Madras High Court
G.Kasinathan vs / on 10 October, 2023
Author: G.Jayachandran
Bench: G.Jayachandran
Criminal Appeal Nos.726, 671, 680, 850, 740 & 749 of 2018
IN THE HIGH COURT OF JUDICATURE AT MADRAS
Reserved on : 11.09.2023 Pronounced on : 10.10.2023
CORAM
THE HONOURABLE Dr. JUSTICE G.JAYACHANDRAN
Criminal Appeal Nos.726, 671, 680, 850, 740 & 749 of 2018
[Crl.A.No.726 of 2018 against C.C.No.4 of 2012]
G.Kasinathan
S/o.Gurusamy,
D.No.10A, South Raja Street,
Uthukuli, Tiruppur 638 751.
... Appellant/Accused No.2
/versus/
The State rep.by
The Inspector of Police,
Central Bureau of Investigation,
ACB/Chennai.
(RC.No.22/A/2010) ... Respondent/Complainant
Prayer: Criminal Appeal has been filed under Section 374(2) of Cr.P.C.,
praying to set aside the judgment passed in C.C.No.4 of 2012 dated
23.10.2018, on the file of the XI Additional Special Sessions Court, Chennai
(Banks and finance industrial related CBI case).
For Appellant : Mr.K.Selvamani
For Respondent : Mr.K.Srinivasan
Special Public Prosecutor (C.B.I).
_____________
Page No.1/46
Criminal Appeal Nos.726, 671, 680, 850, 740 & 749 of 2018
[Crl.A.No.671 of 2018 against C.C.No.4 of 2012]
E.Palani
Proprietor,
M/s.Om Motors,
Veppampathi Village & Post,
Vandavasi Taluk, Thiruvannamalai District.
... Appellant/Accused No.3
/versus/
State rep. by
The Inspector of Police,
SPE/CBI/ACB/Chennai. ... Respondent/Complainant
Prayer: Criminal Appeal has been filed under Section 374(2) of Cr.P.C.,
pleased to set aside the conviction and sentences passed by the lower Court
in C.C.No.4 of 2012 dated 23.10.2018 by the Court of XI Addl. & Special
Session Judge for CBI cases relating to Banks and Financial Institutions at
Chennai and allow this Appeal with costs.
For Appellant : Mr.T.Sivananthan,
For Respondent : Mr.K.Srinivasan
Special Public Prosecutor (C.B.I).
[Crl.A.No.680 of 2018 against C.C.No.4 of 2012]
R.Vijayan @ Vijayakumar
Alapathur Village,
Pudupattu Post, Chengam Taluk,
Tiruvannamalai District. ... Appellant/Accused No.4
/versus/
State, Rep By:
The Inspector of Police,
CBI/ACB, Chennai. ... Respondent/Complainant
_____________
Page No.2/46
Criminal Appeal Nos.726, 671, 680, 850, 740 & 749 of 2018
Prayer: Criminal Appeal has been filed under Section 374(2) of Cr.P.C.,
pleased to call for the records in C.C.No.4 of 2012 on the file of Learned XI
Additional Special Session Court Judge, (Banking & Financial Institution
Cases for CBI) Chennai by its order dated 23.10.2018 and set aside the same.
For Appellant : Mr.R.Bhagawat Krishna
For Respondent : Mr.K.Srinivasan,
Special Public Prosecutor (C.B.I).
[Crl.A.No.850 of 2018 against C.C.No.4 of 2012]
1. S.Venkatachalam
S/o.Subramani,
Oosambadi Village,
Kurinjapuram Post,
Tiruvannamalai Taluk & Dist,
2. C.Ramanujam
S/o.Chinnaiya Naidu
R/o Alapathur village,
Pudupattu Post,
Chengam Taluk,
Tiruvannamalai Dist.
3. R.Annamalai
S/o.Ranagkonar,
Padagam Village, Polur Taluk,
Tiruvannamalai Dist.
4. C.Periyathambi
S/o.Chinnasamy
Reddiyarpalayam Village,
Venkitampalayam post,
Tiruvannamalai Dist.
_____________
Page No.3/46
Criminal Appeal Nos.726, 671, 680, 850, 740 & 749 of 2018
5. K.Annadurai
S/o.Kannu Goundar,
Pyyanandhal Village,
Arpakkam Post,
Mangalam, Tiruvannamalai Taluk & Dist.
6. M.Annamalai
S/o.Manthan
Oosambadi Village,
Kurinjapuram Post,
Tiruvannamalai Taluk & Dist.
7. Smt.Amaravathy
W/o.M.Annamalai
Oosambadi Village,
Kurinjapuram Post,
Tiruvannamalai Taluk & Dist.
8. D.Chinnathambi
S/o.Durai Samy
Uthukuttai Village,
Vedandhavari Mathura,
Tiruvannamalai Taluk & Dist.
... Appellants/Accused 6, 7, 9 to 11, 13, 14 & 16
/versus/
State, Rep By:
The Inspector of Police,
SPE/CBI/ACB/ Chennai.
... Respondent/Complainant
Prayer: Criminal Appeal has been filed under Section 374(2) of Cr.P.C.,
praying to set aside the conviction and sentences passed by the lower Court
in C.C.No.4 of 2012 dated 23.10.2018 by the Court of XI Additional Special
Judge for CBI cases relating to Banks and Financial Institutions at Chennai
and allow this appeal with costs.
_____________
Page No.4/46
Criminal Appeal Nos.726, 671, 680, 850, 740 & 749 of 2018
For Appellants : Mr.T.Sivananthan
For Respondent : Mr.K.Srinivasan,
Special Public Prosecutor (C.B.I).
[Crl.A.No.740 of 2018 against C.C.No.4 of 2012]
V.Kannan
S/o.Veeran
No.45, 2nd Main Road,
3rd Cross, I phase,
VGP Layout, Palavakkam,
Chennai-41. ... Appellant/Accused No.1
/versus/
The State, Rep By:
The Inspector of Police,
Central Bureau of Investigation,
ACB / Chennai.
(RC.No.22/A/A2010)
... Respondent/Complainant
Prayer: Criminal Appeal has been filed under Section 374(2) of Cr.P.C.,
praying to set aside the judgment passed in C.C.No.4 of 2012 dated
23.10.2018 on the file of the XI Additional Special Session Court, Chennai
(Banks & Finance Industrial related CBI case).
For Appellant : Mr.K.Selvamani
For Respondent : Mr.K.Srinivasan,
Special Public Prosecutor (C.B.I).
_____________
Page No.5/46
Criminal Appeal Nos.726, 671, 680, 850, 740 & 749 of 2018
[Crl.A.No.749 of 2018 against C.C.No.4 of 2012]
1. D.Kothandaraman
S/o.Dhanapal Gounder,
Erumpoondi Village & Post,
Pennathur Taluk,
Tiruvannamalai District-604 601.
2. V.Pachaiyappan
S/o.Veeraragavan,
Aarpakkam Village,
Tiruvannamalai District. ... Appellant/Accused No.8 & 15
/versus/
The Inspector of Police,
Central Bureau of Investigation,
CBI/ACB / Chennai.
RC.No.22/A/2010
... Respondent/Complainant
Prayer: Criminal Appeal has been filed under Section 374(2) of Cr.P.C.,
praying to set aside the judgment and sentence imposed on the accused A8 &
A15 by the learned 11th Additional Special Judge for CBI Cases (Bank &
Financial Institution cases), Chennai in C.C.No.4/2012 dated 23.10.2018 and
acquit the appellants.
For Appellants : Mr.S.Vediappan
For Respondent : Mr.K.Srinivasan,
Special Public Prosecutor (C.B.I).
*****
_____________
Page No.6/46
Criminal Appeal Nos.726, 671, 680, 850, 740 & 749 of 2018
COMMON JUDGMENT
On 21.05.2010, based on the complaint received from the AGM, Union Bank of India, Regional Office, Salem, the Superintendent of Police, CBI at Chennai registered a case in Crime No.RC MA1 2010 A 0022 against 10 named accused and others for offences under Section 120B r/w 420, 409, 467, 468 r/w 471 IPC and Sections 13(2) r/w 13(1)(d) of PC Act.
2. The gist of the complaint was that during the period between 12.02.2008 and 14.12.2008, Shri V.Kannan while serving as Branch Manager, Union Bank of India, Thiruvannamalai, Shri R.Vijayan, an agent for tractor dealers and various firms with the connivance of each other entered into a criminal conspiracy with an intent to cheat the Union Bank of India, Thiruvannamalai Branch in the matter of sanctioning agricultural and crop loans etc. In pursuance of the conspiracy, Shri V.Kannan sanctioned and disbursed crop loans, pipe loans, etc., to an extent of Rs.101.38 lacs to the borrowers who were canvassed and brought by the agent and the dealers firm without adequate primary security and by accepting fake and fabricated documents. Thereby they caused a wrongful loss to a tune of Rs.109.22 lacs to the bank including interest as on 31.03.2010. _____________ Page No.7/46 Criminal Appeal Nos.726, 671, 680, 850, 740 & 749 of 2018
3. On completion of investigation, the Investigation Officer filed 8 separate final reports for each set of conspiracy and conspirators. In some of the cases, A1-V.Kannan and A2-G.Kasinathan are common accused. Rest of the accused were suppliers, facilitators and borrowers. These 8 final reports were taken cognizance by the Trial Court and assigned C.C.No.4 of 2012 to C.C.No.11 of 2012.
4. In C.C.No.4 of 2012, the final report filed against 16 persons, out of which, A1-V.Kannan and A2-G.Kasinathen were public servants working as Branch Manager, Union Bank of India. Rest of them are private individuals either facilitators for the loan availed by the farmers for the alleged purpose of purchasing Power Tiller. In the final report, 10 incidents of dishonest disbursement of loan by A1 and A2 alleged. The sum and substance of the final report was, Shri V.Kannan(A1) while working as the Branch Manager, Union Bank of India, Tiruvannamalai Branch, during the relevant period as mentioned above, had resorted to the modus-operandi of sanctioning and disbursing the agricultural loans for the purchase of tractors and/or Power Tillers and crop loans to the farmers who are not either eligible for the same or the purpose is not genuine. By floating the norms of the bank, they _____________ Page No.8/46 Criminal Appeal Nos.726, 671, 680, 850, 740 & 749 of 2018 siphoned off the funds of the bank based on the false and fabricated revenue certificates like, copies of adangal, valuation certificates, extracts of FMB sketches, Encumbrance Certificates, etc.
5. By entering into a criminal conspiracy with the Dealer(s) of the tractor/Power Tillers and with the farmers/borrowers of loans in abuse of their official position, they disbursed the loan amount in the name of the dealers without effecting the supply of the Power Tillers. The investigation conducted in the above regard revealed that Shri V.Kannan (A1) while working as Branch Manager at Tiruvannamalai Branch, sanctioned Power Tiller Loans to the borrowers (A6 to A16) brought in by Shri.E.Palani (A3), the owner of M/s.Om Motors. M/s.Om Motors was registered for buying and selling of tractors, tractor spares and implements and subsequently registered with manufacturer, M/s.Greaves Cotton Ltd for buying and selling of Power Tillers. Ten instances found to be bogus Power Tiller loans under the dealership of M/s.Om Motors. They are:-
1. S.Venkatachalam (A6) - Loan Amount Rs.2,10,000/-
2. C.Ramanujam (A7) - Loan Amount Rs.2,50,000/-
3. D.Kothandaraman (A8) - Loan Amount Rs.2,50,000/-
_____________ Page No.9/46 Criminal Appeal Nos.726, 671, 680, 850, 740 & 749 of 2018
4. R.Annamalai (A9) - Loan Amount Rs.2,50,000/-
5. C.Periyathambi (A10) - Loan Amount Rs.2,50,000/-
6. K.Annadurai (A11) - Loan Amount Rs.2,50,000/-
7. P.Kannan (A12) - Loan Amount Rs.2,50,000/-
8. M.Annamalai (A13) and P.Amaravathi(A14) - Loan Amount Rs.2,50,000/-
9. V.Pachaiappan (A15) - Loan Amount Rs.2,10,000/-
10.D.Chinnathambi (A16) - Loan Amount 2,10,000/-.
6. A1-V.Kannan and A2-G.Kasinathan, being public servants, the sanction to prosecute them under PC Act was obtained on 26.07.2011 and the final report was laid.
7. Based on the material submitted by the prosecution, the trial Court took up the final report on file, assigned C.C.No.4 of 2012. The following charges were framed against the accused:-
“FIRSTLY that You, A1, A2, A-3, A-4, A5, A6, A7, A8, A9, A10, A11, A12, A13, A14, A15 and A16 had entered into a criminal conspiracy during the year 2008 at Thiruvannamalai, to cheat Union Bank of India, Thiruvannamalai Branch, in the matter of applying, obtaining agricultural credit facilities, in the pretext of purchasing of _____________ Page No.10/46 Criminal Appeal Nos.726, 671, 680, 850, 740 & 749 of 2018 tractors/power tillers/ crop loans in the name of you A6 to A-16 and you A1 and A2 by abusing your official position as a public servants, committing criminal misconduct and criminal breach of trust, dishonestly and fraudulently, had sanctioned and disbursed the 11 agricultural loans knowing fully well that the loans were not intended for the genuine need of the borrowers, further you A3 and A4 in the pretext as supplier of power tillers/ its accessories etc, had dishonestly and fraudulently created false and fabricated invoices, land revenue records like copies of adangal, valuation certificates, extracts of FMB Sketches, Encumbrance certificates etc. and used the same as genuine, in support of the proposed loanees, further you A5 while working in Union Bank of India as Tiruvannamalai branch, as temporary employee, with active connivance of A1 and A2 had dishonestly and fraudulently created false, fabricated and forged revenue records like copies of adangal, valuation certificates, extracts of FMB Sketches, Encumbrance certificates etc. further you to A6 to A16 dishonestly and fraudulently submitted loan applications to the Bank on different dates along with forged and fabricated invoices, land documents etc., created by A3, A4 and A 5, without any intention to purchase any power tillers/ accessories etc., and you A1 & A2 had sanctioned and released loans to A6 to A16, without adhering to the norms to the Bank and failed to ensure the security, by corrupt or illegal means and by abusing your official position as public servant and the acts of you A1 to A16 had caused a loss to the tune of R 29,67,381/- to Union Bank of India Thiruvannamalai branch, and corresponding wrongful gain to yourselves and thereby you A1 to A16 _____________ Page No.11/46 Criminal Appeal Nos.726, 671, 680, 850, 740 & 749 of 2018 have committed he offence punishable under section 120-B r/w 409, 420, 467, 468 and 471 IPC and Section 13(2) r/w 13(1) (d) of PC Act 1988 and is within my cognizance.
SECONDLY that in pursuance of the aforesaid criminal conspiracy and in furtherance thereof you A6 had dishonestly and fraudulently applied for an agricultural loan bearing No.604/19 on 20.05.2008 to the extent of Rs.1,80,000/- you A7, had dishonestly and fraudulently applied for an agricultural loan bearing No.604/24 dated 02.07.2008 to the extent of Rs.2,00,000/-, you A8 had dishonestly and fraudulently applied for an agricultural loan bearing 604/34 dated 07.08.2008 for a loan amount of Rs.2, 12,500/-, you A9 had dishonestly and fraudulently applied for an agricultural loan bearing No.604/70 dated 10.11.2008 for a loan amount of Rs.2,10,000/-, you A10 had dishonestly and fraudulently applied for an agricultural loan bearing No.604/71 dated 11.10.2008 for a loan amount of Rs.2,10,000/- you A11 had dishonestly and fraudulently applied for an agricultural loan bearing No.604/72 dated 25.10.2008 for a loan amount of Rs.2,10,000/-, you A12 had dishonestly and fraudulently applied for an agricultural loan bearing No.604/80 for a loan amount of Rs.2.10,000/-, you A13 & 14 had dishonestly and fraudulently applied for an agricultural loan bearing No.604/83 dated 25.10.2008 for a loan amount of Rs.2,10,000/-, you A15 had dishonestly and fraudulently applied for an agricultural loan bearing No.604/84 dated 20.12.2008 for a loan amount of Rs.2.10,000/-, and you A16 had dishonestly and fraudulently applied for an agricultural loan bearing No.604/101 dated 18.12.2008 for a loan amount of Rs 2,10,000/- all _____________ Page No.12/46 Criminal Appeal Nos.726, 671, 680, 850, 740 & 749 of 2018 with Union Bank of India Tiruvannamalai branch, and the above loans were meant for the purchase of Power Tiller its accessories etc., without intending to purchase the same and you A2 the proprietor of M/s. Aruneshwara Hi Tech with the active connivance of you A3 had dishonestly and fraudulently created forged and fabricated invoices showing supply of power tillers in the name of A6 to A16, further enclosed with forged and fabricated land revenue records like copies of adangal, valuation certificates, extracts of FMB Sketches, Encumbrance certificates etc. separately in the name of individual loanees and got sanctioned and released four agricultural power tiller loan in the name of A6 to A16, further you A5 while working in Union Bank of India, Tiruvannamalai branch, as temporary employee, had dishonestly and fraudulently created forged and fabricated land revenue records like copies of adangal, valuation certificates, extracts of FMB Sketches, Encumbrance certificates etc, and you A1 and A2 the then Branch Managers of Thiruvannamalai Branch during the relevant period, respectively, with active connivance of you A3 A4 and A5, had dishonestly and fraudulently sanctioned and released the agricultural loans in the name of A6 to A16 knowing fully well that none of the borrowers are not interested to purchase any power tillers and further accepted the forged and fabricated invoices and other revenue records etc and facilitated the misappropriation of the bank funds and all the eleven loan accounts became Non-performing assets and had caused a loss to the tune of Rs.10,55,876/-to Union Bank of India Thiruvannamala branch. and corresponding wrongful gain to you A1 to A16 and thereby you A1 to _____________ Page No.13/46 Criminal Appeal Nos.726, 671, 680, 850, 740 & 749 of 2018 A16 have committed he offence punishable under section 420 and is within my cognizance.
THIRDLY that in pursuance of the aforesaid criminal conspiracy and in furtherance thereof as per the facts referred in the second charge, during the year 2008, you A6 to A16 had dishonestly and fraudulently applied for an agricultural loan bearing No.604/19 No.604/24, 604/34, No.604/70, No.604/71, No.604/72 No.604/80 No 604/83, No.604/84, and No.604/101 respectively with Union Bank of India Tiruvannamali branch, and the above loans were meant for the purchase of Power Tiller its accessories etc.. without intending to purchase the same and you A2 the proprietor of M/s. Aruneshwara Hi Tech with the active connivance of you A3 had dishonestly and fraudulently fabricated forged and fabricated invoices showing supply of power tillers in the name of A6 to A16, further enclosed with forged and fabricated land revenue records like copies of adangal, valuation certificates, extracts of FMB Sketches, Encumbrance certificates etc. separately,in the name of individual loanees and got sanctioned and released eleven agricultural power tiller loan in the name of AS to A16 further you A5 while working in Union Bank of India, Tiruvannamalai branch, as temporary employee, had dishonestly and fraudulently created forged and fabricated land revenue records like copies of adangal, valuation certificates, extracts of FMB Sketches, Encumbrance certificates etc. and all the eleven loan accounts became Non-performing assets and had caused a loss to the tune of Rs 10,55,876/- to Union Bank of India Thiruvannamalai branch, and thereby you A3 to A16 have committed he offence punishable under _____________ Page No.14/46 Criminal Appeal Nos.726, 671, 680, 850, 740 & 749 of 2018 section 467 IPC and is within my cognizance.
FOURTHLY that in pursuance of the aforesaid criminal conspiracy and in furtherance thereof as per the facts referred in the second charge, during the year 2008 you A6 to A16 had dishonestly and fraudulently applied for an agricultural loan bearing No.604/19 No.604/24, 604/34, No.604/70, No.604/71, No.604/72 No.604/80 No.604/83, No.604/84, and No 604/101 respectively with Union Bank of India Tiruvannamali branch, and the above loans were meant for the purchase of Power Tiller its accessories etc.. without intending to purchase the same and you A2 the proprietor of M/s. Aruneshwara Hi Tech with the active connivance of you A3 had dishonestly and fraudulently fabricated forged and fabricated invoices showing supply of power tillers in the name of A6 to A16, further enclosed with forged and fabricated land revenue records like copies of adangal, valuation certificates, extracts of FMB Sketches, Encumbrance certificates etc. separately in the name of individual loanees and got sanctioned and released eleven agricultural power tiller loan in the name of A6 to A16 further you A5 while working in Union Bank of India, Tiruvannamalai branch, as temporary employee, had dishonestly and fraudulently created forged and fabricated land revenue records like copies of adangal, valuation certificates, extracts of FMB Sketches, Encumbrance certificates etc and all the eleven loan accounts became Non-performing assets and had caused a loss to the tune of Rs.10,55,876/- to Union Bank of India Thiruvannamalai branch, and thereby you A3 to A16 have committed he offence punishable under section section 468 IPC and is within my cognizance. _____________ Page No.15/46 Criminal Appeal Nos.726, 671, 680, 850, 740 & 749 of 2018 FIFTHLY that in pursuance of the aforesaid criminal conspiracy and in furtherance thereof as per the facts referred in the second charge, during the year 2008, you A6 to A6 had dishonestly and fraudulently applied for an agricultural loan bearing No. 604/19 No.604/24, 604/34, No.604/70, No.604/71, No.604/72 No.604/80, No.604/83,No.604/84, and No.604/101 respectively with Union Bank of India Tiruvannamali branch, and the above loans were meant for the purchase of Power Tiller its accessories etc., without intending to purchase the same and you A2 the proprietor of M/s. Aruneshwara Hi Tech with the active connivance of you A3 had dishonestly and fraudulently fabricated forged and fabricated invoices showing supply of power tillers in the name of A6 to A16, further enclosed with forged and fabricated land revenue records like copies of adangal, valuation certificates, extracts of FMB Sketches, Encumbrance certificates etc. separately in the name of individual loanees further you A5 while working in Union Bank of India, Tiruvannamalai branch, as temporary employee, had dishonestly and fraudulently created forged and fabricated land revenue records like copies of adangal, valuation certificates, extracts of FMB Sketches, Encumbrance certificates etc. and dishonestly used the same as genuine by you A1 to A16 and got sanctioned and released eleven agricultural power tiller loan in the name of A6 to A16 and all the eleven loan accounts became Non- performing assets and had caused a loss to the tune of Rs.10,55,876/- to Union Bank of India Thiruvannamalai branch, and thereby you A1 to A16 have committed the offence punishable under section section 471 R/w 468 IPC and is within my cognizance.
_____________ Page No.16/46 Criminal Appeal Nos.726, 671, 680, 850, 740 & 749 of 2018 SIXTHLY that in pursuance of the aforesaid criminal conspiracy and in furtherance thereof as per the facts referred in the second charge, you A1 and A2 as Branch Managers of Union Bank of India, by abusing your official position as a public servant, had dishonestly and fraudulently accepted the loan application of A4 to A7 enclosed with forged and fabricated invoices showing supply of power tillers in the name of A4 to A7 further enclosed with forged and fabricated land revenue records like copies of adangal, valuation certificates, extracts of FMB Sketches, Encumbrance certificates etc. separately in the name of individual loanees, further without verifying the genuineness of the same and knowingly accepted the same with active connivance of A2 and A3, further you A1 and A2 have not obtained the sale invoices from the dealer in evidence for having effected the supply of power tillers to the borrowers and did not ensure the creation of asset for which the loan was sanctioned, without ensuring coverage of insurance, as required, without creating any valid and proper equitable mortgage by drawing the memorandum of deposit of title deeds, and further by way of accepting quotations of A3 which are not signed by the borrowers, and had disbursed the loan without adhering to the norms of the Bank and failed to ensure the security and all the loan accounts became Non performing Assets and thereby facilitated the misappropriation of the bank funds for a total sum of Rs.10,55,876- and thereby you A1 have committed the offence punishable under Sections 13(2) r/w 13(1)(d) of Prevention of Corruption Act 1988 and is within my cognizance. SEVENTHLY that in pursuance of the aforesaid criminal conspiracy _____________ Page No.17/46 Criminal Appeal Nos.726, 671, 680, 850, 740 & 749 of 2018 and in furtherance thereof as per the facts referred in the second charge, you A1 and A2 as Branch Managers of Union Bank of India, by abusing your official position as a public servant, had dishonestly and fraudulently accepted the blank loan application of A4 to A7 enclosed with forged and fabricated invoices showing supply of power tillers in the name of A4 to A7 further enclosed with forged and fabricated land revenue records like copies of adangal, valuation certificates, extracts of FMB Sketches, Encumbrance certificates etc. separately in the name of individual loanees, further without verifying the genuineness of the same and knowingly accepted the same with active connivance of A3, further you A1 and A2 have not obtained the sale invoices from the dealer in evidence for having effected the supply of power tillers to the borrowers and did not ensure the creation of asset for which the loan was sanctioned, without ensuring coverage of insurance, as required, without creating any valid and proper equitable mortgage by drawing the memorandum of deposit of title deeds, and further by way of accepting quotations of A3 which are not signed by the borrowers, and had disbursed the loan without adhering to the norms of the Bank and failed to ensure the security and all the loan accounts became Non performing Assets and thereby facilitated the misappropriation of the bank funds for a total sum of Rs.10,55,876/- and thereby you A1 have committed the offence punishable under Sections 409 IPC end is within my cognizance.”
8. The prosecution, to prove the above charges, examined 17 witnesses (PW1 to PW17) and marked 119 Exhibits (Ex.P.1 to Ex.P.119). In defence, _____________ Page No.18/46 Criminal Appeal Nos.726, 671, 680, 850, 740 & 749 of 2018 one witness examined as D.W.1, 6 documents (Ex.D.1 to Ex.D.6) were marked. Exs.C1 to C3 were marked as Court exhibits.
9. Pending trial A12 died and hence, the charges against him got abated. The trial Court on appreciating the evidence acquitted A5-P.Anjana for want of proof. Regarding the other accused, Court found them guilty of all the charges and sentenced them as below:-
Name of Charges Punishment the accused
U/s.120(B) r/w 409 IPC, To undergo 4 years R.I and fine 420, 467, 468 & 471 IPC and of Rs.10,000/-, in default to Section 13(2) r/w 13(1)(d) of undergo 1 year S.I. P.C.Act U/s.420 IPC To undergo 4 years R.I., and fine of Rs.10,000/-, in default to undergo 1 year S.I U/s.471 r/w 468 IPC To undergo 4 years R.I., and fine A1 of Rs.10,000/-, in default to undergo one year S.I U/s.13(2) r/w 13(1) (d) of To undergo 4 years R.I., and fine P.C. Act of Rs.10,000/-, in default to undergo one year S.I U/s 409 IPC To undergo 4 years R.I and fine of Rs.10,000/- in default to undergo one year S.I A2 U/s.120(B) r/w 409 IPC, To undergo 2 years R.I and fine 420, 467, 468 & 471 IPC and of Rs.5,000/-, in default to Section 13(2) r/w 13(1)(d) of undergo 6 months S.I. P.C.Act U/s.420 IPC To undergo 2 years R.I., and fine _____________ Page No.19/46 Criminal Appeal Nos.726, 671, 680, 850, 740 & 749 of 2018 Name of Charges Punishment the accused of Rs.5,000/-, in default to undergo 6 months S.I. U/s.471 r/w 468 IPC To undergo 2 years R.I., and fine of Rs.5,000/-, in default to undergo 6 months S.I U/s.13(2) r/w 13(1) (d) of To undergo 2 years R.I., and fine P.C. Act of Rs.5,000/-, in default to undergo 6 months S.I U/s 409 IPC To undergo 2 years R.I and fine of Rs.5,000/- in default to undergo 6 months S.I. U/s.120(B) r/w 409 IPC, To undergo 4 years R.I and fine 420, 467, 468 & 471 IPC and of Rs.10,000/-, in default to Section 13(2) r/w 13(1)(d) of undergo one year S.I. P.C.Act U/S.420 IPC To undergo 4 years R.I and fine of Rs.10,000/-, in default to undergo one year S.I U/S 467 IPC To undergo 4 years R.I and fine A3 of Rs.10,000/-, in default to undergo one year S.I U/S 468 IPC To undergo 4 years R.I and fine of Rs.10,000/-, in default to undergo one year S.I U/S 471 R/W 468 IPC To undergo 4 years R.I and fine of Rs.10,000/-, in default to undergo one year S.I U/s.120(B) r/w 409 IPC, To undergo 4 years R.I and fine 420, 467, 468 & 471 IPC and of Rs.10,000/-, in default to A4 Section 13(2) r/w 13(1)(d) of undergo 1 year S.I. P.C.Act _____________ Page No.20/46 Criminal Appeal Nos.726, 671, 680, 850, 740 & 749 of 2018 Name of Charges Punishment the accused U/S.420 IPC To undergo 4 years R.I and fine of Rs.10,000/-, in default to undergo one year S.I U/S 467 IPC To undergo 4 years R.I and fine of Rs.10,000/-, in default to undergo one year S.I U/S 468 IPC To undergo 4 years R.I and fine of Rs.10,000/-, in default to undergo one year S.I U/S 471 R/W 468 IPC To undergo 4 years R.I and fine of Rs.10,000/-, in default to undergo one year S.I U/s.120(B) r/w 409 IPC, To undergo each 1 year R.I and 420, 467, 468 & 471 IPC and fine of Rs.1,000/- each, in default Section 13(2) r/w 13(1)(d) of 3 months S.I each.
P.C.Act
U/s. 420 IPC To undergo each 1 year R.I and
fine of Rs.1,000/- each, in default
3 months S.I each.
A6 to A11, U/S 467 IPC To undergo each 1 year R.I and
A13 to A16 fine of Rs.1,000/- each, in default
3 months S.I each.
U/S 468 IPC To undergo each 1 year R.I and
fine of Rs.1,000/- each, in default
3 months S.I each.
U/S 471 r/w 468 IPC To undergo each 1 year R.I and
fine of Rs.1,000/- each, in default
3 months S.I each.
_____________
Page No.21/46
Criminal Appeal Nos.726, 671, 680, 850, 740 & 749 of 2018
10. Among the accused, who have been found guilty and convicted, A1 & A2 were public servants working as Bank Managers in Union Bank of India, Tiruvannamalai Branch during the period between 12.02.2008 to 20.12.2008 and 15.12.2008 to 29.06.2009 respectively, A3 to A5 are the facilitator, supplier of Power Tiller and A6 to A16 are the borrowers/agriculturists.
11. V.Kannan (A1) and G.Kasinathan (A2) convicted for the charge that they sanctioned and disbursed loans for the purchase of Power Tillers to the farmers, who were not eligible for the same. Based on false and fabricated Revenue certificates like copies of adangal, valuation certificates, extracts of FMB sketches, Encumbrance certificate etc., by floating the norms of the Bank siphoned the funds of the Bank by entering into criminal conspiracy with the dealers of Power Tillers and facilitators (A3 to A5), loan sanctioned to A6 to A16 dishonestly and fraudulently accepting the forged and fabricated invoices, land documents etc., created by A3, A4 & A5. Thereby, Union Bank of India had incurred loss to the tune of Rs.29,67,381/- [Rupees Twenty Nine Lakhs Sixty Seven Thousand Three hundred and eighty one only].
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12. A1 & A2, who are the public servants/Bank Managers placed their appeal on the ground that the Trial Court has proceeded against them on a wrong premise as if the loans to the farmers for purchasing Power Tiller was sanctioned by floating the norms of the Bank and thereby, caused huge loss to the Bank. Whereas as a fact of the matter, Ex.C1 clearly proved that the Bank has recovered the loan amount from the borrowers and Bank has not incurred any loss. Contrarily the agriculturists, who have availed the loan had enjoyed the advantage of owning a Power Tiller to augment their income. The appellants, as Bank officials in order to implement the scheme, had identified the beneficiaries through the facilitators and disbursed the loan after collecting necessary documents. The cheques were released to the dealer, who supplied the Power Tillers to the end user namely the borrowers [A6 to A16].
13. The Trial Court had erroneously held the Bank Managers as guilty for not registering the Power Tiller with the RTO and for not taking insurance cover for the vehicle. It is an option left to the discretion of the borrower whether to register the vehicle or to insure only vehicles which ply _____________ Page No.23/46 Criminal Appeal Nos.726, 671, 680, 850, 740 & 749 of 2018 on the road requires registration. As a Bank Manager, A1 & A2 have no control over the decision of the borrower.
14. Regarding the alleged forgery of Revenue documents, the counsels, referring the evidence of the prosecution witnesses submitted that prosecution has not proved the forgery in the manner known to law. When PW3 had admitted in the cross- examination that all the loans were properly secured and recovered, lapse, if any while scrutinising the loan applications cannot be fastened with criminal liability. With skeleton staff in the branch, as Managers, these two appellants were able to reach the target. The Trial Court had relied heavily on the evidence of Tmt.Sudha, who turned hostile and her handwritten notes, which is not a reliable document to be taken as statement of account maintained in the ordinary course of business transaction. The purchase of Power Tillers duly proved by the invoices and acknowledgement of the loan amount by the suppliers. Few exception for not supplying or substituted supply at the dealer end cannot be a reason to penalise the Bank Managers. It is contrary to the documentary evidence to hold that Power Tillers were not supplied to the borrowers, merely because _____________ Page No.24/46 Criminal Appeal Nos.726, 671, 680, 850, 740 & 749 of 2018 the invoice does not contain Registration Number and Chasis number. Such erroneous inference has led to miscarriage of justice.
15. The prosecution witnesses had admitted that Registration of Power Tiller at RTA is not necessary. The Bank accounts were audited by the Bank Audit Team and they have not found any irregularity in the sanction of loan. Since there was some inconvenience caused to the General Manager, who visited the Tiruvannamalai Branch, roving enquiry was conducted and false complaint lodged against these two officers. The departmental proceedings initiated against the appellants were dropped exonerating them. Therefore, for the very same set of facts the prosecution laid is abuse of law. Every month, the performance of branches is assessed by the Regional Office.
16. The Tiruvannamalai Branch was also assessed and was appreciated as the best branch. During his tenure, V.Kannan (A1) had sanctioned 19 tractor loans and 89 Power Tiller loans, out of which, the alleged irregularity in sanction of loan for 36 Power Tillers and one tractor, 8 complaints lodged. While the pay orders paid to the dealers and not to the borrowers, if at all there was no delivery or sale of Power Tiller, the error might have happened at the dealer's end and not in the Bank's end.
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17. V.Kannan (A1) was holding the office till November, 2008 followed by G.Kasinathan (A2). The borrowers have admitted the purchase of Power Tiller from the loan advanced by the Bank. There is no allegation that these two Officers obtained pecuniary advantage while granting loan. The entire loan amount sanctioned by these two appellants duly repaid by the borrowers. The loans were sanctioned only after obtaining opinion from the panel advocates. Before lodging the complaint and handing over the files to CBI, documents were removed in order to create an impression that loan files were not properly maintained. For all the loans, proper documents obtained, mortgage deed was created. The allegation that the borrowers were not eligible to get Power Tiller loan, since they did not posses minimum 3 acres of land is also incorrect. Even if it is so, it will not attract criminal liability, if loan is sanctioned to a farmer, who posses few cents lesser than 3 acres of land. While the land was sanctioned based on the valuation certificate, legal opinion and creating hypothecation of the vehicle alleging that the Bank Managers committed criminal breach of trust, cheating and forgery.
18. The learned counsel appearing for the facilitators viz., A3 to A5 submitted that Palani (A3) is the proprietor of M/s.Om Motors, which deals _____________ Page No.26/46 Criminal Appeal Nos.726, 671, 680, 850, 740 & 749 of 2018 in Power Tillers, 10 Power Tillers sold to A6 to A16 from and out of the loan sanctioned by the Union Bank of India, Tiruvannamalai Branch. As a genuine dealer in Power Tiller, he sold Power Tillers after getting the cheque from the Bank. Based on the documents produced by the farmers in respect of their holdings and solvency, Bank has sanctioned loan and forwarded the Cheque amount to the supplier viz., M/s.Om Motors. On receipt of the pay orders, Power Tillers were delivered to the loanee. The learned counsel for A3 to A5 contended that it is false to allege that no Power Tiller sold pursuant to the loans sanctioned by the Bank. In fact Power Tiller relating to the loans sanctioned to A6 to A16, were delivered between 22.05.2008 to 18.12.2008. Registration of the Power Tiller with RTA being optional, the borrowers thought fit not to register. Non registration of the Power Tiller, which is only optional, is not a reason to infer there was no sale of vehicle. Exs.P33 and P34 are the Sale tax return, wherein tax for the sale of 10 Power Tillers mentioned and paid.
19. Much before the disposal of the criminal case, the borrowers have paid the loan amount and cleared the same, despite that the prosecution continued, unmindful of the fact that it is purely a civil transaction. _____________ Page No.27/46 Criminal Appeal Nos.726, 671, 680, 850, 740 & 749 of 2018
20. M/s.Om Motors is a proprietary concern owned by E.Palani (A3). He is a registered dealer of M/s.Greaves Cotton Ltd. PW12-Kannan, the Sales Manager of M/s.Greaves Cotton Ltd., had spoken about this fact and also (about) supply of Power Tiller to M/s.Om Motors.
21. The entries found in the diary maintained by PW15-Sudha admittedly created by the prosecution at Shastri Bhavan, where the witness Sudha was called and kept under illegal custody for two days and forced her to write the entires. Witness in the cross-examination had admitted that those entries were made on the same day and same time and not on different dates and time.
22. The counsel appearing for A4-Vijayan submitted that the Trial Court ought not to have relied upon the evidence of PW6, who had contradicted his own version in chief and cross-examination. The charges against this appellant that he forged the signature of VAO in the Revenue certificate, valuation certificate and Adangal not proved except saying that he was an Agent of M/s.Om Motors and forged documents. The charges against A4 is vague and not proved. The Trial Court, which extended the benefit of doubt to A5-Anjana ought to have extended very same benefit to _____________ Page No.28/46 Criminal Appeal Nos.726, 671, 680, 850, 740 & 749 of 2018 A4 also, since he falls on the same footing. As a facilitator, this accused used to assist the unlettered villagers to fill up the application forms to avail loan. There is no incriminating materials against this accused for the charges tried. The Trial Court had erroneously held that for availing loan, this appellant (A4) had fabricated revenue document for the borrowers and forged the documents. According to the learned counsel for the A4-Vijayan, the evidence of PW13-VAO and PW14-Handwriting experts not adequate to prove A4 forged Exs.P13, P36 and P37.
23. As far as the third category of the accused viz., borrowers, who are A6 to A16, the counsels appearing for the respective borrowers/accused submitted that as a common villagers, when the Bank offered loan for purchasing Power Tiller, they approached the Bank through the facilitators and got Power Tiller from the dealer. The documentations were done by the facilitators and borrowers are not aware whether any of the Revenue records were forged. As far as the properties given as security, they are genuine and the guarantors are the owners of the property. It is not the case of the prosecution that they borrowed loan using forged title documents. The case _____________ Page No.29/46 Criminal Appeal Nos.726, 671, 680, 850, 740 & 749 of 2018 of the prosecution is that the Chitta, adangal and some of the Revenue documents in few cases suspected to be forged. In any event, Bank had proceeded against the borrowers and the borrowers have cleared their loans, which is proved through Court document marked as Ex.C1.
24. The counsels also submitted that Power Tiller purchased by them were very well under their use and due to efflux of period, it was sold or junked. Since the Power Tiller was used only for agricultural purpose, they have not registered the vehicle before the RTA and it is not violation of any Motor vehicle Rules.
25. The learned Special Public Prosecutor appearing for the State submitted that the scheme of sanctioning loan for purchase of tractor and Power Tiller mandates certain conditions and primary among them is that in case of Power Tiller borrowers should possess minimum 3 acres of land and Manager should verify the extent of agricultural land held by the borrower before sanctioning the loan. Once the Power Tiller is purchased, it has to be registered in the concerned RTO Office and also vehicle should be insured. The hypothecation document invoice should contain the Engine number and Chasis number of the Power Tiller. The RC book of the Power Tiller should _____________ Page No.30/46 Criminal Appeal Nos.726, 671, 680, 850, 740 & 749 of 2018 be retained by the Bank after making necessary endorsement. In these 10 cases where loan disbursed to A6 to A16, the invoices furnished, no detail regarding identification of the vehicle available. In none of the loan documents, the Engine number and Chasis number mentioned. Even in the hypothecation deed, A1 & A2 without mentioning the Engine number and Chasis number, had taken the hypothecation document, which is contrary to the Banking Rules. These vehicles were not registered and not insured. Thus, by violating the basic norms, A1 & A2 had dishonestly disbursed the loan amount over which, they had dominion.
26. PW3-V.Kathiresan had deposed about the procedure and the violation committed by A1 & A2 to favour A3, A4 & A5 through A6 to A16/the borrowers. For A3, the preparation of documents to avail loan, was done by A4 & A5. Those documents including Revenue records like Chitta and same proved to be fake. Therefore, the learned Special Public Prosecutor contended that the subsequent repayment of the loan or shortage of staff for not filling up the documents with necessary particulars, cannot be an excuse to exonerate A1 & A2 or the beneficiaries (A6 to A16). _____________ Page No.31/46 Criminal Appeal Nos.726, 671, 680, 850, 740 & 749 of 2018
27. The invoices had emanated from M/s.Om Motors owned by E.Palani (A3), who was assisted by Vijayan @ Vijayakumar (A4). Since documentary evidence as well as oral evidence are against the accused to prove Power Tiller was not sold and the loans were disbursed based on forged invoice, fake chitta and adangal. The Trial Court rightly convicted them after proper appreciation of evidence. Since there is no merit in these appeals, the learned Special Public Prosecutor (CBI) sought for dismissal of the Appeals.
28. Heard the Learned Counsel for the appellants. Records perused. The submission made by the Learned Special Public Prosecutor appearing for the respondent/C.B.I taken into consideration.
29. The sum and substance of the evidence marshalled by the prosecution is that Union Bank of India, Tiruvannamalai branch had disbursed loan for about 89 Power Tillers and 19 tractors to the farmers through various dealers. The investigation by CBI had led to 8 separate final reports for different sets of loans. As far as the complaint in RC MA1 2010 A 0022 dated 21.05.2010, which is the subject matter of C.C.No.4 of 2012 is in respect of 10 loans for Power Tiller sanctioned to A6 to A16. The _____________ Page No.32/46 Criminal Appeal Nos.726, 671, 680, 850, 740 & 749 of 2018 supplier of the Power Tillers is M/s.Om Motors. The pay order towards the costs of the Power Tiller drawn in favour of the dealer based on the proforma-invoice given by the dealer. V.Kannan (A1) was the Bank Manager between 12.02.2008 to 21.12.2008. G.Kasinathan (A2) was the Bank Manager from 15.12.2008 to 29.06.2009. The loans were sanctioned during their period. The sales of Power Tiller through M/s.Om Motors owned by E.Palani (A3) was done through the salesmen Vijayan @ Vijayakumar (A4) and Anjana (A5), the business facilitator. A5 acquitted in this case, since no incriminating evidence available against her. Whereas against others, who had appropriated the value of the loan amount through fabricated invoices and revenue documents held guilty and convicted.
30. According to the prosecution, the borrowers (A6 to A16) had not really purchased any Power Tiller from A3 as found in the loan files. Records were created as if Power Tillers were sold to them. A1 & A2 had accepted false and fabricated Revenue certificates like copies of adangal, valuation certificate, extracts of FMB sketch, Encumbrance certificate produced by the dealer through their salesmen and facilitator. A1 & A2 had fabricated pre-sanction inspection report. The sanctioning of loans, without _____________ Page No.33/46 Criminal Appeal Nos.726, 671, 680, 850, 740 & 749 of 2018 making pre-sanction verification and testing of the genuineness of documents produced has led to loss of Rs.29,57,381/- including interest upto 15.05.2011 in the case of 10 loans advanced for purchase of Power Tiller.
31. The counsels appearing for the accused had argued at length to establish that they are innocent and case has been wrongly foisted against them. While the counsel appearing for the Bank Managers (A1 & A2) contended that to reach the farmers and assist them financially by providing loan, Mela was conducted through the loan facilitators, prospective borrowers were identified and more than 500 farmers in the District were benefited. A roving enquiry conducted by CBI with mala fide intention had not resulted in any grave violation or illegality. However, in respect of about 39 Power Tillers and one tractor, 8 separate final reports were filed and they were prosecuted intentionally. In spite of settling the loan amount and same duly proved through Court Ex.C1, the Trial Court had imposed excessive punishment of 4 years of R.I and fine of Rs.10,000/-.
32. As far as the counsel appearing for the dealer (A3) and the salesmen (A4), it is contended that Registration of Power Tiller before the RTO is only optional and for that reason, the Court has wrongly presumed _____________ Page No.34/46 Criminal Appeal Nos.726, 671, 680, 850, 740 & 749 of 2018 that there was no sale of Power Tiller. The borrowers have admitted the delivery of Power Tiller to them and their usage of it. Also they have repaid the loan amount. Since it was a mass Loan Mela, the Engine number and Chasis number could not be noted in the invoice. However, the purchase of Power Tiller by A3 firm and sale of it through the Bank to the borrowers is reflected in the Sales Tax returns Ex.P7. While so, ignoring the records maintained in Sales Tax Department and proved through Ex.P7, the Trial Court has erroneously held that the suppliers of the Power Tiller guilty of serious charge of cheating and forgery for the only reason that the borrowers failed to pay the instalment in time. Then again, the Trial Court has failed to take note of the fact that the borrowers though did not pay the due in time, they have cleared the loan later and there is no due on the date of judgment and the same is proved through Court Ex.C1.
33. If really A3 had sold 10 Power Tillers to A6 to A16, as he claims, then a proper invoice, delivery note and vehicle engine number and chasis number must be available in the loan files. No trace of sale available in the file. A product which is subject to Excise duty, Sales Tax and Transit pass, cannot be believed to have bought and sold by A3 merely based on a _____________ Page No.35/46 Criminal Appeal Nos.726, 671, 680, 850, 740 & 749 of 2018 proforma invoice or invoice without any description of the product with unique identity of the product carry. As far as A4, the evidence of PW13 VAO categorically prove that Exs.P13, P36 and P37 are not documents used by the VAO office. The signature in the documents is not of any of the VAO's. PW14, the Handwriting expert has opined that those writtings tallies with A4 handwriting. As far as A4, the opinion of the Handwriting expert- PW14, which is marked as Exs.P49 & P50 indicates that R.Vijayan @ Vijayakumar (A4) and E.Palani (A3) had forged the documents found in the loan files, which are purported to have been issued by the Revenue Department and Registration Department.
34. The learned counsels appearing for the borrowers contended that the borrowers are unlettered villagers engaged in agricultural activity, they are not aware of the integrity of Banking Rules. They have produced their property documents and Revenue records to the dealer and in turn, got Power Tillers for their agricultural use, which requires no Registration at RTO office. They all have cleared their dues and default in payment earlier was due to monsoon failure and other reasons, but there was no dishonest intention of cheating the Bank. The Trial Court erred in relying Ex.P119 _____________ Page No.36/46 Criminal Appeal Nos.726, 671, 680, 850, 740 & 749 of 2018 which is a proceedings alleged to have drawn during investigation in the presence of police. The statement of the borrower alleged to have given to the IO that no Power Tiller supplied to them has no evidenciary value, since it is hit by Section 25 of The Indian Evidence Act.
35. Few of the borrowers present in person and produced photographs of the Power Tiller which they claim to have purchased in the year 2008. These photos were not produced before the Trial Court. There is no material to correlate these photos to the Power Tiller alleged to have purchased by them in the year 2008.
36. The counsels appearing for the appellants in general made a submission that the prosecution has not proved the charge of conspiracy or dishonest intention to cheat the Bank. While sanctioning the loan en mass, possibility of some lapse cannot be ruled out, but it not amount to any criminality, when the loan given without any dishonest intention. The title deed of the property produced by the borrowers are genuine and it was scrutinised by Panel Lawyer. Based on the legal opinion, Bank sanctioned loan and also it is only an inference that Power Tillers were not supplied. Such an inference being drawn because Engine number and Chasis number _____________ Page No.37/46 Criminal Appeal Nos.726, 671, 680, 850, 740 & 749 of 2018 not find place in the invoices. Relying upon the defence exhibits, particularly the departmental proceedings against Kannan (A1) and the deposition of witnesses, it was contended that the Bank officials neither had dishonest intention in processing the loan nor they had dishonestly obtained any pecuniary advantage for themselves or for others. The forgery of document alleged by the prosecution done by the salesmen of the dealer also not with any illegal intention, but to expedite the processing the loan.
37. The said arguments and submissions though superficially appears to be convincing, the omission on the part of A1 & A2 not recording the Engine number and Chasis number in the loan documents and the hypothecation deeds is a very grave omission. The vehicle for which loan sanctioned is the primary security for the Bank and by omitting to record the identity of the Power Tiller, which was sold to the borrowers, the recovery of loan in case of default by seizure of the vehicle has extinct. Further, it has also led to a strong inference that there was no sale of Power Tiller at all. The Sale tax return Ex.P7 is not a proof that 10 Power Tillers which are the subject matter of the loans given to A6 to A16 bought and sold by A3. Unless purchase document and Sales documents are produced and same _____________ Page No.38/46 Criminal Appeal Nos.726, 671, 680, 850, 740 & 749 of 2018 correlated to the Power Tillers allegedly sold to A6 to A16, the proof of sale to A6 to A16 cannot be held to true. The omission to record Engine number and Chasis number of the Power Tiller sold by A3 to A6 to A16, the forgery of ancillary documents, failure to conduct post and pre-sanction inspection are facts proved by the prosecution through oral and documentary evidence. They are all evidence that no sale was effected. Above all, while the terms of the loan specifically mandates that the bank should ensure registration of the Power Tiller at RTO and insurance of the vehicle, A1 & A2 had miserably failed to comply this mandate. Registration and Insurance may be optional in normal case, but when bank advances loan to purchase the vehicle, Registration and Insurance become mandatory to secure the interest of the Bank. A1 & A2 had compromised the interest of the Bank by their failure in not insuring and not registering the Power Tiller. For the said reason, the accused are held guilty of conspiracy and other substantive offences under the Indian Penal Code.
38. This Court has no doubt that the meeting of mind to advance loan by violating the Banking Rules is well established in this case. As a result of conspiracy, loans have been sanctioned to A6 to A16 and they defaulted in _____________ Page No.39/46 Criminal Appeal Nos.726, 671, 680, 850, 740 & 749 of 2018 repaying the loan. It is a fact that, at the later point of time, loan due has been repaid, but with delay and waiver of substantial portion of the interest. In so far as A1 & A2 being the public servants, they are charged under Sections 13(2) and 13(1) (d) of PC Act. The evidence in this case proves the ingredients to attract offence under the provisions of Prevention of Corruption Act. Particularly, from the loan files, it is clear that A1 & A2 had with dishonest intention of abusing their official position in sanctioning the loans disbursed the loan amount without pre and post sanction inspection. Though no evidence available to show that they obtained pecuniary benefits, due to their dishonest misconduct, the dealer, the inter-mediators and the borrowers have obtained illegal gain. The breach of trust in respect of property entrusted to them over which they had dominion, also established by prosecution through the witnesses, who had deposed that the Power Tillers sold to A5 & A6 not registered with RTA and not insured.
39. On examining the entire prosecution evidence, the attribution against these two public servants is their failure to ensure the borrowers furnish necessary particulars about the Power Tiller they have purchased, and their failure to verify the genuineness of Revenue records like Patta, Chitta _____________ Page No.40/46 Criminal Appeal Nos.726, 671, 680, 850, 740 & 749 of 2018 and adangal. Yet another serious allegation against them is that loan has been sanctioned to persons, who are not eligible i.e., while guidelines of the Bank mandates for sanctioning loan to purchase Power Tiller, the borrower should have minimum 3 acres of land in his name. In some of the cases, borrower were shortage of required extent of land. To cope up the loan conditions, the Revenue records like Adangal and valuation certificates forged. As far as this forgery is concerned, Bank Managers have gone by the certificate of VAO produced by the borrowers. Those VAO certificates found to be false. The explanation of A1 & A2 that when a mass Loan Mela conducted when more than 100 loan applications processed, in few cases, forged documents being produced by the borrowers through the Traders cannot be ruled out. However, said forgery and fabrications were not apparent to the naked eyes so they were carried away by its apparent look.
40. This explanation may only mitigate the offence and reduce the term of sentence, but cannot to exonerate them fully. Having entrusted with responsibility of disbursing loan as per the guidelines of the Bank, breach of the guidelines detrimental to the interest of the Bank warrants penal action. As far as this case is concerned, taking note of the fact that Bank has _____________ Page No.41/46 Criminal Appeal Nos.726, 671, 680, 850, 740 & 749 of 2018 substantially recovered the loan amount after penal action and borrowers are all uneducated farmers, this Court while confirming the conviction, modified the sentence imposed on the accused as under:-
Name of the Charges Sentence modified by this accused Court
U/s.120(B) r/w 409 IPC, 420, To undergo 2 years S.I and 467, 468 & 471 IPC and Section fine of Rs.10,000/-, in default 13(2) r/w 13(1)(d) of P.C.Act to undergo one year S.I. U/s.420 IPC To undergo 2 years S.I and fine of Rs.10,000/-, in default to undergo one year S.I. U/s.13(2) r/w 13(1) (d) of P.C. To undergo 2 years S.I., and A1 Act fine of Rs.10,000/-, in default to undergo One year S.I U/S. 471 r/w 468 IPC To undergo 2 years S.I., and fine of Rs.10,000/-, in default to undergo One year S.I U/s 409 IPC To undergo 2 years S.I and fine of Rs.10,000/- in default to undergo One year S.I U/s.120(B) r/w 409 IPC, 420, To undergo 2 years S.I and 467, 468 & 471 IPC and Section fine of Rs.5,000/-, in default 13(2) r/w 13(1)(d) of P.C.Act to undergo 6 months S.I. U/S 420 IPC To undergo 2 years S.I and fine of Rs.5,000/-, in default to undergo 6 months S.I. A2 U/S 471 r/w 468 IPC To undergo 2 years S.I and fine of Rs.5,000/-, in default to undergo 6 months S.I. U/s.13(2) r/w 13(1) (d) of P.C. To undergo 2 years S.I., and Act fine of Rs.5,000/-, in default to undergo 6 months S.I _____________ Page No.42/46 Criminal Appeal Nos.726, 671, 680, 850, 740 & 749 of 2018 Name of the Charges Sentence modified by this accused Court U/s 409 IPC To undergo 2 years S.I and fine of Rs.5,000/- in default to undergo 6 months S.I. U/s.120(B) r/w 409 IPC, 420, To undergo 2 years S.I and 467, 468 & 471 IPC and Section fine of Rs.10,000/-, in default 13(2) r/w 13(1)(d) of P.C.Act to undergo One year S.I. U/S.420 IPC To undergo 2 years S.I and fine of Rs.10,000/-, in default to undergo one year S.I U/S 467 IPC To undergo 2 years S.I and A3 fine of Rs.10,000/-, in default to undergo one year S.I U/S 468 IPC To undergo 2 years S.I and fine of Rs.10,000/-, in default to undergo one year S.I U/S 471 R/W 468 IPC To undergo 2 years S.I and fine of Rs.10,000/-, in default to undergo one year S.I A4 U/s.120(B) r/w 409 IPC, 420, To undergo 2 years S.I and 467, 468 & 471 IPC and Section fine of Rs.10,000/-, in default 13(2) r/w 13(1)(d) of P.C.Act to undergo one year S.I. U/S.420 IPC To undergo 2 years S.I and fine of Rs.10,000/-, in default to undergo one year S.I U/S 467 IPC To undergo 2 years S.I and fine of Rs.10,000/-, in default to undergo one year S.I U/S 468 IPC To undergo 2 years S.I and fine of Rs.10,000/-, in default to undergo one year S.I U/S 471 R/W 468 IPC To undergo 2 years S.I and _____________ Page No.43/46 Criminal Appeal Nos.726, 671, 680, 850, 740 & 749 of 2018 Name of the Charges Sentence modified by this accused Court fine of Rs.10,000/-, in default to undergo one year S.I U/s.120(B) r/w 409 IPC, 420, To undergo each 1 year S.I 467, 468 & 471 IPC and Section and fine of Rs.1,000/- each, 13(2) r/w 13(1)(d) of P.C.Act in default 3 months S.I each.
U/s. 420 IPC To undergo each 1 year S.I and fine of Rs.1,000/- each, in default 3 months S.I each. U/S 467 IPC To undergo each 1 year S.I A6 to A11, and fine of Rs.1,000/- each, A13 to A16 in default 3 months S.I each. U/S 468 IPC To undergo each 1 year S.I and fine of Rs.1,000/- each, in default 3 months S.I each. U/S 471 r/w 468 IPC To undergo each 1 year S.I and fine of Rs.1,000/- each, in default 3 months S.I each. The period of sentence shall run concurrently. The period of
imprisonment already undergone shall be set off under Section 428 Cr.P.C.
41. Accordingly, these Criminal Appeals are partly allowed. The judgment of conviction passed by the trial Court in C.C.No.4 of 2012 by XI Additional Special Judge, (CBI cases), is hereby confirmed. The Trial Court is directed to secure the custody of the accused to undergo the remaining _____________ Page No.44/46 Criminal Appeal Nos.726, 671, 680, 850, 740 & 749 of 2018 period of imprisonment.
10.10.2023
Index :Yes/No.
Speaking order/non speaking order
Neutral Citation Case: Yes/No.
kmi
To:-
1.The XI Additional Special Judge for CBI Cases, Chennai.
2.The Inspector of Police, CBI, ACB, Chennai.
3.The Special Public Prosecutor, High Court, Madras.
_____________ Page No.45/46 Criminal Appeal Nos.726, 671, 680, 850, 740 & 749 of 2018 Dr.G.JAYACHANDRAN, J kmi Criminal Appeal Nos.726, 671, 680, 850, 740 & 749 of 2018 10.10.2023 _____________ Page No.46/46