Madras High Court
K.B.Sampath vs / on 31 July, 2023
Author: G.Jayachandran
Bench: G.Jayachandran
Crl.A.Nos.816 and 834 of 2013
IN THE HIGH COURT OF JUDICATURE AT MADRAS
Reserved on :03.07.2023
Pronounced on :31.07.2023
Coram:
THE HONOURABLE DR.JUSTICE G.JAYACHANDRAN
Crl.A.Nos.834 and 816 of 2013
Crl.A.No.816 of 2013:-
K.B.Sampath .. Appellant/Accused-4
/versus/
The Inspector of Police,
CBI/ACB, Chennai. .. Respondent/Complainant
Prayer: Criminal Appeal has been filed under Section 374 of the Cr.P.C., against
the judgment and conviction dated 26.11.2013 made in C.C.No.16 of 2008 on the
file of the XI Additional City Civil & Sessions Judge – CBI Cases Relating to
Banks and Financial Institutions, Chennai-1.
For Appellant :Mr.L.V.Rohith
For Respondent :Mr.K.Srinivasan (SC)
Special Public Prosecutor (CBI)
_____________
Page No.1/46
https://www.mhc.tn.gov.in/judis
Crl.A.Nos.816 and 834 of 2013
Crl.A.No.834 of 2013:-
N.K.Ravindran .. Appellant/Accused No.1
/versus/
Union of India,
Rep. by Inspector of Police,
CBI/ACB, Chennai. .. Respondent/Complainant
Prayer: Criminal Appeal has been filed under Section 374 of the Cr.P.C., against
the judgment and conviction dated 26.11.2013 made in C.C.No.16 of 2008 on the
file of the XI Additional City Civil & Sessions Judge – CBI Cases Relating to
Banks and Financial Institutions, Chennai-1.
For Appellant :Mr.R.Thiagarajan
For Respondent :Mr.K.Srinivasasan (SC)
Special Public Prosecutor (CBI)
------
COMMON JUDGMENT
On 18.03.2003, during the regular inspection conducted by Mr.K.Lakshmanan, Senior Manager, Indian Bank, Inspection Centre, Chennai-79, he found that in Royapuram Branch, Trade advances under MDL, powers were not judiciously used. Head Quarters guidelines are not complied in about 16 loans. Out of 16 such irregular loans, 15 were sanctioned by N.K.Ravindran, Manager who _____________ Page No.2/46 https://www.mhc.tn.gov.in/judis Crl.A.Nos.816 and 834 of 2013 assumed charge on 09.09.2002. For all these 15 loans irregular loan accounts, a consolidated report for each individual loan exclusive report submitted by Mr.K.Lakshmanan to the Deputy General Manager, Indian Bank, Inspection Centre, Chennai-79. In this report, he observed that, M/s R.S.V.Chemical Corporation, a sole proprietor concern owned by V.G.Krishnan, wholesale dealer in Chemical/allied products having office at No 30 Krishnappa Agraharam, Chennai-79, is one among the 15 accounts, which was granted loan in violation of the Banking norms. The Inspection Report outlined that M/s R.S.V.Chemical Corporation is a fictitious firm. The visit to the office at the given address namely, No.30, Krishnappa Agraharam, Chennai-79, found no such firm. On verification, at old door No.10, new door No.30, found a firm by name Vaibhav Plastics engaged in plastic business without any name board, but a board displaying ‘hypothecated to TMB’. The scrutiny of the loan file reveal that OCC of Rs.15 lakhs sanctioned on 07/03/2003 by Branch Manager (A-1) taking third party guarantee from A.S.Suresh, A.P.Kuppusamy and K.S.Purushotaman. Immovable property of A.P.Kuppusamy at S.No.144/4A at Padiayanallur Village and of K.S.Purushotaman at S.No. 91/3A, Naravarikuppam1 Village (Redhills Byepass), Ponneri Taluk, were taken as collateral security and EM created. Under what _____________ Page No.3/46 https://www.mhc.tn.gov.in/judis Crl.A.Nos.816 and 834 of 2013 circumstances, third parties security taken and their interest in the borrower firm not mentioned. The turnover from 10/03/2003 till the date of report was only Rs.54,668/- as against the project sale of Rs.8 lakhs per month. The entire loan amount withdrawn and paid to various persons between 10/03/2003 and 12/03/2003. A.N.Suresh, one of the guarantor himself a borrower had stood guarantor for 3 loan accounts including the loan account of M/s R.S.V.Chemical Corporation.
2. About 30 months later, the Inspector of Police attached to SPE/CBI/ACB/Chennai on 28.10.2005 registered case based on source information for offences under Section 13(2) r/w 13(1)(d) of the Prevention of Corruption Act, 1988 and Sections 120-B r/w 420, 409, 467, 468, 471 IPC suspecting the following persons:-
(1)N.K.Ravindran (Manager Scale II), the then Branch Manager, Indian Bank, Royapuram Branch, Chennai.
(2)Shri Dinesh Kumar Mishra, No.13/6, Doulatkhan Street, Anna Salai, Chennai 600 002, Proprietor of M/s Steelex Impex India, chennai.
(3)Shri Andrews Thamba, No.1/90, Kannadasan Nagar, Chennai 600 118, _____________ Page No.4/46 https://www.mhc.tn.gov.in/judis Crl.A.Nos.816 and 834 of 2013 Proprietor of M/s Imperial Corporation, Chennai.
(4)Shri.S.Thiagarajan, No.10-41, II Avenue, Anna Nagar, Chennai 600 040, Proprietor of M/s Best Computers, Chennai.
(5)Shri.V.Gopala Krishnan, No.48, 6th Main Road, Nanganallur, Chennai 600 061, Proprietor of M/s VEE GEE KAY Enterprises, Chennai.
(6)Shri.V.G.Krishnan, No.47, Selva Vinayagar Koil Street, Razack Garden, Chennai 600 106, Proprietor of M/s RSV Chemical Corporation, Chennai and others.
3. Five specific instances of conspiracy, cheating, fabrication of documents and use of false documents as genuine were narrated in the FIR’s. One of the firm named in the FIR is M/s R.S.V.Chemical Corporation, a proprietory concern owned by V.G.Krishnan.
4. As per the FIR, the Current Account was opened in the name of fictitious firm, M/s RSV Chemical Corporation on 05.03.2003. An open Cash Credit of Rs.15lakhs was sanctioned by A1 on 07/03/.2003. V.G.Krishnan forged documents EM property in the name of G.Krishnan. He gave fake EC for the _____________ Page No.5/46 https://www.mhc.tn.gov.in/judis Crl.A.Nos.816 and 834 of 2013 property. The property actually owned by A.K.Mohammed Buhari, who purchased it from one B.Rahamath on 27/09/1994. This transaction not disclosed in the EC produced by V.G.Krishnan. The Branch Manager N.K.Ravindran, without conducting proper enquiry and verification about the documents, sanctioned the limits and allowed V.G.Krishnan to issue bank pay orders for some beneficiaries within a couple of days violating the norms of the Bank. After diverting the loan amount, the account become inoperative. Bank lost Rs.17.54 lakhs.
5. On completion of Investigation, Final Report in respect of M/s R.S.V. Chemical Corporation filed against the following four persons.
1.N.K.Ravindran
2.V.G.Krishnan
3. A.S.suresh
4.K.B.Sampath.
6. The trial Court framed charges against A1, A-3 and A-4 (A2 V.G.Krishnan absconded, Case got split up) under Sections 120-B r/w 420, 467, 468 and 471 r/w 467 and 468 of IPC and Section 13(2) r/w 13(1)(d) of the _____________ Page No.6/46 https://www.mhc.tn.gov.in/judis Crl.A.Nos.816 and 834 of 2013 Prevention of Corruption Act, 1988. Against A-2 under Section 420 of IPC and Section 468 IPC. Against A-3 under Section 420 IPC. Against A1: Section 13(2) r/w 13(1)(d) of the Prevention of Corruption Act, 1988.
7. The charges reads as below:-
Charge No.1: That you A-1 to A-4, with dishonest and fraudulent intentions to cheat Indian Bank, Royapuram Branch, Chennai, entered into a criminal conspiracy, during the year 2002-2003 at Chennai, in the matter of sanctioning and release of Trade Well Loan in the name of M/s R.S.V. Chemicals Corporation, No.30, Krishnappa Agraharam, Chennai-1 owned by you A-2 as Proprietor, by way of submitting false and fabricated documents like fabricated sale deed, forged encumbrance certificate, forged house tax receipt, forged TNGST and CST Certificates etc. and thereby induced the Bank to part with the Trade Well Loan / Open Cash Credit to the tune of Rs.15 lacs from the bank by way of committing criminal mis nonduct by you A-1 and by abusing the official position of you A-1 as Public Servant sanctioned and released the said loan by way of accepting the said forged documents and also by you A-3 filling up the forged and fabricated documents and also you A-4 by issuing a false and fabricated valuation _____________ Page No.7/46 https://www.mhc.tn.gov.in/judis Crl.A.Nos.816 and 834 of 2013 report to the Bank in support of the sanctioning of the loan and the acts of you A-1 to A-4 caused the Bank to suffer a loss to the tune of Rs.17,26,423/- and thereby you A-1, A-3, and A-4 have committed the offences punishable U/s 120-B r/w 420, 467, 468 and 471 r/w 467, 471 r/w 468 of IPC & Sec.13(2) r/w 13(1)(d) of PC Act, 1988 and is within my cognizance.
Charge No.2: That in pursuance of the aforesaid criminal conspiracy and in furtherance thereof, to cheat Indian Bank, Royapuram Branch, Chennai, you A-3 dishonestly and fraudulently filled up loan application, knowing fully well that there is no such firm in the name and style of M/s R.S.V. Chemicals Corporation, No.30 Krishnappa Agraharam, Chennai, further stood as a guarantor for the said firm for sanctioning the loan further forging the house tax receipt purported to have issued by VAC Naravarikuppam village pertaining to survey No.91/3B, Naravarikuppam owned by K.S. Purushothaman, and thereby induced the Bank to part with Trade Loan / Open Cash Credit of Rs.15 lakhs to M/s R.S.V. Chemicals Corporation, No.30, Krishnappa Agraharam, Chennai- owned by A2, thereby you A-3 have committed the offence punishable U/s.420 IPC and is within my cognizance.
_____________ Page No.8/46 https://www.mhc.tn.gov.in/judis Crl.A.Nos.816 and 834 of 2013 Charge No.3: That in pursuance of the aforesaid criminal conspiracy and in furtherance thereof, to cheat Indian Bank, Royapuram Branch, Chennai, you A-3 dishonestly and fraudulently filled up loan application, knowing fully well that there is no such firm in the name and style of M/s R.S.V. Chemicals Corporation, No.30, Krishnappa Agraharam, Chennai-1, further stood as a guarantor for the said firm for sanctioning the loan further forging the house tax receipt purported to have issued by VAC Naravarikuppam village pertaining to survey No.91/3B, Naravarikuppam owned by K.S. Purushothaman, and thereby induced the Bank to part with Trade Loan / Open Cash Credit of Rs.15 lacs to M/s R.S.V. Chemicals Corporation, No.30, Krishnappa Agraharam, Chennai-1 owned by A2, thereby you A-3 have committed the offence punishable U/s.468 IPC and is within my cognizance.
Charge No.4: That in pursuance of the aforesaid criminal conspiracy and in furtherance thereof, to cheat Indian Bank, Royapurarn Branch, Chennai, you A-4, as an Approved Valuer of Indian Bank, Royapuram Branch, Chennai dishonestly and fraudulently prepared a false valuation report dated 07.03.2003 valuing the property at survey No. 91 /3B, Naravarikuppam Red Hills, Chennai in the name of K.S. Purushothaman for Rs.10,85,000/- and property in survey _____________ Page No.9/46 https://www.mhc.tn.gov.in/judis Crl.A.Nos.816 and 834 of 2013 No.144/4A, Jothinagar, Padianallur Red Hills Chennai, in the name of A.P.Kuppusamy, for Rs.8,65,000/- without visiting the property and identifying the same and thereby induced the Bank to sanction a Trade Well/Cash Credit of Rs.15 lakhs in favour of M/s R.S.V.Chemical Corporation, No.30, Krishnappa Agraharam, Chennai-1 owned by A-2 and thereby committed the offences punishable U/s.420 IPC and is within my cognizance.
Charge No.5: That in pursuance of the aforesaid criminal conspiracy and in furtherance thereof, you A-1, as Branch Manager of Indian Bank, Royapuram Branch, Chennai, dishonestly and fraudulently sanctioned and released Trade Well Loan / Open Cash Credit of Rs.15 lakhs to M/s R.S.V. Chemical Corporation, No.30, Krishnappa Agraharam, Chennai-1, owned by A-2 on 08.03.2003, by way of abusing your official position as a Public Servant, knowing fully well that the property documents offered as collateral securities are forged and fabricated, without verifying the real owner of the property and also by violating the specific instructions given by the Panel Lawyer to obtain Nil Encumbrance Certificate on the property and further without verifying the official premises of M/s R.S.V.Chemical Corporation, No.30, Krishnappa Agraharam, Chennai, while sanctioning the loan as stipulated by the Bank Guidelines, without _____________ Page No.10/46 https://www.mhc.tn.gov.in/judis Crl.A.Nos.816 and 834 of 2013 checking with the genuineness of the document like; fabricated sale deed, forged encumbrance certificates, forged TNGST and CST Certificates, forged House Tax receipt etc, enclosed by A-2 to the Bank and thereby caused a loss to the tune of Rs.17,26,423/-/- to the Bank and thereby you A-1 have committed the offences punishable U/s.13(2) r/w 13(1)(d) of PC Act, 1988 and is within my cognizance.
8. A-2 Suresh absconded and shown as absconding accused in the charges. The case against him got split up and assigned C.C.No:2/2009.
9. To prove these charges, the prosecution examined 13 witnesses, marked 76 documents. Pending trial the 3rd accused A.S.Suresh died and charge against him got abated. Against the remaining accused A-1 and A-4, the trial Court held the charges proved and sentenced them as below:
Rank of the Conviction Sentence
accused
A1 Sections 120-B r/w 420, 467, To undergo RI for 3 years and to pay a
468 and 471 r/w 467 & 468 fine of Rs.2,000/- in default to undergo of IPC and Section 13(2) r/w SI for six months 13(1)(d) of PC Act, 1988 A4 Sections 120-B r/w 420, 467, To undergo RI for 3 years each and to 468 and 471 r/w 467 & 468 pay a fine of Rs.1,000/- each, in of IPC and Section 13(2) r/w default to undergo SI for three months _____________ Page No.11/46 https://www.mhc.tn.gov.in/judis Crl.A.Nos.816 and 834 of 2013 Rank of the Conviction Sentence accused 13(1)(d) of PC Act, 1988 each A4 Section 420 IPC To undergo RI for 1 year and to pay a fine of Rs.1000/- in default to undergo SI for 3 months A1 Section 13(2) r/w 13(1)(d) of To undergo RI for 3 years and to pay a PC Act, 1988 fine of Rs.2,000/-, in default to undergo SI for six months.
The sentence of imprisonment was ordered to run concurrently and the period of imprisonment already undergone as under trial prisoner was ordered to be set off. The sentence in default in fine was ordered run consecutively.
10. Being aggrieved, C.A.No.834 of 2013 by A-1 [N.K.Ravindran]; and C.A.No.816/2013 by A-4 [K.B.Sampath] filed.
11. Case of the prosecution:-
On 5.3.2003 a Current Account was opened by M/s.R.S.V Chemical Corporation represented by its Proprietor V.G.Krishnan. The address given is No.30, Krishnappa Aghragaram, Chennai-79. The Account Opening form along with the specimen signature card is Ex.Pl. The account Ex.P1 was authenticated by A1. The account was introduced by Vee Gee Kay Enterprises. After opening the account M/s. RSV Chemical Corporation applied for loan for Trade Well Loan/Open Cash Credit for a limit of Rs.15lakhs (Rupees Fifteen lakhs only)for _____________ Page No.12/46 https://www.mhc.tn.gov.in/judis Crl.A.Nos.816 and 834 of 2013 doing wholesale chemical and allied products. The loan application is Ex.P2 (2 sheets). The party has offered collateral security of land and building belonging to A.P. Kuppusamy situated at 144/4A, JothiNagar, Padiyanallur to an extent of 2117 Square feet and another property offered by K.S.Purusothaman situated at 91/3B, Narayanakuppam, Ponneri Taluk to an extend of 2400 square feet along with Ex.P2. V.G.Krishnan has submitted xerox copy of saral form for the assessment year 2002-2003, xerox copy of income tax challan, dated 7.10.2002, xerox copy of certificate of registration issued by CTO, Chennai, copy of Trading, Profit and Loss Account for the year ending 31.3.2001 along with the Balance Sheet, xerox copy of Saral Form for the assessment year 2001-2002, In- come Tax challan, dated 28.9.2002 and Trading, Profit and Loss account for the year ending 31.3.2002 along with projected Balance Sheet as on 31.3.2003 are Ex.P3 series (12 sheets).
12. The loan application was apprised by Al and the Appraisal Memorandum, dated 07.03.2003 is Ex.P4 in which Al has sanctioned Rs.15 lakhs (Rupees Fifteen Lakhs only) as loan to M/s. RSV Chemical Corporation. The guarantor K.S. Purushothaman has given a consent letter offering his property as _____________ Page No.13/46 https://www.mhc.tn.gov.in/judis Crl.A.Nos.816 and 834 of 2013 collateral security for the loan sanctioned to M/s. RSV Chemical Corporation the letter is Ex.P5. Similarly A.P. Kuppusamy, the guarantor has given a consent letter offering this property as collateral security and the letter is Ex.P6. The Assets and Liability statement of the guarantors K.S. Purushothaman and A.P. Kuppusamy submitted to the bank is Ex.P7 (2sheets). The properties of K.S.Purushothaman and A.P. Kuppusamy are valued by A4 herein. The property of K.S. Purushothaman was valued at Rs.10,85,000/- and A.P. Kuppusamy was valued at Rs.8,65,000/- (Rupees Eight Lakhs Sixty Five Thousand only). The certificates are Ex.P.8 (6sheets) & Ex.P.9 (5sheets). The properties were valued on the basis of site and building. The office and factory of M/s. R.S.V Chemical Corporation was inspected by Al as a pre condition for sanction. The visit report dated 07.03.2003 was prepared and sign by Al is Ex.P10.
13. The statement of account M/s. R.S.V Chemical Corporation from 10.3.03 to 16.9.04 is Ex.P.11(2 sheets).The Demand Promissory Note dated 8.3.2003 is Ex.P12. The letter of continuity is Ex.P13. The agreement of Open Cash Credit is Ex.P14. The statement of book debts submitted by the party is Ex.P15. The Agreement of Guarantee executed by K.S. Purusothaman is Ex.P16. _____________ Page No.14/46 https://www.mhc.tn.gov.in/judis Crl.A.Nos.816 and 834 of 2013 The consent letter of A.S. Suresh (A2) is Ex.P17. The Agreement of Guarantee by A2 Suresh is Ex.P18. The Agreement of Guarantee by A.P. Kuppusamy is Ex.P19. The Power of Attorney for collection of bills etc. in favour of bank executed by V.G. Krishnan is Ex.P20. The legal opinion dated 07.03.2003 is Ex.P21. The Sale Deed bearing No.3302 of 1982 is Sub Registrar Office, Ambattur of the property belongs to K.S.Purushothaman is Ex.P22 (9sheets). The copy of parent document of Ex.P22 given by the party is Ex.P23 (5 sheets). The kist receipt issued by Deputy Tahsildar in favour of K.S. Purusothaman is Ex.P24. The EB card for the service connection in the name is Ex.P25. The Property Tax Receipt, dated 7.3.2003 for the property of K.S. Purusothaman is Ex.P26. The Encumbrance Certificate for the period from 1.1.69 to 30.9.71 for the property of K.S. Purusothaman is Ex.P27. The letter of acknowledgement of K.S. Purusothaman, dated 30.11.2003 is Ex.P28. The particulars of Equitable Mortgage created by K.S. Purusothaman in favour of the bank is entered in the registered of the bank is Ex.P29. Ex.P29 is received by Al on behalf of the bank.
14. The legal opinion dated 7.3.2003 for the property of K.P. Kuppusamy is Ex.P30. The Sale Deed bearing No.83/1961 standing in the name of K.P. _____________ Page No.15/46 https://www.mhc.tn.gov.in/judis Crl.A.Nos.816 and 834 of 2013 Kuppusamy is Ex.P31 (7 sheets). The kists receipt dated 12.10.1983 issued by the Deputy Tahsildar, Ponneri in favour of K.P. Kuppusamy is Ex.P32. The Encumbrance Certificate for the period 1.12.1999 to 12.5.2003 for the property of K.P.Kuppusamy is Ex.P33. Another Encumbrance Certificate for the period 1.1.1987 to 1.12.1992 for the property of K.P.Kuppusamy is Ex.P34. The approved plan for the property of K.P. Kuppusamy is Ex.P35. The house tax receipt dated 18.2.2003 of K P. Kuppusamy is Ex.P36. EB card in the name of K.P. Kuppusamy is Ex.P37. The letter of acknowledgement is Ex.P38. The page No.28 of the Equitable Mortgage register of the bank signed by Al is Ex.P39. On 21.4.2003, the firm M/s. RSV Chemical Corporation was visited by him along with Lakshmanan, Inspector of branches. During the visit, they did not find any firm in the given address. Lakshmanan, Inspector prepared a report of the visit.
15. PW.2 has stated that in Ex.P.40, he specifically mentioned the defective loan documentation, the collateral security accepted by N.K. Ravindran (AI) as Branch Manager for sanction of credit facilities. He also mentioned regarding the inspection of godown, the verification of stock, acceptance of third party collateral security without insisting on borrowers property or any other _____________ Page No.16/46 https://www.mhc.tn.gov.in/judis Crl.A.Nos.816 and 834 of 2013 property closely related to the borrower and there was no reason has been mentioned or expressed by Al Ravindran, for acceptance of 3rd party collateral security by the branch for release of credit facility. He also mentioned the release of credit facility made by Al Ravindran without identifying the operation of the account. The consolidated report dated 21.04.2003 signed by him addressed to Deputy General Manager, Indian Bank, Inspection Centre, Chennai regarding the inspection conducted by him of 16 accounts with Indian Bank, Royapuram Branch, sanctioned by Al Ravindran except one account. The report is Ex.P.63.(5 sheets).
16. The Accused V.G. Krishnan sole Proprietor of R.S.V. Chemical Corporation opened Current Account bearing No.101116 on 05.03.2003. He has submitted application for "Advance to Traders" for Rs.15 lakhs on 01.03.2003 and the loan was sanctioned by Al on 07.03.2003 for Rs.15 lakhs against stock of chemicals and book debts and against the personal guarantees given by M.S. Purushothaman and A. Kuppusamy The third party collateral properties belong to Purushothaman and A.P. Kuppusamy at Jothinagar, Padiyanallur. Ex.P.4 is the Appraisal Memorandum prepared by A1. PW3, S. Sarveshwaran has stated that _____________ Page No.17/46 https://www.mhc.tn.gov.in/judis Crl.A.Nos.816 and 834 of 2013 after assuming charge, he obtained fresh Encumbrance Certificates for the period from 01.01.1987 to 30.11.1992 are Ex.P.41 (3 sheets) for the property of Kuppusamy. Another Encumbrance Certificate for the period from 01.01.1983 to 31.12.1986 is Ex.P.42. In Ex.P.42 there is an Encumbrance showing that the property was sold by Kuppusamy by sale deed No.3491/1986. Hence at the time of creation of Equitable Mortgage, said Kuppusamy did not have valid title deed to create E.M. The encumbrance certificate pertains to the property of K.S. Purushothaman for the period 01.01.1969 to 30.09.1971 is Ex.P.27. After his assuming charge, he obtained fresh EC for the period from 01.01.1980 to 31.12.1986 on 09.09.2006. The same is Ex.P.43. PW3 has further stated that Ex.P.43 shows encumbrance that Purushotham has sold the said property on 24.03.1983 by Document No.1824/1983 to R.Thanikachalam and further the said Thanikachalam has sold the property to A.Kattan on 08.12.1983 by Document No.5577/1983. Purushothaman was not having valid title on the date of creation of Equitable Mortgage. In spite of his repeated visits, he was not able to meet V.G. Krishnan (the split up accused). He had made several visits to the residence of Suresh (A2) to find out the whereabouts of V.G. Krishnan. In spite of his best efforts, he could not get the whereabouts of V.G. Krishnan. There was also no _____________ Page No.18/46 https://www.mhc.tn.gov.in/judis Crl.A.Nos.816 and 834 of 2013 stock in the godown while he inspected along with Al. The account of M/s. R.S.V. Chemical Corporation for the period from 10.03.2003 to 10.03.2004 is Ex.P.11. When he took charge, the account has become New Performing Account and outstanding in the Account as on 10.03.2004 was Rs.17.26 lakhs.
17. C.A.No.834 2013 by A-1 [N.K.Ravindran]:-
The Learned Counsel for the appellant N.K.Ravindran (A-1) submitted that the scrutiny of the loan documents and verification of the borrowers credit worthiness has to be done by the loan officer, who is PW-1 in this case. The procedure to be followed before sanctioning loan is deposed by PW-1 to PW-3. They all admit that the loan was sanctioned by the appellant on the recommendation of PW-1, the loan officer and it was well within his pecuniary limits. Further, PW-3 admits that pre- sanction field inspection by the Manager was made mandatory only after the Head Office Circular dated 20/03/2003. Therefore, the omission to verify whether the documents given by the borrower is genuine or fake is not the responsibility of the Manager, it is is the duty of the loan officer and the panel lawyer who gave the opinion about the title found in the documents or omission to make pre-sanction inspection by him may not even be a negligence or wilful negligence. Certainly, the material evidence does not bring home the charges of conspiracy or intentional and _____________ Page No.19/46 https://www.mhc.tn.gov.in/judis Crl.A.Nos.816 and 834 of 2013 dishonesty to commit any of the crime mentioned in the charges.
18. In addition, the learned counsel for the appellant/A-1 reiterated the argument that A-1 is a public servant. Prior sanction ought to have been obtained for prosecuting as contemplated under Section 197 Cr.P.C and Section 19 of Prevention of Corruption Act. In the absence of valid sanction, the conviction and sentence imposed by the trial Court on is liable to be set aside.
19. C.A.No.816/2013 by A-4 [K.B.Sampath]:
The learned counsel appearing for K.B.Sampath, (A-4) the approved valuer/ appellant submitted that the trial Court judgment suffers error of proper application of law and appreciation of material evidence. The valuation certificate given by the appellant, which is marked as Ex.P-9 for the property of K.S.Purushotaman and Ex.P-9 for the property of Kuppusamy is neither over valued nor a false certificate. The opinion of the panel lawyer about the ownership of the property is relied by the valuer. It is not the responsibility of the valuer to verify the ownership. There is no evidence to disprove the assertion of the valuer about his visit to the property in the name of K.S.Purushotaman at S.No.91/3B, _____________ Page No.20/46 https://www.mhc.tn.gov.in/judis Crl.A.Nos.816 and 834 of 2013 Naravanikuppam Village, Redhills Bye pass andvalued it worth Rs 10,85,000/- and also visited the property of A.P.Kuppusamy at Door No: Y543, S.No.144/4A , Jothi Nagar , Padianallur, Redhills Chennai. Also, there is no contra evidence to show the value of the said property estimated by him as Rs.8,65,000/- is an inflated value. The Lawyer and the Valuer both being professionals in their respective field are to be treated alike. The panel lawyer PW-4 [Mr.Sukadev] gave opinion about the marketable title of the property and opined that the property is worthy of creating EM. If the property is not worthy of taking it as collateral security and the documents he relied are not genuine documents then he should have been held guilty and not the valuer, who was sought to give his opinion only on the value of the property and not on the title of the property.
20. PW-12[D.Sebastian] who investigated the case, admits that he was satisfied with the genuineness of the opinion given by the panel lawyer. If the legal opinion on title, which is apparently erroneous, is believed to be genuine, there is no reason to suspect the genuineness of the valuation certificate given by this appellant. More so, when there is no evidence to suspect the value shown in Ex.P- 9, dated 07/03/2003 is excessive or for a non-existing property. Therefore, the _____________ Page No.21/46 https://www.mhc.tn.gov.in/judis Crl.A.Nos.816 and 834 of 2013 baseless conviction of this appellant is to be set aside.
21. Submission by the Learned Special Public Prosecutor (CBI) for the Respondent:
Based on source information, FIR [Ex.P-71] was registered on 28/10/2005 and taken up for investigation. The investigation culminated in filing of 5 separate charge sheets. In each case, though the borrower name is different, the modus operandi is one and the same. For non-existing or non functioning firms loan was advanced. Pre-loan inspection not conducted by the Branch Manager Mr.N.K.Ravidran. The title deeds offered for EM were not genuine. The legal opinion and valuation certificates were accepted by A-1 to sanction loan knowing well that they are not genuine. The title documents, dead certificates and the encumbrance certificate produced by the borrower to create equitable mortgage ( EM) were found to be false. After availing loan, the amount had been withdrawn immediately and loan was not repaid. The persons who were paid from the loan amount, had no business transactions with the borrowers. The loan, which is meant for improving the business of mid scale traders been misused for personal enrichment. The Manager of the Bank A-1, the Panel Lawyer, the Valuer along _____________ Page No.22/46 https://www.mhc.tn.gov.in/judis Crl.A.Nos.816 and 834 of 2013 with the borrower and the guarantor with dishonest intention to cheat the bank conceived the design of offering 3rd part property as security created false documents and used it as genuine to sanction loan.
22. A-1 as Manager did not verify the loan documents properly and his failure is a wilful omission and intentional. A-1 did not collect the original documents for creating EM. He accepted unrelated 3 rd party collateral security, and the said 3rd party Kuppusamy is not the owner of the property. Kuppusamy sold away the property in the year 1986 itself. The other guarantor for the loan Mr.Purushotaman had no valid title for the property he gave as collateral security. That property was sold to one Thanikachalam in the year 1983. Subsequently, Thanikachalam had sold it to one Kuttan. At the time of creating EM, the properties were not the properties of the guarantors. The EC enclosed were fake EC. The Manager had not insisted for current EC for the properties he created EM. A-1failed to collect the originals in spite of the instruction of the panel lawyer in his opinion. Hence, he cannot blame the panel lawyer who gave the opinion on title. The valuer who had ascertained the ownership of the property is liable for giving a misleading certificate and thereby induced the bank to sanction loan. After _____________ Page No.23/46 https://www.mhc.tn.gov.in/judis Crl.A.Nos.816 and 834 of 2013 obtaining loan by producing fake documents and false documents, the absconding borrower withdrew the loan amount immediately through several cheques and then failed to repay the loan. The loan amount was not utilised for purchase of goods and material required for the trade. The inspection report of PW-2 marked as Ex P- 40 and his consolidated report marked as Ex P-63 proves that A-1 had sanctioned loan to a non-entity.
23. Heard the counsels. Records perused.
24. The case of the prosecution is that, when Al [N.K.Ravindran] was discharging his duty as public servant by working as Manager Indian Bank, Royapuram Branch, during the year 2002-03, he had entered into criminal conspiracy at Chennai and other places with borrowers and obtained valuation certificates from K.B. Sampath,(A-4) the approved Valuer for the bank in respect of properties which were not owned by the persons who offered it as collateral security. Using fake and false documents loans were sanctioned. The valuation certificates given by A-4 were used to induce the Indian Bank, Royapuram Branch to sanction loan.
_____________ Page No.24/46 https://www.mhc.tn.gov.in/judis Crl.A.Nos.816 and 834 of 2013
25. The evidence from the prosecution witnesses coupled with the documents marked as exhibits before this Court show that in pursuance of the aforesaid criminal conspiracy, A2 V.G.Krishnan (absconding accused) claiming as the proprietor of M/s R.S.V Chemicals Corporation having office at No; 30, Krishnappa Agraharam, Chennai applied for Trade well Loan/Open Cash credit of Rs.15lakhs (Rupees Fifteen lakhs only) on 01.03.2003. Thereafter became the customer of the bank opening a Current Account on 05/03/2003. For the loan Kuppusamy and Purushotaman stood guarantors and offered property documents in their name as collateral security. To show those properties are worthy taken as security EC also produced. These two guarantors are not the real owners of the properties on the date when EM created. Through the evidence of Thanikasalam (PW-5) and Jothi (PW-6), the fact, Purushotaman was not the owner of the property offered as collateral security is proved. The testimony of PW-8, Secretary to Southern Region in the Institute of Chartered Accountants(in short “SRICA”), has proved that the Statement of Assets and Liability given for M/s M.S.V.Chemicals Corporation in the name M/s Muthu Subramaniam, Chartered Accountant is fake. The inspection conducted by PW-2 reveal that the in the address shown by the borrower as the place of business, there is no activity in the _____________ Page No.25/46 https://www.mhc.tn.gov.in/judis Crl.A.Nos.816 and 834 of 2013 name of M/s M.S.V.Chemicals Corporation. The evidence of PW-4, the panel lawyer and his opinion Ex.P-21 and Ex.P-30 was subject to compliance of certain instructions. A-1 had not followed the instruction but had sanctioned the loan violating the instruction. Above all, the loan amount been withdrawn immediately after its disbursement and not utilized for purchase of raw materials but paid to parties who have no trade connection.
26. None of the documents like kist receipts, EB card, Tax receipts were genuine or related to the period of creating EM. The Hand writing expert Mr.N.Ravi (PW-11) had in his report as well as in his deposition has identified and opined that the documents in the name of Purushotaman were in the hand writing of A-2 Suresh, the absconding accused.
27. As far as A4-K.B.Sampath, the approved Valuer the panel of Indian Bank had given valuation reports Ex.P-8 and Ex.P-9. In his reports, he had mentioned Purushotaman and Kuppusamy as the respective owners of the properties. The prosecution has proved through sufficient evidence that these properties were not the properties of Purushotaman and Kuppusamy on the date of _____________ Page No.26/46 https://www.mhc.tn.gov.in/judis Crl.A.Nos.816 and 834 of 2013 creating EM by them in favour of the Bank. Also, there is no evidence that they really with knowledge and consent gave the documents and signed the consent letters, agreement to create EM of the properties. Therefore, A-4 the valuer, who based on the panel lawyer opinion had under the impression that these persons are the real owners of the property given his valuation reports. The role and responsibility of the valuer is to ascertain the value of the property and not the title of the property. It is the specific case of the prosecution that Al-Ravindran, having connived with A2 to A4 and by abusing his official position as Manager, Indian Bank, Royapuram Branch, had dishonestly sanctioned Trade Well Loan/Open Cash Credit to the tune of Rs.15Lakhs (Rupees Fifteen lakhs only) to M/s. R.S.V. Chemicals Corporation a non-existing firm. The evidences of P.W.1 to P.W.3 would go to show that though the assessment report prepared by P.W.3-Loan Officer, the ultimate loan sanctioning authority is vest only with A-l. He had not been diligent. Without verifying the genuineness of documents, the present ownership of the property offered as collateral security had sanctioned the loan. He had recorded that he visited the office premises of V.G.Krishnan, proprietor of M/s R.S.V.Chemicals Corporation on 07/03/2003 and given a report Ex.P-10 recording his satisfaction about the existence of the firm and its operation. The prosecution _____________ Page No.27/46 https://www.mhc.tn.gov.in/judis Crl.A.Nos.816 and 834 of 2013 has proved through the evidence of PW-2 and his report that A-1 has created a false visit report. A-1 contended that he being a public servant, no cognizance without prior sanction ought to have taken. Prior sanction for prosecuting as contemplated under Section 197 Cr.P.C and Section 19 of the Prevention of Corruption Act, 1988 not obtained in this case.
28. This contention is unsustainable, since A-1 was never a public servant appointed by the Government State or Central. He did not discharge the functions of the State, which requires prior sanction under Section 197 of Cr.P.C. Further, he being an employee of a nationalised bank covered under Section 2(u) of the Prevention of Corruption Act, 1988. On the date of taking cognizance, A-1 was not an employee of the bank. He was compulsorily retired from service before the Court took cognizance of the offence.
29. The Prevention of Corruption Act contemplates prior sanction to take cognizance of a public servant, who is in service on the date of taking cognizance of the offence. If the public servant has ceased to be so on the date of taking cognizance of the offence, sanction is not necessary. The said legal proposition is _____________ Page No.28/46 https://www.mhc.tn.gov.in/judis Crl.A.Nos.816 and 834 of 2013 well fortified on plain reading of the relevant Sections of law and the dictum of the Courts referred below.
30. Section 197(1)(a)(b) of Cr.P.C, 1973 reads as below:
“197. Prosecution of Judges and public servants (1) When any person who is or was a Judge or Magistrate or a public servant not removable from his office save by or with the sanction of the Government is accused of any offence alleged to have been committed by him while acting or purporting to act in the discharge of his official duty, no Court shall take cognizance of such offence except with the previous sanction-
(a) in the case of a person who is employed or, as the case may be, was at the time of commission of the alleged offence employed, in connection with the affairs of the Union, of the Central Government;
(b) in the case of a person who is employed or, as the case may be, was at the time of commission of the alleged offence employed, in connection with the affairs of a State, of the State Government: 1 Provided that where the alleged offence was committed by a person referred to in clause (b) during the period while a Proclamation issued under clause (1) of article 356 of the Constitution was in force in a State, clause (b) will apply as if for the expression" State Government" occurring therein, the expression" Central Government" were substituted.
39. Section 19 of Prevention of Corruption Act, 1988:
19. Previous sanction necessary for prosecution.— _____________ Page No.29/46 https://www.mhc.tn.gov.in/judis Crl.A.Nos.816 and 834 of 2013 (1) No court shall take cognizance of an offence punishable under sections 7, 10, 11, 13 and 15 alleged to have been committed by a public servant, except with the previous sanction,—
(a) in the case of a person who is employed in connection with the affairs of the Union and is not removable from his office save by or with the sanction of the Central Government, of that Government;
(b) in the case of a person who is employed in connection with the affairs of a State and is not removable from his office save by or with the sanction of the State Government, of that Government;
(c) in the case of any other person, of the authority competent to remove him from his office.
(2) Where for any reason whatsoever any doubt arises as to whether the previous sanction as required under sub-section (1) should be given by the Central Government or the State Government or any other authority, such sanction shall be given by that Government or authority which would have been competent to remove the public servant from his office at the time when the offence was alleged to have been committed.
(3) Notwithstanding anything contained in the Code of Criminal Procedure, 1973 (2 of 1974),—
(a) no finding, sentence or order passed by a special Judge shall be reversed or altered by a court in appeal, confirmation or revision on the ground of the absence of, or any error, omission or irregularity in, the sanction required under sub-section (1), unless in the opinion of that court, a failure of justice has in fact been occasioned thereby;
(b) no court shall stay the proceedings under this Act on the ground of any error, omission or irregularity in the sanction granted by the authority, unless it is satisfied that such error, omission or _____________ Page No.30/46 https://www.mhc.tn.gov.in/judis Crl.A.Nos.816 and 834 of 2013 irregularity has resulted in a failure of justice;
(c) no court shall stay the proceedings under this Act on any other ground and no court shall exercise the powers of revision in relation to any interlocutory order passed in any inquiry, trial, appeal or other proceedings.
(4) In determining under sub-section (3) whether the absence of, or any error, omission or irregularity in, such sanction has occasioned or resulted in a failure of justice the court shall have regard to the fact whether the objection could and should have been raised at any earlier stage in the proceedings.
Explanation.—For the purposes of this section,—
(a) error includes competency of the authority to grant sanction;
(b) a sanction required for prosecution includes reference to any requirement that the prosecution shall be at the instance of a specified authority or with the sanction of a specified person or any requirement of a similar nature.”
31. As far as offence under Prevention of Corruption Act, 1988, to take cognizance of offence committed by a public servant, prior sanction is required, if he is in service at the time of taking cognizance. In respect of other offences, whether the accused is or was a public servant prior sanction of the respective government is required provided the said public servant must have been employed in connection with the affairs of the Union or State. In this case, A-1 was not an employee under the State or Union. Hence, though he fall under the definition of _____________ Page No.31/46 https://www.mhc.tn.gov.in/judis Crl.A.Nos.816 and 834 of 2013 Public Servant as per the definition under Section 2 (c) of Prevention of Corruption Act, 1988, he will not come under the definition of Public Servant under Section 21 of Indian Penal Code.
(i)In Ch.Prasad –vs- Vanalatha Devi:[(1987) 2 SCC 52], ], at paras 6 and 7 the Hon'ble Supreme Court has held: -
“6.It is very clear from this provision that this section is attracted only in cases where the public servant is such who is not removable from his office save by or with the sanction of the Government. It is not disputed that the appellant is not holding a post where he could not be removed from service except by or with the sanction of the government. In this view of the matter even if it is held that appellant is a public servant still provisions of Section 197 are not attracted at all.
7.It was contended by the learned counsel that the competent authority who can remove the appellant from service derives his power under regulations and those regulations ultimately derive their authority from the Act of Parliament and therefore it was contended that the regulations are framed with the approval of the Central Government but it does not mean that the appellant cannot be removed from his service by anyone except the Government or with the sanction of the Government. Under these circumstances on plain reading of Section 197 the view taken by the courts below could not be said to be _____________ Page No.32/46 https://www.mhc.tn.gov.in/judis Crl.A.Nos.816 and 834 of 2013 erroneous. We therefore see no reason to entertain this appeal. It is therefore dismissed.”
(ii)In Md. Hadi Raja –vs- State of Bihar reported in [(1998) 5 SCC 91], the Hon’ble Supreme Court has clarified the legal position as below:-
“19.“Public servant” has not been defined in the Code of Criminal Procedure but Section 2(y) of the Code of Criminal Procedure provides that the words used in the Criminal Procedure Code but not defined in the Criminal Procedure Code but defined in the Penal Code, 1860 shall be deemed to have the same meaning attributed to them in the Penal Code, 1860. Section 21 of the Penal Code, 1860 defines “public servant” and therefore the expression “public servant” will have the same meaning in the Criminal Procedure Code. It will be appropriate to refer to clauses 9 and 12 of Section 21 IPC.
“21.Ninth.—Every officer whose duty it is, as such officer, to take, receive, keep or expend any property on behalf of the government, or to make any survey, assessment or contract on behalf of the government or to execute any revenue process, or to investigate, or to report, on any matter affecting the pecuniary interests of the government, or to make, authenticate or keep any document relating to the pecuniary interests of the government or to prevent the infraction of any law for the protection of the pecuniary interests of the government.
_____________ Page No.33/46 https://www.mhc.tn.gov.in/judis Crl.A.Nos.816 and 834 of 2013 Twelfth.—Every person—
(a) in the service or pay of the government or remunerated by fees or commission for the performance of any public duty by the government;
(b) in the service or pay of a local authority, a corporation established by or under a Central, Provincial or State Act or a government company as defined in Section 617 of the Companies Act, 1956 (1 of 1956).”
20.Although the instrumentality or agency with a corporate veil, for all intents and purposes may be held to be a third arm of the Government and such instrumentality discharges the duties and functions which the State intends to do as indicated in Ajay Hasia case [(1981) 1 SCC 712 :
1981 SCC (L&S) 258] such instrumentality or agency is none the less a juridical person having a separate legal entity. Therefore, such instrumentality must be held to have an independent status distinct from the State and cannot be treated as a government department for all purposes. Therefore, even if an officer of such instrumentality or agency takes or receives, keeps or expends any property or executes any contract, such acts even though in ultimate analysis may be held to have been done in the interest of the State, such action cannot be construed, as of rule, an action of the Government by its employees or by an authority empowered by the Government. It may be indicated here that it is not necessary that persons falling under any of the descriptions given in various clauses _____________ Page No.34/46 https://www.mhc.tn.gov.in/judis Crl.A.Nos.816 and 834 of 2013 under Section 21 of IPC need to be appointed by the Government. If such person falls under any of the descriptions as contained in various clauses of Section 21 of the Penal Code, 1860, such person must be held to be a public servant. Explanation 1 of Section 21 indicates that persons falling under any of the above descriptions are public servants whether appointed by the Government or not. Explanation 2 indicates that wherever the words “public servant” occur, they shall be understood of every person who is in actual possession of the situation of a public servant, whatever legal defect there may be in his right to hold that situation. Sub-clause (b) of clause twelve of Section 21 expressly makes the officers of local authority and corporation established by or under a Central, Provincial or State Act or a government-owned company as defined in Section 617 of the Companies Act, 1956, public servants. But protection under Section 197 CrPC is not available to a public servant unless other conditions indicated in that section are fulfilled.
21.It is to be noted that though through the contrivance or mechanism of corporate structure, some of the public undertakings are performing the functions which are intended to be performed by the State, ex facie, such instrumentality or agency being a juridical person has an independent status and the action taken by them, however important the same may be in the interest of the State cannot be held to be an action taken by or on behalf of the _____________ Page No.35/46 https://www.mhc.tn.gov.in/judis Crl.A.Nos.816 and 834 of 2013 Government as such within the meaning of Section 197 CrPC.
25.It will be appropriate to notice that whenever there was a felt need to include other functionaries within the definition of “public servant”, they have been declared to be “public servants” under several special and local acts. If the legislature had intended to include officers of an instrumentality or agency for bringing such officers under the protective umbrella of Section 197 CrPC, it would have done so expressly.
26.Therefore, it will not be just and proper to bring such persons within the ambit of Section 197 by liberally construing the provisions of Section 197. Such exercise of liberal construction will not be confined to the permissible limit of interpretation of a statute by a court of law but will amount to legislation by court.
27.Therefore, in our considered opinion, the protection by way of sanction under Section 197 of the Code of Criminal Procedure is not applicable to the officers of government companies or the public undertakings even when such public undertakings are “State” within the meaning of Article 12 of the Constitution on account of deep and pervasive control of the Government. The appeals are disposed of accordingly.”
(iii) In K.Veeraswami v. Union of India and others reported in [(1991) SCC (cri) 734], the Hon'ble Supreme Court has said:
_____________ Page No.36/46 https://www.mhc.tn.gov.in/judis Crl.A.Nos.816 and 834 of 2013 “107.Clauses (a), (b) and (c) in sub-section (1) of Section 6 exhaustively provide for the competent authority to grant sanction for prosecution in case of all the public servants falling within the purview of the Act. Admittedly, such previous sanction is a condition precedent for taking cognizance of an offence punishable under the Act, of a public servant who is prosecuted during his continuance in the office. It follows that the public servant falling within the purview of the Act must invariably fall within one of the three clauses in sub-section (1) of Section 6. It follows that the holder of an office, even though a ‘public servant’ according to the definition in the Act, who does not fall within any of the clauses (a), (b) or (c) of sub-section (1) of Section 6 must be held to be outside the purview of the Act since this special enactment was not enacted to cover that category of public servants in spite of the wide definition of ‘public servant’ in the Act. This is the only manner in which these provisions of the Act can be harmonized and given full effect. The scheme of the Act is that a public servant who commits the offence of criminal misconduct, as defined in the several clauses of sub-section (1) of Section 5, can be punished in accordance with sub-section (2) of Section 5, after investigation of the offence in the manner prescribed and with the previous sanction of the competent authority obtained under Section 6 of the Act, in a trial conducted according to the prescribed procedure. The grant of previous sanction under Section 6 being a condition _____________ Page No.37/46 https://www.mhc.tn.gov.in/judis Crl.A.Nos.816 and 834 of 2013 precedent for the prosecution of a public servant covered by the Act, it must follow that the holder of an office who may be a public servant according to the wide definition of the expression in the Act but whose category for the grant of sanction for prosecution is not envisaged by Section 6 of the Act, is outside the purview of the Act, not intended to be covered by the Act. This is the only manner in which a harmonious construction of the provisions of the Act can be made for the purpose of achieving the object of that enactment. This appears to be the obvious conclusion even for a case like the present where no such sanction for prosecution is necessary on the view taken in Antulay [(1984) 2 SCC 183 : 1984 SCC (Cri) 172 : (1984) 2 SCR 495] , and not challenged before us, that the sanction for prosecution under Section 6 is not necessary when cognizance of the offence is taken after the accused has ceased to hold the office in question.”
(iv)The relevant portion of the Hon'ble Supreme Court judgment in Abhay Singh Chautala –vs- CBI [(2011) 7 SCC (cri) 141] reads as below:-
“41.It is in the light of this that the Court did not have to specify as to under what circumstances would a duty arise for locating the authority to give sanction. The doubt could arise in more manners than one and in more situations than one, but to base the interpretation of Section 19(1) of the Act on the basis of Section 19(2) _____________ Page No.38/46 https://www.mhc.tn.gov.in/judis Crl.A.Nos.816 and 834 of 2013 would be putting the cart before the horse. The two sections would have to be interpreted in a rational manner. Once the interpretation is that the prosecution of a public servant holding a different capacity than the one which he is alleged to have abused, there is no question of going to Sections 6(2)/19(2) at all in which case there will be no question of any doubt. It will be seen that this interpretation of Section 6(1) or, as the case may be, Section 19(1), is on the basis of the expression “office” in three sub-clauses of Section 6(1), or as the case may be, Section 19(1). For all these reasons, therefore, we are not persuaded to accept the contention that Antulay case [(1984) 2 SCC 183 : 1984 SCC (Cri) 172] was decided per incuriam of Section 6(2). In our opinion, the decision in K. Veeraswami v. Union of India [(1991) 3 SCC 655 :
1991 SCC (Cri) 734] or, as the case may be, P.V. Narasimha Rao case [(1998) 4 SCC 626 : 1998 SCC (Cri) 1108] are not apposite nor do they support the contention raised by the learned Senior Counsel as regards Antulay case [(1984) 2 SCC 183 : 1984 SCC (Cri) 172] being per incuriam of Section 6(2).
54.The learned Senior Counsel tried to support their argument on the basis of the theory of “legal fiction”. We do not see as to how the theory of “legal fiction” can work in this case. It may be that the appellants in this case held more than one offices during the check period which they are alleged to have abused; _____________ Page No.39/46 https://www.mhc.tn.gov.in/judis Crl.A.Nos.816 and 834 of 2013 however, there will be no question of any doubt if on the date when the cognizance is taken, they are not continuing to hold that very office. The relevant time, as held in S.A. Venkataraman v. State[AIR 1958 SC 107 : 1958 Cri LJ 254] , is the date on which the cognizance is taken. If on that date, the appellant is not a public servant, there will be no question of any sanction. If he continues to be a public servant but in a different capacity or holding a different office than the one which is alleged to have been abused, still there will be no question of sanction and in that case, there will also be no question of any doubt arising because the doubt can arise only when the sanction is necessary. In case of the present appellants, there was no question of there being any doubt because basically there was no question of the appellants' getting any protection by a sanction.”
32. Therefore, there was no legal impediment for the trial Court to take cognizance of the offence without sanction to prosecute A-1, the erstwhile Manager of a Nationalized Bank both for offences under Prevention of Corruption Act, 1988 as well as offences under IPC.
33. The evidence placed by the prosecution prove beyond any pale of doubt that A-1 as Manager of the Branch and sanctioned trade loans in gross _____________ Page No.40/46 https://www.mhc.tn.gov.in/judis Crl.A.Nos.816 and 834 of 2013 violation of the banking norms, instruction of the panel lawyer and suppressing the facts about the borrowers. A-1 had not only allowed the borrower to make his application first and then opened Current Account. Recorded incorrect details in the appraisal report and sanctioned loan. (A-1 and the absconding borrower were in unison acted in furtherance of common intention to cheat the Bank. The meeting of mind between A-1 and A-2( absconding accused) is well proved. The loss of about Rs.17.45 lakhs due to the sanction of loan accepting false documents produced as genuine satisfies the necessary ingredients to convict them for the offences charged and tried.
34. Crl.A.No.834 of 2013 stands dismissed. The judgment of conviction passed by the learned XI Additional city Civil & Sessions Judge for CBI Cases, Chennai made in C.C.No.16 of 2008, dated 26.11.2013, is hereby confirmed. The period of substantive sentence shall run concurrently. This period of sentence shall also run concurrently with the period of substantive sentence imposed in CC 13/2008. The period of sentence already undergone by the accused is set off. Bail bond if any executed by the accused shall be cancelled. The respondent police shall secure the accused and remand them to the judicial custody to undergo the _____________ Page No.41/46 https://www.mhc.tn.gov.in/judis Crl.A.Nos.816 and 834 of 2013 remaining period of sentence imposed by the trial Court, if any.
35. Crl.A.No.816/2013:
The appellant is the approved valuer who had had given his report Ex.P-8 and Ex.P-9. The prosecution witnesses had proved that the property does not belong to Purushotaman and Kuppusamy. But the existence of the property is not disputed. The ownership mentioned in Ex.P-8 and Ex.P-9 report is based on the panel lawyer’s report. Regarding the value estimated by A-4, the prosecution has not come forward with the case that the value is inflated dishonestly to cheat the bank. There is no other opinion about the value of the properties except Ex.P-8 and P-9.
36. In L.N.Rajagopalan –vs- State reported in [CDJ 2009 MHC 3754] at para 11 and12, this Court has observed:-
“11. Firstly, the Valuer is not associated with the business transaction when the application for loan is submitted by the borrower. Therefore, there is no occasion for the Valuer to see the persons who appear before the bank. Some of the properties might have been Government _____________ Page No.42/46 https://www.mhc.tn.gov.in/judis Crl.A.Nos.816 and 834 of 2013 properties. It is not the duty of the Valuer to go to the Registrar's Office to verify whether the lands belong to the Government or private individuals.
12. The next allegation is that the petitioner violated the guidelines of the bank and submitted valuation reports of properties which do not exist. The prosecution has not produced any documents to show that there are specific guidelines issued to the Valuers for valuing the property.”
37. The dictum laid by this Court cited supra regarding the role of a valuer wholly applies to the facts of the case. The prosecution failed to prove that the valuer had for some extraneous interest in the loan transaction, gave wrong information about the owner and because of the wrong information alone loan was sanctioned. From Ex.P-8 and Ex.P-9 and from the evidence of the Investigating Officer, this Court no apparent error or dishonesty in the valuation reports, Therefore, there is no adequate evidence to hold that this appellant had conspired with the other accused to cheat the bank.
38. As a result, the Criminal Appeal No.816/2013 stands allowed. The judgment of conviction and sentence passed by the learned XI Additional City Civil & Sessions Judge for CBI Cases, Chennai made in C.C.No.16 of 2008 dated _____________ Page No.43/46 https://www.mhc.tn.gov.in/judis Crl.A.Nos.816 and 834 of 2013 26.11.2013 is hereby set aside. Bail bond if any executed by the accused shall be cancelled. Fine amount if any paid by the accused shall be refunded to him. The appellant is at liberty forthwith unless his presence is not required in connection with any other criminal case.
In sum,
(i) Crl.A.No.816 of 2013(K.B.Sampath) is allowed.
(ii) Crl.A.No.834 of 2013(N.K.Ravindran) is dismissed.
31.07.2023 Index:yes/no speaking order/non speaking order ari To:
1.The XI Additional Special Judge (CBI cases relating to Banks and Financial Institutions) Chennai.
2.The Deputy Superintendent of Police, SPE/CBI/ACB,Chennai.
3.The Special Public Prosecutor CBI Cases, High Court, Madras.
_____________ Page No.44/46 https://www.mhc.tn.gov.in/judis Crl.A.Nos.816 and 834 of 2013 DR.G.JAYACHANDRAN,J.
ari delivery Common judgment made in Crl.A.Nos.816 and 834 of 2016 _____________ Page No.45/46 https://www.mhc.tn.gov.in/judis Crl.A.Nos.816 and 834 of 2013 31.07.2023 _____________ Page No.46/46 https://www.mhc.tn.gov.in/judis