TaxTMI 
TaxTMI 
2009 (8) TMI 694
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....ll relevant times and still is a broker and, inter alia, deals in securities. 3. Accused Nos. 1, 2, 4 and 5, in their capacity as public servants, were working in the Fort Branch of Andhra Bank. 4. They were charged with abuse of their position and acting dishonestly and fraudulently, as a result whereof undue pecuniary advantage is said to have been procured by Accused No. 3 by way of crediting bankers' cheques without them having been presented or sent for clearance and, thus, cheating Andhra Bank and dishonestly permitting substantial withdrawals from his current account by the Accused No. 3. They are said to have prepared false documents and used them as genuine ones, with the intention to defraud and falsify entries in the books of account of the Bank. They are also charged with entering into the criminal conspiracy, as they, having been entrusted with the property of the Andhra Bank, prepared credit and debit vouchers in favour of Accused No. 3 authorizing credit of amounts of various cheques to the account of Accused No. 3 without having actually received any bankers' cheques. 5. Indisputably, the Reserve Bank of India appointed a Committee known as the Jankiraman C....
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....d used them as genuine ones for the purpose of falsification of accounts. 10. The prosecution case is that such credits should not have been given until the amount of the cheques was realized. It was furthermore alleged that credit had been given even though the said cheques had not actually been received in the Fort Branch of Andhra Bank. The aforementioned acts on the part of the officers of Andhra Bank constituted criminal breach of trust and forgery, as well as offences under the Prevention of Corruption Act, 1981. Proceeding before the special court 11. As many as ten transactions were in question before the learned judge. Separate charges were framed in respect of each of the aforementioned ten transactions. Before the learned Special Court, 26 witnesses were examined by the prosecution. 12. PWs 1 to 10 were employees/officers working in the drawer bank along with four officers from the Funds and Investment Department. 13. PWs 11 to 19 and 22 to 24 were working in the Andhra Bank. PW-11 Hemlala G. Nair and PW-12 Rajinderkumar and one Rane, were working as clerks in the Funds and Investment Department, Andhra Bank. Rane died in 1993 and thus, could not be examin....
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....by him on 6-11-1991 although the cheque was realized on 8-11-1991; 7-11-1991 being a holiday. Hence, on the day on which the credit was given, the cheque was not in the hands of the A2 and A4; and by issuing the credit voucher on 6-11-1991, they have committed the offence of criminal breach of trust as also falsification of documents. 18. It was also held in respect of transaction No. 7, that the cheque dated 13-11-1991 was received on that date and the credit was given on 13-11-1991, although the cheque amount was realized only on 14-11-1991. The cheque was not sent for clearing on 13-11-1991 and therefore, by issuing credit voucher on that day, A1, A2 and A4 had committed criminal breach of trust and were also guilty of preparing false documents. 19. So far as transaction No. 8 is concerned, the Special Court held that the cheque dated 4-12-1991 was received on 5-12-1991 and the credit was given on 4-12-1991, despite the amount was realized only on 5-12-1991. Evidence on record has clearly proved that the cheque in question was not received in the Funds Department on 4-12-1991, although A1 and A5 authorised crediting the cheque amount into A3's account on that day and there....
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....nsible for sending the banker's cheques to the Reserve Bank of India for clearance. (vi)It was not proved that the bank officers received any pecuniary advantages for themselves but by their action pecuniary advantages were received by Accused No. 3. (vii)Whereas there are no guidelines for operation of the Funds Department, guidelines have been issued by the Andhra Bank for other connected departments, viz., Current Account Department, Clearing Department and Day Book Department. (viii)It is also not in dispute that a machine known as Advance Ledger Posting Machine (ALPM) was installed in the Current Account Department which was possible to be operated manually. We will highlight the operational details of the said machine at an appropriate stage. Submissions of learned senior counsel 24. Mr. Naphade, Mr. C. Mukund and Mr. Das, learned counsel appearing on behalf of the accused Nos. 1, 2, 4 and 5 urged :- (i )Since the First Information Report was lodged only on the basis of the report of the Jankiraman Committee without any further preliminary enquiry, the entire proceeding is vitiated in law. (ii )Jankiraman Committee having only pointed out irregularities c....
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....llowed by the banks. Accordingly, no case for the commission of an offence of criminal breach of trust had been made out. (x )It being not the case of the prosecution that the procedures in respect of the said transactions were totally disregarded and only because the scam broke out, faults were sought to be found without rectifying the said procedure and in that view of the matter, the functionings of the appellants could not have been questioned. (xi)The veracity or the existence of the documents being not disputed, the judgment of the Special Court as regards, actual date of receipt of the cheques were wholly unjustified, particularly in view of the statements made by the witnesses examined on behalf of the drawer banks who had categorically stated that no cheque was ante-dated. (xii)The Andhra Bank not being involved in the security transactions wherein only the drawer banks were involved, the Special Court had no jurisdiction to try the alleged offence. (xiii)Even if the findings of the Special Court that some documents did not contain all the details is held to be correct, all the officers concerned, from receiving the cheque to clearance thereof (including the cl....
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....al and within the framework of law particularly when in relation to bankers' cheques, as was admitted by PW-20, Anand Sinha, an officer of the Reserve Bank of India that no guidelines had been issued therefor. (xxiii)From the deposition of prosecution witnesses, particularly those who are high ranking officers including PW-23, Sh. G. Bhalla, Chief Manager of Andhra Bank, it would be evident that the appellants had followed the usual banking practice. It has also been admitted that any transaction carried out was subject to scrutiny, as the Funds Department used to send a daily report to PW-23. (xxiv)Accused No. 5 having been shown to be involved in respect of only two transactions, namely transaction Nos. 8 and 9, and as in respect of transaction No. 9, he had not been found guilty, for the self-same reasons he should have been found to be not involved in respect of transaction No. 8 as well. (xxv)There being no independent material on record to show conspiracy between A-1, A-2, A-4 and A-5 on the one hand and A-3 on the other the appellants could not have been convicted for commission of an offence under sections 120A and 120B of the Indian Penal Code 1860. (xxvi)As co....
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.... thus, no exception having been made granting him the facility of overdraft, charging of interest on any advance or overdraft etc., the officers of the banks having not taken the requisite precautions by them in regard to receipt of any cheque and, thus, have violated the directions as the account of accused No. 3 was credited much before the Bank received credit in respect of the said cheques in the account maintained with the Reserve Bank of India. (iii)The cheques/transactions would fall into three categories, namely-(1) post-dated cheques and credit given therefor earlier; (2) cheques although not in physical possession of Andhra Bank, but credit was still given to the account of accused No. 3; and (3) cheques presented for clearance the next day, but account of accused No. 3 was credited the previous day, all of which were wholly illegal. (iv)From a bare perusal of the findings of the learned Special Court it would appear that in regard to transactions 1, 2, 3, 4, 7, 8 and 10 the cheques were not in physical possession of Andhra Bank at the time when the account of accused No. 3 was credited, although in respect of transaction No. 1 the cheque might have been with the An....
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....he said offence. (xii)Even for a banking branch to grant immediate credit to the account of accused No. 3; as at least in respect of 5 cheques, the conditions required therefor, namely the physical availability of bankers' cheques with the Andhra Bank, having been found to be missing at the point of time when the credit was given to the account of accused No. 3, the appellants must be held to have committed the offence under section 409 read with section 120B of the Indian Penal Code. (xiii)When an account holder is permitted to draw money in excess of the amount in his account, it would be an overdraft or an advance or loan from the bank to the account holder, wherefor interest would become chargeable and as no interest has been charged, the same would amount to giving undue benefit to the account holder, and loss to the bank, particularly when in the circular letter (Ext. 322) there was no exception made in favour of accused No. 3. (xiv)As Accused No. 3 had no overdraft facility or overdraft limit sanctioned to him, he could not have indirectly obtained the facility at the behest of accused Nos. 1, 2, 4 and 5. (xv)In a situation of this nature, the Court is required t....
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....se the Special Courts so constituted had jurisdiction to try this matter. 29. Indisputably section 7, read with sub-section (2) of section 3 of the Special Courts Act, limits the jurisdiction of Special Courts only to offences relating to transactions in securities after 1-4-1991 and before 6-6-1992. 30. Further section 8 provides that the special courts shall have jurisdiction to try any person concerned for the offence referred to in sub-section (2) of section 3 either as a principal, conspirator or abettor and accused persons can be jointly tried at one time, in accordance with Cr.PC. 31. Since we have already dealt with the issue as to the ambit of jurisdiction of the Special Courts in R. Venkatkrishnan v. CBI (Crl. Appeal No. 76 of 2004 decided today), it is not necessary to deal with this aspect of the matter once again. 32. Indisputably the jurisdiction of the Special Court is wide in nature. The provisions of the Act need to be interpreted keeping in mind its object and purport. The Act being a Special Act must be given its full effect. 33. It would bear repetition to state that A3 was one of the clients of Andhra Bank dealing with the purchase and sale of se....
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....as the other departments namely Current Accounts Department, the Clearing Department and the Day Book Department were under the Operations Department of Fort Branch of Andhra Bank, Mumbai. 39. The Funds Department which was functioning at the Fort Branch was exclusive to the said branch, and did not exist in any other branch of Andhra Bank throughout India. This department was dealing in call money and securities transactions on behalf of the bank as a whole. The functioning of the department was directly under the supervision of the head office of the bank, situated at Hyderabad. 40. For a proper analysis of the factual matrix of the case it would be essential to take a close look at the procedure followed in the various departments of the Bank. Funds Department 41. Bankers cheques used to first arrive at the Funds Department of the Bank. These cheques which were received from the drawer bank were accompanied with a forwarding letter indicating the nature of the beneficiary and the amount of the Cheque. On receipt of the Cheque, an entry used to be made in the Bankers Cheque Receivable Register [BCR Register). The register contains all necessary particulars with regard....
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....posting, be credited to the account of the client indicated on the credit voucher. At the end of the day two lists used to be generated through the ALPM system from the computer. The first list concerned Exceptional Transactions of the day which were transactions involving amounts of more than one lakh. The second list, namely the transaction listing, was for all the transactions handled by the Current Account Department on that day. Clearing department 49. As has already been noted, the Clearing Department used to receive the consolidated credit vouchers along with the slip bearing the amounts of the various cheques, along with the cheques themselves from the Funds Department. These cheques, thereafter, were bifurcated bankwise and accordingly a bankwise slip, for the purpose of preparing the bank schedule, was made. Mr. Sarkar [PW 15] used to verify the entries made in the bank schedule along with the cheques before sending them to the service centre for clearance. 50. A clearing rubber stamp along with the date would be put on each Cheque as well as the consolidated credit voucher. The date of the stamp would be the date on which the Cheque was received in the Clearing ....
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....tion behind issuing the guidelines was to ensure that the purchase price for the transaction would be made only after ensuring that the sale proceeds of the transaction are credited in the RBI to Andhra Bank. 59. As per him, the Funds Department would receive the bankers cheques on account of sale transactions of the clients and enter the particulars of these instruments and send them to the Service Centre for being forwarded to the RBI for crediting the amount to Andhra Bank's account. 60. Guideline 12 of Exhibit 322 [Operations of Security Transactions for Constituents at Fort Branch, Bombay] specifically provides :- "Please ensure that all the cheques received towards sale transactions will be presented in Special Clearing for interbank cheques and ensure that the credit is afforded to our Bank with RBI on the same day." 61. It had also been vehemently submitted before the Special Court that the said guidelines were not in respect of the Funds Department. It was furthermore contended that guideline itself does not indicate that they were pertaining to the Funds Department. The learned Special Judge rightly rejected the said arguments. 62. These guidelines were iss....
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....e the charge of conspiracy as without involvement of other departments, it was not possible for accused No. 3 to obtain any pecuniary gain out of the said transactions at all, if any. 68. We must also notice that the functioning of the different departments has not been seriously disputed. 69. The functioning of the Funds Department has been proved by PW 2, Sampada S. Amre, and the other departments' functionings by PW 11, Hemlata Nair. The same would also be apparent from the entries made in the BCR register, marked as Ext. 111. So far as the functioning of the Clearing Department is concerned, the same has been proved by PW 13, Sunil Pore. Therein, cheques are segregated bankwise and amountwise. There appears to be some controversy as to at what time cheques are sent out for clearance. According to the appellants, the Funds Department is bound to receive cheques up to 3.00 p.m. However, according to the prosecution, a consolidated statement of the cheques received upto 2.30 p.m., after preparing bank schedule by the Clearing Department are sent at about 2.45 p.m. to the service centre and the R.B.I. Appellants contend that any cheque received after the prescribed hours, i.e....
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....iolation of the guidelines issued by the Bank. Credit had been given on the basis of post-dated cheques. Two cheques were not in the physical possession of the Andhra Bank. Although the cheques were presented for clearance on the next date, the account of Accused No. 3 was credited on a previous day. 77. Although we have been taken through the depositions of all important witnesses, as regards the functioning of the Bank, which includes not only the internal functioning of its different departments but also the banking practice developed over the years for grant of instant credit to its customers including Accused No. 3, it may not be necessary to delve thereto in details. 78. In our considered opinion, we may proceed on the assumption that the transactions in question are exceptional transactions and a banking practice had developed for grant of advance credit to some of the customers of the Bank, including Accused No. 3. 79. It is not in dispute that the guidelines issued by Andhra Bank (Ext. 322) do not relate to Bankers Cheques. It is also not in dispute that the payment under the Bankers Cheques is guaranteed. It is furthermore admitted that the Funds Department used ....
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.... Current Account in the Branch. He did not enjoy any overdraft facility. It was the Funds and Investment Department's responsibility to carry out sale and purchase of received banker's cheques on his behalf. Criminal Conspiracy 87. Appellants were charged for entering into a criminal conspiracy in the matter of commission of several offences. 88. Criminal conspiracy, it must be noted in this regard, is an independent offence. It is punishable separately. A criminal conspiracy must be put to action; for so long as a crime is generated in the mind of the accused, the same does not become punishable. Thoughts even criminal in character, often involuntary, are not crimes but when they take a concrete shape of an agreement to do or caused to be done an illegal act or an act which is not illegal, by illegal means then even if nothing further is done, the agreement would give rise to a criminal conspiracy. 89. The ingredients of the offence of criminal conspiracy are :- (i)an agreement between two or more persons; (ii)an agreement must relate to doing or causing to be done either (a) an illegal act; (b) an act which is not illegal in itself but is done by illegal means. ....
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....] 4 SCC 659 opined that it is necessary for the prosecution to establish that a particular unlawful use was intended, so long as the goods or services in question could not be put to any lawful use, stating :- "24. The aforesaid decisions, weighty as they are, lead us to conclude that to establish a charge of conspiracy knowledge about indulgence in either an illegal act or a legal act by illegal means is necessary. In some cases, intent of unlawful use being made of the goods or services in question may be inferred from the knowledge itself. This apart, the prosecution has not to establish that a particular unlawful use was intended, so long as the goods or service in question could not be put to any lawful use. Finally, when the ultimate offence consists of a chain of actions, it would not be necessary for the prosecution to establish, to bring home the charge of conspiracy, that each of the conspirators had the knowledge of what the collaborator would do, so long as it is known that the collaborator would put the goods or service to an unlawful use." [See also K.R. Purushothaman v. State of Kerala [2005] 12 SCC 631] 94. Since we have dealt with the law with respect to c....
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.... issued by Andhra Bank on the 20th, serious doubt arises as to how the credit voucher for the same could have been prepared on 18-5-1991. 101. Mr. Sastry (PW 22) in his evidence categorically stated that the bankers' cheques are never post-dated since they relate only to that particular days transaction. The evidence of Mr. Bhalla (PW-23) is in the following terms :- "Post dated banker's cheque cannot be issued as per the practice followed in the Andhra Bank." 102. Kamble (PW 12) in his evidence stated that neither in the BCR Register of 20-5-1991 nor in the Transfer Scroll of the said date, he found any entry made as regards the aforementioned cheque for the credit or debit voucher for Rs. 2 crores. In the transfer scroll of 20-5-1991 as also the debit voucher, details of the said cheque were not found. They could be found only in the Transfer Scroll of 18-5-1991. The debit voucher also bore the same transfer scroll number being number 21. 103. Indisputably the Transfer Scroll Register (Exhibit 140) as also the credit voucher, show that the amount was to be credited to the account of Accused No. 3. The credit vouchers, therefore, were prepared on 18-5-1991 although it ....
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.... it in the account of Mr. Narottam, the question of issuance of the post-dated cheque would not arise. The said purported admission does not relate to the cheque in question. 107. Moreover, as indicated hereinbefore, the entries made in the BCR register, consolidated credit voucher (Exhibit 132) are clear pointers to the fact that the cheque was received by Andhra Bank only on 20-5-1991. The cheque for a sum of Rs. 2 crores of Bank of Karad also finds mention in the bank schedule dated 20-5-1991 and not in the Bank Schedule dated 18-5-1991. It would bear repetition to state that PWs 22 and 23, furthermore stated that bankers cheques are never post-dated. 108. Moreover, if an account is overdrawn, it amounts to an overdraft and for the same, the account holder is liable to pay interest. No interest was charged from the account of A3 in this regard. Loss to the bank on account of interest was Rs. 20,274. 109. Therefore, we are of the opinion that the involvement of Accused Nos. 1, 2 and 3 as regards the said transaction has sufficiently been established by the prosecution. Second and Third Transactions 110. So far as the 2nd and 3rd transactions are concerned they invo....
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....s of the cheques were credited to the account of accused No. 3 on 5-7-1991 itself. From Ext. A-1(14), Current A/c. Register, ALPM II, it would furthermore appear that posting of the cheques was done by the Current Department at Sl. No. 179. 114. The fact that the cheques were dated 5th July, 1991 is not in dispute. It is also not disputed that the voucher Ext. 151 was prepared on 5-7-1991. 115. PW-15, Ragvinder Sarkar, stated :- "Unless and until the cheque issued in favour of Party are cleared, in clearing and the account of the drawee with the RBI is credited to the account of that bank with RBI, credit of the amount of that cheque is not given to the account of that party." 116. Although according to him, the said cheques were not sent for clearance on that date as per the schedule, in his cross-examination he stated :- "20. ....The amount is credited to the account of the client by making entry in his current account. We do not maintain any Clearing Register in Clearing Department with regard to the cheques received from the Funds and Investment Department. There was no procedure to maintain such Register." He further accepted that there was no practice of iss....
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....e guilt of the appellants must be adjudged on the basis of all the materials brought on record. The only lacunae which has been pointed out that the details of the cheques had not been mentioned in the BCR Register and the amount of both the cheques had been clubbed together. 122. PWs. 11 and 12 were the best persons to state before the Court as to whether the said cheques were received on those days or not. PW-13, Sunil Pore, Clerk in the Clearing Department and PW-15, Ragvinder Sarkar, Officer in the Clearing Department stated that they had no knowledge as to when the cheques were received. The prosecution, thus, failed to bring on record any clinching evidence to show that the cheques were received only on 6-7-1991 and not a date prior thereto. 123. We may at this stage also notice the statement of PW-4, Sudhakar A. Ali, Clerk in the Securities Department, Bank of Karad, which reads :- "I do not know when Mr. Raje handed over the cheque and the covering letter, Extt. 12 and 17 to Mr. Narottam. It is not correct to say that Mr. Raje used to comply with the directions of Mr. Narottam giving go by to the Banking rules and regulations." 124. PW-12, Rajendra Kumar V. Kamb....
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.... the current account officers and the Chief Manager, Bhalla and they would obviously have raised an objection. 130. The learned judge of the Special Court has wrongly not attached any importance to the exceptional transactions record on the ground that there are too many transactions and therefore officers concerned are not expected to scrutinize the said list. This inference was against the evidence on record which show that there used to be only a few exceptional transactions every day (at the most 7 to 8 in a day) and it is impossible that the officer signing the said note would not note the transactions in question. 131. The learned judge seems to have mixed the exceptional transactions with the transaction listing, which contains all the transactions of the day sent to the current account department. However exceptional transactions are very few in number and the very purpose of maintaining separate vouchers for such transactions is to bring to the attention of the superior officers for their authorization. 132. The ALPM manual clearly requires the manager to scrutinize the exceptional transactions to ensure that there has been no unauthorized use of discretionary pow....
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....on by the prosecution against the appellant can be said to have been proved satisfactorily and all those circumstances, which are not of any clinching nature, even if held to be proved do not complete the chain of evidence so complete as to lead to an irresistible conclusion consistent only with the hypothesis of the guilt of the appellant and wholly inconsistent with his innocence. The prosecution has not established the case against the appellant beyond a reasonable doubt." 137. Thus, as the fact that the cheques were not received on 5-7-1991 has not been proved, there is no reason as to why benefit of doubt should not be given to the accused herein. 138. Moreover in our opinion the practice of instant credit stands accepted. 139. The practice has been established though the evidence of Sastry (PW 22) and of (PW 23) Bhalla. Their evidence clearly shows that this practice was known to the head office and to all the superior officers of the Bank. It is also not in dispute that the payment against Bankers cheques is 100 per cent guaranteed. The accused have followed the practice that was in vogue for a long time. 140. The learned Special Judge has ignored and has not tak....
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.... that there was an entry with regard to the said Cheque not only as to the amount of the Cheque but also of the Cheque number, date and name of the A3 being the beneficiary thereof. Furthermore there was no entry of the said Cheque on 18-9-1991. 146. The learned Special Judge could not have rejected the defence of the accused that the Cheque had in fact been received very late on 17-9-1991 and was therefore sent along with a single credit voucher to the clearing department but the clearing department returned it and therefore it was sent on 18-9-1991, i.e., on the next day to the clearing department again with a single credit voucher. The only ground on which the learned judge rejected the defence was that in the normal course of the banking business the Cheque should have been included in the very first consolidated credit voucher which was sent to the clearing department on 18-9-1991 but it was sent along with a single credit voucher which goes on to show that it had been received quite late on 18th itself. 146.1 The said reasoning in our opinion is not acceptable. 147. The learned judge has overlooked the fact that the said cheque was sent in high value clearing, i.e., ....
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....ransfer scroll giving the details of the cheque. We do not find any reason to interfere with the said finding. We agree with the observations of the Special Judge that all the evidence on record would only go on to show that the cheques had in fact been received on 6-11-1991. 154. The next question which arises for our consideration is as to whether the said cheque had been sent for the clearing department on the date of its receipt itself or on 8-11-1991. 155. The learned Special Judge in regard to the said question has clearly held that the two cheques were sent to the clearing department on the 8th only and not on the 6th. 156. The learned Special Judge, however, in our opinion, erroneously rejected the argument advanced on behalf of the appellant that the said cheques were sent along with a single voucher but they were returned and therefore were again sent back to the clearing department on 8-11-1991. As long as there is the slightest opportunity of two views possible, in our opinion, the one in favour of the accused must be adopted. 157. All the materials on record were required to be considered having regard to the fact that 7-11-1991 was a bank holiday and accor....
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....s. 2,37,29,750. On that day credit voucher [Exhibit - 78] was prepared for the amount of the difference between the amount of the cheque and the amount of Rs. 1.5 crores which was credited on 13-11-1991 to the account of Hiten P. Dalal. The credit voucher, therefore, is for Rs. 8,72,975. . . ." 163. No adequate or sufficient explanation in regard thereto was furnished by the concerned appellants. Admittedly, there was no entry in the BCR register with regard to the said cheque. There are no details in the Current Account Credit Voucher. 164. It has been submitted by the learned counsel appearing on behalf of the appellants that the cheque was received late on 13-11-1991 but was not sent for clearance. It was furthermore submitted that the BCR Register was not exhibited in the evidence. 165. From the records as also the findings of the learned Special Judge, it is evident that the cheque was not received in the Funds Department on 13-11-1991. The entry of this cheque finds place as per Exhibit 77 only on 14-11-1991. The details of the said transaction shows that the beneficiary thereof was the Accused No. 3 and other details have also been mentioned therein. The credit vouc....
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.... stated that the amount was overdrawn, and, therefore, it attracted levy of interest. 167. The debit voucher dated 13-11-1991 is for Rs. 1.5 crores and is signed by both A-1 and A-4. It is not difficult to infer that A1 has also played an equally active role in ensuring an ad hoc credit of Rs. 1.5 crores into the Account of Accused No. 3. In her evidence, Ms. Hemlatha Nair has identified the signature of A1 in the debit voucher (Ext. - 75). Therefore, it is not difficult to perceive that A-1 is involved in this transaction. 168. The learned counsel for the appellant would contend that the error was an inadvertent one and as the said error was detected, it was re-submitted on the next day. We do not think that the said explanation is sufficient. We, therefore, are of the opinion that the involvement of the concerned appellants - Accused Nos. 3 and 4 is established beyond any doubt with regard to the said transaction. Eighth transaction 169. The Eighth transaction pertains to Cheque No. 193889 dated 4-12-1991 for Rs. 7 crores issued by Bank of Karad, Fort Branch, Bombay. [Ext. 32] PW2, Ms. Sampada Ambre, who was working in Bank of Karad during the time of the transaction,....
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.... by Accused No. 2. 177. She deposed further that on 5-12-1991, as per the instructions of accused Nos. 2 and 5, she prepared the BCR Debit Voucher which does not include the Cheque amount of Rs. 7 crore. She identified the handwriting, signatures and initials of herself, Accused Nos. 1, 2 and 5. 178. Had the said credit been not given, the account of the Accused No. 3 would have been overdrawn by Rs. 3,01,92,461.90. No interest was charged as a result whereof the bank suffered a loss of Rs. 45,547.90. 179. Thus, it is evident that the amount of the cheque was credited to the account of Accused No. 3 on 4-12-1991, even without having the same in the possession of the bank. It is also clear from the perusal of the records that certain irregularities are present in the records pertaining to the cheque which, undoubtedly involved Accused Nos. 1 and 2. We are, thus, of the opinion that Accused Nos. 1 and 2 have undoubtedly assisted in ensuring the credit of Rs. 7 crore in the account of Accused No. 3. 180. The allegation against Accused No. 5 is only regarding signing by him the Consolidated Debit Voucher for a lesser amount even when it was not tallying with the total amoun....
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.... same, it was once again sent to the Clearing Department with the consolidated voucher (Exhibit 122) on 17-12-1991. The learned Special Judge opined that if the cheque was received on 16-12-1991, the same should have been sent to the Clearing Department for clearance on the same day and as such the learned Judge has inferred that the cheque must have not been received before 3.00 p.m. Had the credit voucher been returned, as has been contended, it was obligatory on the part of the concerned appellants to intimate the Current Account Department so as to enable them to, through posting of the credit voucher give credit to the account of the Accused No. 3. It was evidently not done. In the said transaction, loss of interest to the bank was for Rs. 57,324. 185. The learned trial judge has rejected the contention of the accused that the cheque was received late and it was sent to the clearing department with a single credit voucher and since the clearing department refused to accept the same, it was once again sent to the clearing department with a consolidated credit voucher (Ext. - 122) on 17-12-1991 on the grounds that even if it was true, it was the duty of the accused No. 1 and ....
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....ence, Mr. Sarmalkar (PW-5) also stated that as Mr. Narottam did not have sufficient amount in his credit, the cheque as also the forwarding letter was actually issued on 8-4-1992 although they were bearing the date 7-4-1992. 193. The BCR Register (Exhibit 105) also did not show that there was any entry in regard to the said cheque on 7-4-1992. No such entry is found even on 8-4-1992. The rubber stamp of Clearing Department, however, showed the date to be 8-4-1992. The corresponding debit voucher (Exhibit 98) also provides the details of the said cheque. The credit voucher (Exhibit 100) on the basis whereof the said sum of Rs. 4.00 crores was credited to the account of Accused No. 3 on 7-4-1992, however, did not mention the other details of the cheque of Bank of Karad. It mentioned the name of the bank as Standard Chartered Bank which is evidently not correct. The said credit voucher was signed by Accused No. 2. Therefore, the basis on which the credit voucher was prepared on 7-4-1992 has not been explained. 194. Contention of the appellant that in the credit voucher, the name of the bank was wrongly mentioned as the Standard Chartered Bank instead and place of Bank of Karad c....
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....d the fact that some of the officers of the Andhra Bank, employed in the Funds Department and authorized to get the amounts in question credited to the account of Hiten P. Dalal, had facilitated the same although the bankers' cheques in question had in some cases not even been received by the Bank clearly establish the factum of conspiracy. 200. An officer of a bank holds a position of trust. Each one of them, keeping in view the nature and extent of duties required to be performed, is expected to do so not only in terms of statutory directions, but as also the directions issued by the Reserve Bank of India and his own employer. Documents for the purpose of giving credit in the account of a customer would indisputably be required to be prepared on the basis of the cheque receipts. It cannot be prepared in anticipation of receipt of a cheque; firstly, because the amount of the cheque, the name of the drawee and other particulars would not be known to them; secondly, the bank is required to maintain a large number of registers to put in place a sound banking system. All precautions must be taken to prevent a fraud or deceit on the part of a customer. 201. Therefore, the fact th....
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....for the offence under section 13(1)(c) and section 13(1)(d) of the Prevention of Corruption Act by the special court below. It is undisputed that accused No. 1 was working as Manager and others accused as officer in the Funds Department of the Fort Branch. Andhra Bank is a Nationalised Bank and, therefore, they are 'Public servants' within the meaning of section 21 of the IPC. 208. The Accused, particularly A1 and A2 had dominion over the funds of the Bank, and they misappropriated the funds of Andhra Bank by issuing credit vouchers to the current account department for getting the amounts credited to the account of A3, in some cases when the cheques were not received or sent for clearance. 209. Prevention of Corruption Act, 1988 replaced the prevention of Corruption Act, 1947. The new Act was enacted to consolidate and amend the law relating to the prevention of corruption and for matters connected therewith. Relevant portions of section 13 which provide for Criminal Misconduct by a public servant read as under :- "13. Criminal misconduct by a public servant.-(1) A public servant is said to commit the offence of criminal misconduct, :- (c )if he dishonestly or fraudule....
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....n accused herein A3 would not have been able to withdraw from his account amounts of money to which he was not entitled to under law. The accused herein being public servants had an additional responsibility of ensuring that the funds of the public were not misappropriated in any manner or form, whatsoever. 213. A3 did not have overdraft facility or any overdraft limit sanctioned to him. A3 could not have overdrawn his account. He was facilitated to do so by A1, A2 and A4. 214. Since we have not been able to find adequate evidence of the involvement of A5 in the transactions we hereby acquit him of all charges under the Prevention of Corruption Act. 215. It is, therefore, beyond the purview of any doubt that A1, A2 and A4 being public servants were guilty of offences under section 13(1)(c) read with section 13(2) as also section 13(1)(d) read with section 13(2) of the said Act. Offences relating to making of false documents 216. The learned special judge has also charged all the accused A1, A2, A4 and A5 for offences under sections 467, 471 and 477A of the IPC. Section 467 deals with the forgery of valuable securities and Wills etc., and is reproduced below :- "46....
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....ith substantially what is known as forgery, defined in section 463 or making of a false document which is provided under section 464. It is reproduced hereto below :- "464. Making a false document.-A person is said to make a false document or false electronicrecord-First-Who dishonestly or fraudulently :- (a )Makes, signs, seals or executes a document or part of a document; (b )Makes or transmits any electronic record or part of any electronic record; (c )Affixes any digital signature on any electronic record; (d )Makes any mark denoting the execution of a document or the authenticity of the digital signature. With the intention of causing it to be believed that such document or part of document, electronic record or digital signature was made, signed, sealed, executed, transmitted or affixed by or by the authority of a person by whom or by whose authority he knows that it was not made, signed, sealed, executed or affixed; or Secondly - Who, without lawful authority, dishonestly or fraudulently, by cancellation or otherwise, alters a document or an electronic record in any material part thereof, after it has been made, executed or affixed with digital signature....
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....f a document or electronic record with, intent to cause damage or injury, to the public or to any person, or to support any claim or title, or to cause any person to part with property, or to enter into any express or implied contract, or with intent to commit fraud or that fraud may be committed, commits forgery." 225. However, since we have already held that the commission of the said offence has not been convincingly established, the accused could not have been convicted for the offence of forgery. The definition of "false document" is a part of the definition of "forgery". Both must be read together. Dr. Vimla v. Delhi Administration [1963] Suppl. 2 SCR 585. 226. Accordingly, the accused could not have been tried for offence under section 467 which deals with forgery of valuable securities, will etc., or section 471, i.e., using as genuine a forged document or section 477A, i.e, falsification of accounts. The conviction of the accused for the said offences is accordingly set aside. Criminal breach of trust 227. The next charge we shall deal with is one arising under section 409 of the IPC with which the accused herein have also been convicted of by the special judge....
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.... servant has been dealt with under section 409 which reads as under : "409. Criminal breach of trust by public servant, or by banker, merchant or agent.-Whoever, being in any manner entrusted with property, or with any dominion over property in his capacity of a public servant or in the way of his business as a banker, merchant, factor, broker, attorney or agent, commits breach of trust in respect of that property, shall be punished with [imprisonment for life], or with imprisonment of either description for a term which may extend to ten years, and shall also be liable to fine." 231. Since we have dealt with the said issue in detail in R. Venkatkrishnan's case (supra), we need not deal with it here again. 232. However, it is important to mention here that more recently this court in State of Punjab v. Pritam Chand 2009 (2) SCALE 457 opined : "The ingredients of offence under section 405 are (i ) entrusting any person with property or with dominion over the property, (ii) the person entrusted (a) dishonestly misappropriated or converted to his own use the property or (b) dishonestly used or disposed of the property or wilfully suffered any other person so to do in viola....
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....409 IPC. 239. Established banking norms are binding on an officer of the Bank in the matter of discharge of the trust, i.e., in dealing with the money entrusted to him. He is required to follow the same and that would be an implied term of his contract of service as an officer of the bank. The accused before us here acted in breach of the same. 240. We are therefore of the opinion that the prosecution has sufficiently been able to prove the involvement of A1, A2 and A4 as regards the offence of criminal breach of trust. Offence relating to receiving stolen property 241. The main accused herein, Hiten P. Dalal, has in addition also been convicted under section 411 which deals with dishonestly receiving stolen property. The said section has been reproduced below : "411. Dishonestly receiving stolen property.-Whoever dishonestly receives or retains any stolen property, knowing or having reason to believe the same to be stolen property, shall be punished with imprisonment of either description for a term which may extend to three years, or with fine, or with both." 242. Stolen property as used in this section has been defined in section 410: "410. Stolen property.-....
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....he conviction of A3 would be even more clearly established from the facts and circumstances of the present case. 248. It must be noted in this respect that this section requires two essentials : (a)Dishonest receipt or retention of stolen property. (b)Knowledge or reason to believe at the time of receipt that the property was obtained in the ways specified in the section. 249. The offence of dishonest retention of property is almost contemporaneous with the offence of dishonestly receiving stolen property. A person who dishonestly receives property and retains it, must obviously continue to retain it. 250. It is the duty of the prosecution in order to bring home the guilt of a person under section 411 to prove : (1)that the stolen property was in the possession of the accused; (2)that some person other than the accused had possession of the property before the accused got possession of it; and (3)that the accused had knowledge that the property was stolen. 251. It has therefore in our opinion been conclusively established by the prosecution that the A3 was guilty of an offence under section 411, since he had dishonestly received stolen property. Senten....