H IN THE HIGH COURT OF ANDHRA PRADESH AT AMARAV TUESDAY, THE EIGHTEENTH DAY OF MARCH TWO THOUSAND AND TWENTY FIVE PRESENT THE HONOURABLE SRI JUSTICE K SREENIVASA REDDY CRIMINAL APPEAL NO: 1536 OF 2006 Appeal under Section 378(4) of Cr.P.C., against the Judgment in C.C.No. 10/2000, dt. 19-01-2006 on the file of the Court of the Special Judge for C.B.I Cases, Visakhapatnam. Between: State represented by its Deputy Superintendent of Police, Central Bureau of Investigation., Special Police Establishment, Visakhapatnam. ...Appellant/Complainant AND 1. D.Bhaskara Rao, S/o Satyanarayana Rao, age 53 years, Formerly Senior Manager, Indian Overseas Bank, Eluru, West Godavari District. 2. Javvadi Subhash Chandra Bose, S/o late Venkateswara Rao, age 31 years, Contractor, Eluru Municipality, Eluru. ...Respondents/Accused Counsel for the Appellant: Sri P S P Suresh Kumar, Special Public Prosecutor for CBI Counsel for the Respondent No.1: Sri A Hariprasad Reddy Counsel for the Respondent No.2: Sri Turaga Sai Surya The Court made the following: THE HON’BLE SRI JUSTICE K. SREENIVASA REDDY CRIMINAL APPEAL No. 1536 OF 2006 JUDGMENT: This Criminal Appeal is preferred by State, represented by the Deputy Superintendent of Police, Central Bureau of Investigation, Special Police Establishment, Visakhapatnam, against the judgment dated 19.01.2006 in C.C.No.lO of 2000 on the file of the Special Judge for C.B.l. Cases, Visakhapatnam(fo r short, ‘the Special Court’), whereunder and whereby the respondents herein/Accused Officers 1 and 2 were found not guilty of the charges levelled against them and accordingly they were acquitted of the same. The appellant herein is the complainant and 2. respondents herein are A. 1 and A.2, in the Calendar Case. For sake of convenience, the psirties are hereinafter referred to, as they are arrayed in the Special Court. The allegations, in brief, are as follows, (a) A. 1 worked as Senior Manager of Indian Overseas Bank 3. (lOB), Eluru from 09.12.1994 to 16.8.1997. His duties include purchase of bills, recommending and disbursement of M.C.C. 2 Limits, etc. A. 2 is a private contractor, registered with Eluru conspiracy with A.2, purchased cheques/ bills of M.C.C. Limits to A.2 and his diverting funds of the Bank properties and did not ensure their Municipality. It is alleged that A.l, iin dishonestly and fraudulently A.2 and recommended and disbursed group of firms, facilitated A.2 i acquiring immovable utilization. in for proper (b) It is alleged that A.2 No.818 with lOB, introduction of A.l. opened by A.2 in the opened a current account Eluru branch 05.12.1995 on with Another current account No.820 was name of Sri Prasanth Book Center with his Another current own introduction. account No.821 was also name of Sri Venkata Dinesh opened on 23.12.1995 in the Traders, with the younger brother of A.2 J.Jawaharlal Nehru its Proprietor on the introduction of A.2. as On 18.06.1996, A.l current account No.831 in the the younger brother of as its Proprietor with the introduction current account No.832 in the name of Sri Venkata Rajitha Enterprises as its Proprietor. authorized opening of another name of Venkata Dinesh Traders with A.2 J.Jawaharlal Nehru of A.2. a.2 also opened another Another current account No.852 was also opened on 3 Kanaka Durga Traders, K.Sobha Rani and of Sri the name 11.03.1997 in the name of introduced by A. 2, in and her husband respectively, dishonestly and fraudulently iz. Sri Venkata K.Narayana Swamy, sister of A.2 It is alleged that A.l 13 bills of A.2 and his group firms viz (c) purchased Dinesh Traders 06.12.1995 and 24.04.1997. purchased, only four cheques were sent the four cheques returned unrealized Traders between and Sri Kanaka Durga Out of the said 13 cheques for clearing by A. 1, and A.l intentionally did all and did not send the concerned drawer bank for clearing. not report the same to Regional Office remaining cheques to the discovered during inspection by the The said cheques were Inspectors of lOB. issued in favour of A.2 by A.2 All the cheques, except three cheques, were himself, and the other three Thus, A.l and A.2 issued by Sri P.S.Kumar. cheques were dishonestly caused wrongful loss to the tune to the lOB and it caused corresponding wrongful gam of Rs.27.70 lakhs to A.2. 06.12.1995, A.2 credit facility of Rs.5.40 lakhs for further alleged that on (d) It is submitted an application for his working capital for carrying recommended the said proposal to Regional Office for sanction A.l out contract works. 4 of Rs.5.00 lakhs M.C.C. Limit. Central Office, the Regional Office 19.3.1996. A.2 submitted of credit facility up to Rs.lO. same was recommended by A. 1 by the Regional Office Office. It is alleged that while deliberately concealed the fact by him in the credit of A.2 and misled i After obtaining approval conveyed its sanction dated another application for enhancement 00 lakhs, on 03.02.1996, and the on 04.06.1996, and sanctioned Central of after obtaining approval from recommending the facility, A.l of return of cheques purchased It. It is alleged that of Rs. 10.00 lakhs, A.l as on 10.07.1996 and as against total sanctioned M.C.C. limits allowed A.2 to draw up to Rs. 12.67 lakhs Rs.3,27,820/- on 11.7.1996. from Regional Office, A. 1 falsely informed regularized. When an explanation is called that the account was On that day, A.l deliberately purchased cheque No.551561, and fraudulently dated 19.8.1996 of A.2 and adjusted the excess drawals in his account. On 02.09.1996, copies of false bills of A.2 A. 1 deliberately forwarded Regional Office falsely showing the fully knowing and having On 10.07.1996, A.l addressed to the end use of funds by him, to believe that they were false. reason letter to the Regional Office recommending sanction of Rs.20.00 lakhs as open cash credit 5 limit to A.2 in addition to Rs. 10.00 lakhs M.C.C. limit availed by A. 2. A. 1 falsely informed the Regional Office vide letter dated 17.07.1996 that his dealings in the account were satisfactory. In form No.209 enclosed to the proposal, A. 1 deliberately did not mention number of bills purchased and returned unpaid. In view of the same, the Regional Office allowed Rs. 10.00 lakhs A. 1 allowed excess drawal of additional M.C.C. Limit to A.2. Rs.15,44,529/- as against sanctioned limit of Rs.20.00 lakhs. 10.07.1996, J.Jawaharlal Nehru, younger (e) On brother of A.2, submitted application to A. 1 for credit facility of Rs.20.00 lakhs for Venkata Dinesh Traders and the same was recommended by A. 1 to the Regional Office on 17.07.1996. On 19.8.1996, A. 1 falsely informed the Regional Office that the party was in the activity for one year on modest scale, but in fact, the applicant was in the college in the said period and was waiting for result. A. 1 could not give reasoned justification of the projected turn over of Rs.2.88 crores of the applicant. On 13.9.1996, the Regionail Office sanctioned M.C.C. Limit of On 3.12.1996, he made Rs. 10.00 lakhs to the applicant, another application to A.l for sanction of credit facility of Rs.30.00 lakhs against the existing facility of Rs. 10.00 lakhs. 6 and the same was recommended by A. 1 on 16.12.1996 and A. 1 allowed excess amounts in M.C.C. account of A.2, the limit of M/s. Venkata Dinesh Traders. guarantor for He was also allowed to draw on behalf of J.J.Nehru, an amount of Rs.25.06 lakhs on 19.6.1997 against the sanctioned limit of Rs. 10.00 lakhs i the name of M/s. Venkata Dinesh Traders. as in (f) On 12.02.1997, another application sanction of credit facility of Rs.20.00 lakhs in the name of Sri Kanaka Durga Traders by K.Sobharani Proprietrix, and A.l recommended the was made for sister of A.2 as same to the Regional Office on 01.03.1997. It is alleged that A.l forwarded false and bogus profit and loss account, balance sheets, etc. of the firm purported to have been issued by Sri P.V.Prasad Chartered Accountants, Koti, Hyderabad, knowing 86 Co., or having reason to believe that they were false. A. 1 also falsely informed the Regional Office that some of the family members of the applicant had experience in rice bran trading. Office sanctioned M.C.C. Limit of Rs. 15.00 lakhs with instructions to regularize the excess allowed in M/s. Venkata Dinesh Traders before release of the limit, said instruction, A. 1 The Regional on 22.03.1997 But, against the allowed excess amount of 7 Rs.9,65,453/- as on 30.05.1997 in the account of M/s. Venkata Dinesh Traders, against the sanctioned limit of Rs. 15.00 lakhs, for which explanation was called from A. 1 by the Regional Office. It is further alleged that A. 2 submitted forged documents viz. copies of letter purported to have been issued by S.E., Panchayat Raj, Eluru showing the award of work of (g) Rs.54.00 lakhs to A.2; G.P.A. purported to have been given by Sri P.S.Kumar, Secretary, Sri Krishna Vaddera 86 S.C. Cooperative Society Limited, Eluru; 13 false bills showing proper utilization of funds of the Bank; contract certificate dated 20.07.1996 purported to have been issued by the Deputy E.E., Irrigation Department; profit and loss account of M/s. Kanaka Durga Traders, purported to have been issued by M/s. P.V.Prasad 86 Co., Chartered Accountants, Koti, Hyderabad, in support of the claims for M.C.C. Limits and used them as It is alleged that there is over-valuation of the A. 1, with dishonest intention. genuine. I collateral security properties. agreed to the same and recommended the application of A.2 A.l intentionally did not ascertain and his group of firms. 8 genuineness of the documents presented by A. 2 and his of firms. group (h) It is alleged that the collateral securities offered by A.2 for the sanction of M.C.C. limit were purchased by A.2 with the funds of the Bank, and after sanction of M.C.C. limits, all the outstanding amounts towards the purchase of cheques adjusted from the funds obtained through M.C.C. Limits. Thus, it is alleged that A.l and A.2, during 1995 to 1997, were parties to criminal conspiracy, cheated the lOB to tune of Rs.85,16,592/- in purchase of bills, disbursement of limits to A.2 and his group of firms and in pursuance of the said conspiracy, A.l recommended, disbursed M.C.C. limits to A.2 and his group of firms through A.2 though A.2 never indulged in any of the contract/business activities as claimed by him. It is further alleged that in pursuance of the said conspiracy, A. 1 abused his official position as public servant dishonestly and fraudulently purchased the cheques/bills of A.2, did not dispatch them for clearance, got over-valuation of collateral securities, accepted false documents of A.2 knowing or having reason to believe that they were false and forged, and recommended and got were (i) a got sanctioned and 9 sanctioned M.C.C. limits to A.2 and his group and did not ensure proper utilization of the funds to the Bank. P.W.8, General Manager, lOB, Chennai, who is G) competent to remove A. 1 from the office, accorded sanction under Section 19 (1) (c) of the Prevention of Corruption Act, 1988 for prosecution of A.l. Hence, the charge sheet. After furnishing copies of case documents and 4. examining the accused under Section 239 CrPC, charges for the offences under Sections 120B, 420, 471 and 468 IPC were framed against both the accused; charge for the offence under Section 409 read with 120B and/or 109 IPC against A.2 and charge for the offence under Section 409 IPC and Sections 13 (1) (c) read with 13 (2) of the P.C. Act, 1988 and 13 (1) (d) (ii) read with 13 (2) of the P.C. Act, 1988 against A.l. When the charges were read over and explained to the respective accused, they pleaded not guilty and claimed to be tried. During trial, P.Ws.l to 25 were examined and Exs.Pl 5. to PI79, including Exs.2A, 6A and 8A, were got marked on No oral evidence was adduced on behalf of the prosecution. behalf of the defence, but Exs.Dl to D5 were got marked on behalf of the defence. 10 1 6. The learned Special Judge, after evidence on record, found A.l and A.2 under Sections 120B, 420, 471 and guilty of the offences under Sections 409 considering the not guilty of the offences 468 IPC; found A.l IPC and 13 (1) (c) read with 13 (2) of the P.C. Act and 13 (1) (d) (ii) read with 13 (2) of the P.C. Act, 1988; found A.2 not not guilty of the offence under Section 409 read with 120B and/or 109 IPC, and accordingly acquitted them of the respective charges. Challenging the IS preferred by the the present Criminal Appeal i same appellant/State. 7. The learned Special Public Prosecutor appearing for the appellant /CBI contended that from documentaiy evidence coupled with evidence prosecution witnesses P.Ws.l, 2, prosecution is able to establish its beyond reasonable doubt, accused had drawn excess amount than the the voluminous of material 10, 12 and 13, the case against the accused It is his contention that the amount allowed under the M.C.C. limits and caused wrongful loss to the Bank, which is evident from the evidence of P.Ws.l submits that A. 1 dishonestly recommended the application of A.2 and his group of firms for sanction of M.C.C. and 2. He limits, and I 11 that for obtaining the M.C.C. limits, A.2 dishonestly and fraudulently submitted forged documents. A.l and A.2, during 1995 to 1997, were parties to criminal conspiracy, cheated the lOB to a tune of Rs.85,16,592/- i__ purchase of bills, disbursement of limits to A.2 and his of firms, and that in pursuance of the said conspiracy, A.l recommended, got sanctioned and disbursed M.C.C. limits to group of firms through A.2 though A.2 indulged in any of the contract/business activities as claimed by him. He submits that in pursuance of the said conspiracy, A.l abused his official position as public servant dishonestly and fraudulently purchased the cheques/bills of A.2, did dispatch them for clearance, got over-valuation of collateral securities, accepted false documents of A.2 knowing or having to believe that they were false and forged, and recommended and got sanctioned M.C.C. limits to A.2 and his group and did not ensure proper utilization of the funds to the He submits that the learned Special Judge has appreciated the evidence on record in proper perspective and erred in acquitting the accused of the charges levelled against He submits that m group A.2 and his never not reason Bank. not 12 them. Hence, he prays to allow the Criminal Appeal and convict the accused of the charges levelled against them. 8. On the other hand, respondents 1 and 2/A.l and prosecution is learned counsel for the A. 2 contended that the to establish that there not able was misappropriation of the amounts drawn through the accounts either by A.l or A.2, and the evidence of P.W.13 i relevant M.C.C. IS on this aspect. He submits that the alleged forgery fabrication of documents is also not established by the prosecution. or He submits that there was no fraudulent dishonest intention entertained by the accused or so as to attract the offence of cheating, and there is no conspiracy between the accused to cause any wrongful loss to the public excheque submits that the allegation of over-valuation of the properties offered as collateral security has been disproved. r. He He submits that except making bald allegations, no material has been produced by the prosecution to substantiate its allegations beyond reasonable doubt. He submits that the Special Judge considered these aspects in right perspective and rightly acquitted the accused, and there are no compelling or substantial reasons to interfere with the judgment of acquittal 13 passed by the learned Special Judge and hence, he prays to dismiss the Criminal Appeal. Now, the point for determination in the present 9. Criminal Appeal is whether the prosecution is able to bring home the guilt of the respondents/A. 1 and A.2 for the respective charges framed against them and whether the impugned judgment passed by the learned Special Judge needs any interference ? This is an appeail against an Order of acquittal. There 10. presumption available under law that an accused is IS a presumed to be innocent unless the guilt is established beyond reasonable doubt. That presumption of innocence is further strengthened by an order of acquittal passed by the trial Court. In dealing with the appeals against acquittal, though this Court has full power to re-appreciate the evidence, at the same time, it would be slow in interfering with the order of acquittal because the presumption under law that accused is presumed to be innocent unless contrary is proved, is further strengthened by the order of acquittal. Unless there are substantial or compelling reasons, this Court will not ordinarily disturb the 14 findings of the trial Court. If the trial Court has given any perverse finding, then it can be a ground to interfere with the order of acquittal. Similarly, if admissible evidence has taken into consideration or inadmissible evidence has been looked into for the purpose of arriving at a particular finding, then also it can be said to be a compelling reason to interfere with the same. not been 11. On this aspect, it is pertinent to refer to a decision in Harbans Singh & another v. the State of Punjab^ wherein it i: held as follows: (para 8) IS “The question as regards the correct principles to be applied by a Court hearing an appeal against acquittal of a person has engaged the attention of this Court from the very beginning. In many cases, especially the earlier ones, the Court has in laying down such principles emphasized the necessity of interference with an order of acquittal being based only on ‘compelling and substantial reasons’ and has expressed the view that unless such reasons are present in an Appeal, Court should not interfere with an order of acquittal (Vide Suraj Pal Singh V. The State, 1952 SCR 193: (AIR 1952 SC 52); Aj Singh V. State of Punjab, 1953 SCR 418: (AIR 1953 SC 459). The use of the words, ‘compelling embarrassed some of the High Courts in exercising their jurisdiction in appeals against acquittals and difficulties occasionally arose as to what this Court had, meant by the words ‘compelling reasons’. In later years the Court has often avoided emphasis on ‘compelling reasons’ but nonetheless adhered to the view expressed earlier that before interfering in appeal with an order of acquittal a mer reasons’ AIR 1962 SC 439 15 Court must examine not only questions of law and fact in all their aspects but must also closely and carefully examine the reasons which impelled the lower courts to acquit the accused and should interfere only if satisfied, after such examination that the conclusion reached by the lower court that the guilt of the person has not been proved is unreasonable.” Heard. Perused the evidence on record. 12. 13. There is no dispute with regard to the fact that A. 1 is a public servant within the meaning of Section 2 (c) of the Act, 1988. P.W.8 worked as the General Manager, lOB, Chennai during the relevant point of time of the incident. He issued Ex.P86-sanction order to prosecute A. 1 issued by P.W.8. It is his evidence that after going through the material papers and application of mind, he issued the sanction to prosecute A.l and he is competent to issue the same. The allegations against the accused are that 14. A.l conspired with A.2 to commit fraud on lOB, Eluru branch and caused wrongful loss to the said bank and wrong gain to A.2 or his associate borrowers, and thereby cheated the Bank by submitting false, fake and forged documents by A.2 for obtaining sanction of M.C.C. limits and enhancement of the said limits, and A.l 16 recommended the same to the Regional Office facts and figures and thus induced with false the Regional Office of the Bank and also by purchasing the demand bills and cheques presented by A.2 exceeding the financial powers of A.l and by not sending certain cheques for clearance and not acting upon certain dishonoured cheques(which were returned uncleared). It is further alleged that the accused fraudulently forged, fake and false documents i. dishonestly used as genuine the or e. copies of false bills of A.2, false and bogus profit and loss account, balance sheets, etc. submitted along with the application facility of Rs.20.00 lakhs in the name of M/s.Kanaka Durga Tranders, belonging documents like for credit to sister of A.2; forged copies of letter purported to have been issued by the Superintending Engineer, Panchayat Raj Eluru showing the award of work of Rs.54.00 lakhs the GPA purported to have been to A.2; given by P.S.Kumar, Secretary of Sri Krishna Vaddera and SC Co-operative Society Limited, Eluru; 13 false bills showing the utilization of funds of the bank; proper purported contract certificate dated 20.7.1996 if issued by the Deputy as r- :'f 17 Executive Engineer, Irrigation Department and the purported profit and loss account of M/s. Kanaka Durga Traders said to have been issued by P.V.Prasad & Co., having knowledge or reason to believe that those documents are forged. It is the further allegation that the accused forged all or any of the aforesaid documents intending that the said documents be used for the purpose of cheating. It is further alleged that A.l, being Senior Branch Manager of lOB, Eluru branch, having been entrusted with or having dominion over, the of the bank in such capacity, committed criminal breach of trust in respect of the said money by allowing M.C.C. Limits beyond his powers to A. 2 and his associates and also his firms and allowed A. 2 and his associates to withdraw the amounts from the bank beyond sanctioned limits and by not regularizing the limits by purchasing the demand bill exceeding his limits and failed to collect the same, and he, being a public servant, dishonestly misappropriated the said monies entrusted to him or over which he has domain by virtue of his said position and allowed A.2 to misappropriate the amounts money the 18 drawn from the bank from time to time and obtained his position pecuniary advantage to A.2 by abusing public servant and as a committed criminal misconduct, further alleged that A.2 abetted A.l to mi It is - misappropriate the 13 demand bills and by of the said cheques and monies of the Bank by purchasing not taking action for clearance also by allowing M.C.C. Limits and also by allowing him the said bank exceeding the exceeding his powers to A.2 to withdraw the amounts from sanctioned limits. 15. A.l worked as Senior Manager of lOB, a private contractor, Eluru branch. a.2 was Eluru Municipality. registered with Opening of current the Bank in the name of A.2 and i accounts with in the name of his firm rises, and also by P.Ws.3 partnership firm M/s. Kanaka P.W.24 in the name of his M/s. Sai Venkata Rajitha Enterpri and 4 in the name of their Durga Traders, Eluru and by firm M/s. Venkata Dinesh dispute. Traders, Eluru, is not in 13 bills (cheques) Further, purchase of belonging to A.2 and his group firms, by A.l and presentation of credit and debit vouchers i also not disputed. - in the Bank, is The same is evident from the evidence 19 of P.Ws.2, 3, 4 and 24 and from the documents Exs.P2 to P67 marked in their evidence. 16. It is the allegation that A.l dishonestly recommended for sanction of M.C.C. limits to A.2 and his group of firms, and A.2 dishonestly and fraudulently submitted forged documents for obtaining the said M.C.C. However, a perusal of the evidence on record goes to show that the prosecution failed to produce and prove said documents viz. copies of letters said to have been issued by the Superintending Engineer, Panchayat Raj, Eluru showing the award of work of Rs.54.00 lakhs to A.2; the alleged GPA said to have been given by P.W.5- P.S.Kumar, Secretary of Sri Krishna Vaddera and SC Co operative Society Limited, Eluru; the alleged 13 false bills showing the proper utilization of funds of the bank; the alleged contract certificate dated 20.7.1996 as if issued by the Deputy Executive Engineer, Irrigation Department and the alleged profit and loss account of M/s. Kanaka Durga Traders said to have been issued by P.V.Prasad & Co. Therefore, the prosecution failed to establish by adducing limits. 20 cogent oral and documentaiy evidence, forged the aforesaid documents. that accused 17. It is the further allegation that the subject 13 cheques of exceeding his financial A.l purchased A.2 and his group of firms by powers and has not obtained prior permission from the Regional Office for purchasing the powers, and that with to A.2 and his group of cheques exceeding his financial regard to sanction of M.C.C. limits firms. It is pertinent to mention here that none of the witnesses deposed about prosecution the alleged conspiracy between A.l and A.2 the Bank and wrongful gain to A.2. to cause wrongful loss to P.W.2, who worked as Assistant Manager of JOB, Eluru branch point of time of the incident. at the relevant deposed with regard - in the name of A.2 and in the name of his firm M/s. Sai Venkata Rajitha Enterprises, and also by P.Ws.3 to opening of current accounts with the Bank i and 4 in the name of their partnership form M/s. Kanaka Durga Traders, by P.W.24 i Eluru and m the name of his firm M/s. Venkata Dinesh The evidence of P.Ws.3, 4 and 24 also Traders, Eluru. runs on the same lines about opening of the said accounts 21 A.2 is brother-in-law of P.W.3. at the instance of A.2. P.W.4 is wife of P.W.3. P.W.24 is younger brother of A.2. P.W.2 deposed in cross-examination that A.2, being a Senior Manager, was attending to clerical job also due to dearth of staff, and that all the cheques that were sent for clearance would be reflected in the cheques purchase referred register and monthly return of cheques purchased is known as CAF-4, in which all the cheques which were purchased in that month would be entered and the same would be sent to the Regional Office every P.W.2 further stated that D.B.P. 18. month for review. (Demand Bills Purchase) cheques are reflected in Ex.P82, sent to office of the Regional original of which was Manager. He further stated that the RM office will have knowledge of the excess purchase of DBPs by the branch after receipt of original of Ex.P82, and to his knowledge, RM office did not raise any queries after receipt of Ex.P82 He further stated with regard to excess DBP purchase, that A. 1 used to send special letters with regard to excess purchases of DBPs to the RM, and A.l used to follow the oral telephonic instructions of RM office in respect of 22 purchase of excess DBFs. He further stated hat i customers approach the RM, Manager i.e. A.l. in some cases, the valued give suitable instructions to the who will 19. P.W. 10 worked as Assistant General Manager, lOB during the relevant noi point of time of the incident. He deposed that while disbursing the loan to A.2, sanctioned uot adhered terms and conditions disbursement were to; that was made exceeding the limits and it was notice of higher authorities, some irregularities i not brought to the deposed about He also in case of accounts of Venkata Dinesh Traders, Kanaka Durga Traders Bose account. and JSC 20. P.W. 13 worked Central Office, Chennai. 1997, as during regular branch i the Bank by Inspection Department, Deputy General Manager in as He deposed that in the year inspection conducted in one Ramaswamy, Inspector of Central Office, serious irregularities noticed, the General Manager of the Bank asked him investigate into those were to matters in Regional Office, is his evidence that he Visakhapatnam. It found • \ 23 procedural irregularities in the matter of conduct of the In cross-examination, he deposed that he did not record separate statements of A. 1 and Regional Manager. accounts. one A.K.Das, He further deposed that during interactive meeting, A. 1 told him in the presence of said A.K.Das that he sought RM’s permission for cheque purchases and that he did not dispatch the purchased cheques as the RM told him not to dispatch the since they were accommodation cheques only, and A.K.Das, the then R.M. kept quiet. same He further deposed that when he questioned A. 1 during the said meeting as to whether R.M. aware of the fact that the cheque purchases amounts were credited to M/s. Venkat Dinesh was Traders and to Bose’s account, which were drawn in cash by Bose, immediately, A.K.Das, the then R.M. intervened and admitted that he permitted the BM to adjust other dues and start running business smoothly, further stated that he detailed the lapses on the part of the Regional Manager, in Ex.P112. P.W.13 He further states that the documents verified by him revealed that the Regional Manager A.K.Das knew about the M.C.C. limits and 24 excess limits and the DBP cheque purchases accounts of Bose. pertaining to 21. From the evidenee of P.Ws.2 and 10, i evident that A.l, being the Branch per the instructions of the Regional Office. It is Manager, has to act as Their evidence, coupled with the evidence of P.W.13, makes it clear that the Regional Manager A.K.Das knew about the M.C.C. limits and excess limits and the DBP cheque purchases pertaining to the account of Bose (A.2), acts on the directions and with the Regional Manager A.K.Das. cross-examination that if and A. 1 did all the permission of the then Further, P.W.l deposed in Braneh Manager wants exercise his discretionary powers and exceed his a to limits, he has to take prior permission from the Regional Manager, and that oral approvals are also being obtained from the Regional Manager. But, the then Regional Manager as a witness for the reasons best A.K.Das is not examined known to the prosecution, though he was cited at sl.No.8 His examination would have certainly thrown some light with regard to the veracity of allegations made in List of Witnesses i charge sheet. in as against A. 1. 25 22. As regards the allegation of conspiracy between both the accused in over-valuing the properties offered by of firms as collateral security for the amounts, the A.2 and his group of excess drawals of M.C.C. prosecution examined P.W.9-Retired Executive Engineer, valuer for lOB, Vijayawada branches and LIC He deposed that he valued the properties of Eluru as the parties wanted to submit to the valuation certificates before the lOB, Eluru. His evidence the valuation given by him in Ex.P87-valuation deposed that at the instance of the Branch Managers, they would go to the places to fix up the valuations and as per the prevailing standard schedule of he evaluated the building and vacant site and also purpose who was a Housing Finance. supports report. He rates enquired about the local rates prevailing at that time for When such is the fixing the values of the vacant site, of P.W.9, the prosecution failed to adduce any evidence other evidence or produce any documentary evidence m that the values shown by P.W.9 m Virtually, the evidence of support of its case EX.P87 are on higher side. P.W.9 and the recitals in Ex.P87 remained unchallenged. 26 No valuation certificates from the Sub to substantiate i Registrars - Its case by the prevailing market value the Sub Registrar’s marked Ex.P96-valuation Panel Valuer, lOB, by examining the concerned are produced prosecution. It is a fact that the of the property is different from Though prosecution valuation. reports given by Eluru, the M.Raghu Kumar, one same is not substantiated witness concerned. 23. The evidence inspection of lOB, Eluru branch of P.W.12, who conducted and submitted Ex.P94- inspection report, is clear that him revealed that the M.C.C. limits Regional Manag examine the valuers and the legal opinion, and the Bank some records verified by excess limits and was within the knowledge of Sri A.K.Das, However, he Branch granted er. stated that he did panel Advocate who not gave the valuer estimated the values of the properties at Rs. 152.30 lakhs. The M.C.C. limits from the Bank is Rs.45.00 availed by the three firms lakhs. More over, the entire transactions are within the knowledge of the Regional Manager A.K.Das, and the a Branch Manager has evidence of P.W. 10 is clear that to T 27 act according to the instructions of the Regional Office, and that he has not taken steps to obtain values from the office of the Sub Registrar concerned. 24. Further more, the evidence of P.W.13 is clinching that he found procedural irregularities in the matter of conduct of the accounts, and during interactive meeting, A. 1 told in the presence of A.K.Das, R.M. that he sought the latter’s permission for cheque purchases and that he did not dispatch the purchased cheques as the latter told him not to dispatch the same since they were accommodation cheques only, for which the latter kept quiet. It is also evident from the evidence of P.W.13 that during the meeting, when he questioned A. 1 as to whether the R.M. was aware of the fact that the cheque purchases amounts were credited to accounts of M/s. Venkat Dinesh Traders and A.2, the then R.M. intervened and admitted that he permitted the Branch Manager to adjust other and It is his evidenee that start running business smoothly, he recorded the minutes of the interactive meeting. It is the further evidence of P.W.13 that the documents verified by him revealed that the A.K.Das, R.M. knew about the 28 M.C.C. limits and excess limits and D.B.P. cheque It is also purchases evident from Deputy pertaining to the account of A.2 the evidence of p.w 22, who worked as Chief Officer, Regional Office, JOB, Visakhapatnam, JOB, and was working as the Chief Officer, at the time inspection of the Chennai, conducted i af giving Bank and submitted straight away lakhs basin queries. Further, produce and Ex.P165-^eport, that the sanctioned the M.C. Regional Office C. Limits of Rs. PI74 without roi 15.00 g on Exs.P173 raising any as held ■supra, the prosecution did not prove any document which iIt alleged as forged or fabricated document ■ The concern of the lendin amounts lent with the secure the g Bank is to secure repayment of the and in order to interest stipulated. same. sufficient immovable securities by A.2 and Ex.P95-sale equitable Ex.P96 and other properties were furnished g^oup of firms, as is evident from "■ith the bank by of title deeds reports furnished by Further, there i as his heeds deposited creating mortgages by deposit valuation and another. and from panel valuers P.W.9 IS no material 29 forthcoming that in view of the alleged acts of the accused, financial loss. On the evidence of P.W. 1, it is clear that amounts relating to the aforesaid recovered along with interest. the lOB, Eluru branch sustained any the other hand, from the entire outstanding customers were aforesaid discussion, it is clear that establish its case beyond 25. From the failed to the prosecution doubt that the accused forged any document for cheating and used reasonable for the purpose of using the same any forged document as genuine, and A.l conspired with A.2 and over-valued the properties offered by A.2 and his of collateral security for the purpose Further more, it is group of firms as drawals of M.C.C. amounts, aforesaid discussion that A.l did all excess also clear from the the acts alleged against him the directions and at the on There of the Regional Office at Visakhapatnam. that the standard of proof required instance cannot be any dispute in an enquiry is different than that of in a criminal case. and the findings in inspection and enquiry reports cannot The be the basis for convicting an accused person. , in the inspection/enquiry reports under findings, if any 30 Exs.P94, pi 12 and PI65, accused guilty of the charges cannot be the basis in the present to find an case. It is ms of A. 2 and his Further, from the evidenee not the case of prosecution that the fir are fictitious firms. relatives of P-W.IO, it is clear that there i to the end facilities. Further, from that the adjust of IS no stipulation with regard through M.C.C. the evidence of P.W.13, it is clear use of the funds released amounts to M.C.C. accounts through to P133 and was done on the advice of A.K.Das, the then such, the various transfer vouchers P135 to P152, Regional Manager. under Exs.P127 As allegation of misappropriation or criminal breach of trust by the accused in respect of allowing M.C.C. limits to A.2 and his group firms beyond the powers of A.l does not arise. No dishonest intention at the inception can be inferred from any of the proved circumstances or evidence, the aforesaid findings, the charges under the Corruption Act, 1988 do not stand. In view of Prevention of There is no legal accused guilty of the charges levelled evidenee to find the against them. 31 26. In view of the foregoing discussion, this Court has no hesitation to hold that the prosecution failed to establish its case against the accused for the charges levelled against them, beyond all reasonable doubt, trial Court, upon appreciation of the evidence on record in right perspective, rightly found the accused not guilty of the charges levelled against them and accordingly acquitted them. There are no compelling or substantial The reasons to interfere with the impugned judgment. The Criminal Appeal is devoid of merits. In the result, the Criminal Appeal is dismissed. 27. confirming judgment dated 19.01.2006 in C.C.No.lO of 2000 on the file of the Special Judge for C.B.I. Cases, Visakhapatnam. As a sequel, pending miscellaneous petitions, if any, in the Criminal Appeal shall stand closed. Sd/- V. DIWAKAR DEPUTY REGISTRAR //TRUE COPY// ECTION OFFICER To, 1. The Special Judge for C.B.I Cases: Visakhapatnam, Visakhapatnam District, (with records) 2. The Superintendent, CBI Special Police Establishment Visakhapatnam, Visakhapatnam District. I 3. One CC to Sri Turaga Sai Surya Advocate [OPUC] 4. One CC to Sri A Hariprasad Reddy Advocate [OPUC] 5. One CC to Sri P S P Suresh Kumar, Special Public Prosecutor for CBI Advocate [OPUC] 6. The Section Officer, Criminal Section, High Court of Andhra Pradesh at Amaravati. 7. Two CD Copies SAM RAM HIGH COURT DATED: 18/03/2025 JUDGMENT CRLA.No.1536 of 2006 dismissing the criminal appeal