Telangana High Court
V.Sunil Reddy And 2 Others vs The State Of A.P. on 24 April, 2024
HIGH COURT FOR THE STATE OF TELANGANA
AT HYDERABAD
*****
Criminal Revision Case No.1280 OF 2008
Between:
V.Sunil Reddy and another ... Petitioners
And
The State of A.P,
rep. by Public Prosecutor
..Respondent/Complainant
DATE OF JUDGMENT PRONOUNCED :24.04.2024
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
2
* THE HON'BLE SRI JUSTICE K. SURENDER
+ CRL.R.C. No.1280 of 2008
% Dated 24.04.2024
# V.Sunil Reddy and another ... Petitioners
And
$ The State of A.P,
rep. by Public Prosecutor Respondent/Complainant
! Counsel for the Petitioners: Smt.Devineni Radha Rani
^ Counsel for the Respondent: Public Prosecutor
>HEAD NOTE:
? Cases referred
3
THE HON'BLE SRI JUSTICE K.SURENDER
CRIMINAL REVISION CASE No.1280 of 2008
JUDGMENT:
1. This Criminal Revision Case is filed by A2 to A4. A3 died
during the pendency of criminal revision. A1 died prior to
framing charges. The name of A6 was deleted from the charge
sheet since the police did not find any evidence. A5, A7 and A8
were tried and acquitted as co-conspirators. The present
revision is argued on behalf of A2 and A4.
2. Briefly, the case of the complainant, which is the Andhra
Pradesh State Cooperative Bank Limited is that A2/1st
petitioner herein was the Managing Director in M/s.Kurnool
Petro Products Limited, A1 is the Executive Director, A3 is the
Chairman and A4 is the Guarantor. A2 as the Managing
Director gave Ex.P1 which is the application for sanctioning of
working capital loan for their company. It was agreed that they
would furnish 100% collateral security of immovable property.
A Board resolution Ex.P2 was passed by the Bank in the
month of March, 1996 sanctioning working capital of Rs.76.00
lakhs. The sanction letter Ex.P3 was addressed to the
accused. Having accepted the conditions laid down under
Ex.P3, A1 and A4 gave collateral security of their agricultural
lands in Dinnedevarapadu village, Kurnool. Ex.P20 is the
registered sale deed in the name of A1, which was deposited in
the Bank. The said document reflects that A1 is the owner of
the said property.
3. Ex.P22 is the registered sale deed standing in the name
of A4. Both A1 and A4 deposited the said sale deeds as
security for the loan obtained on behalf of M/s.Kurnool Petro
Products by A2 as Managing Director and other Directors.
4. Having obtained loan, the entire amount was credited to
the account. However, accused failed to clear the outstanding
and the cheques which were issued by the firm were returned
due to insufficient funds. The Bank approached the Registrar
of Cooperative Societies with their grievance of the accused not
repaying the loan amount, which outstanding including
interest was Rs.1,02,76,540/- up to 30th September, 1998.
Ex.P25 was issued under Section 71 clause (1) of A.P. Co-
operative Societies Act, 1964 by the deputy Registrar of
Cooperative Societies directing the accused herein to pay the
arrears, failing which, the Bank was at liberty to realize the
amount by proceeding against the properties which were
mortgaged. The Bank made enquiries and found that Exs.P20
and P22 sale deeds deposited by A1 and A4 respectively were
fake and fabricated documents and no such property existed.
Enquiries were made with the revenue department.
P.W.8/VRO, P.W.9/MRO, P.W.10/Sub-registrar were
examined to prove that Exs.P20 and P22 were fake.
5. On the basis of the complaint Ex.P25 dated 10.08.2000,
the CCS Police registered case and investigated into by
P.Ws.12, 13 and 14/Investigating Officers. Charge sheet was
filed for the offence under Sections 468 r/w 34 IPC, 471 r/w
34 IPC and 420 of IPC. Charges were framed against A2 to A8,
since A1 died even prior to framing charges.
6. Learned trial Magistrate having examined P.Ws.1 to 14
on behalf of the prosecution and marking Exs.P1 to P43 found
that the A2, A3 and A4 who are guilty of the offence under
Section 471 and 420 r/w 34 IPC and acquitted under Section
468 r/w 34 IPC. However, A5, A7 and A8 were found not guilty
of any of the offences alleged, vide judgment in C.C.No.14 of
2005 dated 04.03.2008 passed by the XII Additional Chief
Metropolitan Magistrate, Hyderabad.
7. The conviction was questioned in appeal before the
Sessions Court. Learned Sessions Judge concurred with the
finding of the learned Magistrate and dismissed the appeal
filed by A2 to A4 vide judgment Criminal Appeal No.66 of 2008
dated 19.08.2008.
8. Sri Vinod Kumar Deshpande, learned Senior Counsel
appearing for the accused would submit that both the Courts
below committed an error in convicting the accused for the
offences under Sections 471 and 420 r/w 34 IPC when it was
specifically found that the accused/revision petitioners were
not guilty of the offence under Section 468 IPC. Once the
petitioners were acquitted for the offence of forgery under
Section 468 IPC, the question of convicting them under
Section 471 IPC does not arise. Further, none of the witnesses
had personal knowledge about any of the transactions. The
documents which are application forms and other documents
executed with the Bank were not sent to the handwriting
expert to ascertain whether the petitioners have signed and
executed the said documents. It is not the case of the
prosecution that A2 had either forged any document or
submitted any document as security but it was A1 and A4,
who deposited title deeds. However, both the Courts below
erred in concluding that it was A1 to A4 who had committed
an offence of forgery and cheating. In the absence of any
evidence against the revision petitioners (A2 & A4), the
conviction has to be set aside. He further argued that the
prosecution failed to file Form-32-A from the Registrar of
Companies to establish that A2 was part of M/s.Kurnool Petro
Products Limited. Further, the said M/s.Kurnool Petro
Products Limited was not prosecuted. Since the company itself
was not prosecuted, the question of prosecuting other
Directors or persons associated with the company does not
arise.
9. On the other hand, learned Public Prosecutor appearing
on behalf of the State would submit that the evidence of P.W.1
coupled with the documents which were executed to cheat the
bank are enough to prove the case against the accused for the
offence of furnishing fabricated documents and securing loan.
The fact remains that the loan was not repaid and the
properties covered under Exs.P20 and P21 do not exist.
10. Ex.P1 application for loan was made by A2 as a
Managing Director of M/s.Kurnool Petro Products Limited. A1
and A4 has deposited title deeds. Ex.P19 is the Memorandum
of Deposit of title deed by A1 while submitting Ex.P20 title
deed. Similarly, Ex.P21 is the Memorandum of deposit of title
deed by A4 while depositing Ex.P22 title deed. Both Exs.P20
and P22 were found to be fabricated sale deeds. The evidence
to that effect was stated by P.W.8/VRO, P.W.9/MRO and
P.W.10/Sub-Registrar.
11. P.W.6 is the Standing Counsel of the complainant Bank.
He issued legal opinion Ex.P37. In his evidence, he stated that
the opinion was given only on the basis of photocopies
provided to him and he has not made any search in the office
with regard to any of the documents and further, it is not his
job to do so. The argument of the counsel for the accused that
legal opinion was given by the Bank counsel and thereafter,
loan was disbursed, cannot form basis to find Exs.P20 and
P22 as genuine. The fact remains that Exs.P20 and P22 are
fabricated documents and proved by prosecution.
12. A2 as the Managing Director had made application Ex.P1
and also signatory to Ex.P12 which is a letter of continuity
addressed to the Managing Director authorizing A4 to operate
the account. A2 and A4 are also signatories to deed of
guarantees executed on behalf of M/s.Kurnool Petro Products
Limited as Directors.
13. A4 had executed the deed of guarantee under Ex.P14 and
as already stated, he had deposited the deed Ex.P22 towards
security for the loan.
14. As seen from the evidence on record, the following
circumstances were proved by the prosecution:
i) Ex.P1 application for loan being made by A2 as
Managing Director, undertaking to furnish 100% security by
depositing title deeds of immovable property at
Dinnedevarapadu village.
ii) Loan being sanctioned by the Bank.
iii) A1 and A4 depositing title deeds of property of
Dinnedevarapadu village standing in their names with the
Bank.
iv) Letter of continuity and letter of guarantee executed
by A1, A2 and A4 under Exs.P12 and P13.
v) Deed of guarantee executed by A4.
vi) Non payment of loan amount.
vii) Bank officials approaching the Deputy Registrar of
Cooperative Societies and seeking direction for
recovery of the arrears from the accused.
viii) In the process of proceeding against the accused, the
documents Exs.P20 and P22 were verified regarding the
properties at Dinnedevarapadu village and finding that the
documents deposited with the Bank are fake and forged.
15. The above circumstances make out a complete chain
which circumstances without any doubt point towards
participation of the accused in defrauding the Bank on the
basis of fabricated documents.
16. Learned Senior Counsel for the accused argued that once
the Court had acquitted the accused for the offence under
Section 468 r/w 34 IPC, committed an error in convicting the
accused for the offence under Section 471 IPC r/w 34 IPC.
17. The said argument has no basis. The provisions under
Sections 468 and 471 of IPC operate in different areas, though
the common factor is cheating. Section 468 IPC is directed
against a person who actually commits forgery for the purpose
of cheating. However, Section 471 IPC is directed against the
person other than the forger. A forger fabricating documents
and using the said documents for the purpose of cheating may
be convicted both under Sections 468 and 471 IPC on the
basis of facts in a case. However, to convict under Section 471
IPC, it is not necessary that the accused should have forged
the document. In the present case, it was found that both
Exs.P20 and P22 were fabricated documents which were used
to cheat the Bank by depositing them as genuine for
furnishing security to the loan that was taken. There is no
infirmity in the findings of the Courts below that the accused
are liable for the offence under Section 471 r/w 34 IPC.
18. In Ex.P1 application made by A2 as the Managing
Director, it is specifically mentioned that company would offer
100 % collateral security by way of immovable property at
Dinnedevarapadu village, Kurnool. It is apparent that by the
time of making application, A2 and others had entered into a
conspiracy and had the intention to cheat the bank from the
inception. The documents which are Exs.P20 and P22 are
properties of Dinnedevarapadu village, Kurnool. It is apparent
that the accused had concerted and conspired to cheat the
Bank.
19. Learned Senior Counsel submitted that the company
M/s.Kurnool Petro Products Limited was not made as an
accused for which reason prosecution cannot be maintained
against the petitioners herein. The said argument has no
basis. The petitioners are not made vicariously liable for the
reason of the company being identified as accused. The case of
the prosecution is that the accused have floated the company
and in the name of the company, loan was sought. The acts
committed as discussed above were done in their individual
capacities, deliberately to cheat the Bank. Not making the
company as an accused will not in any manner come in the
way of prosecuting the accused, in the present facts of the
case.
20. The other argument advanced by the learned Senior
Counsel for the accused is that the documents were not
proved. Merely marking the documents would not suffice.
21. P.W.1 worked as Assistant General Manager in the
complainant Bank from 1997 to 2001. During his tenure with
the Bank, the accused were identified and order was sought
under Ex.P25 for recovery of the amounts by proceeding
against the properties deposited as security by A1 and A4.
Having taken the orders under Section 25, when steps were
taken to recover the amount, it was found that the documents
were forged and fabricated. Accordingly, P.W.1 filed the
complaint on behalf of the Bank under Ex.P34 which was
registered and charge sheet filed. In the said circumstances, it
cannot be said that P.W.1 does not have knowledge about the
transactions.
22. During the course of trial, the accused did not
specifically deny any of the documents that were filed either in
the cross-examination or during Section 313 Cr.P.C
examination. The accused have not denied either depositing
the title deeds or making the application for loan or regarding
the signatures appearing on the Bank documents. To the
questions put in Section 313 Cr.P.C regarding documents
being executed by the accused, except stating that the
evidence of witnesses was false, signatures on documents and
approaching the Bank for loan was not specifically denied. The
prosecution has examined witnesses who were acquainted
with the documents and transactions in question. Having
dealt with the documents and proceeding against the accused
both before the Deputy Registrar and also filing complaint
before the police by furnishing all the documents, it cannot be
said that P.W.1 did not have knowledge about the documents.
Merely because the officers before whom the documents were
executed were not examined, it is of no consequence in the
present facts of the case.
23. In the result, Criminal Revision Case fails and the
conviction of the accused imposed by the trial Court and
confirmed by the Sessions Court. However, since the case is of
the year 2000, this Court deems it appropriate to reduce the
sentence of imprisonment of five years under Section 471, 420
r/w 34 IPC to 2(two) years. Both the sentences shall run
concurrently. The remand period, if any, shall be given set off
under Section 428 of Cr.P.C. Since the revision petitioners are
on bail, the trial Court is directed to cause appearance of the
accused and send them to prison to serve out the remaining
period of sentence.
24. Accordingly, Criminal Revision Case is partly allowed.
__________________
K.SURENDER, J
Date : 24.04.2024
Note: LR copy to be marked
B/o.kvs
THE HON'BLE SRI JUSTICE K.SURENDER
CRIMINAL REVISION CASE No.1280 of 2008
Dt. 24.04.2024
kvs
