TaxTMI 
TaxTMI 
2009 (8) TMI 694
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...., 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 Committee whence the alleged security scam came to....
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....ccounts. 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 examined as a witness. PW-13 Sunil Pore and PW-14 Dilip Gursahani were working as....
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....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 therefore A1 and A5 were guilty of criminal breach of trust as also making of false documents ....
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....at 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 committed both by the Current as well as the Clearing Department, appellants cannot be said to have been involved in commiss....
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....ot 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 clearance of the Funds Department) should be held to be liable therefor and not the appellants alone. (xiv)In view of the pressure of work on all ....
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....a 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 conspiracy is a separate and distinct offence under the Indian Penal Code, and the original agreement between the accused is a sine qua non therefor, mere knowledge of consp....
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....e 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 Andhra Bank and, thus, the charge against the appellant must be held to have been established. (vi)Insofar as the first transaction is concerned, account of accused No. 3 was credited on 18-5-....
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....lability 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 to take a holistic view of the matter and for the said purpose the materials brought on record to prove the ingredients may have to be considered from different angles, namely-(a) if a cheque had been received th....
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....fences 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 securities through the Funds Department and that he had a Current Account bearing No. 4819 mainly for the said purpose. 34. While dealing with the securities transactions on behalf of A3, there used to be sale as well as purchase of....
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....ort 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 to the Cheque, the name of the drawer bank, the number, the date and amount thereof as also to whom the amount of the Cheque was to be credited. 42. Thereafter, entries used to be made in the transfer scroll, which contained credit as well as debit vo....
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....ng 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 Department and sent to the service centre for realization. It was the job of the service centre to send the cheques to the RBI where the amount of the cheque would be credited in the account of Andhra Bank with RBI. 51. The cheques would then go back to the drawer bank and th....
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....le 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 issued by the Head Office. They were issued for the purpose of operation of security transaction at Fort, Bombay Branch of Andhra Bank. The guidelines moreover specify that permission had been granted to Hiten P. Dalal (A3) for the purpose of securities transactions. 63. Therefore, these directions were obvi....
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....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., 2.30 - 2.45 p.m., is sent with a single voucher to another department. 70. It is accepted by PW 13, Sunil Pore that any cheque received up to 3.00 p.m. is also entertained wherefor a separate voucher is prepared, and the same is sent to the Current Account Department. This voucher may not he sent on that date, but must be sent on the day after. 71. It is also contended that in regard to the processing of the cheque for givin....
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....nly 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 to receive cheques along with a forwarding letter mentioning in whose account the same is to be credited and upon verification thereof, it would be sent to the Clearing Department. The cheques used to be received by the officer of the Funds Department and on the instructions of these officers that the credit vouchers were to be prepared. After preparation, the vouchers were to be handed over to the officers who, by signing them, used to authorise th....
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....minal 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. Condition precedent for holding the accused persons to be guilty of a charge of criminal conspiracy must, therefore, be considered on the anvil of the fact which must be established by the prosecution, viz., meeting of minds of two or more persons for doing or causing to be done an illegal act or an act by illegal means. 90. The courts, however, while drawing an inference from the materials brought on record to arrive at a finding as to whether the charges of the criminal ....
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....s 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 criminal conspiracy in detail in R. Venkatkrishnan's case (supra) we need not deal with it here at once again. 95. We may however notice that this court most recently in Mohmed Amin v. CBI 2008 (14) SCALE 240 after taking recourse to law governing the field noted thus :- "55. The principles which can be deduced from the above noted judgments are that for proving a charge of conspiracy, it is not necessary that all the conspirators know each and every details of the conspiracy so long as they a....
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....either 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 bore the date 20-5-1991. Even the BCR Register for 20-5-1991 (Exhibit 139) does not show receipt of the cheque. 104. Appellants, however, contend that although the cheque was dated 20-5-1991, the same had been received on 18-5-1991 on the basis of which the credit voucher was prepared and sent for the purpose of posting, as per the practice of giving instant credit which, in our opinion, is not worth any credence. It is not in dispute that the normal banking practice is that an entry of each cheque would be made immedi....
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....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 involve bankers cheques bearing Nos. 664786 dated 5-7-1991 amounting to Rs. 29 lakhs and 664785 dated 5-7-1991 for Rs. 71 lakhs issued by the Bank of Karad in favour of Andhra Bank. 111. Indisputably a single credit voucher for Rs. 1 crore authorising the crediting of the said amount into the account of accused No. 3 was issued by accused No. 2. The corresponding debit voucher dated 5-7-1991 was also for Rs. 1 crore and it was in the handwriting of Accused No. 2 and signed by both accused Nos. 1 and 2. This transaction was also included i....
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....ith 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 issuing acknowledgement to the Funds Department for receiving cheques from them or vice versa. 117. According to him the Clearing Department does not accept cheque from the Funds Department once the bank schedule is sent to the Service Centre. He furthermore stated :- "Functioning of the clearing department was to send for clearing whatever cheques are received from the Funds and Investment Department or from other department. No department can get the cheque cleared by sending them directly to the service centre by-passing the Clearing Department." 118....
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....en 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. Kamble had made the said entry. According to him it came within the purview of the bank practice. He further stated that as the Clearing Department refused to accept the cheques on 5-7-1991 they were returned to the Funds Department where they were separately recorded and a separate BCR was prepared and sent to the Clearing Department. According to the said witness it was a practice of the bank to send refused cheque through a separate voucher so as to make it distinct. 125. It is furthermore important to note that because of the urgency, details, such as the cheque number, d....
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.... 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 power and to sign the exceptional transactions list after proper scrutiny. 133. The Special Court, in our opinion, committed an error in opining that the cheques were not received on 5-7-1991. Furthermore the Current Account Department, could not have given credit for the two cheques since the computer system had an inbuilt mechanism which would not allow credit therefor before the clearance. It was, thus, for the Current Account Department to take necessary steps either for obtaining proper authorisation or to deny mutual operation in respect thereof. 134. It is, therefore, evident that t....
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.... 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 taken into account the documentary evidence on record, which shows that the cheques in respect of transaction Nos. 2 and 3, were received on the dates on which the transaction was made. We are therefore of the opinion of giving the benefit of doubt should be given to all the accused as regards transaction Nos. 2 and 3. Fourth Transaction 141. The fourth transaction relates to bankers cheque No. 078398 dated 17-9-1991 amounting to Rs. 61,84,925.59 ps. which was issued by Canbank Financial Services Limited, a sister concern of Canara Bank in favour of Andhra Bank. As per the evidence of PW 10 Vernekar on 17-9-199....
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....redit 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., at 12 O'clock on 18-9-1991, i.e., before 2.45 pm. The clearing schedule of the high value clearing is at [Exhibit 163]. Therefore, with respect, the learned Judge wrongly held that the cheque dated 17-9-1991 was received on 18-9-1991 at 2.45 pm. The learned judge had also ignored the material brought on record that on 18-9-1991 there was no entry of the said cheque in the BCR Register, and therefore it stands established that the cheque was sent to clearing department on 17-9-1991. The clearing department could not present the said cheque on 17-9-1991 but had presented it on 18-9-1991 in the high value clearing. Hence, the sing....
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....rned 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 accordingly the credit voucher could only have been sent on 8-11-1991. 158. In our opinion, the learned Special Judge was, with respect, wrong in concluding that even though the two cheques were probably received on 6-11-1991, they were not sent for clearing on 6-11-1991. 159. In our considered opinion, despite evidence leading to the effect that cheques were received on 6-11-1991, the finding to the contrary was clearly erroneous. We are, therefore, of the opinion that the prosecution has not been successful in establishing the involvement of the accused as regards these transactions. Seventh transaction 160. So far as the seventh transaction is con....
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....3-11-1991 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 voucher, according to Hemlata Nair (PW-11) was sent to the Current Account Department under the signature of the Accused No. 4. Ordinarily, it should have contained the details, but, as noticed hereinbefore, it was only for a sum of Rs. 1.50 crores. A debit voucher (Exhibit 75) was issued wherein it was stated :- "To receive Rs. 1.50 crores cheque, but received cheque for Rs. 2,39,29,750 - erroneously not presented in the clearing. Presented on 14-11-1991." Mention of both the credit and debit vouchers finds place in Scroll Register [Exhibits 76(1) and 76(2)]. The Transfer Scroll entries [Exhibits 76(3) and 76(4)] also show that the credit as against the cheque at Exhibi....
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.... 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, in her evidence, affirms that she had prepared the said Cheque and that was signed by PW-5, Mr. Sarmalkar. 170. It is being claimed on behalf of the Petitioners that the said Cheque was received by Andhra Bank on 4-12-1991. 171. A perusal of the record reveals that the Cheque was dated 4-12-1991. The amount for the same was credited to the Account of Accused on 4-12-1991 but the Cheque was presented for clearing only on 5-12-1991. However the irregularities in the records should have been subjected to close scrutiny to determine collusion, if any, between the Accused persons for the purpose of serving a common object. 172. In her deposition, Mrs. Hemlata Nair, (PW-11) Clerk, Funds....
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....he 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 amount of the cheques recorded in the BCR Register on 5-12-1991. 181. Accused No. 5, contended that he had done so because the amounts were not tallying with and was less by seven crores. His further contention was that the Consolidated Credit Voucher was prepared by Ms. Hemalatha Nair and put up to him for his signature, and he signed it keeping with the requirements of double entry system and to avoid double debit as the same had already been debited on 4-12-1991. 182. We may also notice that accused No. 5 was acquitted by the Trial Court in respect of transaction dated 16-12-1991 despite the Consolidated Debit Voucher not tallying with the total as reflected in the BCR Register. Thus, being only involved i....
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....erest 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 Accused No. 2 to immediately intimate the Current Accounts department to withhold posting of the credit voucher for giving credit in the Accused No. 3's account. 186. In relation to this transaction also, it appears to us that the learned Special Judge failed to consider the practice of "Clear" and "Unclear Credit" to which we have already made reference hereinbefore and for the sake of brevity, we restrain ourselves from elaborating thereon once again. 187. However, we are constrained to mention that is difficult to accept that a mere failure to intimate the current accounts department to withhold posting when there existed a mechanism of clear and unclear credits, would be sufficient to establish conspiracy. We do....
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....ails 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 cannot be accepted. Even the BCR Register does not show that a cheque for the aforementioned amount has been received. The bank schedule dated 7-4-1992 also does not indicate receipt of such a cheque from either of the said banks on 7-4-1992. The consolidated credit voucher also does not bear any entry. It, therefore, appears that the said credit voucher was wrongly prepared for a sum of Rs. 4.00 crores mentioning the name of the drawer bank as Standard Chartered Bank. False entry was also made in the Transfer Scroll (Exhibit 102) showing the name of the drawer bank as Reserve Bank of India. Even in the BCR Register of 8-4-1992, no entry is found as regards the said cheque (Exhibit 12). The amount of the said cheque was, however, included....
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....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 that, credit and debit vouchers were prepared and other registers were filled up, although the cheques were not in physical possession of the bank, in our opinion, clearly establishes the existence of a criminal conspiracy between the ultimate beneficiary, on the one hand, and some of the officers of the bank, on the other. 202. A debit or credit voucher furthermore is not prepared in piecemeal or in instalments. Bank officers are not supposed to know the immediate requirement of an account holder. 203. An analysis of the facts of the case clearly demonstrates that a conspiracy had been hatched between the accused Nos. 1, 2, 3 and 4 its object being that accused Nos. 1, 2 and 4 who were the manager and officers working in the Funds Department and had do....
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....on 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 fraudulently misappropriates or otherwise converts for his own use any property entrusted to him or under his control as a public servant or allows any other person so to do; or (d )if he,- (ii )By abusing his position as a public servant, obtains for himself or for any other person any valuable thing or pecuniary advantage; or (2) Any public servant who commits criminal misconduct shall be punishable with imprisonment for a term which shall be not less than one year but which may extend to seven years and shall also be liable to fine." Section 13 in general lays down that if a public servant obtain for himself or for any other person, any valuable thing or pecuniary advantage he would be guilty of criminal misconduct and sub-section (2) thereof prescribes of the punishment for ....
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....)(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 :- "467. Forgery of valuable security, Will, etc.,-Whoever forges a document which purports to be a valuable security or a will, or an authority to adopt a son, or which purports to give authority to any person to make or transfer any valuable security, or to receive the principal, interest or dividends thereon, or to receive or deliver any money, movable property, or valuable security, or any document purporting to be an acquittance or receipt acknowledging the payment of money, or an acquittance or receipt for the delivery of any movable property or valuable security, 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." 217. Section 471 which deals with using as genuine a forged document has ....
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....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 either by himself or by any other person, whether such person be living or dead at the time of such alteration; or Thirdly - Who dishonestly or fraudulently causes any person to sign, seal, execute or alter a document or an electronic record or to affix his digital signature on any electronic record knowing that such person by reason of unsoundness of mind or intoxication cannot, or that by reason of deception practised upon him, he does not know the contents of the document or electronic record or the nature of the alterations. . . ." 220. A person is said to make a false document or record if he satisfies one of the three conditions as noticed hereinbefore and provided for under the said section. The first condition being that the document has been falsified with the intention of causing it to be believed that such docum....
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....enuine 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. The punishment for criminal breach of trust by a public servant is provided under section 409. However we must herein make reference of definition of criminal breach of trust simplicitor which reads as under section 405 :- "405. Criminal breach of trust.-Whoever, being in any manner entrusted with property, or with any dominion over property, dishonestly misappropriates or converts to his own use that property, or dishonestly uses or disposes of that property in violation of any direction of law prescribing the mode in which such trust is to be discharged, or of any legal contract, express or implied, which he has made touching the discharge of such trust, or wilfully suffers any other person so to do, commits 'criminal breach of trust'." The punishment for criminal breach of trust is provided in section 406. Punishment for aggravated forms of....
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....f 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 violation (i) of any direction of law prescribing mode in which such mode is to be discharged or (ii) of any legal contract made touching the discharge of trust." 233. Further, more the court in Sharon Michael v. State of Tamil Nadu 2009 (1) SCALE 627 noted thus :- "Ingredients of section 409 of IPC read as under :- (i)The accused must be a public servant; (ii)He must have been entrusted, in such capacity, with property; (iii)He must have committed breach of trust in respect of such property." 234. Therefore, in view of the principles of law extracted above in our opinion there is no doubt that the offences relating to criminal breach of trust stands established against the accused. They were the officers in the Funds Department of Andhra Bank. In the said capacity they had been entrusted with the funds of the Bank. In that sense they had dominion over a thing. The money ....
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....son 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.-Property, the possession whereof has been transferred by theft, or by extortion, or by robbery, and property which has been criminally misappropriated or in respect of which criminal breach of trust has been committed, is designed as "stolen property", whether the transfer has been made, or the misappropriation or breach of trust has been committed, within or without India. But, if such property subsequently comes into the possession of a person legally entitled to the possession thereof, it then ceases to be stolen property." Section 410 accordingly defines stolen property. A property is stolen for the purpose of this section when its possession is transferred by theft, extortion, robbery, dacoity or criminal breach of trust or which was obtained under misappropriation committed whether in India or outside. 243. An extended meaning is given to the words 'stolen property' which are used in the four subse....
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....sed 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. Sentencing and conclusion 252. We may also place on record that as the CBI has not preferred any appeal against the quantum of sentence, this Court cannot impose a higher sentence. 253. Since we have acquitted accused No. 5 Mir Nagvi Askari of all the charges against him the order of sentence passed against him is hereby quashed. 254. Since we have acquitted all the accused of offences under section 467 read with sections 120, 471 read with section 120B as well as section 477A read with section 120B of the Indian Penal Code, the sentence passed by the learned Special Judge against all the accused as regards the said offences is hereby quashed. 255. The Main accused herein A3, Hiten P. Dalal has been found guilty of offences punishable under sections 120B and 411 read with section 120B. He is hereby sentenced to suffer rigorous imprisonment for 6 months and to pay a fine of Rs. 50,000 and in default to suffer rigorous imprisonment for one m....