Bangalore District Court
Central Bureau Of vs Shri Byrappa on 14 February, 2018
IN THE COURT OF THE XLVI ADDITIONAL CITY CIVIL
AND SESSIONS JUDGE AND SPECIAL JUDGE FOR
CBI CASES (CCH-47) AT BENGALURU
Dated this the 14th day of February, 2018.
PRESENT:
S.H.PUSHPANJALI DEVI, B.A. LL.B.,
XLVI Additional City Civil and Sessions Judge
and Special Judge for C.B.I. Cases,
Bengaluru.
SPECIAL CRIMINAL CASE No.166/2004
COMPLAINANT: Central Bureau of
Investigation,
A.C.B., Bengaluru.
(By Public Prosecutor)
-VERSUS-
ACCUSED : 1 Shri Byrappa,
S/o.Late Lingappa,
Former Branch Manager,
Union Bank of India,
Haines Road Branch,
Bengaluru.
R/o.House No.9, I Block,
II Cross, Akshya Nagara,
Ramamurthy Nagar Post,
Bengaluru.
2 Spl.C.C.No.166/2004
2 Shri Mudanna Mylar,
S/o.Late K.M.Mallaiah,
Former Accountant,
Union Bank of India,
Haines Road Branch,
Bengaluru.
R/o.No.12, 5th Main, 6th
Cross,
Krishnappa Block,
Ganganagar,
Bengaluru.
3 Shri B.N.Udaya Kumar,
S/o.B.Nanjundappa,
R/o.No.4, 3rd Cross,
Lingayana Palya,
Ulsoor,
Bengaluru.
4 Shri S.Pradeep,
S/o.T.Sethuram,
R/o.No.30, B Block,
AECS Layout,
Kundalahally,
Bengaluru.
5 Shri Anjaneya Reddy,
S/o.Late Krishna Reddy,
C/o.Smt.B.K.Shanta,
No.80, Ist Stage, 11th Cross,
Indira Nagar,
Bengaluru.
3 Spl.C.C.No.166/2004
6 Shri K.V.Bhaskar,
S/o.K.Ramappa,
C/o.B.N.Uday Kumar,
R/o.No.4, 3rd Cross,
Lingayana Palya,
Ulsoor,
Bengaluru-08.
7 Shri S.N.Jayasimhan,
No.7, 6th Temple Street,
15th Cross, Malleswaram,
Bengaluru-03.
8 Shri Shabeir Ahmed,
S/o.Late Abdul Jabbar,
Hutting Colony, No.116,
Indira Nagar, Ist stage,
Binna Mangala,
Bengaluru-38.
9 Shri D.Ananda Kumar,
S/o.Deva Rao,
C/o.M/s.Sanarco Cold
Storage Pvt.Ltd.,
No.164, Chikkahullur,
Hosakote Taluk,
Bengaluru Rural Dist.
10 Shri M.L.Narendra Kumar,
S/o.M.A.Lakshman,
Managing Director,
C/o.M/s.Sanarco Cold
4 Spl.C.C.No.166/2004
Storage Pvt.Ltd.,
No.164, Chikkahullur,
Hosakote Taluk,
Bengaluru Rural Dist.
R/o.No.54, 3rd A Cross,
Prithvi Layout, Whitefield,
Bengaluru-66.
11 Shri K.Rehman,
S/o.Late Abdul Gaffar,
Former DGM, Regional
Office,
Union Bank of India,
Bengaluru.
R/o.Union Bank Building,
Near Ambedkar College,
Wadala West,
Mumbai.
12 M/s.Sanarco Cold Storage
Pvt.Ltd.,
Represented by its Managing
Director,
Shri M.L.Narendra Kumar.
13 M/s.Rajarajeswari Cold
Storage Pvt.Ltd.,
Represented by
Shri M.A.Lakshman,
S/o.Late Anjaneya Reddy,
No.1/2356, Gandhi Nagar
Extension,
Chintamani,
Kolar Dist.
5 Spl.C.C.No.166/2004
1. Date of Commission of : During the period
Offence 1999-2000.
2. Date of Report of Offence : 11.4.2002
3. Date of Arrest of accused : -
4. Date of release of accused : -
on bail
5. Period of undergone in : -
custody
6. Name of the complainant : Source Information
7. Date of commencement of : 6.8.2016
Evidence
8. Date of closing of Evidence : 11.7.2017
9. Offences complained of : 120-B r/w.420, 468,
471 and 477-A IPC
and Sec.13 (2) r/w.13
(1)(d) of Prevention of
Corruption Act, 1988.
Charges framed : 120-B r/w.420 of
Indian Penal Code,
468, 471 and 477-A of
Indian Penal Code and
6 Spl.C.C.No.166/2004
Section 13(2) read
with r/w.Sec.13(1)(d)
of Prevention of
Corruption Act, 1988.
10. Opinion of the Judge : As per final order
11. State represented by : Public Prosecutor
12. Accused defended by : A-1 by Sri Kiran Javali,
Adv.
A-2 by Sri
S.G.Bhagavan, Adv.
A-3, 5, 9 and 11 by Sri
C.R.Raghavendra
Reddy, Adv.
A-4 by Sri Muniyappa,
Adv.
A-6 by Sri Narayana
Reddy M., Adv.
A-7 by Sri K.Ramanna
Adv.
A-8 by Sri M.N.Nehru,
Adv.
A-10, 12 & 13
Companies by
Sri Gururaj V., Adv.
(S.H.PUSHPANJALI DEVI)
XLVI Addl. City Civil and Sessions Judge
and Special Judge for CBI Cases,
Bengaluru.
7 Spl.C.C.No.166/2004
JUDGMENT
This charge sheet is filed by the Inspector of Police, CBI/ACB/Bengaluru against the accused Nos.1 to 13, registered on the basis of Source Information for the offences punishable under Sections 120-B r/w.420, 468, 471 and 477-A IPC and Sec.13(2) r/w.13 (1)(d) of Prevention of Corruption Act, 1988.
2. The brief facts of the case of prosecution alleged against accused Nos.1 to 13 that, accused No.1 Branch Manager, accused No.2 Accountant of Union Bank of India, Haines Road Branch, Bengaluru, and accused No.11 - Deputy General Manager of Union Bank of India, Regional Office, Bengaluru, during the period 1999-2000 had entered into a Criminal Conspiracy with accused Nos.3 to 10, 12 and 13 Companies to do an illegal act. Accused Nos.1 and 2 in furtherance of Criminal Conspiracy by illegal or corrupt means had obtained pecuniary advantage for themselves and other accused persons, dishonestly and fraudulently processed seven housing loan applications in the names of 8 Spl.C.C.No.166/2004 accused Nos.3 to 7 and 9 on 1.6.2000 and accused No.8 on 12.7.2000. They sanctioned housing loan of Rs.5,00,000/- each to them, knowing fully well that no sufficient securities given and also the said loan amounts sanctioned were not used for the purpose of the construction of houses, but for the utilization of accused No.10.
3. Further alleged that during the said period, in view of Criminal Conspiracy,s the accused No.10 with the assistance of accused Nos.3 to 9 had dishonestly prepared false salary certificates in their names only to cheat Union Bank of India, Haines Road Branch, Bengaluru to get sanction of housing loans, Accused Nos.3 to 9 dishonestly and fraudulently submitted the forged salary certificates as genuine. The accused Nos.1 and 2 as Branch Manager and Accountant of Union Bank of India, Haines Road Branch with malafide intention sanctioned house building loans to them, without verifying salary certificates produced by accused No.10 knowing fully well those were false. 9 Spl.C.C.No.166/2004
4. Further alleged that accused Nos.1 and 2 after sanctioning housing loans in favour of accused Nos.3 to 9, allowed the accused No.10 to divert the sanctioned loan amount for the purpose other than for which, sanctioned only to cheat the UBI, Haines Road Branch, Bengaluru. Subsequently accused Nos.1 and 2 by illegal means had obtained pecuniary advantage for themselves and for the other accused persons, released an amount of Rs.3,00,000/- each as first installment of housing loans to accused Nos.3 to 9 and they dishonestly and fraudulently, credited the amount in one of the group companies account owned by accused No.10 namely M/s.Rohini Constructions.
5. The prosecution made allegation that during the said period in view of Criminal Conspiracy with accused Nos.2 to 9, 12 and 13 Companies, after sanction of housing loan by accused No.1, the accused No.10 with the assistance of accused Nos.1 to 9, dishonestly and fraudulently withdrawn the said amount sanctioned for the construction of house from the account of M/s.Rohini Constructions and had utilized the same for other purposes 10 Spl.C.C.No.166/2004 and caused wrongful loss to the Union Bank of India, Haines Road Branch, Bengaluru. Therefore, the accused Nos.1 and 2 have committed Criminal Misconduct by allowing accused No.10 to utilize the amount sanctioned for the construction of house for the purpose other than for which it was sanctioned.
6. The accused Nos.1 and 2 as Branch Manager and Accountant of Haines Road Branch illegally recommended to the Regional Office for enhancement of Term Loan and Cash Credit limits of loan to accused No.10. Accused No.11 being Deputy General Manager at Regional Office, has sanctioned enhancement of loans to accused No.10 on 16.12.1999 knowing fully well the previous credit facilities of accused No.10 were irregular, only to cause wrongful loss and defraud the bank. The accused Nos.1,2 and 11 being public servants in their different capacities, allowed the accused No.10 to divert the loan amount in the name of M/s.Sanarco Cold Storage Pvt.Ltd. and M/s.Rajarajeswari Cold Storage Pvt.Ltd. and committed Criminal Misconduct. 11 Spl.C.C.No.166/2004
7. The prosecution further alleged that during the said period, accused No. 10 in furtherance of Criminal Conspiracy with accused Nos.1 to 9, 11 to 13, had dishonestly opened Current Account with Union Bank of India, Haines Road Branch, Bengaluru with the introduction of accused No.1, only to cheat the said Bank. Accused No.1 with the assistance of accused No.2 had prepared cash credit application for sanction of Rs.25,00,000/- to accused No.10, fraudulently mentioning that the account was taken over from M/s.Tamilnadu Mercantile Bank, M.G.Road, Bengaluru. The accused Nos.1 and 2 knowing fully well the facilities availed by accused No.10 and others were outstanding to the tune of Rs.13,48,000/- in the Bank as on 27.9.1999, to get pecuniary advantage for themselves and for other accused sanctioned the Cash Credit limit of Rs.25,00,000/- on 28.9.1999 to M/s.Narendra Service Station owned by accused No.10.
8. Further alleged that during the above said period, accused Nos.1 and 2 in view of Criminal Conspiracy with accused Nos.3 to 13 regularized the excess drawings 12 Spl.C.C.No.166/2004 made by accused No.10 in the account of M/s.Narendra Service Station. They further recommended for enhancement of Cash Credit Limit from Rs.25,00,000/- to Rs.50,00,000/-and falsely certified the stock and receivables available in M/s.Narendra Service Station.
9. The prosecution further alleged that accused No.10 with malafide intention to cheat Union Bank of India, submitted another proposal as Managing Director of M/s.Sanarco Cold Storage Pvt.Ltd., to the accused No.1 who was the Branch Manager of Haines Road Branch for sanction of facilities of a) Working Capital/Cash Credit limits for Rs.50,00,000/- b) Term Loan of Rs.10,00,000/- and c) Non-fund based facility for Rs.10,00,000/-. On the basis of said proposal made by accused No.10, the accused Nos.1 and 2 had processed and recommended to the Regional Office for sanction of said loans as proposed on 20.1.2000, knowing fully well that the account of M/s.Narendra Service Station was outstanding to the tune of Rs.68,94,906/- only to show undue official favour to accused No.10. 13 Spl.C.C.No.166/2004
10. The prosecution has made allegation that during the above said period the accused No.11 being Deputy General Manager at Regional Office, in furtherance of Criminal Conspiracy with accused Nos.1 to 10, 12 and 13 Companies had obtained pecuniary advantage for himself and sanctioned the proposals made by accused Nos.1 and 2, knowing fully well that previous credit facilities sanctioned to accused No.10 were outstanding. Accused No.11 was also aware that the previous loans sanctioned by accused Nos.1 and 2 with dishonest intention at Branch level to accused No.10 were fraudulently diverted for other purpose rather than it was sanctioned. Inspite of that accused No.11 with dishonest intention had sanctioned the Term Loan and other credit facilities to accused No.10 without following terms and conditions of the sanction. Thereafter, accused No.10 with the assistance of accused Nos.1 and 2 had dishonestly diverted the whole amount sanctioned in the name of M/s.Sanarco Cold Storage Pvt.Ltd., and issued various cheques, transferred the amounts to other accounts.
14 Spl.C.C.No.166/2004
11. The prosecution has further made allegation against accused Nos.1 and 2 that in furtherance of Criminal Conspiracy with accused Nos.3 to 10, 12 and 13 Companies, they with malafide intention to show favour to accused No.10 had fraudulently prepared and forwarded another application for sanction of a Term Loan of Rs.50,00,000/- to M/s.Rajarajeswari Cold Storage Pvt.Ltd., one of the companies in the Narendra group of companies and sent proposal to the Regional Office of Union Bank of India, Bengaluru. Accused Nos.1 and 2 knowing fully well the previous credit facility sanctioned to accused No.10 in the name of M/s.Narendra Service Station and M/s.Sanarco Cold Storage Pvt.Ltd., were irregular. They were aware of that there was no prime security given to cover the bank finance, recommended for sanction of Term Loan in the name of M/s.Rajarajeswari Cold Storage Pvt.Ltd.
12. Further prosecution alleged that during the above said period the accused No.11 in furtherance of Criminal Conspiracy with accused Nos.1 to 10, 12 and 13 15 Spl.C.C.No.166/2004 Companies, after receiving proposal for sanction of Rs.50,00,000/- Term Loan to M/s.Rajarajeswari Cold Storage, fraudulently mentioned the borrowers' dealings and operations in the accounts of M/s.Narendra Service Station and M/s.Sanarco Cold Storage Pvt.Ltd. were satisfactory. Thereafter, with malafide intention shown official favour to accused No.10 and sanctioned credit facility in the name of M/s.Rajarajeswari Cold Storage knowing fully well that previous accounts of M/s.Narendra Service Station and M/s.Rajarajeswari Cold Storage, though the reports of irregularities submitted regularly by Credit Monitoring and Recovery Department (CMRD) in respect of said two accounts.
13. The prosecution further alleged that during the said period, the accused Nos.1 and 2 with malafide intention to cheat Union Bank of India, Haines Road Branch, Bengaluru and to show official favour to accused No.10, had fraudulently created Equitable Mortgage for Rs.19,75,000/- on the property which was valued only Rs.15,12,720, even 16 Spl.C.C.No.166/2004 though property worth Rs.94.05 lakhs was offered as collateral security.
14. The prosecution made allegation that during the above said period, accused Nos.1, 2 and 11 being public servants, by corrupt and illegal means had obtained pecuniary advantage for themselves and other accused persons by releasing an amount of Rs.25,00,000/- on 8.8.2000, to the account of M/s.Rajarajeswari Cold Storage and had fraudulently allowed accused No.10 to withdraw entire amount on 10.8.2000 by issuing various cheques, after transferring the amount to another account of M/s.Rohini Constructions. Therefore, they being public servants had committed Criminal Misconduct by allowing accused No.10 to utilize amount sanctioned in respect of M/s.Rajarajeswari Cold Storage for the purpose other than it was sanctioned.
15. After receiving the source of information for the above allegations against the accused Nos.1 to 13, the CBI has registered the case in RC No 11(A)/2002-BLR for the 17 Spl.C.C.No.166/2004 offences punishable under Sections 120-B r/w.420 IPC and Sec.13(2) r/w.13 (1)(d) of Prevention of Corruption Act, 1988. The FIR and Government Notification dated 15.3.2002 were produced before the XXI Addl.City Civil and Sessions Judge, Bengaluru.
16. Thereafter, the accused No.10 was granted anticipatory bail in Crl.Misc.2869/2002 on 6.1.2003 and accused No.1 granted anticipatory bail on 12.6.2003 in Crl.Misc.1053/2003. Subsequently, the Court has granted regular bail to both accused No.1 and accused No.10 on different dates.
17. The Investigating Officer after completing investigation has filed charge sheet against accused Nos.1 to 13 for the offences punishable under Sections 120-B r/w.420,468,471,477A IPC and Section 13(2) r/w.13(1)(d) of Prevention of Corruption Act, 1988.
18. The Sanction Orders to prosecute accused Nos.2 and 11 obtained by Investigating Officer as required under 18 Spl.C.C.No.166/2004 Section 19(1)(c) of Prevention of Corruption Act, 1988. In the charge sheet, it is mentioned that since the accused No.1, the then Bank Manager, Haines Road Branch, and Bengaluru was compulsorily retired from service in pursuance of a Departmental proceedings initiated against him, no Sanction is obtained as per law.
19. After filing charge sheet, the learned Presiding Officer of XXI Addl. City Civil and Sessions Judge, Bengaluru, had took cognizance of the offence punishable under Section 120-B r/w.420, 468, 471, 477A of IPC and Sec.13(2) r/w.13(1)(d) of Prevention of Corruption Act, 1988 against accused Nos.1 to 13. The case is registered in Spl.C.C.166/2004 and summons issued to accused Nos.1 to
13. After service of summons, accused Nos.2 to 9, 11 to 13 were appeared through different counsel; subsequently they were also granted bail on different dates. Accused Nos.1 and 10 were also appeared through different Counsel and they were obtained regular bail prior to service of summons.
19 Spl.C.C.No.166/2004
20. Thereafter, on 20.11.2010 as per the Notification No.ADM-I(A)/790/2010, case was withdrawn from XXI Addl.City Civil and Sessions Judge, Bengaluru (CCH-4) and made over to this Court for disposal in accordance with law.
21. After Investigating Officer filing the charge sheet, the copies of same were furnished to the accused Nos.1 to 13. Thereafter, the applications filed by accused Nos.1, 3, 5, 7, 9, 11 and 13 under Section 227 Cr.P.C. for their discharge from the case. Heard arguments of learned P.P. and learned counsel for said accused on applications filed for discharge and other accused both on respective applications and on HBC. Subsequently, the said applications were dismissed by this court on different dates.
22. Subsequently, the entire records of the case were submitted to the Hon'ble High Court of Karnataka with reference in Crl.R.P.No.29/2012 clubbed with Crl.R.P.No.33/2012 on 7.3.2012. The Hon'ble High Court of Karnataka has stayed the matter and extended the stay 20 Spl.C.C.No.166/2004 from time-to-time finally dismissed both the Criminal Revision Petitions.
23. Subsequent to the receipt of records from Hon'ble High Court of Karnataka, on 20.5.2016, this Court has framed the charge against accused Nos.1 to 13 for the offences punishable under Sections 120-B r/w.420, 468, 471 and 477-A IPC and Sec.13 (2) r/w.13 (1)(d) of Prevention of Corruption Act 1988, read over and explained to them. They have denied the charges leveled against them and claimed to be tried. Hence, the case was posted for trial.
24. The prosecution in proof of the case has examined 43 witnesses as PWs.1 to 43 out of 48 witnesses. The documents in support of prosecution case are marked as Exs.P1 to P105. In the cross examination of prosecution witnesses, some of the documents available in the "P" series exhibits already marked for prosecution were confronted in support of the defence of accused and admitted by the witnesses are marked as Exs.D1 to D29. 21 Spl.C.C.No.166/2004 CW35 was reported to be dead, the learned P.P. has given up CWs.12, 20, 25, 32 and 33 and closed the evidence of prosecution.
25. After closure of prosecution evidence, the statement of accused Nos.1 to 13 recorded under Section 313 of Cr.P.C. by reading the incriminating circumstances in the evidence of prosecution witnesses. The accused Nos.1 to 13 have denied the evidence deposed by the prosecution witnesses and they have not chosen to lead any defence evidence. The accused Nos.1, 2, 7 and 11 in support of their defence have filed their written statements under Section 313(5) of Cr.P.C. separately. The accused No.2 along with written statement has filed Xerox copy of Concession Certificate issued by District Surgeon to show he is permanently disabled. The accused No.7 has filed copy of the letter dated 2.11.2016 issued by Central Public Information Officer, Regional office Bengaluru.
26. Heard arguments of learned Public Prosecutor for prosecution and learned Counsel for accused Nos.1 to 13 on 22 Spl.C.C.No.166/2004 merits. The learned Public Prosecutor has filed list with citations. The learned Counsel for accused Nos.1, 2 and 7 filed the written arguments with citations separately. The learned Counsel for accused No.11 has submitted citations.
27. Perused the records and points argued for prosecution and accused Nos.1 to 13 with supporting citations filed before the court.
28. The points that would arise for my consideration is:-
1) Whether the prosecution is able to prove that Sanction Orders obtained to prosecute accused Nos.2 and 11 are valid as required under law and no sanction is necessary to prosecute against accused No.1, as he was compulsorily retired in view of departmental enquiry?
2) Whether the prosecution is able to prove that during the period 1999-2000, the accused Nos.1 and 2 with accused Nos.3 to 11, accused Nos.12 and 13 23 Spl.C.C.No.166/2004 Companies had entered into Criminal Conspiracy in process of sanction of housing loans with fraudulent intention to cheat Union Bank of India, Haines Road Branch, Bengaluru?
3) Whether the prosecution is able to prove that during the period 1999-2000, accused Nos.1 and 2 being public officers of Union Bank of India, Haines Road Branch, Bengaluru, dishonestly processed the housing loan applications and sanctioned the same in the names of accused Nos.3 to 9, without obtaining sufficient securities and not verified the false and forged salary certificates issued by accused No.10 produced by accused nos3 to 9 as genuine?
4) Whether the prosecution is able to
prove that during the said period the
accused Nos.1 and 2 after sanctioning
24 Spl.C.C.No.166/2004
housing loans in favour of accused Nos.3 to 9 allowed the accused No.10 to withdraw the entire loan amount to divert for utilization of different purpose other than the purpose it was sanctioned?
5) Whether the prosecution is able to prove that during the above said period accused Nos.1 and 2 have recommended for enhancement of loan and Term Loan for accused No.10 to the Regional Office and accused No.11 being Deputy General Manager at regional office had sanctioned the same inspite of previous credit facilities obtained by accused No.10 were irregular only to cause wrongful loss and to defraud the Bank?
6) Whether the prosecution is able to prove that during the said period accused Nos.1, 2 and 11, in furtherance of Criminal 25 Spl.C.C.No.166/2004 Conspiracy with accused Nos.3 to 10 dishonestly allowed accused No.10 to divert the loan amount in respect of accused No.12 Company M/s.Sanarco Cold Storage Pvt.Ltd. and accused No.13 Company M/s.Rajarajeswari Cold Storage Pvt.Ltd. and committed Criminal Misconduct?
7) Whether the prosecution is able to prove that accused Nos.1 to 11, A-12 Company represented by A-10 M.L. Narendra Kumar and A-13 Company represented by M.A.Lakshman have
committed the offence punishable under Sections 120-B r/w.420 Indian Penal Code, accused Nos.3 to 10 have committed the offence punishable under Section 468 and 471 of Indian Penal Code, accused Nos.1 ,2 and 11 have committed the offence punishable under Section 477-A Indian Penal Code and accused Nos.1, 2 and 11 26 Spl.C.C.No.166/2004 being public servants have committed the offence punishable under Section 13(2) read with Section 13(1)(c) of Prevention of Corruption Act, 1988?
8) What Order?
29. My findings on the above points are as follows:-
Point-1: In the Negative Point-2: In the Negative Point-3: In the Negative Point-4: In the Negative Point-5: In the Negative Point-6: In the Negative Point-7: In the Negative Point-8: As per final order for the following:-
REASONS
30. Point No.1 :- The prosecution has alleged that accused Nos.1 and 2 being Manager and Accountant of the UBI, Haines Road Branch, Bengaluru and accused No.11 27 Spl.C.C.No.166/2004 being Deputy General Manager, UBI, Regional Office, have entered into Criminal Conspiracy with accused Nos.3 to 10, and 12 and 13 - Companies, while processing and sanctioning of housing loans and enhancement of Term Loans respectively and cheated the UBI, Haines Road Branch. Further, the accused Nos.1, 2 and 11, in their official capacity with dishonest intention in view of Criminal Conspiracy with accused Nos.3 to 10, 12 and 13 falsified the accounts and obtained pecuniary advantage for themselves and for also other accused persons, by corrupt or illegal means, abused their official position as public servants, while they were holding office as public servants. Therefore, the allegations made against accused Nos.1, 2 and 11 particularly for the offences punishable under Section 120-B r/w.420 Indian Penal Code and 477-A IPC and Sec.13(2) r/w.13 (1)(d) of Prevention of Corruption Act, 1988.
31. In order to prosecute accused Nos.2 and 11, the Sanction obtained by the Investigating Officer issued by the competent authority General Manager (HRM) and Chairman 28 Spl.C.C.No.166/2004 and Managing Director of UBI, vide order dated 15.10.2013, respectively. The prosecution has examined both the competent authority, to prove the validity of Sanction Order issued by them.
32. The witness who had issued Sanction to prosecute accused No.2 is K.L.Gopala Krishna, examined as PW38 worked as General Manager, at Head Office, Bombay, has deposed about his powers of appointing and removing of officials up to the level Assistant General Manager has said to be verified the documents and evidence produced by CBI. According to him, after perusal of entire materials produced by CBI, had issued the Sanction Order to prosecute against accused No.2, which is identified and marked as Ex.P92 and his signature is marked as Ex.P92 (a). Though he has stated about verification of all the documents produced by CBI, in the cross-examination, has admitted that the housing loan records were also included in those documents, not remember to say who were obtained the housing loans. He is also not able to say the responsibility of the Accountant 29 Spl.C.C.No.166/2004 in the Branch Office, against whom to prosecute issued Sanction as per Ex.P92. However, though he has not listed the documents produced by CBI, specifically stated that the Investigation Report examined by him before according Sanction. The important aspect is the said Investigation Report, which is an important document, on the basis of which, he had issued Sanction is however, not produced before the Court. Likewise, he is not able to say the names of witnesses and nature of the documents mentioned in the said Report.
33. Another witness said to be the competent Authority issued Sanction to prosecute against accused No.11 is Vittal Das Leeladhar, examined as PW39. He was said to be worked as Chairman and Managing Director of UBI, had power to appoint and remove the officials up to the level of Deputy General Manager. After receiving requisition with records from CBI, in the month of October- 2003, he has gone through the records and found prima facie material to prosecute against accused No.11, therefore, issued Sanction, identified before the Court 30 Spl.C.C.No.166/2004 marked as Ex.P93 and his signature is marked as Ex.P93(a).
34. In the cross-examination he has admitted that Resolution passed by the Board to remove the officials up to the level of Deputy General Manager is not produced before the Court, though admitted that the Finance Ministry will take appropriate decision in connection with important matters of the Bank. The powers given to the officials of Branch and Regional Office to consider the loan applications and sanction the loan up to their limit is not disputed. He has also admitted that in the Regional Office a separate mechanism available to process the loan recommendation made by the Branch. However, it is made out from the Sanction Ex.P93 reference made regarding conspiracy between Bank Officials namely R.M.Agarwal, Doraiswamy Reddy, Paulraj and K.Rehman. But, except said Rehman, other officials were not made as accused by CBI. He is not remember to say on what basis the documents referred by him regarding specific omission and commission committed by accused No.11. Though he has stated that receipt also 31 Spl.C.C.No.166/2004 issued to the Investigating Officer after receiving the records containing many documents, the same is not produced before the Court.
35. After going through the evidence of PWs.38 and 39, it is made out that, they were based on certain documents produced by CBI to examine to issue Sanction to prosecute against accused Nos.2 and 11. But both of them were not able to mention specific documents, on the basis of which they issued Sanction. It is verified from the Sanction Orders under Exs.P92 and 93 though were issued by different persons, the contents of the paras 1 to 3 are similar. In the remaining paras of Ex.P92, it is alleged that accused No.2 being Accountant of UBI, Haines Road Branch, Bengaluru entered into Criminal Conspiracy with accused No.1 Branch Manager and other accused Nos.3 to 10 while processing housing loan applications and other papers of Narendra Group of Companies for sanction of C.C. limit, thereafter recommended for sanction and enhancement of loan within a short span of three months from Rs.25,00,000/- to Rs.50,00,000/- with a sole intention 32 Spl.C.C.No.166/2004 to cover the excess drawls made by accused No.10. Further stated that accused No.2, while functioning as Accountant, not only entered into Criminal Conspiracy with accused No.1 but also with accused No.10 and PW41 - Paul Raj in recommending for Term Loan of Rs.50,00,000/- to M/s.Rajarajeswari Cold Storage Pvt.Ltd. Therefore, PW38 stated that acts of accused No.2 constitute commission of offences punishable under Sections 120-B read with 420 Indian Penal Code and Section 13(2) read with.13(1) (d) of Prevention of Corruption Act, 1988. On all the said grounds stated that accorded Sanction under Section 19(1) (c) of Prevention of Corruption Act, 1988 to prosecute him for the above said offences.
36. Likewise, it is verified from the Sanction Order issued under Ex.P93 paras 1 to 3 similar as of Ex.P92. Thereafter, stated that accused No.11 being Deputy General Manager in Regional Office also with dishonest intention entered into Criminal Conspiracy with accused Nos.1 and 2, who were Branch Manager and Accountant of UBI, Haines Road Branch and with private person accused 33 Spl.C.C.No.166/2004 No.10. However, it has been further stated that the process note prepared by Assistant Manager recommended by Sr.Manager(Credit) for enhancement of loan from Rs.25,00,000/- to Rs.50,00,000/- in respect of M/s.Narendra Service Station. Further mentioned that accused No.11 while functioning his duty as Deputy General Manager, in the Regional Office during the relevant point of time entered into Criminal Conspiracy with R.M.Agarwal, Chief Manager - Paul Raj and accused No.10 to sanction the loan of Rs.50,00,000/- on 31.7.2000. Therefore, stated that accused No.11 has committed the offence punishable under Section 120-B read with 420 Indian Penal Code and Section 13(2) read with 13(1)(d) of Prevention of Corruption Act, 1988. On all the said grounds, issued Sanction to prosecute against accused No.11 as required under Section 19(1) (c) of Prevention of Corruption Act, 1988.
37. The witnesses PWs.38 and 39 being competent authority of issuing Sanction Orders have clearly stated that they were examined materials placed before them by CBI, 34 Spl.C.C.No.166/2004 which includes FIR, copies of statements of witnesses, material documents in respect of allegation made against accused Nos.2 and 11. But they were not able to say the nature of documents which were examined by them and also prima facie materials to issue Sanction as required under Law. Therefore, it can be said that they have not applied their mind before issuing Sanction to prosecute against accused Nos.2 and 11.
38. The learned Counsel for accused No.2 has brought to the notice of the Court the similarity of the contents of three paragraphs of Sanction issued under Exs.P92 and 93. The submission made regarding the validity of Sanction to be considered as to whether the draft charge sheet was placed before PW38 at the time of his consideration to issue Sanction to prosecute accused No.2 in view of citation reported in, 2014 AIR SCW 472 in the case of CBI v/s Ashok Kumar Aggarwal, in which, the observation made by the Hon'ble Supreme Court of India that, Prosecution is under obligation to place 35 Spl.C.C.No.166/2004 entire record before Sanctioning Authority and satisfy Court that Authority has applied its mind.
The learned Counsel further relied on following rulings:
AIR 2012 Supreme Court 858, in the case of Dinesh Kumar v/s Chairman, Airport Authority of India and another.
The Hon'ble Supreme Court of India has observed that though cognizance had already been taken by the Trial Judge, the question of validity of Sanction Order can be challenged during the trial.
AIR 1997 Supreme Court 3400 in the case of Mansukhlal Vithaldas Chauhan v/s State of Gujarat, the Hon'ble Supreme Court of India has observed under Section 6 of Prevention of Corruption Act, 1988, The validity of Sanction depends on the applicability of mind by the Sanctioning Authority to the facts of the case as also the material and evidence collected during investigation, it necessarily follows that the Sanctioning Authority has to apply its own independent mind for the generation of 36 Spl.C.C.No.166/2004 genuine satisfaction whether prosecution has to be sanctioned or not. The mind of the Sanctioning Authority should not be under pressure from any quarter nor should any external force be acting upon it to take a decision one way or the other.
39. The learned Counsel for accused No.11 pointed out important aspect elicited in the evidence of PWs.38 and
39. The submission made regarding procedure was not followed by them and all the documents produced by Investigating Officer not examined by superior Officers of accused No.11, amounts no application of mind before issuing the Sanction. In support of the arguments relied on the citation reported in, AIR 2014 Supreme Court 827 in the case of C.B.I. Vs. Ashok Kumar Aggarwal. The observation made by the Hon'ble Supreme Court of India that:
The Sanctioning Authority has to do complete and conscious scrutiny of whole record placed before it--Sanction Order should to show that Authority has considered all relevant facts and applied its mind. It is the duty of the prosecution to place entire record before Sanctioning Authority and 37 Spl.C.C.No.166/2004 satisfy Court that the Authority has applied its mind.
40. After going through the entire evidence of PWs.38 and 39, along with the observation made by the Hon'ble Supreme Court of India in the above rulings, I come to conclusion that Sanction obtained by Investigating Officer to prosecute against accused Nos.2 and 11 are not proper as required under Section 19 (1)of Prevention of Corruption Act, 1988.
41. It is important to point out that the prosecution has also alleged the above mentioned similar offences committed by accused No.1 being a public servant as Branch Manager while working in Haines Road Branch during the same period. However, in the charge sheet the Investigating Officer has stated since accused No.1 was compulsorily retired from service in view of departmental proceedings initiated against him, no Sanction obtained. But the offences alleged against him as committed in the capacity of Branch Manager of Haines Road Branch, Bengaluru for the period 1999-2000. Admittedly, during 38 Spl.C.C.No.166/2004 the said period he was working as Branch Manager and case is registered in RC/11/A/2002/BLR on the basis of report dated 11.4.2002 said to be received at 4.00 P.M.
42. The learned Counsel for accused No.1 submitted that- the prosecution has not obtained Sanction Order to prosecute him as required Section 19(1)(c) of Prevention of Corruption Act, 1988 in compliance of Section 197 of Cr.P.C. and relied on the following Rulings :-
1998 Cri.L.J. 3519 (Rajasthan High Court), in the case of Suraj Narain Vs. The State.
The gist of this Ruling is proper Sanction for prosecution is necessary even in case of retired Government servants. The point of taking cognizance is of no relevance as to whether it is taken prior to retirement or after retirement.
AIR 2008 Supreme Court 1992 in the case of Anjani Kumar Vs. State of Bihar & Anr.
The Hon'ble Supreme Court of India referred decision AIR 1967 SC 776 P Arulswami Vs. State of Madras, in which held that --- every offence committed by a 39 Spl.C.C.No.166/2004 public servant that requires Sanction for prosecution under Section 197(1)of Criminal Procedure Code; nor even every act done by him while he is actually engaged in the performance of his official duties; but if the act complained of is directly concerned with his official duties so that, if questioned, it could be claimed to have been done by virtue of the office, then sanction would be necessary. It is quality of the act that is important and if it falls within the scope and range of his official duties, the protection contemplated by Section 197 of Criminal Procedure Code will be attracted. An offence may be entirely unconnected with the official duty as such or it may be committed within the scope of the official duty. It is prima facie found that the act or omission for which the accused was charged had reasonable connection with discharge of his duty then it must be held to be official to which applicability of Section 197 of the Code cannot be disputed.
2004 Cri.L.J. 2011 (Supreme Court) ,in the case of State of Orissa and others Vs. Ganesh Chandra Jew.
The observation made that under Section 197 Cr.P.C. Sanction is required even in cases 40 Spl.C.C.No.166/2004 where a retired public servant is sought to be prosecuted.
2008 Cri.L.J. 2054 (Supreme Court) in the case of Raghunath Anant Govilkar Vs. State of Maharashtra & Ors.
The Hon'ble Supreme Court of India held that under Section 197 Cr.P.C., Sanction for prosecution is necessary even when retired public servant is prosecuted for offence alleged to be committed while he was in service.
2008 AIR Supreme Court 1937 in the case of P.K.Choudhury Vs. Commander, 48 BRTF (GREF) The Hon'ble Supreme Court of India held that when the offence alleged against public servant has direct nexus with discharge of his official duties, Sanction to prosecute is necessary under Section 197 of Cr.P.C.
In view of observation made in the above rulings, it is found that the Sanction to prosecute against the retired public servant is necessary, even though the offences alleged was committed during his service. 41 Spl.C.C.No.166/2004
43. The evidence of PWs.38 and 39 discussed above along with Sanction issued under Exs.P92 and 93 clearly establish that both of them being competent authority, have not applied their mind while examining the records produced by Investigating Officer, before issuing Sanction to prosecute against accused Nos.2 and 11. Further, though the offences alleged against accused No.1 in the capacity as Branch Manager along with accused Nos.2 and 11, who are also public servants, the Investigating Officer has failed to obtain Sanction as required under law to prosecute against accused No.1 is however, not proper. Therefore, after detail perusal of entire records with observation made in the above rulings, I am of the view that prosecution has utterly failed to prove that the Sanction obtained to prosecute against accused Nos.2 and 11 under Exs.P92 and 93 are valid in accordance with Section 19(1) of Prevention of Corruption Act, 1988 and Section 197 of Cr.P.C. Further, prosecution has failed to prove that Sanction is not required or necessary to prosecute accused No.1, on the ground that he was 42 Spl.C.C.No.166/2004 compulsorily retired in view of departmental enquiry held in the Bank subsequently. Hence, I answer point No.1 in Negative.
44. Point Nos.2 to 7 :- All these points are required common discussion, therefore, taken together to avoid repetition. It is already pointed out that the CBI has alleged against accused Nos.1 and 2 who were the then Branch Manager and Accountant of Union Bank of India (hereinafter referred as 'UBI') Haines Road Branch, Bengaluru and accused No.11 Deputy General Manager of UBI, at Regional Office, Bengaluru during the period 1999- 2000 had entered into Criminal Conspiracy with accused Nos.3 to 10, 12 and 13 Companies. The accused Nos.1 and 2 by illegal and corrupt means obtained pecuniary advantage for themselves and for other accused persons dishonestly and fraudulently processed seven housing loan applications in the name of accused Nos.3 to 9 and sanctioned Rs.5,00,000/- each to accused Nos.3 to 7 and 9 on 1.6.2000 and housing loan sanctioned to accused No.8 on 12.7.2000. The specific allegation made that accused 43 Spl.C.C.No.166/2004 Nos.1 and 2 in their official capacity while granting housing loans did not obtain sufficient security and the amounts sanctioned were not for the purpose of construction of houses, but for the utilization of accused No.10. It is alleged that accused No.10 with assistance of accused Nos.3 to 9 dishonestly prepared false salary certificates in their names and submitted for obtaining housing loans only to cheat UBI and to get sanction of housing loans.
45. The Bank officials, particularly who were worked in the Haines Road Branch during the tenure of accused No.1 as Branch Manager and accused No.2 as Accountant, have deposed about the housing loans sanctioned in the names of accused Nos.3 to 9 who were employees of M/s.Sanarco Cold Storage. It is made out from the records that except accused No.8, other accused Nos.3 to 7 and 9 were sanctioned housing loan of Rs.5,00,000/- each on 1.6.2000 and for accused No.8, it was sanctioned on 12.7.2000. The said loans alleged to be sanctioned without sufficient security obtained from the accused Nos.3 to 9 for construction of houses, but the loan amounts utilized by 44 Spl.C.C.No.166/2004 accused No.10 for other purpose. Therefore, at the first instance it is to be verified whether any proof placed by prosecution in proof of the said allegations.
46. The prosecution has placed both oral and documentary evidence and relied evidence of Bank official in proof of allegations made against accused Nos.1 to 13. PW2 - M.Shashikala, worked as clerk-cum-typist in Haines Road Branch, has identified accused Nos.1 and 2 who were the then Branch Manager and Accountant in the said Branch. She was looking after advance department and attending other work entrusted by the Branch Manager, has identified the house loan files of accused Nos.3 to 8 marked as Exs.P57 to 63. In the said files Ex.P63 pertains to accused No.3, Ex.P57 is of accused No.4, Exs.P60, 61 and 62 are relating to accused Nos.5, 6 and 7, respectively. It is not disputed that during the relevant period, the accused No.1 was Branch Manager and accused No.2 was Accountant of Haines Road Branch and accused No.11 was Deputy General Manager working in the Regional Office, Bengaluru.
45 Spl.C.C.No.166/2004
47. PW2 has stated that accused Nos.1 and 2 in the Haines Road Branch, were processed the housing loans of accused Nos.3 to 9. In the cross-examination she has admitted that the Sanction Advice found in the file Ex.P57 relates to housing loan of accused No.4 marked as Ex.D2. In the same file, the carbon copy of memorandum of deposit of title deeds identified and marked as Ex.D3. The portion of remarks made by accused Nos.1 and 2 in the loan application at page No.11 shown in red ink as 45 written by her admitted and marked as Ex.D4. The signatures of accused Nos.1 and 2 put to the said remarks identified and marked as Ex.P57(a) & (b). Further she has admitted the documents confronted in the cross- examination are the letter of request given by accused No.4 dated 7.8.2001 marked as Ex.D10, discloses that the loan of Rs.3,00,000/- released by the Bank on 1.6.2000, he had expressed his intention not to avail balance amount of Rs.2,00,000/- as he will make own arrangement to complete the ground floor of the building under 46 Spl.C.C.No.166/2004 construction. The said letter enclosed with Xerox copy of the cheque drawn on State Bank of Travancore for Rs.30,000/- paid towards repayment of the installment of housing loan. The document Ex.D11 is the carbon copy of the sanction of credit facility of housing loan and its payment schedule dated 8.11.2001 sent to the accused No.4. Ex.D12 is the letter dated 30.1.2001 written by Branch Manager of Haines Road Branch to accused No.4 with respect to subject of visit to his site of construction and further stated that, the estimation of the project issued by the Architecture received by the Bank. The accused No.4 was asked for details of bills and certificate from the Architecture towards utilization of the funds for audit purposes of the Bank. Ex.D13 is the letter written by accused No.4 to the Manager of Haines Road Branch dated 24.3.2001 informing about first phase of Rs.3,00,000/- towards housing loan released and construction was also inspected by the Bank with details of his occupation and income. He had requested to release balance amount of Rs.2,00,000/- to enable to complete the construction of his house.
47 Spl.C.C.No.166/2004
48. The housing loan file of one Chandrashekar Patil marked under Ex.P58 contained the similar documents in which, the application for house loan identified and marked as Ex.D5. The Sanction Advice marked as Ex.D6 and the carbon copy of the Memorandum of deposit of Title deeds marked as Ex.D7. The entry made as the amount of Rs.5,00,000/- disbursed to the account of M/s.Rohini Constructions in the account extract of his housing loan marked as Ex.D8.
49. PW2 has further identified the loan application filed by accused No.8 found in the housing file Ex.P59 which contain Sanction Advice marked as Ex.D9. The details of house property valued Rs.16.65 lakhs out of which half share amounts Rs.8.33 lakhs mentioned in the loan application given as security. Further he had also executed an stamped agreement and power of attorney for both housing loan and Term Loan. The Xerox copy of the settlement dated 9.9.2004 confronted to her and marked as Ex.D15. She has admitted that the Bank Authorities and 48 Spl.C.C.No.166/2004 the loanee have followed all the norms and rules as to granting of loan and repayment of loan. The categorical admission made by her that accused No.8 has not committed anything wrong while getting housing loan and its repayment. The contents of the said letter shows that accused No.5 was sanctioned housing loan of Rs.5,00,000/- for the purpose of construction of the house on site No.25. Since he turned irregular, the account classified as NPA on 31.3.2001, therefore, he had approached for settlement. Afterwards, the Bank waived off the interest of Rs.69,860/- and agreed for one time settlement for Rs.2,59,000/- and the housing loan was fully settled under compromise and original documents were returned to him on 2.8.2003.
50. In further cross-examination of PW2 on behalf of accused No.5, she has admitted the contents of the letter dated 29.11.2003 shown to her marked as Ex.D14 with subject to objection. The said letter contains since the housing loan account of accused No.5 classified as NPA on 31.3.2001, he had approached for compromise. Therefore, the higher authorities have approved the compromise for 49 Spl.C.C.No.166/2004 Rs.2,59,000/- by waving interest of Rs.69,860/-. The compromise was entered between the bank and accused No.5 as fully settled and all the original title deeds were returned to him on 2.8.2003. However, though the said document is a Xerox copy marked with subject to objection, the prosecution has not produced any supporting documents to prove the falsity of its contents. Therefore, the objection raised cannot be sustained.
51. Further PW2 has identified the documents submitted along with the application for housing loan of accused No.7 marked as Ex.P62 contains the account extract maintained for housing loan account by the UBI marked under Ex.D17, in which the entry made that the amount of Rs.3,00,000/- credited in the name of M/s.Rohini Constructions on 1.6.2000. Admittedly, the accused No.10 was the guarantor for housing loans of accused Nos.3 to 7 gave letter of undertaking dtd.25.3.2002 stating that he will repay the loan amount availed by them, the said letter is marked as Ex.D17. She has further identified and admitted the document dated 3.12.2003 issued by UBI to 50 Spl.C.C.No.166/2004 the accused No.9 marked as Ex.D18, under which, housing loan amount of accused No.9 was fully settled as per compromise. The contents of the same are similar to other letters of settlement as to the borrowers became irregular in paying installments subsequent to availing housing loan of Rs.5,00,000/- for construction of houses. Thereafter, he approached for compromise and the Bank agreed for settlement for Rs.3,50,000/-, interest of Rs.1,24,050/- waived off and his account entered as fully settled. She has identified another Settlement Certificate dated 15.4.2009 issued to accused No.3 with regard to compromise settlement entered in respect of his total dues, which is marked as Ex.D19. It reveals that the security of property bearing No.53 measuring 1200 square feet situated at K.R.Puram, Bengaluru given for the loan availed by him.
52. It is made out from the evidence of PW2 she worked in the Branch Office, looking after Advance Department and attending other work entrusted by the Branch Manager during the relevant point of time. She did 51 Spl.C.C.No.166/2004 not know about rules and regulations framed by the Bank Authorities as to allotment of the work to the officials. But she has admitted that all the banking transactions used to be done by two officials, one official will prepare document and another will verify the document. She has stated that the borrower was to open S.B. account prior to sanction of loan and also Sanction Advice used to be prepared to process the loan application. She has also identified the memorandum of deposit of title deeds annexed to all housing loan applications given by accused Nos.3 to 8 along with salary certificates issued by accused No.10 as Managing Director of M/s.Sanarco Cold Storage Pvt.Ltd.
53. Admittedly, during 1999-2000, UBI, Haines Road Branch was Scale-III Branch, Branch Manager was superior to the Credit Officer and Accountant was the subordinate to the Credit Officer. PW2 herself has admitted filled the limit applications abd identified her handwriting in the housing loan files of accused Nos.4 and 3 marked as Exs.P57 and
63. It is made out from her cross-examination that she has filled the details in limit application on the basis of 52 Spl.C.C.No.166/2004 documents furnished by the borrowers. She has admitted the difference in the ink found in the handwriting of Ex.D5 the application given by one Chandrashekar Patil for housing loan and the handwriting of accused No.2 in the file of said loan marked as Ex.P58. Likewise, she has admitted the housing loan file Ex.P59 pertaining to accused No.8, in which particulars of information annexed are not in the handwriting of accused No.2. According to her, the notices issued by the Branch Office contains date, but no date in the notice issued to accused No.6, annexed in his housing loan file Ex.P61. She has clearly admitted that the Bank Authorities have followed the rules, while granting housing loan to accused No.8 and no wrong committed by him while availing the said loan.
54. PW2 has further admitted that the housing loan amount of Rs.3,00,000/- sanctioned to accused No.7 was credited to the Current Account of M/s.Rohini Constructions on 1.6.2000. In the further cross-examination on behalf of accused Nos.10, 12 and 13 it is elicited that loan amount was credited to M/s.Rohini Constructions, which is a 53 Spl.C.C.No.166/2004 proprietary concern and one Ramprakash was the Proprietor, who is not made as witness for prosecution. Further the evidence of PW2 infers that, the guidelines followed by the Bank Manager while processing the loan application usually filled by Branch with the assistance of Credit Manager, Field Officer and another responsible officer of the Bank. It is further admitted that Bank usually grant loan on the basis of personal ability of repayment of loan, apart from collateral security offered by loanee.
55. The important evidence elicited regarding limit of sanctioning loans by the Branch Manager on the recommendation made by the subordinate officer. At the Regional office level, the Chief Manager, with the assistance of Sr. Manager - Advance and Credit, Technical Officer and other officers sanction the loans as per the procedure of the Bank followed by the officials. It is made from her evidence that loan files were usually be processed from the concerned Branch to the Regional Office with recommendation, thereafter, the loan will be granted after 54 Spl.C.C.No.166/2004 processing by the Chief Manager, Sr. Manager and Technical Officer.
56. The oral evidence deposed by PW2 is supported with the documentary evidence of concerned housing loan files containing letters issued by the Bank and also property offered as collateral security for all the housing loans. The Settlement Certificates issued by Bank confronted to her in the cross-examination which is already pointed out disclose that all the housing loans borrowed by accused Nos.3 to 9 are settled subsequently.
57. The prosecution has further examined some of the witnesses in proof of the signatures of accused Nos.1 and 2 in the documents and also the amount of housing loan Rs.3,00,000/- each credited to the account of M/s.Rohini Constructions. The witness PW3 - Manohar, worked as Cashier in UBI, Haines Road Branch, Bengaluru, during 1999-2000 deposed that accused Nos.1 and 2 were Manager and Accountant in the said Branch and he was conversant with the signatures of both of them. He has 55 Spl.C.C.No.166/2004 also identified handwriting of accused No.2 in the housing loan files Exs.P58 and 59, which are related to one Chandrashekar Patil and accused No.8, respectively. But in the cross-examination he has admitted that handwriting of accused No.2 not found in housing loan file of accused No.8. Further he has shown ignorance about loan transaction of accused No.6 and also difference in the handwriting found in the loan application Ex.P59 and Ex.D5. The said document Ex.D5 is the letter written by Chandrashekar Patil to the Chief/Branch Manager, UBI, Haines Road Branch, requesting housing loan of Rs.5,00,000/-. Therefore, his evidence will not prove anything about identification of handwriting by accused No.2 in the loan application of one Chandrashekar Patil, who is not made as accused in this case.
58. Another witness, who has identified the signatures of accused Nos.1 and 2 is PW19 - Ravi Gopal Hegde worked as Scale-I Officer in Haines Road Branch from 1998-2009. He was acquainted with the signatures of accused Nos.1 and 2 as they were working as Manager and 56 Spl.C.C.No.166/2004 Accountant respectively in the same Branch. Since he was looking after operational side of the bank and knew about credit facility provided to accused no.10 by both Haines Road Branch and Regional Office. He has identified housing loan files Exs.P-57 to P-63, which bears signature of accused No.1 as Manager and accused No.10 as well as handwriting of PW2, who had admittedly filled some of the housing loan applications. The signature of accused Nos.1 and 2 identified by him in the housing loan applications in the column of remarks marked as Ex.P-57(a) & Ex.P-57(b), Ex.P-58(a) & (b) Ex.P-59(a) & (b), Ex.P-60(a) & (b), Ex.P- 61(a) & (b), Ex.P-62(a) & (b) and Ex.P-63(a) & (b). In the cross-examination he has admitted that he never worked in advance section of Haines Road Branch, since worked in operational section has identified signature of accused Nos.1 and 2. Apart from identifying signatures of accused Nos.1 and 2 in the housing loan files, he has deposed about process of approach made by the customers for loan and discussion regarding their financial status, credibility and locality with Manager. Admittedly, he had no personal 57 Spl.C.C.No.166/2004 knowledge of loan transactions, but examined only to identify the signatures of accused Nos.1 and 2.
59. In the further cross-examination he has admitted that accused No.2 was disabled person, not able to walk during the working hours of the Bank. He has identified signatures of accused No.2 in the documents marked under Ex.P55 and the same are marked as Ex.P56(a) to (c) respectively. Those documents are debit slip dated 16.2.2000 for Rs.70,000/-, particulars of payment slip dtd.16.2.2000 for the total amount of Rs.70,000/- paid into the credit of current account of Narenda Service Station and challan dtd.30.6.2000 for the amount of Rs.9,00,000/- paid into the credit of cash credit account of M/s.Narendra Service Station. It is elicited that PW19 is not aware of the names of Directors of M/s.Sanarco Cold Storage Pvt. Ltd. and M/s.Rajarajeshwari Cold Storage Pvt.Ltd. and also not aware of the contents of remarks written in the recommendation column of Exs.P57 to 63. However, he has admitted that no wrong committed 58 Spl.C.C.No.166/2004 by the Bank officials while filling loan applications submitted by the borrowers.
60. The then Chief Manager (Vigilance), UBI, Zonal Office, Bengaluru, V.Elangovan deposed as PW16. He has identified the housing loan files marked as Exs.P57 to 63 and stated that those files pertain to Haines Road Branch, Bengaluru. According to him, after going through all the housing loan files has made observation. He has stated about non-compliance of conditions was found after going through the housing loan files and particularly stated that the Branch Manager and Accountant of the UBI, Haines Road Branch were not complied terms and conditions stipulated in the Sanction Advice. According to him, for sanction of housing loan the borrower should open Savings Bank Account or Current Account and to deposit 25% of the margin amount. But some of the borrowers have not opened Savings Account or Current Account and without deposing margin money, the housing loans sanctioned to them. He has further stated that the documents produced as security of the loan, were not scrutinized by the Branch 59 Spl.C.C.No.166/2004 officials and they have not obtained site plan, BDA approval and Khata of the property. Though he has stated that the loan amount was disbursed at one stretch, which ought to have been paid by stage-by-stage, only after inspecting the progress relating to construction of house. The loan files produced before the Court identified by him under Exs.P57 to 63 shows that the amount of Rs.3,00,000/- each was disbursed to the account of M/s.Rohini Constructions both on 1.6.2000 and 12.7.2000 respectively, which is also mentioned in the housing loan account statements of Chandrashekar Patil and accused No.7 as per Ex.D8 and Ex.D16. No doubt, he has alleged that the Branch officials have not verified housing loan files and observation made by him that only on the basis of salary certificates were obtained from accused No.10, the Managing Director of M/s.Sanarco Cold Storage Pvt.Ltd. and no collateral security taken by the Branch office while sanctioning housing loans. But the housing loan files contain the list of documents of immovable property given as collateral security. Therefore, his evidence goes against the prosecution case relating to housing loan no sufficient security obtained by the Bank. 60 Spl.C.C.No.166/2004
61. Though PW16 has admitted that he never worked in the Haines Road Branch at any point of time and not sanctioned any loan, admitted that only on the basis of documents shown by CBI he has deposed that the Branch Manager and Accountant of the Haines Road Branch have not complied the terms and conditions stipulated in the Sanction Advice. He has not explained or clarified how the terms and conditions were not complied by them, when the documents produced by CBI clearly establish after following the procedure of Bank, the housing loans were sanctioned to accused Nos.3 to 8.
62. PW16 has clearly admitted that the documents Compliance Report of Registered Memorandum of Title Deeds and closure of housing loan accounts by the loanees were not shown to him by the Investigating Officer. Therefore, only on the basis of documents shown by CBI Officer, he made an observation regarding non-compliance of terms and conditions by accused No.1 while sanctioning of housing loans.
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63. However, the evidence deposed by PW16 establish that housing loans sanctioned to accused Nos.3 to 8 and one Chandrashekar Patil and amount of Rs.3,00,000/- disbursed to the account of M/s.Rohini Constructions on different dates proves, the loans were used only for the purpose of construction of houses and not for different purpose as alleged by prosecution. The documents enclosed to the housing loan files, contain some of the letters sent by Haines Road Branch to the accused persons marked on their behalf proves the defence taken by them.
64. The evidence of PW1 - S.Jayaram, who was working as Clerk in the Haines Road Branch during the year 1999, has stated that at the relevant point of time accused No.1 was Manager, accused No.2 was Accountant in the said Branch, therefore, he was conversant with the signatures of both of them. According to him, accused No.10 was client in the Haines Road Branch had two accounts bearing Nos.24026 and 29126 opened on 62 Spl.C.C.No.166/2004 18.8.1999 and 13.12.1999. In support of the same has referred the documents Exs.P1 and P2. Ex.P1 is the request to open Current Account by accused No.10 in the name of M/s.Narendra Service Station, the business of which shows as dealer, Indian Oil Corporation Ltd. running a Petrol Bunk since 32 years. Accused No.10 signed as Proprietor of M/s.Narendra Service Station. Ex.P2 is the Current Account opening form dated 13.12.1999 shows Title of account opened in the name of M/s.Sanarco Constructions INC, the Business/Profession of which entered as Building and Civil works, Building material supply, Group housing etc. He has identified the documents Confidential Credit Information given by accused No.10 as Proprietor of M/s.Sanarco Constructions Inc on behalf of accused No.13 signed in the relevant columns marked as of Exs.P3 and 4, in which, the Nature of main business mentioned as Cold Storage Service and Trading of Fruits and vegetables, which are supported by Pre-loan sanction Inspection Report submitted by accused No.10 as per Ex.P5. The loan was processed by the Bank with regard to cash credit limit for business purpose identified as 63 Spl.C.C.No.166/2004 Ex.P6, furnished by accused Nos.1 and 2 as Bank Manager and Accountant and their signatures marked as Ex.P6(a) and (b).
65. PW1 has further identified the statement of account ledger extract of both M/s.Narendra Service Station and M/s.Sanarco Constructions INC marked as Exs.P9 relates to M/s.Narendra Service Station, whose favour loan of Rs.25,00,000/- sanctioned, thereafter, it was enhanced to Rs.50,00,000/-. The document Ex.P10 relates to the loan of Rs.35,00,000/- limit sanctioned to M/s.Sanarco Cold Storage Pvt.Ltd. Both the loan amounts were sanctioned and enhanced from time to time. PW1 has further deposed that the cheque issued by M/s.Narendra Service Station identified under Ex.P11 along with creation of Equitable Mortgage with regard to same under Ex.P12. The list of documents of property contained are registered sale deed dated 19.12.1960, property assessment register extract dated 19.9.1997, tax paid receipt dated 19.9.1997 and encumbrance certificate from 19.9.1997 till 11.5.1999, are singed by two of the officers of the UBI.
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66. The description of the immovable property No.95, Assessment No.2356/2271, Division No.1 situated at Chintamani town, Municipality belonging to accused No.13 Company represented by M.A.Lakshman is mentioned in the documents. The Valuation Report relating to the said property submitted under Ex.P13 by H.Jayasurya and Associates, request letter for enhancement of the cash credit hypothecation limit under LTF from Rs.25,00,000/- to Rs.50,00,000/- marked as Ex.P14 given by accused No.10 as Proprietor of M/s.Narendra Service Station. The Branch Manager of Haines Road Branch, sent proposal of M/s.Narendra Service Station for enhancement of loan to Deputy General Manager, Regional Office, Bengaluru, through letter dated 3.12.1999 marked as Ex.P15.
67. The Haines Road Branch has obtained legal opinion in respect of the property belonging to accused No.13 situated at Chintamani, bearing No.95, under Ex.P16. As per the legal opinion, the accused No.13 was the absolute owner in possession and enjoyment of the said 65 Spl.C.C.No.166/2004 property, offered as security for M/s.Narendra Service Station, who had also created Equitable Mortgage of the same property by way of deposit of original title deeds. The Statement of Stock of M/s.Narendra Service Station marked as Ex.P17 and Proposal for enhancement of limits to the account of M/s.Narendra Service Station under LTF referred from Regional Office to the Branch Manager for confirming of all dues of the borrower adjusted or not. The Sanction Advice Ex.P19 relates to the loan availed by accused No.10 in the name of M/s.Narendra Service Station.
68. In the cross-examination of PW1, he has identified the letters dated 23.11.2000 regarding confidential opinion of the account of M/s.Narendra Service Station and M/s.Sanarco Cold Storage obtained from Canara Bank, State Bank of India, Vijaya Bank, Karnataka Bank Ltd., Chintamani, marked under Ex.P20. The terms and conditions forming part of Sanction Advice No.109/99 dated 16.12.99 in the name of account M/s.Narendra Service Station found in Ex.P19 is marked as Ex.D21. The letter dated 8.12.2000 by SBM, Chintamani Branch 66 Spl.C.C.No.166/2004 sent with regard to confidential opinion of M/s.Narendra Service Station, Chintamani to the Bank Manager, Haines Road Branch. Admittedly, the Circular issued by UBI, Central Advances Department, as per Ex.P22 was sent to all the branches and the subject referred is Management of Credit Portfolio: Revision in the Scheme of Delegation of Loaning Powers. The said circular reveal about Revised Scheme of powers of sanctioning loans given to Executive Scale-IV.
69. The register Ex.P23 is identified by PW1 contains confidential report received from State Bank of Mysore and Karnataka Bank. The accused No.10 as Managing Director, M/s.Sanarco Cold Storage Pvt.Ltd. requested for working capital limit and the Term Loan for cold storage project marked as Ex.P24. The KSFC had issued letter dated 6.1.99 to M/s.Sanarco Cold Storage Pvt.Ltd. with regard to re-schedulement of principal and interest overdue as per Ex.P25. The limit application given for sanction of loan in the name of M/s.Sanarco Cold Storage Pvt. Ltd., marked as Ex.P26 says nature of business mentioned as cold 67 Spl.C.C.No.166/2004 storage services and Agro products trading. Further, the document Ex.P27 is copy of the letter issued by KSFC to the Branch Manager of Haines Road Branch in respect of second charge to be created by M/s.Sanarco Cold Storage Pvt.Ltd., Hosakote, Bengaluru.
70. The Inspection Report of M/s.Sanarco Cold Storage Pvt.Ltd. submitted by Technical Officer under Ex.P28, is identified by PW1. He has further identified Ex.P29, the sanction Letter pertaining to M/s.Sanarco Cold Storage given by Head Office relating to new limit proposal which includes working capital of Rs.15,00,000/- Term Loan of Rs.10,00,000/- Inland L/C & L/G Rs.10,00,000/- account with Haines Road Branch. The Sanction Advice Ex.P30 is relating to M/s.Sanarco Cold Storage Pvt.Ltd. and collateral security of Land, Building, Plant and Machineries furnished, valued at Rs.286.00 lakhs situated at Chikkahullur, Chintamani Road, Hosakote, Bengaluru, on which second charge created by KSFC. The letter by Haines Road Branch Manager to the Chief Manager, Regional Office dated 23.11.2000 for revocation of Bank Guarantee No.LG 131- 68 Spl.C.C.No.166/2004 2000 dt.13.6.2000 for Rs.9,00,000/- in respect of account of M/s.Sanarco Cold Storage Pvt.Ltd. marked under Ex.P31. The Current account report pertaining to the same marked under Ex.P31.
71. PW1 has identified the documents with loan application given for sanction of loan to M/s.Rajarajeswari Cold Storage Pvt.Ltd., and the Memorandum of Articles of Association of it identified under Ex.P33. The Process note pertaining to said company marked under Ex.P34 bears signature of accused Nos.1 and 2 identified by him and marked as Ex.P34(a) and (b). Regional Office sought for clarification under Ex.P35, which was clarified by accused No.10 on behalf of M/s.Rajarajeswari Cold Storage Pvt.Ltd., marked as Ex.P37. The Branch Office has gave reply with respect to the said company as sought by the Regional Office under Ex.P38. Again Regional Office has issued reminder to M/s.Sanarco Cold Storage under Ex.P39, which was replied under Ex.P40. The request for Term Loan by M/s.Rajarajeswari Cold Storage Pvt.Ltd., and process note forwarded to the Regional Office identified by PW1 under 69 Spl.C.C.No.166/2004 Ex.P41, which is supported by Technical report of M/s.Rajarajeswari Cold Storage Pvt.Ltd. filed as per Ex.P42. The Bank has prepared Bank note with respect to the same as per Ex.P43.
72. PW1 has identified the Valuation report obtained relating to the property of accused No.13 under Ex.P44. The register of Charge pertaining to M/s.Rajarajeswari Cold Storage Pvt.Ltd., identified under Ex.P45. The visit reports given by the Monitoring Officer of Haines Road Branch are marked as Ex.P46 and 47. The sanction note given by Regional Office relating to enhancement of the loan limit to M/s.Narendra Service Station can be made out from Ex.P48. PW1 has further identified the Monthly/Quarterly report submitted by Branch office to Regional Office as per Ex.P49. The second monitoring report submitted by Branch to the Regional Office marked as Ex.P50.
73. PW1 has further identified the documents relating to the loan sought in the name of M/s.Rajarajeswari Cold Storage Pvt.Ltd., are identified by PW1 marked as 70 Spl.C.C.No.166/2004 Exs.P51 to 54. The file containing Cheques, DDs. and other Vouchers pertaining to M/s.Rajarajeswari Cold Storage Pvt.Ltd., M/s.Sanarco Cold Storage Pvt.Ltd., and M/s.Narendra Service Station marked as Ex.P55. The original cheques and vouchers relating to M/s.Sanarco Cold Storage and M/s.Narendra Service Station marked as Ex.P56.
74. In the cross-examination, PW1 has admitted that the manual of instructions and guidelines issued by the Central Office were followed by credit department in all the Branches of the UBI at the time of sanction of loans. The separate cabin given to Branch Manager and no separate cabin provided to other staff of the Bank is admitted. It is made out further that accused No.2 was working in common hall along with other staff, since he was suffering from polio, unable to walk therefore, he was always in the Branch during banking hours at the relevant point of time. The important admission made by him that Accountant of the concerned Branch had no power to sanction any credit facility or increase the loan limit amount. 71 Spl.C.C.No.166/2004
75. PW1 being Senior Manager worked as Clerk at the relevant point of time has admitted that pre-requisite agreement executed between builder, borrower and the Branch Manager was required at the time of sanction of housing loan. He is not able to say the financial limit for the Manager of the Bank to sanction the loans. Further admitted that during 1999-2000, loans were sanctioned under the scheme Liberal Credit Finance and certain conditions were relaxed subsequently. Though he has identified the documents relating to housing loan of the accused No.4 from the Haines Road Branch, he is not able to say the said loan has been cleared, afterwards he had closed his bank accounts prior to source of information received by CBI. However, he has admitted the letter dated 11.6.2002 issued by Haines Road Branch in the name of accused No.4, marked as Ex.D1 shows that the housing loan of Rs.3,00,000/- released was fully adjusted and all his dues were paid as on 11.6.2002 under compromise, therefore, all the original documents returned to him. 72 Spl.C.C.No.166/2004
76. The prosecution has alleged about irregularities found in the Haines Road Branch said to be made out during inspection by Vigilance Department. The witness PW4 - Maruthi Kumble who took charge as Branch Manager of Haines Road Branch after report of irregularities found during the inspection by the Vigilance Department of the Regional Office has deposed about irregularities made known by one Ramesh officiating Branch Manager and gone through the audit report and report of the officers of Regional Office. The copy of the audit report shown to him marked as Ex.P64 with subject to objections raised on behalf of accused Nos.2 and 11. However, he does not remember to say irregularities found while sanctioning of housing loan and other loans. In the cross-examination he has admitted that Haines Road Branch is categorized as larger Branch and the loans appraised by the Branch with report prepared as ADV1151. The manual of instructions issued by Union Bank of India, followed by the concerned Branch Officials while doing banking transactions is admitted. He has stated that the Bank Manager after receiving loan application, refer to the concerned official for 73 Spl.C.C.No.166/2004 examination and to prepare the process note. Thereafter, on the basis of process note, pre loan inspection and sufficient collateral security loan was to be sanctioned. However, the sanction of loan will be brought to the notice of Regional Office. Further, the procedure followed soon after receiving loan application also stated that the application should be checked by two officers namely "maker" and "chequer".
77. According to PW4, the internal auditor, statutory auditor and auditor appointed by Reserve Bank of India for conducting audit of each Branch, every year apart from surprise audit made by the audit section of Regional Office. But, no discrepancies found as to the utilization of loan amount by the loanees as made out from the files. Therefore, the allegation made against accused No.10, that he has diverted the housing loan sanctioned in the name of accused Nos.3 to 9 goes against prosecution case as this witness not admitted the utilization of the amount for different purpose, other than it was sanctioned. He has stated the discrepancies found in the Branch office, if any, 74 Spl.C.C.No.166/2004 were to be intimated to Regional Office regularly and he himself physically verified as to construction of houses by the respective loanees. Therefore, it falsifies allegation of housing loan amount credited in to the account of M/s.Narendra Service Station. He being successor of accused No.1 as Branch Manager, has also inspected the cold storage and other disputed loan documents. The loan granted under LTF scheme for cold storage is not denied, which comes under priority sector, inspected by him and he is familiar with the disputed loans.
78. Prosecution to prove the alleged irregularities in support the evidence of PW4 examined another witness Ravi Shetty as PW28, the Officer of Union Bank of India, CMRD Department, Bangalore. He has deposed about his duty to visit various branches and find out any irregularities for the particular period 1999-2000. He had inspected Haynes Road Branch and verified the documents pertaining to loan and advances sanctioned by the branch for the period from July, 1999 to February, 2000. He found irregularities in the documentation of M/s.Narendra Service 75 Spl.C.C.No.166/2004 Station, whereas the Branch Office allowed huge excess amount of Rs.24,00,000/- and outstanding amount was Rs.74,00,000/-. The personal guarantee of accused No.10 was not obtained for the said loan. Further, the Branch Office has also not obtained encumbrance certificate, tax paid receipt and other documents relating to property as mentioned in the legal opinion. After verifying the documents, he had prepared a report under Ex.P-46, and identified his signature marked as Ex.P46(a). However, the said report submitted before Chief Manager at Regional Office, who had also put his signature to the report.
79. In the cross-examination, PW28 has stated that no document pertaining to loan of M/s.Narendra Service Station obtained from the Haines Road Branch. Admittedly, the loan was sanctioned to M/s.Narendra Service Station under LTF scheme, which was a proprietary concern, for which, accused No13 was the guarantor to the loan. The third party guarantee has been obtained for the said loan and borrowers should have submit a simple declaration relating to the value of the stocks and book debts as noted 76 Spl.C.C.No.166/2004 in Ex.D20. He has also admitted that Ex.P-49 is the stock certificate dtd.31.3.2000 related to M/s.Narendra Service Station, however, the report Ex.P-46 is dated 9.2.2000.
80. PW28 has also admitted the system of sending quarterly, monthly, half yearly and yearly statements to Regional Office by the Branch Office. If no statements submitted, then the Regional Office issue reminders to send the concerned statement. But he does not know any reminders issued to Haines Road Branch. He has not inspected 'Inward and Outward' register maintained in the Branch and Regional Office. He has also not enquired about reminders sent by Regional Office for not sending timely statements by the Branch office. The copy of the certificate issued by the Chairman and M.D. of Central Vigilance Department, UBI is admitted and marked as Ex.D-23. The Encumbrance Certificate produced by I.O pertaining to Sy.No.95 for the period from 1.4.1960 to 15.11.2000 pertains to M.A.Lakshman confronted and marked as Ex.D-24 and Ex.D-25.
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81. Admittedly, the credit report of M/s.Narendra Service Station was not placed during his inspection. Therefore, only on the basis of documents produced before him, he gave his report as per Ex.P46. Further, he has stated about separate procedure followed to grant loans for trading Petrol, Diesel and loans to the Petrol bunks. It is made out that M/s.Narendra Service Station is a petrol bunk and entire loan process was submitted by the Branch Office to Regional Office. The mechanism of process of loan papers by Regional Office also deposed by him, which was headed by Chief Manager(Credit), assisted by two senior managers, who in turn assisted by Managers, thereafter, they assisted by Deputy Managers and processing staff. The process of recommendation sent by the Branch, depending upon the sanction powers of the officers also stated. However, the report given by him under Ex.P46 reveal that the alleged irregularities found in respect of many units, out of which, alleged that there was deficiency in the documents as to sanction of cash credit facility to M/s.Narendra Service Station. 78 Spl.C.C.No.166/2004
82. Another officer PW29 - H.R.Vishwanath, was Sr.Manager, CMRD Department, also entrusted the work to visit branches to inspect the loan disbursed during the quarter and submit the report to his Chief Manager. Accordingly, he had inspected Haines Road Branch and found some irregularities in respect of loans and submitted a report under Ex.P47 bears his signature Ex.P47(a). He has clearly stated that some irregularities found in respect of M/s.Sanarco Cold Storage Pvt.Ltd. as per the report and it was submitted to Chief Manager. He has admitted that the loan sanctioned by Regional Office to M/s.Sanarco Cold Storage Pvt.Ltd., but he do not know whether the said loan granted after verification of all records. However, according to him, the Regional Office may sanction or reject the loan, even after its satisfaction. The power given to the Regional Office is stated either to sanction or to reject the recommendation made by the Branch office.
83. The prosecution has further alleged that apart from sanction of housing loans, other loans were sanctioned 79 Spl.C.C.No.166/2004 by accused Nos.1, 2 and 11 in their official capacity in favour of accused No.10 and allowed him to divert the housing loan and utilized the same for other purposes. Further accused Nos.1 and 2 recommended for sanction of Term Loan though previous credit facilities of accused No.10 were irregular and allowed him to divert the loan amount in the name of M/s.Sanarco Cold Storage Pvt.Ltd. and M/s.Rajarajeswari Cold Storage Pvt.Ltd. Therefore, alleged that the accused Nos.1, 2 and 11 have committed Criminal Breach of Trust by abusing their official position. In order to make out whether the loans sanctioned in favour of accused No.10 who was said to be allowed to divert the loan amount for other purpose by violating the norms of the Bank by accused Nos.1 and 2 at Branch level and at the Regional Office by accused No.11, it is necessary to discuss in brief the evidence deposed by officials, who have investigated the irregularities in the Haines Road Branch conducted audit in the Branch Office and Regional Office.
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84. It is alleged irregularities found in the Haines Road Branch, the Head Office of UBI, directed to investigate the irregularity in the said Branch with respect to the loan account of Narendra Groups. The witness Ashok Shankar Oulkar examined as PW6 worked in Vigilance Department, from 1994 to 2006 has deposed that he along with three other officials investigated the matter. During inspection said to be verified the account of accused No.10 and his other groups of Companies and submitted the Special Report. According to him, after examining all accounts in the Branch office, made out that accused No.1 being Branch Manager and accused No.2 as Accountant have committed irregularities. During the above said period, accused No.11 was the Deputy General Manager at Regional Office. After visiting Haines Road Branch, he has visited M/s.Sanarco Cold Storage, M/s.Narendra Service Station, M/s.Rajarajeswari Cold Storage Pvt.Ltd., and verified some other accounts of accused No.10. The irregularities contained, the Branch officials allowed unauthorized accounts pertaining to Narendra Kumar Group of accounts and suppressed those irregularities from Regional Office. 81 Spl.C.C.No.166/2004 He has stated that the CCI hypothecation to M/s.Narendra Service Station sanctioned which was not within the proximity of the Branch and 75 kilo meters away from the Branch. In the same account, officials allowed diversion of funds sanctioned to M/s.Narendra Service Station.
85. PW6 has further stated after visit and examining documents in the Branch Office and above units submitted the reports to the Chief Vigilance Officer signed by him, the same is not produced before the Court. It is true, the application filed by prosecution to file additional document, which is the certified copy of Investigation Report dated 18.9.2000, was rejected by this Court by passing considered order. However, the said Order is not challenged by prosecution though it has based on the said report in proof of the alleged offences committed by accused Nos.1 to 13. Therefore, non-production of the important report proves against the case of prosecution. For the said reason the evidence deposed by PW6 cannot be considered as not corroborated with the report of irregularities alleged to be found during his inspection. 82 Spl.C.C.No.166/2004
86. However, PW6 in the cross-examination has admitted that he along with other officers formed group of vigilance made out the irregularities found in the Haines Road Branch. He has admitted the statement given before CBI containing the portion marked as Ex.D27 for the defence of accused reads as "At NRO, Bengaluru Sri Paul Raj, Technical Officer submitted his report which contains misleading information. He has not studied the potentiality of the Cold Storage at the place where it is situated. He has not mentioned information regarding overdue of KSFC though the same was evident as per the letter of KSFC given to Branch. The projections made by Sri Paul Raj were on higher side. He has recommended the proposal despite adverse features existing in the account." However, in the report given by Technical Officer - Paul Raj as per Ex.P28, it has been alleged that accused No.10 has diverted of the loan amount sanctioned for different companies. The document of statement of excess beyond 10 percent excess powers submitted to RO/ZO/GM(C)/ED/ MD/MDM/Board is admitted and marked as Ex.D28, in which the name of the 83 Spl.C.C.No.166/2004 borrower shown M/s.Narendra Service Station, Working capital limits was Rs.50,00,000/-, at Sl.No.16 the name of M/s.Rohini Constructions mentioned, Column No.13 relates to Reason/justification for allowing excess mentioned as adjusted.
87. However, PW6 has admitted that the investigation conducted by the Vigilance Department only for the purpose of internal use by the Bank to find out whether if there are any latches on the part of the Branch while following procedure of the Bank. It is admitted by the Bank Officers that if any lapse found on the part of the Branch, the same will be rectified by the Regional Office on the basis of Investigation Report. The important aspect deposed by him as, after report given by Vigilance Department, no complaint given against any of the officers of the Bank to the Head Office of UBI. In spite of that alleged that some irregularities found while sanctioning housing loans by accused No.1 to accused Nos.3 to 9 and also some loans enhanced in respect of M/s.Narendra Service Station, M/s.Sanarco Cold Storage and 84 Spl.C.C.No.166/2004 M/s.Rajarajeswari Cold Storage Pvt.Ltd. Though he has particularly stated that bank officials sanctioned CCI hypothecation to M/s.Narendra Service Station and allowed to diversion of funds sanctioned to it, the said evidence is not supported by any documents maintained in the Branch office.
88. Another member of Vigilance Department of UBI, V.A.Mendonsa is examined as PW7. He has also deposed irregularities committed in UBI, Haines Road Branch, on the basis of Zonal office report filed by concerned official. According to him, he along with other team members went to the Branch and verified 51 accounts, in which, serious irregularities were observed in connection with Narendra Kumar Group of Companies. Those serious irregularities are mentioned in detail with regard to pre-sanction formalities, verification of securities offered by the borrower, obtaining information from other banks and post sanction irregularities consisting of proper documentation, proper end use of funds, non-availability of prime 85 Spl.C.C.No.166/2004 securities, non-inspection of documents and also actual availability of reported securities not verified. He has also deposed that housing loans were sanctioned to the employees of M/s.Sanarco Cold Storage Pvt.Ltd., and the entire amount deposited in the connected account of accused No.10. But the said evidence is contrary to the evidence deposed by concerned officials of Branch, who were processed the housing loan applications and the housing loans were deposited to the account of M/s.Rohini Constructions. Further the alleged irregularities said to be reported by the Auditor cannot be made out, as no Report is produced before the Court.
89. Further, in the cross-examination PW7 has admitted that Sr. Manager and Chief Manager at the Regional Office are competent to sanction the loans to their limit. It is also admitted that M/s.Narendra Service Station, M/s.Sanarco Cold Storage Pvt.Ltd. and M/s.Rajarajeswari Cold Storage Pvt.Ltd., are the sister concern. Further, it is elicited that another document Zonal office Report is the basis for initiating vigilance investigation in the Haines Road 86 Spl.C.C.No.166/2004 Branch, the said Report is also not produced before the Court. The document Ex.P5 is pre-loan sanction inspection report relating to M/s.Narendra Service Station, in which, at column No.8 for stocks held at the time of visit entered as Sufficient to cover bank advance, bears the signature of inspection officer, the accused No.1. The document Ex.P4 - Credit information is relating to Cold storage and Services and trading in Fruits and Vegetables, the name of accused No.13 M.A.Lakshman entered in the relevant column of the borrower.
90. PW7 has also identified monthly statement submitted by Haines Road Branch to Regional Office as per Ex.P58 is one of the post sanction of loan formality. The Statutory Audit Report of Haines Road Branch, by Chartered Accountant for the year 2000 marked as Ex.D29 dtd.15.4.2000 issued with enclosures. He has also stated Vetting Certificate issued by Vetting Officer in respect of M/s.Narendra Service Station, M/s.Sanarco Cold Storage and M/s.Rajarajeswari Cold Storage Pvt.Ltd. Though it is alleged that the accused Nos.1 and 2 being officials of 87 Spl.C.C.No.166/2004 Haines Road Branch were allowed the entire housing loan amount deposit to the account of accused No.10, he has categorically stated that no document is available to show the diversion of housing loan amount to the account of accused No.10.
91. Another witness, PW8 - Vinayak S.Jog, Manager, Vigilance Department during 1999-2000 has conducted investigation of the alleged irregularities taken at Haines Road Branch, Bengaluru. He has also deposed similarly as to visited Haines Road Branch for investigation with other members to make out the irregularities found with regard to account of accused No.10 and his other groups of Companies. He has stated about irregularities found after going through the documents and submitted the Report to the Chief Vigilance Officer, but the said report is not produced before the Court.
92. PW10 - H.V.Srihdar Bhat, Sr.Manager of Vigilance Cell, CBI Zonal office, Bengaluru was also said to 88 Spl.C.C.No.166/2004 be accompanied PWs.6 to 8 at the time of investigation conducted in the Haines Road Branch in respect of M/s.Narendra Service Station and M/s.Sanarco Cold Storage Pvt.Ltd. He has identified all the documents after shown to him and stated about alleged irregularities committed by the accused Nos.1, 2 and 11. The Sanction Advice Ex.P8 with respect to M/s.Narendra Service Station under which, first sanction advice for Rs.25,00,000/-. However, from the said sanction limit it was enhanced to Rs.50,00,000/- within 3 months as per Ex.P19, which was against the Banking Rules, as the renewal was normally done once in a year. Therefore, as the enhancement made for the accounts of M/s.Narendra Service Station from Rs.25,00,000/- to Rs.50,00,000/-, within three months, is one of the irregularity. In corroboration of said evidence identified the account extract of M/s.Narendra Service Station marked as Ex.P9, in which, the sanction limit was initially shown as Rs.25,00,000/- as on 28.9.1999. However, the Regional Office of UBI, enhanced the loan amount to Rs.50,00,000/- as on 16.12.1999. He has stated during the investigation, no stocks pertaining to cash credit 89 Spl.C.C.No.166/2004 amount in respect of M/s.Narendra Service Station was found and no stock statement furnished to the Bank. The prime security of stocks of each amount was not shown is also another irregularity. Further, deposed about turnover in the account not communerating with the sanctioned limit, if Rs.50,00,000/- was sanctioned, two crore turnover has to be shown by the concerned account. But the turnover of M/s.Narendra Service Station was not reached that much, which is classified as irregularity. The cheque purchased in the above account and realized belatedly also classified as irregularity committed in the Branch.
93. Further PW10 has identified the statement of account relating to M/s.Sanarco Cold Storage under Ex.P32, in which on 24.3.2000, Rs.15,00,000/- was transferred to M/s.Narendra Service Station, which is marked as Ex.P32(a). The Term Loan was to be used for construction of M/s.Sanarco Cold Storage, but it was transferred to M/s.Narendra Service Station, without any permission stated as another type of irregularity. However, He was also inspected M/s.Sanarco Cold Storage Pvt.Ltd. and found 90 Spl.C.C.No.166/2004 that construction was not completed. Though there was KSFC loan for more than one crore and first charge on collateral security created by KSFC, the second charge not created by officials Haines Road Branch.
94. PW10 has further stated D.D. amount of Rs.13,48,000/- was transferred in favour of Tamilnadu Mercantile Bank Ltd., through cheque marked under Ex.P11 dated 28.9.1999, the said cheque was issued by accused No.10 as proprietor of M/s.Narendra Service Station. Issuance of cheque Ex.P11 in favour of Tamilnadu Mercantile Bank Limited also stated as another type of irregularity committed by the Bank and also by M/s.Narendra Service Station. Though he has deposed about housing loans obtained by the employees of M/s.Narendra Service Station and M/s.Sanarco Cold Storage Pvt.Ltd., the salary certificates issued by accused No.10 as Managing Director of M/s.Sanarco Cold Storage Pvt.Ltd. are produced before the Court. According to him, during inspection, no construction of buildings found near the place of M/s.Sanarco Cold Storage. He has further 91 Spl.C.C.No.166/2004 stated that accused No.1 being Branch Manager, has also sanctioned car loans, computer loans and personal loans to M/s.Narendra Service Station and M/s.Sanarco Cold Storage Pvt.Ltd., but during his inspection no computers or cars were found. He has also stated about Report submitted to the Central Vigilance Cell, Central Office, Bombay. But the said Report of Investigation is not produced before the Court.
95. However, PW10 in the cross-examination has stated that any type of investigation will be conducted only on the basis of instructions given by Central Vigilance Cell of the Bank for the purpose of internal use of the Bank. It is further elicited about processing of application for credit facility be done on the basis of application and also photocopies of the document produced by the borrower.
96. It is very particular from the evidence of PW10 that he himself personally prepared the inspection report, which is an important document, based for the allegation made against the accused Nos.1 to 13. But the said 92 Spl.C.C.No.166/2004 important Report is not produced before the Court. However, he has clearly stated that the visit of spot where construction of houses were taken place belong to accused Nos.3, 5 and 9, which is goes against the allegation made regarding diversion of housing loans by accused No.10 for other purpose. Moreover, when he visited and inspected the spot, saw the houses constructed at the spot. He is not aware of the loan account of accused No.7 which was said to be closed subsequently. He has stated clearly that he himself visited the spot for inspection in his Maruti-800 Car and inspected 4-5 housing sites. However, he is not able to say names of persons in whose favour housing loans were sanctioned.
97. Further, PW10 is aged about 70 years as on the date of cross-examination on 3.10.2017, though deposed about inspection of Haines Road Branch and identified some of the documents along with loan sanctioned under LTF scheme, not able to identify the Report said to be given by him as it is not produced before the Court. He has admitted that as per Ex.P9 letter Rs.3,00,000/-, Rs.6.10 lakhs and 93 Spl.C.C.No.166/2004 Rs.5 lakhs sanctioned on different dates, out of said Rs.5 lakhs Rs.1 lakh transferred from M/s.Narendra Service Station to the account of M/s.Sanarco Cold Storage. He has identified the letter issued by KSFC as per Ex.P27 and the amount of Rs.13.48 lakhs transferred to Tamilnadu Mercantile Bank Ltd. as shown in Ex.P7. Though he is not remember to say all the names of other four Directors of M/s.Sanarco Cold Storage Pvt.Ltd. are M.L.Ashok Kumar, H.G.Bachegowda, Chanrashekar Patil and Shabir Ahmed, said that accused Nos.10 and 13 are also Directors of said Company.
98. The procedure of Bank to conduct audit in the Branch Office and Audit Report submitted has been deposed by the witnesses examined as PWs.9 and 11. P.W.9 - B.L.Shankarappa, working as Manager (Audit) in Zonal Audit Office, Bengaluru, was asked to conduct audit in the Haines Road Branch. Accordingly, the witness Paramashiva was the team leader, along with Gururaja and Bailaiah, as team members have conducted regular audit in the Haines Road Branch in the month of September, 2000. During the 94 Spl.C.C.No.166/2004 said period, accused No.1 was the Manager of the said Branch and accused No.2 was the Accountant. After audit, they found serious irregularities in respect of the account of M/s.Sanarco Cold Storage, for which, accused No.10 was Managing Director. They have also inspected the unit and found it was not working and no activities in the said unit. The employees of M/s.Sanarco Cold Storage have borrowed housing loans from UBI, Haines Road Branch, but during the inspection they found no existence of the houses and only foundation situated in Hosakote. However, he has examined the loan papers containing pro-note, mortgage deeds, loan applications, loan sanction advice and other documents.
99. The alleged irregularities pertaining to housing loan reported in the Audit Report prepared by them marked under Ex.P64. The said document is marked subject to objection as Ex.P64(a). However, he has identified the loan files Exs.P57 to 63 and stated about accused No.10, being Managing Director of M/s.Sanarco Cold Storage Pvt.Ltd. had another construction company, but housing loans were 95 Spl.C.C.No.166/2004 filed in the names of employees of M/s.Sanarco Cold Storage Pvt.Ltd. He has particularly stated that the entire housing loan amount was credited to the account of M/s.Narendra Construction Company, which is not supported by any document. He has further stated for all the irregularities accused No.1, who was the Manager of Haines Road Branch was responsible.
100. In the cross-examination he has admitted that the manual of instructions for all the business transaction of UBI maintained in the Bank, which is not seized by the CBI Officer. Likewise, monthly statement relating total deposits in the Branch and total loan disbursed to the borrowers also not seized by the Investigating Officer. He being Manager of audit work at Zonal audit office has clearly stated that the Manager is ultimate Authority to sanction the loan. It is not in dispute that whenever housing loan is granted, original title deeds were produced by way of creating equitable mortgage. Admittedly, the bank has maintained equitable mortgage register, in which the entries will be made after clearance of the mortgage loan amount and title 96 Spl.C.C.No.166/2004 deeds will be returned to the borrower. The Investigating Officer has also not seized the said Equitable Mortgage Register during the investigation. He is not aware of the housing loans sanctioned were repaid subsequently. However, he has admitted that housing loans were borrowed for construction of houses and the loan was disbursed in installments. It is also stated that if the Contractor has to construct the house, the amount will be disbursed in his favour with the consent of the borrower in writing.
101. However, during the inspection, PW9 has not enquired about who had put up foundation in the housing sites at the spot. The important aspect is, though he has said to be submitted Audit Report as per Ex.P64, not able to say who has signed and put the seal of the Bank on Ex.P64 and 64(a). The evidence elicited in the further cross- examination prove that his visit to the location of construction of houses, but not able to say any house of accused No.4 constructed at the relevant point of time. He is not able to say entire housing loan amount repaid by 97 Spl.C.C.No.166/2004 accused No.4 on 11.6.2002. The agreement between borrower and the builder is not denied. Likewise, Ex.P58 contains agreement to reconstruct the apartment which discloses that one Ramprakash was the Proprietor of M/s.Rohini Constructions which is not denied. The amount of Rs.5,00,000/- disbursed to M/s.Rohini Constructions under Ex.D8, an amount of Rs.3,00,000/- relating to accused No.5 disbursed as per Ex.P60, the housing loan of Rs.3,00,000/- disbursed under Ex.P61, an amount of Rs.3,00,000/- disbursed as per Ex.D16 are admitted. However, all the said housing loan amounts admittedly disbursed to the account of M/s.Rohini Constructions, which is also contains amount of Rs.3,00,000/- each disbursed to the same pertaining to housing loans of accused Nos.3 and 4.
102. PW11 - J.M.Paramashivan, Sr.Manager of Zonal Audit Office, UBI, has stated about Audit conducted in the Haines Road Branch as per the request of Assistant General Manager. He being head, along with PW9, Gururaj, Bailaiah as team members visited Haines Road Branch and 98 Spl.C.C.No.166/2004 conducted audit in the month of December-2000. After examination of cash credit account and other accounts, found irregularities relating to M/s.Sanarco Cold Storage Pvt.Ltd., M/s.Narendra Service Station, Sanarco Power Systems, Brindavan Traders, R.B.Petrol Service, Maruti Agro Traders, Monarch Hospitality, Shashi Interior Decorations and Sai Agro Trading Company. He has also identified the Audit Report Ex.P64, in which, the alleged irregularities by the Branch Manager is stated enclosed with Xerox copy of Annexure-5 marked as Ex.P64(a).
103. It is perused from Ex.P64 the Audit report said to be given in respect of alleged irregularities of M/s.Sanarco Cold Storage Pvt.Ltd. and M/s.Narendra Service Station, which contain names of other 8 companies from which some irregularities also found during audit. The document Ex.P64(a) Annexure-5 contained the account of M/s.Rajarajeswari Cold Storage Pvt.Ltd., for which Term Loan sanctioned by Deputy General Manager, Nodal Regional Office, Bengaluru. The details of different personal 99 Spl.C.C.No.166/2004 loans and housing loans sanctioned in the names of accused Nos.3 to 6, 8 and 9 with one Chandrasehkar Patil.
104. However, the irregularities observed of each account mentioned separately in Ex.P64, will not contain signature of PW11 as a team leader and the other members of the team, who were said to be accompanied him during audit period also not put their signature. The said document marked with subject to objection, which was challenged before the Hon'ble High Court of Karnataka in Criminal Petition No.6085/2016. The said Criminal Petition disposed off on 1.9.2016 with an observation that the serious objection raised while marking the document through a person who was not the author of the document to be considered at the appropriate time and question whether the document is valid or could not be relied upon is left open. However, the document Ex.P64 cannot be taken into consideration as it is not supported by certificate required under Section 65(B) of Evidence Act, as it is a computerized copy.
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105. PW5 - P.S.Vargeesh was Clerk at Haines Road Branch from 1997-2000, accused Nos.1 and 2 were Manager and Accountant in the same Branch. He has identified loan documents pertaining to the accused No.10 along with cheques issued by him. The signature of accused No.1 also said to be identified by this witness, but no documents relating to the loan of accused No.10 bears signature of accused No.1 marked through this witness. However, in the cross-examination he has admitted that since Haines Road Branch was busy Branch during the usual course of business audits were conducted regularly in the said Branch.
106. PW17 - A.N.Kotian, retired Senior Manager, UBI, who worked in the same Audit Department, Regional Office, Bengaluru in the month of May-2000 till April-2001, has deposed about statements pertain to NPA accounts, recoveries and branches of roving officer's report for further action looked after by him. He has stated that while visiting branches, they were verifying the fresh advances made by the branch apart from verification of documents. Any 101 Spl.C.C.No.166/2004 discrepancies is found they were rectified the same, if not possible, the discrepancies of documentation was reported to the higher authorities. He has deposed about visiting Haynes Road Branch, Bangalore in the year 2000 where accused No1 was Manager and accused No.2 was Accountant. He has verified the loan documents pertaining to Narendra Group of Companies and some housing loans and made out some irregularities committed by the branch. Afterwards, he has reported the irregularities to higher authorities in writing. Though he has stated about irregularities found in some of the housing loans, he was not able to say the irregularities in respect of sanctioning of those loans. He has admitted that inward and outward registers were maintained both in the Haines Road Branch and Regional Office of UBI.
107. Though PW17 has stated about the irregularities reported to the higher authorities in writing, the same is not placed before the Court. The general circulars issued by head of UBI to all the Branches relating to advance of various types of loans is admitted. The Xerox copy of the 102 Spl.C.C.No.166/2004 circular dated 21.4.1999 issued by UBI is marked as Ex.D20.
108. PW35 - N.N.S.Vellaiswamy, the then Chief Manager, Tamilnad Mercantile Bank, M.G. Road Branch, Bengaluru from 2002 to 2004 has stated that the accounts maintained in the name of M/s.Narendra Service Station and their sister concern which were availed short term credit facilities from the said Branch. The total outstanding dues was Rs.13,48,000/-. The particulars of outstanding dues of the said accounts were furnished by his predecessor as per Ex.P7. The covering letter marked under Ex.P88 bears his signature marked as Ex.P88(a) subject to objections as it is not certified under Section 2(A) of Banker's Book Evidence Act, 1891. The transfer book and accounts statement extract marked as Ex.P89. He has clearly admitted no personal knowledge of the transactions mentioned in statements of account relating to M/s.Narendra Service Station and its sister concern. 103 Spl.C.C.No.166/2004
109. PW20 - Swaminathan worked as Computer operator in SBI, Sadashiva Nagar Branch from 2001-2006 has deposed about documents of current account of one M.Krishna handed over to the CBI Officer with covering letter of Manager Ranganath. The said covering letter enclosed with statement of current account of one Krishna marked as Ex.P77. He has identified signature of said Ranganath marked as Ex.P77(a).
110. The CBI has alleged that accused Nos.3 to 9 have obtained housing loans by producing fake salary certificates issued by accused No.10 as genuine. I have already pointed out that housing loans Exs.P57 to 63 contain salary certificates issued by accused No.10 as Managing Director, M/s.Sanarco Cold Storage Pvt.Ltd. It is pertinent to note that salary certificate issued to accused No.3 B.N.Udaykumar shows that he was working as Manager and drawing monthly salary of Rs.18,950/-. The salary certificate of accused No.4 - Pradeep shows that he was working as General Manager and drawing salary of Rs.20,750/-. The salary certificate issued to accused No.5, 104 Spl.C.C.No.166/2004 Anjaneya Reddy shows that he was working as Manager(Operations) and monthly drawn by him at Rs.19,000/-. The salary certificate issued to accused No.6, K.V.Bhaskar shows as he was working as Manager(projects) his monthly salary shown at Rs.19,150/-. The salary certificate of accused No.7 - S.N.Jayasimhan shows that he was Financial Controller and monthly salary shown at Rs.19,000/-. The salary certificate issued to accused No.8 - Shabeir Ahmed shows that was General Manager (Projects) drawing monthly salary of Rs.20,750/-. The housing loan file of accused No.9 not produced before the Court. However, the salary certificate issued to one Chandrashekar Patil shows that he was working in the organization of M/s.Sanarco Cold Storage Pvt.Ltd. as Director and monthly salary shown at Rs.20,750/-.
111. However, the carbon copy of the letter signed by the bank officials found in all the housing loan files reveal that the Memorandum of Deposit of Title Deeds by accused Nos.3 to 8 contained absolute sale deed dated 22.5.2000, Sale deed registered deed dated 24.5.2000, 105 Spl.C.C.No.166/2004 Tax paid receipt dated 27.7.2000, Khata certificate dated 28.7.2000, Khata endorsement dated 26.7.2000 and E.C. dated 26.5.2000 were produced by accused Nos.3 to 8 at the time of availing housing loan. Therefore, the evidence deposed by Investigating Officer that no title deeds obtained at the time of sanctioning of housing loan is false. Moreover, it is elicited in the evidence of Bank officials that title deeds deposited at the time of borrowing housing loan were returned to the respective borrowers after settlement of entire dues towards the housing loan. The housing loan files reveal that the accused Nos.3 to 8 were availed housing loans not only on the basis of salary certificates, but also on the immovable property on which created mortgage by way of depositing title deeds.
112. The prosecution made allegation against accused No.1 that he being Manager of Haines Road Branch, dishonestly sanctioned the loan to accused No.10 and recommended for enhancement of Term Loan and cash credit facility for him only to cause wrongful loss to Bank and for wrongful gain for himself and other accused. But, 106 Spl.C.C.No.166/2004 accused No.1 alone is not responsible for sanction of loan to accused No.10, on the ground that the loan papers at the Branch level processed by different officials. Thereafter, accused No.1 has recommended for enhancement of Term Loan, on his recommendation, the officials at Regional Office processed the loan papers and placed before Deputy General Manager for enhancement. The act of each official from stage to stage can be made out from their evidence. Therefore, it is important to discuss the evidence of PW12
- S.K.Mohan Assistant Manager in the Regional Office had processed loan papers for enhancement of loan amount recommended by Haines Road Branch, Bengaluru in connection with M/s.Narendra Service Station. He has identified his signature in the process note Ex.P48 marked as Ex.P48(a) and deposed about the recommendation and request made by the Haines Road Branch to enhance the loan amount from Rs.25,00,000/- to Rs.50,00,000/-, under letter of proposal Ex.P15. He has deposed about some clarification sought by Regional Office in respect of proposal for enhancement of limits to M/s.Narendra Service Station under Ex.P18, bears his signature and it is marked as 107 Spl.C.C.No.166/2004 Ex.P18(a). The clarification furnished by Haines Road Branch also identified under Ex.P66. In the cross- examination for accused No.11, he has admitted that statement given before CBI as per the direction given by Doraiswamy Reddy, the then Manager (Credit) of Regional Office, Bengaluru. He had also prepared note in respect of enhancement of limit pertains to M/s.Narendra Service Station.
113. The important evidence elicited in cross- examination of PW12 is that the Regional Office was headed by DGM assisted by Chief Manager, two Senior Managers and other processing officers processed the recommendation made by the Branch Office. It is also admitted that DGM and other cadre of Managers have their own powers of sanctioning limits of loan proportionate to their designation and they have no power to sanction the loans without being in process in accordance with the procedure. He has further admitted that the loan amount sought by the borrower is beyond the powers of the Branch Manager, it should be recommended to the Regional Office. 108 Spl.C.C.No.166/2004 The evidence elicited from this witness establishes that Deputy General Manager had given power to sanction the loan whenever recommendation made by the Branch Manager for enhancement of the loan, which was exceeds the limits of Branch Office. However, the sanction of loan by Regional Office after receiving some clarification from the concerned Branch is made out from the above- mentioned documents.
114. The categorical admission made by PW12 that no irregularity or deviation by the Regional Office while sanctioning or enhancing the loan proposed by the Branch Office. Further elicited that the circulars issued by Head Office, from time to time were followed for granting loan as per manual of instructions issued by Union Bank of India. Further evidence deposed by him that M/s.Narendra Service Station's loan application categorized "Liberalized Trade Finance Scheme" and he himself prepared Process Note under Ex.P48 after satisfaction and verification of the records. The said Process Note bears his signature and signature of Deputy General Manager. Admittedly, the 109 Spl.C.C.No.166/2004 Branch Office has submitted all the details and particulars pertaining to M/s.Narendra Service Station while recommending enhancement of loan from Rs.25,00,000/- to Rs.50,00,000/-.
115. P.W.13 - N.H.Prabhu worked as Manager in the Haines Road Branch from 2001-2004, has deposed that before he took charge as Manager, accused No.1 was the Manager in the same Branch from 1999 to 2000, the accused No.2 was working as Accountant at the relevant point of time. According to him, after taking charge, he found many irregularities pertaining to the account of Narendra Group of Companies, operated by one Narendra Kumar. He has stated, initially the Bank Manager of Haines Road Branch sanctioned Rs.25,00,000/- to M/s.Narendra Service Station and it was enhanced by the Regional Office in the year 2000. He has further deposed about during the audit in the Haines Road Branch, the auditors have found irregularities in connection with operations and sanctioning of loan. Therefore, accused Nos.1 and 2 being its Branch 110 Spl.C.C.No.166/2004 Manager and Accountant, respectively suspended from the duties. The documents Exs.P64 to 74 are identified by him bears his signatures marked as Ex.P.64(a) to 74(a). The letter dated 4.4.2003 as per Ex.P67 given to CBI with reference to forwarding of original documents and correspondence file relating to Term Loan of Rs.50,000/- granted to M/s.Rajarajeswari Cold Storage Pvt.Ltd. In the said letter referred as 25 original documents enclosed with original correspondence including sanction letter, limit application, process note, documents of technical officer etc. The letter dated 3.1.2003 Ex.P68, under which investigation papers submitted which includes original documents, cheques, vouchers of M/s.Narendra Service Station, M/s.Sanarco Cold Storage and M/s.Rajarajeswari Cold Storage Pvt.Ltd. The letter dated 19.9.2002 Ex.P69 under which original ledger extracts relating to the accounts of all the said three companies submitted to Investigating Officer. The housing loan files relating to accused Nos.3 to 8 with original documents and agreements were submitted under letter dtd.19.4.2002 as per Ex.P70. The letter dated 22.4.2002 marked under Ex.P71 relates to original 111 Spl.C.C.No.166/2004 documents and other letters in connection with housing loans in respect to accused Nos.5, 7, 8 and one Chandrashekar Patil. The letters Exs.P72, 73 and 74 dated 25.4.2002, under which, the original security documents for the loans of M/s.Narendra Service Station, M/s.Sanarco Cold Storage Pvt.Ltd. and housing loan files were sent to the Superintendent of Police, CBI, Bengaluru.
116. It is important to point out that PW13 has deposed about diversion of loan sanctioned to accused Nos.3 to 9 by accused No.10 for other purpose rather than the purpose for which it was granted on the basis of Bank certificate issued under Ex.P75. In the said letter, it is mentioned that on 29.4.2000 M/s.Narendra Service Station had issued Cheque No.141105 owning to Razia Begum for Rs.6,00,000/- and the said cheques was debited to their account and credited to SB account of said Razia Begum and others. Admittedly, he was not present at the time of alleged loan transaction took in Haines Road Branch and Regional Office, as charge taken as Manager from his 112 Spl.C.C.No.166/2004 predecessor, Maruthi Kumble and no personal knowledge of the loan transaction of accused Nos.3 to 10.
117. PW14 - P.K.Kalyan Raman was the Chief Manager (Credit), Union Bank of India, Nodal Regional Office, Bangalore, was within the knowledge of banking procedures relating to the sanction of credit facilities to the borrowers. He has deposed about the duties of Branch Manager to verify the credentials, background, creditworthiness, market report and experience etc. of borrowers, if any application for opening current account given to the Bank. The duty of the Branch Manager to see the nature of the business of the borrower, apart from types of service and manufacturing products by use of raw materials and verification of its requirement. Likewise, it is duty of the Branch Manager while sanctioning the cash credit facility to Petrol Bunk to ensure that storing capacity and quantum of facility being sanctioned after obtaining adequate collateral security from the borrower. He has clearly stated that the enhancement of loan will come within the powers of Regional Office, whenever regular 113 Spl.C.C.No.166/2004 application with connected papers submitted by Branch Office. Only after receiving proper application with supporting documents, the officials in Regional Office scrutinize and place a note before competent authority for approval. He has also stated about the certificate issued by the UBI, Central Office and same marked as Ex.P76. According to him, during existence of unit by the borrower if any additional credit facility for installation of another unit made by him, the Sanctioning Authority must satisfy about the work of existing unit satisfactorily and honouring banking obligations promptly. He has also stated about certain irregularities found after the documents received from Haines Road Branch. In the cross-examination admitted that he was one of the witness in the departmental enquiry pertaining to loan transaction of Narendra Kumar group of companies. He has admitted that the various loans were sanctioned to M/s.Sanarco Cold Storage Company, Narendra Kumar Group of Companies and its related companies under the scheme of Liberal Trade Finance. He has admitted that as per the guidelines, recommendation made by the Haines Road Branch to the 114 Spl.C.C.No.166/2004 Regional Office with the application to process for enhancement.
118. Further, it is not in dispute that Deputy General Manager was head of the Regional Office, Chief Manager is his subordinate, two chief managers Credit and Planning and Development respectively were under the Deputy General Manager. According to him, one R.M.Agarwal was the Chief Manager (Credit) and he was succeeded to him. Normally processing officers of the Regional Office process the loan application for enhancement of loan sent by the Branch Office, afterwards, it was placed before the Deputy Manager, then before Manager, thereafter before Senior Manager, Chief Manager and finally before DGM for orders. However, it is made out from his further evidence that all the said officers have their own powers of grant loan proportionately under the delegated authority. He has also deposed that one Paulraj was the Technical Officer at relevant point of time and gave report to the Regional Office.
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119. PW14 admitted that Deputy General Manager has powers to sanction the loan recommended by the Branch office. But he is not remember to say any objections raised by staff of Regional Office when the enhancement of loan sanctioned by the Deputy General Manager. Though he has stated about many documents pertaining to different loans of Narendra Group of Companies were shown to him by the CBI Officer, not remember to say the particulars of those documents. In the cross-examination admitted that not worked in the Regional Office or Haines Road Branch when the alleged loan transactions were processed in the Bank.
120. Admittedly, the documents submitted for the loan by the borrowers were verified by the Credit Monitoring Officer in the Regional Office. But the Monitory Officer who had verified the documents not made as a witness. However, from the evidence of PW14 it is made out that he had no personal knowledge as to the loan transaction documents. Therefore, he was not able to say whether Branch Manager and in the Regional Office had 116 Spl.C.C.No.166/2004 taken sufficient collateral security for advancing the loans. The Instruction Circular dtd.21.4.1999 issued by UBI, Central Advances Department to all Branches marked under Ex.D20 is admitted.
121. PW15 - K.Ramulu worked as Chief Manager, Nodal Regional Office, Bangalore, from Nov-2000 to May- 2003, was looking after credit monitoring, recovery department, planning and development department. He has deposed the main function of CMRD is to monitor the irregular accounts/NPA accounts, sticky accounts of the branches falling under the jurisdiction of regional office. The Haynes Road branch comes under the jurisdiction of the Regional Office, Bangalore and all the Branch Managers were submitted weekly/fortnightly and monthly reports as to irregular/sticky/NPA accounts. He has deposed about the procedure followed by the Branch Manager, for sanctioning credit limits after preparing note, limit application form was forwarded to the Regional Office. After receiving the loan application for enhancement, Regional Office recommends the limits of loans to the 117 Spl.C.C.No.166/2004 Deputy General Manager, the Sanctioning Authority. He has deposed that the Manager, Senior Manager, Chief Manager and DGM were in the Regional Office. He has also deposed that the procedure to conduct inspection of the unit by the Branch Manager and report the same to the Regional Office along with application form.
122. According to PW15, the Deputy Managers and Managers of CMRD department of Regional Office inspected the Haines Road Branch in the year 1999 or 2000 and observed some irregularities relating to Narendra Group of Companies. He has identified the signature of accused No.11 in the process note Ex.P43 marked as Ex.P43(a). The said process note is a proposal for Term Loan of Rs.50,00,000/- to the account of M/s.Rajarajeswari Cold Storage Pvt.Ltd. sent by the Haines Road Branch. Likewise, he has admitted the Sanction Advice Ex.P19 issued by the Regional Office in connection with loan facility of M/s.Narendra Service Station. He has admitted the enhancement of loan from Rs.25,00,000/- to Rs.50,00,000/- sanctioned to the M/s.Narendra Service 118 Spl.C.C.No.166/2004 Station. But he has stated that the accused No.1 being Branch Manager has not complied terms and conditions of Sanction Advice submitted to Regional Office. Admittedly, if any irregularities found during the regular audit, the special report will be prepared, on the basis of which, the Zonal audit and Vigilance audit will be conducted.
123. It is seen that the proposal made under Ex.P43 was processed by Technical Officer, Paulraj, recommended by Sr.Manager(Credit), Natarajan and Chief Manager, R.M.Agarwal. Finally, on the basis of said recommendation accused No.11 as DGM sanctioned the loan. He has clearly identified signatures of said Officers as written in pencil under their signatures. However, he is not able to say whether Sr.Manager and Chief Manager overlooked the process of Ex.P43 for proposal for Term Loan of Rs.50,00,000/- to M/s.Rajarajeswari Cold Storage Pvt.Ltd. Admittedly, Deputy General Manager has power to consider the proposal, if it is sent by Technical Officer, Manager (Credit) and Sr.Manager. Therefore, since there was no objection by Processing Officer, the Chief Manager of Credit 119 Spl.C.C.No.166/2004 and Sr.Manager - accused No.11 has recommended and sanctioned the loan as proposed by the Branch Office.
124. PW15 who has not worked in the UBI, Haines Road Branch, and not conducted audit pertaining to said Branch or Regional Office. He has deposed only on the basis of documents and admitted that since the enhancement of loan recommended by Branch Manager was beyond his limit at the Branch level, it was considered by the Regional Office. He does not have any knowledge about sanctioning of housing loan to accused Nos.3 to 9 and closure of loans subsequently. Likewise, he was not concerned to the sanction of loans to the Narendra Group of Companies, M/s.Rajarajeswari Cold Storage Pvt.Ltd., M/s.Narendra Service Station and M/s.Sanarco Cold Storage Pvt.Ltd.
125. The document which is a part of Ex.D19 confronted to him marked as Ex.D21 is about terms and conditions forming part of Sanction Advice No.109/99 dated 16.12.1999. It relates to the account of M/s.Narendra 120 Spl.C.C.No.166/2004 Service Station referred by Haines Road Branch under which Sl.No.1(a) to (h) says about Branch has to comply the conditions before release of limits. Those are to obtain and forward the Valuation report from the Valuer on mortgaged property, legal opinion on the property, compile credit report and copy of the same submit to the Regional Office, process required licence as per the local laws such as Trade licence, Sales Tax registration etc. However, those documents are produced before the Court along with valuation of the property offered as collateral security as per the legal opinion The Branch has complied the conditions as the entire stocks hypothecated to the Bank are also insured in the name of Bank before release of the facility. Equitable Mortgage created as per the instructions issued by the Bank from time-to-time. The Branch has obtained Simple Declaration from the borrower with regard to the stocks and other moveable hypothecated to Bank. The reasonable turnover shown in the account relating to the limits sanctioned or enhanced. The certificate of confirming the creation of valid Equitable Mortgage on the mortgaged properties with original documents also 121 Spl.C.C.No.166/2004 obtained. The enhanced limits released only after inspection of mortgaged property after confirming its valuation.
126. The bank has got valued the property situated at Chintamini Town offered as security by accused No.13, Lakshman through different Valuers. PW18 - Ranganath Kumar. A.N is the proprietor of Nakasha Plazam is a registered Valuer and approved penal of Valuers of Union Bank of India. He along with bank officials and CBI police visited Chintamani, where the property was situated, which was identified by accused No13. After measurement, he has prepared the report under Ex.P44 and his signature marked Ex.P44(a). The signature of another Valuer Shashikumar, who was said to be accompanied him marked as Ex.P44(b). In the cross-examination he has clearly stated that on the basis of legal opinion dated 6.9.1999, he has given valuation report in respect of site and house bearing Municipal Khata No.2496/2356 at Chintamani Town. The legal opinion given by the Advocate 122 Spl.C.C.No.166/2004 under Ex.P16 is identified. However, the difference in the khata number mentioned in legal opinion 2356/2271 is pointed out, which is not tallied with the khata number mentioned in Exs.P12 and 13.
127. After going through the Memorandum of deposit of title deeds marked under Ex.P12, it is made out that the property No.95, Assessment No.2356/2271 situated at Chintamani, belonging to accused No.13 - M.A.Lakshman on which the loan was sanctioned to M/s.Narendra Service Station. The valuation report given under Ex.P13 by H.Jayasurya and Associates is with respect to the property belonging to M.A.Lakshman bears the Khata No.2356/2271 measuring 10,920 Sq.ft. He has further admitted the Valuation Report given under Ex.P44 is based on the information given by Bank officials.
128. PW34 - Jayasurya said to be started M/s.H.Jayasurya and Associates, a team of civil and mechanical engineers to do valuation of immovable property, has deputed one Vishnu, Chartered Civil Engineer 123 Spl.C.C.No.166/2004 with accused No.10 to assist and take actual measurement of immovable property owned by accused No.13 M.A.Lakshman. After inspection of the property belonging to him, Valuation Report prepared under Ex.P13, bears his signature marked as Ex.P13(a). He has deposed about guidelines as to inspect and identify the property, measure the property, ascertain the value of the property fixed by Government of Karnataka and the actual market value of the property by enquiring neighbours and real estate agencies in the local area followed before issuing the said Valuation Report. Accordingly, after going through the E.C. relating to M/s.Sanarco Cold Storage Private Limited, he along with his team have ascertained the value of the property. The correctness of the contents of Ex.P13, the Valuation Report submitted by him is admitted. The search report kept in the file Ex.P53 marked as Ex.P53(a), contains the name of Company - M/s.Rajarajeswari Cold Storage Pvt.Ltd., availed Term Loan of Rs.50,00,000/- by hypothecating plants and machinery belonging to the Company in favour of UBI, Haines Road Branch. His inspection of the site for identification of the property and 124 Spl.C.C.No.166/2004 ascertainment of the value of the same is not disputed. It is also made out that the guidelines issued by the Bank Authorities also followed while issuing Valuation Report after ascertaining the Government valuation and actual market value of the property. He has admitted Valuation Report given by him in respect to some other property relating to accused No.10 and has clearly stated that will not issue any Valuation Report without being satisfied himself with regard to boundaries and measurement of the property.
129. The documents produced before the Court in respect of loan processed by accused No.1 as Manager of UBI, Haines Road Branch for enhancement to Regional Office, Bengaluru, where accused No.11 was working as Deputy General Manager. The duty of the Manager (Credit) assigned to one Duraiswamy Reddy examined as PW30. His duty was to supervise the work of processing officers, Technical Officers, Deputy Managers and other clerical staffs who were in the department. He has deposed that in the month of Dec-1999, UBI, Haynes Road Branch 125 Spl.C.C.No.166/2004 forwarded the enhancement proposal under LTF scheme to M/s.Narendra Service Station for Rs.50 lakhs. Initially, the loan of Rs.25 lakhs as cash credit limit sanctioned by the Branch Office for the purpose of trading petrol, diesel and lubricants. However, the accused No.1 Manager of Haines Road Branch at the relevant point of time forwarded loan application for enhancement in respect of M/s.Narendra Service Station as per proposal form Ex.P15. PW30 has identified the signature of accused Nos.1 and 2 who were the then Branch Manager and Accountant respectively, which are marked as Ex.P15(a) and (b). After going through the said recommendation, the staff - S.K.Mohan, who is examined as PW12 sought for clarification from the Branch Office, which was replied under Ex.P66. In the said reply, he has identified signature of accused No.1 marked as Exs.P66(a) and (b). It is made out that PW12 - S.K.Mohan himself prepared Note Ex.P48, which is signed by PW30 and his signature marked as Ex.P48(b). The signature of accused No.11 as Deputy General Manager identified and marked as Ex.P48(c).
126 Spl.C.C.No.166/2004
130. PW30 has identified the Sanction Advice of Regional Office prepared by PW12 under Ex.P19, which was sent to Haines Road Branch. Further identified limit application pertaining to M/s.Sanarco Cold Storage Pvt.Ltd. submitted by Branch under Ex.P26, which was also recommended by accused No.1 for enhancement of loan. The signatures of accused No.1 and accused No.2 are identified in the said document marked as Ex.P26(a) to (d) and Ex.P26(e) and (f) respectively. Further he has identified process note prepared by Technical Officer Paulraj with respect to M/s.Sanarco Cold Storage Private Limited, was signed by him marked as Ex.P29 and signature as Ex.P29(a). The signature of accused No.11, Deputy General Manager, marked as Ex.P29(b). He has deposed about the second charge created over the property mortgaged to KSFC and he does not know the reasons for no signature but by Chief Manager to Ex.P29.
131. PW30 though stated that accused No.11 sanctioned loan without recommendation of the Chief Manager, in the cross-examination he has admitted that the 127 Spl.C.C.No.166/2004 Regional Office have powers to sanction excess loan amount, whenever it exceeds limits of the Branch. Likewise, when the limit of Regional Office exceeds, then higher competent Authorities will sanction the loan amount. He is very particular about during his tenure as Manager, Regional Office sanctioned loans in the name of M/s.Narendra Service Station and M/s.Sanarco Cold Storage Private Limited. The inspection report prepared by the Technical Officer after visit of spot identified under Ex.P28 is relates to M/s.Sanarco Cold Storage Pvt.Ltd. The stock inspection also made as per the document Ex.P49 and cash credit facility was enhanced to M/s.Narendra Service Station from Rs.25,00,000/- to Rs.50,00,000/-. It is also admitted that KSFC had no objection for creating second charge on the property given to it for loan as per Ex.P27. However, the recognized Valuer gave report in respect of immovable property offered as collateral security to the loan sanctioned to M/s.Narendra Service Station and M/s.Sanarco Cold Storage Pvt.Ltd. He is very particular about putting his signature only after scrutinizing and going through the loan papers. Admittedly, 128 Spl.C.C.No.166/2004 before sanctioning of the loan by the Regional Office on the recommendation made by the Branch Office, it ought to have gone through the entire records and power given to Regional Office to accept or reject the enhancement of loan.
132. The clear admission made by PW30 that the loans relating to M/s.Narendra Service Station, M/s.Sanarco Cold Storage Pvt.Ltd. and M/s.Rajarajeswari Cold Storage Pvt.Ltd., are sanctioned by the Regional Office. He has also admitted that the Branch Office recommended for enhancement of loan amount already granted to the limit of Rs.25,00,000/-. The procedure followed while forwarding recommendation that loan papers were to be placed before the Processing Officer of Regional Office, thereafter, papers will be placed before the Manager (Credit), then before Chief Manager and finally before Deputy General Manager.
133. Further PW30 has clearly stated that Deputy General Manager is the final authority of sanctioning of loan, in the absence of Chief Manager, without waiting for his signature he can sanction the loan. Therefore, one of 129 Spl.C.C.No.166/2004 the allegations that accused No.11 with dishonest intention only to enhance the loan, not placed before Chief Manager cannot be said irregularity. Further the clear admission made that CMRD Authority have not found any illegalities or irregularities in sanctioning of the loan by the Regional Office.
134. Another officer worked at Regional Office is PW31 - Ram Mohan Agarwal, was Chief Manager (Credit) during the period 1998-2000 has deposed his nature of duty entrusted during the said period to recommend loan processed by the Branch Manager. After processing of the said recommendation, Senior Manager (Credit) used to verify it, thereafter it was coming to his verification, thereafter, the proposal has put up before the DGM for final sanction of loan. However, the said procedure being normal Rule of the bank followed by the Regional Office. Further, he has deposed about the proposal made by Haines Road Branch with respect to M/s.Rajarajeswari Cold Storage Pvt.Ltd. and under Ex.P34, on the basis of which Regional Office has prepared process note under 130 Spl.C.C.No.166/2004 Ex.P35. He has identified the proposal prepared by Regional Office under Ex.P43 sent by him as per Ex.P43(b). He has clearly stated that recommendation made on the basis of Technical Report prepared by Technical Officer, Paulraj. He has identified Ex.P29 relating to the process note of M/s.Sanarco Cold Storage Pvt.Ltd. He has further identified the process note prepared by Regional Office with respect to M/s.Narendra Service Station under Ex.P48. He being Chief Manager (Credit) at Regional Office, has categorically stated that the loan papers pertains to M/s.Rajarajeswari Cold Storage Pvt.Ltd., M/s.Narendra Service Station and M/s.Sanarco Cold Storage Pvt.Ltd., are within the limits and there were no irregularities. He has identified the document Ex.P43 proposal for Term Loan of Rs.50,00,000/- relating to Rajarajeshwari Cold Storage recommended by Haines Road Branch, bears his signature in Ex.P43 marked as Ex.P43(b). It is not disputed by him that under the said document, reference also made to sanction loan to M/s.Sanarco Cold Storage. 131 Spl.C.C.No.166/2004
135. It is made out from his evidence that no complaint filed by him to the higher Authority stating that the loan process note relating to M/s.Narendra Service Station and M/s.Sanarco Cold Storage were deliberately not placed before him and the loan sanctioned by Deputy General Manager was against to the norms of the Bank. Admittedly no Circular or Notification issued to the Head Office stating that Deputy General Manager has no power to sanction loan without signature of Chief Manager. Moreover, he has admitted circulars will be issued by Head Office in respect of sanction of housing loan and also excess limits of the loan as per circular Ex.D23. Further it is made out that the monthly, quarterly, half yearly and yearly returns submitted by the Branch Office to the Regional Office were monitored by department of CMRD, at Regional Office. However, if any excess of limits sanctioned by the Branch Office found, it was reported to the CMRD, in case of not sending any statement, reminders used to be issued to the concerned Branches to submit the same. Admittedly both M/s.Rajarajeswari Cold Storage Pvt.Ltd., and M/s.Sanarco Cold Storage are different local entities. 132 Spl.C.C.No.166/2004 The process note Ex.P43 bears the endorsement that 'please collect latest position of O/S in sister concerned', which was made by accused No.11 as Deputy General Manager, which was complied by his subordinate officers from Branch Office.
136. The important aspect is after receiving recommendation for sanction of loan of M/s.Rajarajeswari Cold Storage Pvt.Ltd., from Haines Road Branch, accused No.11 Deputy General Manager gone through the proposal submitted under Ex.P41 which contains subordinate papers for the installation of cold storage, which is supported by Inspection Report Ex.P42. The said report given by Technical Officer R.Paulraj, who is examined as PW41, who has deposed about visiting to M/s.Sanarco Cold Storage as instructed by Chief Manager for sanctioning various credit facilities, for inspection along with Branch Manager of Haines Road Branch. During his visit, the unit was not working and one unit was ready for operating. He had also visited M/s.Rajarajeshwari Cold Storage at Chintamani where there was one land and building were 133 Spl.C.C.No.166/2004 situated. Thereafter, he had submitted report as per Ex.P42 and identified his signature marked as Ex.P42(a). The report given by him in respect of Rajarajeshwari Cold Storage identified under Ex.P-28 and his signature is marked as Ex.P-28(a).
137. However, PW41 has stated at the time of inspection of both units, accused No.1 had furnished the documents relating to the units. He has admitted that he was also loan processing officer in regional office in respect of M/s.Sanarco Cold Storage and M/s.Rajarajeshwari Cold Storage. Admittedly, the loans granted to both units were classified as Small Scale Industries Loan and no role played by Haines Road Branch in sanctioning of loan to M/s.Sanarco Cold Storage. The clear admission made by him indicates that he, along with Senior Manager and Chief Manager at Regional Office processed both the said loans. According to him, only after due inspection he had prepared inspection reports relating to above said units under Ex.P28 and 42. It is made out from the records that only on the basis of report submitted by this witness as Technical 134 Spl.C.C.No.166/2004 Officer, the Regional Office where accused No.11 was working as Deputy General Manager sanctioned both the loans.
138. The Revenue Officer - Gurusiddaiah, CMC, Chintamani is examined as PW26. He has furnished the document relating to property of accused No.13 - M.A.Lakshman and identified the documents Exs.P81 and
82. Copy of the document S.R.No.1784/2001-02 marked as Ex.P-83. In the cross-examination admitted that the contents of Ex.P83 - Gift deed executed on 4.7.2001 and it relates to the Khata No.2496/2356.
139. Further the evidence of PW25 - N.Vijayamma working as SDA in Primary Co-operative Agricultural and Rural development Bank Limited, Chintamani has deposed that accused No.13, M.A.Lakshman had availed two loans from said Branch during 1979 and 1986 for the purpose of digging the well and purchasing of the pumpset. The cheque issued by accused No.10 for Rs.86,000/- towards the loan due by his father and the same identified under 135 Spl.C.C.No.166/2004 Ex.P55(d). She has admitted that loan sanctioned to accused No.13 was for agricultural purpose as he was having agricultural land.
140. PW33 - N.Obalappa, working as General Manager from 2002 to October, 2004, is acquainted with the signatures of one Veeresh, who was the Manager of Chintamani Branch in the year 2000 since both of them worked together. During the said period, cash credit account was opened in the name of M/s.Narendra Service Station. Subsequently, in the year 2000, UBI, Haines Road Branch sought for confidential opinion of the partners of said concern, under the letter Ex.P20(1), for which, the Chief Manager, Veeresh had put his signature. PW33 since acquainted with his signature identified the same marked as Ex.P21(a). In the cross-examination he has admitted that he is not the author of documents Ex.P-20 and P-21 and shown ignorance about cash credit loan of Rs.25,00,000/- paid towards the account of M/s.Narendra Service Station in the year 2013. He is also not aware that accused No.13 M.A.Lakshman, accused No.10 M.L.Narendra Kumar and 136 Spl.C.C.No.166/2004 Ashok Kumar were the partners of the same. He is not aware of cash credit facility granted by UBI, Haines Road Branch to M/s.Narendra Service Station which is a proprietorship concern.
141. PW23 - K.Shivanna worked as Senior Manager in Kalpatharu Grameena Bank, Mallimakanapura branch, Hoskote Taluk has deposed about accused No.10 had two current accounts in the said branch in the names of M/s.Narendra Service Station and M/s.Sanarco Cold Storage. He has produced cheques in respect of both the accounts to the CBI Officer with covering letter as per Ex.P79 and identified his signature as Ex.P79(a). According to him, in the year 2002, one Bairappa visited their bank and presented cheques for Rs.5,00,000/- issued in his name by M/s.Narendra Service Station and M/s.Sanarco Cold Storage. After verifying both the accounts, since there was no funds, the cheque was returned with an endorsement 'insufficient funds'. This witness treated partly hostile and cross-examined by the learned Public Prosecutor. In the cross-examination 137 Spl.C.C.No.166/2004 identified the cheque bearing No.252464 dated 17.4.2000 was purchased by UBI, Haynes Road Branch from M/s.Narendra Service Station. The account extract of M/s.Narendra Service Station and M/s.Sanarco Cold Storage confronted to him, particularly the entry dated 17.4.2000, which reveal amount of Rs.5,43,000/- shown as balance marked on behalf of accused No.1 as Ex.D22.
142. PW22 - Manjunath is aware of M/s.Narendra Service Station situated at Chintamani, but he has not worked in the said concern. However, he has stated it was owned by one M.A.Lakshman and do not know anything about business of service station. He was treated hostile and cross-examined, in which, denied the statement given before CBI, under Ex.P78.
143. The witness - H.J.Bachegowda the classmate of accused No.10 in the year 1976, examined as PW21. He has stated that accused has incorporated the company M/s.Sanarco Cold Storage, which contained seven directors in the year 2000. He was also one of the Directors and 138 Spl.C.C.No.166/2004 had given his one acre 10 guntas of land towards his share for the Company without any value of the land. Further he has stated that accused No.10 applied loan from KSFC for the construction of M/s.Sanarco Cold Storage. According to him, he has signed loan papers of UBI, Haynes Road Branch, Bangalore and accused No.10 became the defaulter in paying installment of loan due to sudden rainfall failure. However, he has admitted that huge amount was invested for construction of Sanarco Cold Storage.
144. The prosecution in proof of the two chits opened in the name of M/s.Sanarco Cold Storage and M/s.Narendra Service Station examined the witness M.R.Krishnamurthy as PW24. He has deposed that M/s.Chaitra Chits Limited started by him during 1995 and face value of the chits in the above said names for Rs.5,00,000/- each. Accused No.10 had taken chit amount in the month of October, 1998 for Rs.3,50,000/- after deducting the bid amount of Rs.1,50,000/-. He has identified the cheques Ex.P55 issued in favour of Chaitra Chits Private Limited by Narendra Service Station, marked 139 Spl.C.C.No.166/2004 as Ex.P-55(a) to (c). However, those cheques were realized and credited to their account and he gave statement before CBI. Admittedly, cheques were issued by M/s.Narendra Service Station and chits were also in its name. No document seized by CBI officer.
145. PW27 - B.N.Prasad, Deputy Manager (Technical) KSFC has deposed that he was posted to Recovery-I department in the year 1997 worked in the same department till 2005. According to him, KSFC had financed total amount of Rs.1,97,50,000/- to M/s.Sanarco Cold Storage Private Limited for the purpose of construction of building, acquisition of plant and machinery for cold storage. The first charge was created by KSFC on the land, building and machinery, which was registered with Registrar of Companies. He had also stated that 'No Objection Certificate' was given to UBI for second charge. However, after obtaining loan from KSFC, it was not repaid by M/s.Sanarco Cold Storage Private Limited. Since, the project was not completed, notice issued to said Company, 140 Spl.C.C.No.166/2004 thereafter, seized the entire property, brought for sale in the public auction. However, as per the directions of Deputy General Manager of KSFC, particulars of loan amount has been handed over under Ex.P84. Though he has admitted that the Rules and Regulations in KSFC relating to creation of charge and sanctioning of loan, no personal knowledge of loan transaction of M/s.Sanarco Cold Storage Pvt.Ltd., as he was not taken any collateral security for the loan borrowed on behalf of it.
146. PW32 - P.Rajagopal, Dy.Manager, (Advances) in SBI, Chintamani Branch has furnished the documents relating to the current account of M/s.Narendra Service Station. The copies of the current account opening form and Accountant extract of a/c. No.SIB-5546 and another account extract relating to M/s.Narendra Service Station bearing Account No.5507 marked as Exs.P-85 to 87, respectively. Admittedly, he was not working in Bank with the accused No.10 both at the time of opening current account in the name of M/s.Narendra Service Station and 141 Spl.C.C.No.166/2004 its closure. He is also not having any personal knowledge relating to transactions of M/s.Narendra Service Station.
147. PW36 - M.Krishna has deposed that he knew accused No.10, who approached him through the real estate agent in the month of June-2000 and had offered to take his premises on lease on monthly rent of Rs.1,00,000/- with refundable advance of Rs.10,00,000/-, for which, he had issued two cheques for Rs.5,00,000/- each drawn on UBI, Haines Road Branch. Thereafter, this witness had executed lease deed in favour of M/s.Sanarco Cold Storage Pvt.Ltd. run by accused No.10. Apart from that he has furnished Bank Guarantee for one year for ensuring payment of monthly rents. However, accused No.10 has paid the rent only for two months, thereafter not paid the rent. Therefore, approached Branch to enforce the Bank Guarantee, but as it was refused by Branch, approached the Regional Office, Bengaluru and Head Office at Bombay. Afterwards, rents have been paid by accused No.10 as per the Bank Guarantee. He has identified the document Ex.P55, out of which, two cheques were 142 Spl.C.C.No.166/2004 identified and marked as Ex.P55(e) and (f). The copy of the Bank Guarantee marked as Ex.P90. However, he has deposed about Rs.10,00,000/- was paid by way of two cheques of Rs.5,00,000/- each towards refundable advance amount and those cheques were presented and encashed subsequently. The document Ex.P32 confronted to him is statement for the period from 1.9.2000 to 30.9.2000 related to M/s.Sanarco Cold Storage Pvt.Ltd., which shows transaction of Rs.90,000/- pertaining to Cheque No.141359 is mentioned. Further, the said Rs.90,000/- was credited to his account is not admitted. The same is marked as Ex.D26. He has stated that the property rented to M/s.Sanarco Cold Storage was allotted to him through BDA. However, he has not admitted that excess rent received by him apart from the Bank Guarantee, admitted that the amount of cheques issued by accused No.10 were encashed by him.
148. PW37 - R.K.Jha, officer in the Bank of India, Jayanagar Branch from 2002 to 2006 has deposed that as per the letter received from Investigating Officer, 143 Spl.C.C.No.166/2004 CBI/ACB/Bengaluru, he has verified the records and found details of three cheques mentioned in the letter deposited in the Bank by M/s.Chitra Chits Pvt.Ltd. to the Current Account No.879 and proceeds of the cheques were created in their account. The documents were handed over by Manager of the said Bank through covering letter Ex.P91. He has identified the cheques Exs.P55(a) to (c).
149. PW40 - T.M.R.Natarajan, worked as Sr.Manager (Credit) in Regional Office from June-2000 to July-2000, has deposed about Term Loan sanction proposal file pertaining to M/s.Rajarajeswari Cold Storage Pvt.Ltd. received from Haines Road Branch. He had gone through the inspection report of Technical Officer along with proposal sent by the Branch Office. After verification he found excess in sister concern, therefore, noted shara 'to adjust the excess availed in the sister concern before releasing the Term Loan'. The same is identified in the process note Ex.P43 marked as Ex.P43(a). The note made observing in the same document relating to 'verify the cost of project and the margin requirements', at page No.1 144 Spl.C.C.No.166/2004 contains his initial signature marked as Ex.P43(d). He has also stated about the observations made as "to enable the Branch to create Equitable Mortgage before availing credit limit and also to collect latest position of outstanding in the sister concern, account in excess and to know him about the latest position of outstanding". After making said observations, file was placed before Chief Manager (Credit) for further action.
150. However, PW40 has stated that accused No.11 being the Deputy General Manager of Regional Office was the Sanctioning Authority at the relevant point of time. In the cross-examination admitted that the loan proposal of M/s.Rajarajeswari Cold Storage Pvt.Ltd., comes under Small Scale Industries Scheme. He has further admitted that the loan amount granted to it was not within the limit of Branch Manager and no role of Manager played except forwarding the loan application with particulars to the Regional Office.
151. Admittedly, the Branch Manager of Haines Road Branch had no power to sanction the loan to 145 Spl.C.C.No.166/2004 M/s.Rajarajeswari Cold Storage Pvt.Ltd. Further admitted that Technical Officer Paul Raj after investigation conducted in respect of M/s.Rajarajeswari Cold Storage Pvt.Ltd., has submitted his report as per Ex.P42. It is made out from the further evidence that the said Paul Raj has recommended to sanction the loan to M/s.Rajarajeswari Cold Storage Pvt.Ltd. After he satisfied with the report filed by Technical Officer, made some observations in Ex.P43, signed by himself, Technical Officer and Chief Manager and PW11. He has further admitted the Valuation Report given by the Valuer as per Ex.P44. He being Sr.Manager (Credit) working in Regional Office has also admitted that each Branch have to submit monthly, quarterly, half yearly and yearly statement of loan sanctioned, excess loan if any, to the Regional Office, which were to be monitored. However, he has admitted in the cross-examination that all the loan transactions and credit facilities comes within the purview of advance section of each Branch and every Branch will prepare F-1 and F2 statements every fortnightly and submit to the Regional Office. Admittedly, there was Credit Processing Unit in the Regional Office to sanction the loan. 146 Spl.C.C.No.166/2004 The processing of loan will start from Credit Officer to Deputy Manager, then to Sr.Manager and Chief Manager. He has admitted that Deputy General Manager at Regional Office got power to sanction the loan without recommendation of Chief Manager or Senior Manager.
152. The I.O. - K.Jayakumar Nair examined as PW42 deposed about FIR registered against accused under Ex.P94 identified his signature Ex.P94(a). The notification issued by Government of Karnataka dated 15.3.2002 marked as Ex.P95. He has deposed about housing loans sanctioned to accused Nos.3 to 9 and identified the files Ex.P57 to 63. He has also deposed that verified the Process note, Technical report and Audit Report and recorded the statements of officials of UBI at Branch Office, Regional Office and Central Office.
153. The documents relating to M/s.Rajarajeswari Cold Storage, M/s.Sanarco Cold Storage and M/s.Narendra Service Station are identified by Investigating Officer and marked as Ex.P96. The particulars of the cheques not 147 Spl.C.C.No.166/2004 signed by the concerned officer marked as Ex.P97. He has also stated about the documents collected from SBM, Chintamani Branch with covering letter under Ex.P98. The documents received from Deputy General Manager marked as Ex.P99 and letter collected from Indian Oil Corporation as Ex.P100. He has identified the files relating to M/s.Rajarajeswari Cold Storage Pvt.Ltd. and M/s.Sanarco Cold Storage received from Haines Road Branch are marked Ex.P101 and 102.
154. He has admitted that the different applications given for housing loans found during the investigation and do not know about all the documents submitted before sanctioning of housing loans. However, he had come to know that during his investigation that housing loans were sanctioned to M/s.Rohini Constructions. He has also admitted that the Branch and Regional Office of UBI has obtained documents from the borrowers at the time of sanction of housing loans in favour of accused Nos.3 to 9 and other loans in favour of accused No.10. 148 Spl.C.C.No.166/2004
155. Admittedly, he has not visited all the housing sites during his investigation and not aware of the settlement entered by the borrowers, who have cleared the entire housing loans subsequently as per the settlement certificates issued by the Bank. He has clearly admitted not aware of title deeds of the property furnished by accused Nos.3, 5 and 9 while borrowing housing loans and shown ignorance about adverse remarks given by the Auditor and Monitoring officer. Though he has admitted the concurrent auditor available in the Branch office, whose duty is to examine transaction in the Branch every day, not recorded his statement.
156. Admittedly, PW42 is not aware of housing loans sanctioned to accused Nos.3 to 9 which were cleared subsequently and their accounts were closed as well as original documents of property returned to them. Therefore, though he has voluntarily stated that for sanction of housing loan, borrower has to submit all the documents and no documents given by them is however not acceptable. He has not seized copies of any title deeds 149 Spl.C.C.No.166/2004 furnished to the housing loans during investigation. However, it is made out from the settlement certificates issued by the Bank under Ex.D19 pertaining to housing loan of accused No.3 and similar settlement certificates available in the Exs.P57 to 63 clearly go to establish that all the housing loans sanctioned in favour of accused Nos.3 to 9 were closed in view of settlement with the Bank.
157. It is relevant to point out that the PW42 being Investigating Officer does not know about the details of loan sanctioned to accused Nos.3 to 9 and also the nature of collateral security obtained by the Bank. However, PW2 one of the officials of the Haines Road Branch has categorically admitted that no fraud committed by accused No.8 while availing housing loan, which was granted after verification of documents by the Bank officials in the Branch. Therefore, the oral evidence of Bank Officials and the documents produced before the Court corroborates each other regarding housing loans were sanctioned by accused No.1 as Branch Manager only after scrutinizing all 150 Spl.C.C.No.166/2004 the documents, which were repaid subsequently and closed the loan accounts as per the settlement certificates.
158. PW42 though stated about flaws found in processing of notes of M/s.Rajarajeswari Cold Storage Pvt.Ltd., M/s.Sanarco Cold Storage and M/s.Narendra Service Station, not able to say which Officer has committed the flaws while processing the loans for said companies and firm. Further he has particularly stated that flaws found against all the above said companies and firm but not able to say the exact date of mistake committed while processing the loans. He has admitted in the cross- examination that the diversion of funds made by M/s.Rohini Constructions, but no explanation offered as to why its Proprietor Ramprakash is not made as an accused.
159. The important evidence elicited in the further cross-examination on behalf of accused No.11 is very clear that at the time of requisition given for sanction to prosecute against accused No.11, the names of other officials Doraiswamy Reddy, Ram Mohan Agarwal and 151 Spl.C.C.No.166/2004 Paulraj, also shown as accused Nos.12 to 14. But all the said officials made as prosecution witnesses and examined before the Court as PWs.30, 31 and 41 respectively. The prosecution case is silent about the reasons for not making them as accused though their names arrayed as accused persons in the requisition letter given by Investigating Officer before obtaining Sanction from competent Authority. Admittedly, he has found some allegations made by the Bank officials against the then Chief Manager R.M.Agarwal and against Paulraj while recording their statements. Admittedly, the said R.M.Agarwal given proposal for loan in the name of M/s.Rajarajeswari Cold Storage Pvt.Ltd. and recommended the enhancement of loan of Rs.50,00,000/- on the basis of Report given by Technical Officer, Paulraj. The categorical admission made by him reveal that the statements of witnesses recorded in the form of question and answers as could be seen from the statements recorded under Section 161 Cr.P.C.
160. PW43 - Suresh Kumar the then Inspector of Police, CBI, ACB, Bengaluru has taken over the charge of 152 Spl.C.C.No.166/2004 this case as per the orders of S.P., CBI/ACB/Bengaluru dtd.29.8.2003 from PW42 and filed the charge sheet with documents on 17.7.2004. In the cross-examination he has admitted that no written complaint given by Bank officials or any others against accused persons. He has stated that gone through the letter dtd.7.5.2005 marked under Ex.P79 at the time of filing the charge sheet. He has denied for the suggestion that the said letter was not at all in existence as on 17.7.2004, when he has filed the charge sheet in the Court. It is relevant to point out that in the letter Ex.P79, which was issued by Kalpathuru Grameena Bank to the Inspector of Police, CBI, in the column of reference no account number is mentioned. On the other hand the relevant column show the word Acc/ /2003-2004. The subject referred the investigation against Byrappa, former Branch Manager, Union Bank of India.
161. In the further cross-examination he has shown ignorance about reference made in respect of Criminal Conspiracy by CWs.42 to 44 with accused No.11. He has also stated that not remember to say whether Smt.Radhika 153 Spl.C.C.No.166/2004 was DIG of CBI, in charge of investigation in Bengaluru wrote letters to CWs.42 to 44 on 11.2.2004. He do not remember to say whether any discussion made by S.P. in connection with CWs.42 to 44 subsequent to 11.2.2004. However, he has not identified the letter dtd.11.2.2004 when confronted in the witness box. Further though he has stated the document marshalling evidence available against accused No.11 had seen by him in Case Diary, the said document is not produced before the Court. Therefore, he is not able to say the points of marshalling evidence available against accused No.11.
162. The prosecution alleged Criminal Conspiracy that accused Nos.1, 2 and 11 and other accused while processing housing loans and also enhancement of credit facilities and other loans to the accused No.10. However, the loan applications given by accused Nos.3 to 6 and 8 for grant of housing loans is not disputed. The process of the said housing loan applications were processed by several staff at different stages till the sanction by accused No.1, the Branch Manager and Haines Road Branch. Likewise, the 154 Spl.C.C.No.166/2004 process of recommendation made by accused Nos.1 and 2 as Branch Manager and Accountant of Haines Road Branch processed by several officials at Regional Office and finally accused No.11 as Deputy General Manager sanctioned the Term Loan and enhanced the loan for accused No.10. Therefore, it is made out the collective act of the officials of the bank at Branch Office and Regional Office which will not amount to Criminal Conspiracy.
163. However, it is made out from the oral and documentary evidence that housing loan files of accused No.4, Chandrashekar Patil, accused No.8 and accused No.7 contained Sanction Advice, Memorandum of title deeds and other documents marked as Exs.D2 to 13, the documents Exs.D16 and 17 marked in support of the defence taken by accused No.8 separately. The letter Exs.D1, 14, 15, 18 and 19 are the settlements entered in respect of the housing loans borrowed by accused Nos.4, 5, 8, 9 and accused No.3 respectively. Though the housing loan file of accused No.9, D.Ananda Kumar is not produced before the Court, the letter Ex.D18 discloses that the housing loan of 155 Spl.C.C.No.166/2004 Rs.5,00,000/- granted to him was settled under the compromise. The security furnished by accused Nos.3 to 8 for housing loans both common immovable property and salary certificates issued by accused No.10 as M.D. of M/s.Sanarco Cold Storage showing their different capacity of work in the said Company.
164. It is true, the learned Public Prosecutor submitted that the housing loan granted to accused No.4 - S.Pradeep is false as his occupation shown is Tourist Guide, in whose favour the housing loan sanctioned by accused No.1 illegally. Further accused No.1 not obtained any document relating to site, plan and other documents in respect of construction of house produced by accused Nos.3 to 9. Therefore, doubt arises that no housing loans granted as mentioned in housing loan files Exs.P57 to 63.
165. However, the admission made by the officials worked in Haines Road Branch, which is already discussed above regarding their participation in processing housing loan application by accused Nos.3 to 8, no doubt infers that 156 Spl.C.C.No.166/2004 accused No.1 as Branch Manager had power to sanction the loan upto the limit of Branch Office and thereafter sanction the housing loans in their favour. Further, the important point is made out that no housing loan sanctioned to accused No.10, who was the Proprietor of M/s.Narendra Service Station and Managing Director of M/s.Sanarco Cold Storage. Accused No.11 being Deputy General Manager of Regional Office, however, is not concerned to sanctioning of housing loans by accused No.1 in favour of accused Nos.3 to 9. Because the request made by accused Nos.3 to 8 for housing loans were considered at the Branch level itself and sanctioned by accused No.1 as Branch Manager after going through the documents produced by them.
166. The accused No.7 S.N.Jayasimhan in his written statement has categorically stated no housing loan obtained by him and no account was opened in the Haines Road Branch. He has stated that either the loan application or promissory note signed by him with other loan documents and also not received loan proceeds. But admitted that the loan was credited to the account of M/s.Rohini 157 Spl.C.C.No.166/2004 Constructions which was the beneficiary subsequently repaid the said loan. However, in connection with the housing loan said to be sanctioned to him, sought for information under the Right to Information Act by filing application on 3.10.2016. The reply sent by Central Public Information Officer through the letter dtd.2.11.2016 in compliance of the same. The said letter enclosed with the written statement filed under Section 313(5) Cr.P.C. shows that no loan account No.HNS:ADV:10768:VIII referred by him was available in the Branch as per the records and he was informed to prefer appeal before the Appellant Authority.
167. However, the contention raised by accused No.7 as no housing loan obtained from Haines Road Branch cannot be accepted in view of Ex.P62 said to be his housing loan file contain the loan application and copies of other documents with signatures. The learned Counsel for accused No.7 submitted the signatures in the pronote filed along with loan application are not proved by sending to FSL. Therefore, submitted the accused No.7 is unconcerned 158 Spl.C.C.No.166/2004 to housing loan file of Rs.3,00,000/- credited to the account of M/s.Rohini Constructions as on 1.6.2000 shown in the statement of account marked under Ex.D16 available in Ex.P62. Further in the same file the letter written by accused No.10 to the Manager of Haines Road Branch, dtd.25.3.2002 marked as Ex.D17, in which referred the subject matter of housing loan accounts pending against accused No.7 and others. It is not in dispute that accused No.10 has taken responsibility to clear the outstanding loan of all the housing loan dues from accused No.7 and others. However, the loan amount credited to the account of M/s.Rohini Constructions which has repaid the entire loan and closed the housing loan account.
168. Admittedly accused No.2 was Accountant in the Branch looking after the work of Credit Officer, whose post kept vacant, and he was entrusted the work of Credit Officer. Therefore, it can be presumed that in the capacity of Credit Officer he put his signature to the housing loan files while sanctioning loans by accused No.1 and also to signed the proposal of recommendation sent to the 159 Spl.C.C.No.166/2004 Regional Office. However, the Accountant of the Branch Office admittedly had no powers to sanction any loan, though the process note contains signature of accused No.2 as one of the Officer of the Branch Office, which was put in the capacity of Credit Officer. It is also admitted that he was handicap during the alleged period and was not able to walk, therefore, sitting in the Bank itself during working hours of Bank.
169. Further, the oral and documentary evidence reveal that accused No.1 being Branch Manager had power to recommend the limit for enhancement of loan to Regional Office, which beyond the limit of Branch Office. The prosecution though alleged method of illegal process and sanction of housing loan to accused Nos.3 to 9 adopted by accused No.1, the same is not proved before the Court. However, only on the ground of process of housing loan in favour of accused Nos.3 to 9, it cannot be said that accused No.1 entered into an agreement with them to do an illegal act which will not amount Criminal Conspiracy. Because the oral evidence of prosecution 160 Spl.C.C.No.166/2004 witnesses establish that accused No.1 had got prepared relevant documents Pre-loan Sanction Inspection Report as per Ex.P5, Loan process form as per Ex.P6, Confidential information under Ex.P9, Sanction Advice under Ex.P8 along with Loan processed note as per Exs.P15 and 26. Apart from those documents, Ex.P11 the letter shows accused Nos.3 to 8 were created Equitable Mortgage on the property offered as security.
170. Further, the working capital and Term Loan for Companies M/s.Sanarco Cold Storage and M/s.Rajarajeswari Cold Storage Pvt.Ltd., sanctioned by accused No.11 in the capacity as Deputy General Manager of Regional Office of UBI, on the basis of Sanction Advice Ex.P30, Process note Ex.P43, Visit Report Ex.P46, Inspection Report of M/s.Sanarco Cold Storage under Ex.P28 and Process note prepared in the Regional Office, relating to M/s.Rajarajeswari Cold Storage Pvt.Ltd., under Ex.P43. The property of M.A.Lakshman, who has represented Company - M/s.Rajarajeswari Cold Storage 161 Spl.C.C.No.166/2004 Pvt.Ltd., also valued by registered Valuer, whose evidence is already discussed above.
171. It is relevant to point out that other officials of Bank both at Branch and Regional Office also performed their duty while processing the loans, sending the proposal for enhancement of cash credit and sanction of Term Loan to above M/s.Sanarco Cold Storage and M/s.Rajarajeswari Cold Storage Pvt.Ltd. Therefore, it was a collective official act of all both in the Branch Office and Regional Office of UBI.
172. The prosecution has failed to prove how the housing loans were credited to the account of accused No.10 when the oral and documentary evidence discussed above shows that all the housing loan account credit to the account of M/s.Rohini Constructions, for which, one Ramprakash was Proprietor. If really there was diversion of funds by accused No.10 and it was used for other purpose rather than for construction of houses, the prosecution ought to have examined the Proprietor of M/s.Rohini 162 Spl.C.C.No.166/2004 Constructions, Ramprakash, who is not made as witness by the CBI, for the best reasons known to it. Moreover, the loans in respect of M/s.Sanarco Cold Storage and M/s.Rajarajeswari Cold Storage Pvt.Ltd., were based on relevant papers submitted by the officials of Regional Office.
173. It is true, different accounts of loan sanctioned to accused No.10 reveal that he was irregular in payment of previous loans, as could be made out from the account extracts Exs.P9 and 10. But all the housing loans were settled by respective borrowers who are accused Nos.3 to 9 as per the settlement certificate issued by the Bank.
174. At the cost of repetition, it is to be pointed out that the property offered as security for the loan borrowed by accused No.10 was got valued through Government Valuer and made out Government Value as well as Market value of the property which was exceeding the loan limit sought by the accused No.10. Further, the property offered as security was belonged to M.A.Lakshman, father of 163 Spl.C.C.No.166/2004 accused No.10, who has represented accused No.13 Company M/s.Rajarajeswari Cold Storage Pvt.Ltd.
175. The documents produced by CBI clearly establish that there was no Criminal Conspiracy by accused Nos.1, 2 and 11 being public servants worked in their different capacities both at Haines Road Branch and Regional Office of UBI, Bengaluru with accused Nos.3 to 10 and 12 and 13 - Companies either while processing housing loans or recommending for Term Loan and enhancement of cash credit facility to the accused No.10. Another important aspect is though different loans were said to be sanctioned to M/s.Narendra Service Station Proprietary concern, for which accused No.10 was the Proprietor. But the said firm M/s.Narendra Service Station is not made as accused. Even if it is considered that the Proprietor of it made as accused No.10 without making firm M/s.Narendra Service Station as accused, CBI cannot allege about irregularities by it. There is no proof to show that the housing loan amount credited to the account of M/s.Narendra Service Station and diverted to invest in the Companies M/s.Sanarco Cold Storage Ltd. 164 Spl.C.C.No.166/2004 and M/s.Rajarajeshwari Cold Storage Pvt.Ltd., made as accused Nos. 12 and 13 respectively.
176. It is true the prosecution has relied on the Audit Report and Anexure-5 said to be prepared by PWs.9 and 11 which are marked as Ex.P64 an P.64(a) with subject to objections. It is already pointed out that the Hon'ble High Court of Karnataka in Criminal Petition No.6085/2016 disposed off on 1.9.2016 left open the consideration of validity of the said documents at the appropriate time. At this stage it is relevant to point out how the said document cannot be relied on, which is not marked through the concerned witnesses PWs.9 and 11 said to be prepared.
177. No doubt, the document Ex.P64 is marked through PW4, who is not the author of said document, but said to be prepared by PW11 who has conducted the audit in the Haines Road Branch. The alleged irregularities pointed out in the Ex.P64 are said to be submitted by PW11 along with team members PW9-Shankarappa with Gururaj and Balaiah. Though the said Gururaj and Balaiah are not 165 Spl.C.C.No.166/2004 examined before the Court, evidence of PW9 also shows the Audit Report prepared by him along with PW11 and others, but they have not signed the document produced before the Court. Even in the evidence of PWs.9 and 11, they have not stated anything about their signatures put to the Audit Report prepared under Ex.P64 and P64(a).
178. The important aspect is when the evidence of PW9 and PW11 is very particular about audit inspection made by them in the Haines Road Branch and pointed out the irregularities in the Report submitted, the original Report with their signatures ought to have been produced before the Court. But Ex.P64 and P.64(a) are computerized copies bears only round seal of UBI, Zonal Office, Bengaluru, and not signed by members of team conducted audit in the Haines Road Branch Office. Therefore, the document which is based by the prosecution for alleged irregularities committed in the Haines Road Branch though marked as Ex.P64 and 64(a) without certificates under Section 65(B) of Evidence Act and Section 2(A) of Bankers' Books Evidence Act cannot be taken into 166 Spl.C.C.No.166/2004 consideration. Because the computerized copies of the documents cannot be admitted and accepted under the Evidence Act, without proper certificates as mentioned above. Moreover, prosecution case is silent about whether the original Report with signatures of PWs.9 and 11 with others is available or not. No reasons made out by prosecution for non-production of original and production of computerized copies of important document, when specifically pointed out the irregularities said to be found in Haines Road Branch during audit. Therefore, the alleged irregularities pointed out in the document Ex.P64 and P64(a) cannot be believable and acceptable. Therefore, the prosecution cannot base on the said document in proof of allegations made against accused Nos.1 to 13.
179. The prosecution has failed to prove how and in what manner accused Nos.1, 2 and 11 being public servants in the Branch and Regional Office of UBI, at Bangalore, along with accused Nos.3 to 10, accused Nos.12 and 13 Companies caused alleged wrongful loss to the UBI. Admittedly, all the housing loans sanctioned to accused 167 Spl.C.C.No.166/2004 Nos.3 to 9 were closed in view of settlement with the Haynes Road branch of UBI, therefore, no question of wrongful loss caused to the said Bank. Likewise, some of the loans sanctioned to accused No.10 were adjusted by selling the immovable property of his father M.A.Lakshman situated at Chintamani, who has represented accused No.13 Company M/s.Rajarajeswari Cold Storage Pvt.Ltd. Therefore, in the absence of any oral and documentary proof, I come to conclusion that prosecution has utterly failed to prove the allegations made against accused Nos.1 to 13, and therefore, I answer point Nos.1 to 6 in Negative.
180. Point No.10:- My discussion made on all the above points clearly establish that there is no corroboration in oral and documentary evidence produced by prosecution in proof of the alleged Criminal Conspiracy by accused Nos.1, 2 and 11 being public servants with accused Nos.3 to 10 and 12 & 13 Companies while processing housing loans in favour of accused Nos.3 to 9 and recommended enhancement of loan and Term Loan in favour of accused 168 Spl.C.C.No.166/2004 No.10. The prosecution has failed to prove diversion of housing loans sanctioned in favour of accused Nos.3 to 9 by accused No.10 for other purpose in order to cheat Haines Road Branch. The dishonest intention of accused Nos.3 to 10 while availing housing loans on the basis of alleged forged salary certificates as genuine is absent in the case of prosecution. Further the alleged falsification of accounts by accused Nos.1, 2 and 11 being officers of UBI, Haines Road Branch and Regional Office is not proved by any supporting corroborative oral and documentary evidence. The diversion of funds by accused No.10 in the name of M/s.Sanarco Cold Storage Pvt.Ltd. and M/s.Rajarajeswari Cold Storage Pvt.Ltd., after sanction of housing loans also not established by oral and documentary evidence. Further, prosecution alleged Criminal Misconduct against accused Nos.1, 2 and 11, they being public servants by corrupt or illegal means obtained pecuniary advantage for themselves and for other accused, by abusing their official position. However, no proof of the same produced through the evidence of prosecution witnesses.
169 Spl.C.C.No.166/2004
181. The learned Public Prosecutor has submitted that the accused Nos.1, 2 and 11 being public servants worked as Branch Manager and Accountant in Haines Road Branch and Deputy General Manager, Regional Office, Bengaluru respectively, sanctioned loan in favour of accused No.10, who was Proprietor of M/s.Narendra Service Station, Managing Director of M/s.Sanarco Cold Storage, who has started M/s.Rajarajeswari Cold Storage Pvt.Ltd., represented by his father - M.A.Lakshman. The accused No.10 himself was the beneficiary of housing loan obtained by producing false salary certificate. Further, along with the limit of cash credit, working capital recommended for sanction to the Regional Office though huge balance of loan amount due of accused No.10, cheque purchase facility also brought to the notice of the Court, under which, accused No.10 purchased his own cheques of different banks. Further relied on Audit Report Ex.P64 and other reports submitted by the Bank officials. The evidence of the witnesses relied in proof of allegation made against all the accused. Further, the housing loan files Exs.P57 to 63, which contained similar type of documents proves the 170 Spl.C.C.No.166/2004 alleged illegal sanction of housing loans to accused Nos.3 to
9. The defence taken by accused No.7 also pointed out who has denied housing loan obtained by him from the Haines Road Branch and its clearance subsequently.
182. In support of the arguments, the learned Public Prosecutor has relied on the following Rulings:-
(2013) 2 SCC 162 in the case of N.V.Subba Rao Vs. State, Inspector of Police, CBI/SPE, A.P. The offences alleged in the said case are punishable under Section 420 and 120(B) Indian Penal Code and Section 13(2) read with 13(1)(d) of Prevention of Corruption Act, 1988.
The accused No.1 as Branch Manager with dishonest intention disbursed the loan to various railway employees without obtaining proper security. The understanding between accused Nos.1 and 2 made them responsible for the offence Criminal Conspiracy and Criminal Misconduct. However, both of them were convicted on the basis of evidence of prosecution, particularly evidence of typist of accused No.2, which proved several 171 Spl.C.C.No.166/2004 meetings between accused Nos.1 and 2, acceptance of money by both of them on many occasions, transfer of sanctioned loans to the credit of the account of accused No.2. Therefore, order of conviction passed by the trial court, confirmed by the Hon'ble Supreme Court as there was reliable evidence against accused.
However, in the present case, no corroboration in the evidence of official witnesses in proof of the alleged conspiracy by accused Nos.1, 2 and 11 with accused Nos.3 to 10 and 12 & 13 Companies.
(2009) 3 SCC CRI.646 in the case of Sudhir
Shantilal Mehta Vs. C.B.I.
The Hon'ble Supreme Court of
India has relied on the evidence placed by the prosecution in proof of the offences committed for the offences discount of cheques, bill discount, bill of exchange and promissory notes- Criminal Conspiracy and Criminal Misconduct by the public servants. The sufficient oral and documentary evidence produced in the 172 Spl.C.C.No.166/2004 said case on the basis of which, accused were convicted for the offences alleged against them.
The facts and circumstances of the said case, no way connected to the present case as there is no agreement between accused Nos.1, 2 and 11 with other accused Nos.3 to 10, 12 and 13 and no illegal act committed by the accused Nos.1, 2 and 11 while sanctioning and enhancing loans in favour of other accused.
(2016) 1 SCC 376 in the case of R.Vasanthi Stanley Vs. State, represented by Inspector of Police, CCB, Chennai.
The observation made on the village documents not claimed by the petitioner as to guarantor, who was bound to repay the loan borrowed from the Bank.
Therefore, the Criminal Petition filed under Section 482 of Cr.P.C. in view of extra ordinary jurisdiction of Hon'ble High Court of Madras were allowed and the Criminal cases filed before the Court were quashed. 173 Spl.C.C.No.166/2004 In the case of CBI Vs. A.Govind Raju in case No.25/11 RC No.1(A)/2000/ACUIV/SPE/CBI Discussed the cases of corruption by a public servant and the magnitude of corruption in public life is incompatible with the concept of a socialist, secular democratic republic. Convict A.Govindraju was sentenced to undergo R.I. for 3 years each and to pay in all Rs.1,00,000/- each, in default further undergo S.I. for 3 months each for the offence under Section 13(2) read with Section 13(1)(c) & (d) of Prevention of Corruption Act, 1988.
The sentence is passed taken into consideration aggravating and mitigating circumstances in the light of settled position of law.
However, the observation made in the above rulings cited by the prosecution are not applicable to the allegations made against accused Nos.1 to 13. Because as pointed out earlier, there is no corroboration in the oral and documentary evidence in proof of alleged Criminal 174 Spl.C.C.No.166/2004 Conspiracy, Forgery, Falsification of documents used as genuine and Criminal Misconduct committed by them.
183. The learned Counsel for accused No.1 submitted both oral and written arguments in proof of defence taken as no offences committed by him as alleged in the charge sheet. It is pointed out, the FIR registered against accused No.1 not based on complaint, non Sanction obtained against him is illegal. Further pointed out the irregularities found in the investigation by the Investigating Officer and no Criminal Misconduct committed by him in view of alleged Criminal Conspiracy with the accused Nos.2 to 13. The admission made by the Bank officials, who are examined as prosecution witnesses pointed out, which supports the defence taken by him as to no pecuniary advantage obtained by corrupt or illegal means and also as of position not abused in any manner as alleged by CBI.
184. In support of the argument, relied on the following Rulings:-
175 Spl.C.C.No.166/2004
AIR 2014 SUPREME COURT 187 in the case of Lalita Kumari Vs. Government of U.P. and others, the Hon'ble Supreme Court of India observed that Registering the case on the basis of source information is uncompromising in law without any preliminary enquiry.
The Hon'ble Supreme Court of India referred Section 154(1) of Cr.P.C. relating to cognizable offences and Police officer has no discretion in the matter in respect of offences specified punishable under Sections 326A, 326B, 354, 354B, 370, 370A, 376, 376A, 376B, 376C, 376D, 376E or Section 509 of Indian Penal Code. But for other cognizable Offences, police has discretion to hold a preliminary enquiry if there is no doubt about correctness of information.
185. Therefore, stated in FIR that on the basis of Source Information registered the case, no preliminary enquiry conducted by Investigating Officer which is improper, as per the observation made by the Hon'ble Supreme Court of India in the above case. Further the Investigating Officer PW42 also admitted that no note made by him about the date of receiving credible or source 176 Spl.C.C.No.166/2004 information either in the book or Station House Register, which indicates no procedure followed by him to conduct the preliminary enquiry, is however, violation of law.
186. The learned Counsel for accused No.1 further relied on the rulings reported in 2010 AIR SCW 1900 in the case of L.I.C. of India and another Vs. Ram Pal Singh Bisen.
The observation made by Hon'ble Supreme Court of India regarding admission of documents even though marked as exhibits, it is the duty has to be discharged to prove the contents of the same. Therefore held that mere admission of documents in evidence does not dispense with its proof.
2007 AIR SCW 2713 in the case of Smt.J.Yashoda v/s Smt.K.Sobha Rani The Hon'ble Supreme Court of India held that the documents in question were photocopies no possibility of said copies being compared with original as same were with another person, since conditions in Section 65(a) of Evidence Act had not been satisfied, documents cannot be accepted as secondary evidence.
177 Spl.C.C.No.166/2004(2009) 3 Supreme Court Cases (Cri) 901 in the case of State of Madhya Pradesh Vs. Sheetla Sahai and Others The observation made regarding decision taken collectively by various authorities which were ad idem in their view in the decision making process, there was nothing to suggest that authorities abused their position or took decision to cause any wrongful gain to themselves or to a third party or for causing wrongful loss to State or to provide pecuniary advantage without any public interest.
Therefore, held if no Criminal Conspiracy the offence under Section 13(1)(d) read with 13(2) of Prevention of Corruption Act, will not attract.
Further discussed that the offence of Criminal Conspiracy can be proved through circumstantial evidence, if no material to establish the Criminal Conspiracy had been hatched no Criminal Misconduct.
AIR 2012 Supreme Court 493 in the case of Sherimon Vs. State of Kerala.
The observation made that for the offence of conspiracy, there must be meeting of minds 178 Spl.C.C.No.166/2004 resulting in decision taken by conspirators regarding commission of crime. No such evidence placed on record, then no offence of Criminal Conspiracy.
1995 Cri.L.J. 4181 (Supreme Court) in the case of B.H.Narasimha Rao Vs. Government of Andhra Pradesh, represented by CBI.
The Hon'ble Supreme Court of India has discussed that accused cannot be convicted under Section 120-B Indian Penal Code only on the ground that he was head of Section of Branch where fraud was alleged to be committed. If no proof placed for the charge under Section 120-B Indian Penal Code against accused other charge lose their roots. 1991 Cri.L.J. 2241 (Gujarat High Court) in the case of Arvind Balashanker Joshi Vs. State of Gujarat.
The discussion made on forgery of documents, if no proof for documents forged by accused produced by prosecution, he cannot be punished under Section 468, 471 and 420 Indian Penal Code, in absence of direct and independent evidence.
179 Spl.C.C.No.166/2004(2010) ACR 51 Supreme Court of India in the case of Md.Ibrahim and Others Vs. State of Bihar and another The Hon'ble Supreme Court of India made discussion on Section 467 and 471 Indian Penal Code, relating to ingredients of forgery. It is held that merely alleging that a person acted fraudulently, it cannot be assumed that he committed an offence under the said Sections.
AIR 2010 Supreme Court 840 in the case of Parninder Kaur Vs. State of U.P. and Another.
The observation made on the allegation made for the offences under Section 420, 467, 468 and 471 Indian Penal Code in the FIR and no dishonest intention or any fraudulent act proved before the Court, then offence under the said charges can be said not proved.
2016 Cri.L.J. 3317 (Karnataka High Court) in the case of N.R.Bhat Vs. State by CBI/SPE, Bengaluru.
The observation made by Hon'ble High Court of Karnataka that if material witness is not examined and report of preliminary investigation by Bank official not produced, the 180 Spl.C.C.No.166/2004 adverse inference can be drawn against prosecution.
Criminal Revision Petition No.708/2010 in the case of J.K.Srinivasa Murthy another Vs. State of Karnataka and another.
The Hon'ble High Court of Karnataka discussed that if Xerox copy of the Report filed and original of it not produced, the said report cannot be based to convict the accused for the alleged charges of forgery.
AIR 2011 Supreme Court 760 in the case of Kalyan Kumar Gogoi Vs. Agnihotri and another.
The Hon'ble Supreme Court of India discussed on evidentiary value of hearsay evidence which is excluded on the ground that it is always desirable, in the interest of justice, to get the person, whose statement is relied upon, into Court for his examination in the regular way, in order that many possible sources of inaccuracy and untrustworthiness can be brought to light and exposed, if they exist, by the test of cross-examination------It is a fundamental rule of evidence under the Indian Law that hearsay evidence is inadmissible.
181 Spl.C.C.No.166/2004AIR 2003 Supreme Court 3039 in the case of S.R.Ramaraj Vs. Special Court, Bombay.
The gist of this ruling is an officer of Bank without any personal knowledge of the transactions in question, deposed on the basis of material on record, his evidence cannot be from his knowledge and necessarily has to be hearsay. Therefore, his evidence cannot be relied on by the Court.
2011 Cri.L.J. 2801 (Kerala High Court) in the case of Rajeevan Aswathy, Pattathanam Kadappakada, Quilon Vs. Superintendent of Police.
The observation made in this case regarding proof of offence under Section 420, 468, 120-B Indian Penal Code, the accused being Bank Manager competent to sanction loan, allegedly obtained pecuniary advantage for co-accused for sanctioning loans on false application and false quotations, loans however, secured by collateral security, the intention to cheat bank cannot be inferred. Further, the Sr.Manager of the Bank, who had conducted pre-sanction inspection and recommended to sanction loans, on the basis after proper enquiry loans sanctioned cannot be said to have sanctioned loans dishonestly and without proper verification.
182 Spl.C.C.No.166/20042012 (2) KCCR 1513 Karnataka High Court in the case of Ismail Khan Shah @ I.K.Shah and Others Vs. State by Central Bureau of Investigation, Bengaluru.
The Hon'ble High Court of Karnataka made an observation that in order to attract offence under Section 420 Indian Penal Code, the prosecution is to establish that the accused had deceived the bank while taking loan or that they had acted dishonestly or fraudulently If no convincing material being placed by prosecution to show that the accused had either given wrong address or the units in question were not in existence, the question of deceiving the bank, when they made the applications for cash credit facility, does not arise.
Further discussed mere non-payment of the loan amount itself cannot be construed as satisfying the ingredients of Section 420 Indian Penal Code. The court cannot infer from the act of accused who had not repaid the loan amount cannot be said that he had committed the offence of cheating.
It is incumbent on the part of prosecution to establish that the accused had deceived the 183 Spl.C.C.No.166/2004 bank while taking loan or that they had acted dishonestly or fraudulently.
2009 AIR SCW 4165 in the case of S.V.L.Murthy Vs. State, Rep.by CBI, Hyderabad.
The Hon'ble Supreme Court of India has discussed that no evidence to show that accused persons being Branch Manager and Accountant of the bank entered into conspiracy with others to cheat the Bank, the prosecution failed to bring on record any evidence of wrongful gain by officers so as to attract Prevention of Corruption Act, 1988 or otherwise, in absence of customers not shown to have wrongful intention when contract as to facility was initiated. Offence, if any, committed under Section 409 for which accused persons were not charged the conviction and sentence of accused for Cheating and Criminal Conspiracy liable to be set aside.
2004 Cri.L.J. 2670 (Allahabad High Court) in the case of State of U.P. Vs. Ganga Sahai Saxena and another.
According to this Ruling, if no report of the audit produced and in absence of observations 184 Spl.C.C.No.166/2004 of auditing party, the ingredients of offence of cheating to make out a case under Section 420 Indian Penal Code missing, acquittal of accused is proper.
2005 Cri.L.J. 4648 (Supreme Court) in the case of K.R.Purushothaman Vs. State of Kerala The Hon'ble Supreme Court of India held that no evidence on record to show agreement between conspirators, then accused held not guilty for the offence of conspiracy under Section 120B of Indian Penal Code.
Further, if property in question neither entrusted nor was under control of accused and he has not obtained for himself or for any other person any valuable thing or pecuniary advantage, he cannot be convicted for the offence under Section 13(1)(c) and (d)of Prevention of Corruption Act, 1988.
(2013) 1 Supreme Court Cases 205 in the case of C.K.Jaffer Sharief Vs. State (through CBI) The Hon'ble Supreme Court of India has held that if prosecution not proved the allegation of dishonest intention of accused to obtain pecuniary advantage, then he cannot be convicted for the offence under Section 13(1)(d) of Prevention of Corruption Act. 185 Spl.C.C.No.166/2004 (2003) 9 Supreme Court Cases 700 in the case of R.Balakrishna Pillai Vs. State of Kerala.
The Hon'ble Supreme Court of India has discussed the essential ingredients of offence under Section 5(2) read with 5(1)(d) of Prevention of Corruption Act, 1988. The observation made regarding requirement of element of mens rea and intention must accompany the culpable act or conduct of the accused - mere intention is not punishable except when it is accompanied by an act or conduct of commission or omission on the part of the accused.
AIR 1990 Supreme Court 1459 in the case of Vijayee Singh and others Vs. State of U.P. The Hon'ble Supreme Court of India discussed on the sections 105, 3, 101 to 104 of Evidence Act and burden of establishing the guilt of accused always is on prosecution and it never shifts. The cardinal principle that the accused is presumed to be innocent unless proved guilty by the prosecution and the accused is entitled to the benefit of every reasonable doubt.
186 Spl.C.C.No.166/2004(1980) 3 Supreme Court Cases 110 in the case of Abdulla Mohammed Pagarkar Vs. State (Union Territory of Goa, Daman and Diu) The observation made by the Hon'ble Supreme Court of India on Sections 420, 468, 471 and 120-B of Indian Penal Code and Section 5(1)(d) of Prevention of Corruption Act. The discussion made regarding the Onus of proof of existence of every ingredient of charge always rests on the prosecution and never shifts on the accused.
(2013) 2 Supreme Court Cases (Cri) 427, (2013) 4 Supreme Court Cases 422 in the case of Sunil Kundu and another Vs. State of Jharkhand.
The observation made in this case that the prosecution cannot draw support from the weakness of the case of accused, if prosecution has not proved its case beyond reasonable doubt adverse inference can be drawn against it.
(2013) 12 Supreme Court Cases 406 in the case of Sujit Biswas Vs. State of Assam.
The Hon'ble Supreme Court of India has referred the observation made in the cases of Hanumanth Govind Nargundkar Vs. State of 187 Spl.C.C.No.166/2004 Madhya Pradesh, State Vs. Mahender Singh Dahiya and Ramesh Harijan Vs. State of Uttarpradesh that in a criminal trail, suspicion no matter how strong, cannot and must not be permitted to take place of proof. -------- The court must ensure, that mis-carriage of justice is avoided, and if the facts and circumstances of a case so demand, then the benefit of doubt must be given to the accused, keeping in mind that a reasonable doubt is not an imaginary, trivial or a merely probable doubt, but a fair doubt that is based upon reason and common sense.
Further referred the observation made in Kali Ram Vs. State of H.P. as another golden thread which runs through the web of the administration of justice in criminal cases is that if two views are possible on the evidence adduced in the case, one pointing to the guilt of the accused and the other to his innocence, the view which is favouarble to the accused should be adopted.
187. The learned Counsel for accused No.2 filed written arguments and pointed out the Sanction Order Ex.P92 issued by competent authority without application of mind. The oral evidence of Bank officials with documents pointed out along with the admissibility of Audit Report 188 Spl.C.C.No.166/2004 Ex.P64 to be considered as observed by Hon'ble High Court of Karnataka in Criminal Petition No.6085/2016 referred with no proof offence placed by prosecution for the offences alleged against accused No.2. In support of arguments, relied on the Ruling reported in (2013) 3 Supreme Court Cases 801 in the case of Joseph John Peter Sandy v/s Veronica Thomas Rajkumar and another. The Hon'ble Supreme Court of India has referred the observation made in State of Bihar Vs. Radha Krishna Singh regarding admissibility of the document. In the said case, it is held that admissibility of a document is one thing and its probative value quite another - these two aspects cannot be combined. A document may be admissible and yet may not carry any conviction and weight or its probative value may be nil......it is further observed that a document may be admissible, but it has to be proved by examining its Author.
188. The learned Counsel for accused No.7 has filed written arguments and pointed out the evidence of prosecution witnesses with documents of housing loan files relating to accused Nos.3 to 9. Further pointed out the 189 Spl.C.C.No.166/2004 signature of accused No.7 not sent for handwriting expert, therefore no proof of his signature find in the loan application in the file Ex.P62. In support of the arguments, relied on the following Rulings:-
(2017) 5 Supreme Court Cases 350 in the case of Central Bureau of Investigation v/s Sadhu Ram Single and Others According to the observation made by the Hon'ble Supreme Court of India if any settlement arrived by the parties, in the non-
compoundable offences, if the continuance of criminal proceedings after the compromise would amount to abuse of process of Court and an exercise in futility since the trial would be prolonged and ultimately, it may end in a decision which may be of no consequence to any of the parties.
(2010) 4 Supreme Court Cases 491 in the case of Life Insurance Corporation of India and another v/s Rampal Singh Bisen.
The observation made by the Hon'ble Supreme Court of India regarding admission of documents even though marked as exhibits, it is the duty has to be discharged to prove the 190 Spl.C.C.No.166/2004 contents of the same. Therefore held that mere admission of documents in evidence does not dispense with its proof.
AIR 1973 Supreme Court 2773 in the case of Kali Ram v/s State of Himachal Pradesh.
The observation made on scope and applicability of statements made to a police officer under Section 162 of Cr.P.C.
AIR 1977 Supreme Court 170 in the case of Rabindra Kumar Dey v/s State of Orissa.
The Hon'ble Supreme Court of India discussed about settled three principles of criminal jurisprudence.
i) the prosecution to prove its case beyond reasonable doubt,
ii) in a criminal trial, the accused presumed to be innocent until he is proved to be guilty,
iii) that the onus of the prosecution never shifts.
AIR 1960 Supreme Court 889 in the case of Jaikrishnadas Manohardas Desai and Another v/s State of Bombay.
The observation made by the Hon'ble Supreme Court of India on proof of offence under Section 409 Indian Penal Code for which 191 Spl.C.C.No.166/2004 it requires to account for the property entrusted, if proved, may in the light of the other circumstances, justifiably lead to an inference of dishonest misappropriation or conversion.
189. The learned Counsel for accused No.11 has pointed out no illegality or irregularity committed by him while functioning as Deputy General Manager in the Regional Office of UBI, at Bengaluru. The accused No.11 had given authority to sanction the Term Loan and enhanced the credit facility comes beyond the limit of Branch Office as per the recommendation sent to the Regional Office. Further pointed out the admissions made by the official witnesses regarding procedure followed by accused No.11 as Deputy General Manager in the Regional Office while considering the recommendation for the loan as proposed by accused No.1 as Branch Manager of Haines Road Branch. Non-application of mind by the competent authority while issuing sanction to prosecute against accused No.11 as per Ex.P93 for the alleged offences mentioned in the charge sheet.
192 Spl.C.C.No.166/2004
190. It is also pointed out how the copy of the Audit Report Ex.P64 is not admissible under Section 65(B) of Evidence Act, the admissibility of the same kept open as per the orders passed by the Hon'ble High Court of Karnataka in Crl.petn.No.6085/2016 dtd.1.9.2016. The lacunas and irregularities of investigation conducted by the Investigating Officer while collecting the documents and also recording the statement of witnesses also mentioned. In support of the arguments, relied on the following Citations:-
AIR 2014 SC 841 in the case of Jasvinder Saini & Ors. Vs. State (Govt. of NCT of Delhi).
The Hon'ble Supreme Court of India made observation on framing of additional charge under Section 302 of Indian Penal Code without adverting to the evidence adduced in a case. The principles of natural justice in judicial process including therein quasi judicial and administrative processes also discussed in detail.193 Spl.C.C.No.166/2004
1997 CRI.L.J. 2377 (Bombay High Court) in the case of State of Maharashtra Vs. Ahmed Gulam Nabi Shaikh and others According to the observation under Section 154 Criminal Procedure Code FIR, not carrying signature or thumb impression of informant, for which no explanation given by officer regarding it, the FIR liable to be rejected.
AIR 2014 SUPREME COURT 187 in the case of Lalita Kumari Vs. Government of U.P. and others, The Hon'ble Supreme Court of India observed that registering the case on the basis of source information is uncompromising in law without any preliminary enquiry. It has referred Section 154(1) of Cr.P.C. relating to cognizable offences and Police officer has no discretion in the matter in respect of offences specified punishable under Sections 326A, 326B, 354, 354B, 370, 370A, 376, 376A, 376B, 376C, 376D, 376E or Section 509 of Indian Penal Code. But for other cognizable Offences, police has discretion to hold a preliminary enquiry if there is no doubt about correctness of information.194 Spl.C.C.No.166/2004
Criminal Appeal No.192/2015 in the case of C.Sukumaran Vs. State of Kerala.
The discussion made that the burden of proving accusation for the offence punishable under Section 13(1) (d) of Prevention of Corruption Act, 1988 is on prosecution with regard to the acceptance of illegal gratification from the Complainant. If there is no evidence to prove the accused had made any demand, the prosecution case fails.
Criminal Appeal No.2720/2013 C/W Criminal Appeal No.2726/2013 in the case of B.Nijalingappa Vs. The State of Karnataka, Lokayukta Police.
The Hon'ble High Court of Karnataka at Dahrwad pointed out the observation made in AIR 1979 SC 1191, in which, discussed on Section 161 and 165A of Indian Penal Code with Section 5(1) (d) clause (2) of Prevention of Corruption Act, 1988 regarding evidentiary value of Complainant in no better position than accomplish after introduction of Section 165A corroboration of material particulars necessity.195 Spl.C.C.No.166/2004
1997 CRI.L.J. 2389 (Madras High Court) in the case of Kalaisamy Nadar Vs. State of Tamil Nadu.
The observation made on testimony of
eye witnesses cogent and consistent,
corroborated with medical evidence and dying declaration recorded by the police officer as well as by the Magistrate in the case of murder under Section 300 Indian Penal Code. It is held that the guilt of the accused proved beyond reasonable doubt, therefore order of conviction is proper.
191. The prosecution alleged the serious offences against the accused Nos.1 to 13 punishable under Section 120-B r/w.420 Indian Penal Code, particularly against accused Nos.3 to 10 offence under Section 468 and 471 Indian Penal Code, against accused Nos.1, 2 and 11 offence under Section 477-A Indian Penal Code and Sec.13(2) r/w.13(1)(d) of Prevention of Corruption Act, 1988. Therefore, it is the duty of the Court to verify whether any proof placed by prosecution as required under the said Sections.
196 Spl.C.C.No.166/2004
192. The offence Criminal Conspiracy punishable under Section 120(B) Indian Penal Code requires proof as required under Section 120(A) Indian Penal Code. According to the said Section, an illegal act by two or more persons entering into an agreement to do or caused to be done by illegal means. Even proviso says no agreement except an agreement to commit an offence shall amount to a Criminal Conspiracy unless some act besides the agreement is done by one or more parties to such agreement in pursuance thereof.
193. But the prosecution has failed to prove ingredients of Criminal Conspiracy required under Section 120(A) Indian Penal Code by corroborating oral and documentary evidence. No material placed to show that the agreement entered between accused Nos.1 to 13 to do an illegal act. The documents discussed above reveal that housing loans sanctioned by accused No.1 after obtaining security and salary certificates of accused Nos.3 to 9 and mortgage of immovable property. The documents of property were admittedly returned to borrowers as all housing loans were cleared and bank also issued settlement 197 Spl.C.C.No.166/2004 certificates. It is already pointed out that the housing loan processed stage to stage by active participation of officials of UBI, Haines Road Branch and finally sanctioned by accused No.1. Likewise, at the Regional Office also loans were sanctioned by accused No.11 as Deputy General Manager after processing the recommendation by different officials sent by the Branch office. Therefore, there cannot be Criminal Conspiracy by accused Nos.1, 2 and 11 with accused Nos.3 to 10 and 12 and 13 Companies.
194. The allegations made against accused Nos.1 to 13 that in view of Criminal Conspiracy while availing different loans from Branch and Regional Office of UBI, all the accused have cheated the Bank. The offence of cheating under Section 420 Indian Penal Code requires proof as per Section 415 of Indian Penal Code which reads as follows:
Cheating .- Whoever, by deceiving any person. Fraudulently or dishonestly induces the person so deceived to deliver any property to any person, or to consent that any person shall retain any property, or intentionally induces the person 198 Spl.C.C.No.166/2004 shall retain any property, or intentionally induces the person Sanction Order 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".
195. The prosecution has failed to prove how and which manner the Bank has processed the housing loans and other loans. Admittedly all the housing loans were repaid by accused Nos.3 to 9 and loans borrowed by accused No.10 were adjusted by way of selling mortgaged immovable properties of his father - M.A.Lakshman situated at Chintamani Though there is some difference in assessing Government and Market value of the properties offered as security to the loans, the amount derived from the sale of immovable property was adjusted towards the loan of accused No.10. Therefore, no cheating or wrongful loss caused to the Bank by the accused Nos.1 to 13.
196. The offence under Section 468 of Indian Penal Code alleged against accused Nos.3 to 10, who were 199 Spl.C.C.No.166/2004 said to be produced forged salary certificates for getting housing loans. But it is not in dispute that accused No.10 is the Managing Director of accused No.12 Company M/s.Sanarco Cold Storage Pvt.Ltd. and accused Nos.3 to 9 are employees of said Company. Therefore, the salary certificates issued in their favour mentioning the nature of work done by them in the said Company and also salary paid to them shown separately cannot be said forged by accused No.10 for the purpose of cheating the Bank.
197. Therefore, the prosecution though alleged the salary certificates produced by accused Nos.3 to 9 issued by accused No.10 as genuine for getting housing loans which are said to be forged and alleged the offence under Section 471 Indian Penal Code. But it has failed to prove the same before the Court with corroborating oral and documentary evidence. Because the Bank officials who have examined before the Court have not stated anything about forged salary certificates used as genuine by accused Nos.3 to 9. Moreover, they have also produced collateral security of immovable property for getting housing loans. 200 Spl.C.C.No.166/2004 Therefore, no proof of offence placed as required under Section 471 Indian Penal Code.
198. The prosecution though alleged the offence under Section 477-A Indian Penal Code, against accused Nos.1, 2 and 11 that they fraudulently processed the housing loan applications in the names of accused Nos.3 to 9 and sanctioned loans without sufficient securities, later the sanctioned amount was fraudulently diverted for other purpose as well as illegal recommendation for enhancement of cash credit facility to cause wrongful loss and to defraud the Bank. However, no proof placed by prosecution regarding falsification of accounts by accused Nos.1, 2 and 11. The evidence of all the Bank officials who were examined before the Court discussed in detail clearly establish that housing loans were processed in the name of accused Nos.3 to 9 by accused No.1 after taking necessary documents. No proof placed in support of diversion of loan amount for other purpose and also later accused Nos.1 and 2 recommended for cash credit limits and accused No.11 sanctioned the same only to 201 Spl.C.C.No.166/2004 cause wrongful loss and defraud the Bank. Because nothing available before Court to establish the intention of accused No.1, 2 and 11 being public servant to cause wrongful loss to the UBI.
199. The Criminal Misconduct by accused Nos.1, 2 and 11 as public servants committed under Section 13(2) read with 13(1)(d) of Prevention of Corruption Act, 1988 alleged against them. The ingredients of Section 13(1)(d) of Prevention of Corruption Act, attracts only whenever a public servant by corrupt or illegal means obtains for himself or for any other person a valuable thing or pecuniary advantage by abusing his official position.
200. Though the prosecution alleged that the Criminal Misconduct committed by accused No.1, 2 and 11 by corrupt or illegal means for pecuniary advantage abusing their official position without verifying the salary certificates sanctioned the housing loans to accused Nos.3 to 9, thereafter, allowed accused No.10 to withdraw the entire loan and divert the said amount in the name of M/s.Sanarco 202 Spl.C.C.No.166/2004 Cold Storage Pvt.Ltd. and M/s.Rajarajeswari Cold Storage Pvt.Ltd., the documents discussed above clearly establish that the housing loans were sanctioned by accused No.1 on the basis of applications submitted by accused Nos.3 to 9 and the loan amount deposited into the account of M/s.Rohini Constructions. It is made out that no documents produced to show the housing loan amount deposited into the account of accused No.10, thereafter, it was used for accused No.12 and 13 Companies. Further the documents reveal that separate loans were sanctioned by Regional Office to accused No.10 in the names of M/s.Narendra Service Station, M/s.Sanarco Cold Storage and M/s.Rajarajeswari Cold Storage Pvt.Ltd.
201. Therefore, I come to conclusion that the prosecution has utterly failed to prove the charges made against the accused Nos.1 to 13 for the offence punishable under Section 120-B r/w.420, 468, 471, 477A of IPC and Sec.13(2) r/w.13(1)(d) of Prevention of Corruption Act, 1988, beyond all reasonable doubt. Hence, in my opinion, the benefit of doubt must be given to accused Nos.1 to 13 203 Spl.C.C.No.166/2004 and they are to be acquitted. Therefore, I proceed to pass the following:-
: ORDER :
Acting Under Section 235(1) of Code of Criminal Procedure 1973, accused No.1 - Byrappa, accused No.2 - Mudanna Mylar, accused No.3 - B.N.Udaya Kumar, accused No.4 - S.Pradeep, accused No.5 - Anjaneya Reddy, accused No.6 - K.V.Bhaskar, accused No.7 - S.N.Jayasimhan, accused No.8 - Shabeir Ahmed, accused No.9 -
D.Ananda Kumar, accused No.10 -
M.L.Narendra Kumar, accused No.11 -
K.Rehman, accused No.12 - M/s.Sanarco
Cold Storage Pvt.Ltd., represented by
Managing Director M.L.Narendra Kumar and accused No.13 - M/s.Rajarajeswari Cold Storage Pvt.Ltd., represented by M.A.Lakshman are hereby acquitted for the offences punishable under Sections 120-B read with Section 420 of Indian Penal Code, Section 468, 471 and 477-A Indian Penal Code and for the offence punishable under Section 13(2) r/w. Section 13(1)(d) of Prevention of Corruption Act, 1988.204 Spl.C.C.No.166/2004
The bail bonds executed by accused Nos.1 to 13 under Section 437(A) of Cr.P.C. shall be in force, till the completion of appeal period.
(Dictated to Judgment Writer, transcribed and computerized by him, corrected, signed and then pronounced by me in the open court today on 14th day of February, 2018.) (S.H.PUSHPANJALI DEVI) XLVI Addl. City Civil and Sessions Judge and Special Judge for C.B.I. Cases, Bengaluru.
ANNEXURE
1. LIST OF WITNESSES EXAMINED ON BEHALF OF THE PROSECUTION :-
C.Ws.
P.Ws. PARTICULARS
P.W.1 S.Jayaraman C.W.6
P.W.2 M.Sasikala C.W.8
P.W.3 Manohar C.W.7
P.W.4 Maruthi Kumble C.W.1
P.W.5 P.S.Vargeesh C.W.5
P.W.6 Ashok Shankar Oulkar C.W.4
P.W.7 Mendonsa C.W.2
P.W.8 Vinayak S.Jog C.W.3
P.W.9 B.L.Shankarappa C.W.9
P.W.10 H.V.Sridhar Bhat C.W.10
P.W.11 J.M.Paramashivan C.W.11
P.W.12 S.K.Mohan C.W.14
P.W.13 N.H.Prabhu C.W.13
205 Spl.C.C.No.166/2004
P.W.14 P.K.Kalyan Raman C.W.15
P.W.15 K.Ramulu C.W.16
P.W.16 V.Elangovan C.W.17
P.W.17 A.N.Kotian C.W.18
P.W.18 Ranganath Kumar A.N. C.W.19
P.W.19 Ravi Gopal Hegde C.W.21
P.W.20 Swaminathan C.W.27
P.W.21 H.J.Bachegowda C.W.24
P.W.22 Manjunath C.W.26
P.W.23 K.Shivanna C.W.34
P.W.24 M.R.Krishnamurthy C.W.36
P.W.25 N.Vijayamma C.W.37
P.W.26 Gurusiddaiah C.W.38
P.W.27 B.N.Prasad C.W.39
P.W.28 Ravi Shetty C.W.40
P.W.29 H.R.Vishwanath C.W.41
P.W.30 S.Duraisamy Reddy C.W.42
P.W.31 Ram Mohan Agarwal C.W.43
P.W.32 P.Rajagopal C.W.28
P.W.33 N.Obalappa C.W.29
P.W.34 Jayasurya C.W.30
P.W.35 N.N.S.Vellaiswamy C.W.31
P.W.36 M.Krisha C.W.22
P.W.37 R.K.Jha C.W.23
P.W.38 K.L.Gopalakrishna C.W.46
P.W.39 Vittal Das Leeladhar C.W.47
P.W.40 T.M.R.Natarajan C.W.12
P.W.41 R.Paul Raj C.W.44
P.W.42 K.Jayakumar Nair C.W.48
P.W.43 B.Suresh Kumar C.W.45
2. LIST OF DOCUMENTS EXHIBITED ON BEHALF OF PROSECUTION :-
EXHIBITS PARTICULARS
Ex.P-1 Account opening form of A-10
Ex.P-2 Another account opening form
206 Spl.C.C.No.166/2004
Ex.P-3 Credit information letter
Ex.P-4 Credit information letter
Ex.P-5 Pre-loan sanction inspection report of A-1
Ex.P-5(a) Signature of A-1
Ex.P-6 Loan process form
Ex.P-6(a) Signature of A-1
Ex.P-6(b) Signature of A-2
Ex.P-7 Confidential information
Ex.P-8 sanction advice
Ex.P-8(a) Signature of A-1
Ex.P-9 Statement of account pertaining to Narendra
Service Station
Ex.P-9(a) Relevant entry
Ex.P-10 Statement of account pertaining to A-12 firm
Ex.P-11 Cheque issued by A-10 as Proprietor of Narendra
Service Station
Ex.P-12 Letter with documents pertaining to creation of
equitable mortgage
Ex.P-13 Valuation report of property of A-13
Ex.P-13(a) Signature of P.W.34
Ex.P-14 Request letter for enhancement of loan by A-10 -
Narendra Service Station
Ex.P-15 Loan processed note
Ex.P-15(a) Signature of A-1
Ex.P-15(b) Signature of A-2
Ex.P-16 Legal opinion obtained by bank
Ex.P-17 Copy of stock statement of Narendra Service
Station
Ex.P-18 sanction letter
Ex.P-18(a) Signature of P.W.12
Ex.P-19 sanction advice
Ex.P.19(a) Signature of Mohan (Deputy Manager) 207 Spl.C.C.No.166/2004 Ex.P-20 5 Copies of letters by bank seeking confidential opinion of account of M/s.Narendra Service Station Ex.P.20(1) Letter pertaining to SBM, Chinthamani Ex.P-21 Copy of confidential opinion of M/s.Narendra Service Station Ex.P-21(a) Signature of Branch Manager, SBM, Chinthamani Ex.P-22 Copy of instruction circular Ex.P-23 sanction register Ex.P-24 Letter given by A-10 for working Capital limit and Term Loan for Sanarco Cold Storage Ex.P-25 Xerox copy of letter given by KSFC Ex.P-26 Loan process note Ex.P-26(a) Signatures of A-1 to (d) Ex.P-26(e) Signatures of A-2 & (f) Ex.P-27 Copy of letter given by KSFC Ex.P-28 Inspection report on M/s.Sanarco Cold Storage Ex.P-28(a) Signature of P.W.41 Ex.P-29 sanction letter Ex.P-29(a) Signature of P.W.30 Ex.P-29(b) Signature of P.W.30 Ex.P-30 sanction advice Ex.P-31 Information letter Ex.P-32 Current account statement of M/s.Sanarco Cold Storage Ex.P-32(a) Relevant entry Ex.P-33 Memorandum of Articles and Association of Rajarajeshwari Cold Storage Ex.P-34 Process note of A-13 Ex.P-34(a) Signature of A-1 208 Spl.C.C.No.166/2004 Ex.P-34(b) Signature of A-2 Ex.P-35 Query note Ex.P-36 Reply by Branch Office to Regional Office Ex.P-37 Clarification given by A-10 Ex.P-38 Reply given by branch to Regional Office Ex.P-39 Second reminder letter Ex.P-40 Copy of reply given by Branch Ex.P-41 New Term Loan proposal for M/s.Rajarajeshwari Cold Storages Pvt. Ltd.
Ex.P-42 Inspection report of A-13 Ex.P-42(a) Signature of P.W.41 Ex.P-43 Process note prepared by Regional Office relating
to M/s.Rajarajeshwari Cold Storages Pvt. Ltd.
Ex.P-43(a) Signature of Deputy General Manager Ex.P-43(b) Signature of P.W.31 Ex.P-43(c) Signature of P.W.40 Ex.P-43(d) Endorsement made by P.W.40 Ex.P-44 Valuation report of properties of A-13 Ex.P-44(a) Signature of P.W.17 Ex.P-44(b) Signature of A.R.Shashikumar Ex.P-45 Register of charge of M/s.Rajarajeshwari Cold Storages Pvt. Ltd.
Ex.P-46 Visit report given by Monitoring Officer Ex.P-46(a) Signature of P.W.28 Ex.P-47 Second visit report Ex.P-47(a) Signature of P.W.29 Ex.P-48 sanction note given by Regional Office relating to
enhancement of loan limit of Narendra Service Station Ex.P-48(a) Signature of P.W.12 209 Spl.C.C.No.166/2004 Ex.P-48(b) Signature of P.W.30 Ex.P-48(c) Signature of Deputy General Manager Ex.P-49 & P- Monthly monitoring reports 50 Ex.P-51 Letter of Acknowledgement for A-13 Ex.P-52 Copy of resolution of A-13 with certificate Ex.P-53 File pertaining to loan account of A-13 Firm Ex.P-53(a) Search report on A-13 firm Ex.P-54 Confidential limit register Ex.P-55 File containing cheques, DDs and vouchers Ex.P-55(a) Cheque (D-119) issued by A-10 for Narendra Service Station Ex.P-55(b) Cheque (D-136) issued by A-10 for Narendra Service Station Ex.P-55(c) Cheque (D-150) issued by A-10 for Sanarco Cold Storage Pvt. Ltd.
Ex.P-55(d) Cheque (D-133) issued by A-10 for Narendra Service Station Ex.P-55(e) UBI cheque No.141354 dated 5.6.2000 (D-110) issued by A-10 for Sanarco Cold Storage Pvt. Ltd. Ex.P-55(f) UBI cheque No.141355 dated 5.6.2000 (D-111) issued by A-10 for Sanarco Cold Storage Pvt. Ltd. Ex.P-56 List of original cheques and vouchers of A-12 firm and Narendra Service Station Ex.P-56(a) Signatures of P.W.19 marked in D-92,93 and 106 to (c) during cross examination, kept in Ex.P-55 Ex.P-57 Housing loan file of A-4 Ex.P-57(a) Signature of A-1 Ex.P-57(b) Signature of A-2 Ex.P-58 Housing loan file of Chandrashekar Patil Ex.P-58(a) Signature of A-1 Ex.P-58(b) Signature of A-2 Ex.P-59 Housing loan file of A-8 210 Spl.C.C.No.166/2004 Ex.P-59(a) Signature of A-1 Ex.P-59(b) Signature of A-2 Ex.P-60 Housing loan file of A-5 Ex.P-60(a) Signature of A-1 Ex.P-60(b) Signature of A-2 Ex.P-61 Housing loan file of A-6 Ex.P-61(a) Signature of A-1 Ex.P-61(b) Signature of A-2 Ex.P-62 Housing loan file of A-7 Ex.P-62(a) Signature of A-1 Ex.P-62(b) Signature of A-2 Ex.P-63 Housing loan file of A-3 Ex.P-63(a) Signature of A-1 Ex.P-63(b) Signature of A-2 Ex.P-64 Audit report of Sanarco Cold Storage Pvt. Ltd. Ex.P.64(a) Annexure-5 of Ex.P.64 relates to Term Loan sanctioned by DGM for Rajarajeshwari Cold Storage Pvt. Ltd.
Ex.P.65 Recommendation letter along with credit report of Narendra Kumar Ex.P.66 Letter of clarification dated 8.12.1999 for enhancement of loan for M/s.Narendra Service Station Ex.P.66(a) & Signatures of A-1
(b) Ex.P.67 to Covering letter addressed to Inspector of Police, P.74 CBI by Branch Manager with regard to forwarding of original documents and correspondence file of Term Loan of Rs.50 lakhs to M/s.Rajarajeshwari Cold Storage Pvt. Ltd, housing loans of A-3 to A-9 and Sanarco Cold Storage Ex.P.67(a) Signatures of P.W.13 to P.74(a) 211 Spl.C.C.No.166/2004 Ex.P.75 Bank certificate dated 3.1.2003 Ex.P.75(a) Signature of P.W.13 Ex.P.76 Instruction Circular issued by UBI, Central office dated 25.2.1984 Ex.P.77 Covering letter addressed to I.O by Branch Manager, SBI, Sadashivanagar Branch, Bangalore Ex.P.77(a) Signature of Ranganath, Branch Manager, Sadashivanagar Branch, Bangalore Ex.P.78 Statement of P.W.22 (C.W.26) dated 10.2.2003 recorded by I.O u/S.161 Cr.P.C marked in cross examination by P.P. Ex.P.79 Covering letter with documents produced by P.W.23 Ex.P.79(a) Signature of P.W.23 Ex.P.80 Letter by Secretary of Primary Co. and Rural Development Bank, Chintamani to CBI Ex.P.80(a) Signature of P.W.25 Ex.P.81 Assessment extract pertaining to property No.2356 of A-13 issued by CMC, Chintamani Ex.P.82 Copy of Assessment of list of buildings and lands pertaining to property No.2356 Ex.P.83 Certified copy of document S.R.No.1784/01-02 Ex.P.84 Particulars of loan amount pertaining to M/s.Sanarco Cold Storage (P) Ltd Ex.P.85 True copy of current account opening form for firms by Accused no.10 Ex.P.86 Certified copy of A/c extract pertaining to account No.SIB-5546 of Narendra Service Station Ex.P.87 Certified copy of a/c extract of A/c.No.5507 of Narendra Service Station 212 Spl.C.C.No.166/2004 Ex.P.88 Letter of details of statement of account of A-10 by Manager to I.O (CBI), P.W.42 Ex.P.88(a) Signature of P.W.35 Ex.P.89 Transfer book for the day dated 28.9.1999 (marked subject to objection raised for A-1) Ex.P.90 Xerox copy of bank guarantee Ex.P.91 Covering letter dated 24.4.2003 with Xerox copies of documents relating to M/s.Chaitra Chits Pvt.
Ltd. by Manager, Bank of India
Ex.P.92 Sanction Order of A2 (7 sheets)
Ex.P.92(a) Signature of P.W.38
Ex.P.93 Sanction Order of A-11 (5 sheets)
Ex.P.93(a) Signature of P.W.39
Ex.P.94 FIR
Ex.P.94(a) Signature of P.W.42
Ex.P.95 Notification of Govt. of Karnataka dated
15.3.2002
Ex.P.96 Letter dated 26.11.2002 with regard to account
files of accused no.12, 13 - firms and Narendra Service Station Ex.P.97 Particulars of cheques of M/s.Narendra Service Station, A-12 and 13 firms Ex.P.98 Letter of SBM, Chintamani dated 19.4.2003 with true copies of particulars of account of M/s.Narendra Service Station Ex.P.99 Letter dated 26.4.2003 of Karnataka State Co-
operative Apex Bank Limited Ex.P.100 Letter from IOCL dated 21.4.2003 with Xerox copies of details of products 213 Spl.C.C.No.166/2004 Ex.P.101 File pertaining to Rajarajeshwari Cold Storage Ex.P.102 File pertaining to Sanarco Cold Storage Ex.P.103 File pertaining to Rajarajeshwari Cold Storage Ex.P.104 Letter of A-10 with Xerox copies of documents for mortgage by deposit of title deeds (10 sheets) Ex.P.105 File pertaining to Narendra Service Station
3) LIST OF EXHIBITS MARKED ON BEHALF OF ACCUSED Nos.1 to 13:-
EXHIBITS PARTICULARS Ex.D-1 Letter dated 11.6.2002 issued by UBI, Haynes Road Branch to A-4 Ex.D-2 sanction advice (in Ex.P.57) Ex.D-3 Copy of memorandum of deposit of title deeds (in Ex.P.57) Ex.D-4 Written contents in page no.45 (in Ex.P-57) Ex.D-5 Application for housing loan by Chandrashekar Patil (in Ex.P.58) Ex.D-6 sanction advice (in Ex.P.58) Ex.D-7 Copy of memorandum of deposit of title deeds (in Ex.P.58) Ex.D-8 Housing loan account of Chandrashekar Patil (in Ex.P.58) Ex.D-9 sanction advice (in Ex.P.59) Ex.D-10 Letter dated 7.8.2001 by A-4 to Manager, UBI (in Ex.P.57) Ex.D-11 Carbon copy of letter of payment schedule dated 8.11.2001 to A-4 (in Ex.P.57) 214 Spl.C.C.No.166/2004 Ex.D-12 Letter dated 30.1.2001 by Branch Manager to A-4 (in Ex.P.57) Ex.D-13 Letter dated 24.3.2001 by A-4 to the Manager, UBI (in Ex.P.57) Ex.D-14 Letter of sanction of housing loan to A-5 dated 29.11.2003 issued by Union Bank Ex.D-15 Xerox copy of settlement certificate dated 9.9.2004 Ex.D-16 Statement of account no.10768 of A-7 (in Ex.P.62) Ex.D-17 Letter dated 25.3.2002 addressed to Manager, UBI by A-10 (in Ex.P.62) Ex.D-18 Letter of sanction of housing loan to Anand Kumar.D dated 3.12.2003 Ex.D-19 Settlement certificate dated 15.4.2009 relates to A-3 Ex.D-20 Xerox copy of the Instruction circular by UBI, Central Advances Department Ex.D-21 Terms and conditions forming part of sanction advice dated 16.12.1999 (marked in Ex.P.19) Ex.D-22 Relevant entry in statement of account of Narendra Service Station enclosed to the letter of KGB - Ex.P.79 Ex.D-23 Copy of Instruction Circular issued by M.D. and Chairman of Central Vigilance Department, UBI Ex.D-24 Copy of EC of property of M.A.Lakshman from 1.4.1960 to 15.11.2000 215 Spl.C.C.No.166/2004 Ex.D-25 Xerox copy of tax receipt dated 22.9.2000 Ex.D-26 Relevant entry in statement from 1.9.2000 to 30.9.2000 of Sanarco Cold Storage Pvt. Ltd marked in Ex.P.32 Ex.D-27 Relevant portion of statement of P.W.6 recorded u/S.161 Cr.P.C.
Ex.D-28 Statement of Excess beyond 10% Excess Powers to be submitted to RO/ZO/GM(c)/ED/ MD/MDM/Board Ex.D-29 Letter of Statutory branch audit report of UBI, Haynes Road Branch, Bangalore dated 15.4.2000 by Chartered Accountant with enclosures (S.H.PUSHPANJALI DEVI) XLVI Additional City Civil and Sessions Judge and Special Judge for CBI Cases, Bengaluru.