Kandikunta Venkata Prasad, Hyd., vs The State Of Telangana, Rep Spl.Pp For ... on 22 March, 2024

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Telangana High Court

Kandikunta Venkata Prasad, Hyd., vs The State Of Telangana, Rep Spl.Pp For ... on 22 March, 2024

Bench: K. Lakshman

            HON'BLE SRI JUSTICE K. LAKSHMAN

        CRIMINAL APPEAL Nos.452 AND 454 OF 2016

COMMON JUDGMENT:

Heard Mr. Nageshwara Rao Pappu, learned senior counsel for appellant - accused No.3 in Crl.A. No.452 of 2016 and Mr. E. Uma Maheshwar Rao, learned counsel representing Mr. Enuganti Sudhanshu Rao, learned counsel for appellants - accused Nos.2 and 5 in Crl.A. No.454 of 2016 and also Mrs. S. Anandi, learned Special Public Prosecutor for CBI appearing on behalf of respondent.

2. Criminal Appeal No.452 of 2016 is filed by accused No.3 challenging the judgment dated 31.05.2016 in C.C. No.2 of 2003 passed by the Principal Special Judge for CBI Cases, Hyderabad, while Criminal Appeal No.454 of 2016 is filed by accused Nos.2 and 5 challenging the very same judgment.

3. Vide the aforesaid judgment, dated 31.05.2016, the trial Court found the appellants - accused Nos.2, 3 and 5 guilty of the charge under Section - 120B of IPC. Apart from the above charges, the appellants - accused Nos.2 and 5 were also found guilty of the charges under Sections - 419, 420, 467, 468 and 471 of IPC and 2 KL,J Crl.A. Nos.452 & 454 of 2016 accordingly imposed respective sentences of imprisonment in the following manner:

i) Accused Nos.2, 3 and 5 were sentenced to undergo rigorous imprisonment for a period of five (05) years each and to pay a fine of Rs.1,00,000/- (Rupees One Lakh Only) each and in default to undergo simple imprisonment for a period of one (01) month each for the charge under Section - 120B of IPC.

ii) Accused Nos.2 and 5 were sentenced to undergo rigorous imprisonment for a period of three (03) years each and to pay a fine of Rs.50,000/- (Rupees Fifty Thousand Only) each and in default to undergo simple imprisonment for a period of fifteen (15) days each for the charges under Sections - 419 and 471 of IPC under each count.

They were also sentenced to undergo rigorous imprisonment for a period of five (05) years each and to pay a fine of Rs.1,00,000/- (Rupees One Lakh Only) each and in default to undergo simple imprisonment for a period of one (01) month each for the charge under Section - 420 of IPC. They were further sentenced to undergo rigorous imprisonment for a period of seven (07) years each and to pay a fine of Rs.5,00,000/- (Rupees Five Lakhs Only) each and in default to undergo simple imprisonment for a period of six (06) 3 KL,J Crl.A. Nos.452 & 454 of 2016 months each for the charges under Sections - 467 and 468 of IPC under each count.

4. The case of the prosecution is as under:

i) Accused No.1 along with other accused stolen four (04) Demand Draft (DD) Books each consists of twenty five (25) leaves, in all hundred (100) folios from Punjab National Bank (PNB), Sanathnagar Branch, Hyderabad of which, he was also the custodian and got them encashed fraudulently to the tune of Crores of rupees during the period from April, to July, 1998.

ii) Out of the aforesaid 100 DDs, 93 DDs were encashed fraudulently at Mumbai to the tune of Rs.8.29 Crores.

iii) The accused persons have cleverly taken 93 DDs for small amounts below Rs.10,000/- between April to July, 1998 from PNB, Sanathnagar Branch, Hyderabad, favouring mostly SBI Magnum and Global Tele System, Mumbai. These DDs were purchased by accused No.5 in cash by giving false names and false addresses which was confirmed by GEQD Opinion that most of 93 application forms for small DDs were written by accused No.5 and he was also identified by the Bank Officers at PNB, Sanathnagar Branch as the person who was coming to purchase DDs of small amounts. Branch serial numbers 4 KL,J Crl.A. Nos.452 & 454 of 2016 were subsequently used on the stolen DDs for getting them fraudulently encashed. After demand drafts were obtained, same 'branch serial number" and 'date of draft' were mentioned on the stolen demand drafts for getting them encashed fraudulently by substituting the amounts and the names of payees.

iv) The conspiracy for stealing the demand drafts from PNB, Sanathnagar Branch and encashing them at Mumbai, by mainly purchasing Gold TT Bars was hatched among accused Nos.1 to 7.

Out of the said 93 stolen DDs, two (02) DDS were favouring Damale & Co., for Rs.9.00 lakhs each, out of which, one DD for Rs.9.00 lakhs was got encashed through accused No.8 and another through one Mr. P.S. Damale and Mr. F.B. Thanvi.

v) Gold TT Bars worth around Rs.8.00 Crores were purchased between May and July, 1998 as per the bill books of M/s. Ummed Jewellers, M/s. Sha Umedmal Tilokchandji & Co. and M/s. Kirtikumar I. Jain, bullion firms of Mr. Indarmal U. Jain and his son Kirtikumar I. Jain having their shops at the main bullion market in Zaveri Bazar, Mumbai.

KL,J Crl.A. Nos.452 & 454 of 2016

vi) The demand drafts have been deposited by them in the accounts of their respective firms at Bank of Baroda, Zaveri Bazar Branch, Mumbai and the same were passed by PNB, CDPC, Mumbai in the normal course.

vii) The planning of the subject fraud and filling up of stolen demand drafts was done by accused No.1 and A2 at Hotel Viceroy, Hyderabad as stated by Accused No.4 during course of custodial interrogation. The same is further corroborated by recovery of 6 Guest Registration Cards of the said Hotel, for stay of accused No.6 on 24.04.1998 to 25.04.1998; as Ramesh Reddy from 30.04.1998 to 05.05.1998; by accused No.2 from 15.05.1998 to 16.05.1998, 03.06.1998 and 07.07.1998 to 08.07.1998 as Ramesh Reddy. Accused No.1 stayed from 30.05.1998 to 31.05.1998 as Prakash Reddy.

viii) Accused No.2 - Mr. K. Venkata Prasad @ Ramesh is an Engineer by qualification and he filled up the names of the Payees on all the stolen DDs in his own handwriting. He has come and stayed at Hotel Sapna, Mumbai under false name on 05.05.1998, 07.05.1998, 03.06.1998, 09.06.1998 and 10.06.1998. The payment in respect of the first two stays was made vide his Credit Card No.4511 5000 2511 3435 of Andhra Bank. During search, the diary of accused No.2 was 6 KL,J Crl.A. Nos.452 & 454 of 2016 seized, wherein the name and phone number of Mr. Md. Shakir - accused No.3, besides other numbers.

a) The scrutiny of his bank accounts at Global Trust Bank Limited, Bowenpally Branch, Secunderabad, Oriental Bank of Commerce, Richmond Road Branch, Bangalore and UTI Bank, Begumpet Branch, Hyderabad, show deposits to the tune of Crores in the name of his Company, Elite Innovative Technologies Pvt. Ltd., his firm Srinivasa Enterprises, his own account and accounts of his wife, mother and co- accused Mr. K. Bhoopal - Accused No.7. These accounts were opened from July, 1998 onwards i.e., the period of the subject fraud;

b) Accused No.2 was also in the process of purchasing six floors (area 25220 square feet) in a building 'Business Tower' at Abids, Hyderabad for Rs.1,09,70,000/- from M/s. Satellite Developers Pvt. Ltd., Mumbai. He paid an amount of Rs.33,67,974/- towards the said purchase;

c) Mr. K. Venkata Prasad - accused No.2 had also taken an amount of $ 20000 from his relative Mr. K.Venu Gopal, who 7 KL,J Crl.A. Nos.452 & 454 of 2016 is staying in USA. His wife also received an amount of $ 14000 in her account from the said K. Venu Gopal;

d) This accused started a company Elite Innovative Technologies Pvt. Ltd. on 06.10.1998 at Bengaluru i.e., immediately after the fraud period;

e) The Directors of the said company are his brother-in-law, Mr. R. Harinath, his wife, his mother and one friend, Mr. Udayeshwar Shetty, who has reportedly resigned in 1999;

f) Office of the said company was purchased for Rs.31.80 lakhs from M/s. Design Express of Mumbai. The office is at N-1005 and 1006, Prestige Meridian-II, 30, M.G. Road, Bengaluru;

g) This accused also diverted around Rs.50.00 lakhs to the Chit Fund Company of Mr. Y.Vijay Kumar, who is running a chit fund company under the name and style 'M/s. Vishnu Priya Enterprises' at Secunderabad.

ix) Mr. M. Md. Shakir - accused No.3, who played an important role in commission of the subject fraud. This accused introduced accused No.6 - Mr. C.N. Sunil Kumar and accused No.2 - Mr. K. Venkata Prasad as Ramesh to Mr. Amrutlal V. Jain and Mr. 8 KL,J Crl.A. Nos.452 & 454 of 2016 S.P. Mehta, Partners of M/s. Shreepal Sales, Mumbai, with whom he was having business relations since the last 20 years. He also got introduced the account of Mr. C.N. Sunil Kumar of accused No.1 Textiles at Dena Bank, Zaveri Bazar Branch through Mr.S.P. Mehta.

a) Thereafter, this accused went with Mr. Amrutlal V. Jain and co-accused Mr. K.Venkata Prasad (A-2) and Mr. C.N. Sunil Kumar (A-6) to the bullion shop of Indarmal U. Jai from where he purchased a gold chain;

b) This accused also got opened the account of accused No.6 at Global Trust Bank, Bandra (W) Branch, Mumbai by talking to his distant relative;

c) In the said account, three (03) stolen DDs worth Rs.19.00 lakhs were subsequently got encashed fraudulently.

x) Accused No.5 - Mr. C. Udaya Kumar alias Prakash Reddy is responsible for purchasing DDs of small amounts of Rs.175 to 500/- from PNB, Sanath Nagar Branch, Hyderabad between 24.04.1998 to 14.07.1998 under false names and false addresses. The sole purpose of which was to use the Branch Sr.No., on the DDs so obtained on the stolen DDs to avoid detection.

KL,J Crl.A. Nos.452 & 454 of 2016

5. After completion of investigation, the CBI laid the charge sheet and the same was taken on file as C.C.No.2 of 2003.

6. During trial, PW.1 to PW61 were examined and Exs.P1 to P487 were marked on behalf of the prosecution. None was examined on behalf of the accused. However, Exs.D1 and D2, which are statements of PWs.38 and 39 recorded under Section - 161 of Cr.P.C., were marked.

7. During pendency of the aforesaid C.C., accused No.4 died and, therefore, the case against him stood abated. The aforesaid case was split up against accused Nos.6 and 8 vide C.C. No.33 of 2004.

8. After hearing both sides, the trial Court found guilty of the appellants herein and other accused Nos.1, 4 and 7 for the aforesaid charges and accordingly recorded conviction and sentences of imprisonment on them in the manner stated therein.

9. While recording conviction, the trial Court observed that the demand drafts so obtained for small amounts under Exs.P3 to P95 - applications were proved to have branch serial Nos.317 to 398 with respective dates. Purchase of the said demand drafts for small amounts, is thus, proved and established by the prosecution and role 10 KL,J Crl.A. Nos.452 & 454 of 2016 of accused Nos.4 and 5 in the said regard was made out. According to prosecution, accused No.1 had assumed a fictitious name as Sri Prakash Reddy and accused No.2 also assumed such fictitious name as Ramesh Reddy, who were in occupation of rooms in Hotel Viceroy, Hyderabad during relevant period for the purpose of fabricating Ex.P186.

i) The trial Court further observed that a careful consideration of evidence of PW.57 along with Exs.P453 to P455 leads to an inference that accused No.3 along with three others travelled from Hyderabad to Mumbai in Indian Airlines regular flight and that they reached Mumbai on 05.05.1998. His evidence has certain bearing in relation to what transpired at Mumbai when the transactions proved by the prosecution evidence through PWs.12 to 15 and 30, which is the mainstay of the prosecution, is considered. Thus, it was proved that accused No.3 along with three others reached Mumbai on 05.05.1998 by the prosecution.

ii) It is a significant circumstance established by the prosecution against accused No.2 which itself is a serious incriminating circumstance to connect accused Nos.2 and 3 in relation 11 KL,J Crl.A. Nos.452 & 454 of 2016 to the transactions in the present case. The proof so established from such material on record did make out participation of accused Nos.2 and 3 in this whole affair at Mumbai which had ultimately led to encashing stolen demand drafts from PNB, Sanathnagar Branch, Hyderabad. Thus, the evidence of PW.59 proved the case of prosecution that accused Nos.2 and 5 were also parties to fabrication of demand drafts in Exs.P186 to P278 with the help of branch serial numbers and dates secured by purchasing demand drafts for small amounts presenting applications in PNB, Sanathnagar Branch, Hyderabad. It is corroborating the evidence on record against accused Nos.2 and 5. PW.61 deposed as to collecting specimen signatures and handwritings from accused Nos.1, 2, 5 and 7. Though none was examined as an independent witness to prove that these specimens were obtained, it is not a serious flaw in trial, since evidence of PW.61 Investigating Officer is proving them.

iii) The trial Court further observed that the circumstances formed a complete chain without missing links against accused Nos.2, 3 and 5 clearly pointing out their role in the entire incident. All the criminal acts were done in a concerted and concealed sequence over a period of time. Therefore, basing on the material placed by the 12 KL,J Crl.A. Nos.452 & 454 of 2016 prosecution, it is proved beyond reasonable doubt that accused No.1 had stolen four demand drafts books of RFR and RIN series from his branch, after 31.03.1998, they were subjected to fabrication and used in preparation of demand drafts, in the nature of Exs.P186 to 278, with the participation of accused Nos.2 and 5 making use of the demand drafts purchased for small amounts presenting Exs.P3 to P95. In the process of encashing the fabricating demand drafts, accused No.3 played an active and significant role in introducing accused Nos.4 and 6 to PW.14 through PWs.12 and 13 and in enabling to open a bank account in Dena Bank, Zaveri Bazar, Mumbai through accused No.6. Presence of accused No.2 at Mumbai along with accused No.3 during the said transactions is also established. All such criminal activity done with fraudulent intention has led to purchase of gold bars through PW.14 in his bullion shops at Mumbai through accused No.4 and in using Exs.P186 to 217 and 220 to 278. Thus, criminal conspiracy, hatched up by all of them in agreement was also established by the prosecution making all of them liable for an offence punishable under Section - 120B of IPC.

iv) The trial Court also observed that accused No.2 presented himself at Mumbai by a false name. Their role in fabrication of 13 KL,J Crl.A. Nos.452 & 454 of 2016 demand drafts in Exs.P186 to 278 was also proved. Thus, the demand drafts were also made use of by them knowing fully well that they were fabricated and false documents. Thus, they are also liable to be punished for the aforesaid offences. Accordingly, the trial Court recorded conviction against them of the aforesaid offences.

10. Challenging the same, the appellants preferred the present appeals.

11. Learned counsel for the appellants - accused Nos.2 and 5 would contend as follows:

i) The trial Court failed to appreciate the fact that none of the witnesses examined by the prosecutions and the documents relied upon would prove the guilt of the appellants herein;

ii) None of the witnesses, more particularly PW.12 and PW.14, identified the appellants as the persons who committed the subject fraud;

iii) The appellants had no role in commission of the aforesaid offences;

iv) No prior sanction was obtained to prosecute the appellants for the offence punishable under Section - 120B of IPC;

KL,J Crl.A. Nos.452 & 454 of 2016

v) There was no recovery of 8 gold biscuits alleged to have purchased by accused No.3 from PW.14;

vi) PW.36 did not identify any accused as Ramesh Reddy;

vii) PW.59 categorically deposed that he does not know whether the specimen signatures were written by accused Nos.2 and 5 on Exs.P463 and 464 and, thus, the same were not proved. No mediator was examined before whom specimen signatures said to have been taken. PW.61 - Investigating Officer did not refer about Exs.P463 and 464 in his evidence. The trial Court did not rely on the evidence of PW.59-hand writing expert as against accused No.1 on the ground that the specimen signatures were not exhibited through Investigating Officer. In view of the same, such an observation would also applicable to the case of accused Nos.2 and 5. Thus, the evidence of PW.59 is not helpful to the case of prosecution. Even otherwise, the evidence of hand-writing expert alone cannot be basis for conviction as held by the Apex Court in Bhagwan Kaur v. Maharaj Krishnan Sharma 1 and Magan Bihari Lal v. State of Punjab 2; 1 . (1973) 4 SCC 46 2 . (1977) 2 SCC 210 15 KL,J Crl.A. Nos.452 & 454 of 2016

viii) No mediator was examined before whom specimen signatures of Accused Nos.2 and 5 said to have obtained;

ix) House-searches of accused Nos.2 and 5 conducted by Investigating Officer (PW.61) were not in accordance with Section - 100 of Cr.P.C. and no incriminating material was found. Further, neither the mediator to Ex.P425 - search list was examined nor search proceedings under Section - 165 of Cr.P.C. were filed by the prosecution. Thus, search of house cannot be conducted unless proceedings are drafted under Section - 165 of Cr.P.C. and the same was admitted by PW.61;

x) Charge No.5 was framed by trial Court against accused Nos.1, 2 and 5 though it states that accused No.1 alone forged demand drafts and, thus, charges under Sections - 467 and 468 cannot be framed against accused Nos.2 and 5;

xi) The stolen demand drafts were not recovered from accused Nos.2 and 5, and so also the gold bars said to be the proceeds of crime. There is no explanation in the charge sheet on that aspect; 16

KL,J Crl.A. Nos.452 & 454 of 2016

xii) Test Identification Parade was not conducted, which is fatal to the prosecution case as held by the Apex Court in Bal Kishan v. State of H.P. 3;

xiii) There are no eye-witnesses to the incident and the entire case rests on circumstantial evidence. There is no chain of circumstances to connect the appellants with the offences alleged to have committed by them. Except alleged evidence of interested witnesses, there is no other evidence to connect the alleged offence and, therefore, much weight need not be given to the prosecution case. The prosecution has miserably failed to prove its case against the appellants beyond all reasonable doubt; and

xiv) Without considering the said aspects, the trial Court erred in recording the conviction against the accused and, therefore, they sought to set aside the convictions and sentences of imprisonment.

12. Apart from the above contentions, learned counsel for the appellant - accused No.2 would specifically contend as under:

i) PW.30 deposed that accused No.2 had not purchased any articles from their shop. Thus, there is no incriminating evidence against accused No.2;

. (2008) 16 SCC 11 17 KL,J Crl.A. Nos.452 & 454 of 2016

ii) Accused No.2 neither purchased the gold, nor delivered demand drafts to the purchase bullion;

iii) The evidence of PWs.19, 47 and 56 does not prove the presence of accused No.2 in Mumbai on 05.05.1998 and 06.05.1998, but the trial Court erroneously relied on their evidence;

iv) PW.47 did not identify accused No.2 as the person who alleged used credit card on 06.05.1998 and 08.05.1998 at Hotel Sapna, Mumbai and that the police did not seize the said alleged credit card. Further, the photo alleged to have shown to PW.47 by the police as that of accused No.2 was not produced. Further, the evidence of PW.53 would falsify the prosecution story as he deposed that he paid cash for Hotel Bill.

v) Thus, the evidence of PWs.19, 47 and 56 on one hand and the evidence of PW.53 on the other hand contradicts with each other.

13. Apart from the above contentions, learned counsel for the appellant - accused No.5 would specifically contend as under:

i) PW.2 did not show demand draft application through which accused No.5 said to have purchased demand drafts for small amounts. Even he did not identify accused No.5 during trial.

KL,J Crl.A. Nos.452 & 454 of 2016

ii) The evidence of PW.2 is not corroborated by PWs.1 and 3. Thus, no weight needs to be given to his evidence to the effect that accused No.5 had obtained demand drafts for small amounts;

14. On the other hand, learned Special Public Prosecutor for CBI, would contend that the evidence of prosecution witnesses would prove the guilt of the appellants herein. The trial Court gave specific reasoning by referring to the depositions of prosecution witnesses and the documents as mentioned in the impugned judgment. Though there is no direct evidence, the trial Court by considering circumstantial evidence and documentary evidence, recorded the conviction for the said offences. She would further contend that the trial Court is having power to record conviction even by relying on circumstantial evidence. There is no circumstance/reason that warrants interference by this Court in the present appeal.

15. In view above, the only issue that falls for consideration by this Court is:

Whether the convictions recorded by the trial Court for the aforesaid offences against the appellants - accused Nos.3, 2 and 5 are sustainable, both on facts and in law?

KL,J Crl.A. Nos.452 & 454 of 2016

16. As discussed supra, the trial Court convicted accused Nos.2, 3 and 5 for the offence under Section - 120B, 419, 420, 467 and 468 and 471 of IPC. Therefore, it is relevant to extract the said provisions and also to discuss the ingredients of the said provisions and the law laid down by the Apex Court.

17. Section - 120B of IPC deals with punishment for criminal conspiracy. Section - 120A of IPC deals with criminal conspiracy and, therefore, both the provisions are extracted hereunder:

"120A. Criminal Conspiracy.--When two or more persons agree to do, or cause to be done,--

(1) an illegal act, or (2) an act which is not illegal by illegal means, such an agreement is designated a criminal conspiracy:

Provided that no agreement except an agreement to commit an offence shall amount to a criminal conspiracy unless some act besides the agreement is done by one or more parties to such agreement in pursuance thereof.

Explanation.--It is immaterial whether the illegal act is the ultimate object of such agreement, or is merely incidental to that object."

"120B. Punishment of criminal conspiracy.--(1) Whoever is a party to a criminal conspiracy to 20 KL,J Crl.A. Nos.452 & 454 of 2016 commit an offence punishable with death, imprisonment for life or rigorous imprisonment for a term of two years or upwards, shall, where no express provision is made in this Code for the punishment of such a conspiracy, be punished in the same manner as if he had abetted such offence. (2) Whoever is a party to a criminal conspiracy other than a criminal conspiracy to commit an offence punishable as aforesaid shall be punished with imprisonment of either description for a term not exceeding six months, or with fine or with both."

18. To bring home the charge of conspiracy within the ambit of Section - 120B IPC, it is necessary to establish that there was an agreement between the parties for doing an unlawful act. It is no doubt true that it is difficult to establish conspiracy by direct evidence and, therefore, from established facts inference could be drawn, but there must be some material from which it could be reasonable to establish a connection between the alleged conspiracy and the act done pursuant to the said conspiracy. The said principle was also held by the Apex Court in P. Vijayan v. State of Kerala 4. 4 . (1999) 3 SCC 54 21 KL,J Crl.A. Nos.452 & 454 of 2016

19. In the absence of any reasonable evidence that at least two brains had consulted the offence, a charge of conspiracy cannot be sustained as held by the Apex Court in Hardeo Singh v. State of Bihar 5.

20. It is also settled principle that merely on the basis of suspicion of informant about conspiracy of accused to commit alleged crime, accused cannot be convicted for the offence under Section - 120B of IPC. The said principle was also held by the Apex Court in Sattar v. State of U.P. 6.

21. In State of Kerala v. P. Sugathan 7, the Apex Court held that an agreement forms the core of the offence conspiracy, and it must surface in evidence through some physical manifestation. As in all other criminal offences, the prosecution has to discharge its onus of proving the case against the accused beyond reasonable doubt. A few bits here and a few bits there on which the prosecution relies cannot be held to be adequate for connecting the accused with the commission of the crime of criminal conspiracy. It was further held that the most important ingredient of the offence being the agreement 5 . AIR 2000 SC 2245 6 . 2001 Crl.L.J. 676 (All.) 7 . (2000) 8 SCC 203 22 KL,J Crl.A. Nos.452 & 454 of 2016 between two or more persons to do an illegal act. In a case where criminal conspiracy is alleged, the Court must inquire whether the two persons are independently pursuing the same end or they have come together to pursue the unlawful object. The former does not render them conspirators but the latter does. For the offence of conspiracy, some kind of physical manifestation of agreement is required to be established. The express agreement need not be proved. The evidence as to the transmission of thoughts sharing the unlawful act is not sufficient.

22. In State (NCT of Delhi) v. Navjot Sandhu 8, the Apex Court held as follows:

"One more principle which deserves notice is that the cumulative effect of proved circumstances should be taken into account in determining the guilt of the accused rather than adopting an isolated approach to each of the circumstances. Of course, each one of the circumstances should be proved beyond reasonable doubt. Lastly, in regard to the appreciation of evidence relating to the conspiracy, the Court must take care to see that the acts or conduct of the parties must be conscious 8 . (2005) 11 SCC 600 23 KL,J Crl.A. Nos.452 & 454 of 2016 and clear enough to infer their concurrence as to the common design and its execution."

23. In Tanviben Pankajkumar Divetia v. State of Gujarat 9, the Apex Court held as under:

"45. The principle for basing a conviction on the basis of circumstantial evidences has been indicated in a number of decisions of this Court and the law is well settled that each and every incriminating circumstance must be clearly established by reliable and clinching evidence and the circumstances so proved must form a chain of events from which the only irresistible conclusion about the guilt of the accused can be safely drawn and no other hypothesis against the guilt is possible. This Court has clearly sounded a note of caution that in a case depending largely upon circumstantial evidence, there is always a danger that conjecture or suspicion may take the place of legal proof. The Court must satisfy itself that various circumstances in the chain of events have been established clearly and such completed chain of events must be such as to rule out a reasonable likelihood of the innocence of the accused. It has also been indicated that when the important link goes, the chain of circumstances gets snapped and the other circumstances cannot, in any manner, 9 . (1997) 7 SCC 156 24 KL,J Crl.A. Nos.452 & 454 of 2016 establish the guilt of the accused beyond all reasonable doubts. It has been held that the Court has to be watchful and avoid the danger of allowing the suspicion to take the place of legal proof for sometimes; unconsciously it may happen to be a short step between moral certainty and legal proof. It has been indicated by this Court that there is a long mental distance between "may be true" and "must be true" and the same divides conjectures from sure conclusions. (Jaharlal Das v. State of Orissa (1991) 3 SCC 27).

(emphasis supplied)"

24. In Ram Narayana Popli v. CBI 10, the Apex Court held as follows:

"... For the offence of conspiracy some kind of physical manifestation of agreement is required to be established. The express agreement need not be proved. The evidence as to the transmission of thoughts sharing the unlawful act is not sufficient..."

25. In Maghavendra Pratap Singh alias Pankaj Singh v. State of Chhattisgarh 11, the Apex Court held that to prove the offence of criminal conspiracy it is imperative to show a meeting of 10 . (2003) 3 SCC 641 11 . 2023 SCC OnLine SC 486 25 KL,J Crl.A. Nos.452 & 454 of 2016 the minds between the conspirators for the intended common object. The prosecution has to prove that there is meeting of minds. The charge of criminal conspiracy requires meeting of minds prior to commission of offence. In the absence of any cogent evidence establishing meeting of minds, recording conviction by trial Court for the offence under Section - 120B IPC is unsustainable.

26. The Apex Court further held that it is not necessary that there must be a clear, categorical and express agreement between the accused. But, however, an implied agreement must manifest upon relying on principles established with the cases of circumstantial evidence.

27. Section - 415 of IPC deals with cheating and the same is extracted hereunder:

"415. Cheating. Whoever, by deceiving any person, fraudulently or dishonestly induces the person so deceived to deliver any property to any person, or to consent that any person shall retain any property, or intentionally induces the person so deceived to do or omit to do anything which he would not do or omit if he were not so deceived, and which act or omission causes or is likely to 26 KL,J Crl.A. Nos.452 & 454 of 2016 cause damage or harm to that person in body, mind, reputation or property, is said to "cheat"."

28. Section - 420 of IPC deals with cheating and dishonestly inducing delivery of property and the same is extracted hereunder;

"420. Cheating and dishonestly inducing delivery of property.-- Whoever cheats and thereby dishonestly induces the person deceived to deliver any property to any person, or to make, alter or destroy the whole or any part of a valuable security, or anything which is signed or sealed, and which is capable of being converted into a valuable security, shall be punished with imprisonment of either description for a term which may extend to seven years, and shall also be liable to fine."

29. The Apex Court in Prof. R.K. Vijayasarathy v. Sudha Seetharam 12, held that the ingredients to constitute an offence under Section - 420 of IPC are as follows:

i) a person must commit the offence of cheating under Section 415; and

ii) the person cheated must be dishonestly induced to

a) deliver property to any person; or

b) make, alter or destroy valuable security or anything signed or sealed and capable of being converted into valuable security.

. (2019) 16 SCC 739 27 KL,J Crl.A. Nos.452 & 454 of 2016 Thus, cheating is an essential ingredient for an act to constitute an offence under Section - 420 of IPC. Cheating is defined under Section

- 415 of IPC. The ingredients to constitute an offence are as follows:

i) there should be fraudulent or dishonest inducement of a person by deceiving him;

ii) The person who was induced should be intentionally induced to deliver any property to any person or to consent that any person shall retain any property, or the person who was induced should be intentionally induced to do or to omit to do anything which he would not do or omit if he were not so deceived.

iii) Thus, a fraudulent or dishonest inducement is an essential ingredient of the offence under Section 415 IPC. A person who dishonestly induced any person to deliver any property is liable for the offence of cheating.

30. The said principle was also laid by the Apex Court in Dr. Lakshman v. State of Karnataka 13 and Archana Rana v. State of U.P. 14.

31. Section - 467 of IPC deals with forgery of valuable security, will, etc. and the same is extracted as under: 13

. (2019) 9 SCC 677 14 . AIR 2021 SC 1177 28 KL,J Crl.A. Nos.452 & 454 of 2016 "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 1 [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."

32. Section - 468 of IPC deals with forgery for purpose of cheating, and the same is extracted as under:

"468. Forgery for purpose of cheating. Whoever commits forgery, intending that the 1 [document or electronic record forged] shall be used for the purpose of cheating, shall be punished with imprisonment of either description for a term which may extend to seven years, and shall also be liable to fine."

KL,J Crl.A. Nos.452 & 454 of 2016

33. With regard to Section - 467 of IPC, in Usha Chakraborty v. State of West Bengal 15 the Apex Court identified the essential ingredients and the same are as under:

"Virtually, the offence under Section 467 is an aggravated form of the offence under Section 466, IPC. The essential ingredients to constitute the offence punishable under this Section are (i) commission of forgery; ii) that such commission of forgery must be in relation to a document purporting to be (a) a valuable property; or (b) a will; or (c) an authority to adopt a son; or (d) which purports to give authority to any person to make or transfer any valuable security; or (e) the receive the principle, interest or dividends thereon; or (f) 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 (g) an acquittance or receipt for the delivery of any movable property or valuable security."

The Apex Court further observed with regard to the essential ingredients of Section - 468 of IPC and the same is as under:

"(i) Commission of forgery; (ii) that he did so intending that the document or electronic record forged shall be used for the purpose of cheating."

. 2023 SCC OnLine SC 90 30 KL,J Crl.A. Nos.452 & 454 of 2016

34. Section - 471 of IPC deals with using as genuine a forged document or electronic record and the same is extracted as under:

"471. Using as genuine a forged document or electronic record.-- Whoever fraudulently or dishonestly uses as genuine any document or electronic record which he knows or has reason to believe to be a forged document or electronic record, shall be punished in the same manner as if he had forged such document or electronic record."

35. With regard to the aforesaid Section, the Apex Court in Mohd. Ibrahim v. State of Bihar 16 laid down certain conditions precedents to attract the said offence and the same is herein under:

"The condition precedent of an offence under Section 467 and 471 of the IPC is forgery (463IPC) by making a false document or false electronic record or part thereof. Further, to constitute the offence under Section 471 of the IPC, it has to be proven that the document was "forged" in terms of Section 470, and "false" in terms of Section 464 of the IPC . Section 470 lays down that a document is 'forged' if there is: (i) fraudulent or dishonest use of a document as genuine; and (ii) knowledge or reasonable belief on the part of the person using the document that it 16 . 2009 INSC 1110 31 KL,J Crl.A. Nos.452 & 454 of 2016 is a forged one. Section 470 defines a forged document as a false document made by forgery. As per Section 464 of the IPC, a person is said to have made a 'false document': (i) if he has made or executed a document claiming to be someone else or authorised by someone else; (ii) if he has altered or tampered a document; or (iii) if he has obtained a document by practising deception, or from a person not in control of his senses. Unless, the document is false and forged in terms of Sections 464 and 470 of the IPC respectively, the requirement of Section 471 of the IPC would not be met."

36. As discussed above, in the present case, there is no direct evidence and the entire case rests on circumstantial evidence. The said fact was also mentioned by the trial Court in the impugned judgment. All the circumstances relied on by the prosecution have to form complete chain and there should not be any break up events of chain. But, in the present case, the circumstances so relied on by the prosecution did not form complete chain. Without considering the said aspects, more particularly, the admissions made by the prosecution witnesses, the trial Court recorded conviction against the appellants herein erroneously.

KL,J Crl.A. Nos.452 & 454 of 2016

37. It is relevant to note that in Sharad Birdhichand Sarda v. State of Maharashtra 17, the Apex Court laid down the following five golden principles to record conviction relying on circumstantial evidence.

"(1) the circumstances from which the conclusion of guilt is to be drawn should be fully established. (2) the facts so established should be consistent only with the hypothesis of the guilt of the accused, that is to say, they should not be explainable on any other hypothesis except that the accused is guilty, (3) the circumstances should be of a conclusive nature and tendency, (4) they should exclude every possible hypothesis except the one to be proved, and (5) there must be a chain of evidence so complete as not to leave any reasonable ground for the conclusion consistent with the innocence of the accused and must show that in all human probability the act must have been done by the accused."

38. The aforesaid golden principles were also reiterated by the Apex Court in Ram Niwas v. State of Haryana 18. 17 . (1984) 4 SCC 116 18 . 2022 SCC OnLine SC 1007 33 KL,J Crl.A. Nos.452 & 454 of 2016

39. Therefore, the prosecution has to prove the guilt of the accused beyond reasonable doubt by producing reliable, legal, coherent, corroborative and cogent evidence and the circumstances so relied upon by the prosecution should form a complete chain. There should not be any break of chain of events.

40. In the light of the said principle, as discussed above, in the present case, there is no direct evidence and the prosecution has relied upon circumstantial evidence. Whether the circumstances relied upon by the prosecution formed complete chain or not, to be considered by the trial Court. In the present case, the trial Court referring to the circumstances relied upon by the prosecution recorded conviction against the appellants herein by holding that the said circumstances formed a complete chain.

41. This Court being the appellate Court is having power to reappraise the whole evidence to come to a conclusion as to whether the circumstances so relied on by the prosecution formed complete chain or is there any break of events of chain.

42. In paragraph No.159 of the impugned judgment, the trial Court held that all these criminal acts are done in a consorted and 34 KL,J Crl.A. Nos.452 & 454 of 2016 concealed sequence over a period of time. No direct ocular testimony can be expected in such situation. Circumstances have been proved against these accused, by prosecution that formed a complete chain, without any missing links. Secrecy at the highest, maintained by these accused, either by camouflaging or impersonation, without overtly revealing their physical identity wearing such veil, is hallmark of the fraud played on PNB, a public sector bank. These circumstances are such that they are leading to an irresistible inference and hypothesis that except accused Nos.1 to 5, who faced trial in this case, none was responsible for the alleged incidents, clearly pointing out their guilt. They are not leading to innocence of these accused in relation to transactions concerned to this case.

43. The said findings of the trial Court are without any basis, contrary to evidence, both oral and documentary and contradictory to each other.

44. In the present case, the allegation against accused No.1 is that, he being the Assistant Manager of PNB, Sanathnagar Branch, committed theft of demand draft forms from the bank, in collusion with other accused forged the signatures, fabricated the DDs, made 35 KL,J Crl.A. Nos.452 & 454 of 2016 use of the same as genuine and purchased the gold. Thus, they have cheated the Bank.

45. PW.1 deposed that he was the Manager and in-charge of the Branch at the relevant point of time. He along with accused No.1 was holding joint custody of cash/jewellery and the security forms etc. in the branch. Accused No.1 was holding the said charge from 01.08.1995 as per office order dated 01.08.1995.

46. As per the procedure in vogue of the bank and as per the rules, the keys of the security forms should be operated by joint custodians that contain blank draft books. The draft books will be handed over to the concerned in-charge in the Section, as per book of instructions of the bank, for day-to-day use upon acknowledging its receipt in security form register.

47. PW.3 deposed that she was the Draft Issuing Officer in the branch at the relevant point of time. In the present case, there is evidence on record that without following the prescribed rules, both the keys of security forms, almirah were being kept in the table draw of accused No.1 in the branch. Whenever draft books were to be taken out from the security forms almirah, PW.3 used to take both the 36 KL,J Crl.A. Nos.452 & 454 of 2016 keys from the table draw of accused No.1 and after using them, she was again keeping them in the same table draw. After taking drafts book, upon making relevant entry in security forms register, she used to bring the drafts book so collected out and thus drafts book was being used for issuing drafts to the customers every day. The table of accused No.1 was just in front of security forms almirah.

48. In respect of the subject forms including the procedure to be followed in checking drafts books and security forms, PW.2 - Senior Branch Manager of the branch as well as PW.1 - Manager failed to check those forms periodically at regular intervals and also failed to carefully check whenever PW.1 signed or subscribed his initials in security forms register.

49. PW.52 had also sent monthly certificates without verification of security forms properly and negligently, signing in certificates in a routine manner.

50. PNB has also issued instructions with regard to maintaining of the said security forms, preparation of demand drafts numbering etc. The said rules says that no two demand drafts issued on the same branch by another branch will have the same branch serial number 37 KL,J Crl.A. Nos.452 & 454 of 2016 within a year since the said serial number is a continuous one maintained by each branch prescribing a separate procedure. Such serial number should start afresh from number one on the first working day of January each year, full numbers of drafts must be entered in the register of drafts issued under separate opening for each branch. They should be serially numbered and a separate series was being used for each branch.

51. Without considering the said procedure and depositions of PW.1, PW3 and PW52, the trial Court held that drafts were stolen by accused No.1 which were fraudulently encashed since on all the 93 stolen demand drafts, he had not only subscribed his signature, but had also forged signatures of PW.3. The said finding of the trial Court, more particularly with regard to the forgery is contrary to evidence on record, both oral and documentary.

52. It is also apt to note that, during cross-examination, PW.1 categorically admitted that there was an office order keeping accused No.1 as custodian of security forms keys along with Manager/Sub- Manager/Branch Manager. The keys used to be kept in a table drawer and particularly there was no officer kept as joint custodian along with 38 KL,J Crl.A. Nos.452 & 454 of 2016 accused No.1. The security forms keys were accessible to all the Officers in the bank. If the draft amount exceeds Rs.10,000/-, it should be signed by two officers, who is holding power of attorney. The same is as per the rules and regulations of the bank. There was one almirah in their branch exclusively meant for security forms. As per the banking rules, the Branch Manager has to check and sign security forms register every month and Senior Manager should also do so once in three months.

i) He further admitted that Exs.P186 to P278 - demand drafts have been issued in a span of three months i.e., from 24.04.1998 to 14.07.1998. During the said period, they were not checked every month. On 31.07.1998, they have checked the security forms register with reference to the security forms available in the almirah. There is no document to show that accused No.1 had issued drafts book to the concerned Officers for day-to-day business. RFR series DD books were received by predecessor of accused No.1. He was not sure about the Officer who received RIN series DD books in their branch. He cannot say, who is the person responsible for body writings of the drafts marked as Exs.P186 to P278. Because accused No.1 was in 39 KL,J Crl.A. Nos.452 & 454 of 2016 joint custody of security forms, he was supposed to be in custody of RFR and RIN series DD books.

ii) He further admitted that he cannot say whether accused No.1 had subsequently applied leave for the days of absence mentioned in his chief-examination. His Senior Manager and himself have suspected that accused No.1 had stolen the DDs. Only on the basis of circumstances, they have entertained suspicion. Accused No.1 was not supposed to check the security forms. In respect of subject missing DDs, his Senior Manager (PW.52) and PW.3, himself were placed under suspension. If the DD advice is not received by the Payee Bank in reasonable time, it would take up the matter with the Issuing Branch relating to the demand drafts.

iii) During further cross-examination for accused Nos.2, 4, 5 and 7, PW.1 further admitted that he is nothing to do with the issuing of DDs referred to in his chief-examination. LW.2, DD Issuing Clerk was under the supervision of PW.3. He need not consult PW.2 with regard to discharge of his duties. Accused No.4 is stranger to him.

53. PW.2, Clerk-cum-Cashier, PNB, categorically deposed he was summoned by CBI three times in year 1998 and three times after 40 KL,J Crl.A. Nos.452 & 454 of 2016 his transfer from the said branch for the purpose of examination and recording the statement. He stated before the CBI that accused No.5 used to take demand draft for small amounts regularly in their branch, on one occasion he enquired accused No.5 as to the purpose of his obtaining DDs for small amounts for which accused No.5 informed him that the same are required for SBI shares. PW.1 asked him to open an account into branch for the purpose of obtaining DDs, he told that he would bring his boss. Accordingly, he brought his boss.

54. PW.3 was the Officer in PNB, Sanathnagar Branch at the relevant point of time. She was also placed under suspension in connection with the subject demand drafts. All the DDs will be in a bound book of 25 sets and each DD will have three copies of same serial number. The first will be the original to be given to the party. The remaining three copies will be in the order of red, green and black colour. No DD can be issued unless all the three copies are filled up. The three copies are the carbon copies of the original. What all written on the original DD is to be found on all the copies. They will sign on the original DD even before it is torn from the book. Her signature is supposed to appear on all the three copies. The green and red colour copies will be sent to the branch on which DD is drawn. 41

KL,J Crl.A. Nos.452 & 454 of 2016 Only after her signature, the DD will be sent to the Assistant Manager if the DD is for over Rs.50,000/-. There is no rule that green and red copies of the DDs need not be sent to drawing branch if the DD amount is small.

55. PW.4 - Manager, PNB, Sanathnagar Branch, deposed that in November, 1998, he was taken to Trimulgherry P.S. to identify one of the two persons visiting their bank for small amount DDs. He told police that the person was not Prakash Reddy. In the year 2001, the police brought one person to the branch and enquired about him. He identified him as Prakash Reddy. On the next day, CBI Police brought another person to their office. The said persons are accused Nos.5 and 4 respectively.

i) During cross-examination, PW.4 categorically admitted that the applicants under Exs.P3 to P95 are strangers to him, there are more than one applicant under the said documents, he cannot identify all of them. He could not identify any of those applicants in any test identification before Magistrate. He did not withhold any DD from issuing to the applicants under the said applications. He met the Public Prosecutor on the previous date of adjournment and also on the 42 KL,J Crl.A. Nos.452 & 454 of 2016 day of his cross-examination morning at about 10.00 A.M. In his presence, the Public Prosecutor asked accused No.4 about his name and he replied.

56. PW.5 - another Officer of PNB, who worked as Clerk-cum- Casher at the relevant point of time, specifically deposed that in the middle of July, 1998, there was an argument in the branch that PWs.1 to 4 with the customer by name Reddy, he came to know that the said Reddy used to come and collect the DDs in the bank.

57. PW.42 also deposed that she was attending to the work of accused No.1 when he was absent from the office as per the instructions of the Branch Manager. She also deposed that PW.3 used to take keys from accused No.1 to take draft books to issue to concerned clerk which was usual practice in the Branch. When she was officiating for accused No.1, in his absence, he was not handing over keys to her since she was not supposed to handle that duty.

58. Considering the said evidence and also deposition of PW.2, in paragraph No.18 of the impugned judgment, the trial Court held that the rule to observe and follow to keep the keys of the almirah with 43 KL,J Crl.A. Nos.452 & 454 of 2016 joint custodians and that they alone should open the said almirah was not followed and they were left with accused No.1 in his custody.

59. PW.52 during cross-examination admitted that the strong room will be opened by the Cashier In-charge and accused No.1 as joint custodians. The date and time of opening and closing strong room will be noted in the register maintained for this purpose in the branch. There are clear instructions in their bank regarding opening and closing of strong room as well as operation of other almirahs kept in the strong room.

60. In paragraph No.19 of the impugned judgment, the trial Court held that the rule relating to holding of keys separately or independently by joint custodians was not followed in the branch.

61. Even then, without considering the said depositions, more particularly, admissions during cross-examination, the trial Court convicted accused No.1 for the offence under Sections - 120B, 420 and 379 of IPC and Section - 13 (2) read with 13 (1) (d) of the P.C. Act, 1988.

62. Basing on the same evidence, the trial Court convicted the appellants herein.

KL,J Crl.A. Nos.452 & 454 of 2016

63. PW.14 in his chief-examination itself deposed that accused No.3 purchased 8 gold biscuits for Rs.9.00 lakhs approximately and he has handed over the said gold on receipt of the two cheques. Subsequently, he purchased gold of 183 kgs., worth about Rs.8.00 Crores. They offered demand drafts and he informed them that he will accept only cash only after they deposited the cash in account and after he purchase the gold from the dealers, then hand over the gold to them.

i) He further admitted that once Mr. Ramesh @ Venkata Prasad brought Pradeep Daswani and told him that the said Pradeep Daswani will bring the demand drafts and pay to him, so that he should give him the gold. Subsequently, Pradeep Daswani brought demand drafts and handed over the same to him, after encashing them, he handed over gold to him.

ii) He further admitted that in 1999, CBI Officers brought Ramesh, Pradeep Daswani and Mohd. Shakir and in the presence of CBI Officers, he identified those three persons. The CBI Officers called him to their office for three or four times. 45

KL,J Crl.A. Nos.452 & 454 of 2016

64. PW.12's evidence with regard to identification of accused No.2 is also relevant. He deposed that he can identify the person on the photo shown to him in the Court. He is Mr. Ramesh. He cannot say whether he is present in the Court among the accused. The said Ramesh was introduced to him by accused No.1. On being asked by the Public Prosecutor as to whether he can identify Shakir and Ramesh, he says yes and when the accused present in the Court stood up he identified accused No.5 as Ramesh and accused No.3 as Shakir.

65. Thus, though there is no corroboration of evidence of the prosecution witnesses, more particularly with regard to identification of the appellants herein, the trial Court recorded conviction against them holding that they were questioned after seventeen (17) years. Therefore, the said finding of the trial Court is contrary to provisions of the Indian Evidence Act and the principle laid down by the Apex Court.

66. To prove the other circumstances i.e., the demand drafts books stolen from PNB, Sanathnagar Branch, Hyderabad, were made use to create demand drafts for higher amounts in Exs.P186 to P218 and those demand drafts were so fabricated in Hotel Viceroy at 46 KL,J Crl.A. Nos.452 & 454 of 2016 Hyderabad on different dates, the prosecution has examined PW.36 - Receptionist of the said Hotel.

67. In Kali Ram v. State of Himachal Pradesh 19, the Apex Court held as under:

"Bare perusal of the provision reproduced above makes it plain that the statement made by any person to a police officer in the course of an investigation cannot be used for any purpose except for the purpose of contradicting a witness, as mentioned in the proviso to sub-section (1), or for the purposes mentioned in sub-section (2) with which we are not concerned in the present case. The prohibition contained in the section relates to all statements made during the course of an investigation. Letter PEEE which was addressed by Sahi Ram to Station House Officer was in the nature of narration of what, according to Sahi Ram, he had been told by the accused. Such a letter, in our opinion, would constitute statement for the purpose of section 162 of the Code of Criminal Procedure. The prohibition relating to the use of a statement made to a police officer during the course of an investigation cannot be set at naught by the police officer not himself recording the statement of a person but having it in the form 19 . (1973) 2 SCC 808 47 KL,J Crl.A. Nos.452 & 454 of 2016 of a communication addressed by the person concerned to the police officer. If a statement made by a person to a police officer in the course of an investigation is inadmissible, except for the purposes mentioned in section 162, the same would be true of a letter containing narration of facts addressed by a person to a police officer during the course of an investigation. It is not permissible to circumvent the prohibition contained in section 162 by the investigating officer obtain a written statement of a person instead of the investigating officer himself recording that statement."

68. In the present case, PW.36 in his evidence deposed about Exs.P413 to P423 - bills. However, during cross-examination, he has admitted that in his 161 statement, he has not informed the Inspector about he leaving Job in Viceroy Hotel two years back, and handled the transactions covered by Exs.P414, P416 and P422. There is a provision for mentioning the signature of the customer on the bills. Signatures of the customers were not obtained on Ex.P413, P415 and P419. According to him, computer data is the best evidence to know whether a particular customer has occupied the room in the Hotel or not.

KL,J Crl.A. Nos.452 & 454 of 2016

69. Even then, no investigation was done to collect said computer data. The trial Court relied heavily on the deposition of PW.36 observing that Exs.P412 to P422, their authenticity that they related to Hotel Viceroy cannot be suspected and doubted, nor the capacity of PW.36 to be doubted in identifying the documents. The said observation is contrary to the record and the trial Court ignored the admissions of PW.36 during cross-examination.

70. The finding of the trial Court relying on PW.37 deposition and Ex.P414 that he identified accused No.7, however, he stated that Sri Prakash Reddy and Ramesh Reddy were not his employees and thus through this evidence prosecution tried to establish a link between occupation of room in Hotel Viceroy, Hyderabad under Ex.P414 by one Sri Ramesh Reddy and accused No.4 is contrary to the deposition of PW.37. PW.37 during cross-examination categorically admitted that though his office was functioning in 1998, most of the time he was in Abroad.

71. PW.57 - Senior Manager, Vigilance, Indian Airlines, during cross-examination, admitted that Exs.P452 to 455 are not certified by any concerned to the effect that they are true generation of the 49 KL,J Crl.A. Nos.452 & 454 of 2016 computerized statement. The PNR number of Mr. S. Kumar is different from the rest of the three names mentioned in Ex.P452. A group PNR can be given to the unconnected people. He further admitted that during the year 1998, there was no process of verifying the ID's of passengers before issuing boarding passes for domestic flights. The complete particulars of passengers are not noted in Exs.P453 to 455. Exs.P454 and 455 are system generated documents. Impersonation of passengers undertaking journey may be possible during the year 1998.

i) Even then, in paragraph No.83 of the impugned judgment, the trial Court held that accused No.3 along with three others reached Mumbai on 05.05.1998.

72. PW.12 and PW.13 deposed that they know accused No.3 for the past 20 years since he had been in cloth business at Kadri in the State of Andhra Pradesh and accused No.3 purchasing clothes from them since 15-20 years.

73. PW.13 deposed that accused No.3 opened account in the name of M/s. A1 Textiles in Zaveri Bazar Branch of Dena Bank, Mumbai. The said fact would reveal that accused No.3 is in the cloth business and, therefore, he used to travel Mumbai for business 50 KL,J Crl.A. Nos.452 & 454 of 2016 purpose. The prosecution cannot contend that just because accused No.3 has opened account, it cannot connect accused No.3 to the present offence. PW.13 has helped accused No.3 in opening the account. But, the finding of the trial Court in paragraph No.89 that it is one of the circumstances relied upon by the prosecution to prove that the accused were available at Mumbai on 06.05.1998 and got opened an account through accused No.6 for encashing fabricated demand drafts rightly is contrary to the evidence. The trial Court failed to consider that PW.13 himself advised accused No.3 to open new account offering to recommend for the said new account. The trial Court also failed to consider that even as per the evidence of PW.12 and PW.13, only once accused No.3 had visited Mumbai.

74. In paragraph No.95 of the impugned judgment, though the trial Court observed that as seen from the evidence of PW.12 and PW.13, there are inconsistencies on certain circumstances, however, the said circumstances relating to purchase of clothes deposed by PW.12 in whose name the account was opened in Dena Bank, Zaveri Bazar Branch, Mumbai, appear to be inconsequential and are minor discrepancies, the trial Court recorded conviction against the appellants herein. The trial Court completely ignored the settled 51 KL,J Crl.A. Nos.452 & 454 of 2016 principle of law that however grave the offence may be, the prosecution has to prove the same beyond reasonable doubt. If two views are possible, the view which is beneficial to the accused shall be taken into consideration.

75. It is relevant to note that PW.12 categorically deposed that he was not in a position to identify accused No.2 as Ramesh, who visited their shop on several occasions, when a photo was shown to him it was his guess that he was Mr. Ramesh. Even then, ignoring the said evidence, the trial Court convicted accused No.2.

76. The prosecution failed to prove by producing cogent evidence that the appellants herein intended to purchase gold ornaments. PW.14 categorically deposed that, he will not accept demand drafts, he will accept only cash, on the assurance given by accused No.2 that accused No.4 will get demand drafts, pay him, so that he could deliver gold and that accused No.4 brought demand drafts and handed over to him, after encashing the said demand drafts he has handed over gold to accused No.4.

77. PW.14 further deposed that his sons and salesman would interact with the customers. Sri Ramesh is not appearing as a 52 KL,J Crl.A. Nos.452 & 454 of 2016 customer in any of the bills in Exs.P315 to P317 - bill books and that Sri Ramesh has not given any demand drafts as per these books. The customers who came along with PW.12 were strangers to him. He gave descriptive particulars and approximate age of those customers brought by PW.12 during investigation and examination by the CBI Officers.

78. PW.15 - son of PW.14 deposed that he was assisting his father in the business.

79. Perusal of depositions of PWs.14, 15 and 16 would reveal that the same are not in corroborative with each other. Even then, in paragraph No.112 of the impugned judgment, the trial Court held that the evidence of PW.14 and PW.16 is consistent in respect of purchase of gold.

80. In paragraph No.113, the trial Court observed that specific identity of accused No.2 is not established from the evidence of PW.14 and if he had pseudo name of Ramesh. The evidence of PW.14 or PW.16 is not making out the identity of accused No.2 as Ramesh who has taken part in all the transactions in purchase of gold. PW.30 categorically admitted that accused No.2 never purchased the 53 KL,J Crl.A. Nos.452 & 454 of 2016 gold. Without considering the same, more particularly, the defence taken by accused No.2 that prosecution failed to prove the identity of accused No.2, the trial Court convicted him.

81. None of the witnesses specifically deposed about committing theft of security forms, fabrication of demand drafts by forging the signatures and using the same as genuine and purchasing gold bars of about 100 kgs. The prosecution failed to prove the same by producing relevant evidence beyond reasonable doubt. Though the prosecution relied on circumstantial evidence, the circumstances so relied upon by the prosecution on the said aspects are not forming complete chain. There was missing of chain at every stage.

82. PW.47 - Receptionist in Hotel Sapna, Mumbai, deposed that at the time of examination, the CBI had shown him Ex.P439 - Room Register, wherein at serial No.2566, accused No.3 stayed in Room No.302 i.e., Ex.P439(A). As per serial No.2567, one Mr. C. Reddy stayed in Room No.101 on 05.05.1998 i.e., Ex.P439(B). He further stated that the guests themselves made the entries in the Register. The payment was made by Mr. K.V. Prasad by way of Credit Card bearing No.4511500025113435. Ex.P441 is the credit card charge slips three (03) in number, the contents are not visible. 54

KL,J Crl.A. Nos.452 & 454 of 2016 When photos were shown to him, he identified one person who stayed in their Hotel i.e., Sri K.V. Prasad.

i) However, during cross-examination, he has admitted that whoever occupies the room, his name will be found in Ex.P439 Register. Mr. K.V. Prasad did not stay and occupy any room in their Hotel. The visitors to the hotel under Ex.P439(A), 439(B) and 439(C) are strangers to him. He was never summoned by CBI for identification of the persons who stayed in the said hotel as per the said entries which do not contain his signatures or initials. Ex.P440 and its enclosures do not disclose the name and details of the credit card holder and the bank which issued the credit card. He has not shown any document to CBI showing the actual recovery of the bill amounts covered by Ex.P440, which is paid through Credit Card. The payment under Ex.P442 is not through credit card, whereas the debate voucher enclosed to Ex.P442 shows that the payment was made through credit card. He was not on duty at the time of preparing Exs.P440 and P442 bills and the same are not signed by the customer/occupant of the room though there is a specific column for obtaining the signature of guests. Even then, the trial Court in paragraph No.126 of the impugned judgment, observed that the said 55 KL,J Crl.A. Nos.452 & 454 of 2016 evidence has to be relied on with reference to the occupation of one of the rooms by accused No.3, one by Mr. Reddy as well as use of credit card in the name of Sri K.V. Prasad. The trial Court failed to see that no investigation was done with regard to the said credit card number to show that it belongs to Sri K.V. Prasad. PW.19's evidence is not supporting the same and it is not sufficient.

ii) During cross-examination, PW.19 categorically admitted that he does not have personal knowledge of the entries made in Ex.P331. Thus, the trial Court completely ignored the deposition of PW.19 while convicting the appellants.

iii) The further finding of the trial Court in paragraph No.130 that the proof so established from such material on record did not make out participation of accused Nos.2 and 3 in this whole affair at Mumbai which has ultimately led to encashing stolen demand drafts from PNB, Sanathnagar Branch, Hyderabad, is contrary to the evidence, more particularly, admissions of the aforesaid prosecution witnesses during cross-examination.

83. PW.56 - Sub-Manager, Saifabad Branch Office, Hyderabad, deposed that the account opening form (Ex.P450) dated 56 KL,J Crl.A. Nos.452 & 454 of 2016 06.06.1997 of ABG Account No.20016 is in the name of Sri Kandikunta Venkata Prasad, wherein he has shown his occupation as business and authorized by D.V.N. Rao. However, during cross- examination, he has admitted that there must be a requisition for issuance of a copy of statement of account. The requisition for issuance of statement of account is not shown to him. There is no certification on Ex.P451 as required under the Bankers' Books of Evidence Act and that he does not know who was custodian of the servers containing the data of Andhra Bank. There is no certification on Ex.P451 as required under Section - 65B of the Evidence Act. He has further admitted that he is not the person who made the entry against Ex.P451 cheque and that he cannot say who made the debit entry in Ex.P451. He has no personal knowledge of opening the account under Ex.P450.

84. As discussed above, even PW.57 categorically admitted that he cannot say who handed over Exs.P452 to P455 to him, the same are not certified by any concerned to the effect that they are true generation of computerized statement. The PNR number of Sri S. Kumar is different from the rest of the three names mentioned in Ex.P452. A group PNR can be given to the unconnected people. 57

KL,J Crl.A. Nos.452 & 454 of 2016

85. Even then, without considering the said aspects, the trial Court in paragraph No.130 of the impugned judgment, held that the prosecution established the guilt of the accused that they have stolen the demand drafts from PNB, Sanathnagar Branch, Hyderabad, forged the signatures, fabricated the same and encashed the same for the purpose of purchasing the gold.

86. PW.58, the Inspector of Police, CBI, Hyderabad deposed that on the orders of the Superintendent of Police, CBI, he registered a case on 06.08.1998 basing on the petition given by Mr. H.M. Sood, the then Regional Manager, PNB, Hyderabad. Ex.P456 is the written complaint dated 06.08.1998 and Ex.P457 is the FIR registered against accused No.1 and unknown persons. He has collected share certificates of Peerless Finance Limited under Ex.P458 and Ex.P459, both dated 07.08.1998.

i) He further deposed that he has seized one photograph of unknown person apart from visiting card etc. Later he examined PWs.1 to 10, 41 to 43 and 52. He has collected the documents, such as 93 cheques connected to the case and specimen signatures of the accused and other suspects, especially of accused No.1 (S-1 to S-375); 58

KL,J Crl.A. Nos.452 & 454 of 2016 of PW.3 (S-376 to S-602); of PW.5 (S-603 to S-826); of PW.4 (S-827 to S-1057) and of PW.2 (S-1058 to S-1085). Apart from the same, he has collected the admitted writings of accused No.1 marked as Exs.A1 to A31. He has sent the said admitted hand writings, specimen signatures and disputed documents to the GEQD for examination.

ii) He has further deposed that during the investigation, accused No.1 appeared before him with anticipatory bail orders and in pursuance of the same, he arrested accused No.1 and released him.

87. PW.59 - the Deputy Government Examiner of Questioned Documents, during cross-examination, admitted that the standard writings consisting of two types i.e., specimen writings and admitted writings. He did not receive any admitted writings of Mr. Kandikunta Venkat Prasad, Mr. Cheruku Uday Kumar and Mr. Kumcham Bhoopal. He does not know whether the specimen signatures marked as Exs.P463, 464 and 465 are written by the aforesaid persons. In Ex.P468, it is described that the opinion under Ex.P467 is supplementary opinion. However, he admits that the first opinion was given when the documents were forwarded to their laboratory by the CBI, Hyderabad, to distinguish or to avoid the confusion when the 59 KL,J Crl.A. Nos.452 & 454 of 2016 documents were forwarded by the CBI, Mumbai, he mentioned the opinion as supplementary opinion in Ex.P468.

i) He further admitted that he did not examine the documents sent by the CBI, Hyderabad and did not give any opinion on the said documents. He never saw the opinion sent from their office to CBI, Hyderabad, because he is aware that once the documents pertaining to RC 19(A)/98 Hyderabad has already been examined in their office. Ex.P469 is not having any date or office stamp. I did not forward any reason along with Ex.P467. He further admitted that the CBI is under the Ministry of Home Affairs, Government of India.

88. It is relevant to note that Expert Opinion with regard to genuinenity of signatures will be obtained by the trial Court to assist it to come to a just conclusion. It is also a weak piece of evidence. It has to be supported by corroborative and cogent evidence. Expert evidence must always be received with great caution and perhaps none so with more caution than the opinion of a handwriting expert. It is unsafe to base a conviction solely on expert opinion without substantial corroboration. This type of evidence, being opinion evidence, is by its very nature, weak and infirm and cannot of itself 60 KL,J Crl.A. Nos.452 & 454 of 2016 form the basis for a conviction. The said principle was held by the Apex Court in Magan Bihari Lal2 and Bhagwan Kaur1.

89. In view of the above, the findings of the trial Court in paragraph Nos.146 to 151 of the impugned judgment are contrary to the evidence, more particularly, the depositions of the aforesaid prosecution witnesses.

90. At the cost of repetition, as stated above, in paragraph No.151 of the impugned judgment, the trial Court held that "however, no nexus is made out by the prosecution as to the affluence of accused No.2, which it had tried to prove and the proceeds of crime concerned to the case". Even then, the trial Court convicted accused No.2 for the aforesaid offences.

91. PW.40 - Trader in Pearls, Silver and Gold at Hyderabad, did not support the prosecution. By examining the said witness, prosecution made an attempt to prove that his services were utilized by accused No.2 for sale of gold biscuits. But, surprisingly in paragraph No.152 of the impugned judgment, the trial Court held that PW.40 did not support the version of prosecution either during investigation or at the trial, denying that he sold gold biscuits on 61 KL,J Crl.A. Nos.452 & 454 of 2016 behalf of accused No.2 to third parties. Ex.P425 is a portion of his statement under Section - 161 of the Cr.P.C., marked at the trial by the prosecution keeping the said witness hostile and when cross-examined on behalf of the prosecution. Even then, the trial Court convicted accused No.2 relying on the said evidence as one of the circumstances.

92. During trial, the appellants - accused referring to the evidence, both oral and documentary, had specifically contended that a parallel story has created by the prosecution in relation to some of the demand drafts said to have been forged and made use of the same in these transactions out of stolen demand draft books from PNB, Sanathnagar Branch, Hyderabad. However, the trial Court in paragraph No.154 of the impugned judgment held that when it is required to consider this case against the accused, who have faced trial now, all these contentions, so advanced are besides the point. Thus, learned trial Court instead of giving a specific finding considering the said contentions, gave the aforesaid finding, which is contrary to the evidence, both oral and documentary and the provisions of the Indian Evidence Act.

KL,J Crl.A. Nos.452 & 454 of 2016

93. With regard to effect of non-conducting of test identification parade, the Apex Court in Bal Kishan v. State of Himachal Pradesh 20, held as under:

"15. It is not disputed by learned counsel for the State that unlike some others the appellant was not caught at the place of occurrence. The Trial Court had itself held that there was no test identification parade in the eye of law. Therefore, identification of the appellant for the first time in court was really of no consequence. Added to that, the only evidence pressed into service by the prosecution so far as the appellant is concerned, was that his name was similar to one of the names which the accused persons were addressing each other, as stated by the prosecutrix. That cannot be by any stretch of imagination an incriminating material.

16. No evidence was led to show the presence of the appellant at the spot of occurrence or to have participated in the crime. That being so, the prosecution has miserably failed to prove the accusations so far as the appellant is concerned. He is acquitted of the charges. He shall be released forthwith from custody unless required to be in custody in connection with any other case."

. (2008) 16 SCC 11 63 KL,J Crl.A. Nos.452 & 454 of 2016

94. Referring to the evidence, both oral and documentary, the appellants - accused have specifically contended that their identity is not proved by the prosecution. Though none of the witnesses identified them, no identification parade was conducted. The Investigating Officer did not make any effort to get the accused identified in a properly constituted identification parade. But, in paragraph No.158 of the impugned judgment, the trial Court though observed that no identification parade was conducted, particularly with reference to accused Nos.2 to 5, evidence on record makes out including cross-examination of PW.61 that in the course of investigation, photographs of the accused were shown to the witnesses, which can be never have the affect of identifying the accused. It could not have been a circumstance to rely on for the prosecution in terms of Section - 9 of the Evidence Act. It is certainly a serious flaw in conduct of investigation in this case. However, the circumstances in this case have formed a complete chain against accused Nos.2, 3 and 5 including accused No.1 clearly pointing out their role in the entire incident. The said finding of the trial Court is contrary to the principle laid down by the Apex Court and also the 64 KL,J Crl.A. Nos.452 & 454 of 2016 evidence on record, more particularly the admissions of PWs.58, 60 and 61 and also contrary to Rule - 34 of Criminal Rules of Practice.

95. The trial Court failed to consider the admissions of PW.61 - Investigating Officer during cross-examination that accused No.3 is not named in the FIR, as per Ex.P458 and P459, no incriminating material was collected against accused No.1 when his house and office were searched by PW.58. He did not make PW.3 as an accused in the present case since she was responsible for detecting the said fraud. In the course of investigation, their Agency did not collect the specimen signatures of accused No.1 and PW.3 maintained in the bank for the purpose of comparison. Exs.P473 and P474 were issued on the letter-heads of SP, CBI. Thus, the prosecution utterly failed to prove the identification of the appellants - accused.

96. As discussed above, the prosecution failed to prove that the accused No.1 committed theft of demand draft forms and in connivance with other accused forged the signatures, fabricated the demand drafts, used the same as genuine, purchased gold and thus cheated the PNB, Sanathnagar Branch, Hyderabad, by producing cogent evidence.

KL,J Crl.A. Nos.452 & 454 of 2016

97. In Munikrishna alias Krishna etc., v. State by Ulsoor PS 21, the Apex Court referring to the decision in Musheer Khan @ Badshah Khan v. State of Madhya Pradesh [ (2010) 2 SCC 748], held as under:

"41. To my mind, the first rule is that the facts alleged as the basis of any legal inference from circumstantial evidence must be clearly proved beyond any reasonable doubt. If conviction rests solely on circumstantial evidence, it must create a network from which there is no escape for the accused. The facts evolving out of such circumstantial evidence must be such as not to admit of any inference except that of guilt of the accused. (See: Raghav Prapanna Tripathi v. State of U.P.[AIR 1963 SC 74 : (1963) 1 Cri LJ 70].

42. The second principle is that all the links in the chain of evidence must be proved beyond reasonable doubt and they must exclude the evidence of guilt of any other person than the accused. (See: State of U.P. v. Dr. Ravindra Prakash Mittal [(1992) 3 SCC 300 : 1992 SCC (Cri) 642 : 1992 Cri LJ 3693] , SCC P. 309, para 20].

. 2022 SCC OnLine SC 1449 66 KL,J Crl.A. Nos.452 & 454 of 2016

43. While appreciating circumstantial evidence, we must remember the principle laid down in Ashraf Ali v. King Emperor [21 CWN 1152 : 43 IC 241] (IC at Para 14) that when in a criminal case there is conflict between presumption of innocence and any other presumption, the former must prevail."

98. In view of the aforesaid principle, as discussed above, the finding of the trial Court in paragraph No.159 that the circumstances relied upon by the prosecution to prove the guilt of the accused forms a complete chain without any missing links is contrary to the evidence, both oral and documentary. The trial Court cannot convict accused holding that no direct, ocular testimony can be expected in such situation. The said finding of the trial Court is contrary to the principle laid down by the Apex Court. However, grave the offence may be, the prosecution has to prove the guilt of the accused beyond reasonable doubt. The circumstances relied upon by the prosecution has to form complete chain, failing which, the accused are entitled for benefit of doubt.

KL,J Crl.A. Nos.452 & 454 of 2016

99. The further finding of the trial Court in paragraph No.162 of the impugned judgment is contrary to Section - 464 of IPC and the principle laid down by the Apex Court Magan Bihari Lal2.

100. As discussed supra, the prosecution has to prove the guilt of the accused beyond reasonable doubt by producing sure, safe, corroborative and cogent evidence. It has to prove the ingredients of the aforesaid offences against the appellants - accused herein. In the present case, the prosecution utterly failed to prove the said ingredients and without considering the same, the trial Court recorded conviction against the accused herein for the aforesaid offence. Therefore, the finding of the trial Court holding that the appellants herein are guilty of the aforesaid offences is not based on cogent evidence and reasoning given by trial Court is contrary to evidence on record.

101. In the light of the aforesaid discussion, the trial Court erred in convicting the appellants - accused Nos.2, 3 and 5 vide impugned judgment dated 31.05.2016 in C.C. No.2 of 2003. Therefore, the said judgment is liable to be set aside. 68

KL,J Crl.A. Nos.452 & 454 of 2016

102. Both these appeals are accordingly allowed setting aside the impugned judgment dated 31.05.2016 passed by the Principal Special Judge for CBI Cases, Hyderabad in C.C. No.2 of 2003 in so far as accused Nos.3, 2 and 5 are concerned. Accused Nos.3, 2 and 5 are acquitted of the charges framed against them. Bail bonds furnished by them stand cancelled. The fine amounts, if any, paid by them are ordered to be returned to the appellants - accused Nos.3, 2 and 5 respectively after expiry of appeal time.

As a sequel, miscellaneous applications, if any, pending in these appeals shall stand closed.

_________________ K. LAKSHMAN, J 22nd March, 2024.

Mgr

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