Bangalore District Court
Cbiacbbengaluru vs A1. Madhu Lakshminarayana And Others on 8 October, 2025
IN THE COURT OF THE XVII ADDITIONAL
CHIEF JUDICIAL MAGISTRATE : BANGALORE.
-: Present :-
Smt. L.J. Bhavani, B.A., LL.M.,
XVII Addl.Chief Judicial Magistrate,
(Spl. Court for CBI Cases) Bangalore.
C.C.No.21483/2016
8th Day of October, 2025
COMPLAINANT :
Central Bureau of Investigation,
Anti Corruption Branch,
Bangalore.
[By learned Sr. P.P.]
// Versus //
ACCUSED :
1. Madhu Lakshminarayana,
Managing Director, M/s Apsis
Technologies Pvt. Ltd., No.3, 4 th
Main, 2nd cross, 4th Stage,
Industrial Town, Rajajinagar,
Bangalore. R/at No.G-2,
Ground Floor, Brigade Lavelle -
II, Lavelle Road, Bangalore.
2. Smt. Suchitra Madhu W/o Sh.
Madhu Lakshminarayana,
Director, M/s Apsis
Technologies Pvt. Ltd., No.3, 4 th
2 C.C.No.21483/2016
Main 2nd Cross, 4th Stage,
Industrial Town, Rajajinagar,
Bangalore. R/at No.G-2,
Ground Floor, Brigade Lavelle -
II, Lavelle Road, Bangalore.
3. Smt. C. Shobha W/o K.R.
Ashok kumar, Managing
Director, M/s Mega Electricals
Pvt. Ltd., No.652/B, 2nd Floor,
Dr. Rajkumar Road, 2nd Stage,
Rajajinagar, Bangalore. R/at
No.17/A, 14th Main, 2nd Phase,
2nd Stage, West of Chord Road,
Bangalore - 560 086.
4. Ravi R. Prabhakar S/o Sri
Triguna Nand Singh, Proprietor,
M/s Gift Express, Saibeen
Complex, Lalbagh, Mangalore -
575 004. R/at "Subha" C/o Sri
Ganesh Kamat, 2nd Cross, Nodu
Lane, Near Ram Mandir, Bejin,
Mangalore - 575 004.
[Sri. V.N.N. Advocate for
accused No.1, 2 and 4 and
Sri. C.V.S. Advocate for
accused No.3]
JUDGMENT
This is the charge sheet submitted by the Inspector of Police, CBI, ACB, Bangalore against the above accused persons (accused No.2 to 5 as per charge sheet) and accused by name Sri. K.R. Prasanna (accused No.1 as 3 C.C.No.21483/2016 per charge sheet) for the offences punishable under Section 120 B r/w Sec. 409, 420, 467, 468, 471, 477 A of IPC and Sec.13 (2) r/w 13 (1) (c) and (d) of P.C. Act before the Hon'ble XLVII ACC & SJ and Spl. Judge for CBI cases Bangalore. Thereafter, the case was registered as Spl.C.C.No.24/2011.
2. The Hon'ble XLVII ACC & SJ and Spl. Judge for CBI cases Bangalore has transferred this case to this Court as per order passed in Crl.P.No.1910/2013 dated 10.08.2016 as the accused by name K.R.Prasanna died before framing of charge and the case was abated against him. Thereafter, this Court has taken cognizance and registered the case against the above said accused persons for the offences punishable under Section 120 B, 420, 467, 468, 471, 477 A of IPC and accused No.2 to 5 as mentioned in the charge sheet are re-arranged as accused No.1 to 4.
3. Brief facts of the prosecution case is as under :
3.1. The accused No.1 by name Madhu Lakshminarayana @ L. Madhu is the Managing Director of M/s Apsis Technologies Pvt. Ltd., accused No.2 Smt. Suchitra Madhu is the Managing Director of M/s Aaura Data Networks Pvt. Ltd., accused No.3 Smt. Shobha is the Managing Director of M/s Mega Electricals Pvt. Ltd, 4 C.C.No.21483/2016 accused No.4 Ravi R Prabhakar is the Proprietor of M/s Gift Express and M/s Express Technologies Mangalore.
The accused No.1 to 4 by colluding with deceased accused K.R.Prassanna the then Branch Manager of Union Bank of India, B.V.K. Iyengar Road Branch, Bangalore entered into a criminal conspiracy at Bangalore and other places during the year 2007 to 2009 to cheat the Union Bank of India, B.V.K. Iyengar Road Branch, Bangalore and in pursuant of such conspiracy, the accused No.1 had opened a SOD (Deposit) A/c No.395304010032110 with Union Bank of India, B.V.K. Iyengar Road Branch, Bangalore on 15.11.2007 and availed SOD (Deposit) limit of Rs.118.00 lakhs against the deposit of Rs.132.00 lakhs on 22.12.2007 and the limit was enhanced to Rs.154.00 lakhs on 06.09.2008 and again to Rs.192.70 lakhs against the value of deposits of Rs.214.38 lakhs on 27.12.2008. The deceased accused K.R. Prasanna in conspiracy with accused No.1 had allowed excesses over the sanctioned limits continuously in this account without any security and powers. The deceased K.R.Prasanna in conspiracy with accused No.1 also purchased cheques on 27.12.2007, 18.03.2008, 27.03.2008, 05.04.2008, 07.06.2008, 10.11.2008, 10.11.2008, 23.01.2009, 09.02.2009 and on 09.02.2009 beyond his delegated powers for the purpose of 5 C.C.No.21483/2016 accommodation without any security and sanction. Further said acts of cheque purchase were not intimated to his controlling office in fortnightly F-1 statements. Subsequently, the said account became Non Performing Asset and the bank could not recover the excess and other facilities which were allowed by the deceased K.R. Prasanna. The said acts of accused persons caused a wrong full loss to the tune of Rs.86,24,386.32 to the Union Bank of India and corresponding wrongful gain to themselves.
3.2. In furtherance of said conspiracy, accused No.1 had opened another current account No.39530101003626 on 25.07.2008 in the name of M/s Apsis Technologies Pvt. Ltd. with Union Bank of India, B.V.K. Iyengar Road Branch, Bangalore and got Temporary Over Draft in this account beyond delegated powers of the deceased K.R. Prasanna and without any sanction and security between 01.12.2008 and 13.02.2009. The deceased K.R.Prasanna also purchased cheques beyond his delegated powers for the purpose of accommodation in this account on 23.01.2009 and 24.01.2009 and did not report this fact to his controlling office in fortnightly F-1 excess statement. Subsequently this account became Non Performing Asset and the acts of the accused caused a wrongful loss to the tune of 6 C.C.No.21483/2016 RS.26.08 lakhs to Union Bank of India and corresponding wrongful gain to themselves.
3.3. The accused No.1 and deceased K.R.Prasanna in furtherance of said criminal conspiracy, accused No.1 had opened another SOD (Deposit) A/c No.395304010032114 in the name of M/s Deejay Technologies on 26.04.2008 and got SOD (Deposit) limit of Rs.18.00 lakhs against the deposit of Rs.20.00 lakhs with 10% margin on the same day. The said limit was enhanced to Rs.113.40 lakhs on 14.08.2008 and to Rs.123.20 lakhs on 23.12.2008. The accused No.1 got excess over the sanctioned limits in this account without any security and subsequently this account became Non Performing Assets and the said acts of the accused caused a wrongful loss to the tune of Rs.73.65 lakhs to Union Bank of India and corresponding wrongful gain for themselves.
3.4. In furtherance of said criminal conspiracy, the accused No.1 had opened another SOD (deposit) A/c No.395304010032113 in the name of M/s Jhanavi Enterprises on 15.02.2008 and got sanctioned SOD (deposit) limit of Rs.41.85 lakhs against the deposit value of Rs.46.50 lakhs with 10% margin on 15.02.2008. Subsequently this limit was enhanced to Rs.44.00 lakhs on 08.12.2008. The accused No.1 got excess over the 7 C.C.No.21483/2016 sanctioned limits in this account without any security to cheat the bank and subsequently this account became Non Performing Assets and the deposit available with the bank was not sufficient to recover the excesses allowed by deceased K.R.Prasanna and the said acts of the accused caused a wrongful loss to the tune of Rs.81.61 lakhs to Union Bank of India and corresponding wrongful gain for themselves.
3.5. In furtherance of said criminal conspiracy, the accused No.1 got released the collateral security documents pledged in the CCH A/c No.395305040050242 of M/s Jhanavi Enterprises on 16.04.2008 and even after releasing the collateral security documents, accused No.1 operated the said account on 09.02.2009 and got Temporary Over Draft of Rs.24,26,500/- in this account without any security with dishonest intention to cheat the Union Bank of India and thereby caused wrongful loss to the tune of Rs.24,22,090/- to the Union Bank of India and corresponding wrongful gain form themselves.
3.6. In furtherance of said criminal conspiracy, the accused No.2 had opened a current A/c No.395301010036293 in the name of M/s Aaura Data Networks Pvt. Ltd., on 19.02.2008 with the Union Bank of India, B.V.K. Iyengar Road Branch, Bangalore and got 8 C.C.No.21483/2016 Temporary over Drafts facility in this account between 26.02.2008 and 04.02.2009 without any security which was allowed by the deceased accused K.R. Prasanna with dishonest intention to cheat the bank. Subsequently this account became Non Performing Assets and the said acts of the accused persons caused wrongful loss to the tune of Rs.22.18 lakhs to the Union Bank of India and a corresponding wrong full gain for themselves.
3.7. In furtherance of said criminal conspiracy, accused No.2 had opened another current A/c No.395301010036325 in the name of M/s Aaura Data Networks Pvt. Ltd., on 25.07.2008 with Union Bank of India, B.V.K. Iyengar Road Branch, Bangalore and got Temporary Over Drafts facility in this account without any security on 02.12.2008 to 30.01.2009 and on 09.02.2009 with dishonest intention to cheat the bank. The then branch Manager deceased K.R.Prasanna in furtherance of said conspiracy, had also purchased cheques in this account beyond his delegated powers on 29.11.2008. Subsequently the said account became Non Performing Assets and the said acts of the accused persons caused wrongful loss to the tune of Rs.35.27 lakhs to the Union Bank of India and a corresponding wrong full gain for themselves.
9 C.C.No.21483/20163.8. In furtherance of said criminal conspiracy, accused No.2 had opened another current A/c No.395301010036323 in her name on 25.07.2008 and got Temporary over Drafts facility in this account without any security between 27.01.2009 and 09.02.2009 with dishonest intention to cheat the Union bank of India. The maximum TOD of Rs.29.44 lakhs was allowed on 09.02.2009 by the deceased K.R. Prasanna beyond his delegated powers and without any security. Subsequently this account became Non Performing Assets and the said acts of the accused persons caused wrongful loss to the tune of Rs.29.44 lakhs to the Union Bank of India and a corresponding wrong full gain for themselves.
3.9. In furtherance of said criminal conspiracy, accused No.1 had opened another current A/c No.395301010036322 in his name on 25.07.2008 with Union Bank of India, B.V.K. Iyengar Road Branch, Bangalore and got Temporary Over Drafts facility without any security between 26.11.2008 and 07.02.2009 in this account with dishonest intention to cheat the Union Bank of India. The then manager deceased K.R.Prassana in furtherance of said criminal conspiracy had also purchased a cheque on 24.01.2009 for Rs.9,82,500/- in this account beyond his delegated 10 C.C.No.21483/2016 power for accommodation purpose. Subsequently the said account became Non Performing Assets and the said acts of the accused persons caused wrongful loss to the tune of Rs.30.53 lakhs to the Union Bank of India and a corresponding wrong full gain for themselves.
3.10. In furtherance of said criminal conspiracy, accused No.3 the Managing Director of M/s Mega Electrical Private Ltd., opened a current A/c No.3953010136309 on 17.05.2008 with Union Bank of Inida, B.V.K. Iyengar Road Branch, Bangalore. The deceased K.R. Prasanna himself introduced this account with dishonest intention to cheat the Union Bank of India. He in furtherance to the said conspiracy and in violation of Union Bank of India Circular No.7495 dated 26.09.2006 had allowed Temporary Over Drafts in the said account without any powers, security and sanction. The deceased accused K.R. Prassana was not empowered to extend any credit facility to M/s Mega Electrical Pvt. Ltd., owned by accused No.3 as she is sister in law of deceased K.R.Prasanna and she is close relative of the public servant deceased K.R.Prasanna who was not entitled for any credit facilities. Further, deceased K.R. Prasanna in furtherance of said criminal conspiracy, also purchased a bill No.39530DBP000108 dated 01.07.2008 amounting to Rs.15,00 lakhs, drawn on M/s 11 C.C.No.21483/2016 Bhoruka Aluminum, Mysore. The said bill was not sent for collection with dishonest intention and to cover up this false bill transaction, deceased K.R.Prasanna had purchased another bill No.39530DBP000108 for Rs.17.40 lakhs on 09.07.2008 in the current account of M/s Mega Electricals Pvt. Ltd. This bill was not sent for collection to M/s Bhoruka Aluminum and instead adjusted on receipt of payment through RTGS received from M/s Bhoruka Aluminum directly.
3.11. In furtherance to said criminal conspiracy, on 18.07.2008 the deceased K.R. Prasanna had purchased another bill No.39530DBP000308 for Rs.8,37,500/- drawn on M/s Bhoruka Aluminum, Mysore. To adjust this bill, deceased K.R. Prasanna had debited the account of M/s Mega Electricals Pvt. Ltd., on 14.08.2008. On 18.09.2008 the deceased K.R.Prasanna had purchased another bill No.39530DBP000408 for Rs.30.92,351/- drawn on M/s Bhoruka Power Corporation. This bill was also not sent for collection with dishonest intention. M/s Bhoruka Power Corporation, Bangalore has not made any payment through bill discounting to M/s Mega Electrical Pvt. Ltd. In this matter. To adjust this false bill purchase entry, deceased K.R.Prasanna had debited Rs.30.92,351/ to M/s Mega Electricals Account on 19.11.2008.
12 C.C.No.21483/20163.12. In Furtherance of said criminal conspiracy, on 10.11.2008 the deceased K.R.Prasanna had purchased another bill amounting to Rs.5,00,841/- vide bill No.39530DBP000508 drawn on M/s Enercon India with dishonest intention. This bill also was not sent for collection. M/s Enercon India Ltd. engaged in generation of electricity through windmill and its installation. In this effect, they have given contract work for laying the electric lines at their sites to M/s Mega Electricals Pvt. Ltd and for that they have made payment to M/s Mega Electricals Pvt. Ltd. Directly and they have not made any payments through bill of exchange. The deceased K.R.Prasanna had purchased the bills without any sanction by abusing his official position with dishonest intention to cheat the bank.
3.13. In furtherance of said criminal conspiracy, the deceased K.R.Prasanna had purchased another bill of Rs.16,33,049.70 on 10.11.2008 vide bill No.39530DBP000608 drawn on M/s Enercon India in the said Mega Electricals Pvt. Ltd. Account. This bill was also not sent for collection and after the realization of post dated cheque No.231100 dated 28.11.2008 for Rs.16.33 lakhs issued by M/s Enercorn India Ltd. The said false bill discounting entry was adjusted on 22.12.2008 with dishonest intention by falsifying the 13 C.C.No.21483/2016 bank records and to cheat the Union Bank of India. Post dated cheques can not be purchased, hence, the deceased K.R.Prsanna in conspiracy with accused No.3 hatched this plan to get the money transfer to the account of M/s Mega Electricals Pvt. Ltd. By creating a false bill for their benefit.
3.14. In furtherance of said criminal conspiracy, on 10.11.2008 the deceased K.R.Prasanna had purchased another bill amounting to Rs.14,63,266/- vide bill No.39530DBP000708 drawn on M/s Enercon India Ltd., in the account of M/s Mega Electrical Pvt. Ltd. This bill was also never sent for collection with dishonest intention to favour his sister in law accused No.3. M/s Enercon India has paid directly to M/s Mega Electricals by way of post dated cheque. The deceased K.R.Prasanna unable to purchase the post dated cheques, hence he colluded with accused No.3 and purchased the false bill without any sanction and intelligently did not send the bill for collection. The deceased K.R.Prasanna in conspiracy with accused No.3, parted the bank money for which she was not otherwise entitle and thereby cheated the Union Bank of India with dishonest intention.
3.15. In furtherance of said criminal conspiracy, deceased K.R.Prasanna had allowed 14 C.C.No.21483/2016 Temporary Over Drafts in the account of M/s Mega Electrical Pvt. Ltd. Between 30.06.2008 and 07.02.2009 without any powers and sanctioned the same for the purpose of accommodation by abusing his official position as branch manager, Union Bank of India. He in conspiracy with accused No.3 had also purchased cheques on 24.05.2008, 18.10.2008, 21.11.2008 and on 29.11.2008 in the said account without any power and security and deceased K.R.Prasanna with dishonest intention did not intimate the said bills discounting and cheque purchases to his controlling office in fortnightly F-1 statements and suppressed this fact till this fraud was detected. Further, accused No.3 also received funds from the accounts of M/s Aaura Data Networks Pvt. Ltd., and M/s Apsis Technologies Pvt. Ltd., by cheques during November December 2008 for the purpose of inter transfer of funds without any genuine business. By this way, accused No.3 is beneficiary of the Temporary Over Drafts/excesses allowed in group accounts of M/s Apsis Technologies Pvt. Ltd., owned by accused No.1 and 2.
3.16. In furtherance of said criminal conspiracy accused No.4 had opened current A/c No.395301010036308 in the name of M/s Gift Express, Mangalore with Union Bank of India, B.V.K. Iyengar Road Branch, Bangalore on 13.05.2008. This account 15 C.C.No.21483/2016 was introduced by accused No.1. Deceased K.R. Prasanna with dishonest intention allowed TODs beyond his delegated powers in this account between 23.07.2008 and 08.02.2009 and he had also allowed inter transfer of funds between this account and other group accounts of M/s Apsis Technologies Pvt. Ltd. And cash withdrawals in this account after transferring the funds from group account of M/s Apsis Technologies Pvt. Ltd. The deceased K.R.Prasanna also purchased cheques on 12.02.2009 in this account beyond his delegated powers with dishonest intention to cheat the Union Bank of India. Subsequently this account became Non Performing asset. The said acts of the accused persons caused a wrongful loss to the tune of Rs.48.59 lakhs to Union Bank of India and corresponding wrongful gain for themselves.
3.17. In furtherance of said criminal conspiracy, accused No.4 had opened another current account No.395301010036292 in the name of M/s Express Technology on 14.02.2008 with Union Bank of India, B.V.K. Iyengar Road Branch Bangalore. This account was also introduced by accused No.1. Deceased K.R.Prasanna in furtherance of criminal conspiracy had allowed Temporary Over Drafts in this account beyond his delegated powers and without any security between 16 C.C.No.21483/2016 04.08.2008 and 12.02.2009 and also with dishonest intention allowed inter transfer of funds between this account and M/s Apsis Technologies Pvt. Ltd and its group accounts to bring down the excesses/TODs allowed in the group accounts owned by accused No.1 and accused No.2 by allowing TODs. Deceased K.R.Prasanna in furtherance to the said conspiracy had also purchased cheque on 05.02.2009 beyond his delegated powers to bring down the debit balance in this account with dishonest intention to cheat the Union Bank of India. The said cheques were returned unpaid subsequently. Then this account became Non Performing Asset. The acts of accused persons caused a wrongful loss to the tune of Rs.30.75 lakhs to Union Bank of India and corresponding wrongful gain for themselves.
3.18. In furtherance of criminal conspiracy, accused No.1 and 2 have opened some more accounts in the names of M/s Apsis Technologies Pvt. Ltd, M/s Aaura Data Networks Pvt. Ltd, M/s Jhanavi Enterprises, M/s Deejay Technologies with Union Bank of India. B.V.K. Iyengar Road Branch, Bangalore and got TODs and inter transfer of funds from these accounts to the said outstanding account and vice versa for the purpose of diverting the bank funds and thereby cheated the Union Bank of India. Further, the delegated powers of 17 C.C.No.21483/2016 deceased K.R.Prasanna for granting TODs/EOL was suspended by the Union bank of India, Regional office Bangalore vide memorandum No.NRO:CR:2197A dated 21.01.2008 and the same was served on him. Inspite of it, deceased K.R. Prasanna had continued to allow excesses/TODs without any powers and security in the group accounts of M/s Apsis Technologies Pvt. Ltd and other connected accounts including the accounts of M/s Mega Electricals Pvt. Ltd., M/s Gift Express, M/s Express Technology in conspiracy with other accused persons with dishonest intention to cheat the Union Bank of India. In furtherance of criminal conspiracy, the deceased K.R. Prasanna had submitted F-1 Statements i.e fortnightly Excess allowed statement to the Regional office, UBI Bangalore from April 2008 onwards wherein, he suppressed the information about the purchase of cheques and bills in the said accounts. The Regional Office Bangalore did not ratify the excesses and Temporary Over Drafts allowed by him and returned the same to the Branch with directions to recover the due amount immediately. Inspite of it, deceased K.R.Prassanna with dishonest intention had allowed TODs and excesses in the said accounts in collusion with other accused persons. The said acts of the accused person caused wrongful loss to the tune of Rs.4,88,60,102/- to the Union bank of India B.V.K. 18 C.C.No.21483/2016 Iyengar Road Branch, Bangalore and corresponding wrongful gain to themselves.
4. After receipt of case file from the Hon'ble XLVII ACC & SJ and Spl. Judge for CBI cases Bangalore, this court took the cognizance of the offences punishable u/Sec.120 B r/w 420, 467, 468, 471 and 477 A of IPC against the accused persons and the accused persons were secured and they were enlarged on bail. The charge sheet copies were furnished to them as required u/Sec.207 of Cr.P.C.
5. Heard both sides on framing of charge. Since there were prima-facie materials available on record, charge was framed and it was read over to the accused persons, they have pleaded not guilty and claimed to be tried.
6. In order to prove the case, prosecution has examined 61 witnesses as PW.1 to 61 and got marked 191 documents as Ex.P.1 to 191 and closed its side evidence.
7. The incriminating evidence prevailing against the accused No.1 to 4, the statement U/sec.313 of the Cr.P.C. was recorded and read over to the accused No.1 to 4. The accused No.1 to 4 denied the same as false and 19 C.C.No.21483/2016 they have not chosen to adduce any evidence on their behalf. The accused No.3 has filed her written statement u/Sec.313 (5) of Cr.P.C.
8. I have heard the arguments of the Ld. Sr. Public Prosecutor and Ld. Counsels for accused No.1 to 4 and perused the materials available on record.
9. On the materials available on record and also on the arguments advanced by both the parties, the points that arose for my consideration are as under;
1) Whether the prosecution proves beyond reasonable doubt that, the accused No.1, 2 and 4 entered into criminal conspiracy with deceased accused K.R.Prasanna during the year 2007-2009 at Bangalore and other places to cheat the Union bank of India, B.V.K. Iyengar Road Branch, Bangalore and in pursuant of such conspiracy, fraudulently and dishonestly opened the current accounts in the names of their companies/firms with the above said bank in order to cheat the bank and dishonestly availed Temporary Over Drafts/Secured Over Drafts facility, cheque discount facility in the names of their companies/firms without sanction and security and accused No.1 and 2 had opened the accounts in their individual names with the said bank and fraudulently and dishonestly inter transferred the funds without any genuine business transaction and 20 C.C.No.21483/2016 thereby committed the offence punishable u/Sec.120 B r/w Sec.420 of IPC?
2) Whether the prosecution proves beyond reasonable doubt that on the above said period, the accused No.1, 2 and 4 in pursuant of criminal conspiracy hatched with deceased accused K.R.Prasanna, fraudulently and dishonestly opened the current accounts in the names of their companies/firms with the Union bank of India, B.V.K. Iyengar Branch, Bangalore in order to cheat the bank and dishonestly availed Temporary Over Drafts/Secured Over Drafts facility, cheque discount facility in the names of their companies/firms without sanction and security and accused No.1 and 2 had opened the accounts in their individual names with the said bank and fraudulently and dishonestly inter transferred the funds without any genuine business transaction and caused wrongful loss of Rs.4,88,60,102/- to the Union bank of India and wrongful gain to themselves and thereby committed the offence punishable u/Sec.420 of IPC?
3) Whether the prosecution proves beyond reasonable doubt that, the accused No.3 entered into criminal conspiracy with deceased accused K.R.Prasanna during the year 2007- 2009 at Bangalore and other places to cheat the Union bank of India, B.V.K. Iyengar Road Branch, Bangalore and in pursuant of such conspiracy, 21 C.C.No.21483/2016 fraudulently and dishonestly opened the current account in the name of M/s Mega Electricals Pvt. Ltd.with the above said bank in order to cheat the bank and dishonestly availed Temporary Over Drafts facility, bill discount facility, cheque discount facility in the name of said company without sanction and security and in pursuant of such conspiracy fabricated the documents for the purpose of cheating and used the fabricated documents as genuine documents and thereby committed the offence punishable u/Sec.120 B r/w Sec.420, 467, 468, 471 of IPC?
4) Whether the prosecution proves beyond reasonable doubt that on the above said period, the accused No.3 in pursuant of criminal conspiracy hatched with deceased accused K.R.Prasanna, fraudulently and dishonestly opened the current accounts in the name of M/s Mega Electricals Pvt. Ltd., with the Union bank of India, B.V.K. Iyengar Branch, Bangalore in order to cheat the bank and dishonestly availed Temporary Over Drafts facility, bill discount facility, cheque discount facility in the name of said company without sanction and security and thereby committed the offence punishable u/Sec.420 of IPC?
5) Whether the prosecution proves beyond reasonable doubt that, the accused No.3 in pursuant of criminal conspiracy hatched with deceased accused K.R.Prasanna and other accused persons fraudulently and 22 C.C.No.21483/2016 dishonestly opened the current account in the name of M/s Mega Electricals Pvt. Ltd., with the Union bank of India, B.V.K. Iyengar Branch, Bangalore and dishonestly availed bill discount facility and cheque discount facility without security by creating false bills of exchange and received the amount from the bank by producing false bills of exchange and thereby committed the offence punishable u/Sec.467 of IPC ?
6) Whether the prosecution proves beyond reasonable doubt that, the accused No.3 in pursuant of criminal conspiracy hatched with deceased accused K.R.Prasanna and other accused persons, fraudulently and dishonestly opened the current account in the name of M/s Mega Electricals Pvt. Ltd., with the Union bank of India, B.V.K. Iyengar Branch, Bangalore and dishonestly availed bill discount facility and cheque discount facility without security by creating false bills of exchange and used the forged documents for the purpose of cheating and thereby committed the offence punishable u/Sec.468 of IPC ?
7) Whether the prosecution proves beyond reasonable doubt that, the accused No.3 in pursuant of criminal conspiracy hatched with deceased accused K.R.Prasanna and other accused persons, fraudulently and dishonestly opened the current account in the name of M/s Mega Electricals Pvt. Ltd., with the Union bank of India, 23 C.C.No.21483/2016 B.V.K. Iyengar Branch, Bangalore and dishonestly availed bill discount facility and cheque discount facility without security by creating false bills of exchange and dishonestly used the said documents as genuine documents knowingly the said documents are forged documents and thereby committed the offence punishable u/Sec.471 of IPC ?
8) What order or sentence?
10. My findings to the above points are as under;
POINT NO.1 : In the Affirmative
POINT NO.2 : In the Affirmative
POINT NO.3 : In the Negative
POINT NO.4 : In the Negative
POINT NO.5 : In the Negative
POINT NO.6 : In the Negative
POINT NO.7 : In the Negative
POINT NO.8 : As per the final order
for the following;
REASONS
11. POINT NO.1 and 2 : Since these points are interlinked, to avoid repetition and for the sake of brevity, they are together taken for consideration.
24 C.C.No.21483/201611.1. Before considering the rival contentions and facts in issue, it is appropriate to note down the undisputed facts which can be gathered from the material placed before the Court, which will be more convenient and helpful in analyzing and appreciating the evidence placed before this Court with regard to the respective contentions of the parties.
12. UNDISPUTED FACTS :
12.1. The deceased accused Sri. K.R. Prasanna was working as a Branch Manager of Union Bank of India, B.V.K. Iyengar Road Branch, Bangalore from 05.06.2007 to 16.02.2009.
12.2. The accused No.1 Sri. Madhu Lakshminarayana is the Managing Director of M/s Apsis Technologies Pvt. Ltd., and he had opened a SOD (Deposit) A/c No.395304010032110 with Union Bank of India, B.V.K. Iyengar Road Branch, Bangalore on 15.11.2007 and availed SOD (Deposit) limit of Rs.118.00 lakhs against the deposit of Rs.132.00 lakhs on 22.12.2007 and the limit was enhanced to Rs.154.00 lakhs on 06.09.2008 and again to Rs.192.70 lakhs against the value of deposits of Rs.214.38 lakhs on 27.12.2008 and also availed cheque discounting facilities on 27.12.2007, 18.03.2008, 27.03.2008, 05.04.2008, 07.06.2008, 10.11.2008, 10.11.2008, 25 C.C.No.21483/2016 23.01.2009, 09.02.2009 and 09.02.2009 and subsequently, the said account became Non Performing Asset.
12.3. The accused No.1 Sri. Madhu Lakshminarayana had opened another current account No.39530101003626 on 25.07.2008 in the name of M/s Apsis Technologies Pvt. Ltd. with Union Bank of India, B.V.K. Iyengar Road Branch, Bangalore and got Temporary Over Draft in this account between 01.12.2008 and 13.02.2009 and also availed cheque discounting facilities in this account on 23.01.2009 and 24.01.2009 and subsequently this account became Non Performing Asset.
12.4. The accused No.1 Sri. Madhu Lakshminarayana had opened another SOD (Deposit) A/c No.395304010032114 in the name of M/s Deejay Technologies on 26.04.2008 and got SOD (Deposit) limit of Rs.18.00 lakhs against the deposit of Rs.20.00 lakhs with 10% margin on the same day and the said limit was enhanced to Rs.113.40 lakhs on 14.08.2008 and to Rs.123.20 lakhs on 23.12.2008 and subsequently this account became Non Performing Assets.
12.5. The accused No.1 Sri. Madhu Lakshminarayana had opened another SOD (deposit) 26 C.C.No.21483/2016 A/c No.395304010032113 in the name of M/s Jhanavi Enterprises on 15.02.2008 and got sanctioned SOD (deposit) limit of Rs.41.85 lakhs against the deposit value of Rs.46.50 lakhs with 10% margin on 15.02.2008 and subsequently this limit was enhanced to Rs.44.00 lakhs on 08.12.2008 and subsequently this account became Non Performing Assets.
12.6. The accused No.1 Sri. Madhu Lakshminarayana had opened another current A/c No.395301010036322 in his name on 25.07.2008 with Union Bank of India, B.V.K. Iyengar Road Branch, Bangalore and got Temporary Over Drafts facility between 26.11.2008 and 07.02.2009 in this account and also availed cheque discounting facility on 24.01.2009 for Rs.9,82,500/- in this account and subsequently the said account became Non Performing Assets.
12.7. The accused No.2 - Smt. Suchitra Madhu had opened a current A/c No.395301010036293 in the name of M/s Aaura Data Networks Pvt. Ltd., on 19.02.2008 with the Union Bank of India, B.V.K. Iyengar Road Branch, Bangalore and got Temporary over Drafts facility in this account between 26.02.2008 and 04.02.2009 and subsequently this account became Non Performing Assets.27 C.C.No.21483/2016
12.8. The accused No.2 Smt. Suchitra Madhu had opened another current A/c No.395301010036325 in the name of M/s Aaura Data Networks Pvt. Ltd., on 25.07.2008 with Union Bank of India, B.V.K. Iyengar Road Branch, Bangalore and got Temporary Over Drafts facility in this account on 02.12.2008 to 30.01.2009 and on 09.02.2009 and also availed cheque discounting facilities in this account on 29.11.2008 and subsequently the said account became Non Performing Assets.
12.9. The accused No.2 Smt. Suchitra Madhu had opened another current A/c No.395301010036323 in her name on 25.07.2008 and got Temporary over Drafts facility in this account between 27.01.2009 and 09.02.2009 and the maximum TOD of Rs.29.44 lakhs was allowed on 09.02.2009 and subsequently this account became Non Performing Assets.
12.10. The accused No.3 Smt. C. Shobha is the Managing Director of M/s Mega Electrical Private Ltd., opened a current A/c No.3953010136309 on 17.05.2008 with Union Bank of Inida, B.V.K. Iyengar Road Branch, Bangalore.
12.11. The accused No.4 Sri. Ravi R. Prabhakar had opened current A/c No.395301010036308 in the 28 C.C.No.21483/2016 name of M/s Gift Express, Mangalore with Union Bank of India, B.V.K. Iyengar Road Branch, Bangalore on 13.05.2008 and availed Temporary Over Drafts in this account between 23.07.2008 and 08.02.2009 and and also availed cheques discounting facilities on 12.02.2009 in this account and subsequently this account became Non Performing Assets.
12.12. The accused No.4 Sri. Ravi R. Prabhakar had opened another current account No.395301010036292 in the name of M/s Express Technology on 14.02.2008 with Union Bank of India, B.V.K. Iyengar Road Branch Bangalore and availed Temporary Over Drafts in this account between 04.08.2008 and 12.02.2009 and also availed cheque discounting facilities on 05.02.2009 and subsequently this account became Non Performing Asset.
13. In view of the above undisputed facts, the evidence placed before this Court relating to the said facts required no much consideration.
14. With the above undisputed facts, now the case of the prosecution and contention of the accused persons are to be analyzed. As already stated, the prosecution has prosecuted the accused persons for the offences punishable under Sections 120 B r/w Sec.420, 29 C.C.No.21483/2016 467, 468 and 471 of IPC and the substantive offences thereof. It is noticed that, the major allegations for the offence punishable under Section 120 B r/w Sec.420 of IPC and substantive offence thereof are against the accused No.1, 2 and 4 and the major allegation for the offence punishable under Section 120 B r/w Sec.420, 467, 468 and 471 of IPC and the substantive offences thereof are against the accused No.3. It is needless to say that, the burden of proving the guilt of the accused for the alleged offences beyond reasonable doubt is on the prosecution. It is the cardinal principle of criminal law that every person is presumed to be innocent until the contrary is proved. Therefore, the entire burden is on the prosecution to prove the guilt of the accused persons for the alleged offences beyond all reasonable doubts.
15. In order to prove the guilt of the accused persons, the prosecution has to prove all the necessary ingredients of the offences leveled against the accused persons beyond all reasonable doubt. Therefore, for better understanding and appreciation of the evidence on record, it is just and proper to refer the ingredients/elements necessary to constitute the offence leveled against the accused persons.
16. Section 120 A of IPC gives definition of criminal conspiracy and Section 120B of the IPC 30 C.C.No.21483/2016 provides punishment for committing the criminal conspiracy. Under Section 120-A, the criminal conspiracy is defined as under;
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, no agreement except an agreement to commit an offence shall amount to a criminal conspiracy unless some criminal act conspiracy besides the agreement is done by one or more parties to such agreement in pursuant thereof.
17. On going through the above provision, it is clear that the following are the necessary ingredients to constitute the criminal conspiracy.
(i) There should be an agreement between the parties who are alleged to conspire.
(ii) Such agreement should be either for doing an illegal act or for doing an act by illegal means.
18. The above provision does not contemplate the agreement shall be in writing. Therefore, the agreement may be express or implied or in part express or implied.
19. In a decision reported in (2002) 7 SCC 334 in between Mohd. Khalid Vs. State of West Bengal, wherein Hon'ble Supreme Court has held that the 31 C.C.No.21483/2016 elements of criminal conspiracy have been stated to be
(a) an object to be accomplished, (b) a plan or scheme embodying means to accomplish that object, (c) an agreement or understanding between two or more of the accused persons whereby they become definitely committed to co-operate for the accomplishment of the object by means embodied in the agreement, or by an effectual means and (d) in the jurisdiction where the statute required an overt act. The essence of a criminal conspiracy is the unlawful combination and ordinarily the offence is complete when the combination is framed.
20. Sec. 420 of IPC reads as under -
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 the valuable security, or any thing 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 7 years and shall also be liable to be fine.
21. From the above provision, it is clear that, in order to constitute the offence punishable under section 420 of the IPC, the following ingredients has to be proved;
32 C.C.No.21483/2016i) there must be a deception i.e. the accused must have deceived someone.
ii) that by the said deception, the accused must induce a person to deliver any property or to make, alter or destroy whole or part of the valuable security or anything which is signed or sealed and which is capable of being converted into the valuable property.
iii) that the accused did so dishonestly.
22. Sec.415 of the IPC provides definition of cheating which reads as under;
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 intentionally retain any property, or 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 cause damage or harm to that person in body, mind, reputation or property, is said to "cheat". Explanation : A dishonest concealment of fact is a deception with the meaning of this section.
23. On reading of the above provision, it is clear that, the necessary ingredients of cheating are ;
(i) deception of any person ;
(ii)(a) fraudulently or dishonestly inducing that person to deliver any property to any person or to consent that any person shall retain any property ;
33 C.C.No.21483/2016(b) intentionally inducing that person 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 cause damage or harm to that person in body, mind, reputation or property.
24. Section 415 read with Section 420 IPC indicates that fraudulent or dishonest inducement on the part of the accused must be at the inception and not at a subsequent stage.
25. The offence punishable under Section 467 of the IPC is concerned, it has to be read along with Section 463 and 464 of the IPC. Section 463 of the IPC gives definition for the offence 'forgery', Section 464 of the IPC deals with making of false documents and Section 467 of the IPC deals with forgery of the valuable security, Will etc.,
26. The term 'forgery' is defined under Section 463 of the IPC as under;
"Section 463 : Whoever makes any false document or false electronic record or part of the document or part of the electronic record, with an intention to cause damage or injury to the public or to any person or to support any claim or title or to cause any person to part with the property or to enter into any express or implied contract, or with an intent to 34 C.C.No.21483/2016 commit fraud or that fraud may be committed, commits forgery.
27. Section 464 of IPC deals with making a false document or electronic records which reads as under;
A person is said to make a false document or false electronic record -- First -- Who dishonestly or fraudulently
(a) makes, signs, seals or executes a document or part of a document;
(b) makes or transmits any electronic record or part of any electronic record;
(c) affixes any electronic signature on any electronic record;
(d) makes any mark denoting the execution of a document or the authenticity of the electronic signature, with the intention of causing it to be believed that such document or part of document, electronic record or electronic signature was made, signed, sealed, executed, transmitted or affixed by or by the authority of a person by whom or by whose authority he knows that it was not made, signed, sealed, executed or affixed;
or Secondly -- Who, without lawful authority, dishonestly or fraudulently, by cancellation or otherwise, alters a document or an electronic record in any material part thereof, after it has been made, executed or affixed with electronic signature either by himself or by any other person, whether such person be living or dead at the time of such alteration; or 35 C.C.No.21483/2016 Thirdly -- Who dishonestly or fraudulently causes any person to sign, seal, execute or alter a document or an electronic record or to affix his electronic signature on any electronic record knowing that such person by reason of unsoundness of mind or intoxication cannot, or that by reason of deception practiced upon him, he does not know the contents of the document or electronic record or the nature of the alteration.
28. On going through the above provisions, it is clear that, in order to constitute the offence of forgery, there should be ;
1. Making of false document or electronic record or part of it.
2. Such making of the false document or electronic record or part of it is with an intention to
(a) to cause damage or injury to (i) public or (ii) any person or
(b) to support any claim or title or
(c) to cause any person to part with the property or
(d) to cause any person to enter into express or implied contract or
(e) to commit fraud or that fraud may be committed.
29. In order to prove the forgery, the prosecution has to prove the above elements in the crime.
36 C.C.No.21483/201630. The term 'making of the false documents' under Section 464 of the IPC implies that it must be a document or electronic record or part of it, dishonestly or fraudulently made and that should have been made, signed, sealed or executed with an intention of causing belief that it was made or executed by authority of a person who did not make or execute it and with the knowledge that it was not so made or executed.
31. Section 467 of the IPC deals with punishment for forgery of valuable security, Will etc., and it reads as under;
Section 467 : Whoever forges a document which purports to be a valuable security or a will, or an authority to adopt a son, or which purports to give authority to any person to make or transfer any valuable security, or to receive the principal, interest or dividends thereon, or to receive or deliver any money, movable property, or valuable security, or any document purporting to be an acquittance or receipt acknowledging the payment of money, or an acquittance or receipt for the delivery of any movable property or valuable security, shall be punished with imprisonment for life, or with imprisonment of either description for a term which may extend to ten years, and shall also be liable to fine.
37 C.C.No.21483/201632. The above provision makes it clear that in order to constitute an offence under the above provision, there should be two elements. (1) that the accused committed the forgery (2) that such forgery was committed in relation to a document which purports to be, (a) a valuable security 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) to receive the principal, interest or dividend 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.
33. Section 468 of IPC deals with punishment for forgery for purpose of cheating and it reads as under ;
Whoever commits forgery, intending that the 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.
34. In order to bring home the offence under Section 468 of the IPC, the prosecution has to prove the following facts;
38 C.C.No.21483/2016(a) that the document has been forged as contemplated in Section 463 of the IPC
(b) that the accused forged the said document
(c) that the accused did so for the purpose of cheating.
35. So far as the offence under Section 471 of the IPC is concerned, Section 471 of the IPC deals with using of the forged document or electronic records as genuine and punishment prescribed for it. It reads as under;
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.
36. On going through the above provision, the necessary ingredients of the said offence are that ;
i) the document or electronic record concerned was forged one to the knowledge of the accused, or is having reason to believe it to be a forged document ; and
ii) the accused fraudulently or dishonestly used such document/electronic record as genuine.
39 C.C.No.21483/201637. The forged document or electronic record is defined under Section 470 of IPC as under ;
A false document or electronic record made wholly or in part by forgery is designated 'a forged document or electronic record'.
38. Section 24 of IPC gives definition of 'dishonestly' which reads as under ;
Whoever does anything with the intention of causing wrongful gain to one person or wrongful loss to another person, is said to do that thing "dishonestly".
39. Section 25 of IPC gives definition of 'fraudulently' which reads as under ;
"A person is said to do a thing fraudulently if he does that thing with intent to defraud but not otherwise".
40. With the above aspects, now, the evidence on record is to be meticulously analysed so as to determine whether the prosecution has proved all the necessary ingredients of the offences alleged against the accused persons. On going through the prosecution case, it is clear that the major offence alleged against the accused persons is cheating of the Bank in the matter of availment of Temporary Over Drafts and Secured Over 40 C.C.No.21483/2016 Drafts facilities, bill discounting facilities and cheque discounting facilities with dishonest intention to cheat the bank and in that connection the accused persons had also committed the offence of conspiracy, creating of false documents and using the same as genuine for the purpose of cheating.
41. The Ld. Counsel for the accused No.1, 2 and 4argued that the entire transaction permitted under banking law and there is no dishonest intention to cheat the bank and also relied upon a decision reported in (2009) 6 SCC 77 in between S.V.L. Murthy Vs. State represented by CBI, Hyderabad wherein Hon'ble Supre Court held that -
A. Penal Code, 1860 - Ss 415, 420, 405, 409 and 120-B - Cheating -
Ingredients - Existence of an intention to cheat at the time of making initial promise or formation of contract -
Importance of and need to prove - HELD, complainant is required to show that accused had fraudulent or dishonest intention at the time of making promise or representation - In the absence of culpable intention at the time of making initial promise, no offence is made out under S.420
- In present case, held, allowing of cheque discounting facility by bank officials to customers of Bank, without any criminal intent being proved, did not amount to commission of offence, particularly as 41 C.C.No.21483/2016 facility allowed was not contrary to RBI Guidelines - It could not therefore also be said that there was meeting of minds in a conspiracy to commit an offence, nor could the act of corruption be inferred from transactions between Bank and its customers - Further, held, accused officials might have been prosecuted under S.409 but they were not charged under this section - Their conviction therefore set aside - Prevention of Corruption Act, 1988 - S.13 (1) (d) -
Banker and Customer - Cheque
discounting facility - Propriety of
granting - RBI Guidelines.
42. In view of the above decision allowing of cheque discounting facility by bank officials to customers of Bank, without any criminal intent being proved, did not amount to commission of offence, particularly as facility allowed was not contrary to RBI Guidelines.
43. In the present case also, the deceased accused Sri. K.R. Prasanna who was the Branch Manager of Union Bank of India, B.V.K. Iyengara Road Branch, Bangalore was allowed cheque discounting facility and bill discounting facility to the accused persons who are the customers of the bank. Hence, allowing of cheque discounting facility and bill discounting facility to the customers of the bank is not constitute an offence. But, the prosecution must prove the criminal intention in 42 C.C.No.21483/2016 allowing the cheuqe and bill discounting facilities to the accused persons to establish commission of alleged offences.
44. Section 6 (a) of Banking Regulation Act, 1949 reads as under ;
6. Forms of business in which banking companies may engage.--
(1) In addition to the business of banking, a banking company may engage in any one or more of the following forms of business, namely:--
(a) the borrowing, raising, or taking up of money; the lending or advancing of money either upon or without security;
the drawing, making, accepting, discounting, buying, selling, collecting and dealing in bills of exchange, hoondees, promissory notes, coupons, drafts, bills of lading, railway receipts, warrants, debentures, certificates, scripts and other instruments, and securities whether transferable or negotiable or not; the granting and issuing of letters of credit, traveller's cheques and circular notes; the buying, selling and dealing in bullion and specie;
the buying and selling of foreign exchange including foreign bank notes; the acquiring, holding, issuing on commission, underwriting and dealing in stock, funds, shares, debentures, debenture stock, bonds, obligations, securities and investments of all kinds; the purchasing and selling of bonds, scripts or other forms of securities on 43 C.C.No.21483/2016 behalf of constituents or others, the negotiating of loans and advances; the receiving of all kinds of bonds, scripts or valuables on deposit or for safe custody or otherwise; the providing of safe deposit vaults; the collecting and transmitting of money and securities;
45. In view of the above provision, in addition to the business of banking, a banking company may engage in business of borrowing, raising, or taking up of money; the lending or advancing of money either upon or without security; the drawing, making, accepting, discounting, buying, selling, collecting and dealing in bills of exchange, hoondees, promissory notes etc. Hence, borrowing of money, the lending or advancing of money either upon or without security, discounting, buying, selling and dealing in bills of exchanges are also forms of business of a banking company.
46. Instant case, the allegation against the accused persons that, they availed cheque discounting facility and bill discounting facility and also availed Temporary Over Draft facility without sanction and security. As per Section 6 (a) of Banking Regulation Act, the lending or advancing of money either upon or without security, discounting, buying, selling and dealing in bills of exchanges are the forms of business of a banking company. Hence, there is no illegality in 44 C.C.No.21483/2016 availing cheque discounting facility and bill discounting facility and Temporary Over Draft facility without security. But, as per above cited decision, allowing of cheque discounting facility by bank officials to customers of Bank, without any criminal intent being proved, did not amount to commission of offence, particularly as facility allowed was not contrary to RBI Guidelines.
47. C.W.1 - Sri. A.K. Ajmera the then A.G.M. of Union Bank of India, Central Office, Mumbai examined as P.W.1 and he deposed in his evidence that he lodged the Ex.P.1 complaint based on the internal investigation reports i.e., Ex.P.2 to 4. Further, he deposed that as per the Ex.P.5 to 10 circulars, Sr. Manager Sri. K.R. Prasanna was authorized to give advances against banks own deposit receipts upto to the margin of 25%, whereas, the said Sr. manager has given at 10% margin and though his actions were ratified by the Regional Manager but he exceeded the sanction limit and also allowed Temporary Over Draft in the name of M/s Apsis Technologies Pvt. Ltd., and also in the names of Directors individual current accounts and also in connected accounts of M/s Apsis Technologies Pvt. Ltd., and because of indiscriminate excesses and TOD, those accounts became non performing assets and bank incurred a loss of Rs.410 lakhs and in respect of M/s 45 C.C.No.21483/2016 Mega Electricals Pvt. Ltd., the Sr. Manager also allowed TOD and bill and cheque purchase without any sanction limit.
48. P.W.1 was subjected to cross examination by the Ld. Counsel for the accused No.3 wherein he admits that if advances are made in excess of powers of the bank manager then he should send F1 statement to the Regional Office and depending upon the nature of advances, the Regional Office either ratify the advance or call reports from the Branch Manager. Further, P.W.1 admits that if the security offered is renders insufficient, the bank can ask the borrower for the additional security to cover the deficiency and the additional security could be collateral security, mortgage, fixed deposits. Further, P.W.1 admits that there is no prohibition for the bank to lend the loan without any security and the main reasons for filing the complaint were that the accounts became NPA and the amount being Rs. 410 lakhs.
49. In view of the above evidence of P.W.1 clearly shows that, he lodged the complaint before the CBI on the basis of internal investigation reports and deceased accused K.R.Prasanna has given 10% margin against banks own deposit receipts instead of upto 25 % margin and this action were ratified by the Regional Office.
46 C.C.No.21483/2016Further, he clearly admits that there is no prohibition for the banks to lend the loan without any securities.
50. Ex.P.1 is the complaint dated 01.12.2009 lodged by the P.W.1 wherein he stated that Sri. K.R.Prasanna Branch Manager, Union Bank of India, allowed overdraft facilities to M/s Apsis Technologies Pvt. Ltd., exceeding the sanction limit and there is an outstanding of Rs.277.05 lakhs and pledge deposit of Rs.213.79 lakhs is not sufficient to meet the said liability and Sri. K.R.Prasanna has extended temporary overdraft in the current account of accused No.1 to the extent of Rs.55 lakhs in excess of his delegated financial powers and Sri. K.R.Prasanna had sanctioned loan to the group companies of M/s Apsis Technologies Pvt. Ltd., i.e. M/s Deejay Technologies, M/s Jahnavi Enterprises, M/s Aaura Data Networks Pvt. Ltd., and Sri. K.R.Prasanna had allowed indiscriminate overdraft in the current account of M/s Deejay Technologies, M/s Jahnavi Enterprises, M/s Aaura Data Networks Pvt. Ltd., and released the original title deeds of the collateral properties offered by M/s Jahnavi Enterprises. It is further reveals that, Sri. K.R.Prasanna had allowed huge temporary overdraft in the current account of accused No.2 and concealed the same from the Regional Office by not reporting the said transaction. Further, the current 47 C.C.No.21483/2016 account held in the name of M/s Mega Electricals Pvt. Ltd., is a staff related account and K.R.Prasanna was not competent to extending any kind of limits to the said company and he had extended temporary overdraft facilities and purchased cheques/bills on 10 occasions etc.
51. Ex.P.2 is the internal investigation report and Ex.P.3 and 4 are the additional internal investigation reports of Union Bank of India.
52. As per observation made in Ex.P.2 internal investigation report, Sri. K.R.Prasanna had allowed huge, continuous and indiscriminate excesses/temporary overdrafts in the accounts of M/s Apsis Technologies Pvt. Ltd., M/s Deejay Technologies, M/s Jahnavi Enterprises, M/s Aaura Data Networks Pvt. Ltd., and Smt. Suchitra Mudhu, Sri. Madhu Lakshminarayana, M/s Express Technology, M/s Mega Electricals Pvt. Ltd., M/s Jasbir Collections, M/s Sri. R. Ramesh exceeding delegated authority and he had purchased cheques on many occasions in the accounts of M/s Express Technology, M/s Apsis Technologies Pvt. Ltd., M/s Gift Express and Sri. R. Ramesh for accommodation purpose and he had purchased the bills on many occasions in the accounts of M/s Mega Electricals Pvt. Ltd., and exceeded the delegated authority and released collateral security in 48 C.C.No.21483/2016 the account of M/s Jahnavi Enterprises and allowed operation in the said account without canceling the limits and not reported the same to the Controlling Office and suppressed the facts etc.
53. As per the prosecution case, the deceased K.R.Prasanna in conspiracy with accused No.1 had allowed excesses over the sanctioned limits continuously in the SOD account No.395304010032110 of M/s Apsis Technologies Pvt. Ltd., with Union bank of India without any security and powers and also purchased the cheques on 10 occasions beyond his delegated powers for the purpose of accommodation without any security and sanction and also not intimated the purchase of cheque in F1 statement.
54. C.W.1/P.W.1 Sri. A. K. Ajmera the then AGM, Union Bank of India stated in his evidence that as per Ex.P.5 to 9 circulars, the Sr. Manager Sri. K.R. Prasanna was authorized to give SOD limits against banks own deposit receipts up to the margin of 25% whereas, the said Sr. Manager has given at 10 % margin and though his actions were ratified by the Regional Manager, but he exeeded the sanction limit and also lowed TOD in the name of M/s Apsis Technologies Pvt. Ltd., and because of indiscriminate excess and TOD, the said account became NPA. In his cross examination he admits that if 49 C.C.No.21483/2016 advances are made in excess power of bank Manager, then he should send F1 statement to the Regional Office and depending upon the nature of advances the Regional Office either rectify the advances or call reports from the Branch Manager.
55. It is specific case of the prosecution that the Branch Manager has not intimated the cheques purchased in his account to his controlling office in F1 statement.
56. C.W.2 - Sri. M.R.Gopalakrishna the then Branch Manager, Union Bank of India, B.V.K. Iyengar Road, Bangalore examined as P.W.2. He deposed before the Court that Ex.P.18 the file of SOD account of M/s Apsis Technologies Pvt. Ltd., reveals that M/s Apsis Technologies Pvt. Ltd., represented by its managing director Madhu Lakshminarayana has opened the SOD account on 15.11.2007 and on perusal of Ex.P.18 it is clear that on 15.11.2007 the SOD limit of Rs.1,18,80,000/- was sanctioned against the deposit of Rs.1,32,00,000/- with 10% margin and first the Sr. Manager Sri K. R. Prasanna had sanctioned the SOD limit a per Ex.P.18 (b) and on 22.12.2007 the same was ratified as per Ex.P.18 (c) by the Regional Office and on 06.09.2008 the Sr. Manager Sri K. R. Prasanna enhanced the SOD limit to Rs.154 lakhs against the 50 C.C.No.21483/2016 deposit of Rs.167.20 lakhs with 10% margin and thereafter, the Regional Office ratified the same as per Ex.P.18(e). He further states that on perusal of Ex.P.18, it is clear that on 16.12.2008 the limit was further enhanced to Rs.192.70 lakhs against the security of Rs.213.79 lakhs as per Ex.P.18 (f) and thereafter, on 27.12.2008 it was ratified by the regional office as per Ex.P.18 (g).
57. P.W.2 further states that Ex.P.18 (h) the statement of SOD account of M/s Apsis Technologies Pvt. Ltd., reveals that though for the second time the SOD was enhanced on 06.09.2008, prior to that Rs.185 lakhs was outstanding amount in excess of Rs.67 lakhs and though on 16.12.2008 for the third time the SOD limit enhanced, prior to that Rs.1,58,15,210/- was outstanding balance against the limit of Rs.1,54,00,000/- and from 18.12.2008 itself the outstanding balance existed was Rs.2 crores as against the enhanced limit on the third time and the Sr. Branch Manager had the power to sanction the SOD limit as allowed by retaining 10% margin but he allowed debits in excess of sanctioned limits. Further, P.W.2 identified Ex.P.19 consolidated statement of cheque purchased by the Union bank of India pertaining to SOD account of M/s Apsis Technologies Pvt. Ltd.
51 C.C.No.21483/201658. In the cross-examination of P.W.2 he clearly admits that the top official can exercise all the powers delegated by him to his subordinate officers but vice versa is not possible and whenever the officer exceeds the delegated authority, then it can be get ratified later and it is practice in bank that first to take oral authority from the superiors over phone whenever feasible or exercise the authority and later get it ratified and in the second instance, F1 statement will be sent to get it ratified. He admitted that whenever a company or a business establishment opens the account in respect of the business, it is the current account and it is incidental to opening of the current account to avail the facilities like discounting of bills, discounting of cheques, purchase of bills, overdraft facilities and other facilities depending upon the credibility of the customer/account holder and the nature and standing of the customers of the account holder are relevant and important.
59. It is pertinent to note that the availing of facilities in current account is not in dispute, but as per the prosecution case the SOD limits exceeds over the sanctioned limits continuously in the said account without any security. Hence, nothing has been elicited in the cross-examination of P.W.2 to show that it is a normal banking transaction.
52 C.C.No.21483/201660. C.W.2/P.W.3 Sri. M. Jayaraj the then Chief Manager of Union bank of India deposed that the Nodal Regional Office has ratified the action of the Branch sanctioning with 10% margin in Ex.P.18 SOD account, in the meantime during the stages of enhancement and ratification, huge excess were permitted by the Branch and they were not ratified by the Nodal Regional Office. He further states that, Ex.P.31 fortnightly F1 statements do not reflect the ratification of excesses and TODs given by the Nodal Regional Office and due to lack of securities and absence of prime and collateral securities, the bank could not recover the due.
61. C.W.4/P.W.4 Sri. B. Suresh Rao the then accountant of Union bank of India deposed that Ex.P.18(h) statement of account reveals that on various occasions excess amounts were allowed against the deposits in SOD account of M/s Apsis Technologies Pvt. Ltd. In his cross-examination he admits that whenever the bank Manager finds that the customer is important, then he exceeds his delegated powers and later get it ratified. It is pertinent to note that, as per the prosecution witnesses the act of the Manager in allowing excess is not ratified.
62. C.W.7/P.W.7 Sri. Abdul Salam the then Manager of Union bank of India deposed that, he has not 53 C.C.No.21483/2016 processed any of the F1 statements of B.V.K. Iyengar Road branch which was in their jurisdiction during the period 2008-09. He further states that in Ex.P.31 F1 statements, almost all excesses given to M/s Apsis groups of accounts have not been confirmed.
63. C.W.18/P.W.15 Sri. V. Sheshadri the then Chief Manager (credit) Union bank of India, Regional Office Bangalore deposed in his evidence that, he received Ex.P.31 fortnightly F1 statements from the B.V.K. Iyengar Road branch seeking ratification of excesses given over sanctioning limit pertaining to M/s Apsis Technologies Pvt. Ltd., M/s Deejay Technologies, M/s Aaura Data Networks Pvt. Ltd., and accused No.1 etc. but he did not confirm the branch actions and asked the branch to recover the excess immediately. In his cross-examination he states that, in F1 statements, they are making symbols square for confirmation and rectangle for not confirmation.
64. C.W.34/P.W.28 Sheik Abdul Rehman the then Chief Manager at credit recovery and legal services department, Union bank of India, Regional Office, Bangalore deposed that during his tenure he has scrutinized the F1 statement of Union bank of India B.V.K. Iyegar branch and he did not ratify the excess which were given beyond the authority of the Branch 54 C.C.No.21483/2016 Manger and intimated to the branch to collect the payments immediately
65. C.W.60/P.W.47 Sri. G. Girish chandra the then Chief Manager of Union bank of India deposed in his evidence that the ratification of excesses comes under the credit department and he has ratified some of the excess given of B.V.K. Iyengar Road Brach in Ex.P.31 with square mark and not ratified some of the other excess given with triangular mark.
66. C.W.14/P.W.53 Sri. K.V. Ravishankar Sharma the then clerk cum cashier of Union bank of India, B.V.K. Iyengar Road brach deposed that on daily basis a report called daily validation report is generated showing ther details of cheqes and IDs of the respective clerk and officer for making entry and posting and any deviation in the procedure and deviation may be insufficient funds in the account, excess over the limit were allowed and temporary overdrafts.
67. Ex.P.18 is the SOD account opening from in the name of M/s Apsis Technologies Pvt. Ltd., and other relevant documents. Ex.P.18 (b) is the sanction note for SOD and loan against deposit. It clearly shows that, M/s Apsis Technologies Pvt. Ltd., had availed the SOD limit at Rs.1,18,00,000/- against the security value of 55 C.C.No.21483/2016 Rs.1,32,00,000/- and accused No.1 also executed the promissory note and letter of continuity etc. Ex.P.18 (c-1) is the office note dated 22.12.2007 which reveals that the Sr. Manager was submitted a office note for approval of SOD facility of Rs.1,18,00,000/- against deposit at reduced margin of 10% and the same is approved by the Dy. General Manager. This document clearly shows that sanctioning of SOD limit of Rs.1,18,00,000/- at margin of 10% was approved by the DGM.
68. Ex.P.18 (d) is the sanction note for SOD and loan against deposit. It clearly shows that, the SOD limit was enhanced to Rs.1,54,00,000/- on 06.09.2008. Ex.P.18 (e) is the ratification of sanction of loan against deposit of Rs.1.67 lakhs at reduced margin of 10% and the same is ratified by the DGM on 30.09.2008. Ex.P.18
(f) is the sanction note for SOD and loan against deposit. It clearly shows that, the SOD limit was enhanced to Rs.192.70 lakhs on 16.12.2008 and the said letter was signed by the said officer and Sr. Manager and also taken the on demand promissory note, letter of continuity. Ex.P.18 (g) is the ratification for sanction of loans against deposit and it reveals that SOD limit was enhanced upto Rs. 192.70 lakhs and the same is approved by the Deputy General Manager. These documents clearly shows that the accused No.1 has 56 C.C.No.21483/2016 availed the SOD limit in the name of M/s Apsis Technologies and also it was enhanced upto Rs. 192.70 lakhs at 10% margin and same is approved by the Deputy General Manager. It shows that, giving the SOD limit against the deposit upto the margin of 10% was ratified by the Regional Office.
69. Ex.P-18(h) statement of accounts reveals that, Rs.1,86,29,961/- was the outstanding amount in the SOD account as on 06.09.2008 and prior to that Rs.1,85,19,144/- was the outstanding balance in the said account. It is pertinent to note that, the SOD limit was enhanced upto to Rs.154 lakhs on 06.09.2008, but the outstanding balance was Rs.1,86,29,961/- as on 06.09.2008 in that account. Further, the account statement reveals that the outstanding balance exceeds Rs.2.00 crores on 22.09.2008 to 29.09.2008 and on 27.09.2008 to 23.10.2008 and on 29.10.2008 to 06.12.2008 and on 18.12.2008 to 30.01.2009 and on 31.01.2009 to 09.02.2009 and further the outstanding balance exceeds Rs.3.00 crores on 09.02.2009 to 14.02.2009 in the said SOD account. It is pertinent to note that SOD limit was enhanced upto Rs.192.7 lakhs on 27.12.2008. Further on perusal of the said account statement, it clears that the deceased accused K.R Prasanna had allowed excess over the sanction of limits 57 C.C.No.21483/2016 continuously in the said SOD account. As per Ex.P.18 (h) statement of accounts, Rs.86,24,386/- was total outstanding amount in the said account.
70. Ex.P.31 statement of excess submitted to the Regional Office it reveals that in the SOD account of M/s Apsis Technologies Pvt. Ltd., the rectangle symbol is mentioned in respect to excesses on 15.11.2008, 30.11.2008, 15.01.2009, 15.02.2009. This document clearly shows that the excess allowed in the above said SOD account were not ratified by the Regional Office.
71. In Ex.P.18 the prosecution has placed the letter correspondences made between the Branch Manager and accused No.1 in respect to SOD account, wherein also the Branch Manager mentioned that excess drawn in the SOD account and there was no provision to allow excess in the SOD account for that the accused No.1 states that he is expecting funds from sister concern accounts and he will arrange the funds. On 30.12.2008 a letter was issued by the accused No.1 wherein also he requested the time to adjust the excess in the SOD account. It appears that the Branch Manager K.R. Prasanna in conspiracy with accused No.1 has allowed the excess in the said SOD account continuously without any provision.
58 C.C.No.21483/201672. P.W.3 further states that the management of the bank from time to time issues instruction circulars governing the branches and administrative offices and as per Ex.P.5 Instruction circular the Sr. Manager of Scale - III cadre could sanction SOD against deposits with 25% margins upto limit of Rs.150 lakhs and the Sr. Manager Scale - III cadre could allow TOD of Rs.1 lakh and he was allowed to permit Rs.5 lakhs for cheques purchase and he was permitted to issue letter of guarantees Rs.20 lakhs with 100% cash margin and he was permitted to allow bill purchase of Rs.10 lakhs under secured nature and Rs.5 lakhs under unsecured nature.
73. Ex.P.5 instruction circular No.7495 dated 26.09.2006 issued in respect management of credit portfolio and delegation of loaning powers wherein annexure-I speaks about revised scheme of delegation of loaning powers. It reveals that, the Branch Manager Scale-III is having a loaning powers to the extend of Rs.1.50 crores in respect to secured over draft/loan against banks term deposit receipts. As discussed above, the recitals of Ex.P.18 (h) statement of accounts shows that the Branch Manager extended the loaning facility above Rs.3.00 crores in SOD account. It clearly shows that, the branch manager Sri. K.R. Prasanna has allowed the excess beyond delegated powers.
59 C.C.No.21483/201674. As per Ex.P.9 instruction circular No.7805 dated 24.10.2007, normal margin for SOD/loan against deposits is 25% and maximum reduction in margin upto 5% only with approval of competent authority and interest on LAD to be serviced regularly etc. Further, it is stated in the said circular that granting excess beyond the permissible levels in SOD/LAD is an abuse of delegated authority which warrants action against erring officials and it should be the endevour of the branch head to adjust the outstandings from the deposit proceeds by giving due notice to the borrower if the excesses are not adjusted in time and if the account is running well and the excess is a temporary phenomenon, interest is to be charged as specified interest to be charge as specified in para No.4.8 and 4.7. However, charging such interest does not entitle the borrower to seek excesses beyond the value of the security and the same also does not absolve the delegatee from digression of the authority vested in him and appropriate action will be initiated.
75. In view of the above circular, granting excess beyond the permissible levels in SOD/LAD is an abuse of delegated authority which warrants action against erring officials. Hence, granting excess beyond the permissible 60 C.C.No.21483/2016 levels in SOD is not a regular banking activity as it is an abuse of delegated authority.
76. As per the prosecution case, the deceased accused K.R.Prasanna in conspiracy with accused No.1 also purchased cheques for the purpose of accommodate without security and sanction and the said acts of cheque purchase were not intimated to his controlling Office in F1 statements.
77. P.W.2 further states that Ex.P.19 is the consolidated statement of cheques purchased by the Union bank of India pertaining to the SOD account of M/s Apsis Technologies Pvt. Ltd.
78. Ex.P.19 is the certificate issued by the P.W.2. It reveals that the details of realization/adjustments made in respect to cheques purchased by Union bank of India, B.V.K. Iyengar Road branch in the SOD account of M/s Apsis Technologies Pvt. Ltd., wherein it is mentioned that 2 cheques purchased on 27.12.2007 and 1 cheque purchased on 18.03.2008 and 1 cheque purchased on 27.03.2008 and 1 cheque purchased on 05.04.2008 and 1 cheque purchased on 27.06.2008 and 2 cheques purchased on 10.11.2008 and 1 cheque purchased on 23.01.2009 and 2 cheques purchased on 09.02.2009 by the Union bank of India and out of them 61 C.C.No.21483/2016 5 cheques realized from service branch, Pune and the cheque bearing No.97413 dated 27.06.2008 was dishonored and debited to Apsis SOD account and 2 cheques realized by way of Demand Drafts and two cheques realized from sundry department bills and the cheque No.13250 and 13249 both dated 09.02.2009 were dishonored and debited to SOD account of Apsis by creating overdraft.
79. On perusal of the Ex.P.18 (h) statement of accounts and Ex.P.19 certificate in respect to cheque purchase by the Union bank Of India, it reveals that on 27.12.2007an amount of Rs.4,86,319/- credited to said account. As per Ex.P.19 certificate, the said amount credited in respect to purchase of cheuqe bearing No.662508, CP No.CPD 9607 dated 27.12.2007. As per Ex.P.18 (h) statement of account the said amount credited in respect to bill No.39530CPD0009607.
80. On perusal of the Ex.P.18 (h) statement of accounts and Ex.P.19 certificate in respect to cheque purchase by the Union bank Of India, it reveals that on 27.12.2007an amount of Rs.4,14,644/- credited to said account. As per Ex.P.19 certificate, the said amount credited in respect to purchase of cheuqe bearing No.662509, CP No.CPD 9707 dated 27.12.2007. As per 62 C.C.No.21483/2016 Ex.P.18 (h) statement of account the said amount credited in respect to bill No.39530CPD0009707.
81. On perusal of the Ex.P.18 (h) statement of accounts and Ex.P.19 certificate in respect to cheque purchase by the Union bank Of India, it reveals that on 18.03.2008 an amount of Rs.6,98.000/- credited to said account. As per Ex.P.19 certificate, the said amount credited in respect to purchase of cheuqe bearing No.397375, CP No.CPD 3608 dated 18.03.2008. As per Ex.P.18 (h) statement of account the said amount credited in respect to bill No.39530CPD0003608.
82. On perusal of the Ex.P.18 (h) statement of accounts and Ex.P.19 certificate in respect to cheque purchase by the Union bank Of India, it reveals that on 27.03.2008 an amount of Rs.6,98,000/- credited to said account. As per Ex.P.19 certificate, the said amount credited in respect to purchase of cheuqe bearing No.697377, CP No.CPD 3908 dated 27.03.2008. As per Ex.P.18 (h) statement of account the said amount credited in respect to bill No.39530CPD0003908.
83. On perusal of the Ex.P.18 (h) statement of accounts and Ex.P.19 certificate in respect to cheque purchase by the Union bank Of India, it reveals that on 05.04.2008 an amount of Rs.6,98,000/- credited to said 63 C.C.No.21483/2016 account. As per Ex.P.19 certificate, the said amount credited in respect to purchase of cheuqe bearing No.697379, CP No.CPD 4608 dated 05.04.2008. As per Ex.P.18 (h) statement of account the said amount credited in respect to bill No.39530CPD0004608.
84. On perusal of the Ex.P.18 (h) statement of accounts and Ex.P.19 certificate in respect to cheque purchase by the Union bank Of India, it reveals that on 27.06.2008 an amount of Rs.30,65,435/- credited to said account. As per Ex.P.19 certificate, the said amount credited in respect to purchase of cheuqe bearing No.97413, CP No.CPD 7308 dated 27.06.2008. As per Ex.P.18 (h) statement of account the said amount credited in respect to bill No.39530CPD0007308.
85. On perusal of the Ex.P.18 (h) statement of accounts and Ex.P.19 certificate in respect to cheque purchase by the Union bank Of India, it reveals that on 10.11.2008 an amount of Rs.5,00,000/- credited to said account. As per Ex.P.19 certificate, the said amount credited in respect to purchase of cheuqe bearing No.228232, CP No.CPD 9608 dated 10.11.2008. As per Ex.P.18 (h) statement of account the said amount credited in respect to bill No.CPD0009608/228232.
64 C.C.No.21483/201686. On perusal of the Ex.P.18 (h) statement of accounts and Ex.P.19 certificate in respect to cheque purchase by the Union bank Of India, it reveals that on 10.11.2008 an amount of Rs.7,00,000/- credited to said account. As per Ex.P.19 certificate, the said amount credited in respect to purchase of cheuqe bearing No.228233, CP No.CPD 9708 dated 10.11.2008. As per Ex.P.18 (h) statement of account the said amount credited in respect to bill No.CPD0009708/228233.
87. On perusal of the Ex.P.18 (h) statement of accounts and Ex.P.19 certificate in respect to cheque purchase by the Union bank Of India, it reveals that on 23.01.2009 an amount of Rs.1,80,000/- credited to said account. As per Ex.P.19 certificate, the said amount credited in respect to purchase of cheuqe bearing No.721447, CP No.CPD 609 dated 23.01.2009. As per Ex.P.18 (h) statement of account the said amount credited in respect to bill No.CPD609/721447.
88. On perusal of the Ex.P.18 (h) statement of accounts and Ex.P.19 certificate in respect to cheque purchase by the Union bank Of India, it reveals that on 09.02.2009 an amount of Rs.14,00,000/- credited to said account. As per Ex.P.19 certificate, the said amount credited in respect to purchase of cheuqe bearing No.13250, CP No.CPD 2309 dated 09.02.2009. As per 65 C.C.No.21483/2016 Ex.P.18 (h) statement of account the said amount credited in respect to bill No.CPD0002309/13250.
89. On perusal of the Ex.P.18 (h) statement of accounts and Ex.P.19 certificate in respect to cheque purchase by the Union bank Of India, it reveals that on 09.02.2009 an amount of Rs.10,75,000/- credited to said account. As per Ex.P.19 certificate, the said amount credited in respect to purchase of cheuqe bearing No.13249, CP No.CPD 2209 dated 09.02.2009. As per Ex.P.18 (h) statement of account the said amount credited in respect to bill No.CPD0002209/13249.
90. Ex.P.19 and 18 (h) clearly shows that cheques were purchased in the SOD account of M/s Apsis Technologies Pvt. Ltd., As per the prosecution case the cheques were purchased in the said SOD account beyond the delegated powers of the deceased accused K.R. Prasanna for the purpose of accommodation.
91. C.W.4/P.W.4 Sri. B. Suresh Rao the then accountant deposed that on the instructions of K.R.Prasanna he prepared the debit vouchers available in Ex.P.39 and on various occasions even though the cheques were presented subsequently, on the instruction of Branch Manager he prepared the debit vouchers and debited the account of M/s Apsis Technologies Pvt. Ltd., 66 C.C.No.21483/2016
92. C.W.5/P.W.5 Sri. Ashok Kumar Barua the then Asst. Manager of Union bank of India deposed in his evidence that he has cleared maximum cheques out of Ex.P.39 and while clearing cheques, he came to know by going through the system what is the limit sanctioned and what is the available security. He identified Ex.P.39
(a) cheque and deposed that he cleared the said cheque bearing No.483314 dated 13.12.2007 and the said account already there was TOD balance of Rs.1,10,62,487/- as on 31.12.2007. He further states that when the party presents the cheque for discounting, then they have to take it to the Branch Manager and after his approval and signature, they have to discounting it and in this account cheques also purchased after taking approval of the Branch Manager and the passing of cheques and discounting of cheques are revealing in the statement of account.
93. Ex.P.69 is the details of funds transferred between connected accounts of Apsis Group of account No. 395304010032110. It reveals that funds transferred to the group accounts i.e. Deejay Technologies, Jhanavi Enterprises, Apsis Technologies, L. Madhu (accused No.1), Aaura Data Networks, Suchitra Madhu, Express Technologies, Jasbir Collection, Gift Express since 16.11.2007 to 09.02.2009 by adjusting the OD and 67 C.C.No.21483/2016 reducing the OD etc. and further funds also transferred from these accounts to the account of M/s Apsis Technologies Pvt. Ltd.
94. As per the above cited decision of Hon'ble Supreme Court in S.V.L. Murthy Vs. State represented by CBI, Hyderabad, allowing of cheque discounting facility by bank officials to customers of Bank, without any criminal intent being proved, did not amount to commission of offence, particularly as facility allowed was not contrary to RBI Guidelines. Instant case, there is evidence on record to shows that excess were allowed and cheques were purchased in the SOD account of M/s Apsis Technologies Pvt. Ltd., in contrary to the circulars issued by the Union bank of India.
95. In view of the discussion made above, this Court is of the opinion that the prosecution has proved beyond reasonable doubt that the deceased accused K.R.Prasanna in conspiracy with accused No.1 had allowed excesses over the sanctioned limits continuously in the SOD account No.395304010032110 without any security and power and also purchased cheques beyond his delegated powers for the purpose of accommodation with dishonest intention and subsequently the said account became NPA and could not recover the excess 68 C.C.No.21483/2016 and other facilities which were allowed by the deceased accused K.R.Prasanna.
96. As per the prosecution case, the deceased K.R.Prasanna in conspiracy with accused No.1 had allowed Temporary Overdraft Facilities in the current account No.395301010036326 of M/s Apsis Technologies Pvt. Ltd., with Union bank of India with dishonest intention and beyond his delegated powers and without sanction and security and also purchased the cheques on 2 occasions beyond his delegated powers for the purpose of accommodation without any security and sanction and also not intimated the purchase of cheque in F1 statement.
97. P.W.2 Sri. M.R.Gopalakrishna the then Branch Manager, Union Bank of India, B.V.K. Iyengar Road, Bangalore deposed before the Court that the accused No.1 Managing Director of M/s Apsis Technologies Pvt. Ltd., was the authorized person to operate the current account and also identified Ex.P.22 file. He further deposed that as per Ex.P.22 (a) statement of account, no facility is sanctioned in that account, but without having any facility, they have availed TOD facilities of Rs.10,90,090.93 on 07.08.2007 and Rs.2,02,921/- on 13.08.2007 and again on the same day 2 cheques for Rs.10,66,994/- and Rs.1,00,000/- were 69 C.C.No.21483/2016 purchased creating overdraft of Rs.11,47,921.93 and to adjust the said overdrafts, 3 credits have been transferred from different accounts. Further he states that on 22.08.2007 the account debited with Rs.15 lakhs creating over draft of Rs.15,33,005.93 on the same day and on 04.09.2007 to 10.09.2007 the account is continuously on debit and to adjust this debit balance one cheque for Rs.34,05,598/- is credited and from 17.09.2007 to 02.10.2007 passing nearly 20 cheques aggregating TOD Rs.47,55,494.26 is allowed. He further states that from 15.10.2007 to 26.12.2007 many cheques have been passed creating maximum TOD of Rs.49,20,953.64 and this is adjusted by transferring the account of M/s Deejay Technologies Pvt. Ltd., and from SOD account of M/s Apsis Technologies Pvt. Ltd. He further states that on 02.01.2008 maximum over draft is Rs.8,05,403.24 and on 09.01.2008 and 10.01.2008 maximum TOD allowed is Rs.9,69,670.66 and on 22.01.2008 maximum TOD allowed is Rs.16,50,979.44 and on the other days small amounts have been taken as TODs. He further states that through this account without having the sanction of TOD facility, they have taken nearly Rs.93 - 94 lakhs as TODs.
98. P.W.2 further states that, Ex.P.22 (b) is the another account pertaining to M/s Apsis Technologies 70 C.C.No.21483/2016 Pvt. Ltd., and in this account without having any sanction of TOD facility from 01.12.2008 to 22.12.2008 several cheques have been passed creating maximum TOD of Rs.55,05,058/- and from 28.01.2009 to 01.02.2009 maximum TOD allowed is Rs.19,94,976.16 and from 06.02.2009 to 13.02.2009 four cheques have been passed creating TOD of Rs.27,24,093/- and in this account without having the sanction of TOD facility nearly Rs.55 lakhs has been allowed as TOD and on 10.10.2009 maximum debit balance is Rs.26,08,026.60. He further states that apart from allowing TOD on 23.01.2009, three cheques have been purchased for Rs.6 lakhs, 4 lakhs and 5 lakhs and on 24.01.2009 one more cheque for Rs.14 lakhs has been purchased.
99. P.W.2 further deposed that Ex.P.44 is the consolidated statement along with certificate pertaining to M/s Apsis Technologies Pvt. Ltd., and Ex.P.45 is 22 cheques and 15 vouchers pertaining to M/s Apsis Technologies Pvt. Ltd., and on perusal of the consolidated statement Ex.P.44, it is clear that the cheques of Ex.P.45 have been drawn by M/s Apsis Technologies Pvt. Ltd., and they have been issued to various parties including M/s Jhanavi Enterprises, M/s Deejay Technologies Pvt. Ltd., M/s Jasbir Collections, M/s Aaura Data Net Works Pvt. Ltd., M/s Express 71 C.C.No.21483/2016 Technology, M/s Mega Electricals Pvt. Ltd., L. Madhu and others.
100. P.W.2 further states that Ex.P.54 is the consolidated statement along with certificate pertaining to current account of M/s Apsis Technologies Pvt. Ltd., and Ex.P.55 is 70 cheques and 23 vouchers pertaining to M/s Apsis Technologies Pvt. Ltd., and on perusal of the consolidated statement Ex.P.54, it is clear that the cheques of Ex.P.55 have been drawn by M/s Apsis Technologies Pvt. Ltd., and they have been issued to various parties including M/s Deejay Technologies Pvt. Ltd., M/s Jasbir Collections, Smt. Suchitra Madhu, M/s Aaura Data Net Works Pvt. Ltd. and others.
101. As per the prosecution case, deceased accused K.R.Prasanna with dishonest intention allowed temporary overdraft facility in the current account No.395301010036326. In Ex.P.22 (b) customer account ledger report it is mentioned that on 01.12.2008 TOD of Rs.41,24,040/-, on 02.02.2009 TOD of Rs.22,000/-, on 02.12.2008 TOD of Rs.34,39,877/-, on 06.02.2009 TOD of Rs.17,05,967/-, on 11.12.2008 TOD of Rs.1,25,000/-, on 12.02.2009 TOD of Rs.10,08,900/-, on 13.02.2009 TOD of Rs.9,225/-, on 22.12.2008 TOD of Rs.12,56,018/-, on 24.01.2009 TOD of Rs.13,99,712/-, on 24.01.2009 TOD of Rs.,4,032/-, on 72 C.C.No.21483/2016 27.12.2008 TOD of Rs.1,284/-, on 28.01.2009 TOD of Rs.19,39,575/-, on 28.02.2009 TOD of Rs.24,783/-, on 31.01.2009 TOD of Rs.33,401/-, on 31,03.2009 TOD of Rs.37,355/- were allowed in the said account without any drawing power. The entries in the Ex.P.22 (b) statement of account and ledger report clearly shows that temporary overdrafts were allowed in the said account by the deceased accused K.R.Prasanna beyond his delegated powers and there was outstanding amount of Rs.26,08,026/- in this account.
102. Ex.P.89 is the details of funds transferred between connected accounts of Apsis Group of account No.395301010036326. It reveals that funds transferred to the group accounts i.e. Deejay Technologies, Gift Express, Express Technologies, Jasbir Collection, Jhanavi Enterprises, Apsis Technologies. L. Madhu, Aaura Data Networks, Suchitra Madhu by adjusting OD and reducing OD etc. and further funds also transferred from these accounts to the account of M/s Apsis Technologies Pvt. Ltd.
103. Ex.P.22 is the account opening form and other relevant document in respect to M/s Apsis Technologies Pvt. Ltd., held with Union bank of India in current account No.395301010036127. The resolution copy reveals that accused No.l was the Managing Director of 73 C.C.No.21483/2016 the said company and he was authorized to avail loan and credit facilities sanctioned to the company by the Union bank of India. Ex.P.22 (a) is the account statement of M/s Apsis Technologies Pvt. Ltd., in respect to CAGEN account No.395301010036127. Ex.P.22(b) is the account statement for the period from 25.07.2008 to 30.12.2009. and customer account ledger report for the period from 01.04.2007 to 31.03.2009 of M/s Apsis Technologies Pvt. Ltd., in respect to UCCA1 account No.395301010036326.
104. Ex.P.88 is the Instruction Circular No.7550 dated 8.12.2006 in respect to introduction of a new current account Union Classic Current Account. It reveals that, clarifications are given to the branches in respect to maintenance of UCCA by the customer availing CC facility wherein it states that in the event of UCCA holder, desiring to avail running account credit facilities such as cash credit/secured overdraft/packing credit etc branches may ensure that the customer, under such circumstances is allowed to maintain UCCA as a dummy account for the sake of keeping the minimum required float funds with the branch and at the same time, cheque operations are allowed only in the cash credit account and in other words, all trade related transactions would continue to be routed through the 74 C.C.No.21483/2016 cash credit/secured over draft/packing credit account, as the case may be and the UCCA would remain as non- cheque operated account and in case the customer is seen requiring balances in UCCA to be transferred to his regular account,the same can be done by auto sweep, e- Banking or even by instructing the bank without resorting the cheque transactions.
105. In view of the above circular, if UCCA holder desire to avail running account credit facilities is allowed to maintain the UCCA as a dummy account for the sake of keeping the minimum required float funds with the branch and at the same time, cheque operations are allowed only in the cash credit account. Further, all trade related transaction would continue to be routed through cash credit/secured overdraft/packing credit account and the UCCA would remain as non cheque operated account.
106. Instant case, accused No.1 being Managing Director of M/s Apsis Technologies Pvt. Ltd., had opened CAGEN account No.395301010036127 in the name of company and also maintained UCCA1 account No.395301010036326 in the name of company. In view of the above circular, UCCA account is a dummy account and it is non cheque operated account.
75 C.C.No.21483/2016107. Ex.P.22 (b) statement of account in respect to UCCA1 account No.395301010036326 reveals that cheques were purchased since 21.11.2008 to till 12.02.2009 in the said account.
108. Ex.P.44 is the details of officials who have entered/posted/verified the cheques/vouchers in the UCCA1 account No.395301010036326 of M/s Apsis Technologies Pvt. Ltd., maintained with Union bank of India. Further, it reveals that the deceased accused K.R.Prasanna has posted and verified the 16 cheques out of 22 cheques. The details of cheque number, date, amount credit voucher also mentioned in Ex.P.44.
109. Ex.P.45 is the 22 cheques and 15 vouchers pertaining to the UCCA1 account No.395301010036326 of M/s Apsis Technologies Pvt. Ltd., and the cheques have been issued to various parties including M/s Jhanavi Enterprises, M/s Deejay Technologies, M/s Aaura Data Networks Pvt. Ltd., M/s Gift Express, M/s Express Technologies, M/s Mega Electricals Pvt. Ltd., Sri. L. Madhu.
110. On perusal of the Ex.P.22 (b) statement of account in respect to UCCA1 account No.395301010036326, Ex.P.44 certificate in respect to details of officials who have entered/posted/verified the 76 C.C.No.21483/2016 cheques/vouchers in the account No.395301010036326 and Ex.P.45 cheques and vouchers issued by the accused No.1 in respect to account No.395301010036326, it reveals that the cheque bearing No.422101 dated 21.11.2008 for Rs.6,50,000/-, cheque bearing No.422105 dated 21.11.2008 for Rs.5,15,000/-, cheque bearing No.422106 dated 21.11.2008 for Rs.11,20,000/-,cheque bearing No.422107 dated 21.11.2008 for Rs.1,80,000/-,cheque bearing No.422102 dated 21.11.2008 for Rs.2,05,000/-, cheque bearing No.422104 dated 21.11.2008 for Rs.6,25,000/-, cheque bearing No.422103 dated 21.11.2008 for Rs.50,000/-, cheque bearing No.422108 dated 21.11.2008 for Rs.17,00,000/-, cheque bearing No.422109 dated 24.11.2008 for Rs.22,48,032/-, cheque bearing No.422110 dated 30.11.2008 for Rs.23,07,763/-, cheque bearing No.422111 dated 01.12.2008 for Rs.18,71,243/-, cheque bearing No.422113 dated 22.10.2008 for Rs.13,88,361/-, cheque bearing No.422112 dated 16.10.2008 for Rs.20,51,496/-, cheque bearing No.422119 dated 11.12.2008 for Rs.1,10,000/-, cheque bearing No.422114 dated 15.12.2008 for Rs.12,56,018/-, cheque bearing No.422122 dated 24.01.2009 for Rs.11,00,000/-, cheque bearing No.422121 dated 24.01.2009 for Rs.3,00,000/-, cheque bearing 77 C.C.No.21483/2016 No.422124 dated 28.01.2009 for Rs.50,00,000/-, cheque bearing No.422123 dated 28.01.2009 for Rs.70,00,000/-, cheque bearing No.073102 dated 05.02.2009 for Rs.7,50,000/-, cheque bearing No.073105 dated 06.02.2009 for Rs.17,01,816/- cheque bearing No.073107 dated 11.02.2009 for Rs.10,08,900/-were issued by accused No.1.
111. C.W.2/P.W.3 in his evidence states that, as per Ex.P.22 there was excesses in both account including cheque purchase and temporary overdrafts and excesses given therein was not ratified by the Nodal Office.
112. C.W.4/P.W.4 in his evidence deposed that in the account No.101-36326 and 101-36127 of M/s Apsis Technologies Pvt. Ltd., temporary overdrafts were given on the instructions of the Manager K.R.Prasanna and debited the account.
113. C.W.7/P.W.7 in his evidence deposed that in case, the branches allowed excess over sanction limit or SODs or TODs or CODs such account have to be reported in a fortnightly F1 statements to the Regional Office asking for ratification or confirmation.
114. C.W.12/P.W.12 - Sri. R. Bala Barathi the then Asst. Manager Union bank of India deposed in his 78 C.C.No.21483/2016 evidence that he entered the status of cheques in respect to account pertaining to M/s Apsis Technologies Pvt. Ltd., M/s Deejay Technologies, M/s Jhanavi Enterprises and M/s Aaura Data Networks Pvt. Ltd. and others and then he came to know that there were no balances in order to get cheques passed and after entering the status of cheques, he brought the balance status of these accounts to the notice of the branch manager K.R.Prasanna.
115. C.W.15/P.W.13 - Sri. N. Stanley Moses the then clerk of Union bank of India deposed that after receiving cheques pertaining to accounts of M/s Apsis Technologies Pvt. Ltd., M/s Jhanavi Enterprises, M/s Aaura Data Networks Pvt. Ltd., etc., he entered the details of status of cheques in the computer system and most of the time there were debit balances in those accounts.
116. C.W.18/P.W.15 - Sri. V. Sheshadri the then Chief Manager deposed that he received Ex.P.31 fortnightly F1 statements from the B.V.K. Iyengar Road branch seeking ratification of excesses given over sanctioning limit pertaining to M/s Apsis Technologies Pvt. Ltd., M/s Deejay Technologies, M/s Aaura Data Networks Pvt. Ltd., and accused No.1 etc. but he did not 79 C.C.No.21483/2016 confirm the branch actions and asked the branch to recover the excess immediately.
117. Ex.P.31 statement of excess submitted to the Regional Office it reveals that in the Union Classic CD-1 account No.395301010036326 of M/s Apsis Technologies Pvt. Ltd., the rectangle symbol is mentioned in respect to allowing TOD on 28.01.2009, 31.01.2009, 02.02.2009, 06.02.2009, 12.02.2009, 13.02.2009 and 28.02.2009. This document clearly shows that the TOD allowed in the above said Union Classic account were not ratified by the Regional Office.
118. It is elicited in the cross-examination of P.W.3 by the Ld. Counsel for the accused No.3 that availing TOD, OD, cheque purchase, bill discount facilities are the incidental to the current account holder. It is pertinent to note that as per above discussion, the UCCA1 account No.395301010036326 is non-cheque operated account and it is a dummy account as per the Ex.P.88 circular. But, the Branch Manager has allowed TOD facility and purchased the cheque in this UCCA1 account No.395301010036326 beyond his delegated power in violation of the circular.
119. As per above circular UCCA account is non- cheque operated account, but the deceased accused K.R. 80 C.C.No.21483/2016 Prasanna has purchased the cheque in this account beyond his delegated power for the purpose of accommodation in violation of the circular issued by the Union bank of India.
120. As per the above cited decision of Hon'ble Supreme Court in S.V.L. Murthy Vs. State represented by CBI, Hyderabad, allowing of cheque discounting facility by bank officials to customers of Bank, without any criminal intent being proved, did not amount to commission of offence, particularly as facility allowed was not contrary to RBI Guidelines. Instant case, there is evidence on record to shows that temporary overdrafts facility was allowed and cheques were purchased in the UCCA1 account No.395301010036326 of M/s Apsis Technologies Pvt. Ltd., in contrary to the circulars issued by the Union bank of India.
121. In view of the discussion made above, this Court is of the opinion that the prosecution has proved beyond reasonable doubt that the deceased accused K.R.Prasanna in conspiracy with accused No.1 had allowed temporary overdraft facility without any security and power and also purchased cheques beyond his delegated powers for the purpose of accommodation in UCCA1 account No.395301010036326 with dishonest intention and subsequently the said account became 81 C.C.No.21483/2016 NPA and it caused wrongful loss to the tune of Rs.26,08,026/- to the Union bank of India.
122. As per the prosecution case, the deceased K.R.Prasanna in conspiracy with accused No.1 had sanctioned SOD limit of Rs.18,00,000/- against the deposit of Rs.20,00,000/- lakhs with 10% margin in the SOD (deposit) account No.395304010032114 of M/s Deejay Technologies with Union bank of India on 26.04.2008 and the said limit was enhanced to Rs.113.40 lakhs on 14.08.2008 and to 123.20 lakhs on 23.12.2008 with dishonest intention without security and power.
123. The P.W.2 further states that Ex.P.21 the file of the SOD account of M/s Deejay Technologies shows that on 26.04.2008 an SOD limit of Rs.18 lakhs was sanctioned by the Sr. manager Sri K. R. Prasanna against the security of Rs.20 lakhs with 10% margin as per Ex.P.21 (a) and thereafter, on 14.05.2008 a requisition was received to enhance the SOD limit to Rs.81 lakhs against the security of Rs.90 lakhs as per Ex.P.21 (b). He further states that there is no document available in this regard and also there is no document obtaining ratification for sanctioning the SOD and for enhancing the SOD. He further states that on 12.06.2008 again the Sr. manager Sri K. R. Prasanna 82 C.C.No.21483/2016 enhanced the SOD limit to Rs.113.40 lakhs against the deposit of Rs.126 lakhs as per Ex.P.21 (c) sanction letter and thereafter, the same was ratified by the Regional Office on 14.08.2008 as per Ex.P.21 (d) and again on 03.11.2008 the SOD limit enhanced to Rs.123.20 lakhs against the security of Rs.126 lakhs as per Ex.P.21 (e) and thereafter, it was ratified by the Regional Office on 23.12.2008 as per Ex.P.21 (f). He further states that Ex.P.21 (g) the statement of SOD account reveals that on 04.06.2008 Rs.53.72 lakhs, on 10.10.2008 Rs.52.41 lakhs and on 28.02.2009 Rs.87.26 lakhs were in excess as against the sanctioned limits.
124. P.W.2 further states that Ex.P.46 is the consolidated statement along with certificate pertaining to M/s Deejay Technologies Pvt. Ltd., and Ex.P.47 is 46 cheques and 07 vouchers pertaining to M/s Deejay Technologies Pvt. Ltd., and on perusal of the consolidated statement Ex.P.46, it is clear that the cheques of Ex.P.47 have been drawn by M/s Deejay Technologies Pvt. Ltd., and they have been issued to various parties including M/s Jhanavi Enterprises, M/s Aaura Data Net Works Pvt. Ltd., M/s Express Technology and others.
83 C.C.No.21483/2016125. Ex.P.21 is the file of SOD account of M/s Deejay Technologies. Ex.P.21 (a) reveals that the bank has sanctioned SOD limit of Rs.18.00 lakhs to the said account and the Asst. Manager and Sr. Manager have signed the said documents. Ex.P.21 (b) is the application submitted by the proprietor of M/s Deejay Technologies to enhance the SOD limit to Rs.90.00 lakhs. Further a demand promissory note also executed by the accused No.1. Ex.P.21 (c) is the sanction note for SOD limit upto Rs.113.40 lakhs. Ex.P.21 (d) is the office note, it reveals that SOD limit upto Rs.113.40 lakhs was approved by the deputy General Manager. Further, accused No.1 also executed the demand promissory note. Ex.P.21 (e) is the sanction note for SOD limit upto Rs.123.20 lakhs and it signed by Credit Manager and the same is approved by Deputy General Manager as per Ex.P.21 (f). Ex.P.21 (g) is the statement of account and it reveals that there was outstanding of amount of Rs.73,65,507/- in the said account.
126. As per the above stated documents and also evidence of P.W.2, the SOD limit sanctioned and further enhanced to the SOD account of M/s Deejay Technologies against the security upto Rs.123.20 lakhs and same is ratified by the Regional Office as per Ex.P.21
(f).
84 C.C.No.21483/2016127. Ex.P.46 is the details of officials who have entered/posted/verified the cheques/vouchers in the account of M/s Deejay Technologies maintained with Union bank of India. Further, it reveals that the deceased accused K.R.Prasanna has posted and verified the 17 cheques and debit vouchers out of 50.
128. Ex.P.78 is the certificate issued by the P.W.2. It reveals that P.W.2 certified that the cheque bearing No.721448 for Rs.15.00 lakhs purchased by the Union bank of India in the account of M/s Deejay Technologies and the same is dishonored and debited to the said account by allowing excess in the account.
129. Ex.P-21(g) statement of accounts reveals that, Rs.26,93,378/- was the outstanding amount in the SOD account as on 14.05.2008. It is pertinent to note that, the SOD limit was enhanced upto to Rs.113.40 lakhs on 14.08.2008, but the outstanding balance was Rs.1,63,60,628/- as on 08.08.2008 in that account. Further, the account statement reveals that the outstanding balance exceeds Rs.1.00 crore since 31.05.2008 and Rs.1.50 crores since 10.07.2008 in the said SOD account. It is pertinent to note that SOD limit was enhanced upto Rs.113.40 lakhs on 14.08.2008, but prior to that Rs.1.50 crores SOD limit were allowed in the said account continuously. Further the SOD limit 85 C.C.No.21483/2016 was enhanced to Rs.123.20 lakhs on 23.12.2008, but the outstanding amount was above Rs.1,50,00,000/- since 14.08.2008 to 01.09.2008 and since 27.09.2008 to 10.10.2008 and since 13.10.2008 to 20.11.2008 and on 01.12.2008 onwards and more than Rs.2.00 crores was the outstanding amount since 09.02.2009 to 30.06.2009. Further on perusal of the said account statement, it clears that the deceased accused K.R Prasanna had allowed excess over the sanction of limits continuously in the said SOD account. As per Ex.P.21(g) statement of accounts, Rs.73,65,507/- was total outstanding amount in the said account.
130. Ex.P.31 statement of excess submitted to the Regional Office it reveals that in the SOD account of M/s Deejay Technologies Pvt. Ltd., the rectangle symbol is mentioned in respect to excesses on 15.06.2008, 30.06.2008, 15.08.2008, 31.08.2008, 30.09.2008, 31.10.2008, 15.11.2008, 04.12.2008, 31.01.2009, 15.02.2009. This document clearly shows that the excess allowed in the above said SOD account were not ratified by the Regional Office.
131. In Ex.P.21 the prosecution has placed the letter correspondences made between the Branch Manager and accused No.1 in respect to SOD account, wherein also the Branch Manager mentioned that excess 86 C.C.No.21483/2016 drawn in the SOD account and there was no provision to allow excess in the SOD account for that the accused No.1 states that he is expecting funds from sister concern accounts and he will arrange the funds. On 30.12.2008 a letter was issued by the accused No.1 wherein also he requested the time to adjust the excess in the SOD account. It appears that the Branch Manager K.R. Prasanna in conspiracy with accused No.1 has allowed the excess in the said SOD account continuously without any provision.
132. P.W.3 further states that the management of the bank from time to time issues instruction circulars governing the branches and administrative offices and as per Ex.P.5 Instruction circular the Sr. Manager of Scale - III cadre could sanction SOD against deposits with 25% margins upto limit of Rs.150 lakhs and the Sr. Manager Scale - III cadre could allow TOD of Rs.1 lakh and he was allowed to permit Rs.5 lakhs for cheques purchase and he was permitted to issue letter of guarantees Rs.20 lakhs with 100% cash margin and he was permitted to allow bill purchase of Rs.10 lakhs under secured nature and Rs.5 lakhs under unsecured nature.
133. Ex.P.5 instruction circular No.7495 dated 26.09.2006 issued in respect management of credit portfolio and delegation of loaning powers wherein 87 C.C.No.21483/2016 annexure-I speaks about revised scheme of delegation of loaning powers. It reveals that, the Branch Manager Scale-III is having a loaning powers to the extend of Rs.1.50 crores in respect to secured over draft/loan against banks term deposit receipts. As discussed above, the recitals of Ex.P.21 (g) statement of accounts shows that the Branch Manager extended the loaning facility above Rs.2.00 crores in SOD account. It clearly shows that, the branch manager Sri. K.R. Prasanna has allowed the excess beyond delegated powers.
134. As per Ex.P.9 instruction circular No.7805 dated 24.10.2007, normal margin for SOD/loan against deposits is 25% and maximum reduction in margin upto 5% only with approval of competent authority and interest on LAD to be serviced regularly etc. Further, it is stated in the said circular that granting excess beyond the permissible levels in SOD/LAD is an abuse of delegated authority which warrants action against erring officials and it should be the endevour of the branch head to adjust the outstandings from the deposit proceeds by giving due notice to the borrower if the excesses are not adjusted in time and if the account is running well and the excess is a temporary phenomenon, interest is to be charged as specified interest to be charge as specified in para No.4.8 and 4.7. However, charging 88 C.C.No.21483/2016 such interest does not entitle the borrower to seek excesses beyond the value of the security and the same also does not absolve the delegatee from digression of the authority vested in him and appropriate action will be initiated.
135. In view of the above circular, granting excess beyond the permissible levels in SOD/LAD is an abuse of delegated authority which warrants action against erring officials. Hence, granting excess beyond the permissible levels in SOD is not a regular banking activity as it is an abuse of delegated authority.
136. As per the above cited decision of Hon'ble Supreme Court in S.V.L. Murthy Vs. State represented by CBI, Hyderabad, allowing of cheque discounting facility by bank officials to customers of Bank, without any criminal intent being proved, did not amount to commission of offence, particularly as facility allowed was not contrary to RBI Guidelines. Instant case, there is evidence on record to shows that excess were allowed in the SOD account of M/s Deejay Technologies in contrary to the circulars issued by the Union bank of India.
137. In view of the discussion made above, this Court is of the opinion that the prosecution has proved beyond reasonable doubt that the deceased accused 89 C.C.No.21483/2016 K.R.Prasanna in conspiracy with accused No.1 had allowed excesses over the sanctioned limits continuously in the SOD account No.395304010032114 without any security and power with dishonest intention and subsequently the said account became NPA and could not recover the excess allowed by the deceased accused K.R.Prasanna.
138. As per the prosecution case, the deceased K.R.Prasanna in conspiracy with accused No.1 had sanctioned SOD limit of Rs.41,85,000/- against the deposit value of Rs.46,50,000/- with 10% margin in the SOD (deposit) account No.395304010032113 of M/s Jhanavi Enterprises with Union bank of India and the said limit was enhanced to Rs.44.00 lakhs on 08.12.2008 and deceased accused K.R.Prasanna had allowed indiscriminate excesses over the sanctioned limit with dishonest intention without security and power.
139. P.W.2 further states that Ex.P.20 is the file of the SOD account of M/s Jhanavi Enterprises and as per Ex.P.20 (a), on 15.02.2008 a SOD limit of Rs.41.85 lakhs was sanctioned by the Sr. Manager Sri K. R. Prasanna against the security of Rs.46.50 lakhs with 10% margin and thereafter, it was ratified by the Regional Office by the letter dated 17.04.2008 as per Ex.P.20 (b). Further he states that on 08.12.2008 the SOD limit was 90 C.C.No.21483/2016 enhanced to Rs.44.00 lakhs against the security of Rs.48.93 lakhs with 10% margin by then the Sr. Manager Sri K. R. Prasanna as per Ex.P.20 (c) and thereafter, it was ratified by a letter dated 13.12.2008 as per Ex.P.20 (d) and though there was limit to sanction the SOD limit, the then Sr. Manager Sri K. R. Prasanna sanctioned in excess and that on 10.11.2008 Rs.53.00 lakhs was sanctioned in excess and on 09.02.2009 there was excess sanction of Rs.83.10 lakhs.
140. P.W.2 further states that Ex.P.48 is the consolidated statement along with certificate pertaining to M/s Jhanavi Enterprises., and Ex.P.49 is 32 cheques and 09 vouchers pertaining to M/s Jhanavi Enterprises and on perusal of the consolidated statement Ex.P.48, it is clear that the cheques of Ex.P.49 have been drawn by M/s Jhanavi Enterprises and they have been issued to various parties including M/s Aaura Data Net Works Pvt. Ltd., M/s Apsis Technologies Pvt. Ltd., M/s Deejay Technologies Pvt. Ltd., Smt. Suchitra Madhu, L. Madhu and others.
141. C.W.2/P.W.2 also deposed that in his evidence that, during the stages of enhancement and ratification in SOD account of M/s Jhanavi Enterprises Pvt. Ltd., huge excess were permitted by the branch and the 91 C.C.No.21483/2016 excess were not ratified by the Nodal Regional Office and on 18.03.2009, there was excesses Rs.84.15 lakhs.
142. C.W.4/P.W.4 also deposed in his evidence that the statement of accounts in respect to M/s Jhanavi Enterprises reveals that on various occasions excesses amount were allowed against the deposits and on the instructions of Branch Manager K.R.Prasanna, the debit vouchers available in Ex.P.49 have been prepared and debited the account of M/s Jhanavi Enterprises in its favour as directed by the account holder.
143. C.W.7/P.W.7 in his evidence deposed that in Ex.P.31 almost all the excesses given to M/s Apsis group of account have not been confirmed.
144. C.W.8/P.W.8 Sri. S.S.Ravi, Sr. Manager, Union bank of India deposed that He furnished Ex.P.99 daily valuation reports from June 2007 to February 2009 and they are reflecting inward clearing cheques wherein the accounts of the balance are insufficient. He further states that he issued the Ex.P.100 certificates, certifying that as per available bank records no written request were issued by the account holders allowing excesses, TODs pertaining to the account of L. Madhu, M/s Apasis Technologies, M/s Jhanavi Enterprises, M/s Aaura data Networks, M/s Deejay Technologies, M/s Gift Express, 92 C.C.No.21483/2016 M/s Express Technologies, M/s Jasbir collections and Mrs. Suchitra Madhu.
145. C.W.15/P.W.13 also deposed that he found that most of the times there were debit balances in the accounts of M/s Jhanavi Enterprises Etc.
146. C.W.18/P.W.15 also deposed that he did not confirm the branch actions in Ex.P.13 F1 statement.
147. Ex.P.20 is the file of SOD account of M/s Jhanavi Enterprises. Ex.P.20 (a) is the sanction note for SOD against deposit and it reveals that the Sr. Manager has sanctioned SOD limit of Rs.41.85 lakhs to M/s Jhanavi Enterprises and the same is approved by the Deputy General Manager as per Ex.P.20 (b). Ex.P.20 (c) is the sanction note for SOD against deposit and it reveals that SOD limit of Rs.41.85 lakh was ratified by the DGM in the said account. Ex.P.20 (d) is the sanction of loan against deposit at reduced margin of 10% and it reveals that DGM has approved to enhance the sanction limit upto Rs.44.00 lakhs. Further accused No.1 being the kartha of HUF has executed the demand promissory note and also filed the application for sanctioning of SOD limit.
93 C.C.No.21483/2016148. Ex.P.48 is the details of officials who have entered/posted/verified the cheques/vouchers in the SOD account of M/s Jhanavi Enterprises maintained with Union bank of India. Further, it reveals that the deceased accused K.R.Prasanna has posted and verified the 13 cheques and debit vouchers out of 34. Ex.P.49 is the cheques and vouchers in respect to M/s Jhanavi Enterprises and it reveals that cheuqes were issued in favour of accused No.1, accused No.2, M/s Aaura Data Network, M/s Apsis Technologies Pvt., Ltd., M/s Deejay Technologies, M/s Jhanavi Enterprises in C.C. account.
149. P.W.2 further states that Ex.P.34 is the file containing the statement of account of M/s Jhanavi Enterprises and on perusal of the statement of account it is clear that no credit facility is sanctioned in this account, but from 06.12.2008 to 31.01.2009 they have availed TODs continuously and that on 31.01.2009 the maximum TOD allowed is Rs.22,81,176.52 and on the same day in order to adjust the debit balance two transfers have been made from the sisters concerned accounts bearing Nos.32113 an 32110 aggregating Rs.25 lakhs.
150. Ex.P.34 is the statement of account of M/s Jhanavi Enterprises in respect to current account 94 C.C.No.21483/2016 No.395301010036118 and it reveals that TOD of Rs.22,81,176/- was allowed in this account on 31.01.2009.
151. Ex.P.180 is the certificate issued by the P.W.2 that 2 cheques purchased by Union bank of India in the account No.395304010032113 of M/s Jhanavi Enterprises and the said cheques were realized by way of DD demand draft.
152. Ex.P.100 is the certificate issued by the P.W.8 and it reveals that one certificate in respect to M/s Jhanavi Enterprises shows that it is certified that as per their available bank records, no written request is received in the account No.395304010032113 of M/s Jhanavi Enterprises for allowing the excess. It is pertinent to note that the Ld. Counsel for the accused have objected to mark the said document, but it is not stated that for what purpose they are objecting to mark the document. This certificate issued by the P.W.8 and he himself identified the said document who is author of the document. The Ld. Counsel for the accused simply objected to mark the said document, but no reason assigned for objection at the time of marking and also not stated the reasons at the time of arguments also. Further, nothing has been elicited in the cross- examination of P.W.8 in respect to authenticity, 95 C.C.No.21483/2016 relevancy of Ex.P.100. Hence, there is no substance in the objection.
153. The account statement of SOD account No.395304010032113 of M/s Jhanavi Enterprises were marked along certificates as per Ex.P-100. The statement of accounts reveals that, Rs.67,98,845/- was the outstanding amount in the SOD account as on 03.03.2008. It is pertinent to note that, the SOD limit was sanctioned upto to Rs.41.85 lakhs on 15.02.2008, but the outstanding balance was Rs.67,98,845/- as on 03.03.2008 in that account. Further, the account statement reveals that the outstanding balance exceeds Rs.1.00 crore since 04.02.2009 and Rs.1.30 crores since 30.04.2009 in the said SOD account. It is pertinent to note that SOD limit was enhanced upto Rs.43.00 lakhs on 08.12.2008, but prior to that more than Rs.50.00 lakhs excess were allowed in the said account continuously. Further on perusal of the said account statement, it clears that the deceased accused K.R Prasanna had allowed excess over the sanctioned limits continuously in the said SOD account. As per Ex.P.100 statement of accounts, Rs.81,61,074/- was the outstanding amount in the SOD account as on 30.06.2009.
96 C.C.No.21483/2016154. Ex.P.31 statement of excess submitted to the Regional Office, it reveals that in the SOD account of M/s Jhanavi Enterprises the rectangle symbol is mentioned in respect to excesses on 30.04.2008, 15.06.2008, 30.06.2008, 15.08.2008, 31.08.2008, 30.09.2008, 15.10.2008, 15.11.2008, 30.11.2008, 31.01.2009, 15.02.2009, 28.02.2009. This document clearly shows that the excess allowed in the above said SOD account were not ratified by the Regional Office.
155. Ex.P.95 is the certificate issued by the Sr. Manager in respect to details of funds transfer between the account No.395304010032113 of M/s Jhanavi Enterprises and connected account of Apsis group of accounts. It reveals that, funds transferred from the M/s Apsis Technologies, M/s Auara Data Networks, M/s Deejay Technologies, M/s Express Technologies, M/s Gift Express, L. Madhu by reduction of OD and further funds transferred from this account to the M/s Apsis Technologies, M/s Auara Data Networks, M/s Jahanavi Enterprises, M/s Deejay Technologies, Suchitra Madhu etc.
156. P.W.3 further states that the management of the bank from time to time issues instruction circulars governing the branches and administrative offices and as 97 C.C.No.21483/2016 per Ex.P.5 Instruction circular the Sr. Manager of Scale - III cadre could sanction SOD against deposits with 25% margins upto limit of Rs.150 lakhs and the Sr. Manager Scale - III cadre could allow TOD of Rs.1 lakh and he was allowed to permit Rs.5 lakhs for cheques purchase and he was permitted to issue letter of guarantees Rs.20 lakhs with 100% cash margin and he was permitted to allow bill purchase of Rs.10 lakhs under secured nature and Rs.5 lakhs under unsecured nature.
157. Ex.P.5 instruction circular No.7495 dated 26.09.2006 issued in respect management of credit portfolio and delegation of loaning powers wherein annexure-I speaks about revised scheme of delegation of loaning powers. It reveals that, the Branch Manager Scale-III is having a loaning powers to the extend of Rs.1.50 crores in respect to secured over draft/loan against banks term deposit receipts. As discussed above, the recitals of Ex.P.100 statement of accounts shows that the Branch Manager exceeds the sanctioned limits in SOD account. It clearly shows that, the branch manager Sri. K.R. Prasanna has allowed the excess beyond delegated powers.
158. As per Ex.P.9 instruction circular No.7805 dated 24.10.2007, normal margin for SOD/loan against deposits is 25% and maximum reduction in margin upto 98 C.C.No.21483/2016 5% only with approval of competent authority and interest on LAD to be serviced regularly etc. Further, it is stated in the said circular that granting excess beyond the permissible levels in SOD/LAD is an abuse of delegated authority which warrants action against erring officials and it should be the endevour of the branch head to adjust the outstandings from the deposit proceeds by giving due notice to the borrower if the excesses are not adjusted in time and if the account is running well and the excess is a temporary phenomenon, interest is to be charged as specified interest to be charge as specified in para No.4.8 and 4.7. However, charging such interest does not entitle the borrower to seek excesses beyond the value of the security and the same also does not absolve the delegatee from digression of the authority vested in him and appropriate action will be initiated.
159. In view of the above circular, granting excess beyond the permissible levels in SOD/LAD is an abuse of delegated authority which warrants action against erring officials. Hence, granting excess beyond the permissible levels in SOD is not a regular banking activity as it is an abuse of delegated authority.
99 C.C.No.21483/2016160. As per the above cited decision of Hon'ble Supreme Court in S.V.L. Murthy Vs. State represented by CBI, Hyderabad, allowing of cheque discounting facility by bank officials to customers of Bank, without any criminal intent being proved, did not amount to commission of offence, particularly as facility allowed was not contrary to RBI Guidelines. Instant case, there is evidence on record to shows that excess were allowed in the SOD account of M/s Jhanavi Enterprises in contrary to the circulars issued by the Union bank of India.
161. In view of the discussion made above, this Court is of the opinion that the prosecution has proved beyond reasonable doubt that the deceased accused K.R.Prasanna in conspiracy with accused No.1 had allowed excesses over the sanctioned limits continuously in the SOD account No.395304010032113 without any security and power with dishonest intention and subsequently the said account became NPA and bank could not recover the excess allowed by the deceased accused K.R.Prasanna.
162. As per the prosecution case, the deceased K.R.Prasanna in conspiracy with accused No.1 had released the collateral security documents pledged in CCH account No.395305040050242 of M/s Jhanavi Enterprises to accused No.1 who is the proprietor of the 100 C.C.No.21483/2016 said concerned on 16.04.2008 and even after releasing the collateral security documents, instead of closing the account, he allowed the operation in the said account and on 09.02.2009 Temporary Overdraft of Rs.24,26,500/- was allowed in this account without any securities and powers with dishonest intention to cheat the bank.
163. P.W.2 further states that Ex.P.24 the file containing cash credit account of M/s Jhanavi Enterprises reveals that in this account cash credit limit of Rs.25 lakhs is sanctioned by the controlling office on 25.02.2007 as per Ex.P.24 (a) and on 20.06.2007 Madhu Lakshminarayana has given a letter to the bank asking to close the CC limit as per Ex.P.24 (b). He further states that, Ex.P.24 (c) the statement of account reveals that though the sanctioned cash credit limit is Rs.25 lakhs from 29.03.2006 to 03.04.2006 they have availed the cash credit exceeding the limit and they have availed the cash credit facility beyond the sanctioned limit on many occasions till withdrawing the facility and from 16.07.2007 to 13.07.2009 even the cash credit limit facility was withdrawn, they continued in availing the cash credit limit and on 08.03.2008 maximum TOD allowed is Rs.29,23,534.14 and on 13.07.2009 the outstanding debit balance is Rs.24,22,090.70.
101 C.C.No.21483/2016164. C.W.2/P.W.3 deposed in his evidence that the branch has released collateral securities in the CC hypothecation account of M/s Jhanavi Enterprises as requested by the party and allowed debit operation with extent of Rs.24.26 lakhs without canceling the limits of account.
165. C.W.4/P.W.4 in his evidence deposed that in the current account No.504-50242 of M/s Jhanavi Enterprises, the cash credit hypothecation limit of Rs.25.00 lakhs was allowed with margin of 20% on furnishing stock which was fully paid and insured and book debts not older than 90 days and in this account additional property was taken as security and on the letter of account holder on 20.06.2007 additional security was released and on 22.12.2008, the amount of Rs.25.00 lakhs was adjusted, subsequently on 09.02.2009 again the limit was opened for Rs.24,26,500/- though the additional security was released. He further identified Ex.P.59 (a) and (b) the cheque and voucher for debiting account for Rs.24,26,500/- and crediting to the account No.40132110 of M/s Apsis Technologies Pvt. Ltd.
166. Ex.P.24 is the file of cash credit account of M/s Jhanavi Enterprises and it reveals that the accused No.1 is the kartha of said HUF account and he availed 102 C.C.No.21483/2016 the cash credit limit of Rs.25.00 lakhs. Ex.P.24 (a) is the sanction advice in respect to sanction of Rs.25.00 lakhs cash credit limit. Ex.P.24 (b) is the letter dated 20.06.2007 issued by the accused No.1 to close the cash credit facility of Rs.25.00 lakhs. Further the copy of the documents ledger and memorandum reveals that accused No.1 has received all original documents which was deposited as security for advancing the amount to M/s Jhanavi Enterprises on 16.04.2008.
167. Ex.P.24 (c) is the statement of account. It reveals that on 09.02.2009 Temporary Overdraft of Rs.24,26,500/- was allowed and there was outstanding amount of Rs.24,22,090/- as on 13.07.2009. Ex.P.24 (b) clearly reveals that accused No.1 has issued the letter to close the CC facility extended by the Union bank of India and he received all original documents on 16.04.2008. But as per Ex.P.24 (c) statement of account in respect to said account reveals that the accused No.1 was operated the said account after 16.04.2008 also and also availed cash credit limit in the said account.
168. P.W.2 further states that Ex.P.58 is the consolidated statement along with certificate pertaining to current account of M/s Jhanavi Enterprises, Ex.P.59 is 33 cheques and 02 vouchers pertaining to M/s Jhanavi Entrerprises and on perusal of the consolidated 103 C.C.No.21483/2016 statement Ex.P.58, it is clear that the cheques of Ex.P.59 have been drawn by M/s Jhanavi Enterprises and they have been issued to various parties including M/s Apsis Technologies Pvt. Ltd., another account of M/s Jhanavi Enterprises.
169. Ex.P.58 is the details of officials who have entered/posted/verified the cheques/vouchers in the account of M/s Jhanavi Enterprises maintained with Union bank of India. Further, it reveals that the deceased accused K.R.Prasanna has posted and verified the 2 cheques out of 33. Ex.P.59 is the cheques and vouchers in respect to M/s Jhanavi Enterprises and it reveals that 1 cheuqe was issued in favour of another account of M/s Jhanavi Enterprises and Ex.P.59 (a) cheque was issued in favour of M/s Apsis Technologies Pvt. Ltd.
170. Ex.P.24 (b) clearly reveals that accused No.1 has issued the letter to close the CC facility extended by the Union bank of India and he received all original documents on 16.04.2008. But as per Ex.P.24 (c) statement of account in respect to said account reveals that the accused No.1 was operated the said account after 16.02.2008 also and also availed temporary overdraft facility in the said account.
104 C.C.No.21483/2016171. P.W.3 further states that the management of the bank from time to time issues instruction circulars governing the branches and administrative offices and as per Ex.P.5 Instruction circular the Sr. Manager of Scale - III cadre could sanction SOD against deposits with 25% margins upto limit of Rs.150 lakhs and the Sr. Manager Scale - III cadre could allow TOD of Rs.1 lakh and he was allowed to permit Rs.5 lakhs for cheques purchase and he was permitted to issue letter of guarantees Rs.20 lakhs with 100% cash margin and he was permitted to allow bill purchase of Rs.10 lakhs under secured nature and Rs.5 lakhs under unsecured nature.
172. In Ex.P.5 instruction circular No.7495 at 10.2 it is mentioned in annexure-I that the branch incharges are authorized to excess in FB/NFB, credit facilities, including a new line of credit, whose accounts are classified under Standard Assets for meeting urgent credit needs of purely temporary nature not exceeding 15 days and branch manager scale-III was authorized to sanction adhoc limits or grant of excess over limit Rs.10.00 lakhs. Further, in annexure-I at 8.1, it is mentioned that branch managers scale-III was authorized to allow the clean overdraft/TOD of Rs.1.00 lakh.
105 C.C.No.21483/2016173. As per Ex.P.5 instruction circular No.7495, at 1.4.24 - Overdraft facility can be allowed under the delegated authority to meet short term business needs and care will be taken to ensure that the accommodation granted does not become part of the borrower's working capital or does not finance the margin requirements in respect of sanctioned limits. To this end, it will be ensured that temporary overdraft is not allowed to run for a period of more than 15 days at a time.
174. On perusal of Ex.P.24 (c) statement of account, TOD of Rs.24,26,500/- was allowed to run for a period more than 15 days.
175. As per the above cited decision of Hon'ble Supreme Court in S.V.L. Murthy Vs. State represented by CBI, Hyderabad, allowing of cheque discounting facility by bank officials to customers of Bank, without any criminal intent being proved, did not amount to commission of offence, particularly as facility allowed was not contrary to RBI Guidelines. Instant case, there is evidence on record to shows that TOD was allowed in the CCH account of M/s Jhanavi Enterprises in contrary to the circulars issued by the Union bank of India.
106 C.C.No.21483/2016176. In view of the discussion made above, this Court is of the opinion that the prosecution has proved beyond reasonable doubt that the deceased accused K.R.Prasanna in conspiracy with accused No.1 had allowed temporary overdraft facility and operation of the said account in the said account after releasing collateral security documents in the CCH account No.395305040050242 without any security and power with dishonest intention and subsequently the said account became NPA and bank could not recover the excess allowed by the deceased accused K.R.Prasanna.
177. As per the prosecution case, the deceased K.R.Prasanna in conspiracy with accused No.1 had allowed Temporary Overdraft facilities between 26.11.2008 and 07.02.2009 with dishonest intention to cheat the bank and without any security and beyond his delegated powers in the current account No.395301010036322 of accused No.1 with Union bank of India and also purchased a cheque on 24.01.2009 for Rs.9,82,500/- in the said account for accommodation purpose.
178. C.W.3/P.W.2 further states that Ex.P.52 is the consolidated statement along with certificate pertaining to current account of Madhu Lakshminarayana and Ex.P.53 is 14 cheques and 02 vouchers pertaining to 107 C.C.No.21483/2016 Madhu Lakshminarayana and on perusal of the consolidated statement Ex.P.52, it is clear that the cheques of Ex.P.53 have been drawn by Madhu Lakshminarayana and they have been issued to various parties including M/s Deejay Technologies Pvt. Ltd., M/s Jasbir Collections, M/s Apsis Technologies Pvt. Ltd., M/s Aaura Data Net Works Pvt. Ltd. and others.
179. C.W.2/P.W.3 identified Ex.P.25 the file of S/B account and current account of Madhu Lakshminarayana and further he deposed that in that current account, TOD was allowed without there being any sanction and that on 18.03.2009 the outstanding in the current account was Rs.30.54 lakhs.
180. C.W.4/P.W.4 in his evidence deposed that Ex.P.25 file of SB account No.2019465 in the name of accused No.1 based on the said SB account, Union Classic Credit Account No.101-36322 has been opened and in the said Union Classic Credit Account, temporary overdrafts ought not to be given, but the said facility has been given on so many occasions as per Ex.P.25 (a) statement of accounts.
181. C.W.18/P.W.15 in his evidence deposed that after putup of F1 statement of B.V.K. Iyengar Road 108 C.C.No.21483/2016 branch pertaining to Mr. Madhu Lakshminarayana, they did not confirm the branch actions.
182. C.W.34/P.W.28 in his evidence deposed that during his tenure as Chief Manager, his scrutinized the F1 statement of Union bank of India, B.V.K. Iyengar Road branch, Bangalore and he did not ratify the excesses given beyond authority of the branch manager.
183. Ex.P.25 is the file in respect to saving account No.395301010036322 standing in the name of accused No.1. The statement of accounts marked as per Ex.P.25
(a) which reveals that it is a UCCA1 account standing in the name of accused No.1 and Temporary Overdraft facilities were allowed in this account on so many occasions and on 24.01.2009 a cheque bearing No.18739 for Rs.9,82,500/- was purchased by the Union bank of India and outstanding amount was Rs.30,53,565/- as on 13.07.2009. Further, customer account ledger report from 01.04.2007 to 31.03.2009 marked along with statement of accounts reveals the details of TOD given in this account. Further, in this document it is mentioned that Zero Drawing Power.
184. Ex.P.52 is the details of officials who have entered/posted/verified the cheques/vouchers in the account of accused No.1 maintained with Union bank of 109 C.C.No.21483/2016 India. Further, it reveals that the deceased accused K.R.Prasanna has posted and verified the 6 cheques out of 14. Ex.P.53 are the cheques and vouchers in respect to accused No.1 and it reveals that cheuqes were issued in favour of M/s Deejay Technologies, M/s Apsis Technologies, M/s Aaura Data Networks, M/s Jasbir Collection and R. Ramesh.
185. Ex.P.88 is the Instruction Circular No.7550 dated 8.12.2006 in respect to introduction of a new current account Union Classic Current Account. It reveals that, clarifications are given to the branches in respect to maintenance of UCCA by the customer availing CC facility wherein it states that in the event of UCCA holder, desiring to avail running account credit facilities such as cash credit/secured overdraft/packing credit etc branches may ensure that the customer, under such circumstances is allowed to maintain UCCA as a dummy account for the sake of keeping the minimum required float funds with the branch and at the same time, cheque operations are allowed only in the cash credit account and in other words, all trade related transactions would continue to be routed through the cash credit/secured over draft/packing credit account, as the case may be and the UCCA would remain as non- cheque operated account and in case the customer is 110 C.C.No.21483/2016 seen requiring balances in UCCA to be transferred to his regular account,the same can be done by auto sweep, e- Banking or even by instructing the bank without resorting the cheque transactions.
186. In view of the above circular, if UCCA holder desire to avail running account credit facilities is allowed to maintain the UCCA as a dummy account for the sake of keeping the minimum required float funds with the branch and at the same time, cheque operations are allowed only in the cash credit account. Further, all trade related transaction would continue to be routed through cash credit/secured overdraft/packing credit account and the UCCA would remain as non cheque operated account.
187. Instant case, accused No.1 had opened SB account No.395302010009465 in his name and also maintained UCCA1 account No.395301010036322 in his name . In view of the above circular, UCCA account is a dummy account and it is non cheque operated account.
188. Ex.P.31 statement of excess submitted to the Regional Office it reveals that in the Union Classic CD-1 account No.395301010036322 of accused No.1, the rectangle symbol is mentioned in respect to allowing TOD on 28.02.2009. This document clearly shows that 111 C.C.No.21483/2016 the TOD allowed in the above said Union Classic account were not ratified by the Regional Office.
189. It is elicited in the cross-examination of P.W.3 by the Ld. Counsel for the accused No.3 that availing TOD, OD, cheque purchase, bill discount facilities are the incidental to the current account holder. It is pertinent to note that as per above discussion, the UCCA1 account No.395301010036322 is non-cheque operated account and it is a dummy account as per the Ex.P.88 circular. But, the Branch Manager has allowed TOD facility and purchased the cheque in this UCCA1 account No.395301010036322 beyond his delegated power in violation of the circular.
190. As per above circular UCCA account is non- cheque operated account, but the deceased accused K.R. Prasanna has purchased the cheque in this account beyond his delegated power for the purpose of accommodation in violation of the circular issued by the Union bank of India.
191. As per the above cited decision of Hon'ble Supreme Court in S.V.L. Murthy Vs. State represented by CBI, Hyderabad, allowing of cheque discounting facility by bank officials to customers of Bank, without any criminal intent being proved, did not amount to 112 C.C.No.21483/2016 commission of offence, particularly as facility allowed was not contrary to RBI Guidelines. Instant case, there is evidence on record to shows that temporary overdrafts facility was allowed and cheque was purchased in the UCCA1 account No.395301010036322 of accused No.1 in contrary to the circulars issued by the Union bank of India.
192. In view of the discussion made above, this Court is of the opinion that the prosecution has proved beyond reasonable doubt that the deceased accused K.R.Prasanna in conspiracy with accused No.1 had allowed temporary overdraft facility without any security and power and also purchased cheque beyond his delegated powers for the purpose of accommodation in UCCA1 account No.395301010036322 with dishonest intention and subsequently the said account became NPA and it cause wrongful loss to the tune of Rs.30,53,565/- to the Union bank of India.
193. As per the prosecution case, the accused No.2 Smt. Suchithra Madhu had opened a current account No.395301010036293 in the name of M/s. Aaura Data Networks Pvt. Ltd., on 19.02.2008 and deceased Sri.K R Prasanna had allowed Temporary Over Drafts in this account between 26.02.2008 and 04.02.2009 beyond his delegated powers and without any security with 113 C.C.No.21483/2016 dishonest intention to cheat the bank and subsequently, this account became Non-Performing Asset and accused persons caused wrongful loss of Rs.22.18 Lakhs to the Union Bank of India.
194. P.W.2 Sri. M.R.Gopalkrishna states that Ex.P.33 is the file containing current account of M/s Aaura Data Net Works Pvt. Ltd., and it reveals that Smt.Suchitra Madhu is the authorized person to handle the account and Ex.P.33 (a) the statement of account shows that in this account also no credit facility is sanctioned, but from 26.02.2008 to 28.02.2009 many cheques have been passed and they have availed TODs and on 24.01.2009 the maximum TOD allowed is Rs.28,77,662.75 and on 30.06.2009 the outstanding amount is of Rs.22,18,627.75. P.W.2 further states that Ex.P.42 is the consolidated statement along with certificate pertaining to M/s Aaura Data Net Works Pvt. Ltd.,and Ex.P.43 is 63 cheques and 03 vouchers pertaining to M/s Aaura Data Net Works Pvt. Ltd., and on perusal of the consolidated statement Ex.P.42, it is clear that the cheques of Ex.P.43 have been drawn by M/s Aaura Data Net Works Pvt. Ltd., and they have been issued to various parties including L. Madhu, M/s Apsis Technologies Pvt. Ltd., another account of M/s Aaura Data Net Works Pvt. Ltd., and others.
114 C.C.No.21483/2016195. P.W.4 Sri. B.Suresh Rao identified the file Ex.P.33 of the current account No.101-36293 of M/s Aaura Data Networks Pvt., Ltd., maintained in B.V.K. Iyengar Road branch, Bengaluru and deposed that in this account, temporary over drafts were given on the instructions of the manager K. R. Prasanna and debited the account as per Ex.P.42 & Ex.P.43 the consolidated statement and cheques for debiting the account.
196. As discussed above, C.W.7/P.W.7, C.W.18/P.W.15, C.W.34/P.W.28 and C.W.60/P.W.47 in their evidence deposed about the excesses given beyond the authority of the Branch Manager were not ratified as per Ex.P.31 F1 statements.
197. As discussed above, C.W.12/P.W.12 and C.W.15/P.W.13 deposed that in their evidence deposed that there were no balance in the accounts of M/s Aaura Data Networks Pvt. Ltd., in order to get cheque passed.
198. P.W.23 Sri. A.S.V.N.S.Padmaraju identified Ex.P.42 the details of transactions and the cheque dated 20.01.2009 for an amount Rs.1,65,654/- favoring LVO - 015 and the cheque was drawn by M/s Aaura Data Networks and deposed that after entering the said cheque in the system, one Ashok Burua of B.V.K. Iyengar 115 C.C.No.21483/2016 Road branch has passed the cheque as there was insufficient fund in the account for automatic clearance.
199. P.W.6 Sri. Raghavan identified Ex.P.43 cheques of M/s Aaura Data Networks Pvt., Ltd., and deposed that he has entered the data of some of the cheques of Ex.P.43 and thereafter, the concerned officer has posted and debited the cheques.
200. P.W.10 Smt. C.Anjali Devi identified Ex.P.43 credit voucher dated 16.07.2008 in favour of M/s Aaura Data Networks and deposed that based on this voucher, she debited and credited the respective accounts. P.W.10 further identified Ex.P.43 cheques bearing Nos.215772 dated 20.01.2009 in favour of Shivakumar R. issued by M/s Aaura Data Networks and 072501 dated 04.02.2009 issued by M/s Aaura Data Networks in favour of M/s Apsis Technologies Pvt. Ltd.
201. C.W.31/P.W.23 the then Asst. Manager identified Ex.P.43 and deposed that cheque dated 20.01.2009 for an amount of Rs.1,65,654/- was drawn by M/s Aaura Data Networks Pvt. Ltd., and after entering the said cheque in the system, Ashok Burua has passed the cheques as there was insufficient funds in the account for automatic clearance.
116 C.C.No.21483/2016202. P.W.57 Sri. Prakash Hattiangadi identified Ex.P.43 cheque No.010601 dated 23/10/2008 for Rs.9,42,500/- in favour of Mohan and deposed that he made entries in their computer system as per Ex.P.43 (a) regarding cheque as per instruction of their branch manager Mr. K.R. Prasanna and that cheque bears transaction ID No.265338 which is written by him in his handwriting.
203. Ex.P.33 is the file containing the account opening form and statement of account etc., in respect to current account No. 395301010036293 of M/s. Aaura Data Networks Pvt. Ltd. It reveals that the accused No.2 is the Managing Director of the said company has opened the current account in the name of the company. As per Ex.P.33(a) statement of account, Temporary Overdraft Facilities availed in this account between 26.02.2008 and 04.02.2009 and there was outstanding amount of Rs.22,18,627/- as on 30.06.2009. Further, customer account leder report from 01.04.2007 to 31.03.2009 also reveals about the TOD facilities allowed in the said account.
204. P.W.3 further states that the management of the bank from time to time issues instruction circulars governing the branches and administrative offices and as per Ex.P.5 Instruction circular the Sr. Manager of Scale -
117 C.C.No.21483/2016III cadre could sanction SOD against deposits with 25% margins upto limit of Rs.150 lakhs and the Sr. Manager Scale - III cadre could allow TOD of Rs.1 lakh and he was allowed to permit Rs.5 lakhs for cheques purchase and he was permitted to issue letter of guarantees Rs.20 lakhs with 100% cash margin and he was permitted to allow bill purchase of Rs.10 lakhs under secured nature and Rs.5 lakhs under unsecured nature.
205. Ex.P.42 is the certificate in respect to details of officials who have entered/posted/verified the cheques/vouchers in the account No. 395301010036293 of M/s.Aaura Data Networks Pvt. Ltd., wherein the deceased accused has posted and verified the 12 cheques and credit vouchers out 64.
206. Ex.P.43 is the cheques and vouchers in respect to M/s.Aaura Data Networks Pvt. Ltd., and it reveals that cheques for issued in favour of M/s. Jahnavi Enterprises, M/s. Deejay Technologies, accused No.1, M/s Apsis Technologies Pvt. Ltd., etc.
207. Ex.P.94 is the details of funds transferred between the account No.395301010036293 of M/s Auara Data Networks Pvt. Ltd and connected accounts of Apsis groups of accounts which reveals that funds transferred from the M/s Apsis Technologies, M/s 118 C.C.No.21483/2016 Jhanavi Enterprises, accused No.1 by adjusting OD and increasing in credit balance, cheque passes and funds transferred to other gorup accounts of M/s Apsis Technologies, M/s Jhanavi Enterprises, M/s Deejay Technologies by reducing OD and adjusting OD etc.
208. Ex.P.31 statement of excess submitted to the Regional Office it reveals that in the current account No.395301010036293 of M/s Aarua Data Networks Pvt. Ltd., the rectangle symbol is mentioned in respect to allowing TOD on 30.04.2008, 15.06.2008, 15.02.2009, 28.02.2009. This document clearly shows that the TOD allowed in the above said current account account were not ratified by the Regional Office.
209. It is elicited in the cross-examination of P.W.3 by the Ld. Counsel for the accused No.3 that availing TOD, OD, cheque purchase, bill discount facilities are the incidental to the current account holder. It is pertinent to note that as per above discussion, the deceased accused K.R.Prasanna who was the Sr. Manager Scale-III cadre could allow TOD of Rs.1.00 lakh. But, as per statement of accounts he allowed the TOD more than Rs.1.00 lakh exceeding his limit and his act was not ratified by the Regional Office. It shows that the Branch Manager has allowed TOD facility in this 119 C.C.No.21483/2016 account No.395301010036293 beyond his delegated power in violation of the circular.
210. As per the above cited decision of Hon'ble Supreme Court in S.V.L. Murthy Vs. State represented by CBI, Hyderabad, allowing of cheque discounting facility by bank officials to customers of Bank, without any criminal intent being proved, did not amount to commission of offence, particularly as facility allowed was not contrary to RBI Guidelines. Instant case, there is evidence on record to shows that temporary overdrafts facility was allowed account No.395301010036293 of M/s Aaura Data Networks Pvt. Ltd. in contrary to the circulars issued by the Union bank of India.
211. In view of the discussion made above, this Court is of the opinion that the prosecution has proved beyond reasonable doubt that the deceased accused K.R.Prasanna in conspiracy with accused No.2 had allowed temporary overdraft facility without any security and beyond his delegated powers in account No.395301010036293 with dishonest intention and subsequently the said account became NPA and it cause wrongful loss to the tune of Rs.22,18,627/- to the Union bank of India.
120 C.C.No.21483/2016212. As per the prosecution case, the accused No.2 Smt. Suchithra Madhu had opened another current account No.395301010036325 in the name of M/s. Aaura Data Networks Pvt. Ltd., on 25.07.2008 and deceased Sri.K R Prasanna had allowed Temporary Over Drafts in this account between 02.12.2008 and 30.01.2009 and on 09.02.2009 with dishonest intention and in violation of Union bank of India instructions circular No.8017 dated 16.06.2008 and also purchased the cheques on 29.11.2008 beyond his delegated powers and without any security with dishonest intention to cheat the bank and subsequently, this account becames Non-Performing Asset and accused persons caused wrongful loss of Rs.35.27 Lakhs to the Union Bank of India.
213. P.W.2 Sri.M.R.Gopalkrishna states that Ex.P.32 the file containing the current account of M/s Aaura Data Net Works Pvt. Ltd. reveals that Madhu Lakshminarayana is the director and Smt. Suchitra Madhu is the M.D. and authorized person to handle the account and Ex.P.32 (a) the statement of account shows that in this account no credit facility is sanctioned and on 06.07.2007 maximum TOD of Rs.9,29,989.63 was allowed and on 11.10.2007 maximum TOD of Rs.40,45,514.78 was allowed and apart from these, 121 C.C.No.21483/2016 meanwhile, they have also availed small amount of maximum TODs.
214. P.W.2 further states that Ex.P.23 the file containing statement of account of M/s Aaura Data Networks Pvt. Ltd. reveals that in this account also no credit facility is sanctioned, but from 21.11.2008 to 09.02.2009 continuously they have availed TOD facilities and on 09.02.2009 maximum TOD allowed is Rs.35,27,282.08 and on 13.07.2009 the outstanding amount is Rs.35,27,282.08 and apart from availing TODs, on 29.11.2008 two cheques have been purchased for Rs.11 lakhs and Rs.15 lakhs. He further states that on perusal of Ex.P.23 and Ex.P.32, it is clear that even though no credit facilities were sanctioned, the bank manager has allowed TODs on several occasions and he has also purchased cheques which was beyond his power.
215. P.W.2 further states that Ex.P.40 is the consolidated statement along with certificate pertaining to M/s Aaura Data Net Works Pvt. Ltd., and Ex.P.41 is 73 cheques and 04 vouchers pertaining to M/s Aaura Data Net Works Pvt. Ltd., and on perusal of the consolidated statement Ex.P.40, it is clear that the cheques of Ex.P.41 have been drawn by M/s Aaura Data Net Works Pvt. Ltd., and they have been issued to various parties including 122 C.C.No.21483/2016 M/s Apsis Technologies Pvt. Ltd., M/s M/s Jhanavi Enterprises, M/s Deejay Technologies Pvt. Ltd., L. Madhu and others.
216. P.W.2 further states that Ex.P.50 is the consolidated statement along with certificate pertaining to M/s Aaura Data Net Works Pvt. Ltd., and Ex.P.51 is 14 cheques and 06 vouchers pertaining to M/s Aaura Data Net Works Pvt. Ltd., and on perusal of the consolidated statement Ex.P.50, it is clear that the cheques of Ex.P.51 have been drawn by M/s Aaura Data Net Works Pvt. Ltd., and they have been issued to various parties including M/s Jhanavi Enterprises, M/s Apsis Technologies Pvt. Ltd., M/s Deejay Technologies Pvt. Ltd., another account of M/s Aaura Data Net Works Pvt. Ltd., M/s Jasbir Collections and others.
217. P.W.3 Sri.M.Jayaraj identified Ex.P.23 the file of current account of M/s Aaura Data Networks Pvt. Ltd. and he deposed that in that account, Temporary Over Drafts (TOD) was allowed which was beyond the delegated power and the same was not ratified by the nodal regional office.
218. P.W.4 Sri.B.Suresh Rao identified the file Ex.P.32 of the current account No.101-36134 of M/s Aaura Data Networks Pvt., Ltd., maintained in B.V.K. 123 C.C.No.21483/2016 Iyengar Road branch, Bengaluru and deposed that in this account, temporary over drafts were given on the instruction of the manager K. R. Prasanna and debited the account as per Ex.P.40 & Ex.P.41 the consolidated statement and cheques for debiting the account.
219. P.W.4 Sri.B.Suresh Rao identified Ex.P.23 the file of Union Classic account No.101-36325 of M/s Aaura Data Networks Pvt., Ltd., and deposed that in this account, the cheque collections were waived subject to condition that there must be minimum balance of Rs.50,000/- as per Ex.P.50 and Ex.P.51 the consolidated statement and cheques for debiting the account and in this account the temporary over drafts were allowed on various occasions against the rule.
220. C.W.6/P.W.6 identified Ex.P.43 cheques of M/s Aaura Data Networks Pvt. Ltd., and deposed that he has entered the data of some of the cheques of Ex.P.43 and concerned officer posted and debited the cheques.
221. As discussed above, C.W.7/P.W.7, C.W.18/P.W.15, C.W.34/P.W.28 and C.W.60/P.W.47 in their evidence deposed about the excesses given beyond the authority of the Branch Manager were not ratified as per Ex.P.31 F1 statements.
124 C.C.No.21483/2016222. As discussed above, C.W.12/P.W.12 and C.W.15/P.W.13 deposed that in their evidence deposed that there were no balance in the accounts of M/s Aaura Data Networks Pvt. Ltd., in order to get cheque passed.
223. P.W.57 Sri.Prakash Hattiangadi identified Ex.P.51 cheque No.422164 dated 02/12/2008 for Rs.17,50,000/- in favour of M/s.Apsis Technologies Pvt. Ltd., and deposed that he made entries as per Ex.P.51 (a) in their computer system regarding cheque as per instruction of their branch manager Mr. K.R. Prasanna and that cheque bears transaction ID No.337214 which is written by him in his handwriting and also identified Ex.P.51 (b) voucher dated 02/12/2008 for Rs.17,50,000/- pertaining to Ex.P.51 (a).
224. Ex.P.32 is the file containing account opening form, statement of account etc., in respect to current account No.395301010036134 of M/s Aaura Data Networks Pvt. Ltd., which reveals that accused No.2 is the Managing Director of the said company and copy of the resolution i.e. Ex.P.32 (b) reveals that the accused No.2 and 3 are the authorized to operate the said account. Ex.P.32 is the statement of account in respect to said current account.
125 C.C.No.21483/2016225. Ex.P.23 is the account statement and customer ledger report in respect to UCCA1 account No. 395301010036325 of M/s. Aaura Data Networks Pvt. Ltd., and it reveals that outstanding amount was Rs.35,27,282/- in this account as on 13.07.2009. The account statement and customer ledger account cleaqly reveals that TOD facilities continuously allowed and 2 cheques for Rs.11.00 and Rs.15.00 lakhs were purchased in the said account.
226. Ex.P.40 is the certificate in respect to details of officials who have entered/posted/verified the cheques/vouchers in the account No. 395301010036134 of M/s.Aaura Data Networks Pvt. Ltd., wherein the deceased accused K.R.Prasanna has posted and verified the 12 cheques and credit vouchers out of 78. Ex.P.41 is the cheques and vouchers and it reveals that cheques were issued in favour of M/s Apsis Technologies Pvt. Ltd., M/s. Deejay Technologies, M/s Jahnavi Enterprises, accused No.1 etc.
227. Ex.P.50 is the certificate in respect to details of officials who have entered/posted/verified the cheques/vouchers in the account No. 395301010036325 of M/s.Aaura Data Networks Pvt. Ltd., wherein the deceased accused K.R.Prasanna has posted and verified the 10 cheques and credit vouchers out of 16.
126 C.C.No.21483/2016228. Ex.P.51 is the cheques and vouchers in respect to account No.395301010036325 and it reveals that cheques were issued in favour of M/s Apsis Technologies Pvt. Ltd., M/s. Deejay Technologies, M/s Jahnavi Enterprises, Jasbir collections etc.
229. Ex.P.77 is the certificate issued by the P.W.2 in respect to cheques purchased by the Union Bank of India in the account of M/s Aaura Data Networks in account No.395301010036325 and it reveals that 3 cheques amount for Rs.4,21,716/-, Rs.11,00,000/-, Rs.15,00,000/- were purchased and it was realized by way of DD.
230. Ex.P.88 is the Instruction Circular No.7550 dated 8.12.2006 in respect to introduction of a new current account Union Classic Current Account. It reveals that, clarifications are given to the branches in respect to maintenance of UCCA by the customer availing CC facility wherein it states that in the event of UCCA holder, desiring to avail running account credit facilities such as cash credit/secured overdraft/packing credit etc branches may ensure that the customer, under such circumstances is allowed to maintain UCCA as a dummy account for the sake of keeping the minimum required float funds with the branch and at the same time, cheque operations are allowed only in the cash 127 C.C.No.21483/2016 credit account and in other words, all trade related transactions would continue to be routed through the cash credit/secured over draft/packing credit account, as the case may be and the UCCA would remain as non- cheque operated account and in case the customer is seen requiring balances in UCCA to be transferred to his regular account,the same can be done by auto sweep, e- Banking or even by instructing the bank without resorting the cheque transactions.
231. In view of the above circular, if UCCA holder desire to avail running account credit facilities is allowed to maintain the UCCA as a dummy account for the sake of keeping the minimum required float funds with the branch and at the same time, cheque operations are allowed only in the cash credit account. Further, all trade related transaction would continue to be routed through cash credit/secured overdraft/packing credit account and the UCCA would remain as non cheque operated account.
232. Instant case, accused No.2 being Managing Director of M/s Aaura Data Networks Pvt. Ltd., had opened CAGEN account No.395301010036134 in the name of company and also maintained UCCA1 account No.395301010036325 in the name of company. In view 128 C.C.No.21483/2016 of the above circular, UCCA account is a dummy account and it is non cheque operated account.
233. Ex.P.23 statement of account in respect to UCCA1 account No.395301010036325 reveals that cheques were purchased since 29.11.2008 in the said account.
234. P.W.3 further states that the management of the bank from time to time issues instruction circulars governing the branches and administrative offices and as per Ex.P.5 Instruction circular the Sr. Manager of Scale - III cadre could sanction SOD against deposits with 25% margins upto limit of Rs.150 lakhs and the Sr. Manager Scale - III cadre could allow TOD of Rs.1 lakh and he was allowed to permit Rs.5 lakhs for cheques purchase and he was permitted to issue letter of guarantees Rs.20 lakhs with 100% cash margin and he was permitted to allow bill purchase of Rs.10 lakhs under secured nature and Rs.5 lakhs under unsecured nature.
235. Ex.P.31 statement of excess submitted to the Regional Office it reveals that in the Union Classic CD-1 account No.395301010036325 of M/s Aaura Data Networks Pvt. Ltd., the rectangle symbol is mentioned in respect to allowing TOD of Rs.25,64,906/- on 30.11.2008 and TOD of Rs.35,27,282/- on 15.02.2009 129 C.C.No.21483/2016 and TOD of Rs.30,925/- on 28.02.2009. This document clearly shows that maximum TOD of Rs.35,27,282/- was allowed and TOD facilities allowed in the above said Union Classic account were not ratified by the Regional Office.
236. It is elicited in the cross-examination of P.W.3 by the Ld. Counsel for the accused No.3 that availing TOD, OD, cheque purchase, bill discount facilities are the incidental to the current account holder. It is pertinent to note that as per above discussion, the UCCA1 account No.395301010036325 is non-cheque operated account and it is a dummy account as per the Ex.P.88 circular. But, the Branch Manager has allowed TOD facility upto Rs.35,00,000/- and purchased the cheques for Rs.11.00 lakhs and Rs.15,00 lakhs in this UCCA1 account No.395301010036325 beyond his delegated power in violation of the circular.
237. As per above circular UCCA account is non- cheque operated account, but the deceased accused K.R. Prasanna has purchased the cheques in this account beyond his delegated power for the purpose of accommodation in violation of the circular issued by the Union bank of India.
130 C.C.No.21483/2016238. As per the above cited decision of Hon'ble Supreme Court in S.V.L. Murthy Vs. State represented by CBI, Hyderabad, allowing of cheque discounting facility by bank officials to customers of Bank, without any criminal intent being proved, did not amount to commission of offence, particularly as facility allowed was not contrary to RBI Guidelines. Instant case, there is evidence on record to shows that temporary overdrafts facility was allowed and cheques were purchased in the UCCA1 account No.395301010036325 of M/s Aaura Data Networks Pvt. Ltd., in contrary to the circulars issued by the Union bank of India.
239. In view of the discussion made above, this Court is of the opinion that the prosecution has proved beyond reasonable doubt that the deceased accused K.R.Prasanna in conspiracy with accused No.2 had allowed temporary overdraft facility without any security and power and also purchased cheques beyond his delegated powers for the purpose of accommodation in UCCA1 account No.395301010036325 with dishonest intention and subsequently the said account became NPA and it cause wrongful loss to the tune of Rs.35,27,282/- to the Union bank of India.
131 C.C.No.21483/2016240. As per the prosecution case, the accused No.2 Smt. Suchithra Madhu had opened another current account No.395301010036323 in her name on 25.07.2008 and deceased Sri.K R Prasanna had allowed Temporary Over Drafts in this account between 27.01.2009 and 09.02.2009 and maximum TOD of 29.44 Lakhs was allowed on 09.02.2009 beyond his delegated powers and without any security with dishonest intention to cheat the bank and subsequently, this account becames Non-Performing Asset and accused persons caused wrongful loss of Rs.29.44 Lakhs to the Union Bank of India.
241. P.W.3 Sri.M.Jayaraj identified Ex.P.26 the file of S/B account and current account of Smt. Suchitra Madhu and he deposed that in that current account, TOD was allowed without there being any sanction and that on 18.03.2009 the outstanding in the current account was Rs.29.73 lakhs.
242. P.W.2 Sri.M.R.Gopalkrishna states that Ex.P.66 is the consolidated statement along with certificate pertaining to current account of Smt. Suchitra Madhu and Ex.P.67 is 02 cheques and 01 voucher pertaining to Smt. Suchitra Madhu and on perusal of the consolidated statement Ex.P.66, it is clear that the cheques of Ex.P.67 have been drawn by Smt. Suchitra 132 C.C.No.21483/2016 Madhu and they have been issued to M/s Deejay Technologies Pvt. Ltd. and M/s Apsis Technologies Pvt. Ltd.
243. P.W.8 Sri.S.S.Ravi deposed that Ex.P.72 the document relating to details of fund transfers between the account of Mrs. Suchitra Madhu to M/s Apsis group of accounts. P.W.2 deposed that Ex.P.72 is the consolidated statement pertaining to Smt. Suchitra Madhu for transferring of funds.
244. Ex.P.26 is the file containing the account opening form, statement of accounts in respect SB account No.395302010009466 of accused No.2.
245. Ex.P.26 (a) is the statement of account and customer account ledger report in respect to UCCA1 account NO.395301010036323 of accused No.2 and reveals that it is a Union Classic CD-1 account and Rs.29,44,356/- is the outstanding amount as on 13.07.2009.
246. Ex.P.66 is the certificate in respect to details of officials who have entered/posted/verified the cheque in the account No. 395301010036323 of accused No.2 wherein the deceased accused K.R.Prasanna has posted 133 C.C.No.21483/2016 and verified the 01 cheque for Rs.7.50 lakhs issued in favour of M/s Apsis Technologies Pvt. Ltd.,
247. Ex.P.67 is the cheques and voucher and it reveals that cheques were issued in favour of M/s Apsis Technologies Pvt. Ltd., M/s. Deejay Technologies.
248. Ex.P.72 is the certificate issued in respect to details of funds transfered between the account No. 395301010036323 of accused No.2 and M/s Apsis Group accounts. It reveals that funds transferred from the group accounts of accused No.1, M/s Jhanavi Enterprises, M/s Aaura Data Networks, M/s Deejay Technologies, M/s Apsis Technologies Pvt. Ltd., M/s Express Technologies by creating DEP and reducing the OD and also funds transferred to other group accounts of M/s Apsis Technologies Pvt. Ltd., M/s Gift Express, M/s Deejay Technologies, M/a Aaura Data Networks by adjuting OD and reducing OD and passing the cheque etc.
249. Ex.P.88 is the Instruction Circular No.7550 dated 8.12.2006 in respect to introduction of a new current account Union Classic Current Account. It reveals that, clarifications are given to the branches in respect to maintenance of UCCA by the customer availing CC facility wherein it states that in the event of 134 C.C.No.21483/2016 UCCA holder, desiring to avail running account credit facilities such as cash credit/secured overdraft/packing credit etc branches may ensure that the customer, under such circumstances is allowed to maintain UCCA as a dummy account for the sake of keeping the minimum required float funds with the branch and at the same time, cheque operations are allowed only in the cash credit account and in other words, all trade related transactions would continue to be routed through the cash credit/secured over draft/packing credit account, as the case may be and the UCCA would remain as non- cheque operated account and in case the customer is seen requiring balances in UCCA to be transferred to his regular account,the same can be done by auto sweep, e- Banking or even by instructing the bank without resorting the cheque transactions.
250. In view of the above circular, if UCCA holder desire to avail running account credit facilities is allowed to maintain the UCCA as a dummy account for the sake of keeping the minimum required float funds with the branch and at the same time, cheque operations are allowed only in the cash credit account. Further, all trade related transaction would continue to be routed through cash credit/secured overdraft/packing credit 135 C.C.No.21483/2016 account and the UCCA would remain as non cheque operated account.
251. Instant case, accused No.2 had opened SBGEN account No.395302010009466 in her name and also maintained UCCA1 account No.395301010036323 in her name. In view of the above circular, UCCA account is a dummy account and it is non cheque operated account.
252. Ex.P.26 (a) statement of account in respect to UCCA1 account No.395301010036323 reveals that TOD facility were allowed in the said account.
253. P.W.3 further states that the management of the bank from time to time issues instruction circulars governing the branches and administrative offices and as per Ex.P.5 Instruction circular the Sr. Manager of Scale - III cadre could sanction SOD against deposits with 25% margins upto limit of Rs.150 lakhs and the Sr. Manager Scale - III cadre could allow TOD of Rs.1 lakh and he was allowed to permit Rs.5 lakhs for cheques purchase and he was permitted to issue letter of guarantees Rs.20 lakhs with 100% cash margin and he was permitted to allow bill purchase of Rs.10 lakhs under secured nature and Rs.5 lakhs under unsecured nature.
136 C.C.No.21483/2016254. Ex.P.31 statement of excess submitted to the Regional Office it reveals that in the Union Classic CD-1 account No.395301010036323 of accused No.2 the rectangle symbol is mentioned in respect to allowing TOD of Rs.6,69,356/- on 04.02.2009 and TOD of Rs.7,50,000/- on 05.02.2009, TOD of Rs.15,25,000/- on 09.02.2009 and TOD of Rs.28,596/- on 28.02.2009. This document clearly shows that maximum TOD of Rs.15,25,000/- was allowed and TOD facilities allowed in the above said Union Classic account were not ratified by the Regional Office.
255. It is elicited in the cross-examination of P.W.3 by the Ld. Counsel for the accused No.3 that availing TOD, OD, cheque purchase, bill discount facilities are the incidental to the current account holder. It is pertinent to note that as per above discussion, the UCCA1 account No.395301010036323 is non-cheque operated account and it is a dummy account as per the Ex.P.88 circular. But, the Branch Manager has allowed TOD facility upto Rs.15,00,000/- in this UCCA1 account No.395301010036323 beyond his delegated power in violation of the circular.
256. As per the above cited decision of Hon'ble Supreme Court in S.V.L. Murthy Vs. State represented by CBI, Hyderabad, allowing of cheque discounting 137 C.C.No.21483/2016 facility by bank officials to customers of Bank, without any criminal intent being proved, did not amount to commission of offence, particularly as facility allowed was not contrary to RBI Guidelines. Instant case, there is evidence on record to shows that temporary overdrafts facility was allowed in the UCCA1 account No.395301010036323 of accused No.2 in contrary to the circulars issued by the Union bank of India.
257. In view of the discussion made above, this Court is of the opinion that the prosecution has proved beyond reasonable doubt that the deceased accused K.R.Prasanna in conspiracy with accused No.2 had allowed temporary overdraft facility without any security and power beyond his delegated powers for the purpose of accommodation in UCCA1 account No.395301010036323 with dishonest intention and subsequently the said account became NPA and it cause wrongful loss to the tune of Rs.29,44,356/- to the Union bank of India.
258. As per the prosecution case, the accused No.4 Sri. Ravi R Prabhakar had opened a current account No.395301010036308 in the name of M/s Gift Express on 13.05.2008 and deceased Sri.K R Prasanna had allowed Temporary Over Drafts in this account between 23.07.2008 and 08.02.2009 and also purchased cheques 138 C.C.No.21483/2016 on 12.02.2009 in this account beyond his delegated powers and without any security with dishonest intention to cheat the bank and also allowed inter transfer of funds between this account and other group account of M/s. Apsis Technologies Pvt. Ltd., and cash withdrawals after tranfering the funds from group accounts of M/s. Apsis Technologies Pvt. Ltd., and subsequently, this account becames Non-Performing Asset and accused persons caused wrongful loss of Rs.48.59 Lakhs to the Union Bank of India.
259. P.W.2 Sri.M.R.Gopalkrishna states that Ex.P.28 the file containing current account of M/s Gift Express which reveasl that in this account no credit facility is sanctioned, but from 23.07.2008 to 13.07.2009 continuously they have availed TODs and on 30.06.2009 the maximum TOD of Rs.52,08,844.24 was allowed and on 13.07.2009 the outstanding debit balance is Rs.48,59,578.24. He further states that Ex.P.28 (b) is the four cheques along with memos and though cheque purchase facility was not sanctioned, but on 24.01.2009 two cheques for Rs.10,25,000/- and Rs.11,45,000/- have been purchased and again on 05.02.2009 one cheque for Rs.14,73,000/- and on 12.02.2009 one cheque for Rs.14,00,000/- have been purchased and the statement of account reveals that one more cheque for 139 C.C.No.21483/2016 Rs.8,90,000/- has been purchased on 12.02.2009 and the said cheques have been returned unpaid because of insufficient funds.
260. P.W.2 Sri.M.R.Gopalkrishna states that Ex.P.62 is the consolidated statement along with certificate pertaining to current account of M/s Gift Express and Ex.P.63 is 15 cheques and 05 vouchers pertaining to M/s Gift Express and on perusal of the consolidated statement Ex.P.62, it is clear that the cheques of Ex.P.63 have been drawn by M/s Gift Express and they have been issued to various parties including M/s Apsis Technologies Pvt. Ltd., M/s Jhanavi Enterprises, M/s Aaura Data Net Works Pvt. Ltd., and others. P.W.2 further deposed that Ex.P.76 is the consolidated statement pertaining to M/s Gift Express for transferring of funds.
261. P.W.3 Sri.M.Jayaraj identified Ex.P.28 the file of current account of M/s. Gift Express and he deposed that in that current account, Cheque purchase of Rs.49.36 lakhs was allowed without there being any sanction and that on 18.03.2009 the outstanding in the current account was Rs.49.36 lakhs.
262. P.W.4 Sri.B.Suresh Rao identified Ex.P.28 the file of the current account No.101-36308 of M/s Gift 140 C.C.No.21483/2016 Express and deposed that in this account, the manager K. R. Prasanna has discounted the cheques beyond his power and as per Ex.P.62 the consolidated statement and Ex.P.63 cheques for discounting the cheques and in this account 4 cheques were retuned unpaid as no amount was available in the account, temporary over drafts were created by debiting the amount of the retuned cheques under the instructions of the branch manager.
263. P.W.8 Sri.S.S.Ravi deposed that Ex.P.76 the document relating to details of fund transfers between the account of M/s Gift Express to M/s Apsis group of accounts. P.W.8 deposed that these documents are relating to inter transfer of funds and these documents reveal that even though in the said accounts, the amount was not sufficient to clear the incoming cheques excesses/TODs have been allowed.
264. P.W.29 Sri. R.Ramesh identified 3 cheques in Ex.P.28 and Ex.P.28 (c) dishonored memos and Ex.P.27 cheque issued by him and Ex.P.27 (c) dishonored memo and deposed that soon after returning of the dishonored cheques, K. R. Prasanna called him to his house and then he went to his house and K. R. Prasanna was telling that he was having 4 unmarried daughters and he was weeping that his job was at stake and told him that if he gave his properties to K. L. Madhu as securities, then he 141 C.C.No.21483/2016 would get some little relief from their higher authorities and within 3 - 4 months he would release the said properties and gave them back to him.
265. P.W.33 Sri.Prashanth D Shet the then Asst. Manager of Karnataka Bank, identified Ex.P.28 (b) cheque No.228332 dated 12.02.2009 and Ex.P.28 (c) return memo and deposed that the present cheque has been issued by R. Ramesh in favour of M/s Gift Express but, as there was insufficient amount, the cheque which was presented at Union bank of India has been dishonored. P.W.33 identified the cheque No.228333 dated 12.02.2009 with return memo and the cheque No.228331 dated 12.02.2009 with return memo in Ex.P.28 (c) and deposed that these cheques have been presented at Union bank of India, B.V.K. Iyengar Road branch and later they were presented to their branch, but they were dishonored due to insufficient funds.
266. P.W.56 N. Sunil Kumar deposed that he does not know the accused Madhu Lakshminarayana and Ravi R. Prabhakar of this case and he is running his Real Estate business in the name of M/s Bhoomi Enterprises and it is a proprietorship concern and he know R. Ramesh of Sarakki and he is his friend. P.W.56 identified Ex.P.133 cheque dated 05.02.2009 for an amount of Rs.14,73,000/- of the account of Corporation 142 C.C.No.21483/2016 bank, Tubugere and Ex.P.134 cheque dated 09.02.2009 for an amount of Rs.10,75,000/- of the account of Corporation bank, Tubugere and Ex.P.135 the cheque dated 09.02.2009 for an amount of Rs.14,00,000/- of the account of Corporation bank, Tubugere and also identified his signatures on these Cheques and deposed that his friend R. Ramesh of Sarakki had asked some of blank cheques for the purpose of adjustments and he issued Ex.P.133 to 135 blank cheques as asked by him and except signatures, he did not write anything in these cheques. P.W.56 further states that now in the said cheques, the dates, amount and some names have been written and Ex.P.133 has been issued in the name of M/s Gift Express and the other two cheques Ex.P.134 & 135 have been issued in the name of M/s Apsis Technologies Pvt. Ltd. P.W.56 identified Ex.P.122 his account opening form and account details and deposed that when Ex.P.134 & 135 presented, the same have been returned as dishonored as there were insufficient funds in his account and he does not know M/s Apsis Technologies Pvt. Ltd., and M/s Gift Express and he has not done any business with them and he has not issued these cheques to them.
267. P.W.56 was subjected to cross examination by the Ld. Counsel for the accused No.1, 2 and 4 wherein he 143 C.C.No.21483/2016 admitted that he has given his statement to the investigating officer and he has not stated before the investigating officer as to his account opening form and bank statement and generally they issue blank cheques in trust to familiar and known persons to accommodate them and likewise, in order to accommodate his friend Ramesh he had issued these cheques. P.W.56 states that he does not with whom Ramesh has transacted using these cheques and what was the relationship or transaction between Ramesh and Payee. P.W.56 admitted that when the open cheque is given the bearer of the cheque has the authority to deal with it.
268. P.W.57 Sri.Prakash Hattiangadi identified Ex.P.63 cheque No.429079 dated 23/10/2008 for Rs.8,05,000/- in favour of Mohan R., and deposed that he made entries as per Ex.P.63 (a) in their computer system regarding cheque as per instruction of their branch manager Mr. K.R. Prasanna and that cheque bears transaction ID No.4224056 which is written by him in his handwriting and in their branch they have also account of a customer namely M/s. Mega Electricals Pvt. Ltd., which is pertaining to relative of their branch manager Mr. K. R. Prasanna and above stated cheques transaction are entered in their computer system by using his user ID and password and the accounts 144 C.C.No.21483/2016 pertaining to above said cheques did not have sufficient balance in their accounts to honour the said cheques.
269. Ex.P.28 is the account opening form in respect to current account No.395301010036308 of M/s Gift Express and it reveals that accused No.4 is the proprietor of the said firm.
270. Ex.P.28 (a) is the account statement and customer account ledger report which reveals that TOD facilities allowed in this account and cheques were also purchased on 12.02.2009 in this account and there was outstanding amount of Rs.48,59,578/- as on 13.07.2009.
271. Ex.P.28 (c) is the 3 cheques and memorandums and it reveals that the said 3 cheques have been issued in favour of M/s Gift Express by R. Ramesh and these cheques returned as dishonored due to insufficient funds. Ex.P.28 (b) is the memorandum in respect to dishonor of cheque.
272. Ex.P.133 is the cheque bearing No.013247 dated 05.02.2009 issued by M/s Bhoomi Enterprises for Rs.14,73,000/- in favour of Gift Express.
145 C.C.No.21483/201651.Ex.P.62 is the certificate in respect to details of officials who have entered/posted/verified the cheques/vouchers in the account No. 395301010036308 of M/s.Gift Express wherein the deceased accused K.R.Prasanna has posted and verified the 6 cheques and credit vouchers out of 22. Ex.P.63 is the cheques and vouchers and it reveals that cheques were issued in favour of M/s Apsis Technologies Pvt. Ltd., M/s. Aaura Data Networks Pvt. Ltd., M/s Jahnavi Enterprises etc.
273. Ex.P.76 is the certificate in respect to details of funds transfered between the M/s. Gift Express and connected accounts of M/s Apsis Group of Accounts and it reveals that funds transferred from the groups accounts of M/s Apsis Technologies, M/s Deejay Technologies, M/s Jasbir Collection, accused No.1, accused No.2 by passing cheque and reduction of OD and funds transferred to the account of Apsis Technologies, M/s Jhanvi Enterprises, M/s Deejay Technologies.
274. P.W.3 further states that the management of the bank from time to time issues instruction circulars governing the branches and administrative offices and as per Ex.P.5 Instruction circular the Sr. Manager of Scale - III cadre could sanction SOD against deposits with 25% margins upto limit of Rs.150 lakhs and the Sr. Manager 146 C.C.No.21483/2016 Scale - III cadre could allow TOD of Rs.1 lakh and he was allowed to permit Rs.5 lakhs for cheques purchase and he was permitted to issue letter of guarantees Rs.20 lakhs with 100% cash margin and he was permitted to allow bill purchase of Rs.10 lakhs under secured nature and Rs.5 lakhs under unsecured nature.
275. In Ex.P.5 instruction circular No.7495 at 10.2 it is mentioned in Annexure-I that the branch incharges are authorized to excess in FB/NFB, credit facilities, including a new line of credit, whose accounts are classified under Standard Assets for meeting urgent credit needs of purely temporary nature not exceeding 15 days and branch manager scale-III was authorized to sanction adhoc limits or grant of excess over limit Rs.10.00 lakhs. Further, in annexure-I at 8.1, it is mentioned that branch managers scale-III was authorized to allow the clean overdraft/TOD of Rs.1.00 lakh.
276. As per Ex.P.5 instruction circular No.7495, at 1.4.24 - Overdraft facility can be allowed under the delegated authority to meet short term business needs and care will be taken to ensure that the accommodation granted does not become part of the borrower's working capital or does not finance the margin requirements in respect of sanctioned limits. To this end, it will be 147 C.C.No.21483/2016 ensured that temporary overdraft is not allowed to run for a period of more than 15 days at a time.
277. On perusal of Ex.P.28 (a) statement of account, TOD was allowed in the said account continuously and maximum TOD of Rs.52,25,178/- was allowed on 30.06.2009.
278. Ex.P.31 statement of excess submitted to the Regional Office it reveals that in the current account No.395301010036308 of accused No.4 the rectangle symbol is mentioned in respect to allowing TOD of Rs.5,95,600/- on 21.05.2008, TOD of Rs.6,15,613/- on 07.11.2008, TOD of Rs.9,74,740/- on 24.11.2008 and TOD of Rs.20,06,000/- on 25.11.2008, TOD Of Rs.15,04,421/- on 28.01.2009 and TOD of Rs.21,79,159/- on 05.02.2009. This document clearly shows that maximum TOD of Rs.21,79,159/- was allowed and TOD facilities allowed in the above said current account were not ratified by the Regional Office.
279. As per the above cited decision of Hon'ble Supreme Court in S.V.L. Murthy Vs. State represented by CBI, Hyderabad, allowing of cheque discounting facility by bank officials to customers of Bank, without any criminal intent being proved, did not amount to commission of offence, particularly as facility allowed 148 C.C.No.21483/2016 was not contrary to RBI Guidelines. Instant case, there is evidence on record to shows that TOD was allowed and cheques were purchased in the current account of M/s Gift Express in contrary to the circulars issued by the Union bank of India and subsequently cheques were dishonored as insufficient funds.
280. In view of the discussion made above, this Court is of the opinion that the prosecution has proved beyond reasonable doubt that the deceased accused K.R.Prasanna in conspiracy with accused No.4 had allowed temporary overdraft facility and purchased the cheques in the account No.395301010036308 without any security and power with dishonest intention and subsequently the said account became NPA and bank could not recover the TOD allowed by the deceased accused K.R.Prasanna.
281. As per the prosecution case, the accused No.4 Sri. Ravi R Prabhakar had opened another current account No.395301010036292 in the name of M/s. Express Technology on 14.02.2008 and deceased Sri.K R Prasanna had allowed Temporary Over Drafts in this account between 04.08.2008 and 12.02.2009 and also purchased cheques on 05.02.2009 beyond his delegated powers and without any security with dishonest intention to cheat the bank and also allowed inter 149 C.C.No.21483/2016 transfer of funds between this account and M/s Apsis Technologies Pvt. Ltd., and its group accounts to bring down the excesses/TODs allowed in the Group Accounts of accused No.1 and 2 and subsequently, this account becames Non-Performing Asset and accused persons caused wrongful loss of Rs.30.75 Lakhs to the Union Bank of India.
282. P.W.2 Sri.M.R.Gopalkrishna states that Ex.P.27 is the file containing current account of M/s Express Technologies and Ex.P.27 (a) is the statement of account which reveals tht in this account no credit facility is sanctioned, but from 04.08.2008 to 10.08.2009 on various occasions TODs are allowed and on 30.06.2009 maximum TOD allowed is Rs.43,29,635.85 and on 10.08.2009 the outstanding debit balance is Rs.30,75,609.85. He further states that on seeing the present statement of account, it is clear that this account has been opened only to transact with the sisters concerned accounts. He further states that Ex.P.27 (b) three cheques with memos reveals that cheques for Rs.14,10,000/-, Rs.13,85,000/- and Rs.12,62,000/- have been purchased on 05.02.2009 and after purchasing these cheques, the same have been sent to collecting banks but the same have been returned unpaid because of insufficient funds.
150 C.C.No.21483/2016283. P.W.3 Sri.M.Jayaraj identified Ex.P.27 the file of current account of M/s. Express Technologies Pvt. Ltd. and he deposed that in that current account CP and TOD were allowed without there being any sanction and that on 18.03.2009 the outstanding in the current account was Rs.44.55 lakhs.
284. P.W.4 Sri.B.Suresh Rao identified Ex.P.27 the file of the current account No.101-36292 of M/s Express Technologies and deposed that in this account, the manager K. R. Prasanna has discounted the cheques beyond his power as per Ex.P.60 the consolidated statement and Ex.P.61 cheques for discounting the cheques and in this account, 3 cheques were retuned unpaid and as no amount was available in the account, temporary over drafts were created by debiting the amount of retuned cheques under the instructions of the branch manager.
285. C.W.7/P.W.7 deposed that in Ex.P.31 almost all the excesses given to M/s Apsis group of accounts have not been confirmed.
286. C.W.34/P.W.28 the then Chief Manager deposed in his evidence that he has scrutinized the F1 statements of Union bank of India, B.V.K. Iyengar Road 151 C.C.No.21483/2016 branch and he did not ratify the excess given beyond authority of bank manager.
287. P.W.30 Sri. Iqbal Hussain deposed that he know C.W.36 R. Ramesh and C.W.39 N. Sunil Kumar and both are in the business of construction and from 2005 to 2015 he was working with them as manager and he had the account at Karnataka Bank, Honnavalli and he know K. R. Prasanna the branch manager of Union bank of India, B.V.K. Iyengar Road branch and once or twice he has met him. P.W.30 further states that R. Ramesh asked him to give his cheques and he gave him two cheque of Karnataka Bank, Honnavalli branch and identified Ex.P.27 (d) the cheques given by him along with dishonored memo.
288. P.W.30 was subjected to cross examination by Ld. Counsel for the accused No.1, 2 and 4 wherein he states that he handed over the cheques to R. Ramesh as he asked him and he does not know personally for what transaction the said cheques have been taken.
289. P.W.2 Sri.M.R.Gopalkrishna states that Ex.P.60 is the consolidated statement along with certificate pertaining to current account of M/s Express Technologies and Ex.P.61 is 19 cheques and 05 vouchers pertaining to M/s Express Technologies and on 152 C.C.No.21483/2016 perusal of the consolidated statement Ex.P.60, it is clear that the cheques of Ex.P.61 have been drawn by M/s Express Technologies and they have been issued to various parties including M/s Apsis Technologies Pvt. Ltd., M/s Deejay Technologies Pvt. Ltd., M/s Aaura Data Net Works Pvt. Ltd., and others.
290. P.W.10 Smt.C.Anjali Devi identified Ex.P.60 cheque bearing No.221527 dated 05.12.2008 issued by M/s Express Technologies in favour of self and deposed that in the said cheque, there is alteration but Mr. K. R. Prasanna told her that he would take signatures of the drawer to the alterations and on his direction she entered the details of the said cheque in the system.
291.P.W.53 Sri.K.V.Ravi Shankar Sharma deposed that Ex.P.61 the cheque dated 24.11.2008 pertaining to M/s Express Technologies drawn in favor of M/s Apsis Technologies Pvt. Ltd., and he has entered all these cheques. P.W.53 states that generally, the cheques should be presented either by the customer or his representative directly in the counter, but, in this case he used to receive the cheques directly from the branch manager Mr. K. R. Prasanna.
292. P.W.57 Sri.Prakash Hattiangadi identified Ex.P.61 cheque No.496073 dated 23/10/2008 for 153 C.C.No.21483/2016 Rs.5,75,000/- in favour of Mohan and deposed that he made entries as per Ex.P.61 (a) in their computer system regarding cheque as per instruction of their branch manager Mr. K.R. Prasanna and that cheque bears transaction ID No.224056 which is written by him in his handwriting. P.W.57 identified Ex.P.61 cheque No.496087 dated 02/12/2008 for Rs.16,89,877/- in favour of M/s.Apsis Technologies Pvt. Ltd.,and deposed that he made entries as per Ex.P.61 (b) in their computer system regarding cheque as per instruction of their branch manager Mr. K.R. Prasanna and that cheque bears transaction ID No.No.336552 which is written by him in his handwriting. Further P.W.57 identified Ex.P.61 (c) voucher dated 07/12/2008 for Rs.16,89,777/- pertaining to Ex.P.61 (b).
293. P.W.57 identified Ex.P.61 cheque No.496085 dated 12/02/2009 for Rs.4,00,000/- in favour of L. Madhu and deposed that he made entries as per Ex.P.61
(d) in their computer system regarding cheque as per instruction of their branch manager Mr. K.R. Prasanna and that cheque bears transaction ID No.No.116594 which is written by him in his handwriting.
154 C.C.No.21483/2016294. P.W.2 Sri.M.R.Gopalkrishna deposed that Ex.P.75 is the consolidated statement pertaining to M/s Express Technologies for transferring of funds.
295. P.W.8 Sri.S.S.Ravi deposed that Ex.P.75 the document relating to details of fund transfers between the account of M/s Express Technologies to M/s Apsis group of accounts. P.W.8 deposed that these documents are relating to inter transfer of funds and these documents reveal that even though in the said accounts, the amount was not sufficient to clear the incoming cheques excesses/TODs have been allowed.
296. P.W.61 Sri.R.K.Shivanna identified Ex.P.176 letter dated 17.05.2010 issued by Sr. Manager, UBI, BVK Iyengar Road Branch, Bengaluru and Ex.P.177 certificates issued by UBI, BVK Iyengar Road Branch, Bengaluru pertaining to account of M/s. Express Technologies along with three slips.
297. Ex.P.27 is the file containing the statement of accounts, customer account ledger report, cheques and memos in respect to current account No.395301010036292 of M/s. Express Technology.
298. Ex.P.27 (a) statement of account reveals that TODs facilities were allowed in this account on various 155 C.C.No.21483/2016 occasions and maximum TOD of Rs.20,59,555/- was allowed on 26.12.2008 and Rs.30,75,609/- was the outstanding amount as on 10.08.2009. Ex.P.27(b) is the memorandum issued by the Karnataka Bank Ltd., and Ex.P.27 (c) to (d) are the cheques. It reveals that 2 cheques issued by the Iqbal and 1 cheque issued by the R. Ramesh were dishonored as insufficient funds and as per Ex.P27 (a) these cheques were purchased by the deceased accused K.R.Prasanna on 05.02.2009.
299. Ex.P.60 is the certificate in respect to details of officials who have entered/posted/verified the cheques/vouchers in the account No. 395301010036292 of M/s.Express Technologies wherein the deceased accused K.R.Prasanna has posted and verified the 9 cheques and credit vouchers out of 19. Ex.P.61 is the cheques and vouchers and it reveals that cheques were issued in favour of M/s Apsis Technologies Pvt. Ltd., M/s. Deejay Technologies, M/s. Aaura Data Networks Pvt. Ltd., etc.
300. Ex.P.75 is the certificate in respect to details of funds tranfered between the account of M/s. Express Technologies and connected accounts of M/s. Apsis Group of Accounts. It is reveals that funds transferred from group accounts of M/s Apsis Technologies, M/s Deejay Technologies, accused No.1, accused No.2 156 C.C.No.21483/2016 Express Technologies by purchasing cheques, reduction of excess and funds were transferred from this account to M/s Deejay Techonlogy, Apsis Technologies, Jhanavi Enterprises, M/s Aaura Data networks, accused No.1.
301. Ex.P.177 is the certificate issued by the Manager of the Union Bank of India in respect cheques purchased by the bank in the account of M/s.Express Technologies and it reveals that 3 cheques purchased on 05.02.2009 and the said cheques were disnonored and debitted to the account of M/s. Express Technologies by creating overdraft in the account.
302. P.W.3 further states that the management of the bank from time to time issues instruction circulars governing the branches and administrative offices and as per Ex.P.5 Instruction circular the Sr. Manager of Scale - III cadre could sanction SOD against deposits with 25% margins upto limit of Rs.150 lakhs and the Sr. Manager Scale - III cadre could allow TOD of Rs.1 lakh and he was allowed to permit Rs.5 lakhs for cheques purchase and he was permitted to issue letter of guarantees Rs.20 lakhs with 100% cash margin and he was permitted to allow bill purchase of Rs.10 lakhs under secured nature and Rs.5 lakhs under unsecured nature.
157 C.C.No.21483/2016303. In Ex.P.5 instruction circular No.7495 at 10.2 it is mentioned in annexure-I that the branch incharges are authorized to excess in FB/NFB, credit facilities, including a new line of credit, whose accounts are classified under Standard Assets for meeting urgent credit needs of purely temporary nature not exceeding 15 days and branch manager scale-III was authorized to sanction adhoc limits or grant of excess over limit Rs.10.00 lakhs. Further, in annexure-I at 8.1, it is mentioned that branch managers scale-III was authorized to allow the clean overdraft/TOD of Rs.1.00 lakh.
304. As per Ex.P.5 instruction circular No.7495, at 1.4.24 - Overdraft facility can be allowed under the delegated authority to meet short term business needs and care will be taken to ensure that the accommodation granted does not become part of the borrower's working capital or does not finance the margin requirements in respect of sanctioned limits. To this end, it will be ensured that temporary overdraft is not allowed to run for a period of more than 15 days at a time.
305. On perusal of Ex.P.27(a) statement of account, TOD was allowed in the said account on various occasions and maximum TOD of Rs.20,59,555/- was allowed on 26.12.2008.
158 C.C.No.21483/2016306. Ex.P.31 statement of excess submitted to the Regional Office it reveals that in the current account No.395301010036292 of accused No.4 the rectangle symbol is mentioned in respect to allowing TOD of Rs.3,98,183/- on 03.04.2008, TOD of Rs.16,85,905/- on 07.11.2008, TOD of Rs.10,01,000/- on 13.11.2008 and TOD of Rs.12,07,222/- on 24.11.2008 and TOD of Rs.17,70,000/- on 25.11.2008 and TOD of Rs.9,09,932/- on 27.11.2008, TOD of Rs.17,06,584/- on 23.12.2008, TOD of Rs.20,59,555/- on 26.12.2008, TOD of Rs.3,94,997/- on 12.02.2009. This document clearly shows that maximum TOD of Rs.20,59,555/- was allowed and TOD facilities allowed in the above said current account were not ratified by the Regional Office.
307. As per the above cited decision of Hon'ble Supreme Court in S.V.L. Murthy Vs. State represented by CBI, Hyderabad, allowing of cheque discounting facility by bank officials to customers of Bank, without any criminal intent being proved, did not amount to commission of offence, particularly as facility allowed was not contrary to RBI Guidelines. Instant case, there is evidence on record to shows that TOD was allowed and cheques were purchased in the current account of M/s Express Technologies in contrary to the circulars issued 159 C.C.No.21483/2016 by the Union bank of India and subsequently cheques were dishonored as insufficient funds.
308. In view of the discussion made above, this Court is of the opinion that the prosecution has proved beyond reasonable doubt that the deceased accused K.R.Prasanna in conspiracy with accused No.4 had allowed temporary overdraft facility and purchased the cheques in the account No.395301010036292 without any security and power with dishonest intention and subsequently the said account became NPA and bank could not recover the TOD allowed by the deceased accused K.R.Prasanna.
309. As per the prosecution case, Sri. K.R.Prasanna in furtherance of conspiracy had allowed inter transfer of funds between the accounts of M/s Gift Express, M/s Express Technologies and group accounts of M/s Apsis Technologies Pvt. Ltd., for the purpose of diverting the bank funds and thereby cheated the Union bank of India.
310. As discussed above, the prosecution has placed the oral evidence of P.W.2, P.W.8 and documentary evidence Ex.P.69 to 78 before the Court to show the inter transfer of the funds between the accounts of M/s Gift Express, M/s Jhanavi Enterprises, 160 C.C.No.21483/2016 M/s Express Technologies and group accounts of M/s Apsis Technologies Pvt. Ltd.
311. The Ld. Counsel for the accused No.1, 2 and 4 has argued that the accused No.1 has furnished the collateral security to the bank and the accused persons have no dishonest intention to cheat the bank.
312. In the cross-examination of P.W.61, it is suggested that accused No.1 being the Director of M/s Apsis Technologies Pvt. Ltd., has mortgaged the properties worth of Rs.2.00 crores to the bank as per Ex.P.69 in respect to loan availed by him, then witness replies that, after availing OD facilities, the accused persons have arranged the collateral security in the year 2009.
313. Ex.P.68 is the copy of the memorandum deposit of title deeds dated 12.06.2009 executed by accused No.1 as GPA holder of R. Ramesh in favour of Union bank of India in respect to debts availed by M/s Apsis Technologies Pvt. Ltd., and connected accounts, M/s Gift Express and M/s Express Technologies. Admittedly, the above said facilities availed in the accounts of accused No.1, 2 and 4 in the year 2007 to February 2009 and subsequently the above said accounts became NPA.
161 C.C.No.21483/2016314. C.W.36/P.W.29 Sri. R. Ramesh deposed in his evidence that the Branch Manager K.R.Prasanna introduced the accused No.1 to him and on the request of K.R.Prasanna and accused No.1, he handed over the original papers of his 3 properties to K.R.Prasanna in the bank and he did not sign any papers and as per the say of Gopalakrishna Branch Manager, he executed the power of attorney in favour of accused No.1 and in turn the accused No.1 tendered the documents to the Union bank of India as collateral. In his cross-examination, he states that there was no agreement between them as to selling of properties and he has given a police complaint against the accused No.1.
315. It is pertinent to note that, the accused No.1, 2 and 4 have availed facilities in the year 2007 to February 2009 without any securities and subsequently on 12.06.2009 accused No.1 executed the memorandum of title deeds of the third party as a GPA holder in respect to loan facility of Rs.2,00,00,000/-.
316. As per observation made in Ex.P.4 Additional Investigation report dated 02.04.2009, Branch has not obtained affidavit and declaration from Sri. R. Ramesh the property owner and also the equitable mortgage memorandum drawn by the branch was not stamped as per the Karnataka Stamp Act and not registered with Sub-Registrar as per the existing rules and in the 162 C.C.No.21483/2016 absence of stamp duty and non registration of the same with Sub-Registrar office, the collateral security valued at Rs.162.00 lakhs cannot be enforceable and the Branch has obtained LIC, HDFC, policies of accused No.1 L. Madhu and HDFC, Birala Sun Life policy of accused No.2 Suchitra Madhu, and as on date the assignment of the said policies was not effected and hence, the above policies can not be taken/considered as collaterals.
317. The Ld. Counsel for accused No.1, 2 and 4 has relied upon the decision reported in (2009) 6 SCC 77 in between S.V.L. Murthy Vs. State represented by CBI, Hyderabad wherein Hon'ble Supre Court held that -
41. An offence of cheating cannot be said to have been made out unless the following ingredients are satisfied:
(i) deception of a person either by making a false or misleading representation or by other action or omissions;
(ii) Fraudulently or dishonestly
inducing any person to deliver any
property; or
(iii) to consent that any person shall retain any property and finally intentionally inducing that person to do or omit to do anything which he would not do or omit".
For the purpose of constituting an offence of cheating, the complainant is required to show that the accused had fraudulent or dishonest intention at the 163 C.C.No.21483/2016 time of making promise or representation. Even in a case where allegations are made in regard to failure on the part of the accused to keep his promise, in the absence of a culpable intention at the time of making initial promise being absent, no offence under Section 420 of the Penal Code can be said to have been made out.
318. In view of the above decision, for the purpose of constituting an offence of cheating, the complainant is required to show that the accused had fraudulent or dishonest intention at the time of making promise or representation. Even in a case where allegations are made in regard to failure on the part of the accused to keep his promise, in the absence of a culpable intention at the time of making initial promise being absent, no offence under Section 420 of the Penal Code can be said to have been made out.
319. In the above decision accused was granted cheque discounting facility and for the said purpose, he deposited his title deeds and collateral securities were furnished by the accused for availing cheque discounting facility. But in the instant case, no collateral securities were furnished by the accused No.1, 2 and 4 for availing cheque discounting facility and temporary overdraft facility. Moreover, in the above decision, accused No.4 164 C.C.No.21483/2016 who was the Branch Manager has stopped the cheque discounting facilities to accused No.1 and on the instruction of Regional Manager, the Branch Manager i.e. accused No.4 continued the practice of discounting cheques to the accused No.1. But in the instant case, the deceased accused K.R.Prasanna who was the Branch Manager has purchased the cheques and allowed the excess in SOD accounts and allowed the TOD beyond his delegated powers. Moreover, as per Ex.P.83 the DGM has suspended the delegated authority of Branch Manager for granting TODs and EOL on 21.01.2008, but the Branch Manager continued to grant TODs and excess in SOD accounts of the accused companies and firms without delegated powers.Hence, facts of the above decision and facts of the case on hand are different. Hence above decision is not applicable to the case on hand.
320. The Ld. Counsel for accused No.1, 2 and 4 has relied upon the decision reported in (2019) 9 SCC 148 in between Satishchandra Ratanlal Shah Vs. State of Gujarat and another, wherein Hon'ble Supreme Court has held that -
13. Now coming to the charge under Section 415 punishable under Section 420 IPC. In the context of contracts, the distinction between mere breach of 165 C.C.No.21483/2016 contract and cheating would depend upon the fraudulent inducement and mens rea. In the case before us, admittedly the appellant was trapped in economic crisis and therefore, he had approached respondent 2 to ameliorate the situation of crisis. Further, in order to recover the aforesaid amount, respondent 2 had instituted a summary civil suit seeking recovery of the loan amount which is still pending adjudication. The mere inability of the appellant to return the loan amount cannot give rise to a criminal prosecution for cheating unless fraudulent or dishonest intention is shown right at the beginning of the transaction, as it is this mens rea which is the crux of the offence. Even if all the facts in the complaint and material are taken on their face value, no such dishonest representation or inducement could be found or inferred.
14. Moreover, this Court in a number of cases has usually cautioned against criminalizing civil disputes, such as breach of contractual obligations. The legislature intended to criminalize only those breaches which are accompanied by fraudulent, dishonest or deceptive inducements, which resulted in involuntary and inefficient transfers, under Section 415 IPC.
321. In view of the above decision, in the context of contracts, the distinction between mere breach of contract and cheating would depend upon the fraudulent 166 C.C.No.21483/2016 inducement and mens rea and mere inability of the appellant to return the loan amount cannot give rise to a criminal prosecution for cheating unless fraudulent or dishonest intention is shown right at the beginning of the transaction, as it is this mens rea which is the crux of the offence.
322. In the above decision, the accused has obtained the loan from the money lending company and he has not repaid the amount, hence complaint has been lodged and charge sheet has been filed by the police u/Sec.406, 420 and 417 of IPC. But in the instant case, the deceased accused K.R.Prasanna who was the Branch Manager has purchased the cheques and allowed the excess in SOD accounts and allowed the TOD beyond his delegated powers. Moreover, as per Ex.P.83 the DGM has suspended the delegated authority of Branch Manager for granting TODs and EOL on 21.01.2008, but the Branch Manager continued to grant TODs and excess in SOD accounts of the accused companies and firms without delegated powers. Hence, facts of the above decision and facts of the case on hand are different. Hence above decision is not applicable to the case on hand.
167 C.C.No.21483/2016323. C.W.33/P.W.25 Sri. A. Sehar Ponraj the then Asst. Registrar of companies deposed that the investigating officer of the CBI asked registered documents on record pertaining to M/s Mega Electricals Pvt. Ltd., M/s Apsis Technologies Pvt. Ltd. and M/s Aaura Data Networks Pvt. Ltd., and then he handed over the certified copies of certificate of incorporation, memorandum of association, articles of association, Form - 32 and annual returns of all the companies with the covering letter as per Ex.P.114 to Ex.P.117 and Madhu Lakhsminarayana and Suchitra Madhu both are having major shares in M/s Apsis Technologies Pvt. Ltd., and M/s Aaura Data Networks and as such, they are called group companies.
324. In view of the evidence of P.W.25, the accused No.1 and 2 are having major shares in M/s Apsis Technologies Pvt. Ltd., and M/s Aaura Data Networks Pvt. Ltd., and they are called group companies and M/s Mega Electricals Pvt. Ltd., M/s Apsis Technologies Pvt. Ltd., and M/s Aaura Data Networks Pvt. Ltd.,are the registered companies.
325. Ex.P.116 is the certified copy of the Certificate of Incorporation, Memorandum of Association, Form No.32 and other relevant documents in respect to M/s 168 C.C.No.21483/2016 Apsis Technologies Pvt. Ltd., and Ex.P.117 is the certified copy of the Certificate of Incorporation, Memorandum of Association, Form No.32 and other relevant documents in respect to M/s Aaura Data Networks Pvt. Ltd. These documents reveals that these two companies are registered companies under the Companies Act, 1956.
326. The Ld. Counsel for accused No.1, 2 and 4argued that, the Managing Directors of the companies are made as accused persons, but the companies are not made as accused persons and relied the following decisions ;
327. The Ld. Counsel for accused No.1, 2 and 4 has relied upon the decision reported in (2012) 5 SCC 661, in between Aneeta Hada Vs. Godfather Travels and Tours (P) Ltd., wherein Hon'ble Supreme Court has held that -
As per as the company is concerned, it was not arraigned as an accused. Ergo, the proceeding as initiated in the existing incarnation is not maintainable either against the Company or against the Director.
328. In view of the above decision, mandatory requirement of impleading company as one of the accused as per Section 141 of N.I. Act and prosecution 169 C.C.No.21483/2016 against Director or authorized signatory of cheque without arraigning of company as accused is not maintainable. In the above decision, the complaint has been filed u/Sec.138 r/w 141 of N.I.Act against the Director of the company as per Section 141 of N.I.Act speaks about offences by companies. But, instant case registered against the accused persons for the offence punishable u/Sec.120 B r/w 420, 467, 468, 471 of IPC. Hence, facts of the above decision and facts of the case on hand are different. Hence above decision is not applicable to the case on hand.
329. The Ld. Counsel for accused No.1, 2 and 4 has relied upon the decision of W.P.No.14973 of 2023 (GM- RES) in between Padpara Patti Syed Basha Aysb @ P.S. Ayub and another Vs. The Laobur Department, Government of Karnataka and another wherein Hon'ble High Court of Karnataka has held that
7. From a bare reading of the aforesaid provision of the law, it is evident that, if the person committing any offence under the Minimum Wages Act, 1948 is a company, the persons in charge of the company as well as the company shall be deemed to be guilty of the offence and they shall be liable to be proceed against and punished. The petitioners herein are being proceeded in their capacity as Directors of the Company known as 170 C.C.No.21483/2016 Attica Gold Pvt. Ltd., the allegations against them is they are vicariously liable on behalf of the company.
Therefore, in the absence of the company being made as accused in the complaint, the complaint is not maintainable.
330. In view of the above decision, if the person committing any offence under the Minimum Wages Act, 1948 is a company, the persons in charge of the company as well as the company shall be deemed to be guilty of the offence and they shall be liable to be proceed against and punished. But, instant case registered against the accused persons for the offence punishable u/Sec.120 B r/w 420, 467, 468, 471 of IPC. Hence, facts of the above decision and facts of the case on hand are different. Hence above decision is not applicable to the case on hand.
331. The Ld. Counsel for accused No.1, 2 and 4 has relied upon the decision reported in (2008) 5 SCC 662, in between S.K. Alagh Vs. State of Uttar Pradesh and others, wherein Hon'ble Supreme Court has held that -
19. As, admittedly drafts were drawn in the name of the Company, even if the appellant was its Managing Director, he cannot be said to have committed an offence under Section 406 of the Penal Code. If and when a Statute 171 C.C.No.21483/2016 contemplates creation of such a legal fiction, it provides specifically therefor. In absence of any provision laid down under the statute, a Director of a company or an employee cannot be held to be vicariously liable for any offence committed by the company itself.
332. In view of the above decision, if and when a Statute contemplates creation of such a legal fiction, it provides specifically therefor and in absence of any provision laid down under the statute, a Director of a company or an employee cannot be held to be vicariously liable for any offence committed by the company itself.
333. The Ld. Counsel for accused No.1, 2 and 4 has relied upon the decision reported in (2009) 1 SCC 516, in between R. Kalyani Vs. Jank C. Mehta and Others, wherein Hon'ble Supreme Court has held that -
41. If a person thus, has to be proceeded with as being vicariously liable for the acts of the company, the company must be made an accused. In any event, it would be a fair thing to do so, as legal fiction is raised both against the company as well as the person responsible for the acts of the company.
334. In view of the above decision, if a person has to be proceeded with as being vicariously liable for the 172 C.C.No.21483/2016 acts of the company, the company must be made an accused.
335. The Ld. Counsel for accused No.1, 2 and 4 has relied upon the decision reported in (2015) 12 SCC 781, in between Sharad Kumar Sanghi Vs. Sangita Rane, wherein Hon'ble Supreme Court has held that -
9. The allegations which find place against the Managing Director in his personal capacity seem to be absolutely vague. When a complainant intends to rope in a Managing Director or any officer of a company, it is essential to make requisite allegation to constitute the vicarious liability.
11. In the case at hand as the complainant's initial statement would reflect, the allegations are against the Company, the Company has not been made a party and, therefore, the allegations are restricted to the Managing Director. As we have noted earlier, allegations are vague and in fact, principally the allegations are against the Company. There is no specific allegation against the Managing Director. When a company has not been arrayed as a party, no proceeding can be initiated against it even where vicarious liability is fastened under certain statues.
336. In view of above decision, when a company has not been arrayed as a party, no proceeding can be 173 C.C.No.21483/2016 initiated against it even where vicarious liability is fastened under certain statues.
337. In this case, the companies and firms are not made as accused persons and the only Managing Director of the M/s Apsis Technologies Pvt. Ltd., and Managing Director of M/s Aaura Data Networks Pvt. Ltd., Managing Director of M/s Mega Electricals Pvt. Ltd., and Proprietor of M/s Gift Express and M/s Express Technologies are made as accused persons.
338. As discussed above, the oral and documentary evidence produced before the Court that M/s Apsis Technologies Pvt. Ltd., M/s Aaura Data Networks Pvt. Ltd., and M/s Mega Electricals Pvt. Ltd., are the registered companies under the Companies Act. These registered companies are not made as accused persons.
339. In the cross-examination of C.W.69/P.W.61 the investigation officer, it is elicited by the Ld. Counsel for the accused No.1, 2 and 4 that M/s Apsis Technologies Pvt. Ltd., M/s Aaura Data Networks Pvt. Ltd., are the registered companies. But, P.W.61 denied that M/s Gift Express, M/s Deejay Technologies and M/s Express Technologies are registered companies under the Companies Act and he specifically states that, they are the firms. Further, P.W.61 states that, the transactions 174 C.C.No.21483/2016 took place in the names of companies, firms and individuals.
340. The evidence available on record shows that, the accused No.1 is the Managing Director of M/s Apsis Technologies Pvt. Ltd., and he opened the SOD account in the name of said company and excess were allowed in the said account and also cheques were discounted in the said account. Ex.P.18 shows that the said account opened in the name of company by the accused No.1 as a Managing Director.
341. The evidence available on record shows that, the accused No.1 is the Managing Director of M/s Apsis Technologies Pvt. Ltd., and he opened the Union Classic Account in the name of said company and TODs were allowed in the said account and also cheques were discounted in the said account. Ex.P.22 shows that the said account opened in the name of company by the accused No.1 as a Managing Director.
342. The evidence available on record shows that, the accused No.1 is the proprietor of M/s Deejay Technologies and he opened the SOD account in the name of said firm and excess were allowed in the said account. Ex.P.21 shows that the said account opened in the name of firm by the accused No.1 as a proprietor.
175 C.C.No.21483/2016343. The evidence available on record shows that, the accused No.1 is the Kartha of HUF of M/s Jhanavi Enterprises and he opened the SOD account in the name of said firm and excess were allowed in the said account and also obtained the TOD facility. Ex.P.20 shows that the said account opened in the name of firm by the accused No.1 as a Kartha of HUF.
344. The evidence available on record shows that, the accused No.1 has opened SB account in his name and also opened Union Classic Account in his name and availed TODs and cheque discounting facilities. Ex.P.25 shows that the said account opened in the name accused No.1.
345. In view of above discussion, the accused No.1 has opened SOD and Union Classic Account in the name of M/s Apsis Technologies Pvt. Ltd., and accused No.1 also opened SOD account as a proprietor of firm by name M/s Deejay Technologies and as a Kartha of HUF of a firm by name M/s Jhanavi Enterprises and further he has opened SB account and Union Classic Account in his name. Admittedly, M/s Apsis Technologies Pvt. Ltd., is a registered company, but there is no evidence available on record to show that M/s Deejay Technologies and M/s Jhanavi Enterprises also registered companies. As per 176 C.C.No.21483/2016 the evidence available on record shows that M/s Deejay Technologies and M/s Jhanavi Enterprises are the firms.
346. The evidence available on record shows that, the accused No.2 is the Managing Director of M/s Aaura Data Networks Pvt. Ltd., and she opened the Current Account in the name of said company and TODs were allowed in the said account. Ex.P.33 shows that the said account opened in the name of company by the accused No.2 as a Managing Director.
347. The evidence available on record shows that, the accused No.2 is the Managing Director of M/s Aaura Data Networks Pvt. Ltd., and she opened the Current Account and Union Classic Account in the name of said company and TODs were allowed in the said account and also cheques were discounted in the said account. Ex.P.32 and 23 shows that the said account opened in the name of company by the accused No.2 as a Managing Director.
348. The evidence available on record shows that, the accused No.2 has opened SB account in her name and also opened Union Classic Account in her name and availed TODs and cheque discounting facilities. Ex.P.26 shows that the said account opened in the name accused No.2.
177 C.C.No.21483/2016349. In view of above discussion, the accused No.2 has opened current account and Union Classic Account in the name of M/s Aaura Data Networks Pvt. Ltd., and further she has opened SB account and Union Classic Account in her name. Admittedly, M/s Aaura Data Networks Pvt. Ltd., is a registered company, but the accused No.2 has opened Union Classic Account in her name and availed the TOD facilities.
350. The evidence available on record shows that, the accused No.4 is the proprietor of M/s Express Technologies and M/s Gift Express and he opened the current account in the name of said firms and availed TODs and cheque discounting facilities in the said account. Ex.P.27 and 28 shows that the said accounts opened in the name of firms by the accused No.4 as a proprietor.
351. In view of the above cited decisions of Hon'ble Supreme Court, if a persons has to be proceeded with as being vicariously liable for the acts of the company, the company must be made an accused as legal fiction is raised both against the company as well as the persons responsible for the acts of the company. Instant case, the registered companies i.e. M/s Apsis Technologies Pvt. Ltd., and M/s Aaura Data Networks Pvt. Ltd., are not made as accused persons.
178 C.C.No.21483/2016352. In a decision reported in 2019 SCC Online Karnataka 4297 in between K. Janardhana Reddy Vs. State by CBI/ACB/Bangalore, wherein Hon'ble High Court of Karnataka has held that ;
In sofar as submission made by the learned Senior Counsel for the petitioner that since the firm has not been made a party, therefore, the petitioner who is a partner of the firm does not deserve consideration as the Supreme Court in the case of Standard Chartered Bank, supra was dealing with the question whether a company or a corporate body could be prosecuted for offences for which sentence of imprisonment is a mandatory punishment, which is evident from para 4 of the report. Therefore, the aforesaid decision, by no stretch of imagination can be considered to be an authority for the proposition that the term corporate body would include even a partnership firm. The aforesaid submission is therefore sans substance.
353. In view of the above decision, by no stretch of imagination can be considered to be an authority for the proposition that the term corporate body would include even a partnership firm.
354. Instant case, the accused No.1 being the proprietor of M/s Deejay Technologies and Kartha of HUF of M/s Jhanavi Enterprises and also in his individual capacity transacted with the bank and availed 179 C.C.No.21483/2016 TOD and excess in SOD account and cheque discounting facilities and the accused No.2 in her individual account availed TOD facilities and accused No.4 being proprietor of M/s Gift Express and M/s Express Technologies has availed TOD and cheque discounting facilities in these accounts against the Rules made under circulars of Union bank of India and these transactions were not ratified by the Regional Office and subsequently these accounts became NPA. Though, the registered companies i.e. M/s Apsis Technologies Pvt. Ltd., and M/s Aaura Data Networks Pvt. Ltd., were not made as accused persons, but the accused No.1, 2 and 4 made transaction with the bank in the individual capacity of accused No.1 and 2 and also proprietor of the firms. In view of the above decision, no stretch of imagination can be considered to be an authority for the proposition that the term corporate body would include even a partnership firm. Hence, the accused No.1 and 2 are responsible for the transactions made in their individual capacity and accused No.1 and 4 are responsible for the transactions made as a Proprietors of their respective firms.
355. In a decision reported in (2009) 8 SCC 1 in between Sudhir Shantilal Mehta Vs. CBI, wherein the Hon'ble Supreme Court has held that the primary question is whether the property of the bank was 180 C.C.No.21483/2016 dishonestly used or disposed of in violation of any direction of law prescribing the mode therefor. The mode of disposal of public money is prescribed in terms of the UCO bank manual and the circulars issued by the Reserve bank of India. It was, however, necessary for the prosecution to prove that the same was done with requisite mens rea.
356. Instant case, the offence had been committed purely for the benefit of accused No.1, 2 and 4 and they are the prime beneficiaries. The Branch Manager K.R.Prasanna in conspiracy with accused No.1, 2 and 4 has allowed the excess in the SOD accounts and allowed the TODs in the UCCA1 accounts and current accounts and also purchased the cheques beyond his delegated powers and even after suspension of delegated powers and allowed inter transfer of funds for the purpose of accommodation with dishonest intention to cheat the Union bank of India and his actions were not ratified by the Regional Office.
357. Thus, on going through the entire oral and documentary evidence and materials placed before this Court meticulously, this Court is of the considered view that the prosecution has established the necessary ingredients of the offence punishable u/Sec.120 B r/w 420 of IPC as against the accused No.1, 2 and 4 beyond 181 C.C.No.21483/2016 all reasonable doubt as they have conspired with the deceased accused K.R.Prasanna and availed the facilities with dishonest intention to cheat the Union bank of India. The evidence on record clinchingly establish the commission of offence punishable u/Sec.420 of IPC in the matter of availing excess in the SOD accounts of firms namely M/s Deejay Technologies and M/s Jhanavi Enterprises and availing temporary overdrafts facilities and cheque discounting facilities in the Union Classic Accounts of the individual accounts of accused No.1 and 2 and availing temporary overdrafts facilities and cheque discounting facilities in the currents account of firms namely M/s Express Technologies and M/s Gift Express. The evidence on record clearly established the dishonest intention on the part of accused No.1, 2 and 4 at the vary inception from the stage of availing facilities. In this regard, the evidence on record established clear circumstances against the accused No.1, 2 and 4 forming complete chain of circumstances which is consistent to prove the guilt of the accused No.1, 2 and 4. Therefore, this Court is of the considered view that, the prosecution has proved Point No.1 and 2 beyond all reasonable doubt as against the accused No.1, 2 and 4. Accordingly, I answer Point No.1 and 2 in the affirmative.
182 C.C.No.21483/2016358. POINT NO.3 to 7 : Since these points are interlinked, to avoid repetition and for the sake of brevity, they are together taken for consideration.
359. As per the prosecution case, the accused No.3 Smt. C. Shobha, Managing Director of M/s. Mega Electricals Pvt. Ltd., in furtherance of conspiracy with deceased accused Sri. K.R. Prasanna had opened a current A/c No. 39530010136309 on 17.05.2008 with Union Bank of India, B.V.K. Iyengar Road Branch, Bengaluru. Deceased accused Sri. K.R. Prasanna himself introduced this account with dishonest intention to cheat the Bank and in violation of Union Bank of India circular No.7495 dated. 26.09.2006 had allowed temporary over drafts in this account without any powers, security and sanction and Sri. K.R. Prasanna was not empowered to extend any credit facility to M/s. Mega Electricals Pvt. Ltd., owned by the accused No.3 as she is sister-in-law of Sri. K.R. Prasanna and accused No.3 who is close relative of Public Servant deceased accused Sri. K.R. Prasanna was not entitled for any credit facilities.
360. Ex.P.6 is the instruction circular No.7198 dated 02.08.2005 and it was issued in respect to management of credit portfolio. In the said circular at para No.1.2.11 reveals as under ;
183 C.C.No.21483/20161.2.11. The definition of term 'Relative' as given by the RBI is as under -
Spouse, Father, Mother (including step Mother), Son (including step son), Son's Wife, Daughter (including step daughter), Daughter's Husband, Brother (including step brother), Brother's wife, Sister (including step sister), Sister's Husband, Brother (including step brother) of the Spouse, Sister (including step sister) of the Spouse.
361. In view of the above circular, Brother's Wife also comes under the definition of relative as given by the RBI. Instant case, the accused No.3 is the Brother's Wife of deceased accused K.R. Prasanna who was the Branch Manager. Hence, accused No.3 is the relative of the Branch Manager deceased accused K.R. Prasanna as per the definition given by the RBI.
362. Ex.P.5 is the instruction circular No.7495 dated 26.09.2006 issued in respect to management of credit portfolio and delegation of loaning powers. It reveals that Rule No.3 deals with prohibition wherein Rule No.3.3 reveals that the delegated authority shall not be exercised in the cases other than by Managing Director and Executive Director where the borrower is related to an employee of bank, any loan other than the non commercial loans viz., educational loan, housing loan, secured loan against deposits/NSC/LIC policies.
184 C.C.No.21483/2016Hence, as per this Rule there is a prohibition to lend loan other than non commercial loan to the relative of the employee of the bank.
363. As per the prosecution case, the accused No.3 is the relative of deceased accused K.R.Prasanna who was the Branch Manager. In view of the above Rule, the deceased accused K.R.Prasanna should not give any loan other than the non commercial loans to his relative. It is pertinent to note that the above Ex.P.5 circular binds on the deceased accused K.R.Prasanna who was the Sr. Manager and he has to follow the rules made under the circulars by the bank while lending the money.
364. The Ld. Counsel for accused No.3 has argued that the accused No.3 had not opened the account in her individual capacity and the account was opened in the name of M/s Mega Electricals Pvt. Ltd., and it is a corporate body and it cannot become a relative of the Branch Manager. It is pertinent to note that in view of the Rule made Ex.P.5 circular, the deceased accused K.R.Prasanna should not give any loan other than the non commercial loans viz. Educational loan, Housing loan, Secured loan against deposits/NSC/LIC policies to his relative. Though, the accused No.3 is the relative of the Branch Manager, but the facilities given to M/s. Mega Electricals Pvt. Ltd.,. Further, M/s. Mega 185 C.C.No.21483/2016 Electricals Pvt. Ltd., is a registered company and it has legal entity and the said company not made as accused in this case.
365. As per the prosecution case, deceased accused Sri. K.R. Prasanna in furtherance of said conspiracy with accused No.3 had purchased a bill No. 39530DBP000108 dated 01.07.2008 amounting to Rs.15 Lakhs drawn on M/s. Bhoruka Aluminum, Mysore and this bill was not sent for collection with dishonest intention and to cover up this false bill transaction, deceased accused Sri. K.R. Prasanna had purchased another bill no.39550DBP000108 for Rs.17,40,000/- on 09.07.2008 in current account of M/s. Mega Electricals Pvt. Ltd., and this bill also not sent for collection to M/s. Bhoruka Aluminum, Mysore and instead adjusted on receipt of payment through RTGS received from M/s. Bhoruka Aluminum, Mysore directly.
366. As per the prosecution case, the deceased accused Sri. K.R. Prasanna in furtherance of conspiracy with accused No.3 had purchased another bill No.39530DBP000308 for Rs.8,37,500/- drawn on M/s. Bhoruka Aluminum, Mysore and to adjust this bill, deceased accused K.R. Prasanna had debited the account of M/s Mega Electrical Private Limited on 14.08.2008.
186 C.C.No.21483/2016367. P.W.2 states that, vide Ex.P.11 seizure memo, he produced the Ex.P.12 file of current account opening form pertaining to M/s Mega Electricals Pvt. Ltd., represented by its Managing Director Smt. C. Shobha has opened the current account and one Sri K. R. Prasanna the then Sr. Manager of B.V.K. Iyengar Road Branch has introduced the customer to the bank and he has authorized opening the account in the name of M/s Mega Electricals Pvt. Ltd. P.W.2 identified the Ex.P.13 the statement of account of M/s Mega Electricals Pvt. Ltd., and Ex.P.14 ledger report and deposed that vide the current account of M/s Mega Electricals Pvt. Ltd., no facilities such as cheque purchase limit, bill purchase limit, cash credit limit, TOD and others were sanctioned , but Ex.P.12 the statement of account clearly shows that vide that account various facilities such as cheque purchase limit, bill purchase limit and TOD were allowed through this account.
368. Further P.W.2 identified the Ex.P.12 (c) letter given by M/s Mega Electricals Pvt. Ltd., along with a bill for Rs.16,75,000/- asking for sanction of Rs.8,37,500/- against the said bill and deposed that on 18.07.2008 the bill Ex.P.12 (c) was purchased and Rs.8,37,500/- was credited to the current account of M/s Mega Electricals Pvt. Ltd. He further states that as per rule the entire 187 C.C.No.21483/2016 amount of the bill should have been credited to the account after purchasing it, but a part of amount only has been credited to the account and after purchasing the bill and crediting the amount, the bill should have been sent to the collecting bank, but the said bill was not sent to the collecting bank and instead by creating over draft the said amount was adjusted against the crediting of Rs.8,37,500/-. He further states that if the bill purchasing facility was not given, then the received bill should be sent to the collecting bank and only after getting the bill proceeds, it should be credited to the bill paid account and the Sr. Manager without being the account allowed to have the TOD facility could sanction TOD upto Rs.1 lakh, but thereafter he should have get ratification from the regional office for allowing the TOD facility without sanction.
369. P.W.2 Sri. M.R Gopalkrishna states that Ex.P.12 (d) the bill dated 09.07.2008 for Rs.17,40,925/- submitted to the bank and the said bill was purchased on 01.07.2008 and on that day only Rs.15 lakhs has been credited against the bill amount of Rs.17,40,925/-, but the said bill was not sent to the collecting bank and the amount was adjusted by transferring Rs.4 lakhs from the current account of M/s Mega Electricals Pvt. Ltd., on 05.07.2008 and the balance amount was adjusted by 188 C.C.No.21483/2016 realization of two cheques one for Rs.9 lakhs and another for Rs.2 lakhs.
370. P.W.3 Sri. M. Jayaraj identified Ex.P.29 the file of M/s. Mega Electricals Pvt. Ltd, containing documentary bills purchase and he also identified the Ex.P.12 the documents of bill purchase.
371. C.W.21/P.W.16 - Smt. Latha Ramanujam, Dy. Manager (Officiating) at State Bank of India, Commercial branch, Saraswathipuram, Mysore deposed that in this case, on the request of the CBI from their branch side, she has furnished two bills of exchanges pertaining to M/s Mega Electricals Pvt. Ltd., to the CBI along with the covering letter as per Ex.P.103. P.W.16 further deposed that on 12.08.2008 RTGs was made to Union bank of India, Bengaluru from their branch for Rs.25,78,425/- total of two bills of exchanges dated 09.07.2008 for Rs.17,40,925/- and 18.07.2008 for Rs.8,37,500/- favoring M/s Mega Electricals Pvt. Ltd., from the account of M/s Bhoruka Aluminium Ltd., and other than these two bills, their commercial branch has not received any bills of exchanges of M/s Mega Electricals Pvt. Ltd. P.W.16 identified Ex.P.104 statement of account pertaining to M/s Bhoruka Aluminium Ltd., maintained in their branch pertaining to 12.08.2008.
189 C.C.No.21483/2016372. P.W.16 was subjected to cross examination by Ld. Counsel for accused No.3 where she stated that M/s Bhoruka Aluminium Ltd., is one of the reputed customers of their branch and M/s Bhoruka Aluminium Ltd., had issued two bills of exchanges in favour of M/s Mega Electricals Pvt. Ltd., and they had come to their branch for collection and after examining the supported documents they have honoured the bills and credited the value of the bills to the payee bank i.e., Union bank of India where M/s Mega Electricals Pvt. Ltd., had an account.
373. P.W.16 further states that the holder of the bill of exchange can get the bill discounted from the payee bank and the payee bank would send the bills for collection to the drawer bank as a normal procedure and if the holder of the bill having got the bill discounted from the payee bank can remit the value of the discounted bill to the payee bank and in such event the payee bank will not forward the bill to the drawer bank for collection as bills stood discharged either by the drawer remitting the amount directly to the payee or the value of the bill could be reconciled or payee/holder of the bill can withdraw the bill after paying the value of the bill.
190 C.C.No.21483/2016374. In view of the evidence of P.W.16 also, M/s Bhoruka Aluminium Ltd., had issued two bills of exchanges in favour of M/s Mega Electricals Pvt. Ltd., and they had come to their branch for collection and after examining the supported documents they have honoured the bills and credited the value of the bills to the payee bank.
375. P.W.37 Sri. R. Chandra Shekar, the then accountant of M/s Mega Electricals Pvt. Ltd., identified Ex.P.12 file containing account opening form and other related documents pertaining to the account opened at Union bank of India in the name of M/s Mega Electricals Pvt. Ltd.
376. C.W.23/P.W.51 - Sri. Ajaykumar Dalmia, CFO at M/s Bhoruka Aluminium Ltd., Mysore deposed that as CFO in the said company his nature of work was looking after the financial matters of the company and he is conversant with the financial transactions of that company and he know M/s Mega Electricals Pvt. Ltd., and M/s Bhoruka Aluminium is the manufacturer of aluminium extrusions and while purchasing materials, the purchase order has been issued by the purchase department and thereafter, the party has supplied the material and the material was received at the stores and 191 C.C.No.21483/2016 thereafter, it was forwarded to the finance/accounts department and then the finance department by recording the transactions in the books of accounts and on due dates it has made payments either trough RTGs or Cheques to the suppliers. P.W.51 identified Ex.P.131 the file pertaining to M/s Bhoruka Aluminium Ltd. and the purchase order number 4520000091 dated 15.03.2008 in the name of M/s Mega Electricals Pvt. Ltd., for an amount of Rs.68,15,850/- and deposed that M/s Mega Electricals Pvt. Ltd., has raised the bills bearing No.40, 41, 43 and 60 covered under 2 bills of exchanges dated 10.07.2008 for Rs.16,75,000/- and dated 28.06.2008 for Rs.34,81,850/- and these bills of exchanges have been accepted by M/s Bhoruka Aluminium Ltd., and thereafter, payments were made through RTGs on 21.07.2008. P.W.51 identified Ex.P.131
(a) to (d) the copies of invoices and a bill of exchange dated 28.06.2008 and Ex.P.131 (e) the invoice and Ex.P.131 (f) bill of exchange dated 10.07.2008 and Ex.P.131 (g) the statement of account for making payment to M/s Mega Electricals Pvt. Ltd., as per the books of M/s Bhoruka Aluminium Ltd. and deposed that Ex.P.131 (g) contains the payments made to M/s Mega Electricals Pvt. Ltd., along with invoice numbers and mode of payment and apart from these 2 bills of exchanges, M/s Bhoruka Aluminium Ltd., has not 192 C.C.No.21483/2016 received any bills of exchanges from M/s Mega Electricals Pvt. Ltd. P.W.51 identified Ex.P.104 the statement of account of their bank.
377. P.W.51 was subjected to cross examination by Ld. Counsel for accused No.3 wherein he stated that in the year 2011 - 12, he left M/s Bhoruka Aluminium Ltd., as he got another job. P.W.51 states that he does not remember when he left M/s Bhoruka Aluminium Ltd., what was its balance sheet and whether it was profits side or not and when actually M/s Bhoruka Aluminium Ltd., and M/s Mega Electricals Pvt. Ltd., started dealing with each other. P.W.51 further states that when M/s Mega Electricals Pvt. Ltd., started dealing with M/s Bhoruka Aluminium Ltd., he was working there as Chief Finance Officer, but he does not remember in the year 2007 how many invoices raised by M/s Mega Electricals Pvt. Ltd., against M/s Bhoruka Aluminium Ltd. P.W.51 further states that M/s Bhoruka Aluminium Ltd., used to assign and entrust certain execution of work relating to electrical installation and transmission and he does not remember the work executed and invoices raised by M/s Mega Electricals Pvt. Ltd., in the year 2008 & 2009. P.W.51 further states that in his examination chief he deposed regarding the mode of payment that M/s Bhoruka Aluminium Ltd., made in 193 C.C.No.21483/2016 discharge of its liability towards M/s Mega Electricals Pvt. Ltd., and the work executed, the invoices raised and payments made in between M/s Bhoruka Aluminium Ltd., and M/s Mega Electricals Pvt. Ltd., are all genuine transactions and it is the general commercial practice that business establishment will have bank accounts of their choice.
378. P.W.51 admitted that the healthy transactions in between customer and banker that would determine the facilities extended to customer. P.W.51 states that while he was working, M/s Bhoruka Aluminium Ltd., had the accounts in the State Bank of India and HDFC bank and M/s Bhoruka Aluminium Ltd., had availed credit facilities only in the State Bank of India and he does not remember the types of credit facilities availed by M/s Bhoruka Aluminium Ltd., from the year 2007 to 2009. P.W.51 further states that he does not remember whether M/s Bhoruka Aluminium Ltd., had availed credit facilities on the work to be executed by M/s Mega Electricals Pvt. Ltd., and when he left M/s Bhoruka Aluminium Ltd., what was the due from M/s Bhoruka Aluminium Ltd., towards M/s Mega Electricals Pvt. Ltd. P.W.51 admitted that M/s Mega Electricals Pvt. Ltd., has duly executed the work entrusted to it. P.W.51 further states that the purchase manager was more familiar 194 C.C.No.21483/2016 than him regarding the transactions between M/s Bhoruka Aluminium Ltd., and M/s Mega Electricals Pvt. Ltd., and there were 3 - 4 persons involved in entering the entries in the computers but, he does not remember their names and the CBI officer has not examined any of the said 3 - 4 persons and the said 3 - 4 persons were not keeping any note books for making entries in computers and the said 3 - 4 persons were having different passwords.
379. P.W.51 further deposed that in the year 2007 to 2009 there was no corruption in the system and the computers were connected with the internet and when the bills of exchanges were accepted they were not making any entries and they were making entries as to them only on their payments and there was no separate payment register. P.W.51 further deposed that he has put his signature to bills of exchanges when they were accepted and even he has certified the said copies while giving to the CBI officer and when he issued the certified copy Ex.P.131 (f), its original was with M/s Mega Electricals Pvt. Ltd., and based on the copies available with them, he has given the certified copy to the CBI office and they have taken the documents to the CBI office pertaining to the transactions made with M/s Mega Electricals Pvt. Ltd., and the CBI officer did not seize all 195 C.C.No.21483/2016 the said documents. P.W.51 further states that the CBI officer did not seize the hard disc of their company and not collected the certification from any of 3 - 4 persons whom he referred and not collected any CD, Bluetooth or USB and he was not authorized to give the certified copy of the statement of the State Bank of India.
380. P.W.51 further deposed that the CBI officer did not ask him the bank statement of any particular period, but the statement is pertaining to cover 2 bills of exchanges that were mentioned and the 2 bills of exchanges were of different dates. P.W.51 further states that he does not remember the backgrounds on which these 2 bills of exchanges were accepted and the exact numbers of RTGs, NEFTs, DDs, Cheques or bills of exchanges drawn pertaining to the transactions met with M/s Mega Electricals Pvt. Ltd. P.W.51 further states that the cheques of M/s Bhoruka Aluminium Ltd., have not been returned being dishonored and the cheques issued during his period were encashed by the payees and now he does not remember whether during his period M/s Mega Electricals Pvt. Ltd., had sent any requisitions seeking payment of their entire due and when he and the purchase manager were in the CBI office both of them certified some of the documents which have been marked as Ex.P.131 (a) to (f) and on that day the 196 C.C.No.21483/2016 purchase manager certified the documents pertaining to his department and he certified the documents pertaining to his department and the purchase manager has issued certified copies based on the computer printouts and their originals were with M/s Mega Electricals Pvt. Ltd., and they had taken the printouts of said documents in their office. P.W.51 admitted that there is no certification mentioning the date when the printouts of these documents have been taken and when he was examined, he answered the questions put by the CBI officer and the CBI officer did not draw any mahazar for taking the documents. P.W.51 admitted that they came to know the bills of exchanges raised against M/s Bhoruka Aluminium Ltd., only when they came to them for acceptance and in the business, the bills of exchanges were drawn and they were presented to bank for discount and if the amount due towards that bill of exchange is remitted through RTGs, NEFT or through any other modes to the payee, then the said bill of exchange would not be come to drawer for acceptance and payment since it is discharged.
381. Ex.P12 is the file containing account opening form of current account No.395301010036309 of M/s Mega Electricals Pvt. Ltd, Board Resolution, letters, bills of exchange etc. 197 C.C.No.21483/2016
382. Ex.P12(d) is the copy of the outward bill dated:09.07.2008 and it reveals that Bill DBP 108 for Rs.17,40,925/- was presented by Union Bank of India to the State Bank of India for collection and name of the drawer mentioned as M/s Mega Electricals Pvt Ltd., and the name of the drawee mentioned as Bhoruka Aluminum Ltd.
383. Ex.P12(c) (1) is the copy of the outward bill dated:18.07.2008 and it reveals that Bill DBP 00308 for Rs.8,37,500/- was presented by Union Bank of India to the State Bank of India for collection and name of the drawer mentioned as M/s Mega Electricals Pvt Ltd., and the name of the drawee mentioned as Bhoruka Aluminum Ltd.
384. Ex.P.80 is the file containing details of bills purchased by the Branch on behalf of M/s Mega Electricals Pvt. Ltd., along with details of proceeds received from the drawee banks/details of adjustment submitted by the PW.2 and account ledger report from 01.05.2007 to 31.03.2009. It reveals that the PW.2 submitted the details of bills purchased by their branch on behalf of M/s Mega Electricals Pvt Ltd., in account No.395301010036309 along with the details of proceeds received from drawee banks details of adjustments made.
198 C.C.No.21483/2016In Sl.No.1 of the said letter it is mentioned that the bill No.39530DBP000108 dated:01.07.2008 for Rs.15,00,000/- was purchased and name of the party mentioned as Bhoruka Aluminum, No.1, KRS road, Metagalli, Mysore and date of discount was 01.07.2008 and the bills sent to (as per system) Bhoruka Aluminum and it was adjusted on 05.07.2008. Further it is mentioned that no proceeds received from the drawee bank and the bill was adjusted by debiting the Rs.4,00,000/- in account No.395301010036309 of M/s Mega Electricals Pvt Ltd., on 05.07.2008 and an amount of Rs.9,00,000/- was credited on 03.07.2008 to BP account -BPAR being the proceeds of DD No.574191 dated 01.07.2008 drawn on SBI presented in clearing and an amount of Rs.2,00,000/- was credited on 03.07.2008 to BP account - BPAR being the proceeds of DD No.574192 dated 01.07.2008 drawn on SBI presented in clearing.
385. Ex.P13 is the statement of account M/s Mega Electricals Pvt Ltd., and it reveals that on 01.07.2008 the bill No.39530DBP00108 Rs.15,00,000/- was credited to the current account of the M/s Mega Electricals and on 05.07.2008 Rs.4,00,000/- in respect to DIFF No.DBP00108 was debited from the said account.
199 C.C.No.21483/2016386. Ex.P.103 is the letter written by Chief Manager, SBI along with documents including two bill of exchanges for Rs.8,37,500/- and Rs.17,40,925/- in respect to Bhoruka Aluminum Ltd. It reveals that PW.16 the then the Chief Manager of SBI written a letter that UBI bill purchase No.39530DBP000108 dated 01.07.2008 for Rs.15,00,000/- has not been received by them for payment and UBI bill purchase No.39530DBP000108 dated 09.07.2008 for Rs.17,40,925/- and UBI bill purchase No.39530DBP000308 dated 18.07.2008 for Rs.8,37,000/- were received by them on collection and aggregating Rs.25,78,425/- was paid by them on 12.08.2008 through RTGS to UBI, BBK Iyenger road branch, Bengaluru and original documents pertaining to the said transactions are forwarded. Original bill of exchange No.DBP000308 dated:10.07.2008 for Rs.8,37,500/- and the orignial bill of exchange No.DBP 108 dated:28.06.2008 for Rs.17,40,925/- and original outward bill etc also produced and it reveals that the accused No.3 has produced the said bills of exchange.
387. Ex.P104 is the statement of accounts of Bhoruka Aluminum Ltd it reveals that on 12.08.2008 Rs.17,40,925/- and Rs.8,37,500/- were transferred.
200 C.C.No.21483/2016388. Ex.P.13 (i) is the entry in the statement of account pertaining to M/s Mega Electricals reveals that on 13.08.2008 Rs.25,78,425/- was credited to the said account.
389. On perusal of the evidence of PW.16 and also Ex.P103 and Ex.P.104, it clearly shows that two bills of exchange No.DBP000308 dated:10.07.2008 for Rs.8,37,500/- and DBP 108 dated:28.06.2008 for Rs.17,40,925/- were produced by the M/s Mega Electricals before the Union Bank of India and the same were sent to SBI, Commercial branch, Mysore for collection and total amount of Rs.25,78,425/- was paid by the SBI through RTGS to Union Bank of India. Hence, there is no substance in the contention of the learned Senior P.P that these bills were not sent for collection and amount of Rs.17,40,925/- adjusted on receipt of payment received from Bhoruka Aluminum directly through RTGS and Rs.8,37,500/- was adjusted by debiting the account of M/s Mega Electricals.
390. On perusal of Ex.P.13 (b) statement of accounts pertaining to M/s Mega Electricals Pvt. Ltd., it reveals that Rs.15,00,000/- was credited to the current account on 01.07.2008 in respect to bill No.39530DBP000108. As discussed above, the said bill No.39530DBP000108 issued for Rs.17,40,925/- which 201 C.C.No.21483/2016 was marked as per Ex.P.103. Hence, the said bill No.39530DBP000108 is for Rs.17,40,925/-, but not Rs.15,00,000/-. In Ex.P.13 statement of account also it is mentioned that Rs.4,00,000/- debited from the said account on 05.07.2008 towards DIFF DBP000108. In Ex.P.80 it is mentioned that on 03.07.2008 an amount of Rs.9,00,000/- was credited to BP account being the proceeds of DD No.574191 dated 01.07.2008 and an amount of Rs.2,00,000/- was credited to BP account being the proceeds of DD No.574192 dated 01.07.2008. In Ex.P.103 the true copies of the DD No.574191 dated 01.07.2008 for Rs.9,00,000/- and DD No.574192 dated 01.07.2008 for Rs.2,00,000/- are produced.
391. The Ld. Counsel for accused No.3 has argued that bill No.108 for Rs.15,00,000/- was produced before the bank and it was discounted and later it was revised and added left out portion and new bill for Rs.17,40,000/- was raised under the same bill number. The material on record clearly shows that, an amount of Rs.15,00,000/- credited in respect to discounting of bill of exchange No.39530DBP000108 and subsequently the said amount was adjusted and again bill of exchange for Rs.17,40,925/- under the same bill No.39530DBP000108 was produced and discounted. It is pertinent to note that there is no piece of documents 202 C.C.No.21483/2016 produced before the court except statement of account to show that bill of exchange No.39530DBP000108 for Rs.15,00,000/- produced before the bank and it was discounted. The said bill of exchange only for Rs.17,40,925/- and not Rs.15,00,000/-. There is no evidence on record to show that this is a false bill transaction. Even there is no avarements in the charge sheet about the said bill of exchange except saying that the said bill was purchased and to cover up the said false bill transaction, another bill was purchased. If the bank has purchased the said bill for Rs.15,00,000/-, then the documents is must be available in the bank. But no documents produced to show the existence of said bill. Even it is not the case of the prosecution that amount credited in respect to non-existing bill of exchange for Rs.15,00,000/-. It is pertinent to note that, the prosecution witnesses not deposed about bill of exchange No.39530DBP000108 for Rs.15,00,000/- in respect to false bill transaction. In the absence of bill of exchange, it cannot be considered that accused No.3 has produced the said bill of exchange and it was discounted. Hence, there is no substance in the contention of the Ld. Sr. PP that it is a false bill transaction.
392. As per the prosecution case, the deceased accused Sri. K.R. Prasanna in furtherance of conspiracy 203 C.C.No.21483/2016 with accused No.3 had purchased another bill No.39530DBP00408 for Rs.30,92,351/- drawn on M/s. Bhoruka Power Corporation and this bill was not sent for collection with dishonest intention and M/s Bhoruka Power Corporation, Bengaluru has not made any payment through bill discounting to M/s Mega Electrical Pvt Limited in this matter and to adjust this false bill, deceased accused K.R. Prasanna had debited the account of M/s Mega Electrical Private Limited on 19.11.2008.
393. C.W.3/P.W.2 in his evidence deposed that the bill No.408 for Rs.30,92,531/- was received from the party and after purchasing it, the amount was credited to the account on 18.09.2008 and the said bill was not sent to the collecting bank and the amount so credited was debited on 19.11.2008 by the said account only.
394. C.W.22/P.W.17 - Sri. N.K. Mohan Manager (finance), M/s Bhoruka Power Corporation Ltd., Bengaluru deposed that on the request of the CBI, he handed over the documents of purchase order and work order issued to M/s Mega Electrcals Pvt. Ltd., and also statement of account from April 2008 to March 2009 and M/s Bhoruka Power Corporation Ltd., is in the business of renewable energy and construction of transmission lines and in the year 2006 KPTCL had awarded 110 KV 204 C.C.No.21483/2016 transmission work to M/s Bhoruka Power Corporation Ltd. and later in the year 2007 the same has been sub contracted to M/s Mega Electricals Pvt. Ltd., from M/s Bhoruka Power Corporation Ltd. P.W.17 further states that after completion of work and after receiving certification from site engineers, M/s Bhoruka Power Corporation Ltd., has made payment to M/s Mega Electricals Pvt. Ltd., through cheques as per the payment terms of work order contract. P.W.17 identified Ex.P.105 the covering letter along with purchase and work orders and also statement of account and deposed that on going through the statement of account, it is clear that payments have been made to M/s Mega Electricals Pvt. Ltd., from M/s Bhoruka Power Corporation Ltd., only through cheques.
395. P.W.17 was subjected to cross examination by Ld. Counsel for accused No.3 wherein he stated that they had given sub contract of their project to M/s Mega Electricals Pvt. Ltd. for its execution and M/s Mega Electricals Pvt. Ltd. was their sub contractor in the year 2007 to 2009. P.W.17 further states that the CBI officer did not seize any ledgers and account books pertaining to sub contract given to M/s Mega Electricals Pvt. Ltd., and all the correspondences between M/s Mega Electricals Pvt. Ltd. and M/s Bhoruka Power Corporation 205 C.C.No.21483/2016 Ltd., are in the computer and the CBI officer did not seize the hard disk and they did not take any copies of the hard disk using accessories such as Bluetooth, USB and CDs. P.W.17 further states that during the said period, he does not know how many times the computer was configured and upgraded and likewise he cannot say how many times the computer was corrupted and corrected.
396. P.W.17 further states that in case of bill of exchanges there are columns containing date, payee, amount to pay, the particulars of drawer and the drawer bank and in case of cheuqe also there are columns similar to that of bill of exchange. P.W.17 admitted that when they issued cheuqes, they will come to know of the same when it comes back to the bank and if the amount is there, then the cheque will be honoured, otherwise it will be dishonoured and in case of dishonour of cheuqe, a debit will be made towards the collection charges and they will not be knowing about the cheque and how the payee handle the same. P.W.17 admitted that it is left to payee whether to discount it or present to its own account and in case of discounting, he has to endorse it.
206 C.C.No.21483/2016397. P.W.61 - Investigation Officer identified Ex.P.187 letter dated 10.02.2010, issued by SBI, addressing to him.
398. Ex.P.80 is the file contending letter dated 12.02.2010 written by the PW.2 and account ledger report from 01.05.2007 to 31.03.2009. The letter dated 12.02.2010 reveals that the PW.2 submitted the details of bills purchased by their branch on behalf of M/s Mega Electricals Pvt Ltd., in account No.395301010036309 along with the details of proceeds received from drawee banks details of adjustments made. In Sl.No.3 of the said letter it is mentioned that the bill No.39530DBP000408 dated:18.09.2008 for Rs.30,92,531/- was purchased and name of the party mentioned as Bhoruka Power Corporation, Lavelle Road, Bengaluru and date of discount was 18.09.2008 and the bills sent to (as per system) SBI, Overseas Branch, Bengaluru and it was adjusted on 19.11.2008. Further it is mentioned that no proceeds received from the drawee bank and the bill was adjusted by debiting the Rs.30,92,531/- in account of M/s Mega Electricals Pvt Ltd., on 19.11.2008. However in the system it is fed that the bill was realized and no entry was found in dispatch register for having sent the bill.
207 C.C.No.21483/2016399. Ex.P105 is the covering letter along with copies of purchase and work order and ledger account of M/s Mega Electrical Pvt. Ltd. It reveals that Sri. M.S Srinivas, General Manager, Finance of M/s Bhoruka Power Corporation Ltd has sent a letter to CBI that 'in terms of payment' as per the contract is through cheque and the company has not accepted any other mode of payment for the said contract and he confirmed that the company has not made any payment amounting to Rs.30,92,531/- has mentioned in the letter through SBI, Oreaseas branch, Bengaluru during September 2008. The Ledger account of M/s Mega Electrical Pvt Ltd., from 01.04.2008 to 31.03.2009 reveals that the M/s Bhoruka Power Corporation Ltd made payments to M/s Mega Electrical Pvt Ltd through cheques only.
400. Ex.P187 is the letter written by the Deputy General Manager of the SBI, Overseas branch, Bengaluru dated:10.02.2010 and it reveals that he informed that they have not received the bill No.DBP-408 dated 18.09.2008 for Rs.30,92,531/- drawn on M/s Bhoruka Power Corporation Ltd, Bengaluru from Union Bank of India, BVK Iyengar branch, Bengaluru.
401. On perusal of Ex.P.13 (g) statement of accounts pertaining to M/s Mega Electricals Pvt. Ltd., it reveals that Rs.30,92,531/- was credited to the current 208 C.C.No.21483/2016 account on 18.09.2008 in respect to bill No.39530DBP000408. As per Ex.P.105 letter issued M/s Bhoruka Power Corporation Ltd., the company has not made any payment of Rs.30,92,531/- to M/s Mega Electricals Pvt. Ltd. Further, as per Ex.P.187 letter issued by the DGM of SBI Overseas Branch, Bangalore, they have not received bill No. DBP - 408 dated 18.09.2008 for Rs.30,92,531/-. But, Rs.30,92,531/- amount was credited to the M/s Mega Electrical Pvt. Ltd., under the bill No.39530DBP000408 as reflected in Ex.P.13 (g).
402. Further, as per the evidence of P.W.2 also the said bill was not sent to the collecting bank and the amount so credited was debited on 19.11.2008 in the said account as per Ex.P13 (h). In Ex.P.13 (h) statement of account also it is mentioned that Rs.30,92,531/- debited from the said account on 19.11.2008. The bill of exchange No.39530DBP000408 is not produced before the Court to show that it was drawn on M/s Bhoruka Power Corporation.
403. In the charge sheet it is specially mentioned that the said bill of exchange was purchased by the K.R.Prasanna and the bill was not sent for collection and to adjust the false bill entry, K.R.prasanna has debited the amount to M/s Mega Electricals Pvt. Ltd., account. If 209 C.C.No.21483/2016 the bill of exchange was purchased by the bank, then it should be availed on the bank records, but no documents produced before the Court to show that the said bill of exchange drawn by the accused No.3. Further, there is no averments regarding whether the said bill was in existence or not. In the absence of bill of exchange, it cannot be considered that accused No.3 has produced the said bill of exchange and it was discounted. Hence, there is no substance in the contention of the prosecution that it is a false bill transaction.
404. As per the prosecution case, in furtherance of the conspiracy with accused No.3, the deceased accused K.R. Prasanna had purchased another bill dated 10.11.2008 amounting to Rs.5,00,841/- vide bill No.39530DBP000508 drawn on M/s Enercon India Ltd with dishonest intention and this bill also not sent for collection and M/s Enercon India Ltd is engaged in generation of Electricity through windmil and its instalation and in this effect, they have given contract work for laying the electric lines at their sites to M/s Mega Electricals Pvt Ltd and for that they have made payments to M/s Mega Electricals Pvt Ltd directly and they have not made any payments through bill of exchange and deceased accused K.R. Prasanna had 210 C.C.No.21483/2016 purchased the bills with dishonest intention without any sanction.
405. As per the prosecution case, in furtherance of the conspiracy with accused No.3, the deceased accused K.R. Prasanna had purchased another bill dated 10.11.2008 amounting to Rs.16,33,049.70/- vide bill No.39530DBP000608 drawn on M/s Enercon India Ltd with dishonest intention and this bill also not sent for collection and after the realization of post dated cheque bearing No.231100 dated 28.11.2008 for Rs.16,33,000/- issued by M/s Enercon India Ltd., the said false bill discounting entry was adjusted on 22.12.2008 with dishonest intention by false paying the Bank records and to cheat the Bank and post dated cheques cannot be purchased, hence, deceased accused K.R. Prasanna in conspiracy with accused No.3 hatched the plan to get the money transfer to the account of M/s Mega Electricals Pvt Ltd., by creating a false bill for their benefit.
406. As per the prosecution case, in furtherance of the conspiracy with accused No.3, the deceased accused K.R. Prasanna had purchased another bill dated 10.11.2008 amounting to Rs.14,63,266/- vide bill No.39530DBP000708 drawn on M/s Enercon India Ltd with dishonest intention and this bill also not sent for collection to favour accused No.3 and M/s Enercon India 211 C.C.No.21483/2016 has paid directly to M/s Mega Electricals Pvt Ltd., by way of post dated cheque and deceased accused Sri. K.R. Prasanna unable to purchase the post dated cheques, hence he colluded with accused NO.3 and purchased the false bills without any sanction and intellegently did not sent the bill for collection and parted the Bank money for which accused No.3 was not other wise entitle and cheated the Bank with dishonest intention.
407. PW.2 further states that Ex.P.12 (e) a letter was received from the party along with the bill for Rs.5,00,841/- on 14.11.2008 and the said bill was purchased and on 10.11.2008 the amount was credited as per Ex.P.13 (c) and the said bill was not sent to the collecting bank and the amount so credited was adjusted by creating over draft facility on 19.12.2008 in the current account of M/s Mega Electricals Pvt. Ltd.
408. P.W.2 further states that Ex.P.12 (f) a letter was received from the party along with the bill of exchange for Rs.16,33,049.70/- on 14.11.2008 and the said bill was purchased and on 10.11.2008 the amount was credited as per Ex.P.13 (e) and the said bill was not sent to the collecting bank and the amount so credited was adjusted by other sources. Further he states that in this transaction the bank had received the post dated cheques from drawee of the bill M/s Enercon India Ltd., 212 C.C.No.21483/2016 to accommodate the party a bill was created and the same was credited to the account of party and after collecting from the said post dated cheques the amount has been adjusted.
409. Further P.W.2 states that Ex.P.12 (g) a bill of exchange for Rs.14,63,266/- was received from the party on 13.09.2008 and the said bill was purchased and on 10.11.2008, the amount was credited as per Ex.P.13 (f) and the said bill was not sent to the collecting bank and the amount so credited was adjusted by the other sources. He further states that on perusal of Ex.P.15 out ward register, it is clear that no bills were sent from the bank for collecting the amount to the collecting banks.
410. C.W.25/P.W.19 - Sri. V. Suresh Assistant Manager at M/s Enercon India Ltd., Bengaluru deposed that he know M/s Mega Electricals Pvt. Ltd., and it was supplying electrical goods to their company and the investigating officer of the CBI had written a letter asking them to confirm whether their banker had received certain documents from their supplier's banker and later they sent the same letter to their Mumbai office and they received the reply from their Mumbai office and later handed over the said reply to the CBI officer as per Ex.P.108.
213 C.C.No.21483/2016411. P.W.19 further states that subsequently they were asked to furnish the related documents with them and then they handed over invoice copies and bank statements along with seizure memo as per Ex.P.109. P.W.19 identified Ex.P.110 two cheques dated 28.11.2008 and 12.12.2008 and deposed that the said cheques have been issued from their company to M/s Mega Electricals Pvt. Ltd., and the payments to M/s Mega Electricals Pvt. Ltd., from their company were only through post dated cheques as per terms of purchase order and during that period they also accepted one bill of exchange from M/s Mega Electricals Pvt. Ltd., but payment for that bill of exchange was made through RTGs. P.W.19 identified entries in the bank statement of account that were credited to the account of M/s Mega Electricals Pvt. Ltd., and also Ex.P.109 (a) the request letter for transfer of funds from M/s Mega Electricals Pvt. Ltd., and Ex.P.109
(b) bill of exchange drawn in their favour.
412. P.W.19 was subjected to cross examination by Ld. Counsel for accused No.3 wherein he states that M/s Enercon India Ltd., is a public Ltd. Company and it is having its branches in 7 states including Karnataka and in the year 2012, M/s Enercon India Ltd., was having around 8 - 9 projects in Karnataka and M/s Mega Electricals Pvt. Ltd., is one of their principal and old 214 C.C.No.21483/2016 suppliers of electrical goods and accessories and they were reputed and credible supplier and they have supplied goods worth of several crores to their company over a period of time.
413. P.W.19 further states that so for a regular supplier is concerned, the company for the goods supplied from the supplier the payments will be made depending upon the availability of funds in the company and if funds are not available, then post dated cheques will be given and if funds are available, then cheques will be issued accordingly and the supplier is also called as a creditor. P.W.19 admitted that if there is cordial relationship in between the creditor and the purchaser, then the mutual accommodations are made and because of mutual understanding and accommodation, the post dated cheques are accepted and M/s Mega Electricals Pvt. Ltd., requested for bill of exchange, so that they can get it discounted by their banker. P.W.19 further admitted that when cheques or bills of exchanges are get discounted, then loss in the form discount charges and commission will be to the creditor/supplier and when cheques or bills are discounted, then there is profit to the bank in terms of discount and commission and the bill of exchange and post dated cheques were discounted by M/s Mega Electricals Pvt. Ltd., to auger the liquidity 215 C.C.No.21483/2016 and that is the essential feature of the business activities.
414. P.W.19 further states that if a post dated cheque or bill of exchange are discounted by the payee bank, before it being forwarded to the drawer bank, if the amount of the cheque or bill of exchange is paid then they will not be forwarded to the drawer bank as consideration is met with and they have made payments by cheques, post dated cheques, bill of exchanges, RTGs transactions and like covering one or more invoices.
415. P.W.19 further states that every invoice raised by M/s Mega Electricals Pvt. Ltd., has been sent to Mumbai office through Bengaluru office and every invoice will be accompanied delivery challan/LR and all invoices are supported by consideration. P.W.19 admitted that the goods supplied by the creditors are hypothecated and the investigating officer has not seized any computer floppy or hard disc from him and the computer and laptop which he was using for the company were under his control. P.W.19 admitted that only after interaction with him Ex.P.108 has been prepared and Ex.P.109 (b) is not the original and he attested it by putting seal and signature at the CBI office and he does not know where the original of Ex.P.109 (b) is and he did not make any enquiry with the Bombay 216 C.C.No.21483/2016 office with regard to the original bill of exchange and Ex.P.109 (b) and when the CBI put their seal to the documents he handed over to them and he was not present and their seal don't contain the date and he has stated before the investigating officer that the original invoices and related documents received from M/s Mega Electricals Pvt. Ltd., have been forwarded to the Mumbai office and he was aware for that they were maintaining as to receipt of invoices and other communications in the excel sheet in their computer and the investigating officer did not show him the excel sheet.
416. P.W.19 has further stated that he stated before the investigating officer in response to the questions put forth to him and also documents shown to him and the investigating officer did not ask him to reveal what he knew about the case and if he had asked he would have revealed all the documents and procedure and when he left the company in the year 2012, M/s Enercon company had liability to pay to M/s Mega Electricals Pvt. Ltd. And he is not aware the exact outstanding due to M/s Mega Electrical Pvt. Ltd.
417. C.W.47/P.W.37 - Sri. R. Chandrashekar an accountant at M/s Mega Electricals Pvt. Ltd. Deposed that M/s Mega Electricals Pvt. Ltd. is doing the business of electrical contracts and earlier Ashok kumar was the 217 C.C.No.21483/2016 managing director and after his death, the accused No.3 Smt. C. Shobha became the managing director of the said company and when Ashok kumar was the managing director, Rathan kumar and the accused No.3 were the other directors of the company and Ashok kumar and Rathan kumar are the brothers and the accused No.3 is the wife of Ashok kumar. P.W.37 further states that he know K.R.Prasanna the bank manager of Union bank of India B.V.K. Iyengar road branch and K.R.Prasanna is the own brother of Ashok kumar and in the year 2006, after the death of K.R. Ashok kumar, his wife the accused No.3 is dealing with the affairs of the company.
418. P.W.37 further states that, he is aware the financial transactions of the company pertaining to the period of his work and M/s Mega Electricals Pvt. Ltd. was having account at SBI, J.C.Road branch, Bangalore and Union bank of India, Chikpet branch, Bangalore. and Ex.P.29 the correspondences made with Union bank of India while requesting purchase of bills and also identified the signatures of the accused No.3 made in the correspondences while requesting purchase of bills. P.W.37 identified Ex.P.104 the file containing the transactions of M/s Mega Electricals Pvt. Ltd. made with M/s Bhoruka Aluminum and Ex.P.36 cheques and Ex.P.37 lists and signatures of the accused No.3 in all 218 C.C.No.21483/2016 the cheques and also identified Ex.P.109 the file containing invoices and delivery challans and signatures of the accused No.3 in Ex.P.109.
419. P.W.37 was subjected to cross examination by Ld. Counsel for the accused No.3 wherein he stated that he is familiar with the documents of M/s Mega Electricals Pvt. Ltd., and the company started in the year 1984 and it was a profit making company and the company originally started by Ashok kumar, Dr. Rathan kumar and their father Ramaswamy. P.W.37 admitted that in the year 2006, when the accused No.3 lost her husband Ashok kumar, she became the Managing Director of the company. P.W.37 admitted that the accused No.3 was guided, advised and instructed by Rathan kumar director of M/s Mega Electricals Pvt. Ltd., her father Chidambaram and branch manager K.R.Prasanna and according their instructions and advise, she would sign the papers and the accused No.3 acted on the instructions and guidance of others in good faith. P.W.37 further admitted that M/s Mega Electricals Pvt. Ltd. being a healthy company any bank would have been very glad to have them as their customer and during his period, M/s Mega Electricals Pvt. Ltd. did not default to any of its commitments or to the banks and in the year 2007 M/s Mega Electricals Pvt. Ltd. was having 219 C.C.No.21483/2016 account at State Bank of India and thereafter they shifted their account to Union bank of India.
420. P.W.37 further admitted that Rathan kumar was the brother of K.R.Prasanna the deceased manager of Union bank of India and the account of M/s Mega Electricals Pvt. Ltd. opened in the Union bank of India to help the good prospect of K.R.Prasanna. P.W.37 further states that the decision of opening the account in the Union bank of India was taken by Dr. Rathan kumar and he was also the authorized signatory of M/s Mega Electricals Pvt. Ltd. P.W.37 admitted that M/s Mega Electricals Pvt. Ltd. successfully executed the work entrusted to it either by M/s Enercon, M/s Bhoruka Aluminium or M/s Bhoruka Power Corporation Pvt. Ltd., and M/s Mega Electricals Pvt. Ltd. apart from the afore said companies it was having multiple clients. P.W.37 further states that in order to execute orders M/s Mega Electricals Pvt. Ltd. had to procure materials from different companies and establishments and M/s Mega Electricals Pvt. Ltd. was used to outsourced some of the tasks and assignments to different companies.
421. P.W.37 admitted that M/s Enercon, M/s Bhoruka Aluminum and M/s Bhoruka Power Corporation were due to pay huge amount of money to M/s Mega Electricals Pvt. Ltd., and M/s Enercon was 220 C.C.No.21483/2016 due to pay more than Rs.77.00 lakhs and M/s Bhoruka aluminium and M/s Bhoruka Power were due to pay more than Rs.40.00 lakhs each. P.W.37 further states that it is the normal practice for any company or bank to discount the bills of exchange and cheque and the documents now he has seen before the Court are the documents that have come into existence in the ordinary course of business with the above said companies and the other companies if any are the companies that are supplied the materials for providing service or to which some works were outsourced.
422. C.W.26/P.W.54 - Sri. Ajay Mehra, Director of M/s Enercon India Ltd., deposed that M/s Enercon India Ltd., is engaged in manufacturing and erection of wind turbines and their company is having its head office at Mumbai and it is having 7 branches including Bengaluru and as the Director, his nature of work is to look after administration of the entire establishment and in branches, the business development officers are looking after the administration. P.W.54 further states that in the head office, there is a separate branch to look after the finance and in the branches also there are separate finance branches and the overall financial transactions are done by the head office and his brother Yogesh 221 C.C.No.21483/2016 Mehra and he himself both are authorized signatories for issuance of cheques on behalf of the company.
423. P.W.54 further states that in the head office, they receive bills and payment request from branches and after verifying in the head office, the amount will be paid and he know M/s Mega Electricals Pvt. Ltd.. and their company had given contract to M/s Mega Electricals Pvt. Ltd., for erection of towers. P.W.54 identified Ex.P.109 (c) the account details of M/s Mega Electricals Pvt. Ltd., maintained at their Bengaluru branch office and Ex.P.109 (d) the bank statement and deposed that pertaining to M/s Mega Electricals Pvt. Ltd., he has signed one bill of exchange for accepting and even then they told that they would not sent it for discount and on their request he also gave post dated cheque for that amount and they told that either they would discount bill of exchange or the cheque. P.W.54 identified Ex.P.12 (g) the bill of exchange dated 13.09.2008 and Ex.P.110 (b) the cheque dated 12.12.2008 and deposed that Ex.P.110 (b) and the bill of exchange Ex.P.12 (g) were issued for the same amount. P.W.54 further states that M/s Mega Electricals Pvt. Ltd., encashed the due amount using the cheque Ex.P.110 (b) and the bill of exchange Ex.P.12 (g) did not come to their Axis bank, Mumbai for collection and other 222 C.C.No.21483/2016 than the present bill of exchange, he has not signed any other bill of exchanges for their acceptance. P.W.54 identified Ex.P.12 (i) the bill of exchange drawn in the name of their company and deposed that they have made payment of the invoices mentioned in the bill of exchange Ex.P.12 (i) through cheque. P.W.54 further identified Ex.P.110 (c)cheque dated 28.11.2008 issued by him for the amount of the invoices mentioned in the bill of exchange Ex.P.12 (i) and also identified Ex.P.12 (j) bill of exchange drawn in the name of their company and deposed that they have made payment of the invoices mentioned in the bill of exchange Ex.P.12 (j) through RTGs.
424. P.W.54 was subjected to cross-examination by the Ld. Counsel for accused No.3 wherein he stated that his brother Yogesh Mehra is the managing director and his brother and he are only the directors from their family and they together look after the finance of the company and they are actively responsible for day to-day transactions. P.W.54 admitted that M/s Mega Electricals Pvt. Ltd. is a well reputed company, but he does not remember since how long they are dealing with M/s Mega Electricals Pvt. Ltd. P.W.54 states that though the board of their company consists of 4 directors, 2 Indians and 2 Germans all decisions are taken by the Indian 223 C.C.No.21483/2016 directors means he and his brother and in the year 2008 & 2009 the financial condition of their company was healthy with banks and other financial institutions including creditors and in the year 2010 & 2011 even then the financial condition was healthy. P.W.54 states that he cannot recollect whether their company owes Rs.70 lakhs to M/s Mega Electricals Pvt. Ltd., and M/s Mega Electricals Pvt. Ltd., at several times demanded their due amount.
425. P.W.54 further states that the CBI officer show him bill of exchanges and all the documents which were shown to him in the court. P.W.54 admitted that except in one bill of exchange and cheques, no other documents bear his signatures and he does not remember whether he has stated to the investigating officer at the time of inquiry that one bill of exchange along with one post dated cheque were given with a condition to encash either one of them as he has stated in his chief examination. P.W.54 further deposed that he has stated before the investigating officer that he was told that M/s Mega Electricals Pvt. Ltd., have some facility for discounting the bills and asked him to accept the bill of exchange, as the party had supplied the goods and executed the work awarded to them and since the party was their client, he accepted the same in good faith 224 C.C.No.21483/2016 and that on the request of them he also issued post dated cheque for the said amount in favour of Union bank of India as the party told them that they would get it discounted from Union bank of India and the portion of the statement was marked as per Ex.D.1.
426. On perusal of the statement of P.W.54 wherein he admits issuance of bill of exchange dated 13.09.2008 for Rs.14,63,266/- and after perusal of the said bill of exchange and admitting his signature on the said bill of exchange, he deposed as per Ex.D.1. Hence, the issuance of bill of exchange No.39530DBP000708 for Rs.14,63,266/- by the P.W.54 is not disputed by him. It is pertinent to note that, in the charge sheet also it is stated that the bill was never sent for collection, but not stated that it is a false bill of exchange. As per the evidence of P.W.54 also Ex.P.12 (g) bill of exchange accepted by him and further he identified his signature on bill of exchange as per Ex.P.12 (h). Hence, it shows that, Ex.P.12 (g) bill of exchange is a genuine bill of exchange.
427. P.W.54 admitted that only when the bill of exchange was presented to their banker for encashment, then their banker notify the same and then only they come to know of it. P.W.54 states that he does not aware whether their Bengaluru branch was sending details of 225 C.C.No.21483/2016 accounts and remarks that were made to their head office and now he can not give details as to transactions pertaining to the invoices of Ex.P.12 (i) and he is familiar with the signature and seal of their company and not the contents. P.W.54 admitted as per Ex.P.109 (c) & Ex.P.109 (d) there were hundreds of transactions and Ex.P.109 (c) shows that as on 31.12.2008 there was outstanding balance of Rs.65,13,185/- towards M/s Mega Electricals Pvt. Ltd., and Ex.P.109 (c) is the incomplete document and as per Ex.P.109 (d) in its last page the balance shown as Rs.1,77,51,674/-. P.W.54 further admitted that the date is not mentioned in Ex.P.109 (d) to shows when it was issued. P.W.54 states that he has not given any table of invoices and payments regarding M/s Mega Electricals Pvt. Ltd., and the CBI officer also did not asked the same and the CBI officer asked the bills of exchanges, cheques with regard to corresponding invoices which he gave to the CBI officer in writing and now he does not recollect whether the CBI officer issued acknowledgment for that. P.W.54 states that now he does not have the copy that was given to the CBI officer and the statement which was given to CBI is in handwriting and he think that it was in his handwriting and in the CBI office itself he wrote that statement. P.W.54 further states that the CBI officer shown him invoices, bills of exchanges and cheques and 226 C.C.No.21483/2016 accordingly, he prepared the statement and gave it to them and now he does not remember whether the CBI officer asked the certificate u/Sec.65 (B) of the Evidence act for the computer generated copies issued by their company and now he does not remember whether the officer asked about the person who was handling the computers and who was responsible for producing printouts. P.W.54 further states that he does not know how the CBI officer has obtained the documents now shown to him and he does not know whether the CBI officer has taken these documents from M/s Enercon India Ltd. P.W.54 admitted that he identified the documents that were shown to him and answered the questions in good faith because it was asked by the CBI officer. P.W.54 states that he does not recollect whether on seeing the documents here in the CBI office he cross checked them with the records of the company. P.W.54 admitted that only on the basis of the statement recorded u/Sec.161 of the Cr.P.C. now he is deposing before the court, but for his statement before the police he would not have recollect the transactions of 2008 - 09 and deposed before the court.
428. Ex.P.80 is the file contending letter dated 12.02.2010 written by the PW.2 and account ledger report from 01.05.2007 to 31.03.2009. The letter dated 227 C.C.No.21483/2016 12.02.2010 reveals that the PW.2 submitted the details of bills purchased by their branch on behalf of M/s Mega Electricals Pvt Ltd., in account No.395301010036309 along with the details of proceeds received from drawee banks details of adjustments made. In Sl.No.4 of the said letter it is mentioned that the bill No.39530DBP000508 dated:10.11.2008 for Rs.5,00,841/- was purchased and name of the party mentioned as Enron India Infrastructure, Brunton Road, Bangalore and date of discount was 10.11.2008 and the bills sent to (as per system) Axis Bank, Andheri West, Mumbai and it was adjusted on 20.12.2008. Further it is mentioned that no proceeds received from the Axis bank and the bill was adjusted by debiting in the account of M/s Mega Electricals Pvt Ltd., on 19.12.2008 and no reference is available in the dispatch register for having sent the bill.
429. In Ex.P.80 at Sl.No.5 of the said letter it is mentioned that the bill No.39530DBP000608 dated:10.11.2008 for Rs.16,33,049.70/- was purchased and name of the party mentioned as Enron India Ltd., Daman and date of discount was 10.11.2008 and the bill sent to (as per system) Axis Bank, Andheri West, Mumbai and it was adjusted on 22.12.2008. Further it is mentioned that no proceeds received from the Axis bank 228 C.C.No.21483/2016 and in the system, it is shown that the bill was realized and an amount of Rs.16,33,049.70/- received through cheque realization and credited to Sun. Dep. Bills account on 22.12.2008 and from there it was transfered to Inland bills purchased account giving reference of the bill No.608.
430. In Ex.P.80 at Sl.No.6 of the said letter it is mentioned that the bill No.39530DBP000708 dated:10.11.2008 for Rs.14,63,266/- was purchased and name of the party mentioned as no details found in the system, however, from the copy of the covering schedule it is understood that the bill was drawn favouring Eneron India Ltd., Mumbai and date of discount was 10.11.2008 and the bill sent to (as per system) Axis Bank, Andheri West, Mumbai and it was adjusted on 29.12.2008. Further it is mentioned that no proceeds received from the Axis bank regarding this bill and in the system, it is shown that the bill was realized and an amount of Rs.14,63,266/- was received through cheque realization and credited to Sun. Dep. Bills account on 29.12.2008 and from there it was transfered to Inland bills purchased account giving reference of the bill No.708 and however, it is not the actual proceeds of the bill.
229 C.C.No.21483/2016431. Ex.P.12(j) is the original bill of exchange dated 06.11.2008 bearing Hundi No.MEPL/EIL/002 for Rs.5,00,841/-. It reveals that the accused No.3 who is the Managing Director of M/s Mega Electricals Pvt Ltd., has requested to M/s Enercon (India) Ltd., that ' on due date i.e., 05.12.2008 please pay to Union Bank of India, BVK Iyangar Road Branch, Bangalore or order a sum of Rs.5,00,841/- for the value of goods supplied / services rendered against invoice detailed'. In this document the accused No.3 has put her four signatures, but there is no signature of Director of M/s Enercon (India) Ltd.
432. Ex.P.12(e) is the letter dated 14.11.2008 issued by the accused No.3 to the Manager of Union Bank of Inidan, BVK Iyangar Branch, Bangalore. It reveals that the accused No.3 has written a letter that she is producing the bill of exchange dated 06.11.2008 bearing Hundi No.MEPL/EIL/002 for Rs.5,00,841/- for the value of goods supplied against their invoices and they will furnish one more copy after they receive it from Enercon Inida Ltd Mumbai which was sent for acceptance and requested to accept and credit the proceeds to their current account No.395301010036309.
433. Ex.P.12(i) is the original bill of exchange dated 06.11.2008 bearing Hundi No.MEPL/EIL/003 for 230 C.C.No.21483/2016 Rs.16.33.049.70/-. It reveals that the accused No.3 who is the Managing Director of M/s Mega Electricals Pvt Ltd., has requested to M/s Enercon (India) Ltd., that ' on due date i.e., 28.11.2008 please pay to Union Bank of India, BVK Iyangar Road Branch, Bangalore or order a sum of Rs.16,33,049.70/- for the value of goods supplied/services rendered against invoice detailed'. In this document the accused No.3 has put her four signatures, but there is no signature of Director of M/s Enercon (India) Ltd.
434. Ex.P.12(f) is the letter dated 14.11.2008 issued by the accused No.3 to the Manager of Union Bank of Inidan, BVK Iyangar Branch, Bangalore. It reveals that the accused No.3 has written a letter that she is producing the bill of exchange dated 06.11.2008 bearing Hundi No.MEPL/EIL/003 for Rs.16,33,049.70/- for the value of goods supplied against their invoices and they will furnish one more copy after they receive it from Enercon Inida Ltd Mumbai which was sent for acceptance and requested to accept and credit the proceeds to their current account No.395301010036309.
435. Ex.P.12(g) is the original bill of exchange dated 18.09.2008 for Rs.14,63,266/-. It reveals that the accused No.3 who is the Managing Director of M/s Mega Electricals Pvt Ltd., has requested to M/s Enercon (India) 231 C.C.No.21483/2016 Ltd., that ' on due date i.e., 12.12.2008 please pay to Union Bank of India, BVK Iyangar Road Branch, Bangalore or order a sum of Rs.14,63,266/- for the value of goods supplied / services rendered against invoice detailed'. On perusal of this document, the invoice Nos.46, 47, 53, 57, 62, 63 and 64 with dates and amount mentioned and total amount was Rs.16,33,049.70/-. But one printed slip pasted on the said portion that invoice Nos. 29, 30, 33, 35, 69 and 71 with date for total of Rs.14,63,266/-. Further, the amount of bill of exchange was over written. Further, it is mentioned that DBP No.000708. This document also signed by the accused No.3 and the Director of the Enercon India Ltd., also signed the said document as accepted. As discussed above, P.W.54 admitted Ex.P.12(g) acceptance of bill of exchange and his signature. Though some overwriting in Ex.P.12 (g) bill of exchange, but it was accepted by the M/s Enercon India Ltd.
436. As per the prosecution case, M/s Enercon (India) Ltd., made payments to M/s Mega Electricals Pvt Ltd., directly and they have not made any payments through bill of exchange. As per Ex.P.12(j), a bill of exchange for Rs.5,00,841/- and as per Ex.P.12(i), a bill of exchange for Rs.16,33,049.70/- were produced by the accused No.3 without the signature of the Director of 232 C.C.No.21483/2016 M/s Enercon (India) Ltd. Further, Ex.P.12(e) and (f) letters issued by the accused No.3 clearly shows that she has produced these two bills of exchange before the Union Bank of India for acceptance and credit of proceeds to the current account of M/s Mega Electricals Pvt Ltd.
437. Ex.P.108 is the letter dated 07.05.2010 issued by Sri. Suresh of M/s Enercon India Ltd., wherein he states that all the payments to Mega Electricals Pvt Ltd., for the purchases made from them are effected from their Corporate Office, Mumbai and as informed from their Corporate Office, the bills i.e., bill No.39530DBP000508 dated 10.11.2008 of Union Bank of India, BVK Iyangar Road Branch, Bangalore for Rs.5,00,841/- and bill No.39530DBP000608 dated 10.11.2008 of Union Bank of India, BVK Iyangar Road Branch, Bangalore for Rs.16,33,049.70/- and bill No.39530DBP000708 dated 10.11.2008 of Union Bank of India, BVK Iyangar Road Branch, Bangalore for Rs.14,63,266/- are not routed through their Axis Bank at Mumbai. Further, he also enclosed the letter from the Corporate Office.
438. In Ex.P.108, a letter dated 07.05.2010 of Corporate Office of M/s Enercon India Ltd., also submitted wherein it is stated by the Senior Manager Accounts that 'on verification of their records, they found 233 C.C.No.21483/2016 that the bill No.39530DBP000508 dated 10.11.2008 of Union Bank of India, BVK Iyangar Road Branch, Bangalore for Rs.5,00,841/- and bill No.39530DBP000608 dated 10.11.2008 of Union Bank of India, BVK Iyangar Road Branch, Bangalore for Rs.16,33,049.70/- and bill No.39530DBP000708 dated 10.11.2008 of Union Bank of India, BVK Iyangar Road Branch, Bangalore for Rs.14,63,266/- are not received through their Banker M/s Axis Bank, Andheri West Branch, Mumbai. However, they made the above referred payment along with other dues to Mega Electricals Pvt Ltd., directly by post dated cheques/ RTGS, directly to M/s Mega Electricals Pvt Ltd.
439. As per recitals of the Ex.P.108 documents, bill No.39530DBP000508 dated 10.11.2008 of Union Bank of India, BVK Iyangar Road Branch, Bangalore for Rs.5,00,841/- and bill No.39530DBP000608 dated 10.11.2008 of Union Bank of India, BVK Iyangar Road Branch, Bangalore for Rs.16,33,049.70/- and bill No.39530DBP000708 dated 10.11.2008 of Union Bank of India, BVK Iyangar Road Branch, Bangalore for Rs.14,63,266/- were not received through the Banker of the M/s Enercon India Ltd., and they made payments to M/s Mega Electricals Pvt Ltd., directly by post dated cheques / RTGS.
234 C.C.No.21483/2016440. Ex.P.110 is the letter dated 24.02.2010 issued by the Manager, Axis Bank Ltd. It reveals that he enclosed the original cheques bearing No.231100 dated 28.11.2008 for Rs.16,33,049.70/- and cheque No.312631 dated 12.12.2008 for Rs.14,63,266/- and also confirmed that they have not received bill No.DBP- 508 dated 10.11.2008 for Rs.5,00,841/-, bill No. DBP- 608 dated 10.11.2008 for Rs.16,33,049.70/- and bill No.DBP-708 dated 10.11.2008 for Rs.14,63,266/-.
441. Ex.P.110(b) is the cheque bearing No.312631 dated 12.12.2008 for Rs.14,63,266/-. It reveals that the authorized signotary of Enercon India Ltd., has issued the account payee cheque for Union Bank of India and it cleared on 16.12.2008.
442. Ex.P.110(c) is the cheque bearing No.23110 dated 28.11.2008 for Rs.16,33,049.70/-. It reveals that the authorized signotary of Enercon India Ltd., has issued the account payee cheque for Mega Electricals Pvt Ltd and it cleared on 04.12.2008.
443. C.W.62 /P.W.49 Smt. Chethana Dixit, the then Operation Head, Axis Bank at Anderi Lokhandwala branch, Mumbai deposed that she was conversant with the accounts of customers of their Anderi Lokhandwala branch during the relevant period and while working at 235 C.C.No.21483/2016 Anderi Lokhandwala branch, the CBI officer had asked their branch pertaining to cheque transactions of M/s Enercon Ltd., and they had also asked about confirmation of receiving 3 specific bills and thereafter, she replied by enclosing 2 cheques and intimating that they did not receive any bills for encashment as asked for. P.W.49 identified Ex.P.110 the reply along with 2 cheques and deposed that out of 2 cheques, one cheque bearing No.231100 is issued by M/s Enercon Ltd., in favour of M/s Mega Electricals Pvt. Ltd., for an amount of Rs.16,33,49.70/- and the other cheque bearing No.312631 is issued by M/s Enercon Ltd., in favor of Union bank of India for an amount of Rs.14,63,266/- and Both the said cheques have been paid.
444. In view of the evidence of PW.49 and also Ex.P.110, 110(a), 110(b), two posted cheques issued for a sum of Rs.16,33,049.70/- and Rs.14,63,266/- respectively and the amount mentioned on the cheques have been paid.
445. Ex.P.109 is the seizure memo and invoices and attested copy of the ledger account of M/s Mega Electricals Pvt Ltd. These documents are marked subject to objection. In the cross examination of PW.19, he states that Ex.P.109(b) is not the original and attested it by putting seal and signatures and he does not know 236 C.C.No.21483/2016 where the original of Ex.P.109(b) is. Ex.P.109(b) is the copy of the bill of exchange for Rs.16,33,049.70/-.
446. Ex.P.109(a) is the true copy of the letter dated 16.12.2008 issued by the Director of Enercon India Ltd., to Axis Bank for transfer of funds amounting to Rs.44,79,617/- to the current account of M/s Mega Electricals Pvt Ltd. Further, ledger account extract of Mega Electricals Pvt Ltd., maintained by the M/s Enercon India Infrastructure Pvt Ltd., also produced and got marked as per Ex.P.109(c).
447. On perusal of Ex.P.13 (c) statement of accounts pertaining to M/s Mega Electricals Pvt. Ltd., it reveals that Rs.5,00,841/- was credited to the current account on 10.11.2008 in respect to bill No.39530DBP000508. As per Ex.P.13 (d), the said bill amount was adjusted on 19.12.2008 by debiting Rs.5,00,841/- from the said account.
448. On perusal of Ex.P.13 (e) statement of accounts pertaining to M/s Mega Electricals Pvt. Ltd., it reveals that Rs.16,33,049.70/- was credited to the current account on 10.11.2008 in respect to bill No.39530DBP000608. As per Ex.P.80 account ledger extract of Union Bank of India, Sundry deposit, an amount of Rs.16,33,049.70/- was credited to the said 237 C.C.No.21483/2016 account on 18.12.2008 towards DBP000608/231100 and debited the said amount on 22.12.2008 towards DBP000608.
449. On perusal of Ex.P.13 (f) statement of accounts pertaining to M/s Mega Electricals Pvt. Ltd., it reveals that Rs.14,63,266/- was credited to the current account on 10.11.2008 in respect to bill No.39530DBP000708. As per Ex.P.80 account ledger extract of Union Bank of India, Sundry deposit, an amount of Rs.14,63,266/- was credited to the said account on 29.12.2008 towards DBP465408/312631 and debited the said amount on 29.12.2008 towards DBP000708.
450. As per above discussion, as per Ex.P.12(j), a bill of exchange for Rs.5,00,841/- and as per Ex.P.12(i), a bill of exchange for Rs.16,33,049.70/- were produced by the accused No.3 without the signature of the Director of M/s Enercon (India) Ltd. and Ex.P.12(e) and (f) letters issued by the accused No.3 clearly shows that she has produced these two bills of exchange before the Union Bank of India for acceptance and credit of proceeds to the current account of M/s Mega Electricals Pvt Ltd.
451. The Ld. Counsel for accused No.3 has argued that, the accused No.3 has issued the letters that she 238 C.C.No.21483/2016 sent the copy of the bill of exchange to M/s Enercon India Ltd., for acceptance as per Ex.P.12 (e) and 12 (f) and Ex.P.12(i) and 12 (j) bills of exchange are not the false documents.
452. In Ex.P.12 (e) and 12(f) letters submitted by the accused No.3 shows that she produced the bills of exchange for the value of goods supplied against invioces they will furnish one more copy after they received it from M/s Enercon India Ltd., which was sent for acceptance. These letters clearly shows that accused No.3 has produced Ex.P.12 (i) and (j) bills of exchange without acceptance by the M/s Enercon India Ltd., who is the drawee.
453. Section 5 of the Negotiable Instruments Act, 1881 reads as under ;
A "bill of exchange" is an instrument in writing, containing an unconditional order, signed by the maker, directing a certain person to pay a certain sum of money only to, or to the order of, a certain person or to the bearer of the instrument.
A promise or order to pay is not "conditional", within the meaning of this section and section 4, by reason of the time for payment of the amount or any instalment thereof being expressed to be on, the lapse of a certain period after the occurrence of a specified event which, 239 C.C.No.21483/2016 according to the ordinary expectation of mankind, is certain to happen, although the time of its happening may be uncertain.
The sum payable may be "certain", within the meaning of this section and section 4, although it includes future interest or is payable at an indicated rate of exchange, or is according to the course of exchange, and although the instrument provides that, on default of payment of an instalment, the balance unpaid shall become due.
The person to whom it is clear that the direction is given or that payment is to be made may be a "certain I person", within the meaning of this section and section 4, although he is mis-named or designated by description only.
454. In view of the above provision of Law, a bill of exchange is an instrument in writing containing an unconditional order, signed by the maker, directing a certain person to pay a certain some of money only to, or to the order of, a certain person or to the bearer of the instrument. Hence, as per the above provision of law, bill of exchange should be signed by the maker i.e. drawer. It is pertinent to note that, the above provision does not speak about the bill of exchange should be signed by the drawee or acceptor.
240 C.C.No.21483/2016455. Section 7 of the Negotiable Instruments Act, 1881 reads as under ;
Drawer, drawee, - The maker of a bill of exchange or cheque is called the "drawer"; the person thereby directed to pay is called the "drawee".
Drawee in case of need - When in the bill or in any endorsement thereon the name of any person is given in addition to the drawee to be resorted to in case of need, such person is called a "drawee in case of need.
"Acceptor - After the drawee of a bill has signed his assent upon the bill, or, if there are more parts thereof than one, upon one of such parts, and delivered the same, or given notice of such signing to the holder or to some person on his behalf, he is called the "acceptor".
Acceptor for honour - When a bill of exchange has been noted or protested for non-acceptance or for better security, and any person accepts it supra-protest for honour of the drawer or of any one of the endorsers, such person is called an "acceptor for honour".
Payee - The person named in the instrument, to whom or to whose order the money is by the instrument directed to be paid, is called the "payee".
456. In view of the above provision of Law, the maker of a bill of exchange or cheque is called the "drawer" and the person thereby directed to pay is called the "drawee" and after the drawee of a bill has signed his 241 C.C.No.21483/2016 assent upon the bill, or, if there are more parts thereof than one, upon one of such parts, and delivered the same, or given notice of such signing to the holder or to some person on his behalf, he is called the "acceptor".
457. Instant case as discussed above, as per Ex.P.12(j) a bill of exchange for Rs.5,00,841/- and as per Ex.P.12(i) a bill of exchange for Rs.16,33,049.70/- were produced by the accused No.3 who is the drawer. M/s Enercon India Ltd., is the drawee. In view of the above provision of law, in Section 7 of N.I.Act, after the drawee of the bill has signed is assent upon the bill and delivered the same, or given notice of such signing to the holder or to some person on his behalf, he is called the acceptor. Instant case, the drawee of the bill of exchange has not signed his assent upon the Ex.P.12 (j) and (i) bills of exchange.
458. Section 30 of the Negotiable Instruments Act, 1881 reads as under;
30. Liability of drawer - the drawer of a bill of exchange or cheque is bound in case of dishonor by the drawee or acceptor thereof, to compensate the holder, provided due notice of dishonor has been given to, or received by the drawer as herein after provided.
242 C.C.No.21483/2016459. In view of the above provision, the drawer of a bill of exchange or cheque is bound in case of dishonor by the drawee or acceptor thereof, to compensate the holder.
460. Section 32 of the Negotiable Instruments Act, 1881 reads as under;
Liability of maker of note and acceptor of bill: In the absence of a contract to the contrary, the maker of promissory note and the acceptor before maturity of a bill of exchange are bound to pay the amount thereof at maturity according to the apparent tenor of the note or acceptance respectively, and the acceptor of a bill of exchange at or after maturity is bound to pay the amount thereof to the holder on demand.
In default of such payment as aforesaid, such maker or acceptor is bound to compensate any party to the note or bill for any loss or damage sustained by him and caused by such default.
461. In view of the above provision, the acceptor before maturity of a bill of exchange is bound to pay the amount thereof at maturity according to the acceptance.
462. As per section 64 of the Negotiable Instruments Act 1881, bill of exchange must be presented for payment to the acceptor by or on behalf of 243 C.C.No.21483/2016 the holder and in default of such presentment, the other parties thereto are not liable thereon to such holder.
463. Instant case as discussed above, the accused No.3 who is the drawer of the bills of exchange No.39530DBP000508 and No.39530DBP000608 has signed and produced before the bank, but the drawee i.e. M/s Enercon India Ltd., who was directed to pay the amount has not signed these bills of exchange as acceptor. These bills of exchange are the documentary bills of exchange and it was produced in respect to genuine transaction between the accused No.3 and M/s Enercon India Ltd. Though the Director and authorized persons of the M/s Enercon India Ltd., deposed that they have not signed these bills of exchange and not received, but in view of Section 5 of N.I.Act the signature of drawee is not mandatory. It is pertinent to note that if the drawee is not accepted the bill of exchange, then the liability is on the drawer to compensate the amount as per Section 30 of the N.I.Act and there is no liability on the part of the drawee. Further, it is elicited in the cross- examination of P.W.19 that if the bill of exchange discounted by the payee bank, before it being forwarded to drawee bank, if the amount of bill of exchange is paid, then they will not forward the same to the bank as consideration is met with. In this case also, the amount 244 C.C.No.21483/2016 of the bill of exchange was debited from the account of the accused No.3 and it was not sent for collection from the drawee bank. Further, these three bills of exchange No.39530DBP000508, No.39530DBP000608 and No.39530DBP000708 were not sent to the Axis bank for collection and after realization of two post dated cheques in Ex.P.110 (b) and (c), the amount was adjusted towards bills of exchange No.39530DBP000608 and No.39530DBP000708.
464. Ex.P.82 is the instruction circular No.6715 dated 26.07.2003 in respect to Management of Credit portfolio bills discounting policies wherein bill discounting policy approved by the Boards as per the guidelines issued by the RBI and it is worth to extract the relevant portion as under ;
2.0 PURCHASING/DISCOUNTING/ NEGOTIATION OF BILLS 2.1 It should be ensured that the Bills are stamped according to the provisions of Indian Stamp Act.
2.2 In case of Documentary Bills, documents covering goods as well as invoices must be thoroughly examined and correctness of prices verified. Bills should not be accepted for purchase unless documents are accompanied by invoices duly signed by the drawers. The value given in the invoice should be 245 C.C.No.21483/2016 generally verified with prevailing market rates. The description of goods in the RR or B/L or Lorry Receipt must agree with the relative invoice and the amount of the Bill should be approximately equal to the value of goods as per invoice. Bills should cover goods, which are normally traded by the customers. Documents tendered should not bear the crossing stamp of any other Bank.
2.7 Credit Reports on drawers / drawees must be held on record and updated periodically.
2.8 Bills purchased on any one particular drawee should be within the limit approved for each drawee.
2.9 Letter of Hypothecation for Bills in the prescribed form must be taken from all such parties at the time of first availment of the limit. At the time of tendering Bills, these should be entered in the Paying-in-slip duly completed.
2.10 Bills purchased by the Branch are to be properly controlled in prescribed registers/ledgers.
2.11 Bills Purchased Account is to be debited only for the advance value (i.e. Bill amount minus margin). At the time of realisation, care should be taken for setting off the advances value alone (with interest due if any), and the balance amount representing the margin should be credited to party's account. While interest / discount will be charged on 246 C.C.No.21483/2016 the advance value of the bill, collection charges should be charged on the full bill value.
8.0 Discounting of Bills under the (Reserve Bank of India) New Bill Market Scheme.
8.2 Under the New Bill Market Scheme of the Reserve Bank, genuine trade Bills of usance not exceeding 90 days (usance Bills upto 120 days also can be discounted provided the unexpired usance at the time of refinance is not more than 90 days) which evidence sale and / or dispatch of goods are eligible for rediscount with the Reserve Bank or other financial institutions. Local Bills arising out of sale of goods by one party to another party in the same area are also eligible provided proper receipted challans or invoice acknowledging receipt of goods by buyers are lodged with the bank at the time of discounting of the Bills. Bills arising out of sale of commodities covered by selective credit control directives of the Reserve Bank. Bills drawn in conformity of the scheme and arising out of sale of goods to the Government Department / Government Companies / Statutory Corporations etc., are eligible for rediscount. Every such Bill must contain a note on its face that it has been drawn in connection with the sale of goods of particular description covered by invoices attached thereto.
247 C.C.No.21483/20168.3 The Bills must be drawn on Hundi Paper of appropriate value. The Bills may be drawn by the seller on the buyer or on the buyer's bank or on the buyer and his Bank jointly or drawn by the seller on the buyer under an irrevocable Letter of Credit opened by the buyer's bank and bearing a Certificate on the face of the Bill that the Bill is drawn under Letter of Credit opened by buyer's Bank. The seller customer of the Bank may be given credit in his account immediately on lodgment of Bills without waiting for Acceptance of Bills by the buyer or his bankers. The Bill will be eligible for rediscount only on Acceptance by the buyer or his bankers. Such Bills drawn on buyer customer of the Bank may also be discounted in his account, provided the branch is satisfied about the genuineness of the signatures of the drawers and their competence to draw the bill.
465. In view of the above circular, the seller customer of the Bank may be given credit in his account immediately on lodgment of Bills without waiting for Acceptance of Bills by the buyer or his bankers. In this case also the bank has discounted bills of exchange after production of the same in respect to genuine transactions. As per the prosecution case the bills of exchange were not sent for collection with dishonest intention.
248 C.C.No.21483/2016466. It is elicited in the cross-examination of C.W.2/P.W.3 that these type of instances i.e. 5-6 cheque purchases and 5-6 bill purchases having regard to the volume of the M/s Mega Electricals Pvt. Ltd., it is a normal business and M/s Mega Electricals Pvt. Ltd., did not commit any irregularities or illegality in seeking and availing in facilities. The allegations against the accused No.3 that she has created the false bills and produced before the bank and get it discounted. In view of the above discussion, the prosecution has not produced any sufficient evidence to show that accused No.3 has created the false bills of exchange for the purpose of cheating and dishonestly availed bill discounting facility by using it.
467. As per the prosecution case, deacesed accused K.R. Prasanna in furtherance of conspiracy with accused No.3 had allowed temporary over drafts in the current account of the M/s Mega Electricals Pvt Ltd., between 30.06.2008 and 07.02.2009 without any power and sanctioned the same for the purpose of accomondation. Further, as per the prosecution case, deacesed accused K.R. Prasanna in furtherance of conspiracy with accused No.3 had purchased cheques on 24.05.2008, 18.10.2008, 21.11.2008 and 29.11.2008 in the current account of the M/s Mega Electricals Pvt Ltd., without 249 C.C.No.21483/2016 any power and security and did not intimate the said bill discounting and cheque purchases to his controlling office with dishonest intention.
468. In the cross-examination of P.W.1, it is elicited that, the main reason for filing complaint were that the accounts became NPA and the amount being Rs.410 lakhs. In Ex.P.1 complaint the outstanding amount as on 30.11.2009 in respect to M/s Mega Electricals Pvt. Ltd., shown as nil. This document shows that, there was no outstanding amount in the current account of the M/s Mega Electricals Pvt. Ltd. Further in the cross- examination of P.W.2, it is elicited that, he has not issued any notice to M/s Mega Electricals Pvt. Ltd., calling upon to repay the liability or regularize the account. Further in the cross-examination of P.W.3, it is elicited that, there was no debit outstanding and credit balance in the account of M/s Mega Electricals Pvt. Ltd., and M/s Mega Electricals Pvt. Ltd., did not commit any irregularities or illegality in opening the current account and in seeking and availing facilities. Further in the cross-examination of P.W.4, it is elicited that, there was no liability of accused No.3 at the time of lodging the complaint. In the cross-examination of P.W.5 it is elicited that M/s Mega Electricals Pvt. Ltd., at the earliest point of time used to regularize the account and the healthy sign of the 250 C.C.No.21483/2016 current account lies in the practice of availing credit facilities and repaying the same within 90 or 180 days as the case may be. In the cross-examination of P.W.8 it is elicited that manipulation, forgery and fabrication are not come under the ordinary course of business. In the cross-examination of P.W.19, it is elicited that, if a post dated cheque or bill of exchange is discounted by the payee bank, before it being forwarded to the drawer bank, if the amount of cheque or bill of exchange is paid, then they will not forwarded to the drawer's bank as consideration is met. The evidence on record shows that, the current account of M/s Mega Electricals Pvt. Ltd., has not became NPA and there was no outstanding amount in the said account.
469. C.W.33/P.W.25 Sri. A. Sehar Ponraj the then Asst. Registrar of companies deposed that the investigating officer of the CBI asked registered documents on record pertaining to M/s Mega Electricals Pvt. Ltd., M/s Apsis Technologies Pvt. Ltd. and M/s Aaura Data Networks Pvt. Ltd., and then he handed over the certified copies of certificate of incorporation, memorandum of association, articles of association, Form - 32 and annual returns of all the companies with the covering letter as per Ex.P.114 to Ex.P.117.
251 C.C.No.21483/2016470. In view of the evidence of P.W.25, M/s Mega Electricals Pvt. Ltd., is the registered company.
471. In view of the above cited decisions of Hon'ble Supreme Court, if a persons has to be proceeded with as being vicariously liable for the acts of the company, the company must be made an accused as legal fiction is raised both against the company as well as the persons responsible for the acts of the company. Instant case, the registered company i.e. M/s Mega Electricals Pvt. Ltd., is not made as an accused person and the accused No.3 is the Managing Director of the said registered company. The transactions made in the name of the registered company and the said company is not made as an accused. The registered company must be made an accused and in the absence of the company no proceedings can be initiated against it.
472. On going through the entire oral and documentary evidence and materials placed before this Court meticulously, this Court is of the considered view that the prosecution has failed to establish the necessary ingredients of the offence punishable under Section 120 B r/w 420, 467, 468 and 471 of IPC and substantive offences thereof as against the accused No.3. The evidence on record did not establish the dishonest intention on the part of accused No.3 at the very 252 C.C.No.21483/2016 inception from the stage of availing facilities. In this regard, the evidence on record not established clear circumstances against the accused No.3 forming complete chain of circumstances.
473. All the above discussed aspects mitigate against the prosecution and make the prosecution version unsustainable. Hence, on careful and meticulous appreciation of evidence and considering the totality of circumstances, this Court is of the view that the prosecution has failed to prove point No.3 to 7 beyond all reasonable doubt as against the accused No.3. Hence, considering the overall circumstances of the case, I answer to point No.3 to 7 in the Negative.
474. Point No.8 :- In view of the foregoing reasons and in the result, I proceed to pass the following order.
ORDER The accused Nos.1, 2 and 4 are found guilty and they are convicted under Section 248(2) of the Cr.P.C. for the offences punishable 120 B r/w Sec.420 of Indian Penal Code and under Section 420 of Indian Penal Code.
Acting under Section 248(1) of Cr.P.C. 1973, accused No.3 is acquitted for the 253 C.C.No.21483/2016 offence punishable under Section Section 120 B r/w 420, 467, 468 and 471 of Indian Penal Code and Section 420, 467, 468 and 471 of Indian Penal Code.
The Bail bonds of the accused No.1 to 4 and their surety bonds stand canceled.
Bail bonds executed by accused No.3 under section 437A of Cr.P.C is in force for 6 months.
To hear regarding Sentence.
[Dictated to the Stenographer directly on the computer, computerized by her, corrected and pronounced by me in the open Court on this the 8th day of October, 2025] [L.J. BHAVANI] XVII ADDL.CHIEF JUDICIAL MAGISTRATE, BANGALORE.
ORDERS REGARDING SENTENCE In this case, the accused No.1, 2 and 4 are convicted for the offence punishable u/Sec.120 B r/w 420 of IPC and Sec.420 of IPC.
254 C.C.No.21483/20162. Heard the accused No.1, 2 and 4, their counsel and the Ld. Sr. Public Prosecutor regarding sentence.
3. The Ld. Counsel for accused No.1, 2 and 4has humbly submitted that, the accused persons have faced length trial and they are never violated the bail conditions and it is a pure business transaction and they are unable to pay the loan and they have furnished the security as per Ex.P.68 and it is still with the bank and they can invoke the same. Further it is submitted that, accused No.1 and 2 are the husband and wife and the accused No.2 having serious health issues and wife of the accused No.4 also having serious health issues and her leg was amputated in the month of September 2025 and they are the sole earning members in their respective family and they have to take care of old aged parents and no minimum sentence is prescribed u/Sec.420 of IPC. Accordingly, prayed for lenient view in favour of the accused No.1, 2 and 4 in the matter of awarding sentence.
4. The accused No.1, 2 and 4 who are before the Court is also submitted in the way as submitted by their Ld. Counsel and prayed for lenient approach in their favour.
255 C.C.No.21483/20165. Per contra, the Ld. Public Prosecutor has submitted that, the offences against the accused persons is proved beyond reasonable doubt and the Court has to consider the nature of the case and gravity of the offence committed by the accused persons and also its effect on the society. Accordingly, prayed for convicting the accused by imposing maximum sentence and fine permissible under law since it is an economic offence.
6. In the matter of imposing the sentence, Court has to hear the accused on sentence, consider the mitigating and aggravating circumstances, gravity of the offence, amount involved, the purpose of punishment being imposed, effect of the offence committed on the society and facts and circumstances of the case under which the offence took place etc. In the present case on hand, the accused No.1, 2 and 4 in conspiracy with the deceased accused K.R. Prasanna dishonestly availed excess in the SOD accounts and temporary overdrafts facilities in the Union Classic Account and discounted the cheques and some of the cheques discounted by the accused No.4 is also dishonoured and inter transferred the funds for the purpose of diversion. The act of the accused is having effect on the public money. The mitigating circumstances expressed by the accused persons are that they have furnished the collateral 256 C.C.No.21483/2016 security and they are not convicted of any offence previously. Further, they are suffering from serious health issues and having old age parents. The aggravating circumstances expressed for the seriousness of the offence, its effect on the society and public money.
7. The provisions of Probation of Offenders Act is not applicable to the present case on hand since it is a economic offence. Hence, this Court is declined to release the accused under the provisions of Probation of Offenders Act, 1958.
8. Section 420 of IPC provides for punishment for cheating and the said offence is punishable with imprisonment of either description for a term which may extend to seven years and also liable to pay fine.
9. Section 120 B of IPC provides for punishment for criminal conspiracy and the said offence under Section 120 B (1) of IPC is punishable in the same manner as if he abated such offence where no express provision is made in IPC for punishment of criminal conspiracy to commit an offence punishable with death imprisonment for life or rigorous imprisonment for a term of two years or upwards and as per Section 120 B (2) of IPC, the party to a criminal conspiracy other than a criminal conspiracy to commit an offence punishable as 257 C.C.No.21483/2016 per Section 120 B (1) of IPC shall be punished with imprisonment of either description for a term not exceeding six months, or with fine or with both.
10. The Court has to consider the mitigating factors which are in favour of the accused No.1, 2 and 4 and aggravating circumstances. There is no material placed to show that the accused No.1, 2 and 4 are having any criminal antecedents. As submitted by the Ld. Counsel for the accused No.1, 2 and 4, it is noticed that, the accused No.2 and wife of the accused No.4 are suffering from health issues and they are having aged old aged parents. They have appeared before the Court to face the trial of this case since 2011 for long years and the offence leveled against accused persons are not punishable with capital punishment. However, the submission made by the Ld. Sr. Public Prosecutor is also to be taken into consideration. Hence, having considered the facts and circumstances of the case, nature and gravity of the offences, its effect on the society, the purpose of the punishment, aggravating and mitigating circumstances of the case, this Court proceed to pass the following ;
ORDER The accused No.1, 2 and 4 are convicted for the offence punishable under Section 120 B r/w 420 of IPC and 258 C.C.No.21483/2016 they are sentenced to undergo simple imprisonment for a period of one year and shall also pay fine of Rs.10,000/-
each and in default of payment of fine amount, they shall undergo simple imprisonment for a period of three months.
The accused No.1, 2 and 4 are convicted for the offence punishable under Section 420 of IPC and they are sentenced to undergo simple imprisonment for a period of two years and shall also pay fine of Rs.20,000/-
each and in default of payment of fine amount, they shall undergo simple imprisonment for a period of three months.
The sentences ordered shall run concurrently.
Office to supply of the free copy of the judgment to the accused No.1, 2 and 4 forthwith.
(Dictated to the Stenographer, directly on the computer, corrected, signed and then pronounced by me in the Open Court on this the 8th day of October, 2025) [L.J. BHAVANI] XVII ADDL.CHIEF JUDICIAL MAGISTRATE, BANGALORE.
259 C.C.No.21483/2016-: ANNEXURE :-
I. List of witnesses examined for the prosecution:
PW 1 : A.K. Ajmera PW 2 : M.R. Gopalkrishna PW 3 : M. Jayaraj PW 4 : B. Suresh Rao PW 5 : Ashok Kumar Barua PW 6 : S. Raghavan PW 7 : Abdul Salam PW 8 : S.S. Ravi PW 9 : Param Jyothi PW 10 : C. Anjali Devi PW 11 : Padmanabha Shetty PW 12 : R. Bala Barathi PW 13 : N. Stanley Moses PW 14 : Suhas Baadgaonkar PW 15 : V. Seshadri PW 16 : Latha Ramanujam PW 17 : N.K. Mohan PW 18 : Raghavendra K. PW 19 : V. Suresh PW 20 : H.M. Shankaramurthy PW 21 : Karunakar K. PW 22 : Krishnavenamma PW 23 : A.S.V.N.S. Padmaraju PW 24 : Juliet D' Souza 260 C.C.No.21483/2016 PW 25 : A. Sehar Ponraj PW 26 : Hiriadka Vishwanath Rao PW 27 : Lavin C. Thadani PW 28 : Sheik Abdul Rahiman PW 29 : R. Ramesh PW 30 : Iqbal Hussain PW 31 : Mallikarjun PW 32 : P. Balappa PW 33 : Prasanth D. Shet PW 34 : K.B. Rajanna PW 35 : P.S. Subramanyam PW 36 : Jasbir Singh PW 37 : R. Chandrashekar PW 38 : B.M. Rajendra PW 39 : Vikram Chugh PW 40 : B.T.Mohan PW 41 : Gayathri P. Gangoli PW 42 : Sanjay S. Baglani PW 43 : Manohar lal PW 44 : Prabhakar Adiga PW 45 : Poornima Biligiri PW 46 : G.D. Suresh PW 47 : G. Girish Chandra P.W.48 : K.Narasimhan P.W.49 : Chetana Dixit P.W.50 : Dayananda Salian 261 C.C.No.21483/2016 P.W.51 : Ajaykumar Dalmia P.W.52 : L.S. Sampangi Ram P.W.53 : K.V. Ravi Shankar Sharma P.W.54 : Ajay Mehra P.W.55 : I.C. Amruth kumar P.W.56 : N. Sunil Kumar P.W.57 : Prakash Hattiangadi P.W.58 : Sunil Kumar P.W.59 : Krishna Prasad K.P. P.W.60 : R. B. Bhonsle P.W.61 : R.K. Shivanna II. List of witnesses examined for the defence :- -NIL-
III. Documents exhibited on behalf of the prosecution:
Ex.P.1 : Complaint
Ex.P.2 : Internal investigation Report
Ex.P.3 & 4 : Addl. Investigation Reports
Ex.P.5 : Circular No.7495 dated
26.09.2006
Ex.P.6 : Circular No.7198 dated
02.08.2005
Ex.P.7 : Circular No.7937 dated
19.03.2008
262 C.C.No.21483/2016
Ex.P.8 : Circular No.7571 dated
04.01.2007
Ex.P.9 : Circular No.7805 dated
24.10.2007
Ex.P.10 : Letter dated 08.02.2009
Ex.P.11 : Production cum Seizure Memo Ex.P.12 : Current account opening form and related documents in respect to M/s Mega Electricals Pvt. Ltd.
Ex.P.13 : Statement of account in respect to M/s Mega Electricals Pvt. Ltd.
Ex.P.14 : Customer Account Ledger Report in respect to M/s Mega Electricals Pvt. Ltd.
Ex.P.15 : Postage/dispatch Register Ex.P.16 : Certificate and relevant document regarding purchase of cheque in respect to M/s Mega Electricals Pvt. Ltd.
Ex.P.17 : Production cum Seizure Memo dated 17.05.2010 Ex.P.18 : File of SOD account of M/s Apsis Technologies Pvt. Ltd.263 C.C.No.21483/2016
Ex.P.19 : Certificate and relevant document regarding purchase of cheque in respect to SOD Account of M/s Apsis Pvt. Ltd.
Ex.P.20 : File of SOD account of M/s Jhanavi Enterprises Ex.P.21 : File of SOD account of M/s Deejay Technologies Ex.P.22 : File of current account & UCCA1 account of M/s Apsis Technologies Pvt. Ltd.
Ex.P.23 : Statement of account of UCCA1 account No. 395301010036325 of M/s Aaura Data Network Ex.P.24 : File of Cash Credit account of M/s Jhanavi Enterprises Ex.P.25 : File of S/B account & UCCA1 account No.395301010036322 of accused No.1 Ex.P.26 : File of S/B account & UCCA1 account No.395301010036323 of accused No.2 Ex.P.27 : File of Current account of M/s Express Technologies Ex.P.28 : File of Current account of M/s Gift Express 264 C.C.No.21483/2016 Ex.P.29 : File of documentary bills purchase of M/s Mega Electricals Ex.P.30 : File of current account of Mr. R. Ramesh Ex.P.31 : Fortnightly F1 Statements Ex.P.32 : File of Current account No.395301010036134 of M/s Aaura Data Networks Pvt. Ltd., Ex.P.33 : File of Current account No.395301010036293 of M/s Aaura Data Networks Pvt. Ltd., Ex.P.34 : Statement of account in respect to current account No.395301010036118 of M/s Jhanavi Enterprises Ex.P.35 : File of Current account of M/s Jasbir Collections Ex.P.36 : Consolidated statement of M/s Mega Electricals Pvt. Ltd., Ex.P.37 : 41 cheques & 9 vouchers of M/s MegaElectricals Pvt. Ltd., Ex.P.38 : Consolidated statement of M/s Apsis Technologies Pvt. Ltd.
Ex.P.39 : 143 cheques and 34 vouchers of M/s Apsis Technologies Pvt. Ltd.265 C.C.No.21483/2016
Ex.P.40 : Consolidated statement of M/s Aaura Data Networks Pvt. Ltd.
Ex.P.41 : 76 cheques and 5 vouchers of M/s Aaura Data Networks Pvt. Ltd.
Ex.P.42 : Consolidated statement of M/s Aaura Data Networks Pvt. Ltd.
Ex.P.43 : 62 cheques and 4 voucher of M/s Aaura Data Networks Pvt. Ltd.
Ex.P.44 : Consolidated statement of M/s Apsis Technologies Pvt. Ltd.
Ex.P.45 : 22 cheques and 15 vouchers of M/s Apsis Technologies Pvt. Ltd.
Ex.P.46 : Consolidated statement of M/s Deejay Technologies Ex.P.47 : 46 cheques and 7 vouchers of M/s Deejay Technologies Ex.P.48 : Consolidated statement of M/s Jhanavi Enterprises Ex.P.49 : 32 cheques and 9 vouchers of M/s Jhanavi Enterprises Ex.P.50 : Consolidated Statement of M/s Aaura Data Networks Pvt. Ltd.
Ex.P.51 : 14 cheques and 6 vouchers of M/s Aaura Data Networks Pvt. Ltd.
Ex.P.52 : Consolidated Statement of UCCA1 account of accused No.1 266 C.C.No.21483/2016 Ex.P.53 : 14 cheques and 2 vouchers of account of accused No.1 Ex.P.54 : Consolidated statement of current account of M/s Apsis Technologies Pvt. Ltd., Ex.P.55 : 70 cheques and 23 vouchers of M/s Apsis Technologies Pvt. Ltd., Ex.P.56 : Consolidated statement of current account of M/s Deejay Technologies Ex.P.57 : 6 cheques and 11 vouchers of M/s Deejay Technologies Ex.P.58 : Consolidated Statement of current account of M/s Jhanavi Enterprises Ex.P.59 : 33 cheques and 2 vouchers of M/s Jhanavi Enterprises Ex.P.60 : Consolidated statement of current account of M/s Express Technologies Ex.P.61 : 19 cheques and 5 vouchers of M/s Express Technologies Ex.P.62 : Consolidated statement of current account of M/s Gift Express Ex.P.63 : 15 cheques and 5 vouchers of M/s Gift Express Ex.P.64 : Consolidated statement of current account of M/s Jasbir Collections 267 C.C.No.21483/2016 Ex.P.65 : 4 cheques and 3 vouchers of M/s Jasbir Collections Ex.P.66 : Consolidated statement of UCCA1 account of accused No.2 Ex.P.67 : 2 cheques and 1 vouchers of account of accused No.2 Ex.P.68 : Copy of Memorandum of Deposit of title deeds dated 12.06.2009 Ex.P.69 : Consolidated statement for transferring of funds in the account of M/s Apsis Technologies Pvt. Ltd.
Ex.P.70 : Consolidated statement for transferring of funds in the account of M/s Apsis Technologies Pvt. Ltd.
Ex.P.71 : Consolidated statement for transferring of funds in the account of M/s Mega Electricals Pvt. Ltd., Ex.P.72 : Consolidated statement for transferring of funds in the account of accused No.2 Ex.P.73 : Consolidated statement for transferring of funds in the account of accused No.1 Ex.P.74 : Consolidated statement for transferring of funds in the account of M/s Jasbir Collections Ex.P.75 : Consolidated statement for transferring of funds in the account of M/s Express Technologies 268 C.C.No.21483/2016 Ex.P.76 : Consolidated statement for transferring of funds in the account of M/s Gift Express Ex.P.77 : Certificate in respect to purchase of cheques with relevant documents of M/s Aaura Data Networks Pvt. Ltd.
Ex.P.78 : Certificate in respect to purchase of cheques with relevant documents of M/s Deejay Technologies Ex.P.79 : Statement of account in respect to Current account No.3951010036083 of M/s Deejay Technologies Ex.P.80 : Consolidated statement of bills purchased in the account of M/s Mega Electricals Pvt. Ltd., and account ledger report Ex.P.81 : Sanction register in 2 volumes Ex.P.82 : Instruction Circular No.6715 dated 26.07.2003 Ex.P.83 : Letter dated 21.01.2008 Ex.P.84 : Letter dated 04.01.2008 Ex.P.85 : Letter dated 17.12.2007 Ex.P.86 : F1 Statement with Covering letter Ex.P.87 : Notes on ratification of branch sanction of SOD limit 269 C.C.No.21483/2016 Ex.P.88 : Instruction Circular No.7550 dated 08.12.2006 Ex.P.89 : Consolidated statement for transferring of funds in the account of M/s Apsis Technologies Pvt. Ltd.
Ex.P.90 : Consolidated statement for transferring of funds in the account of M/s Deejay Technologies Ex.P.91 : Consolidated statement for transferring of funds in the account of M/s Deejay Technologies Ex.P.92 : Consolidated statement for transferring of funds in the account of M/s Aaura Data Networks Pvt. Ltd.
Ex.P.93 : Consolidated statement for transferring of funds in the account of M/s Aaura Data Networks Pvt. Ltd.
Ex.P.94 : Consolidated statement for transferring of funds in the account of M/s Aaura Data Networks Pvt. Ltd.
Ex.P.95 : Consolidated statement for transferring of funds in the account of M/s Jhanavi Enterprises Ex.P.96 : Consolidated statement for transferring of funds in the 270 C.C.No.21483/2016 account of M/s Jhanavi Enterprises Ex.P.97 : Details of guarantees issued in the account of M/s Apsis Technologies Pvt. Ltd.
Ex.P.98 : Seizure Memo dated 01.07.2010 Ex.P.99 : Daily Validation Reports
Ex.P.100 : Certificates and statement of account of M/s Jhanavi Enterprises Ex.P.101 : Seizure Memo dated 11.06.2010 Ex.P.102 : Certificate in respect to allotment of user IDs Ex.P.103 : Covering letter with 2 bills of exchange & relevant documents Ex.P.104 : Statement of account of M/s Bhoruka Aluminium Ltd.
Ex.P.105 : Covering letter with copies of purchase, work orders & ledger account of M/s Bhoruka Power Corporation Ltd.
Ex.P.106 : Letter dated 07.06.2010 Ex.P.107 : Statement of account of M/s Mega Electricals Pvt. Ltd.
Ex.P.108 : Letters dated 07.05.2010 Ex.P.109 : Seizure Memo dated 10.05.2010 & documents in respect to M/s Mega 271 C.C.No.21483/2016 Electricals Pvt. Ltd.
Ex.P.110 : 2 Cheques bearing No.231100 & 312631 Ex.P.111 : Covering Letter dated 01.02.2010 with documents in respect to M/s Apsis Technologies Pvt. Ltd.
Ex.P.112 : Copies of the account opening form, statement of account of M/s Aaura Data Networks Pvt. Ltd.
Ex.P.113 : Covering letter dated 06.02.2009 with copies of the documents in respect to M/s Apsis Technologies Pvt. Ltd.
Ex.P.114 : Covering letter dated 07.06.2010 Ex.P.115 : Certified copies certificate of incorporation, memorandum of association, articles of association, Form 32 and annual returns of M/s Mega Electricals Pvt. Ltd.
Ex.P.116 : Certified copies certificate of incorporation, memorandum of association, articles of association, Form 32 and annual returns of M/s Apsis Technologies Pvt. Ltd.
Ex.P.117 : Certified copies certificate of incorporation, memorandum of association, articles of association, Form 32 and annual returns of M/s Aaura Data Networks Pvt. Ltd.
272 C.C.No.21483/2016Ex.P.118 : Letter dated 02.07.2010 along with copies of the documents Ex.P.119 : Seizure Memo dated 08.03.2010 Ex.P.120 : Certificate of Sri.I.C. Amruth kumar Ex.P.121 : Statement of accounts of M/s Vishal Enterprises Ex.P.122 : Covering letter dated 19.08.2010 with copies of the account opening form and account statement of M/s Bhoomi Enterprises Ex.P.123 : Covering Letter dated 19.08.2010 Ex.P.124 : Account opening form, statement of account and other related documents pertaining to S/B Account of R.Ramesh Ex.P.125 : Account opening form, statement of account and other related documents pertaining to S/B Account of Iqbal Hussain Ex.P.126 : Covering Letter dated 21.08.2010 & relevant documents Ex.P.127 : Covering Letter dated 23.08.2010 along with details of chit accounts Ex.P.128 : Covering letter dated 31.08.2010 with copies of account opening form, statement of account and other documents.
273 C.C.No.21483/2016Ex.P.129 : Covering letter dated 05.02.2010 with statement of account of M/s Aaura Networks Ex.P.130 : Search list dated 18.12.2009 Ex.P.131 : File of M/s Bhoruka Aluminum Ltd.
Ex.P.132 : Instruction circular No.8017 dated 16.06.2008 Ex.P.133 : Cheque bearing No.013247 dated 05.02.2009 Ex.P.134 : Cheque No.013249 dated 09.02.2009 Ex.P.135 : Cheque No.013250 dated 09.02.2009 Ex.P.136 : Specimen Signatures/handwriting of accused No.4 Ex.P.137 : Specimen Signatures/handwriting of accused No.3 Ex.P.138 : Specimen Signature/handwriting of Sri. Nikhil A. Athreya Ex.P.139 : Letter dated 09.01.2011 Ex.P.140 : Examination report/opinion of CFSL, Hyderabad Ex.P.141 : FIR Ex.P.142 : Search List dated 18.12.2009 Ex.P.143 : Search List dated 18.12.2009 274 C.C.No.21483/2016 Ex.P.144 : Seizure Memo dated 28.06.2010 Ex.P.145 : Covering letter dated 18.02.2010 Ex.P.146 : Copies of the account opening from and other documents of M/s Deejay Technologies Ex.P.147 : Cheque No.008453 and pay in slip Ex.P.148 : Statement of account of account standing in the name of Sri. K.R. Prasanna Ex.P.149 : Covering letter dated 22.10.2008 Ex.P.150 : Letter of guarantee issued by accused No.2 Ex.P.151 : Deposit reinvestment certificate Ex.P.152 : Deed of bank guarantee Ex.P.153 : Letter dated 21.01.2009 Ex.P.154 : Letter dated 22.10.2008 Ex.P.155 : Letter of guarantee issued by accused No.2 Ex.P.156 : Deposit reinvestment certificate dt 22.10.2008 Ex.P.157 : Deed of bank guarantee Ex.P.158 : Letter dated 07.05.2009 Ex.P.159 : Letter dated 11.05.2009 275 C.C.No.21483/2016 Ex.P.160 : Letter dated 22.10.2008 Ex.P.161 : Letter of guarantee issued accused No.2 Ex.P.162 : Deposit of reinvestment certificate dt.22.10.2008 Ex.P.163 : Deed of bank guarantee Ex.P.164 : Letter dated. 30.07.2009 Ex.P.165 : Letter dated 22.10.2008 Ex.P.166 : Letter of guarantee issued by accused No.2 Ex.P.167 : Deposit of reinvestment certificate dt.22.10.2008 Ex.P.168 : Deed of bank guarantee dt.
21.10.2008 Ex.P.169 : Letter dated 26.09.2009 Ex.P.170 : Letter dated 22.10.2008 Ex.P.171 : Letter of guarantee issued by accused No.2 Ex.P.172 : Deposit of reinvestment certificate dt. 22.10.2008 Ex.P.173 : Deed of bank guarantee dt.
21.10.2008 Ex.P.174 : Letter dated 08.12.2009 276 C.C.No.21483/2016 Ex.P.175 : Letter dt. 14.12.2009 Ex.P.176 : Letter dated 17.05.2010 Ex.P.177 : Certificate in respect to cheques purchased in the account of M/s Express Technologies Ex.P.178 : Certificate in respect to cheques purchased in the account of M/s Jasbir Collections Ex.P.179 : Certificate in respect to cheques purchased in the account of accused No.1 Ex.P.180 : Certificate in respect to cheques purchased in the account of M/s Jhanavi Enterprises Ex.P.181 : Certificate in respect to cheques purchased in the account of M/s Apsis Technologies Pvt. Ltd.
Ex.P.182 : Certificate in respect to cheques purchased in the account of M/s Gift Express Ex.P.183 : Cheques Collection schedule dated 12.02.2009 Ex.P.184 : Cheque No.429003 dated 12.02.2009 Ex.P.185 : Cheque No.429059 dated 12.02.2009 Ex.P.186 : Cheque No.429001 dated 12.02.2009 277 C.C.No.21483/2016 Ex.P.187 : Letter dated 10.02.2010 Ex.P.188 : Letter dated 10.08.2010 Ex.P.189 : Certificate in respect to details of officials who have created/entered/posted/verified the bills in the account of M/s Mega Electricals Pvt. Ltd.
Ex.P.190 : Certificate in respect to leave title of
K.R.Prasanna
Ex.P.191 : Concurrent audit reports
IV. LIST OF DOCUMENTS EXHIBITED FOR DEFENCE:-
-NIL-
V. LIST OF MATERIAL OBJECTS MARKED FOR THE PROSECUTION:-
-NIL-
VI. LIST OF MATERIAL OBJECTS MARKED FOR THE DEFENCE:-
-NIL-
[L.J. BHAVANI ] XVII ADDL.CHIEF JUDICIAL MAGISTRATE, BANGALORE.