.
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28. He would further contend that in the absence of any tacit
understanding among the accused persons, why would accused
Nos.1 and 2 go on lending further advances to accused Nos.3
and 4 especially when the account is irregular and the security
offered is not sufficient to secure the outstanding amount of the
Canara Bank, Hunasuru Branch. Therefore, prosecution is
successful in establishing all the ingredients to attract the
offences alleged against the appellants and sought for dismissal
of the appeals.
29. Insofar as the alternate submission is concerned, Sri
Prasanna Kumar would contend that material on record would
be sufficient enough even to maintain the conviction for the
offence punishable under Section 13(1)(d) r/w Section 13(2) of
the Prevention of Corruption Act, and sought for dismissal of
the appeals in toto.
30. Having heard the parties in detail, this Court perused the
material on record meticulously.
31. On such perusal of the material on record, the following
points would arise for consideration.
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(i) Whether the material evidence placed on record on
behalf of the prosecution would be sufficient enough
to maintain the order of conviction of the appellants
for the offence punishable under Section 13(1)(d) r/w
Section 13(2) of the Prevention of Corruption Act?
(ii) Whether the appellants make 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?
(iii) Whether the sentence needs modification?
(iv) What Order?
32. REGARDING POINT Nos.1 and 2: In the case on hand,
fact of accused Nos.3 and 4 holding accounts in the names of
M/s Fathima Marry Rice Mill and M/s Abhisheka Enterprises,
Mysuru, in Canara Bank, Hunasuru Branch is not in dispute. So
also, taking the loan from time to time from Canara Bank,
Hunasuru Branch is not in dispute.
33. Admittedly, the first loan was sanctioned on 30.09.2003.
At that point of time, one Lingappa was the AGM. Accused
No.1-L.S.Dinamani assumed the charge of AGM on 24.05.2004
and got transferred on 29.04.2006. Accused No.2 was the
Manager of Canara Bank, Hunasuru Branch on and from
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29.06.2002 till 28.05.2005. The loan of accused Nos.3 and 4
was irregular as is found from the material evidence placed on
record. However, despite the fact that loan was irregular,
instead of taking effective steps to recover the irregular loan,
further advances were made in respect of the business of
accused Nos.3 and 4.
34. The security that was offered for the advances were the
stock in trade. The material on record would indicate that the
person who inspected the stock yard noted that stock of M/s
Fathima Marry Rice Mill and M/s Abhisheka Enterprises, Mysuru,
and M/s Amulya Enterprises were kept in same place and they
were not separated nor stock was available for proper
identification as to which stock belongs to which of the
concerns.
35. No doubt, the person who inspected the spot has
answered in the cross-examination that he did not carry stock
register with him so as to identify the stock. At any rate, since
three different entities have had the loan transaction with the
Canara Bank, Hunasuru Branch, it was their duty to identify
and show which stock belongs to which of the firms and as on
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the date of inspection the stock that has been offered as
security was available to be identified by the inspecting staff
who had gone for inspection from Canara bank, Hunasuru
Branch.
36. Therefore, contentions urged on behalf of the appellants
that the loan was secured cannot be countenanced in law.
Further, again the collateral security offered for the loan
transactions were also not proper.
37. The material on record would depict that even though the
original documents are given to Canara Bank, on the same set
of documents there were other encumbrances earlier.
Admittedly, those encumbrances were suppressed by the
persons who gave collateral security.
38. All these factors, on cumulative analysis would establish
that all was not well with the accounts of accused Nos.3 and 4
and, accused No.5 has lent his hand in forging the documents
for and on behalf of accused Nos.3 and 4 for obtaining the
financial assistance from Canara Bank for which accused Nos.1
and 2 were responsible at the relevant point of time.
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39. There is some force in the argument put forth on behalf
of the appellants that prosecution evidence do not clearly
indicate as to when the conspiracy has actually taken birth, in
the attendant facts and circumstances of the case.
40. It is settled principles of law and requires no emphasis
that for establishing the existence of conspiracy, hardly any
positive evidence could be placed on record, as such positive
evidence is seldom available.
41. Therefore, Courts while appreciating the existence of
conspiracy, is bound to infer from the material evidence on
record about the existence of conspiracy.
42. In this regard, this Court gainfully places reliance on the
judgment of the Hon'ble Apex Court in the case of Mohd.
Khalid vs. State of West Bengal reported in (2002)7 SCC
334 wherein, Hon'ble Apex court has followed the judgment of
the Constitution Bench of the Hon'ble Supreme Court in the
case of Kehar Singh vs. State (Delhi Administration)
reported in (1988)3 SCC 609.
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43. Applying the test mentioned in the Constitution Bench
which was reiterated in the case of Mohd. Khalid supra,
accused Nos.1 and 2 being responsible public servants
occupying the posts of AGM and Branch Manager, 'why would
they lend further amounts to the sticky accounts of accused
Nos.3 and 4 without verifying the stock and proper security', is
a question that has to be answered by accused Nos.1 and 2.
44. Mere recommending for taking a civil action could only be
at best inferred as a corrective measure or damage control
mechanism. That itself would not be sufficient enough to
ignore the existence of conspiracy among the accused persons.
45. If accused Nos.3 and 4 are total strangers and if accused
No.5 has forged the documents for and on behalf of accused
Nos.3 and 4 and sent the same as collateral security, as a
responsible public servant what are the precautionary measures
exercised by accused Nos.1 and 2 before lending further loan to
accused Nos.3 and 4 is not explained by accused Nos.1 and 2
either in the form of suggesting the prosecution witnesses that
the action attributable to accused Nos.1 and 2 is only an
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irregularity and not illegality, nor any explanation is offered
while recording the accused statement.
46. The material on record would definitely establish that
without proper exercise of the responsibility of accused Nos.1
and 2 they have gone on lending the financial assistance to
accused Nos.3 and 4 and therefore, existence of conspiracy and
other ingredient to attract the remaining offences under the
Indian Penal Code stands established in the case on hand.
47. Further, for attracting the offence under Section 13(1)(d)
r/w 13(2) of the Prevention of Corruption Act, prosecution has
not placed any positive materials. Again, insofar as the offence
under Section 13(1)(d) is concerned, mere inaction or improper
action on the part of the public servant would not ipso facto
result in the offence punishable under Section 13(1)(d) of the
Prevention of Corruption Act. Some more positive evidence is
necessary, as presumption under Section 20 of the Prevention
of Corruption Act would be applicable to Section 7 and not for
Section 13(1)(d) of the Prevention of Corruption Act.
48. Therefore, there is sufficient force in the arguments put
forth on behalf of the appellants that public servants viz.,
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accused Nos.1 and 2 are entitled for an order of acquittal for
the offence punishable under Section 13(1)(d) r/w 13(2) of the
Prevention of Corruption Act.
49. The apprehension expressed by the prosecution in this
regard is that if the order of acquittal is recorded insofar as
accused Nos.1 and 2 is concerned for the offence punishable
under Sections 13(1)(d) r/w 13(2) of the Prevention of
Corruption Act is concerned, the disqualification would
extinguish and they would lay necessary claim.
50. Apprehension of the prosecution that the accused would
lay necessary claim would get extinguished in view of the
affidavits filed by accused Nos.1 and 2 to the effect that they
would not claim any terminal benefit from the employer.
51. Contents of the affidavit of accused Nos.1 and 2 are
extracted hereunder for ready reference:
"Affidavit in Crl.A.No.918/2011
I, Shri. L.S Dinamani , late S/O L.S Srinivasan, Aged about
75 years Residing at Sri Raghavendra Nilaya, 4th Cross, 1st
Stage, 2nd Phase Chandra layout, Bangalore-560040, do
hereby solemnly affirm and state on oath as follows:
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1. I submit that I am the Appellant in this case. I know
the facts of the Case. Accordingly I swear this Affidavit.
2. I submit that the C.B.I Police has registered a FIR in
R.C.No.10(A)/2007 against me and Accused No.1 and 4
others for the offences punishable under section 120-B, 420,
468 and 471 of IPC and under Section 13(1)(d) R/w. Sec
13(2) of Prevention of Corruption Act.
3. It is alleged by prosecution that while I was working
as Assistant General Manager, Canara bank Regional office
Mysore, during the period 2004-06 I and Accused No.2 was
involved in a criminal conspiracy with Accused No.3 to 5
forged the documents with an intention to cheat the bank,
making use of the forged document as genuine in connection
with the current account No.424 held by the Accused No.3 in
the name of Fathima Marry Rice Mill, current A/c No.442 in
the name of M/s Abhishek enterprises and current A/c
No.441 in the name of Amulya Enterprises permitting
Accused No.3 and 4 various cash credit and cheque discount
facilities by making use of forged document as genuine and
thereby to cheat canara bank by causing monetary loss in
connection with the various loans.
4. I submit that after the conclusion of the trial the Hon'ble
trial court has convicted me and other accused for the
offenses punishable u/s 120-B, 420, 468 and 471 of IPC and
under Section 13(1)(d) R/w. Section 13(2) of Prevention of
Corruption Act. Being aggrieved by the order of conviction
dated 23.08.2011 passed by the XXXII Additional City Civil &
Sessions Judge and Special Judge for C.B.I.Cases (CCH-34),
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Bangalore in Special. C.C.No.36/2009 the present appeal
was filled.
5. I submit that after conviction I was terminated from
service and issued with an order of dismissal. Due to my old
age I have decided to put an end to the litigation. If I am
imposed with any punishment without imprisonment I
undertake not to claim any terminal benefit from my
employer.
I submit that the averments made in Paragraph 1 to 5 of this
Affidavit are true to the best of my knowledge, belief and
information."
Affidavit in Crl.A.No.958/2011
I, Ganesh Hegde, S/o Late D.N. Hegde, aged about 71 years,
residing at No.835/11-12, 'Sharanye', 4th A Main, 6th Cross,
Navodaya Nagar, J.P. Nagar, 7th Phase, Bengaluru - 560 076,
do hereby solemnly affirm and state on oath as follows:
1. That I am the appellant in the subject appeal and that I
am aware of the facts of the case, that I am competent to
swear to this affidavit and hence I am swearing to the
affidavit. The averments in the Criminal Appeal may be
treated as a part and parcel of the instant affidavit for the
sake of brevity and to avoid repetition
2. That I have preferred the subject criminal appeal
questioning the judgment and order dated 23.08.2011 in
Special CC No.36 of 2009 passed by the XXXII Additional
City Civil and Sessions Judge and Special Judge for CBI
Cases, Bangalore (hereinafter referred to as `Trial Court'
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for short). This Hon'ble Court by order dated 20.09.2011
suspended the conviction of the appellant.
3. That on the very same allegations, Canara Bank
(hereinafter referred to as `the Bank' for short) initiated
disciplinary proceedings against the appellant by Charge
Sheet No. 22.07.2008. After conclusion of the disciplinary
proceedings, the appellant was imposed with a minor penalty
of 'reduction to a lower stage in time scale of pay by three
stages for a period of three years during which he shall not
earn increments of pay and on expiry of the said period,
the reduction shall have the effect of postponing
his future increments of pay.' This order has attained finality.
4. That I retired from the services of the Bank as Senior
manager on reaching the age of superannuation on
31.10.2013. I have received the terminal benefits from the
Bank and I am receiving monthly pension from 01.11.2013
onwards.
5. That I hereby undertake that I shall not claim any other
benefit in respect of bank service in the future other than
those I am already receiving.
I declare that this is my name and signature and that
the contents of this affidavit are true to the best of my
knowledge."
52. Admittedly, role of accused No.2 was assessed by the
higher authorities of the Canara Bank itself. Having known
about the role played by accused No.2 in the departmental
proceedings, minor punishment of cutting two increments has
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been ordered insofar as accused No.2. Therefore, he was
allowed to continue in the service and permitted to retire as
any other employee. As such, he is entitled to necessary
benefits which he has been taking all these years.
53. Therefore, in the absence of material evidence placed on
record by the prosecution to maintain the offence under Section
13(1)(d) r/w Section 13(2) of the Prevention of Corruption Act,
1988, conviction of the appellants for the offence punishable
under Section 13(1)(d) r/w Section 13(2) of the Prevention of
Corruption Act, 1988, needs to be set aside.
54. Further, the consequences of setting aside the conviction
for the offence punishable under Section 13(1)(d) r/w 13(2) of
the Prevention of Corruption Act, 1988, will be subject to the
contents of the affidavit as referred to supra.
55. In view of the foregoing discussions, point Nos.1 and 2
are answered partly in the affirmative.
REG.POINT No.3:
56. This Court having set aside the conviction of the
appellants for the offence punishable under Section 13(1)(d)
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r/w Section 13(2) of the Prevention of Corruption Act, 1988,
wherein the statute has prescribed minimum period of
imprisonment as six months, upholding the conviction of the
appellants for the remaining offence under Indian Penal Code,
does not necessarily demand imposition of jail period.
57. Taking note of the fact that appellants are the first time
offenders and they are in their advanced age, if the fine
amount is enhanced reasonably and sentence of imprisonment
is set aside for the remaining offences under the Indian Penal
Code would meet the ends of justice. Accordingly, point No.3 is
answered partly in the affirmative.
REG.POINT No.4:
58. In view of the findings of this Court on point Nos.1 to 3 as
above, following:
ORDER
i. Criminal Appeals are allowed in part.
ii. Accused Nos.1 and 2 who are the appellants in
Crl.A.No.918/2011 and Crl.A.No.958/2011
respectively, are acquitted for the offence
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punishable under Section 13(1)(d) r/w Section
13(2) of the Prevention of Corruption Act, 1988.
iii. Conviction of the appellants including the
appellant in Crl.A.No.950/2011 for the offences
punishable under Section 120B read with Section
468, 471, 420 of IPC, is hereby maintained and
sentence of imprisonment ordered by the learned
Trial Judge is hereby set aside by enhancing the
fine amount in a sum of Rs.1,00,000/- to each of
the appellants payable on or before 15.03.2025
failing which they shall undergo imprisonment as
ordered by the learned Trial Judge.
iv. It is made clear that accused Nos.1 and 2 who
are appellants in Crl.A.Nos.918/2011 and
958/2011, if already have deposited any fine
amount for the offences under Section 13(1)(d)
r/w 13(2) of Prevention of Corruption Act, same
shall be adjusted towards the enhanced fine
amount.
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v. Office is directed to return the Trial Court
Records with copy of this order forthwith for
issuing modified conviction warrant.
Sd/-
(V SRISHANANDA)
JUDGE
kcm-paragraphs 1 to 49;
KAV-paragraphs 50 till end.
List No:2, Sl No:3
