[Cites 9, Cited by 0]

Kerala High Court

K.Ramachandran vs Cbi on 16 January, 2026

                                                 2026:KER:3788

Criminal Appeal No.2528 of 2007       1


            IN THE HIGH COURT OF KERALA AT ERNAKULAM

                                  PRESENT

           THE HONOURABLE MR. JUSTICE A. BADHARUDEEN

 FRIDAY, THE 16TH DAY OF JANUARY 2026 / 26TH POUSHA, 1947

                        CRL.A NO. 2528 OF 2007

          AGAINST THE ORDER/JUDGMENT DATED 24.12.2007 IN CC

NO.4 OF 2003 OF SPECIAL C SPE/CBI-I&3 ADDITIONAL DISTRICT

 COURT / I ADDITIONAL MOTOR ACCIDENT CLAIMS TRIBUNAL/RENT

             CONTROL APPELLATE AUTHORITY, ERNAKULAM

APPELLANT/ACCUSED NO.1:

            K.RAMACHANDRAN
            AGED 1 YEARS
            CHIEF MANAGER, STATE BANK OF TRAVANCORE,
            RESIDING AT PLOT NO., P.M.G.NAGAR, TRIVANDRUM.

            BY ADVS.
            SRI.ANIL K.MUHAMED
            SRI.R.ANIL
            SRI.DELVIN JACOB MATHEWS
            SHRI.SUJESH MENON V.B.

RESPONDENTS/COMPLAINANT/STATE:

     1      CBI
            KERALA UNIT, KOCHI.
                                                2026:KER:3788

Criminal Appeal No.2528 of 2007   2



     2      STATE OF KERALA REPRESENTED BY THE
            PUBLIC PROSECUTOR, HIGH COURT OF KERALA,,
            ERNAKULAM.


            BY ADVS.
            SHRI.SREELAL N.WARRIER,SREELAL N.WARRIER,
            SPL.PUBLIC PROSECUTOR, CENTRAL BUREAU OF
            INVESTIGATION (CBI)
            PUBLIC PROSECUTOR



OTHER PRESENT:

            SPL PP CBI SREELAL N.WARRIER

         THIS CRIMINAL APPEAL HAVING BEEN FINALLY HEARD
ON 16.01.2026, THE COURT ON THE SAME DAY DELIVERED
THE FOLLOWING:
                                                             2026:KER:3788

Criminal Appeal No.2528 of 2007        3




                                                                           C.R.

                          A.BADHARUDEEN, J.
                -----------------------------------------------
                 Criminal Appeal No.2528 of 2007
                -----------------------------------------------
              Dated this the 16th day of January, 2026


                             JUDGMENT

The 1st accused in C.C.No.4 of 2003 on the files of

the Court of the Special Judge (SPF/CBI)-I, Ernakulam has filed

this appeal challenging conviction and sentence imposed

against him as per judgment dated 24.12.2007.

2. Heard the learned counsel for the appellant and the

learned Special Public Prosecutor appearing for CBI/the

prosecution.

3. The prosecution case is that accused Nos.1 and 2

hatched conspiracy to grant loan of Rs.5 lakhs in the name of

Cheriyan Varghese, the father of the 2nd accused and later this

loan was released in the account of the 2 nd accused. This loan 2026:KER:3788

Criminal Appeal No.2528 of 2007 4

was sanctioned without the knowledge of the Zonal Office. The

further case is that in pursuance of the criminal conspiracy, in

order to secure more funds for the personal needs of the 2 nd

accused, the 1st accused sanctioned Housing loan for Rs.5 lakhs

in the name of Cheriyan Varghese, the father of the 2 nd

accused. The amount under housing loan was released and it

was credited in the CC account of the 2 nd accused. This was

done without the knowledge of Zonal office. The said amount

was availed by the 2nd accused for his personal needs. The 1st

accused in pursuance of the criminal conspiracy by abusing his

official position dishonestly sanctioned Rs.1 lakh as clean

overdraft to the 2nd accused on 15.11.1997. The amount

sanctioned under the above overdraft was transferred to the

Cash Credit account No.201 of the 2 nd accused. The 1st accused

in pursuance of the criminal conspiracy dishonestly sanctioned

two clean Overdrafts of Rs.2 Iakhs each in the name of one

Varghese Daniel, the brother-in-law of the 2 nd accused and one

M.G.Baby, a close associate of the 2 nd accused. Both of them 2026:KER:3788

Criminal Appeal No.2528 of 2007 5

were strangers to the Bank and these loans were sanctioned by

the 1st accused in order to provide funds to the 2 nd accused. The

1st accused also dishonestly and by abusing his official position

purchased clean bills presented by the 2 nd accused in his cash

credit account without intimating the Zonal office, to the tune of

Rs.2 lakhs on 19.01.1998, Rs.2.5 lakhs on 06.02.1998, Rs.1.6

lakhs on 16.03.1998, Rs.2 lakhs on 03.04.1998 and Rs.2.25

lakhs on 16.04.1998. The cheque purchased on 16.04.1998 for

Rs.2.25 lakhs was returned unpaid. Thereafter one

V.G.Narayanan Unnithan was taken by the 2nd accused to the 1st

accused intimating him that the Manager was arranging loan

from SBT, Pandalam. The 1st accused Ramachandran and the

2nd accused Moncy Cheriyan, in furtherance of the said

conspiracy requested Narayanan Unnithan to make a transfer of

12.50 cents of land belonging to him and his wife, Meera to a

person in Pandalam area in order to sanction a loan against the

said transfer. Narayanan Unnithan was told by the 1 st accused

and 2nd accused that a loan would be sanctioned in the name of 2026:KER:3788

Criminal Appeal No.2528 of 2007 6

the buyer and the proceeds of the loan would be given to

Narayanan Unnithan as the seller of the property. Accordingly,

the property was transferred in the name of one Simon Daniel.

Then the 1st accused dishonestly sanctioned housing loan to the

tune of Rs.4 lakhs and by abusing his official position. The

amount was transferred to the joint SB Account of Narayanan

Unnithan and Meera and the cheque book issued to this

account was kept by the 1st accused. On 01.03.1999, three

cheques of the above account in the name of Narayanan

Unnithan and Meera amounting to Rs.2,25,800/-, Rs.84,200/-

and Rs.90,000/- were fraudulently obtained from Narayanan

Unnithan and Meera by the 1st accused. Thereafter, the 2nd

accused prepared and gave three credit vouchers of similar

amount and gave the same to the 1st accused. The 1st accused

dishonestly sent the credit vouchers to the cash counter of the

paying Cashier without the consent of Narayanan Unnithan

transferred the amount of Rs.4 lakhs to various accounts as per

the credit voucher. Narayanan Unnithan was thereby cheated 2026:KER:3788

Criminal Appeal No.2528 of 2007 7

by the 1st accused and the 2nd accused. The amount

outstanding in the overdraft account in the name of Varghese

Daniel as on 22.05.2000 was Rs.58,519/-. The housing loan

account in the name of Simon Daniel became an NPA and the

amount outstanding this account as on 22.05.2000 was

Rs.4,44,993/-. On 18.08.1998 the 2 nd accused brought George

Daniel one of his friends to avail Rs.2 lakhs clean overdraft and

the 1st accused dishonestly sanctioned Rs.2 lakhs overdraft in

the name of George Daniel and transferred the amount to the

cash credit account 201 of the 2 nd accused. The 1st accused in

furtherance of his criminal conspiracy with the 2 nd accused

released 23 cents of land in the name of the 2 nd accused to sell

the property to one A.Joseph, which was kept as Collateral

Security without informing the matter to Zonal Office. The 1 st

accused by abusing his official position sanctioned a housing

loan of Rs.2.3 lakhs to Joseph for purchasing this land. The 1 st

accused dishonestly issued an office cheque to Joseph asking to

withdraw the cash and then to deposit the amount in the Cash 2026:KER:3788

Criminal Appeal No.2528 of 2007 8

Credit account 201 of the 2nd accused. The 1st accused abused

his official position to disburse the amount in lumpsum.

Rs.30,000/- was paid to Joseph to meet the transaction

expenses. This account also has become an NPA and the

outstanding amount in this account as on 28.03.2001 was

Rs.2,71,933/-. The 1st accused and the 2nd accused decided to

sell the property of Cheriyan Varghese where a housing loan of

Rs.5 lakhs was sanctioned by the bank. The 1 st accused

forwarded a proposal to Zonal Office for availing Rs.12 lakhs as

housing Loan in the name of two NRIs for purchasing this

property. The 1st accused dishonestly hidden the fact from

Zonal office that the bank had already sanctioned a housing

loan on the same property. The 1st accused by abusing his

official position dishonestly sanctioned a clean overdraft of Rs.2

lakhs in the name of one Santhamma George, wife of one of the

NRI partner and this amount was deposited in the SB account of

one Prema Pappachan, her sister and wife of another NRI

partner to show as margin money for the proposed loan. This 2026:KER:3788

Criminal Appeal No.2528 of 2007 9

amount was transferred to the fixed deposit from the SB

account. Thus the acts of the 1st accused and the 2nd accused,

State Bank of Travancore, Pandalam sustained a wrongful loss

of Rs.27,00,349/- thereby the 1st accused and the 2nd accused

committed offences punishable under Section 120B read with

Section 420 of the Indian Penal Code (in short 'IPC') and Section

13(2) read with Section 13(1)(d) of the Prevention of Corruption

Act, 1988 (for short 'the PC Act, 1988').

4. The Special Court framed charge for the said

offences, on completing pre-trial formalities and proceeded

with the trial. During trial, PW1 to PW28 were examined and

Exts.P1 to P115 were marked on the side of the prosecution.

During the prosecution evidence, Exts.D1 to D3 contradictions

were marked on the side of defence. Thereafter, the accused

persons were examined under Section 313(1)(b) of Code of

Criminal Procedure and their explanations to the incriminating

circumstances were recorded. Availing the opportunity given by

the Special Court to adduce defence evidence, the accused 2026:KER:3788

Criminal Appeal No.2528 of 2007 10

persons examined DW1 and DW2 and marked Exts.D4 to D26

on the side of defence. The learned Special Judge considered

the arguments on the issue and appraised the evidence. Finally,

the Special Court found that accused Nos.1 and 2 committed

offences punishable under Section 120B read with Section 420

of the IPC, while the 1st accused found guilty for the offences

punishable under Section 13(1)(d) read with 13(2) of the PC

Act, 1988. Accordingly, accused Nos.1 and 2 were sentenced to

undergo rigorous imprisonment for a period of 3 years each and

to pay a fine of Rs.2 lakhs each and in default of payment of

fine to undergo simple imprisonment for a period of one year

each and the 1st accused was sentenced to undergo rigorous

imprisonment for a period of two years and a fine of Rs.1 lakh

and in default of payment of fine to undergo simple

imprisonment for a period of six months.

5. Multifold contentions were raised by the learned

counsel for the 1st accused/appellant while assailing the verdict

of the Special Court. The learned counsel appearing for the 1 st 2026:KER:3788

Criminal Appeal No.2528 of 2007 11

accused/appellant argued that the evidence available in this

case to fasten criminal culpability upon the 1 st accused is

insufficient, rather not free from doubts. The Special Court,

without appreciating the evidence and on erroneous analysis of

the circumstances alone, entered into conviction. According to

the learned counsel for the 1st accused/appellant, during 1997,

when the 1st accused /appellant took charge as the Chief

Manager of the Pandalam Branch of the State Bank of

Travancore, the business of the branch was low and there was

pressure to increase the business focusing marketing plans

finalized after discussion with the Assistant General Manager.

Accordingly, the 2nd accused, who was the proprietor of

Mamoottil Rubber Agencies, was introduced to the Bank by

PW2, who was the Assistant Manager (Advances), Mammoottil

Rubber Agencies maintained cash credit facility with the Central

Bank of India, Kaipattur Branch for Rs.5 lakhs and after initial

discussion and taking note of the absolute necessity, a proposal

for Rs.15 lakhs was recommended to the Zonal Office as the 2026:KER:3788

Criminal Appeal No.2528 of 2007 12

Chief Manager had powers to sanction cash credit limit of Rs.10

lakhs only. Thereafter, the accused found that a loan of Rs.10

lakhs could be granted by him without the authority of the

Zonal Office, he had granted Rs.10 lakhs. Therefore, no

illegality or criminal overt acts was done by the accused. It is

also submitted that the evidence available did not show any

dishonest intention as alleged, so as to find commission of

offences punishable under the PC Act, 1988, with the aid of

Section 120B of the IPC by the accused. Therefore, the

conviction and sentence are liable to be interfered with.

6. Whereas, the learned Special Public Prosecutor for

the CBI zealously opposed interference in the verdict impugned

and submitted that the evidence adduced by the prosecution,

substantially proved the offences beyond reasonable doubt and

therefore, the verdict could not be interfered with.

7. Adverting to the rival arguments, the points arise for

consideration are;

(i) whether the Special Court is right in holding that 2026:KER:3788

Criminal Appeal No.2528 of 2007 13

accused Nos.1 and 2 committed offence punishable under

Section 120B read with 420 IPC?

(ii) whether the Special Court is right on holding that

accused Nos.1 and 2 committed offence punishable under

Section 120B?

(iii) whether the Special Court went wrong in holding that

the 1st accused committed offence under Section 13(1)(d) read

with 13(2) of the PC Act, 1988?

(iv) Is it necessary to interfere with the verdict impugned

for any reason?

8. Point Nos. (i) to (iv)

The prosecution allegation is confined to grant of

credit facility including CC Account in the name of the 2 nd

accused for Rs.10 lakhs and OD facility for Rs.1 lakh in the

name of the 2nd accused and also another housing loan

amount to the tune of Rs.5 lakhs in the name of Cheriyan

Varghese, the father of the 2nd accused, who was aged 70 years

at the time of sanctioning the loan. The specific case of the 2026:KER:3788

Criminal Appeal No.2528 of 2007 14

prosecution is that the 1st accused had no right to sanction

Rs.10 lakhs in an application, which was forwarded to Zonal

Office for sanction when Rs.15 lakhs was applied for. That

apart, the Zonal Office sanctioned Rs.10 lakhs, on condition of

taking four properties as security while granting loan. Out of the

said four properties, only two properties were accepted by the

1st accused and the title documents of other two items of

properties were found defective. Thereafter, out of the two

properties accepted as security, the 1st accused released

property having an extent of 23 cents without the sanction of

the Zonal Office to the 2nd accused. Later, the 2nd accused sold

the property to Joseph and obtained housing loan amounting to

Rs.2,30,000/-. Out of the said amount of Rs.2,00,000/- was

credited to the account of the 2nd accused.

9. As deposed by PW1 and PW2, who are the Chief

Manager of Guruvayoor Branch of SBT, during 2002-2006 and

the Manager of Kodannur Branch of SBT and worked as

Manager, SBT Pandalam from May 1997 to May 2000 as 2026:KER:3788

Criminal Appeal No.2528 of 2007 15

Assistant Manager, when loan was sanctioned by the Zonal

Office, the permission of the Zonal Office is necessary to

change any one of the condition of the sanction order and in

this regard, Ext.P1 circular No.46/1994 and Ext.P2 circular

No.48/1998 were tendered in evidence through PW1. It is

discernible from Ext.P3, the application put up for loan was

forwarded to Zonal Office and the 1 st accused dishonestly and

by abusing his position as Public Servant sanctioned Rs.10

lakhs acting on Ext.P3 loan application and this was beyond his

discretionary power. But, the contention of the 1 st accused is

that the 1st accused who held the post of Chief Manager of the

Branch had an authority to sanction loan upto Rs.10 lakhs and

therefore grant of Rs.10 lakhs as loan by the Chief Manager is,

in no way, either illegal or irregular. In addition to that there is

serious allegation in this case and the same is centered on non-

obeying of the conditions imposed by the Zonal office by the

first accused while issuing Ext.P4(b) sanction. It is relevant to

note that the 1st accused, in fact, sanctioned the loan for Rs.10 2026:KER:3788

Criminal Appeal No.2528 of 2007 16

lakhs on 15.11.1997 even before issuance of Ext.P4(b) sanction

and the sanction was issued only on 19.11.1997. It has been

specifically provided in Ext.P4(a) that the 1st accused should

obtain four items of property as security while granting the

loan. But, the 1st accused released the entire loan amount

without obtaining four items of properties as mandated in

Ext.P4(a), after accepting two items of properties as security,

on noticing that the other two items of properties and the title

thereof were defective. Apart from that, one item of property

having an extent of 23 cents was also released before

repayment of the loan. In addition to that, when the 2nd accused

applied for a cash credit facility for Rs.1 lakh, the 1 st accused

sanctioned the overdraft facility to the tune of Rs.1 lakh to the

2nd accused on getting a promissory note and the letter was

shown as that of the 2nd accused and the amount was

withdrawn and credited in the C.C. Account No.201 of the 2 nd

accused and Ext.P7 is the credit voucher for the same and

Ext.P30 is the Overdraft ledger in the name of the 2 nd accused.

                                                        2026:KER:3788

Criminal Appeal No.2528 of 2007      17

The prosecution case further is that when the 2 nd accused

applied for a housing loan in the name of Cheriyan Varghese,

the father of the 2nd accused, by fabricating the signature of

Cheriyan Varghese as per Ext.P29 file, the said loan also was

sanctioned by the first accused. When Ext.P29(a), the

application for loan allegedly to be put in by Cheriyan Varghese

was forwarded to compare the signature of Cheriyan Varghese

therein with that of his admitted signature, PW2, the expert,

opined as per Ext.P93 report that the signature in Ext.P29(a) is

not that of Cheriyan Varghese, supporting the prosecution

allegation regarding fabrication of housing loan application by

the the 2nd accused in his father's name.

10. In this connection, when PW26 Cheriyan Varghese

was examined, he deposed that he had signed the application

as against the FSL Report, therefore the learned Special Judge

disbelieved the evidence of PW26 Cheriyan Varghese as one

which was intended to save his son and accepted the FSL

Report and the evidence of PW2 to hold that in Ext.P29(a), 2026:KER:3788

Criminal Appeal No.2528 of 2007 18

Cheriyan Varghese did not sign and the same was a forged

application. In the instant case, the further case of prosecution

is that Cheriyan Varghese was aged 70 years at the time of

filing Ext.P29(a) application and the Branch Manager had no

authority to sanction housing loan to a person aged more than

65 years. Thus, if at all Ext.P29(a) was signed and put up by

PW26, the loan granted in favour of Cheriyan Varghese who

was aged 70 at the time of granting the loan, is illegal. The

evidence of PW17 Narayanan Unnithan would show that he was

indebted to various persons and during this period, he had

noticed a paper publication to the effect that loan would be

made available on the security of immovable properties.

According to him, he was taken before the 2 nd accused in

connection with the loan transaction and the 2nd accused

informed him that he had connection with the 1 st accused and

loan would be arranged. In order to sanction the loan, the

property of Narayanan Unnithan should be transferred in favour

of an NRI and the 2nd accused made arrangements for the same 2026:KER:3788

Criminal Appeal No.2528 of 2007 19

with PW14, (an NRI). When PW14 inspected the property for

purchase, he noticed that the value of the property was much

below than that of the proposed loan amount and thereby he

did not agree for the purchase of the property.

11. Simon Daniel was the landlord of the building in

which the 2nd accused was conducting Mammoottil Rubber

Agencies. He informed Simon Daniel about the proposed

transaction. The 2nd accused directed the 1st accused to bring

his documents in relation to his land. Unnithan through Jyothi

Unnithan brought the title deeds of his property of 7.50 cents of

land. The 2nd accused along with Unnithan met the 1st accused

in his chamber. The 1st accused informed that the above 7.5

cents of land was not sufficient to grand a loan. The 1 st accused

and the 2nd accused, while they were in the chamber of the 1 st

accused and Unnithan was outside the chamber, discussed the

matter about Rs.4 lakhs. Unnithan was called into the chamber.

The 1st accused enquired whether Simon Daniel had any other

property. He had another property having an extent of 5 cents.

                                                         2026:KER:3788

Criminal Appeal No.2528 of 2007     20

The title deed of which was entrusted to another person in

connection with a loan transaction. The 2nd accused met the

person and give cheque for Rs.50,000/- and they gave back the

title deed. The property was in the joint name of Unnithan and

his wife Meera. Meera along with Unnithan went to the house of

Simon Daniel and explained their financial difficulties. Due to

sympathy towards Narayanan Unnithan, Simon Daniel agreed

for the transaction.

12. Narayanan Unnithan was not able to raise funds for

purchasing stamp paper and for executing the sale deed and

registering the same. The 1st accused and the 2nd accused

telephoned one Pasha and Pasha arranged the amount for

purchasing stamp paper and amount for registration.

Meanwhile the 2nd accused requested Narayanan Unnithan to

pay a sum of Rs. 10,000/- to the 1 st accused as gratification for

finalising the arrangement. Unnithan entrusted Rs.10,000/- to

the 2nd accused and the 2nd accused had given Rs. 10,000/- to

the 1st accused at his chamber. The deposition of PW17 would 2026:KER:3788

Criminal Appeal No.2528 of 2007 21

show that the 1st accused had received an illegal gratification of

Rs.10,000/- and obtained illegal financial advantage by abusing

his power as Chief Manager of SBT Pandalam Branch. The sale

deed was executed in favour of PW16, Simon Daniel.

Subsequently, Simon Daniel executed a power of Attorney in

favour of Jyothi Unnithan, PW21, a relative of Narayanan

Unnithan. The arrangement made by the 1st accused and the 2nd

accused was to the effect that Narayanan Unnithan should

execute a sale deed of his property and Meera in favour of

Simon Daniel and Simon Daniel would execute a power of

attorney to one of the person pointed out by Unnithan. So in

furtherance of the above arrangements Simon Daniel executed

a power of attorney in favour of Jyothi Unnithan and Simon

Daniel forwarded an application for housing loan to the 1 st

accused. The 1st accused and the 2nd accused granted a housing

loan in the name of PW16 Simon Daniel and transferred the sale

proceeds in the joint account of PW17 Unnithan and PW20 his

wife Meera. PW15 the wife of PW16 also deposed that 2026:KER:3788

Criminal Appeal No.2528 of 2007 22

Narayanan Unnithan and Meera Unnithan met them and

requested to help them. The 1st accused dishonestly sanctioned

the housing loan in the name of Simon Daniel and transferred

the proceeds in the joint account of PW17 and PW20 as per

Ext.P83(a). The 1st accused kept the cheque book of the newly

opened account of PW17 and PW20 with him and obtained the

signature of PW20 in three cheque leaves through PW21 Jyothi

Unnithan. PW21 deposed that he took the three cheques given

by the 1st accused to Meera and got her signature on the

cheque and entrusted it to the 1st accused. As per the request

of the 1st accused, Narayanan Unnithan also put his signature

on the above three cheque leaves. The above cheque leaves

were marked as Exts.P37, 38 and 39. PW17 deposed that the

amounts covered by the cheques were not given to him or

PW20. The amount mentioned in the cheques were utilised by

the 1st accused and the 2nd accused on the basis of Exts.P40, 41

and 42 transfer credit vouchers. These transfer credit vouchers

were executed without the knowledge and consent of Unnithan.

2026:KER:3788

Criminal Appeal No.2528 of 2007 23

Ext.P38 cheque was for Rs.2,25,000/-. The above amount was

appropriated for closing the overdraft of M.G.Baby under

Ext.P41 credit slip. Unnithan and M.G.Baby had no direct

contact between themselves. The amount under Ext.P39

cheque was for Rs.84,200/- which was utilised for closing the

overdraft account of Varghese Daniel under Ext.P42 credit slip.

Ext.P37 cheque for Rs.90,000 was utilised to make credit slip to

CC account No.201 in the name of the 2 nd accused and the

credit was made under Ext.P40 credit voucher. These three

credit vouchers were prepared by the 2nd accused. Ext.P26 is

the account opening form of account number 12826 in the

name of Narayanan Unnithan and Meera Unnithan.

13. PW13 Mary George (Santhamma) and PW27 Prema

Pappachan testified that the 2 nd accused Moncy Cheriyan

approached them offering to sell the property with a partly

constructed housing building of Cheriyan Varghese for Rs.12

lakhs. Since they had no sufficient money to purchase the

property, the 2nd accused offered to provide a housing loan for 2026:KER:3788

Criminal Appeal No.2528 of 2007 24

them from the bank through the 1st accused. Ext.P59 is the

document relating to the said loan. The 1st accused forwarded

the application for the housing loan to the Zonal officer

suppressing the fact that the very same property was subjected

to mortgage in the bank and another amount of Rs.5 lakhs had

already been sanctioned as housing loan in the name of

Cheriyan Varghese and that was outstanding. The 1 st accused

prepared the loan application in the name of the husband of

Prema Pappachan and Mary George without informing them.

The 1st accused directed Prema Pappachan and Mary George to

get the power of attorney in the name of Varghese Pappachan

and George Scaria in order to get them as guarantors. There

was no margin money available for them. The 1 st accused

sanctioned an OD in the name of Santhamma as OD No.9/98.

Ext.P60 is the statement of account of the above said loan. An

amount of Rs.2 lakhs was debited as clean overdraft as per

Ext.P61 and the same was credited in the SB account No.12793

under Ext.P63 voucher. Ext.P95 account opening form was got 2026:KER:3788

Criminal Appeal No.2528 of 2007 25

signed from her by the 1st accused by misrepresentation. A

cheque book was issued in her name by the 1 st accused. The 1st

accused filled up the said cheque for Rs.2 lakhs and utilised the

proceeds of the same cheque. Ext.P63 term deposit receipt was

taken for Rs.2 lakhs. The term deposit amounting to

Rs.2,09,086/- was transferred into overdraft account in the

name of Santhamma by Ext.P65. The Zonal office rejected the

above housing loan application.

14. In paragraph 36 of the judgment of the learned

Special Judge, the learned Special Judge found that while

granting loan of Rs.10 lakhs to the 2 nd accused after forwarding

the loan application filed by him to the Zonal office and before

sanction of the same from the Zonal office, the 1 st accused

abused his position and violated the condition of sanction of

C.C.No.201. The learned Special Judge also observed that the

1st accused should have obtained four items of properties as

collateral security and instead he had secured only two items of

properties. Further, among the two items of properties offered 2026:KER:3788

Criminal Appeal No.2528 of 2007 26

as collateral security, he had released one of the properties

without getting any sanction from the Zonal office. The learned

Special Judge also found that the 1 st accused and the 2nd

accused, in furtherance of their criminal conspiracy, granted

sufficient overdrafts to persons not formally known to the Bank

and appropriated the overdraft amount towards the loan of the

2nd accused and thereby the 2nd accused had obtained illegal

pecuniary advantage.

15. The evidence of PW17 Narayanan Unnithan and

PW20 Meera Unnithan would show that they were directed to

sell their property in favour of one Simon Daniel and they were

informed further that Narayanan Unnithan and Simon Daniel

would execute Power of Attorney in favour of one of a

trustworthy person of Unnithan. While so, the 1 st accused

granted housing loan to the tune of Rs.4 lakhs in the name of

Simon Daniel, but the amount was not deposited either in the

account of Simon Daniel or to the seller's property viz.

Narayanan Unnithan and Meera Unnithan. Instead, the 1st 2026:KER:3788

Criminal Appeal No.2528 of 2007 27

accused and the 2nd accused created Exts.P40 to 42 credit

vouchers and credited the amount to the accounts as directed

by the 2nd accused and in turn, the 2 nd accused thereby

released the amount and obtained pecuniary advantage.

16. Ext.P107 is the sanction order issued by the

appointing authority of the 1st accused, the Chief Manager,

State Bank of Travancore, who was examined as PW23. On a

reading of the evidence of PW23 and Ext.P107 sanction, the

same was issued by the authority on applying its mind, after

verification of the prosecution records and therefore the

prosecution succeeded in proving the sanction, for which no

dispute is raised by the appellants. It is decipherable from the

evidence that overdraft facility also granted to Varghese Daniel

as detailed in paragraph 20 of the judgment of the Special

Court, which reads as under:

"20. OD was also granted to Varghese Daniel. Ext.P69 shows that OD was granted on 24.7.1998 in favour of Varghese Daniel. Varghese Daniel was examined as PW24. This loan was granted only for the benefit of A2 in furtherance of the conspiracy with A1.

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Criminal Appeal No.2528 of 2007        28

Rs.2 lakhs was withdrawn by PW24 Varghese Daniel. Another OD for Rs.2 lakhs was granted to M.G.Baby. Out of the said 4 lakhs Rs. 3.8 Iakhs was utilised for making payment of CC a/c of A2. On the reverse of Ext.P66 the total of Rs.2 lakhs + 1.8 lakhs is calculated and on the reverse of Ext.P71 on the credit slip would show the utilisation of the above 3.8 lakhs. Out of the said amount of Rs.3.8 lakhsm an amount of Rs.79,474/- was transferred in the OD No.2 in the name of A2 another amount of Rs.64,681/- was transferred under Ext.P74 to CC a/c 201 of A2. Another amount of Rs.2,25,000/-was transferred into CC a/c 201 under Ext.P73 voucher. In order to realise cheque produced in CC No.201. Another amount of Rs.10,815/- and another amount of Rs.30/- by Ext.P72 was transferred to CC a/c of 201. The entire amount of Rs.3.80 lakhs were appropriated for the benefit of A2. The above two ODs were sanctioned by A1 to Varghese Daniel and M.G.Baby only for the benefit of A2 in furtherance of the conspiracy entered

into between A1 and A2. "

As regards the misappropriation, the 1st accused and the 2nd

accused granted a housing loan in the name of PW16 and

transferred the sale proceeds in the joint account of PW17

Unnithan and PW20, his wife Meera and thereafter the 1 st

accused dishonestly sanctioned housing loan in the name of

Simon Daniel and transferred the money in the joint account of

PW17 and PW20 as per Ext.P83(a). Thereafter, the 1 st accused 2026:KER:3788

Criminal Appeal No.2528 of 2007 29

kept the cheque book from the newly opened account in the

name of PW17 and PW20, after obtaining signatures and he

encashed three cheques Exts.P37, P38 and P39 and not given

the amount either to PW17 or PW20. Thereafter, the amounts

covered by Exts.P37, P38 and P39 cheques were utilised by the

1st accused and the 2nd accused, on the basis of Exts.P40 to 42

transfer credit vouchers and those vouchers were executed

without the knowledge or consent of Unnithan. Ext.P38 is the

cheque for Rs.2,25,000/- and the above amount was

appropriated for closing the overdraft of M.G.Baby under

Ext.P41 credit slip. Further, Unnithan and M.G.Baby had no

direct contact between themselves and the amount under

Ext.P39 cheque to the tune of Rs.84,200/- was utilised for

closing the overdraft account of Varghese Daniel under Ext.P42

credit slip. That apart, Rs.90,000/- encashed through Ext.P37

cheque was utilised to make credit slip to C.C.Account No.201

in the name of the 2nd accused and the credit was made under

Ext.P40 credit voucher. The above three credit vouchers were 2026:KER:3788

Criminal Appeal No.2528 of 2007 30

prepared by the 2nd accused, Ext.P26 tendered in evidence is

the account opening form pertaining to account No.16826 in

the name of Narayanan Unnithan and Meera Unnithan. This

evidence is supported by the version of PW6 and PW7. In this

case, DW1 was examined from the side of the accused to prove

that the statement of PW1 Latha was regarded by PW9, which

was marked as Ext.D7. Similarly, Ext.D8 statement of Unnithan

was tendered in evidence to prove contradictions between the

statements of Unnithan DW1 and his deposition as PW17. In

fact, the methodology adopted by the defence to prove

contradiction by examining the author of a statement without

using the same for contradicting the witness during his

examination with the aid of Section 145 of the Indian Evidence

Act, 1872, itself is a wrong procedure and therefore the Special

Court found that even though Exts.D20 to 24 circulars were

given emphasis by the accused to prove that the Chief Manager

was competent to grant loan upto Rs.10 lakhs, the case of the

prosecution is that the Chief Manager had no power to grant 2026:KER:3788

Criminal Appeal No.2528 of 2007 31

loan upto Rs.10 lakhs after forwarding the loan application to

the Zonal office for sanction, would sustain. Therefore, the

learned Special Judge found that documents Exts.D20 to D24 or

Exts.D25 to D26 could not prove that the Manager had acted

within his powers and he did not abuse his position as public

servant. The Special Court also considered the evidence of DW2

to prove that the 2nd accused never requested DW2 to

mortgage her property as security for obtaining loan for and on

behalf of Pasha. Narayanan Unnithan, DW2 deposed further

that she put her signature for a loan of Rs.5 lakhs in order to

save the life of Narayanan Unnithan. But, the Bank had issued a

notice to her for realisation of Rs.70 lakhs and she was not

aware of the fact that she was a guarantor of Pasha for a sum of

Rs.70 lakhs.

17. Summing up the discussions, this Court would hold

that the prosecution allegation regarding grant of loan and

overdraft facility without proper authority and misappropriation

of the same are established by the evidence discussed in detail 2026:KER:3788

Criminal Appeal No.2528 of 2007 32

and thereby the learned Special Judge rightly entered into the

finding that accused 1 and 2 committed the offences and

accordingly they were sentenced. Therefore, the conviction

imposed by the Special Court is perfectly in order and the same

does not require any interference.

18. However, in consideration of the arguments

advanced by the learned counsel for the 1st accused/appellant

and taking note of the minimum sentence provided for the

offence, I am inclined to modify the sentence.

In the result, this appeal is allowed in part.

Conviction imposed by the Special Judge is upheld. Sentence

stands modified as under:

(i) The 1st accused/appellant is sentenced to undergo

rigorous imprisonment for a period of two years for the offence

punishable under Section 13(2) read with Section 13(1)(d) of

the PC Act, 1988 and to pay a fine of Rs.1 lakh and in default of

payment of fine, the 1st accused/appellant shall undergo default

rigorous imprisonment for a period of 6 months.

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Criminal Appeal No.2528 of 2007 33

(ii) The 1st accused/appellant is sentenced to undergo

rigorous imprisonment for a period of 6 months for the offence

punishable under Section 120B of the IPC and to pay a fine of

Rs.10,000/- and in default of payment of fine, the 1 st

accused/appellant shall undergo default rigorous imprisonment

for a period of three weeks.

(iii) The 1st accused/appellant is sentenced to undergo

rigorous imprisonment for a period of 6 months for the offence

punishable under Section 420 read with Section 120B of the IPC

and to pay a fine of Rs.25,000/- and in default of payment of