Telangana High Court
Ganesh Rathod, vs The State Of A.P., on 17 October, 2023
Bench: K.Surender
HIGH COURT FOR THE STATE OF TELANGANA
AT HYDERABAD
*****
Criminal Appeal No.667 OF 2007
Between:
Ganesh Rathod ...
Appellant/A11
And
The State of Andhra Pradesh, rep.by
Public Prosecutor, High Court of A.P.,
Hyderabad.
...Respondent
Criminal Appeal No.714 OF 2007
Between:
Pamula Gangadharam
...Appellant/A12
And
The State of A.P. rep. by
Public Prosecutor. ...Respondent
Criminal Appeal No.753 OF 2007
Between:
Kadimi Venkateswara Rao ...Appellant/A3
And
The State of A.P.
Rep by its Public Prosecutor,
High Court, Hyderabad.
...Respondent/Complainant
Criminal Appeal No.791 OF 2007
Between:
R.Mothya Naik ...Appellant/Accused
No.1
And
The State of A.P.
Through Public Prosecutor,
High Court of A.P. ...Respondents
DATE OF JUDGMENT PRONOUNCEMENT :17.10.2023
Submitted for approval.
THE HON'BLE SRI JUSTICE K.SURENDER
1 Whether Reporters of Local
newspapers may be allowed to see the Yes/No
Judgments?
2 Whether the copies of judgment may
be marked to Law Reporters/Journals Yes/No
3 Whether Their Ladyship/Lordship
Wish to see their fair copy of the Yes/No
Judgment?
__________________
K.SURENDER, J
* THE HON'BLE SRI JUSTICE K. SURENDER
+ CRL.A. No. 667 of 2007
% Dated 17.10.2023
# Ganesh Rathod ...
Appellant/A11
And
$ The State of Andhra Pradesh, rep.by
Public Prosecutor, High Court of A.P.,
Hyderabad.
...Respondent
+ CRL.A. No. 714 of 2007
# Pamula Gangadharam ...Appellant/A12
And
$ The State of A.P. rep. by
Public Prosecutor. ...Respondent
+ CRL.A.No. 753 of 2007
# Kadimi Venkateswara Rao ...Appellant/A3
And
$ The State of A.P.
Rep by its Public Prosecutor,
High Court, Hyderabad.
...Respondent/Complainant
+ CRL.A.No.791 of 2007
R.Mothya Naik ...Appellant/Accused
No.1
And
The State of A.P.
Through Public Prosecutor,
High Court of A.P. ...Respondent
! Counsel for the Appellants: Sri A. Prabhakar Rao, K. Suresh
Reddy,
T.Pradyumnakumar Reddy &
Sreenivasa Rao Ravulapati
^ Counsel for the Respondents: SriPublic Prosecutor
>HEAD NOTE:
? Cases referred:
1.2023 SCC Online SC 900
2.(2007) 1 SCC 1
3.(1984) 4 SCC 116
4.(2023) 4 Supreme Court Cases 731
5.(2011) 10 Supreme Court Cases 768
6.(1995) 1 Supreme Court Cases 142
7.1984 (Supp) Supreme Court Cases 207
8.(2019) 2 SCC 303
9.(Criminal Appeal No. 25 of 2012 dated 11.08.2022)
10.2023 SCC Online SC 900
11.2023 SCC Online Pat 2239
12. 1973 AIR 2773
13.(2012) 2 SCC 34
THE HONOURABLE SRI JUSTICE K.SURENDER
CRIMINAL APPEAL Nos.667, 714, 753 and 791 OF 2007
COMMON JUDGMENT:
1. Criminal Appeal No.667 of 2007 is filed by A11,
Crl.A.No.714 of 2007 is filed by A12, Crl.A.No.753 of 2007 is filed
by A3 and Crl.A.No.791 of 2007 is filed by A1, questioning their
conviction in CC.No.2 of 2003, vide Judgment dated 11.06.2007
recorded by the Special Judge under the Prevention of
Corruption Act for Speedy Trial of Cases of Embezzlement of
Scholarship amounts in Social Welfare Department, Etc. at
Criminal Courts Complex, Nampally, Hyderabad.
2. The appellants were convicted and sentenced for the
offences punishable under Sections 420, 471, 409 r/w.109, 420
r/w.109, 467 r/w.109, 468 r/w.109 and 471 r/w.109 of the
Indian Penal Code. Since all the appeals are arising out of
common judgment in CC No.2 of 2003, all these appeals are
being heard together and disposed by way of this Common
Judgment.
3. The case pertains to the pre-metric scholarships scam.
Investigation was triggered on the basis of report Ex.P2 given by
PW1-B.Limba Reddy who was Inspector of Police, Special Team,
WCO, Central Crime Station, Hyderabad. DCP-Sri Narasimha
Rao directed PW1 to inquire into pre-metric scholarship scam.
The said orders were given to PW1 on 03.10.2002. Ex.P2-report
was given by PW1 on 09.11.2002, addressed to the DCP,
Detective Department. In Ex.P2, PW1 stated that he enquired
into the pre-matric scholarship scam perpetrated by the
accused. He presented a detailed enquiry report to the DCP,
Detective Department, Hyderabad, stating that during the period
from 1992 to 2000, A1-R.Mothya Naik in conspiracy with the
other accused floated 8 bogus schools which were not in
existence, forged and fabricated pre-matric scholarship bills in
the names of those bogus schools, collected A.P.Government
Cheques from the Deputy Pay Accounts Office and embezzled
about Rs.3.78 crores and thereby cheated the Government.
4. The said complaint was addressed to the Deputy
Commissioner of Police, Detective Department. The same was
registered on 9.11.2002. Investigation was handed over to
PW.52- Investigating Officer. Details of investigation are-
(i) A-1 R.Mothya Naik worked as a Warden in Social
Welfare Department from 3/1985 to 6/2002 and was
dismissed from service. A-2 D.Vijaya Lakshmi @
R.Vijaya Lakshmi is the wife of A-1. A-3 Kadimi
Venkateswar Rao worked as Sperintendent from 7/1995
to /2002 (dismissed from service), A-4 Ratilal Lalji
Praveen Chander worked as an Auditor from 7/2000
to /2002 (dismissed from service), A-5 Pemmirajuu
Ramalingeswara Sarma worked as Superintendent from
1/1994 to 4/1997 (retired from service), A-6
K.V.S.Ramachandra worked as Superintendent from
4/1997 to 2/1998, A-7 Tangirala Venkata Sastri worked
as Superintendent from 7/1998 to 8/2000 (dismissed
from service), A-8 Tangirala Laxminarayana worked as
APAO (Assistant Pay and Accounts Officer) (retired from
service), A-9 Arisetty Prasada Rao worked as APAO from
4/1996 to 7/1998 (retired from service), A-10 Maddali
Bala Venkata Ramana Rao worked as APAO from
1/1999 to 7/2001 (dismissed from service) in Deputy
PAO, Telugu Samkshema Bhavan, Masab Tank,
Hyderabad. A-11 Ganesh Rathod worked as Junior
Assistant from 6.09.94 to 15.09.2001 in District Tribal
Welfare Office, Parigi, Ranga Reddy District and was
dismissed from service. A-12 Pamula Gangadharam
worked as D.T.W.O. (District Tribal Welfare Officer) from
28.12.1998 to 27.10.2000 and retired from service. A-
13 Krishna Kumar worked as Deputy Pay and Accounts
Officer from July 1999 to 31.07.2000 and retired from
service.
(ii) A-1 to A-13 were parties to a criminal conspiracy to
swindle huge amounts of Government money meant for
pre-matric scholarships for the poor students of ST
community and in pursuance of the said criminal
conspiracy they created false and forged bills, cheques
and other documents. Opened bank accounts in the
names of Principals/Headmasters of the bogus non-
existing schools in various banks by impersonation and
later withdrew those amounts from the bank accounts
and misappropriated the same. Thus they have cheated
the Government and caused loss to the extent of several
crores of rupees. A-1 R.Mothya Naik, A-3
K.Venkateswara Rao and A-11 Ganesh Rathod have
master minded the conspiracy and in connivance with
the officials of DTWO's office and Pay and Accounts
Office, Hyderabad, prepared forged and fabricated pre-
matric scholarship bills in the names of fictitious and
non-existing schools viz., 1)RSM School, Sainagar,
Hyderabad, 2) Alekhya High School, Prashanthnagar,
Hyderabad 3) Chaitanya High School, Upperapalli,
Hyderabad, 4) Effiath School, Jangammer, Hyderabad,
5) Divya Teja Public School, Prashanth Nagar,
Langerhouse, Hyderabad, 6) New Eden Public School,
Natraj Nagar, Karwan, 7) Srinikethan High School,
Karwan and 8) St.George High School, Uerpalli,
Hyderabad. Such bills were presented in the Deputy Pay
and Accounts Office, Telugu Samkshema Bhavan,
Masab Tank, Hyderabad from the years 1992 to 2000,
got them passed with A-3 K.Venkateswara Rao, Auditor,
A-4, Ratilal Lalji Praveen Chander, Auditor, A-5
Pemmiraju Ramalingeswara Sarma, Superintendent, A-
6 K.V.S.Ramachandra, Superintendent, A-7 Tangirala
Venkata Sastry, Superintendent, A-8 Tangirala
Laxminarayana, APAO, A-9 Arisetty Prasada Rao, APAO,
A-10 Maddali Bala Venkataramana Rao, APAO and A-13
Krishna Kumar, Dy.APAO and collected A.P.Government
cheques to the tune of Rs.3.78 crores.
iii) A-1 R.Mothya Naik opened accounts in State Bank
of Hyderabad, Raidurg Branch and Ramnagar Branch,
deposited A.P.Government cheques, got them cleared
from SBH, Gunfoundary, Hyderabad, presented self-
cheques in the concerned banks in the name of
fictitious Principals/Headmasters and withdrew a total
amount of Rs.3.78 crores. He has distributed the ill-
gotten money to the other accused as per their shares.
He and A-3 have purchased huge properties
disproportionate to their known source of income with
the ill-gotten money in their names and in the names of
their family members and relatives and also deposited
cash in banks. The other accused who have also
received the ill-gotten money from A-1 and A-3 spent
the same for their family necessities. Thus the accused
have caused wrongful loss to the Government to the
tune of Rs.3.78 crores which was meant for the
students of ST community.
5. Learned Special Judge examined the witnesses P.Ws.1 to
52, marked Exs.P1 to P105. The defence examined D.W.1 and
during the course of trial, Exs.D1 to D13 were marked.
6. Learned Special Judge concluded that no case was made
out against A2, A4 to A6, A8 and A10. Case against A10 was
split up. Since he died during trial, case was abated against him.
SANCTION ORDERS TO PROSECUTE PUBLIC SERVANTS
7. Sanction against public servant is an act necessitated
under Section 197 of Cr.P.C to protect officers from false
criminal prosecutions. Learned Special Judge has committed an
error in finding that there was no necessity of Sanction orders,
reducing sanctity of Section 197 of Cr.P.C for obtaining sanction
orders and its object redundant. Section 197 of Cr.P.C or similar
provision under the Prevention of Corruption Act were
introduced by the legislature to prevent and protect public
servants from being criminally prosecuted, which acts amounted
to criminal offences, during discharge of their official duties.
Recently, the Hon'ble Supreme Court in the case of
A.Srinivasulu v. State rep. by the Inspector of Police1
clarified that the observations of the Hon'ble Supreme Court in
Prakash Singh Badal and another v. State of Punjab and
others 2, held as under:
"50. But the above contention in our opinion is far-fetched. The
observations contained in paragraph 50 of the decision in Parkash Singh
Badal (supra) are too general in nature and cannot be regarded as the ratio
flowing out of the said case. If by their very nature, the offences under
sections 420, 468, 471 and 120B cannot be regarded as having been
committed by a public servant while acting or purporting to act in the
discharge of official duty, the same logic would apply with much more
vigour in the case of offences under the PC Act. Section 197 of the Code
does not carve out any group of offences that will fall outside its purview.
Therefore, the observations contained in para 50 of the decision in Parkash
Singh Badal cannot be taken as carving out an exception judicially, to a
statutory prescription. In fact, Parkash Singh Badal cites with approval
the other decisions (authored by the very same learned Judge) where this
Court made a distinction between an act, though in excess of the duty, was
reasonably connected with the discharge of official duty and an act which
was merely a cloak for doing the objectionable act. Interestingly, the
proposition laid down in Rakesh Kumar Mishra (supra) was distinguished
2023 SCC OnLine SC 900
(2007) 1 SCC 1
in paragraph 49 of the decision in Parkash Singh Badal, before the Court
made the observations in paragraph 50 extracted above.
51. No public servant is appointed with a mandate or authority to
commit an offence. Therefore, if the observations contained in paragraph
50 of the decision in Parkash Singh Badal are applied, any act which
constitutes an offence under any statute will go out of the purview of an act
in the discharge of official duty. The requirement of a previous sanction will
thus be rendered redundant by such an interpretation."
8. The Hon'ble Supreme Court observed that the requirement
of previous sanction would be rendered redundant if it is
interpreted that every act of which a public servant is alleged to
have committed would be without protection, which the
legislature thought it fit to protect public servants who were
discharging their duties, which are reasonably connected to their
official functions.
FINDINGS OF TRIAL COURT
9. The findings of the learned Special Judge is on the following
basis;
i) Eight schools were bogus and floated by A1;
ii) The Pay and Accounts personnel, who were accused
have conspired with A1 and processed the bills;
iii) A1 and A2 opened accounts in SBH and Andhra Bank,
deposited cheques and withdrew the money;
iv) Witnesses are examined to speak about receipt of
cheques from the fake account opened by A1.
10. Even prior to discussing the evidence in the present case,
it is necessary that the law laid down by the Hon'ble Supreme
Court for appreciating evidence has to be gone into. A reading of
the evidence of witnesses and findings of the learned Special
Judge, the basics of admissibility of evidence in criminal trial
have been utterly disregarded and on the basis of inadmissible
evidence, conclusions were drawn in the judgment.
11. The case is one of circumstantial evidence. The five golden
principles constituting panchsheel to prove a case based on
circumstantial evidence were summed up in Sharad
Birdhichand Sarda v. State of Maharashtra 3, which reads as
follows:
"153. A close analysis of this decision would show that the following
conditions must be fulfilled before a case against an accused can be said to
be fully established:
(1) the circumstances from which the conclusion of guilt is to be drawn
should be fully established. It may be noted here that this Court indicated
that the circumstances concerned "must or should" and not "may be"
established. There is not only a grammatical but a legal distinction between
"may be proved" and "must be or should be proved" as was held by this
Court in Shivaji Sahabrao Bobade v. State of Maharashtra [(1973) 2 SCC
793 : 1973 SCC (Cri)1033 : 1973 Crl LJ 1783] where the observations were
made: [SCC para 19, p. 807: SCC (Cri) p. 1047]
"Certainly, it is a primary principle that the accused must be and not
merely may be guilty before a court can convict and the mental distance
between 'may be' and 'must be' is long and divides vague conjectures from
sure conclusions."
(2) the facts so established should be consistent only with the hypothesis
of the guilt of the accused, that is to say, they should not be explainable on
any other hypothesis except that the accused is guilty,
(3) the circumstances should be of a conclusive nature and tendency,
(4) they should exclude every possible hypothesis except the one to be
proved, and
(5) there must be a chain of evidence so complete as not to leave any
reasonable ground for the conclusion consistent with the innocence of the
accused and must show that in all human probability the act must have
been done by the accused."
(1984) 4 SCC 116
12. In Neeraj Dutta v. State (Government of NCT of
Delhi) 4 the Hon'ble Supreme Court held :
"52. Again, oral evidence can be classified as original and hearsay
evidence. Original evidence is that which a witness reports himself to have
seen or heard through the medium of his own senses. Hearsay evidence is
also called derivative, transmitted, or second-hand evidence in which a
witness is merely reporting not what he himself saw or heard, and not
what has come under the immediate observation of his own bodily senses,
but what he has learnt in respect of the fact through the medium of a third
person. Normally, a hearsay witness would be inadmissible, but when it is
corroborated by substantive evidence of other witnesses, it would be
admissible vide Mukhtiar Singh [Mukhtiar Singh v. State of Punjab, (2017)
8 SCC 136 : (2017) 3 SCC (Cri) 607] .
55. Documentary evidences, on the other hand, are to be proved by the
production of the documents themselves or, in their absence, by secondary
evidence under Section 65 of the Act. Further, facts showing the existence
of any state of mind, such as intention, knowledge, good faith, negligence,
or ill will need not be proved by direct testimony. It may be proved
inferentially from conduct, surrounding circumstances, etc. (See Sections 8
and 14 of the Evidence Act.)
56. Insofar as oral evidence is concerned, this Court in State of
Rajasthan v. Babu Meena [State of Rajasthan v. Babu Meena, (2013) 4
SCC 206 : (2013) 2 SCC (Cri) 364] ("Babu Meena") has classified the same
into three categories : (i) wholly reliable; (ii) wholly unreliable, and; (iii)
neither wholly reliable nor wholly unreliable. While an accused can be
convicted on the sole testimony of a wholly reliable witness, the
uncorroborated evidence of a wholly unreliable testimony of a witness
must result in an acquittal.
57. Section 60 of the Evidence Act requires that oral evidence must be
direct or positive. Direct evidence is when it goes straight to establish the
main fact in issue. The word "direct" is used in juxtaposition to derivative
or hearsay evidence where a witness gives evidence that he received
information from some other person. If that person does not, himself, state
such information, such evidence would be inadmissible being hearsay
evidence. On the other hand, forensic procedure as circumstantial or
inferential evidence or presumptive evidence (Section 3) is indirect
evidence. It means proof of other facts from which the existence of the fact
in issue may be logically inferred. In this context, the expression
"circumstantial evidence" is used in a loose sense as, sometimes,
circumstantial evidence may also be direct.
58. Although the expression "hearsay evidence" is not defined under the
Evidence Act, it is, nevertheless, in constant use in the courts. However,
hearsay evidence is inadmissible to prove a fact which is deposed to on
hearsay, but it does not necessarily preclude evidence as to a statement
having been made upon which certain action was taken or certain results
followed such as evidence of an informant of the crime.
(2023) 4 Supreme Court Cases 731
61. Section 62 of the Evidence Act defines primary evidence to mean the
documents itself produced for the inspection of the court. If primary
evidence is available, it would exclude secondary evidence. Section 63 of
the Evidence Act deals with secondary evidence and defines what it
means and includes. Section 63 mentions five kinds of secondary
evidence, namely--
(i) Certified copies given under the provisions hereinafter contained;
(ii) Copies made from the original by mechanical processes which in
themselves ensure the accuracy of the copy, and copies compared with
such copies;
(iii) Copies made from or compared with the original;
(iv) Counterparts of documents as against the parties who did not execute
them; and
(v) Oral accounts of the contents of a document given by some person who
has himself seen it.
69. One of the modes through which a fact can be proved. But, that is not
the only mode envisaged under the Evidence Act. Proof of the fact depends
upon the degree of probability of it having existed. The standard required
for reaching the supposition is that of a prudent man acting in any
important matter concerning him."
13. In Sherimon v. State of Kerala 5, the Hon'ble Supreme
Court held as follows:
"17.The gist of the offence of conspiracy is the agreement between two and
more persons to do or cause to be done an illegal act or a legal act by
illegal means. There must be meeting of minds resulting in an ultimate
decision taken by the conspirators regarding commission of the crime."
14. In P.K.Narayanan v. State of Kerala6, the Hon'ble Supreme
Court held as follows:
"9........ An offence of conspiracy cannot be deemed to have been
established on mere suspicion and surmises or inferences which are not
supported by cogent evidence.
10. The ingredients of this offence are that there should be an
agreement between the persons who are alleged to conspire and the said
agreement should be for doing of an illegal act or for doing by illegal
means an act which by itself may not be illegal. Therefore the essence of
criminal conspiracy is an agreement to do an illegal act and such an
agreement can be proved either by direct evidence or by circumstantial
evidence or by both and it is a matter of common experience that direct
evidence to prove conspiracy is rarely available. Therefore the
circumstances proved before, during and after the occurrence have to be
considered to decide about the complicity of the accused. But if those
circumstances are compatible also with the innocence of the accused
(2011) 10 Supreme Court Cases 768
(1995) 1 Supreme Court Cases 142
persons then it cannot be held that the prosecution has successfully
established its case. Even if some acts are proved to have been
committed it must be clear that they were so committed in pursuance of
an agreement made between the accused who were parties to the
alleged conspiracy. Inferences from such proved circumstances regarding
the guilt may be drawn only when such circumstances are incapable of
any other reasonable explanation. From the above discussion it can be
seen that some of the circumstances relied upon by the prosecution are
not established by cogent and reliable evidence. Even otherwise it
cannot be said that those circumstances are incapable of any other
reasonable interpretation."
15. In Jethsur Suranghai v. State of Gujarat 7, the Hon'ble
Supreme Court held as follows:
"9. Having gone through the judgment of the High Court......In our
opinion, the contention raised by the counsel for the appellant is well-
founded and must prevail. With due respect what the High Court
seems to have missed is that in a case like this where there was
serious defalcation of the properties of the Sangh, unless the
prosecution proved that there was a close cohesion and collusion
between all the accused which formed the subject matter of a
conspiracy, it would be difficult to prove the dual charges particularly
against the appellant (A-1). The charge of conspiracy having failed, the
most material and integral part of the prosecution story against the
appellant disappears...."
16. In State of U.P. v. Wasif Haider 8, the Hon'ble Supreme
Court held as follows:
"22. In the instant appeals before us, the prosecution has failed
to link the chain of circumstances so as to dispel the cloud of doubt
about the culpability of the respondent-accused. It is a well-settled
principle that a suspicion, however grave it may be cannot take place
of proof i.e. there is a long distance between "may be" and "must be",
which must be traversed by the prosecution to prove its case beyond
reasonable doubt [see Narendra Singh v. State of M.P. [Narendra
Singh v. State of M.P., (2004) 10 SCC 699 : 2004 SCC (Cri) 1893] ].
23. This Court in Kailash Gour v. State of Assam [Kailash Gour v. State
of Assam, (2012) 2 SCC 34 : (2012) 1 SCC (Cri) 717] , has held that :
(SCC pp. 50-51, para 44)
"44. The prosecution, it is axiomatic, must establish its case
against the accused by leading evidence that
is accepted by the standards that are known to criminal jurisprudence
regardless of whether the crime is committed in the course of communal
disturbances or otherwise. In short, there can only be one set of rules
1984 (Supp) Supreme Court Cases 207
(2019) 2 SCC 303
and standards when it comes to trials and judgment in criminal cases
unless the statute provides for anything specially applicable to a
particular case or class of cases."
24. In the present case, the cumulative effect of the aforesaid
investigative lapses has fortified the presumption of innocence in favour
of the respondent-accused. In such cases, the benefit of doubt arising out
of a faulty investigation accrues in favour of the accused."
17. In Ramnivas v. State of Haryana 9, the Hon'ble Supreme
Court held as follows:
"20. It is settled law that the suspicion, however strong, it may be,
cannot take the place of proof beyond reasonable doubt. An accused
cannot be convicted on the ground of suspicion, no matter how strong it
is. An accused is presumed to be innocent unless proved guilty beyond a
reasonable doubt.
21. In the preset case, we find that the prosecution has utterly failed to
establish the chain of events which can be said to exclusively lead to the
one and only conclusion, i.e., the guilt of the accused...."
18. In A.Srinivasulu v. State rep. by the Inspector of
Police 10, the Hon'ble Supreme Court held as follows:
"50. But the above contention in our opinion is far-fetched. The
observations contained in paragraph 50 of the decision in Parkash
Singh Badal (supra) are too general in nature and cannot be regarded
as the ratio flowing out of the said case. If by their very nature, the
offences under sections 420, 468, 471 and 120B cannot be regarded
as having been committed by a public servant while acting or
purporting to act in the discharge of official duty, the same logic would
apply with much more vigour in the case of offences under the PC Act.
Section 197 of the Code does not carve out any group of offences that
will fall outside its purview. Therefore, the observations contained in
para 50 of the decision in Parkash Singh Badal cannot be taken as
carving out an exception judicially, to a statutory prescription. In
fact, Parkash Singh Badal cites with approval the other decisions
(authored by the very same learned Judge) where this Court made a
distinction between an act, though in excess of the duty, was
reasonably connected with the discharge of official duty and an act
which was merely a cloak for doing the objectionable act. Interestingly,
the proposition laid down in Rakesh Kumar Mishra (supra) was
distinguished in paragraph 49 of the decision in Parkash Singh Badal,
before the Court made the observations in paragraph 50 extracted
above.
51. No public servant is appointed with a mandate or authority
to commit an offence. Therefore, if the observations contained in
(Criminal Appeal No.25 of 2012 dated 11.08.2022)
2023 SCC OnLine SC 900
paragraph 50 of the decision in Parkash Singh Badal are applied, any
act which constitutes an offence under any statute will go out of the
purview of an act in the discharge of official duty. The requirement of a
previous sanction will thus be rendered redundant by such an
interpretation."
19. In Teni Yadav v. State of Bihar 11, the Hon'ble Supreme
Court held as follows:
"11. ...... The burden is always on the prosecution to prove its case
beyond reasonable doubt on the basis of legally admissible evidence
and when the offence charged is gruesome or diabolic, much higher,
degree of assurance is required to infer the guilt of the accused. This
principle is succinctly explained by the Hon'ble Supreme Court
in Mousam Singha Roy v. State of W.B. reported in (2003) 12 SCC 377,
paragraphs 27 and 28 of which reads as under:--
"27. Before we conclude, we must place on record the fact that we are
not unaware of the degree of agony and frustration that may be caused
to the society in general and the families of the victims in particular, by
the fact that a heinous crime like this goes unpunished, but then the law
does not permit the courts to punish the accused on the basis of moral
conviction or on suspicion alone. The burden of proof in a criminal trial
never shifts, and it is always the burden of the prosecution to prove its
case beyond reasonable doubt on the basis of acceptable evidence. In
the similar circumstance this Court in the case of Sarwan Singh Rattan
Singh v. State of Punjab (AIR 1957 SC 637) stated thus (AIR p.645,para
12)
"It is no doubt a matter of regret that a foul cold-blooded and cruel
murder should go unpunished. There may also be an element of truth in
the prosecution story against the accused. Considered as a whole, the
prosecution story may be true; but between 'may be true' and 'must be
true' there is inevitably a long distance to travel and the whole of this
distance must be covered by the prosecution by legal, reliable and
unimpeachable evidence before an accused can be convicted.
28. It is also a settled principle of criminal jurisprudence that the more
serious the offence, the stricter the degree of proof, since a higher degree
of assurance is required to convict the accused."
12. Similar is the observation of the Hon'ble Supreme Court in Shivaji
Sahebrao Bobde v. State of Maharashtra ((1973) 2 SCC 793 : AIR 1973
SC 2622) whether it is held that certainly it is a primary principle that
the accused 'must be' and not merely 'may be' guilty before a court to
convict and the mental distance between 'may be' and 'must be' is long
and divides vague conjunctures from sure conclusions."
[[
2023 SCC OnLine Pat 2239
BOGUS SCHOOLS:
20. The Special judge has concluded that the prosecution has
proved that the schools were bogus on the basis of the evidence
of P.W.1, Ex.P2, the evidence of P.W.26, Assistant Director in the
office of Commissioner and Directorate of School Education and
the letter issued by him under Ex.P179.
21. Ex.P2 is the letter/complaint by P.W.1 addressed to the
Dy.Commissioner of Police, Detective Department. In the said
letter, P.W.1 specifically stated that A1 along with other officials
of District Tribal Welfare Office and Pay and Accounts Office
during the years 1992-2000 conspired to swindle the
Government funds meant for pre-matric scholarships in the
name of the eight schools. Accounts were opened in Andhra
Bank, Karwan branch, State Bank of Hyderabad, Ramnagar
branch, State Bank of Hyderabad, Raidurg branch and withdrew
an amount of Rs.3.67 Crores. With the said amount, A1 and A2
purchased several properties and were also shared among the
other accused. During cross-examination, PW1 admits that he
has not made any specific enquiry nor mentioned names of the
officials whom he met and on what date. No documents were
obtained from any of the office nor can give names of the officials
whom he met in Pay and Accounts Office and District Tribal
Welfare Office (DTWO). Further, he says that he received
information from informants and came to conclusion that
schools were bogus. Government records were not verified
regarding the existence or otherwise of the schools. Having given
the details of the eight alleged bogus schools, exact amount
swindled, one fails to understand as to how these details were
available with P.W.1 even before initiating any investigation in
the case and without examining any official or visiting any office
or going through any official record in the DTWO or PAO offices
or banks. The final outcome of the investigation gives the very
same details as in Ex.P1. Apparently, P.W.1 suppressed the
actual events and there was no necessity to do so. Investigation
should be fair and transparent. Suppression creates doubts in
the mind of the Court.
22. The other evidence is that of P.W.26, who has given
Ex.P179 letter. The said letter was addressed by Dr.Man Mohan
Singh, Commissioner and Director of School Education to Sri
Mohd. Ismail, Assistant Commissioner of Police. P.W.26 has
signed the said letter on behalf of the Commissioner and Director
of School Education. In the said letter, it is mentioned that in
respect of Alekhya High School, Prashant Nagar, permission was
not granted and no school in the Mandal. In respect of
Chaitanya High School, Upparapalli, the same was existing at
Hyderguda, Ranga Reddy District and not at Upparpally. In
respect of Effiath School, the school was granted recognition. In
respect of New Eden Public School, Prasanth Nagar, school was
granted recognition and finally in respect of St.George High
School, Moulali, it was existing and classes I to X were being
run.
23. The said document goes contrary to the case of the
prosecution that eight schools are bogus schools. In Ex.P179, it
was informed regarding existence of five schools out of the
alleged eight bogus schools. In the cross-examination, the
witness stated that his boss Commissioner was examined by
police and he was not examined. He further admits that he is not
aware about the basis on which Ex.P179 was prepared. A letter
cannot form basis to rely on the said contents unless
prosecution places any other circumstantial evidence to
substantiate the contents of the letter. As already said, Ex.P2
claims eight schools were bogus. However, Ex.P179 claims
existence of five schools out of the said eight schools.
24. The Investigating Officer-P.W.52 has stated that he has
based his conclusion regarding the bogus nature of the schools
on the basis of the letter issued under Ex.P2 and Ex.P179. It is
admitted by the witness that the department maintains a list of
the schools that are recognized and existing in the jurisdiction.
However, the said registers or the details which are available in
the department were not collected during the course of
investigation. P.W2 admits that a list is available regarding
recognized schools and also to whom the scholarships can be
granted. The said documents which would establish the
allegation of the prosecution that the eight schools are bogus
were not seized nor copies produced nor are any witnesses
examined who maintains the registers and scholarship details.
25. Under Section 114-G of Indian Evidence Act, it may be
presumed that evidence that could be produced and is not
produced, if produced would be unfavorable to the person who
withholds it. The Court may presume the existence of such fact.
In the absence of any evidence apart from the inadmissible and
uncorroborated contents of Exs.P2 and P179, it creates any
amount of doubt on the prosecution case about the claim of the
eight schools being non-existent.
26. In Kali Ram v. State of Himachal Pradesh 12, the
Hon'ble Supreme Court held that if a statement made by a
person to a police officer in the course of an investigation is
inadmissible except for the purpose mentioned in s.162, the
same would be true of a letter containing narration of facts
1973 AIR 2773
addressed by a person to a police officer during the course of
investigation. It is not permissible to circumvent the prohibition
contained in S.162 by the investigating officer obtaining a
written statement of a person instead of the investigating officer
himself recording that statement. The restriction placed by s.162
on the use of statement made during the course of investigation
is in general terms. There is nothing in the section to show that
the investigation must relate to any particular accused before a
statement to the police pertaining to that accused can be held to
be inadmissible. The letter is, therefore, inadmissible in
evidence.
27. Though the authors of the letters Ex.P2 and P179 are
examined as PW1 and P26 respectively, both the witnesses are
personally not aware about the contents of the letters. The
witnesses stated that the information is on the basis of
information received from others and registers available in the
office. Details of such persons who secured information was not
given nor the documents/registers produced. The evidence is
hearsay and inadmissible.
SUBMISSION OF BILLS AND RECEIPT OF CHEQUES:
28. Learned Special Judge has framed a point no.5 that arises
for consideration. For the sake of convenience, the same is
extracted hereunder:
"5. Whether the prosecution has proved its case against A1
regarding preparation of pre-matric scholarship bills etc., as
mentioned in Charge No.8 beyond all reasonable doubt?"
29. Having framed the point for consideration, nowhere in the
judgment, learned Special Judge has discussed about the
preparation of pre-matric scholarship bills by A1. However,
coming to the finding at page 122 and 129 of the judgment,
learned Special Judge has stated that as per the findings for
Point no.5 it was A1 who submitted form 103 pre-matric
scholarships bills on behalf of the said bogus schools in Deputy
PAO's office. Not even a single witness stated about bills being
submitted by A1. Learned Special Judge further found that A3 in
criminal conspiracy with A1 intentionally avoided following the
established departmental procedures and cleared bogus bills in
Form 103 submitted to facilitate A1 to get Government cheques.
The said finding is without any discussion or what evidence
formed the basis for such conclusion, except stating that the
prosecution has proved its case. Assumptive inferences or
conclusions without any basis are illegal and untenable.
30. None of the witnesses have spoken regarding A1 submitting
any bills. P.W.2 is the District Tribal Welfare Officer. Through the
said witness, Exs.P3 to P17 bills of alleged bogus schools were
marked. In the said bills, P.W.2 has also signed. However, in all
the bills he claims that his signature was forged but identifies
the signatures of other accused. Similarly, other witnesses are
all examined to identify that bills were produced against which
cheques were issued. However, none of the witnesses speak
about A1 submitting any of the bills or receiving any cheques. In
the absence of any such direct evidence or prosecution
producing any circumstantial evidence, there cannot be any
assumption that bills were produced by A1 and cheques were
drawn by him.
31. P.W.2 speaks about the procedure of scholarship claims.
According to P.W.2, he was dealing with pre-matric and post-
matric scholarship for students of SC and ST community.
According to procedure, Press notification will be issued calling
for applications from students of ST community who are eligible
for scholarships. There is a selection committee under the
Chairmanship of District Collector and the DTWO as a Convener.
After applications are received, the DTWO will examine the
applications with the help of DEO, students will be selected for
scholarships. It is done with the approval of District Collector.
After selection, principals of respective schools will admit the
students and the DTWO will visit the schools concerned to verify
whether admissions are made or not in accordance with the
selection list. Thereafter, DTWO will send proposals to the
Commissioner of Tribal Welfare for release of budget. After
budget is released, principals will claim scholarships from the
DTWO. Having received the bills from the Principals, DTWO will
prepare bills and submit it to Pay and Accounts Office. After
processing the bill, the Pay and Accounts officer will issue
cheques in the name of concerned principals through DTWO.
Thereafter, DTWO will handover the cheques to the concerned
Principals, then the principals would encash the cheques.
32. In the said procedure, the persons involved are the DTWO
(A12), P.W.2, DEO and the District Collector. According to the
procedure, principals would claim scholarships from DTWO and
DTWO send the same to the Pay and Accounts Officer-P.W.4.
The communication and documents would be between DTWO,
P.W.2 and P.W.4 regarding the applications for scholarships,
budget being released. Recommendation for payment and
handing over of cheques to the concerned principals was also by
P.W.2 after receiving them from P.W.4's office.
33. Both P.W.2 and P.W.4 pleaded ignorance about the
applications and the cheques being handed over and only stated
that they have not signed on the bills identified by them.
34. At this juncture, it would be appropriate to discuss the
investigation which was done in the present case. Though all the
documents were collected which are bills, account opening
forms, cheques etc., none of the documents were subjected to
hand-writing expert examination. Though it is on record that
admitted signatures of all the accused were handed over to the
investigating officer, however, there is no opinion in respect of
any of the documents. Curiously, no efforts were made to
ascertain who had submitted cheques in the banks or the bills
Exs.P3 to P17. The appellants have pleaded ignorance. It is for
the prosecution to substantiate their case by sending documents
to the expert to ascertain writings on the documents. Exs.P19,
20, 21, 23, 24, 25 and 26 which are bills pertaining to the
various schools including form 103 bills etc. All the said cheques
and bills were collected during the course of investigation.
However, none of the cheques were sent to expert to ascertain
whether A1 and A2 had either claimed the cheques or presented
them or withdrew the amount from the bank account.
35. Another curious aspect of the case is that the account
opening forms were produced but marked by bank officials, who
had no personal knowledge.
36. There is no investigation in the direction of ascertaining
that the signatures in any of the vouchers pertaining to the
schools or in the account opening forms in the Banks were that
of A1 and A2. No reasons are given as to why secondary evidence
which are photo copies of account opening forms etc., filed in the
case should be accepted.
37. The Pay and Accounts Officer-P.W.4 is crucial witness for
the prosecution from the Pay and Accounts Office. P.W.4 has
stated that the Assistant Social Welfare Officer or the Assistant
Tribal Welfare Officer and the District Backward Classes Welfare
Officer would present the pre-matric scholarship bills at the
Deputy Pay and Accounts Office, Masab Tank. At the time of
presenting the bills, token will be given at the counter.
Thereafter, the bills would be taken to the scholarship section
where the Assistant Auditor would make a note regarding all the
bills received in a register called Audit Treasury Manual. Then
the Assistant Auditor will pass on the bills to the Auditor who
deals with scholarship bills. The Auditor shall verify the
specimen signatures of the sanctioning authority and the
drawing officer with the signatures in the bills as per para 5.4 of
the Functionary Manual of PAO. The Auditor checks all the
enclosures of the bill with regard to accuracy. The bills would
contain sanction proceedings, non-drawl certificate, list of
students for whom the scholarships were sanctioned and
attendance of the students. After satisfying the correctness of the
bills, the same is entered into Form-44 Register, which is called
the Budget Control Register. Brief note is made in the said
Register. The entries regarding the scholarship, token number
and total amount will also be reflected in the register. After being
satisfied about the said bills they will be passed on to the
Superintendent, who will sign the bill along with Form 44
Register. The Superintendent, who is the immediate superior
officer of the auditor would verify regarding the contents of the
bill and then pass on to the Assistant Pay & Accounts Officer,
who is the passing authority. The Assistant Pay & Accounts
Officer would go through the bill and after satisfying himself
regarding the correctness, the same is entered in Form 44
register. The said bill will be sent to the cheque section and on
giving the token and on the basis of the authorization given by
the Drawing Officer, cheque will be handed over to the person
with the token. The said bills will be given voucher numbers and
fed into the computer for preparation of accounts. After
preparation, they will be sent to the main office forthwith for
consolidation. The Deputy Pay & Accounts Office prepares an
expenditure statement showing the particulars of the amounts
drawn during the particular month with full details. The Drawing
Officer would send his staff to the Deputy Pay & Accounts Office
to take the expenditure statement and after obtaining
expenditure statement, which would come to the main office and
verify the correctness in the Central Compilation Section. In the
said section, the expenditure statement with the records
available in the office would be verified and if there is any
variation, it would be brought to the notice of the scholarship
section in Dy.PAO's office where it would be rectified. It is the
duty of the Drawing Officer to see to that the concerned
institutions would receive the amounts in accordance with the
budget allocation.
38. P.W.4 further identified the bills Exs.P19, 20, 21, 22, 23,
24, 25 and 26 which are the files pertaining to the alleged bogus
schools. In the said files, the signatures of A3, A4, A7, A9, A10
and A13 were identified by the witnesses. P.W.4 does not say
why the procedure prescribed for passing of bills was not
followed. He only identifies the signatures of the accused and
states that he has provided admitted writings of A3, A4, A7, A9,
A10 and 13 to the Investigating Officer. It is not the evidence of
P.W.4 that the bills were not in order or not in accordance with
the procedure prescribed.
39. The Investigating Officer has failed to collect the Audit
Treasury Manual, Budget Control Register, Form 44 Register,
which would reflect the passing of bills. The procedure as spoken
to by P.W.2-District Tribal Welfare Officer, PW.4-Pay and
Accounts Officer, there are set of schools which are identified
and accordingly on the basis of requirements, budget is allocated
and thereafter disbursed in accordance with the procedure as
stated above. It is again suspicious as to how over a period of
several years fraud could not be detected. It is not the case that
any of the accused who were tried have anything to do with the
identification of the schools or preparing the list of schools or
students who are entitled to claim scholarships. If the budget
allocation is on the basis of earlier exercise of preparing the
details of schools and requirements for scholarships, it is not
explained as to how the budget was allocated in favour of non-
existent schools. Even according to P.Ws.2 and 4, there is
periodical check regarding the allocations and distribution of the
scholarships. None of the accused were tried or shown as
responsible for preparing the eligibility list of schools or students
and the consequent approval of the budget. The said factors also
give rise to any amount of doubt in the prosecution case.
40. Heavy reliance is placed on the evidence of Bank officials
who are P.W.8 to P.W.21. P.Ws.22 to 26 are examined to state
that cheques were issued by A1 from the accounts maintained
by him in the accounts of bogus schools which were operated by
A1 and A2.
41. Prosecution chose to examine the bank officials who were
not present at the time of opening of accounts. PW8 of SBH
Bank admits that he did not have any personal knowledge.
P.Ws.9 and 10 of Andhra Bank admitted that they did not work
in the said bank when the transactions had taken place. P.W.13
has no personal knowledge. P.W.24 deposed that he has no
personal knowledge. P.Ws.15 to 17 who speak about opening of
accounts on the basis of documents, did not have personal
knowledge. P.W.20 of Indian Bank has no personal knowledge.
P.Ws.39 and 40 Bank officials do not have personal knowledge
about the accounts being opened by A1 and A2. The witnesses
who were examined were either not working in the bank when
the accounts were opened or when the transactions have taken
place or have deposed that they came to know that A1 and A2
were running the accounts. It was admitted by all the bank
officials that there was nothing wrong with the opening of the
accounts which were in different names. None of the account
opening forms or any vouchers or cheques was sent for the
purpose of hand writing examination. The sending of documents
to the hand writing expert is significant for the reason of total
denial by the accused A1 and A2 that they are no way concerned
with the bank transactions. The bank officials who were
examined did not have knowledge about the transactions.
Hearsay evidence cannot be made basis to infer guilt of the
accused.
42. The Hon'ble Supreme Court in Kailash Gour v. State of
Assam 13, has held that: (SCC pp.50-51, para 44)
"44. The prosecution, it is axiomatic, must establish its case against
the accused by leading evidence that is accepted by the standards that
are known to criminal jurisprudence regardless of whether the crime is
committed in the course of communal disturbances or otherwise. In
short, there can only be one set of rules and standards when it comes
to trials and judgment in criminal cases unless the statute provides for
anything specially applicable to a particular case or class of cases.
24. In the present case, the cumulative effect of the aforesaid
investigative lapses has fortified the presumption of innocence in
favour of the respondent-accused. In such cases, the benefit of doubt
arising out of a faulty investigation accrues in favour of the accused."
43. The alleged scam is enormous in the context of involvement
of officials/accused, fabrication of documents and the way the
Government was cheated. However, the investigation has not
collected direct evidence which was available and based
investigation on assumptions and presumptions. Even during
the course of trial, the prosecution has merely marked
documents without connecting the links. The evidence is
circumstantial in nature and the circumstances so elicited
during evidence has to form a complete chain without there
being any missing links or doubts that would be created when
the case is viewed as a whole. The prosecution has resorted to
marking documents through witnesses who had no knowledge
about the execution of the said documents and deposed based
on their information from others. It is not known as to why the
(2012) 2 SCC 34
said persons who had direct knowledge about the transactions
were not examined. Merely marking documents will not suffice to
read into the contents of the said documents and infer that the
accused were responsible. The basis for the scam being floating
of fake schools and fake names of students, however, the direct
evidence available regarding details of schools in the
departments, which witnesses admit as available, was not
produced.
44. There cannot be any moral conviction of accused. Unless
the burden is discharged by the prosecution proving the case
beyond reasonable doubt, no conviction can be recorded. The
prosecution has placed heavy reliance on the alleged
transactions in banks. The said bank officials had no direct
knowledge and none of the witnesses said about withdrawal of
the amounts by the accused or depositing of the cheques by the
accused. The said cheques originated from the Pay and Accounts
Office and en-cashed in the Bank. Serious doubts arise in the
absence of proof of documents and absence of witnesses to
speak about handing over of the cheques to the accused or the
accused transacting business in the account. For the reasons
best known, none of the documents were subjected to
handwriting expert examination and no reasons are given why
the said procedure which could aid in concluding the guilt or
otherwise of the accused was not followed. The specimen
signatures of sanctioning officer of bills were available in the Pay
& Accounts Office but not collected during investigation. The
register of tokens given to persons who present bills and collect
cheques were available but not seized for reasons best known to
the investigating officer.
45. A perusal of documents would show that most of the
documents in the case were sent for FSL examination by a hand
writing expert. It is evident since there were markings as 'Q' in
the documents, encircled with blue and red pencils. Nothing is
clarified by the Investigating Officer as to why documents were
sent and no opinion was received. If received, why the said
reports were not filed or having sent them, why the documents
were taken back without opinion.
46. The prosecution has left yawning gaps in investigation and
failed to prove their case beyond reasonable doubt by adducing
admissible evidence. For the reasons in the foregoing
paragraphs, the prosecution has failed to prove by reliable
evidence that the offence was committed by the appellants
herein, as such, benefit of doubt is extended to the appellants.
47. In the result,
48. Criminal Appeal No.667 of 2007 filed by A11 is allowed.
49. Crl.A.No.714 of 2007 filed byA12 is allowed.
50. Crl.A.No.753 of 2007 filed by A3 is allowed.
52. Crl.A.No.791 of 2007 filed by A1 is allowed.
_________________
K.SURENDER, J
Date: 17.10.2023
Note: LR copy to be marked.
B/o.kvs
THE HON'BLE SRI JUSTICE K.SURENDER
CRIMINAL APPEAL Nos. 667, 714, 753 and 791 OF 2007
Dt. 17.10.2023
kvs
