Karnataka High Court

S Murali vs State By Central Bureau Of on 27 June, 2025

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                                                        CRL.A No. 1049 of 2012


                 HC-KAR



                     IN THE HIGH COURT OF KARNATAKA AT BENGALURU

                            DATED THIS THE 27TH DAY OF JUNE, 2025

                                            BEFORE
                               THE HON'BLE MRS JUSTICE M G UMA

                             CRIMINAL APPEAL NO. 1049 OF 2012 (C)

                 BETWEEN:
                 S. MURALI
                 S/O. LDR G. SRINIVASAN (RTD.),
                 AGED ABOUT 51 YEARS,
                 R/O NO.113, PROMENADE ROAD,
                 FRAZER TOWN, BANGALORE - 560 005.
                                                                      ...APPELLANT
                 (BY SRI. GANESH KUMAR .R., ADVOCATE)

                 AND:
                 STATE BY CENTRAL BUREAU OF
                 INVESTIGATION/ACB
                 BANGALORE - 01
                                                                    ...RESPONDENT
                 (BY SRI. P. PRASANNA KUMAR, ADVOCATE)

                        THIS CRL.A IS FILED U/S.374(2) OF CR.P.C PRAYING TO SET
Digitally
signed by        ASIDE THE JUDGMENT OF CONVICTION AND ORDER OF SENTENCE
NANDINI B G
Location: High   OF IMPRISONMENT DATED 30/8/2012 IN SPL.C.C. 103/2001 PASSED
Court of
Karnataka        BY THE XLVI ADDL. CITY CIVIL JUDGE & SESSIONS JUDGE & SPL.
                 JUDGE FOR CBI CASES, BANGALORE - CONVICTING THE APPELLANT/
                 ACCUSED-1    FOR   OFFENCES   P/U/S.120B,   420   R/W.120B,   468
                 R/W.120B, 471 R/W.120B OF IPC AND SEC.13(2) R/W.13(1)(D) OF
                 PREVENTION OF CORRUPTION ACT AND ETC.,

                        THIS CRL.A, COMING ON FOR FINAL HEARING, THIS DAY,
                 JUDGMENT WAS DELIVERED THEREIN AS UNDER:

                 CORAM:     HON'BLE MRS JUSTICE M G UMA
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                                          NC: 2025:KHC:22630
                                      CRL.A No. 1049 of 2012


HC-KAR




                     ORAL JUDGMENT

The appellant - accused No.1 in Spl.C.C.No.103/2001, on

the file of the learned XLVI Additional City Civil Judge and

Sessions Judge and Special Judge for CBI case, Bangalore, is

impugning the Judgment of Conviction and Order of Sentence

dated 30.08.2012, convicting accused No.1 for the offences

punishable under Sections 120B, 420 r/w Section 120B, 468

r/w Section 120B, 471 r/w Section 120B of Indian Penal Code

(for short 'IPC') and under Section 13(2) r/w Section 13(1)(d)

of the Prevention of Corruption Act, 1988 (for short 'PC Act')

and sentenced him to undergo simple imprisonment for a

period of one year with fine of Rs.2,000/- for the offence

punishable under Section 120B of IPC; to undergo simple

imprisonment for a period of one year with fine of Rs.2,000/-

for the offence punishable under Section 420 r/w Section 120B

of IPC; to undergo simple imprisonment for a period of one

year with fine of Rs.2,000/- for the offence punishable under

Section 468 r/w Section 120B of IPC; to undergo simple

imprisonment for a period of six months for the offence

punishable under Section 471 r/w Section 120B of IPC; to

undergo simple imprisonment for a period of two years with

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fine of Rs.5,000/- for the offence punishable under Section

13(2) read with Section 13(1)(d) of PC Act, with default

sentences.

2. Brief facts of the case as per the prosecution are

that, the appellant was working as Senior Branch Manager in

Syndicate Bank, Indiranagar branch, Bangalore for a period

from 20.12.1990 to 25.01.1993. He conspired with accused

Nos.2 to 4 to cheat Syndicate Bank, Indiranagar branch and

Sriramapura Co-operative Bank Ltd, Sriramapura, by

dishonestly and fraudulently accepting and endorsing cheque

bearing No.24055 dated 11.01.1993 as 'good for payment' as

presented by M/s. Nagaraj Leather Pvt. Ltd., and permitted

withdrawal of an amount of Rs.32,78,626.50/- by discounting it

before its clearance.

3. It is also the contention of the prosecution that

accused No.1 accepted the cheque bearing No.434818 for

Rs.40 lakhs issued by the Municipal Administration, Bangalore

meant for opening an FDR in the account of Srirampuram Co-

operative Bank Ltd., and dishonestly appropriated the said

amount to the cheque that was presented by M/s. Nagaraj

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Leather Pvt. Ltd., and thereby, defrauded the Syndicate Bank,

Municipal Administration, Bangalore, and also Srirampuram Co-

operative Bank Ltd by using the forged documents as genuine

documents. Hence, he has committed the offence of

misconduct as stated above.

4. A Source Report was prepared by the Inspector of

Police, CBI to contend that, the appellant in conspiracy with

accused Nos. 2 to 4 had committed the offence. FIR came to be

registered on the basis of the source report and investigation

was undertaken. Later, final report came to be filed against

accused Nos. 1 to 4.

5. The Trial Court took cognizance of the above said

offences and summoned the accused. Accused has appeared

before the Trial Court. He pleaded not guilty and claimed to be

tried. The prosecution has examined PWs.1 to 22, got marked

Ex.P1 to P59. The accused has denied all the incriminating

materials available on record in his statement recorded under

Section 313 of Cr.PC, but has not led any evidence in support

of his defence. However, Exs.D1 and D2 got marked during

cross examination of prosecution witnesses.

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6. The Trial Court after taking into consideration all

these materials on record, came to the conclusion that the

prosecution is successful in proving the guilt of the accused

No.1 beyond reasonable doubt. Accordingly, passed the

impugned judgment and order convicting and sentencing the

accused for the offences punishable under Sections 120B, 420

r/w Section 120B, 468 r/w Section 120B, 471 r/w Section 120B

of IPC and under Section 13(2) r/w Section 13(1)(d) of PC Act.

Being aggrieved by the same, the accused is before this Court.

7. Heard Sri. Ganesh Kumar.R, learned counsel for

the appellant and Sri.P Prasanna Kumar, learned counsel for

the respondent. Perused the materials including the Trial Court

records.

8. In view of the rival contentions urged by learned

counsel for both the parties, the point that would arise for my

consideration is:

"Whether the appellant-accused has made out a case to interfere with the impugned judgment of conviction and order of sentence passed by the Trial Court?"

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My answer to the above point is in the 'Affirmative' for

the following:

REASONS

9. It is the contention of the prosecution that the

appellant being the Senior Branch Manager in Syndicate Bank,

Indiranagar branch permitted M/s. Nagaraj Leather Pvt. Ltd., to

open an account in the branch and to present the cheque

bearing No.24055 dated 11.01.1993 issued in his favour, drawn

on Srirampura Co-operative Bank Ltd., for Rs.40 lakhs. Instead

of sending the cheque for clearance, he discounted it and

permitted one S. Nagaraj, the owner of M/s. Nagaraj Leather

Pvt. Ltd., to withdraw an amount of Rs.32,78,626.50/- on the

same day and thereby, committed fraud and cheating.

10. It is also the contention of the prosecution that on

the very next day i.e., on 12.01.1993, Srirampura Co-operative

Bank Ltd., referred to above which had endorsed 'good for

payment' on the cheque bearing No.24055 issued in favour of

M/s. Nagaraj Leather Pvt. Ltd., opened an account with the

Syndicate Bank, Indiranagar branch of which accused No.1 was

the Senior Manager and presented the cheque bearing

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No.434818 for Rs.40 lakhs which was issued by the Municipal

Administration, Bangalore in its favour for opening an FDI. The

said amount was appropriated by the appellant towards the

amount which was credited to the account M/s. Nagaraj Leather

Pvt. Ltd., and thereby, misappropriated the amount and

committed misconduct.

11. It is pertinent to note that neither the Syndicate

Bank, Indiranagar branch, nor the Municipal Administration,

Bangalore nor Srirampura Co-operative Bank Ltd., filed any

complaint against the appellant. But on the other hand, the

Inspector of Police, CBI prepared the source report and on the

basis of the same, FIR was registered. The said Officer is not

examined before the Trial Court. There is no explanation as to

why none of the entities i.e., Syndicate Bank, Municipal

Administration, Bangalore or Srirampura Co-operative Bank

Ltd., have not chosen to file the complaint, if at all they have

sustained any loss or any fraud or cheating was committed.

12. The facts of the case made out by the prosecution

and as spoken to by the prosecution witnesses disclose that, on

11.01.1993 one S. Nagaraj introduced himself as the owner of

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M/s.Nagaraj Leather Pvt. Ltd., for opening a current account in

Syndicate Bank, Indiranagar branch. He presented the original

of Ex.P1 - a cheque drawn for Rs.40 lakhs by S. Nagaraj on

Srirampura Co-operative Bank Ltd., The said cheque was

having an endorsement as 'good for payment'. It is the

contention of the learned counsel for the appellant that, once

the cheque is endorsed as good for payment, it is as good as a

demand draft and hence, there was no reason for accused No.1

to suspect about its genuinity or sending it for clearance. Prima

facie, upon being satisfied with the genuinity of account holder,

the amount was credited to the account and permitted

Mr.S.Nagaraj - the owner of M/s. Nagaraj Leather Pvt. Ltd., to

withdraw an amount of Rs.32,78,626.50/-.

13. The materials on record also disclose that on the

very next day i.e., on 12.01.1993, Srirampura Co-operative

Bank Ltd., presented a cheque for Rs.40 lakhs for collection. In

the meantime, accused No.1 received the intimation that the

original cheque Ex.P1 was not honored and immediately, he

appropriated the amount of Rs.32,78,626.50/- cheque bearing

No.24055 presented by Srirampura Co-operative Bank Ltd., to

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appropriate the amount which was withdrawn by S.Nagaraj,

owner of M/s. Nagaraj Leather Pvt. Ltd., These facts are not in

dispute as the witnesses have spoken to about the same and

supported by the documents. If these facts are taken into

consideration, I do not find any justification for CBI to prepare

source report, making allegations against accused No.1.

14. PW17 - the bank official deposes that accused No.1

was having a limit of only Rs.10,000/- and in permitting

Mr.S.Nagaraj to withdraw an amount of Rs.32,78,626.50/- by

accepting the cheque for Rs.40 lakhs, he exceeded his limits. It

is pertinent to note that during cross examination of this

witness, learned counsel for the appellant tendered Ex.D2 - a

Power of Attorney deed executed in favour of accused No.1 by

Syndicate Bank. Learned counsel for the appellant has drawn

the attention of the Court to paragraph No.4 of this Power of

Attorney deed which was admitted by PW17, according to

which, no restriction is imposed on the authority of accused

No.1. It only says, he is authorized to deal with securities.

When as per the admitted document-Ex.D2 authorizes accused

No.1 to deal on behalf of the bank without any restrictions on

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the authority of accused No.1, I do not find any justification or

support for the evidence of PW17. Moreover, accused No.1 was

working as a Senior Manager in Syndicate Bank, Indiranagar

branch. Under such circumstances, the contention of the

prosecution that he was having limit of only Rs.10,000/- to act

on his discretion cannot be accepted even for a moment, that

too without any supporting document. The contention of the

learned counsel for the respondent that as per RBI guidelines,

there was restrictions on the authority of the Senior Manger of

the nationalized banks also cannot be accepted as no such

guidelines or circulars have been produced before the Court to

substantiate such contention.

15. Admittedly, neither the Syndicate Bank, nor the

Municipal Administration, Bangalore or Srirampura Co-operative

Bank Ltd., have sustained any loss. There is no quantification of

loss from any of these entities. When it is not the contention of

the prosecution that, any of these entities have sustained loss

by the act of accused No.1, I do not find any support for its

contention that the appellant by making use of the forged

documents had committed cheating and misconduct.

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16. From the materials on record, I am satisfied that it

is a futile attempt on the part of the CBI to prepare source

report and to prosecute the present appellant by examining

PWs1 to 22 and getting marked Exs.P1 to P59 in support of its

contention. Unfortunately, no case is made out against accused

No.1. It is to be noticed that accused Nos.2 and 4 have died

during pendency of the matter before the Trial Court. They

have not faced trial as case against them was abated. Accused

No.3 even though faced trial and alleged to have conspired with

accused No.1 is already acquitted by the Trial Court by giving

him a clean chit. Under such circumstances, I do not find any

support to contend that the appellant has committed the

offence punishable under Sections 120B, 420 r/w Section 120B,

468 r/w Section 120B, 471 r/w Section 120B of IPC and under

Section 13(2) r/w Section 13(1)(d) of PC Act. Therefore, I am

of the opinion that the appellant is entitled for acquittal.

17. I have gone through the impugned judgment

passed by the Trial Court. The Trial Court has taken into

consideration the voluminous oral and documentary evidence

placed before it to form an opinion that the prosecution is

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successful in proving the guilt of accused No.1 alone of the

conspiracy, cheating etc., and committed the misconduct. I do

not find any justification for the same. Hence, the impugned

judgment of conviction and order of sentence is liable to be set

aside.

18. Accordingly, I proceed to pass the following:

ORDER

(i) The Criminal Appeal is allowed.

(ii) The Judgment of Conviction and Order of Sentence

dated 30.08.2012 passed in Spl.C.C.No.103/2001, on the file of

the learned XLVI Additional City Civil Judge and Sessions Judge

and Special Judge for CBI case, Bangalore is hereby set aside.

(iii) Consequently, accused No.1 is acquitted for the

offences punishable under Sections 120B, 420 r/w Section

120B, 468 r/w Section 120B, 471 r/w Section 120B of IPC and

under Section 13(2) r/w Section 13(1)(d) of PC Act.