Madras High Court
State Rep. By vs M.R.Natarajan on 2 February, 2012
Author: R.Mala
Bench: R. Mala
IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED: 02.02.2012 CORAM: THE HONOURABLE MS. JUSTICE R. MALA Criminal Appeal No.1454 of 2003 State rep. by Inspector of Police CBI/SCB/Chennai. .. Appellant/Complainant vs. 1.M.R.Natarajan 2.S.Xavier Moni .. Respondents/A1 and A2 Prayer:Criminal Appeal filed under Section 378 Cr.P.C. against the acquittal of Judgment dated 03.01.2003 made in C.C.No.6 of 1997, on the file of the Special Court, Chennai. For Appellant : Mr.N.Chandrasekaran Special Public Prosecutor for C.B.I.cases For R1 and R2 : Mr.B.S.Jhothiraman J U D G M E N T
Challenging the judgment of acquittal dated 03.01.2003 made in C.C.No.6 of 1997 by the learned Principal Special Judge for C.B.I. Cases, Chennai., the State has preferred this appeal.
2.The case of the prosecution is as follows:
(i) P.W.32-Shivaji, Inspector of Police, C.B.I., E.O.W., Chennai has laid a final report against A1 and A2/respondents herein for the alleged offences punishable under Sections 120B read with 420, 467, 468, 471 and 477A IPC and Section 5 (2) read with 5(1)(d) of P.C. Act, 1947.
(ii)A1 was functioning as a Dealer and A2 was an Officer in Foreign Exchange Department, Bank of India, Main Branch at Chennai. During the period between 1980 and 1981, first accused as a Dealer and second accused as an officer, purchased and sold foreign currency. The case of the prosecution is that during that period, no interbank foreign transaction between Lakshmi Vilas Bank and Bank of America and that A1 and A2 have fabricated the documents and caused loss to the tune of Rs.6,22,282.48 to the Bank. Therefore, P.W.1 has accorded sanction for prosecuting A1 and A2/respondents herein and gave Ex.P1-sanction order.
(iii)P.W.2-Jagannathan, P.W.3-Gopalakrishnan and P.W.5-Sethumadhavan rao are Officers of the Lakshmi Vilas Bank. They deposed that there was no such sale and purchase of foreign currency with Bank of India for purchasing 1,55,000 and 5,00,000 U.S. Dollars to the tune of as per the documents under Exs. P7 and P11. P.W.4-M.S.Govindan was working as Special Assistant, Accounts Section, Foreign Exchange Department, Lakshmi Vilas Bank, stated that as per the entries in Ex.P12, dated 15.4.1981, there was no forward purchase for 50,000 U.S. Dollars from Bank of India by Lakshmi Vilas Bank.
(iv)P.W.6-Mohandoss and P.W.7-Uma Srinivasan, who were working in Bank of America during that period also deposed that there was no contract on 31.01.1981 between Bank of India and Bank of America. P.W.8 was a partner of M/S.G.A.Vasanth Exchange and P.W.9-Hari Krishnan was working as an Agent in M/S.V.Chandar and sons. They also deposed that there was no such transaction. As soon as the prosecution has submitted that there was no interbank for dealing during that period, A1 and A2 conspired themselves and in order to conceal the actual foreign exchange position, A1 and A2 gave a false sales purchase to the various banks. As a result, there was a loss to the tune of Rs.6,22,282.48.
(v)The Special Court after following the procedure, framed 12 charges. Since the accused pleaded not guilty, considering the evidence of P.W.1 to P.W.32 and Exs.P1 to P226, acquitted the accused stating that the sanction accorded by P.W.1 is not in accordance with law and the documents alleged to be marked to show that there was a fictitious transaction and there was no interbank between Bank of India with Lakshmi Vilas Bank and Bank of America, were not original. Further, Original documents were not marked and copies of documents alone had been produced and no reason was assigned why originals were not produced before the Court. It is also further held that the author of the documents was not examined to prove the genuineness of the document. Furthermore, investigating Officer has not followed the procedure for seizing the documents and he has not preferred any Seizure mahazar and recovery mahazar and hence, the documents produced before the Court had not proved in accordance with law. Hence, the trial Court had given benefit of doubt in favour of the accused and acquitted the accused.
3.Challenging the order of acquittal, Mr.N.Chandrasekaran, the learned Special Public Prosecutor submitted that P.W.1 is a competent person to accord sanction. Admittedly A1 is a dealer in-charge of the Foreign Exchange Department and A2 is an officer in-charge. During their tenure, they fabricated and produced false purchase register to various banks, thereby the Bank of India has suffered a huge loss. Hence, P.W.1 has given sanction order for prosecuting the respondents herein. It is not hit by any provision of law. To substantiate his arguments, he relied upon the decision reported in (1991) 3 SCC 655 (K.Veeraswami v. Union of India and others) and AIR 2007 SC 1274 (Parkash Singh Badal and another v. State of Punjab and others). He further submitted that each and every documents were produced through the persons, who well acquaintance with the same and they were also examined. The Special Court had overlooked the fact that witnesses from Lakshmi Vilas Bank, namely, P.W.2 to P.W.6 have deposed that there was no transaction at all as reflected in the records of Bank of India with Lakshmi Vilas Bank and the same has not been properly considered by the learned Special Judge. He further submitted that learned Special Judge has not considered the evidence of P.W.8 & P.W.9 and erroneously drawn adverse inference against the prosecution on the non-production of the reports of P.W.28-Narayanaswamy. On the basis of the report submitted by P.W.27 and P.W.28, FIR has been registered and that factum has not been considered by the Special Court. The learned Special Judge has overlooked the fact that the alleged transactions between Bank of India, Lakshmi Vilas Bank and Bank of America have been denied by the officials of the Said Banks which go to prove the falsity of the transactions and participation of the respondents 1 and 2 in creating the false records. Hence he submitted that those documents are clearly proved that after investigating the matter, P.W.27 and P.W.28 filed the reports under Exs.P217 to P224, which clearly proved that the falsification of the records made by the respondents 1 and 2 and that factum has not been considered by the learned Special Judge. Therefore, the accused are guilty of the charges levelled against them and it has clearly proved by the oral and documentary evidence. Hence, he prayed for allowing of the appeal.
4.Resisting the same, Mr.B.S.Jothiraman would submit that none of the original documents have been filed before the Special Court. The Special Court has correct in held that P.W.1 is not a competent person to accord sanction for prosecution, since P.W.1 and P.W.2 are bank employees, only Board of Directors is an appointing authority and they alone accord sanction for prosecution. But the Board has authorised Chairman of the Board for appointment. So that Chairman is a competent person to accord sanction. Here, P.W.1 was not a Chairman and he was working as General Manager of Bank of India. In his cross-examination, he stated that the power was given to the Chairman and in his turn it was delegated to the General Manager. But the Power of attorney deed has not been filed. That factum has been considered by the Special Court and hence, the Special Court is correct in held that sanction is not accorded in accordance with law.
5.The second limb of argument advanced by the learned counsel for the respondents is that all the documents filed by the prosecution are only a carbon copy and office copy and P.W.32- investigating officer is failed to explain how he got the documents. Neither the documents were seized under Seizure mahazar nor under recovery mahazar. P.W.32 fairly conceded that he has not recovered the documents either under Seizure mahazar or under recovery mahazar. He further submitted that the documents were not marked through the persons, who are author of the documents. Furthermore, respondents herein has filed petitions in Crl.M.P. Nos.1312 of 1992 and 240 of 1993 under Section 91 of Cr.P.C. for production of the documents. But the documents had not been produced before the Special Court. So the Special Court considered all the aspects and drawn adverse inference against the prosecution. He further submitted that no document would show that who authorised and constituted the Committee for scrutinising the records. Since the prosecution failed to prove the guilt of the accused beyond reasonable doubt, benefit of doubt given in favour of the respondents 1 and 2 and they are acquitted. Hence, the order of acquittal has not suffered any irregularity and illegality. He further submitted that the burden is heavily upon the prosecution, since the respondents were acquitted. So they have to prove the case beyond reasonable doubt. He further submitted that unless the judgment of the trial Court is perverse, it can be set aside, if two views are possible, the view favouring the accused to be taken into consideration. But here, the prosecution miserably failed to prove the guilt of the accused beyond reasonable doubt. Hence he prayed for the dismissal of the appeal.
6.Considered the rival submissions made on both sides and the materials available on record.
7.Now this Court has to decide whether P.W.1 is a competent person to accord sanction for prosecuting the respondents here? At this juncture, it is appropriate to consider the evidence of P.W.1 and Ex.P1-sanction order. P.W.1 was working as General Manager of Bank of India. In his evidence, he stated that General Manager is the authority to appoint and remove the officers of the Bank. He issued Ex.P1 sanction order to prosecute the respondents 1 and 2. P.W.1 in his cross-examination, he fairly conceded that there were four General Managers and he was in-charge of Personal and Operation. There is a General Power of Attorney given by the Board to the Chairman to grant sanction. C.B.I. Inspector never asked him to show the General power. The perusal of the Power will disclose about the General Manager's power to grant sanction. He denied the suggestion, which was posed to him that he has no power to grant sanction. He also stated that he did not remember whether the Board has given any specific directions in the power to grant sanction for prosecution. In page-24 of his cross-examination in the pleadings set, it is stated as follows:
" The power was given to the Chairman and in his turn it was delegated to the G.M. Power of attorney is the vital document to show the powers of the G.M. The sanction order is not drafted by me. I have not gone through the provision of the P.C.Act, before granting sanction."
The above deposition of P.W.1 stated that on the basis of the power of attorney given to him he has accorded sanction, but the power has not been placed neither before the investigating agency nor before the Special Court.
8.At this juncture, it is appropriate to consider the decisions relied upon by the learned Special Public Prosecutor (CBI cases) appearing for the appellant reported in (a) (1991) 3 SCC 655 (K.Veeraswami v. Union of India and others) in which, it is held as follows:
"No sanction for prosecution of the appellant under Section 6 was necessary since he had retired from the service on attaining the age of superannuation and was not a public servant on the date of filing the charge-sheet.
The competent authority has to examine independently and impartially the material on record to form his own opinion whether the offence alleged is frivolous or vexatious. The competent authority may refuse sanction for prosecution if the offence alleged has no material to support or it is frivolous or intended to harass the honest officer. But he is duty bound to grant sanction if the material collected lend credence to the offence complained of. When a public servant is prosecuted for an offence which challenges his honesty and integrity, the issue in such a case is not only between the prosecutor and the offender, but the State is also vitally concerned with it as it affects the morale of public servants and also the administrative interest of the State. The discretion to prosecute public servant is taken away from the prosecuting agency and is vested in the authority which is competent to remove the public servant. The authority competent to remove the public servant would be in a better position than the prosecuting agency to assess the material collected in a dispassionate and reasonable manner and determine whether sanction for prosecution of a public servant deserves to be granted or not.
The competent authority before granting sanction has to apply its mind and be satisfied about the existence of a prima facie case for prosecution of the public servant on the basis of the material placed before it. "
(b) AIR 2007 SC 1274 (Parkash Singh Badal and another v. State of Punjab and others) in para-52 and 53, it is held as follows:
"52.The sanctioning authority is not required to separately specify each of the offence against the accused-public servant. This is required to be done at the stage of framing of charge. Law requires that before the sanctioning authority materials must be placed so that the sanctioning authority can apply his mind and take a decision. Whether there is an application of mind or not would depend on the facts and circumstances of each case and there cannot be any generalized guidelines in that regard.
53.The sanction in the instant case related to offences relatable to Act. There is a distinction between the absence of sanction and the alleged invalidity on account of non-application of mind. The former question can be agitated at the threshold but the latter is a question which has to be raised during trial. "
The above citations are not applicable to the facts of the present case. Here, admittedly, Chairman is a sanctioning authority, but the Chairman has not accorded the sanction. But he delegated the powers to the General Manager. Except the CBI report and disciplinary authority report, he has not seen any other documents before according sanction. So it shows that P.W.1 without applying his mind, accorded sanction. So the sanction is not in accordance with law. In para-67 of the Judgment, that factum has been considered by the Special Court by relying upon several decisions and came to the conclusion that P.W.1 is not a competent person to accord sanction. So I do not find any reasons warranting interference in respect of sanction. It is a well settled principle that once sanction is not in accordance with law, entire criminal proceedings will be vitiated.
9.The learned Special Public Prosecutor for C.B.I. cases has relied upon the decision reported in 2002 SCC (cri) 1734 (Mohd. Khalid v. State of West Bengal), in para-17, it is held as follows:
"17. .. .. The elements of a criminal conspiracy have been stated to be: (a) an object to be accomplished, (b) a plan or scheme embodying means to accomplish that object, (c) an agreement or understanding between two or more of the accused persons whereby they become definitely committed to co-operate for the accomplishment of the object by the means embodied in the agreement, or by any effectual means, and (d) in the jurisdiction where the statute required an overt act. The essence of a criminal conspiracy is the unlawful combination and ordinarily the offence is complete when the combination is framed. Law making conspiracy a crime, is designed to curb immoderate power to do mischief which is gained by a combination of the means. The encouragement and support which co-conspirators give to one another rendering enterprises possible which, if left to individual effort, would have been impossible, furnish the ground for visiting conspirators and abettors with condign punishment. The conspiracy is held to be continued and renewed as to all its members wherever and whenever any member of the conspiracy acts in furtherance of the common design. .. .. "
But the above citation is not applicable, because there is no evidence to show that accused have conspired together to commit such an illegal act by causing loss to the Bank. As already discussed above, the prosecution has failed to prove that the Bank has sustained loss. Hence, the above citation is not applicable to the facts of the present case.
10.The learned Special Public Prosecutor would submit that the Special Court has committed an error in discarding the documents filed by the prosecution stating that no reason has been assigned for non-filing of the original documents.
11.At this juncture, it is appropriate to consider Sections 61 to 63 of the Indian Evidence Act, which are as follows:
"61.-Proof of contents of documents--
The contents of documents may be proved either by primary or by secondary evidence.
62.-Primary evidence-- Primary evidence means the document itself produced for the inspection of the court.
Explanation 1. Where a document is executed in several parts, each part is primary evidence of the document:
Where a document is executed in counterpart, each counterpart being executed by one or some of the parties only, each counterpart is primary evidence as against the parties executing it.
Explanation 2. Where a number of documents are all made by one uniform process, as in the case of printing, lithography, or photography, each is primary evidence of the contents of the rest; but, where they are all copies of a common original, they are not primary evidence of the contents of original."
Admittedly, no original documents were filed before the Special Court to prove that the respondents herein have colluded together and fabricated, concocted and created the false documents with an intention to cheat the Bank of India. Prosecution also filed the Bank documents such as debit vouchers, the letter of purchase contract, daily position sheet of Lakshmi Vilas Bank, Bill of exchange etc. But all of them are carbon copies, xerox copies and not original. So it is not a primary evidence as contemplated under Section 62 of the Evidence Act. Section 63 deals with secondary evidence. Section 65 shows that under what circumstance, the documents/secondary evidence have been relied upon.
12.Section 63 of the Indian Evidence Act is extracted hereunder:
"Section 63. Secondary evidence: - Secondary evidence means and includes: (1)Certified copies given under the provisions hereinafter contained;
(2)Copies made from the original by mechanical processes, which in themselves ensure the accuracy of the copy, and copies compared with such copies;
(3) Copies made from or compared with the original;
(4) Counterparts of documents as against the parties who did not execute them;
(5) Oral accounts of the contents of a document given by some person who has himself seen it."
As per Section 65 of the Indian Evidence Act, secondary evidence may be given of the existence, condition or contents of a document in the following cases, which is as follows:
(a) When the original is shown or appears to be in the possession or power ( of the person against whom the document is sought to be proved, or of any person out of reach of, or not subject to, the process of the court, or of any person legally bound to produce it, and when, after the notice mentioned in section 66, such person does not produce it;
(b) When the existence, condition or contents of the original have been proved to be admitted in writing by the person against whom it is proved or by his representative in interest;
(c) When the original has been destroyed or lost, or when the party offering evidence of its contents cannot, for any other reason not arising from his own default or neglect, produce it in reasonable time;
(d) When the original is of such a nature as not to be easily movable;
(e) When the original is a public document within the meaning of section 74;
(f) When the original is a document of which a certified copy is permitted by this Act, or by any other law in force in [India] to be given in evidence;
(g) When the originals consist of numerous accounts or other documents which cannot conveniently be examined in court, and the fact to be proved is the general result of the whole collection.
In case (a), (c) and (d), any secondary evidence of the contents of the documents is admissible.
In case (b), the written admission is admissible.
In case (e) or (f), a certified copy of the document, but no other kind of secondary evidence, is admissible.
In case (g), evidence may be given as to the general result of the documents by any person who has examined them, and who is skilled in the examination of such documents.
But admittedly, none of the grounds has been mentioned by the prosecution as to why they are not in a position to file the original documents before the Special Court. That factum has been correctly considered by the Special Court.
13.Mr.N.Chandrasekaran, learned Special Public Prosecutor (CBI cases) also relied upon the decision reported in AIR 1989 SCC 702 (Prithi Chand v. State of Himachal Pradesh) and submitted that marking of carbon copy is an admissible evidence in view of Section 32 of Evidence Act, being primary evidence within explanation 2 of Section 62 of Evidence Act. In para-4, it reads as follows:
"4. .. .. Section 32 of the Evidence Act provides that when a statement, written or verbal, is made by a person in the discharge of professional duty whose attendance cannot be procured without an amount of delay, the same is relevant and admissible in evidence. Besides, since one carbon copy was made by one uniform process the same was primary evidence within the meaning of explanation 2 to Section 62 of the Evidence Act. Therefore the medical certificate Ex. P-E was clearly admissible in evidence. That apart, there is strong, reliable and dependable evidence of the prosecution witnesses which clearly proves that the prosecutrix was raped by the appellant."
In the above citation, it was held that the medical certificate was prepared by one Dr.Vedwa and she was not examined as witness before the Court. P.W.2-Dr.Kapila, who was conversant with her handwriting and signature, he having worked with her for about two years, was examined. In the case on hand, it is interbank communication and registers were maintained by the Bank concerned and Agents concerned. But, none of the witnesses were assigned any reasons for non-filing of the original documents. The prosecution also failed to assign reason as to why they are not examined the author of the documents. In such circumstances, the above citation is not applicable to the facts of the present case.
14.It is appropriate to consider the evidence of P.W.32-Investigating Officer, in his evidence, he stated that in the list of documents, which are filed in this case, did not contain the search list, seizure memo or recovery mahazar, even though he seized so many documents.
15.Exs.P2 to P14 were marked through P.W.2-Jagannathan, but he is not an author of the documents. P.W.4-M.S.Govindan, who was working as Special Assistant, Lakshmi Vilas Bank, written Ex.P12, a ledger form from 20.01.1981 to 23.01.1981 maintained by Lakshmi Vilas Bank and counter signed by P.W.3-P.N. Gopalakrishnan, who was an Officer in Lakshmi Vilas Bank. P.W.5-Sethu Madhavan Rao, who joined as a Clerk in Lakshmi Vilas Bank, stated that Ex.P11 is a reply letter, dated 25.08.1981, sent to Bank of India, in which, it was stated that there was no forward purchase contract for 1,55,000 U.S. Dollar. Ex.P11 is a reply letter to Ex.P5 letter, dated 21.08.1981. But the original has not been seized from the Bank of India. So Exs.P2 to P14 have not been proved in accordance with law. To prove there was a malpractice in respect of transaction between Bank of India and Bank of America. Officers from Bank of America have also been examined as P.W.6 Mohandoss and P.W.7-Umasrinivasan, through whom Exs.P15 to P24 were marked. They also deposed that there was no such interbank transaction.
16.It is pertinent to note that investigating officer has stated that neither he seized the documents under seizure mahazar nor under the recovery mahazar. Ex.P218 is the report submitted by P.W.28 in respect of falsification of the records in Foreign Exchange transaction, Madras Branch. Admittedly, there was no reason has been assigned as to why the original reports were not forwarded to register the case by C.B.I. Authorities. The basic documents for preparing the reports under Exs.P217 to P224 were not marked before the Court and they have not proved in accordance with law. Only xerox copies and carbon copies alone have been marked and no reason has been assigned as to why the original documents were not seized and marked before the Special Court. As already stated that as per Section 65 of the Indian Evidence Act, it has provided on what circumstance, the secondary evidence has been let in. But admittedly, no reason has been assigned either by the investigating agency or by the person through whom those documents have been marked.
17.At this juncture, it is appropriate to consider the evidence of P.W.27. It is pertinent to note that P.W.27-M.R.Krishnan, was working in Foreign Exchange Department of Madras main branch from 1966 to 1982. In his chief-examination, he stated that the Department, which deals with exports and imports, also sends returns and reports to Reserve Bank of India and the Zonal office of Bank of India. He was also working as an Officer in-charge of Foreign Exchange Department from 1977 to 1981. During the said period, he was worked in various sections like exports, imports, contracts returns and remittance. He was the dealer up to 31.5.1981. In his evidence, he fairly conceded that a probe was done by Narayanaswamy in respect of the foreign exchange transaction for the period between January 1980 and June 1981. He further submitted that he did not know whether there was any order in writing given to Narayanaswamy, who asked P.W.27 to assist him. He gone to the extent of saying that he did not know who choose P.W.31-M.N.Gopinath, an Officer of the Bank, who assisted P.W.28-Narayanaswamy. P.W.27, in his chief-examination, he stated as follows:
" .. .. The Zonal Manager Mr.P.S.Santhanam, directed D.Narayanaswamy, to investigate the matter for the period from 01.01.1980 to 30.06.1981. A committee was formed for investigation, Mr. D.Narayanaswamy was the head of the committee. I was instructed by the Zonal Manager to assist him. M.N.Gopinath, an officer, Bank of India was also assisting D.Narayanaswamy as per Zonal Manager's instructions. The committee was going through the papers and records of the bank. The committee has given a series of reports., to the Zonal Manager. During the enquiry, we found out certain false contracts entered into in the books of accounts. .. .."
P.W.27, in his cross-examination, he stated as follows:
" .... The probe done by Narayanaswamy related to the period January 1980 to June 1981. This is the period of the probe. I do not know whether there was any order in writing given to Narayanaswamy. Narayanaswamy asked me to assist him. I do not know who has chosed Mr.Gopinath. I do not know who fixed the period of probe. I do not know whether any other person assisted Mr.Narayanaswamy in this probe. Whatever documents we have seen during the probe were mentioned in the report. The copies of the document were also enclosed with the report. .."
P.W.27, in his cross-examination, his candid admission is that they were not mentioned in Exs.P217 to P222 that they have perused the notes and files during the probe. He was not aware of 30 million pound swap transaction in April 1980 with the approval of the Assistant General Manager, Southern Region and he is not aware whether the then Manager Hemmady has written a letter on 11.07.1980 confirming the approval of the AGM to the transactions. Further, he did not question A1 regarding the irregularity mentioned in Exs.P217 to P222. These reports have not been signed by P.W.27. All reports have been signed by Narayanaswamy, who was examined as P.W.28.
18.P.W.28-Narayanaswamy was working as Accountant in Madras Main Branch from 01.02.1980 to the middle of August 1981. In his chief examination, he stated that he submitted the reports under Exs.P217 to P224 in respect of irregularities in the Foreign Exchange transaction during the period January 1980 to 30.06.1981. In his cross-examination, he fairly conceded that he did not remember that whether there is any written letter appointing himself and two others to probe into the foreign exchange deals. It is further stated that the Manager Mr.Hemmady asked them to investigate the deals. It is some times in July 1980, they started the dealings. During the period, they did not maintain any diary. Whatever records they have seen, they enclosed those records with reports. Apart from the Manager, no other persons instructed to probe the deal. He did not see any auditors report in respect of the foreign exchange dealings for the year 1980. If there is any loss, it would have been reflected in the auditors report. As per the register, the profit shown for the above period is Rs.3,79,523.09. In page-3 of the sterling position book from 16.5.1979 to 26.5.1980, an observation is made as "cable balance, as on every Friday only received". He fairly conceded that the observations have been signed either by Manager or by the Accountant. A book from 10.6.1981 to 23.5.1983 was maintained by foreign exchange department particularly the dealer and he did not know who made the entry in the register. At page-10 of the register, P.W.27 have signed and checked the entries. At page-22 also, he made a sign. While considering the entire deposition of P.W.28, it would clearly prove that either he stated that he was not definite or not known about the correct position of the transactions. In such circumstances, the evidence of P.W.28 is not trustworthy and not reliable. Admittedly, neither the document nor scrap of papers were filed to show that during that period, the said Banks suffered a loss in their foreign Exchange transactions.
19.P.W.28 in his cross-examination, he stated that the reports Exs.P217 to P224 were drafted by three of them, and the conclusions therein are their joint conclusions. It is not a conclusion of himself alone. He further stated as follows:
".. .. Myself and the Manager Mr.Hemmady prepared a note in respect of foreign exchange business for the year 1980. I don't remember that whether it was sent to the higher officials or not. I agree with the conclusion contain in the note said about. These reports will go back to the department and department will keep the same in the file. .. ..
.. .. I don't remember that whether with oral approval the deals are concluded and thereafter office notice sent confirming the deal. .. ..
.. .. There is an internal audit, external audit and audit by R.B.I. every year. The auditors will submit their reports. If there is an adverse reports, the accountant and manager will be required to give an explanation for the time. I don't remember that whether the audits were conducted in the year 1981. Invariably no remarks were made by the auditor or the manager of accountant. .. ..
.. .. The profit and loss will be reflected in the mirror account ledger, profit and loss account ledger, and general ledger. I do not remember that whether I have been examined the persons who gave letters regarding the foreign exchange deals by the Bank of America and Lakshmi Vilas Bank. .. ..
.. .. I do not remember that whether I have stated that I took the reports and personally handed over the Zonal officer during my examination by CBI. I cannot now given explanation for my linking of 3 real and 3 unreal transactions mentioned in the report. .. ..
.. .. I deny the suggestions that at the instance of union director Mr.Sampath Kumar the management is directed me to probe and submit an adverse report against A1. I deny the suggestion that our probe is in complete and the vital records such as correspondence, and note file were not looked into. It is not true that if the entire records were looked into, there is no irregularity. I don't agree with the suggestion that the entire deal in respect of foreign exchange referred to in my report is approved by the accountant, Manager & other higher officials of the bank and those documents were deliberately burked by the Bank."
20.P.W.31-M.N.Gopinath, was working as Assistant General Manager in Bank of India, who assisted P.W.28. In his cross-examination, he stated that during the period of probe namely, 1.1.1980 to June 1981, Mr.Krishnan was working as Special Assistant under Narayanaswamy and in relation to probe what was the functions assign to him, he did not know P.W.28 and Krishnan were working in the Branch from January 1980-June 1981. In any branch, profit or loss is arrived and posted in the ledger. It could not be verified from the profit and loss ledger, since it would not reflect separately. The loss which he has stated will reflect in the mirror account. Further, he stated as follows:
".. I did not peruse the inter office notes between the dealer, the accountant and the Manager. So also the inter office memorandum between the higher officials. I deny the suggestion that if myself, Krishnan and Narayanaswamy perused the entire records said above including the correspondence there is no irregularity as alleged by the prosecution, and in the report. I deny the suggestion that the probe did not consider the record in entirety and the correspondence and that is why the committee has given an incorrect report. I deny the suggestion that the reports were prepared at the instance of the higher authorities and the staff union. It is not correct to say that the perusal of entire records and correspondence would show that the report is false. I am not aware of any records fixing the responsibility for the dealer. I deny the suggestion that all the deals were concluded with the concurrence and concern of the higher official. .. ..
.. .. I am not aware of the internal audit during the period of probe. I do not know about the report submitted by RBI relating to the period of probe. .."
Considering the evidence of witnesses, who gave the reports under Exs.P217 to P222, they specifically admitted that they are not perused some of the documents which are relevant.
21.At this juncture, it is appropriate to consider Ex.P225-complaint given by the Bank of India, Regional Office, Southern Region, to the Superintendent of Police, C.B.I. In para-3 and 4, it is held as follows:
"3.As a consequence of the aforesaid acts of the captioned officers Messrs.M.R.Natarajan (under suspension) and S.Xavier Moni (under suspension), the Bank has suffered a total loss of about Rs.11,97,984.72 during the period 1.1.1980 to 30.6.1981.
4.Since the above facts and circumstances pertaining to the transaction, in our opinion, require expert police investigation and as a number of non-official witnesses are likely to be examined to arrive at the truth and as it appears, prima facie, that a criminal offence has been committed by Shri.M.R.Natarajan and Mr.Xavier Moni to benefit others or themselves, it has been decided to refer the case to you for investigation according to law. Please take necessary action and intimate to us the results of your investigations in due course."
Admittedly, during the investigation, investigating agency has not seized any documents to show that Bank of India, Madras Branch, has suffered a loss during the period between 01.01.1980 to 30.06.1981.
22.Admittedly, the transaction done by the Foreign Exchange Department. There is a mirror account which reflects both in the profit and loss ledger. The foreign exchange transactions are done accordingly by Reserve Bank of India instructions. The principle adopted in the Foreign Exchange Department is 'buy high' 'sell low' by this principle, buy the foreign currency at the lower rate thereby to derive the profit to the bank. The bank maintains the Nostro accounts there is foreign currency accounts maintains at a foreign centre. The deal slip will be prepared by the dealer, and the entries in respect of Forward contract, sale/purchase will be entered by the Clerk each entry will be signed by the officer who is assisting the dealer. In every contract the original and duplicate will be sent to the purchasing or selling Bank, they will return the duplicate copy signed for confirmation.
23.While considering the evidence, most of the transactions are done either by Manager or by the Accountant and counter signed the same very next day. The Bank sends weekly statement to the Head office and R.B.I., Manager of the bank receives correspondence from Zonal, Regional and Head office and mark the same to the various relevant sections. Matters relating to account are marked to the Accountant. Manager signs daily exchange position books, monthly balancing books, "R" Return Statement, mirror account ledgers, profital cross account register, and its vouchers general ledgers, broker commission vouchers, R.B. and R.B.I. cheques to register. In Ex.D7, P.W.27 has signed, and also signed by A1. Ex.D7 is the carbon copy of the overseas dealings concluded on 20.08.1980 and the same was forwarded to the Manager/Accountant for the information and approval. It shows that every day after concluding the overseas dealings, the copy has been forwarded to the Manager/Accountant for the information and approval. So the original of Ex.D7 is with the Bank. But the investigating agency has not obtained any of such documents to prove that respondents/A1 and A2 have fabricated the documents as if there is interbank dealings.
24.The evidence has proved that during the said period, there was a profit and no loss. The prosecution has not filed any documents to show that on what authority P.W.27, P.W.28 and P.W.31 have probe the matter and on what basis they filed the reports under Exs.P217 to P224. Furthermore, the prosecution has not taken any steps to recover the original of Exs.P217 to P224. Even though P.W.2 to P.W.4, who are the Officers of the Lakshmi Vilas Bank were examined and through them Exs.P2 to P14 were marked, author of the original documents were not examined. Likewise, through the Officers of Bank of America (i.e.) P.W.6 and P.W.7, Exs.P15 to P24 were marked. To prove whether there is a interbank transaction between Bank of India and Bank of America, authors of the documents were not examined before the Court. Furthermore, the originals were not marked before the Court and no reason has been assigned. It is also pertinent to note that the respondents herein have filed applications in Crl.M.P.Nos.1312 of 1992 and 240 of 1993 under Section 91 of Cr.P.C., to direct the prosecution to produce the documents. But the documents have not been produced, even though sufficient opportunity has been given. That factum has been considered by the Special Court and came to the correct conclusion and drawn adverse inference against the prosecution. Furthermore, the dealers, who were dealing with the Banks were not examined before the Court even though they were available. In respect of the reply by Bank of America, the reference number has not been mentioned. It is true, P.W.32 has not seized any documents under seizure mahazar and recovery mahazar, it will not vitiate the entire case, but here no explanation has been given by the P.W.32, who investigate the matter, as to why he has not followed the procedure. This factum has been considered by the learned Special Judge in para-75 of his Judgment.
25.It is well settled principle of law once the accused facing the criminal trial, the presumption that he is innocent, once he acquitted, he is declared as innocent. In such circumstances, burden is heavily upon the prosecution to prove the guilt of the accused beyond reasonable doubt. It is also well settled principle, if two views are possible, the view favouring the accused is to be taken into consideration.
26.On perusal of the oral and documentary evidence, the prosecution has failed to prove the guilt of the accused beyond reasonable doubt and that has been considered by the Special Court in para-75 of his judgment, held that the non-production of vital documents, non-production of documents called for by the accused, non-examination of vital witnesses, non-furnishing of records to the accused, eleventh hour disclosure of Narayanaswamy report (Exs.P217 to P224), absence of independent and impartial investigation by the investigating officer, drawn adverse inference against the prosecution. Hence the Special Court has correct in held that the prosecution has failed to prove the guilt of the accused beyond reasonable doubt and therefore, acquitted the accused. So I do not find any reasons warranting interference with the findings of the Special Court and hence, the order of acquittal passed by the Special Court is hereby confirmed.
27.In fine, The Criminal Appeal is dismissed confirming the order of acquittal dated 03.01.2003 made in C.C.No.6 of 1997, on the file of the Special Court, Chennai.
Consequently, connected Miscellaneous Petition is closed.
02.02.2012
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Index :Yes
Internet:Yes
R.MALA,J.
Kj
To
1.The Special Court (CBI cases)
Chennai.
2.Inspector of Police
CBI/SCB/Chennai.
3.The Special Public Prosectuor
(CBI Cases), High Court, Madras.
4.The Record Keeper
Criminal Section
High Court, Madras.
Pre-delivery judgment made in
Crl.A.No.1454 of 2003
02.02.2012