Bangalore District Court
Cbi/Acb/Blr vs A1 Nalini Rao on 21 April, 2025
KABC010123142019
IN THE COURT OF THE XLVI ADDITIONAL CITY CIVIL AND SESSIONS
JUDGE AND SPECIAL JUDGE FOR CBI CASES (CCH-47)
AT BENGALURU
Dated this the 21st day of April, 2025
PRESENT:
SRI. SANTOSH.S.PALLEDH, B.A., LL.B. (Spl.),
XLVI Additional City Civil and Sessions Judge
and Special Judge for C.B.I., Cases,
Bengaluru.
SPECIAL CRIMINAL CASE No.425/2019
COMPLAINANT : State by Central Bureau of Investigation,
A.C.B., Bengaluru.
(By Public Prosecutor)
-VERSUS-
ACCUSED A1. Smt. Nalini Rao,
D/o KKM Rao,
The then Divisional Officer,
DO-1,Gandhi Nagar,
Oriental Insurance Corporation Limited,
Bangalore.
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A2. Sri. KKM Rao,
S/o Late K.Subbarao,
Accused No.1 and 2 are residing at
No.101, East End, C Main,
9th Block, Jayanagar,
Bengaluru - 560 006.
A3. Sri. B.C Channabasavaiah,
S/o Late Chikkathontadaradhya,
Residing at No.109-B, 1st Floor,
16th A Main, 4th Block,
Koramangala,
Bengaluru.
A4. Smt. Asha.N.R.,
W/o Sri. K.S.Sheshadri,
Residing at No.1852,
"K" Block, 1st Cross, Pache Road,
Adichunchnagiri Road,
Kuvempu Nagar,
Mysore.
A5. Smt. Geeta P Suvarna,
W/o Sri. Pravin Suvarna,
Residing at No.5072,
PrestigeWellingtonPark,
IAF Main Road, Jallahalli,
Near Gangamma Circle,
Bengaluru - 560 013.
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1. Date of Commission of Offence : From April 2008 to June 2018
2. Date of Report of Offence : 31.05.2018
3. Date of Arrest of accused : -
4. Date of release of accused on bail : -
5. Period of undergone in custody : -
6. Name of the complainant : Central Bureau of Investigation, A.C.B.,
Bengaluru.
7. Date of recording of Evidence : 04.08.2022
8. Date of closing Evidence : 22.10.2024
9. Offences complained of : Offences punishable Under Sections
Charges framed 120-B, r/w Sections 420, 409, 467, 468 and
471 of I.P.C., and Sec.13(2) r/w Sec. 13(1)
(d) of the Prevention of Corruption Act,
1988.
10. Opinion of the Judge : Accused not found guilty
11. State/CBI represented by : Special Public Prosecutor
12. Accused defended by A.1& 2 - By Sri.R.V.S., Advocate,
A.3 - By Sri.S.G.M.G., Advocate,
A.4 - By Sri.M.N.R.Advocate,
A.5 - By Sri.K.V.N., Advocate.
(SANTOSH S. PALLEDH)
XLVI Addl. City Civil and Sessions Judge
and Special Judge for C.B.I. Cases,
Bengaluru.
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JUDGMENT
The Inspector of Police, CBI, Anti Corruption Branch has filed charge-sheet against the Accused Nos.1 to 5 for the offences punishable under sections 120-B R/w Sections 420, 409, 467, 468 and 471 of I.P.C. and Sections 13(2) R/w Sec.13(1)(d) of the Prevention of Corruption Act, 1988.
2. The case of the prosecution is as under:
It is the case of the prosecution that, the accused No.1-Nalini Rao, a public servant, who was working in the capacity of Divisional Manager and Senior Divisional Manager at M/s The Oriental Insurance Company wherein she has served at various places at Divisional Office at Bengaluru and Mysore between the period 2008 to June 2018. Accused No.2-Sri.KKM Rao, who is the father of accused No.1, Accused No.3- Sri.B.C.Channabasavaiah, who had retired from M/s The Oriental Insurance Company as Divisional Manager and accused No.5 Geetha P. Suvarna is the aunt of accused No.1 and the accused No.4-Asha.N.R was having close acquaintance with accused No.1. It is further contended that, the accused No.1 being the Divisional Manager and Senior Divisional Manager of the Company and accused No.3-B.C.Channabasavaiah, who was the retired Divisional Manager of the Oriental Insurance Company, in furtherance of the criminal 5 conspiracy with accused No.4-Geetha.P.Suvarna and accused No.5- Asha.N.R had included them as the Oriental Insurance Company's agents and had also opened three bank accounts in the joint name of accused No.2-KKM Rao with accused No.4 and accused No.5 as dummy agents at Karnataka State Co-operative Apex Bank, which were used to receive the commission/incentives from the Company and had produced the insurance business which were existing from the period of accused No.3- Channabasavaiah, who was working at The Oriental Insurance Company and purported it to be the policies purchased in the name of M/s Suprajith Automatives, M/s Suprajith Engineering, M/s Pharmed Ltd., M/s Pharmed Medicare, M/s Bio Plus Life Science Pvt. Ltd. M/s V B Medicare Pvt Ltd., M/s Santech Engineering Pvt., Ltd., M/s Techmek Engineering Pvt., Ltd., through the agents accused No.4 and accused No.5 along with Smt.Pavithra Balekai and had got withdrawn the incentives/commission deposited in their account, through accused No.2-KKM Rao, who was the joint account holder and also forged the cheques and created Income Tax refund documents by obtaining pecuniary advantage without any public interest by abusing the position as public servant and knowing fully well that, the said documents were not genuine and withdrawn the amount from the account through accused No.2 and fraudulently received the commission amount and incentives from the Company and caused 6 wrongful loss to The Oriental Insurance Company to an extent of Rs.2,62,92,665/- and thereby committed the offences punishable under Sections 120-B R/w Sections 420, 409, 467, 468 and 471 of I.P.C. and Sections 13(2) R/w Sec.13(1)(d) of the Prevention of Corruption Act, 1988.
3. Initially, the FIR has been registered by Smt.Roopa.M., Superintendent of Police, CBI/ACB, Bengaluru in RC No.8(A) of 2018 dated 31.05.2018 under Sections 120-B read with sections 420 of IPC and under section 13(1)(d) of the Prevention of Corruption Act 1988 against one Smt.Nalina Rao, Senior Divisional Manager, M/s The Oriental Insurance Company Limited, DO-2, Gandhinagar, Bengaluru. After the investigation progressed it is revealed that the accused No.2-Sri.KKM Rao, father of the accused No.1, Accused No.3-Sri.B.C.Channabasavaiah, who had retired from M/s The Oriental Insurance Company as Divisional Manager, Accused No.5-Geetha.P.Suvarna is the aunt of accused No.1 and Accused No.4-Asha.N.R was having close acquaintance with accused No.1 being the agents of the company have committed the alleged offences.
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4. After obtaining sanction from the competent authorities, the Investigating Officer has filed charge-sheet against Accused Nos.1 to 5 for the offences punishable under sections 120-B R/w Sections 420, 409, 467, 468 and 471 of I.P.C. and Sections 13(2) R/w Sec.13(1)(d) of the Prevention of Corruption Act, 1988.
5. On perusal of the entire charge sheet, this court had found that there were necessary materials to take cognizance against the accused persons and as such cognizance was taken by the learned predecessor in office, against the accused persons. On taking of cognizance, the accused were summoned before the court . In response to the summons, the accused Nos.1 to 5 had appeared before the court and they were enlarged on bail. The copy of the charge sheet was furnished to the accused and hence, the provision of Sec.207 of Cr.P.C. was complied with.
6. The Accused Nos.1 to 5 had filed separate discharge applications, which came to be dismissed and subsequently this court had come to a conclusion that there were necessary materials to frame charges and accordingly my learned predecessor in office has framed the charges against the accused No.1 to 5 for the offences punishable under 8 sections 120-B R/w Sections 420, 409, 467, 468 and 471 of I.P.C. and Sections 13(2) R/w Sec.13(1)(d) of the Prevention of Corruption Act, 1988. The accused Nos.1 to 5 pleaded not guilty and claimed to be tried.
7. Accordingly the trial was fixed and prosecution in order to prove their case, got examined totally 35 witnesses as PW-1 to PW-35 and had got marked the documents as Exs.P.1 to P.391. On completion of the prosecution evidence, the statement of the accused Nos.1 to 5 came to be recorded as contemplated under section 313 of Cr PC. The Accused Nos.1 to 5 have denied all the incriminating materials which were put forth to them and have submitted that a false case was foisted against them. Further they submitted that they have no defence evidence on their behalf. However during the cross examination of the witnesses, they have got confronted documents which are marked as Ex.D.1 to D.27. The accused no.1 and 2 submitted their reply under section 313(5) of Cr.P.C. Hence, the case was posted for arguments on merits.
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8. Heard arguments from the learned Public Prosecutor and learned counsel for the accused persons. The counsel for accused no.1 and 2 and learned Public prosecutor also filed written arguments. Perused the entire materials produced on record. The following points arise for my consideration :-
1. Whether the sanction accorded for prosecution against the accused No.1 is valid and proper?
2. Whether the prosecution proves beyond all reasonable doubt that the accused No.1 Smt.Nalani Rao, who was the public servant working in the capacity of Divisional Manager and Senior Divisional Manager at M/s The Oriental Insurance Company Limited had entered into a criminal conspiracy with accused No.2- KKM Rao, A-3-
B.C.Channabasavaiah, retired Divisional Manager of Company, A-4 Smt.Asha N.R and accused No.5 Geetha.P.Suvarna to do an illegal act or an act which is not illegal by illegal means and in furtherance of the said conspiracy, accused Nos.1 to 5 had conspired to obtain agent commission towards the direct insurance business as the rules of the Company did not permit to obtain agent commission and had got the insurance policies obtained by 10 purporting it to be made through the agent though they were the existing policies from the period when accused No.3 was working in the Company and by submitting the same had fraudulently received the commission amount and incentives from the Company by causing loss to an extent of Rs.2,62,92,665/- and thereby committed an offence punishable under Section 120(B) of IPC?
3. Whether the prosecution proves beyond all reasonable doubt that the accused No.1 Smt. Nalani Rao being a Divisional Manager and Senior Divisional Manager of the Company between the period 2008 to June 2018 knowing well that, the Company did not offer agent commission to the direct insurance business, in furtherance of the criminal conspiracy with accused No.4 Asha N.R and accused No.5 Geetha.P.Suvarna had included them as Oriental Insurance Company Limited agents and had also opened three bank accounts in the joint name of accused No.2-KKM Rao, father of accused No.1 with accused No.4 and accused No.5 as dummy agents at Karnataka State Co-operative Apex Bank, which were used to receive the commission / incentives from the Company and had procured the insurance business which were existing from the period of accused No.3 Channabasavaiah, who was then working at Oriental Insurance Company Limited and purported it to be the policies purchased through the agents accused No.4 and accused No.5 along with Smt.Pavithra Balekai and had 11 got withdrawn the incentives/commission deposited in their account through accused No.2-KKM Rao who was the joint account holder and also had forged the cheques for IT refund received from Income Tax Department and got it credited to the account in the name of accused No.4 and accused No.5 and had dishonestly induced the Company to issue agent commission/incentives and thereby committed an offence punishable under Section 420 R/w Sec.120(B) of IPC?
4. Whether the prosecution proves beyond all reasonable doubt that the accused No.1-Smt. Nalani Rao being a Divisional Manager and Senior Divisional Manager of the Company between the period 2008 to June 2018 and accused No.3-B.C Channabasavaiah, who was the retired Divisional Manager of Oriental Insurance Company Limited, in furtherance of the criminal conspiracy with accused No.4 and accused No.5 had ensured of accused No.4 and accused No.5 being the agents of the Company and accused No.3 had got the policies in the name of the above said agents in order to receive agent commissions, since the company did not offer any commission to direct insurance business and in furtherance of the same, the accused No.1 had opened bank accounts in the name of accused No.4 and accused No.5 and as such accused No.1 being a public servant and accused No.3 being a retired official of the Company entrusted with the property with the Company in 12 the form of agent commission had breached the same and as such the accused have committed criminal breach of trust and thereby committed an offence punishable under Section 409 R/w Sec.120(B) of IPC?
5. Whether the prosecution proves beyond all reasonable doubt that the accused No.1 Smt. Nalani Rao being the Divisional Manager and Senior Divisional Manager of the Company between the period 2008 to June 2018 in furtherance of their criminal conspiracy with other accused persons had got listed accused No.4 and accused No.5 as agents of the Company and accused No.2 KKM Rao, who is the father of accused No.1 and accused No.3 B.C.Channabasavaiah, being a retired employee of the Company had ensured the existing policies to be routed through the agents accused No.4 and accused No.5 so as to purport it to be the policies made through the agents to claim incentives/ commissions and in order to withdraw the said commission amount accused No.1 had forged the account opening form of accused No.5 Asha N.R and also the IT refund received for accused No.4 and accused No.5 and presented the same to the bank accounts of accused No.4 and accused No.5 which were jointly operated by accused No.2 KKM Rao in order to facilitate the withdrawal of amount knowing fully well that, the said documents will be used for cheating and accused No.3 to accused No.5 in furtherance of conspiracy, had knowledge of using it for cheating and 13 thereby committed an offence punishable under Section 467 and 468 R/w Sec.120(B) of IPC?
6. Whether the prosecution proves beyond all reasonable doubt that the accused No.1 Smt.Nalani Rao being the Divisional Manager and Senior Divisional Manager of the Company between the period 2008 to June 2018 in furtherance of their criminal conspiracy with other accused persons had got listed accused No.4 and accused No.5 as agents of the Company and accused No.2 KKM Rao, who is the father of accused No.1 and accused No.3 B.C.Channabasavaiah, being a retired employee of the Company had ensured the existing policies to be routed through the agents accused No.4 and accused No.5, so as to purport it to be the policies made through the agents to claim incentives / commissions and in order to withdraw the said commission amount, accused No.1 had forged the account opening form of accused No.5 Asha N.R and also the IT refund received of accused No.4 and accused No.5 and presented the same to the bank accounts of accused No.4 and accused No.5 which were jointly operated by accused No.2 KKM Rao in order to facilitate the withdrawal of amount, knowing fully well that, the said documents were not genuine but forged documents which were being used fraudulently with the connivance of accused No.3 to accused No.5 and thereby committed an offence punishable under Section 471 R/w Sec.120(B) of IPC ?
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7. Whether the prosecution proves beyond all reasonable doubt that the accused No.1 Smt. Nalani Rao being a public servant and worked as the then Divisional Manager and Senior Divisional Manager of the Company between the period 2008 to June 2018 in derogation of the duty had entered into a criminal conspiracy to cheat and defraud the Company and in furtherance of the same, had got listed accused No.4 and accused No.5 as the agents of the Company and with the connivance and support of accused No.3 who was the retired Divisional Manager of Company had routed the existing insurance polices which were made during the tenure of accused No.3 and purported it to be the policies made through the agents and obtained agent commissions / incentives credited to the joint account of accused No.2 KKM Rao and accused No.4 and to the joint account of accused No.2 and accused No.5 and by forging the Income Tax refund documents had withdrawn the amount from the account through accused No.2 and obtained pecuniary advantage without any public interest by abusing her position as public servant and thereby committed an offence punishable under Section 13(2) R/w Sec.13(1) (d) of Prevention of Corruption Act 1988?
8. What order?
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9. I have gone through the prosecution papers, evidence, and arguments of both side and after analyzing the same, my findings on the above points are as follows:-
Point No.1 : Affirmative
Point No.2 : Negative
Point No.3 : Negative
Point No.4 : Negative
Point No.5 : Negative
Point No.6 : Negative
Point No.7 : Negative
Point No.8 : As per final order
for the following:-
:REASONS:
10. POINT NO.1:- In this case it is not in dispute that the
accused No.1 was a public servant when the alleged offence was
committed and as per the provisions of law, the investigation agency has to seek the sanction for prosecuting accused No.1, from the competent authority. In the instant case, according to the prosecution, PW-31- Navaneet Doda is the Competent Authority. PW-31 in his chief examination has deposed that during the year 2019, when he was working as General Manager, The Oriental Insurance Company Limited at New 16 Delhi, he received a request letter along with some documents from the Vigilance Department of The Oriental Insurance Company Limited forwarded by CBI to them, for according sanction to prosecute accused No.1, who was then working as Senior Divisional Manager, in The Oriental Insurance Company Ltd., Bengaluru. After receiving the said requisition, he has noticed that there was a FIR registered by the CBI, statement of witnesses, reports of CBI and on examination of those documents applying judicious mind has taken independent decision by holding that there was a prima-facie case to accord sanction for prosecuting accused No.1. As such, he has issued the sanction order as per Ex.P.378. He has further deposed that, during that period he was the Competent Authority to appoint officer in the cadre of Senior Divisional Manager and to remove such officer and to show the same he has highlighted Ex.P.379, which is copy of the Oriental Insurance Company (Conduct, Discipline and Appeal) Rules 2014.
11. Though this witness is cross examined by the learned counsel for accused No.1. but it has not taken away the fact that he was the competent authority to remove the accused No.1 from the office. The cross examination upon careful appreciation, it shows that much is emphasized on the Rules and conditions of working of agent, passing of 17 commission amount and mandate issued by various companies. Perhaps when he was cross examined further, he answered that he has gone through all the documents, reports and found prima facie case against the accused No.1 and thereby he has issued the sanction order. He has denied to the suggestion that without application of mind and only on the basis of the request made by the CBI, he has adopted a causal approach and issued a causal order.
12. The learned counsel for accused No.1 has argued that on perusal of Ex.P.378 and Ex.P.379 and evidence of PW-31, alleged agents were licensed agents and there is no irregularity in appointing them and they were appointed according to the procedure followed by the Oriental Insurance Company Limited and commission granted on the basis of mandate given by various companies who have done business with Oriental Insurance Co,Ltd. The sanction authority has not appreciated these factors and documents and not applied its mind. The learned counsel for accused No.1 has taken through the evidence of PW-31, especially the cross examination done by them and has highlighted that the agents were not transferred by accused No.1, but it was the order of Regional Office. PW.31 has not observed the documents relating to transfer of some of the agents from Bengaluru Division to Mysore Division, whether the said documents were sent by the CBI or not. The CBI has not 18 examined the documents with regard to the Insurance Policies issued in favor of the persons who were not direct customers of Insurance Company and CBI has not supplied at least one policy document to show that the persons were direct customers of the Oriental Insurance Company Limited. He has not mentioned for what offences the sanction for prosecution was accorded. From this evidence, it can be gathered that there is no application of mind by this witness and hence, the sanction suffers from legality and on this point alone the accused can be acquitted as this court lacks jurisdiction, if there is no proper and valid sanction. Further, in this regard has placed reliance on the judgment of Hon"ble Apex Court in the matter of Nanjappa V/s State of Karnataka (2015(4) SCC 186 and relied on para No.24, wherein it is held that no proper sanction means failure of justice. In this regard Ex.P.378 is also silent as to which offence the sanction was accorded, as such, it is not proper sanction. Hence, prayed to acquit the accused No.1.
13. The learned Senior Public Prosecutor in reply highlighted Ex.P.379, which contains the list of officers permitted to accord sanction. The schedule shows that for officers in scale IV and V, the appointing authority is officer in Scale-VII and Disciplinary authority is officer in Scale VII, Appellate Authority is CMD and Memorial Authority is Board Sub 19 Committee (HR). It is not in dispute that, the accused No.1 was the scale- IV employee when the offence was alleged and the PW-31 is the Scale-VII officer and thereby there is no dispute that he was the competent authority to remove accused No.1 from the office. On the basis of records submitted by the CBI, he had accorded sanction and it shows that there is application of mind. Nevertheless it is a matter of appreciation of other evidence on merits, which would decide whether the accused No.1 has committed the offence or not. But, at this stage stating that accorded sanction on finding prima facie material, is sufficient to say that there is application of mind for according sanction.
14. In respect of appreciation of evidence on the point of Sanction, the Hon'ble Supreme Court in the case of State of Maharashtra through CBI Vs. Mahesh G. Jain, reported in (2013) 8 SCC 119, has held that "an order of sanction should not be construed in a pedantic manner and there should not be a hyper technical approach to test its validity. When there is an order of sanction by the competent authority indicating the application of mind, the same should not be lightly dealt with. The flimsy technicalities cannot be allowed to become tools in the hands of the accused". 20
15. Further in another decision in the case of CBI Vs. Ashok Kumar Agarwal 2014 (4) SCC 295, it is held that:
"The prosecution has to satisfy the court that at the time of sending the matter for grant of sanction by the competent authority, adequate material for such grant was made available to the said authority. This may be evident from the sanction order, in case, it is not extremely comprehensive as well as facts and circumstances of the case may be spelt out in the sanction order. However, in every individual case, the court has to find out whether there has been an application of mind on the part of the sanctioning authority concerned on the material placed before it."
16. In the case of Subramanyaswamy Vs. Dr. Manmohan Singh, reported in (2012) 3 SCC 64, it is held that:
"The grant or refusal of the sanction is not a quasi judicial function, what is required to be seen by the competent authority is whether the facts placed before it by investigation agency prima-facie disclose the commission of the offence by the public servant. If the competent authority satisfied that the material placed before it is sufficient for prosecution of the public servant, then, it is required to grant the sanction. If the satisfaction of the competent authority is otherwise, then, it can refuse the sanction. The 21 competent authority cannot undertake a detailed inquiry to decide whether or not the allegation made against the public servant are true."
Further, in the decision of C.S.Krishna Murthy Vs. State of Karnataka (2005) 4 SCC 81, the Hon'ble Apex Court held that;
"Therefore, the ratio is sanction order should speak for itself and in case, facts do not so appear, it should be proved by leading evidence that all the particulars were placed before the sanctioning authority for due application of mind. In case, the sanction speaks for itself, then, the satisfaction of the sanctioning authority is apparent by reading the order". It is further observed by the Hon'ble Supreme Court that, "it is no doubt true that the sanction is necessary for every prosecution of the public servant, this safeguard is against the frivolous prosecution against the public servant from harassment. But, the sanction should not be taken as a shield to protect corrupt and dishonest public servant."
Therefore, considering the above judgments cited supra, it has to be examined whether the prosecution has proved that the sanction accorded is valid as stated above.
17. After considering the rival submissions and on going through the evidence of PW-31, Ex.P.378 and Ex.P.379 documents, it is apt to note that the evidence of PW-31 when read as whole, he has specifically 22 stated in the cross examination that " I have stated about the offences in the previous paras, but not in the last para of sanction order". If Ex.P.378 is read altogether, it points out that there was clear observation with regard to each and every allegation leveled against accused in the FIR. Further there is reference to the effect that he was supplied with FIR, CBI report, Search list, Bank account Statements,Commission bills, statement of witnesses copies. Thus after verifying all the documents supplied to him he has accorded sanction and it is nothing but application of mind finding prima facie case. It is the case of the prosecution that this accused No.1 has influenced other officials to appoint her relatives as agents and made her father as joint account holder with these agents and through her father, withdrawn the amount of commission, which is against to the Rules of the Oriental Insurance Company (Conduct, Discipline and Appeal) Rules 2014.
18. This Court cannot sit in as Appellate Court in evaluating the correctness of the sanction order, what to be seen is only the prima facie material satisfying the authority to sanction for prosecution. On going through the evidence of PW-31, wherein he has clearly expressed his opinion that there is a prima facie material, would definitely show that he has gone through all the documents, made verification, applied the mind and then came to the conclusion that the sanction is necessary to 23 prosecute. Thus, in my opinion, the contention of the learned counsel for the accused No.1 is not acceptable and the judgment relied by them would not help their case as there is clear evidence of PW-31 to ascertain that there is application of mind in passing sanction order finding prima- facie case. Hence, Point No.1 is answered in the Affirmative.
20. In this case the accused no. 1 to 5 are alleged of committing offences under section 120(B), 420,467,468,471 of IPC and particularly offences under section 409 of IPC and section 13(1) (d) 13(2) of Prevention of Corruption Act, attributed against accused no.1. From the facts narrated and evidence led, the alleged role of each accused can be deciphered as under:
i) The accused no.1 is alleged as being the employee of Oriental Insurance Company Ltd is said to have inducted accused no.4,5 and PW.34 who are her relatives as agents of Oriental Insurance Company Ltd. Further with the help of accused no.3 who was the ex-employee of Oriental Insurance Company Ltd, being Advisor of many companies in respect of Insurance, obtained the policies through him which were already doing business with Oriental Insurance Company Ltd, but shown them as doing business with the help of agents accused no. 4 and 5, for 24 getting the commission amount of agency and with the help of her father opened bank account of accused no. 4, 5 and PW.34 along with accused no.2 and through accused no.2 got withdrawn the amount of commission deposited and also forged documents for opening bank account, ITR returns and refunds and all this is done only with an intention to gain the commission amount which she could not have gained if had shown the policy obtained by the companies directly. Thus it is alleged that she has committed the act of criminal conspiracy, criminal breach of trust, cheated the Oriental Insurance Co.Ltd deceiving them to deliver the commission amount, committed forgery of documents, used them as genuine, wrongfully gained for herself and committed the offence of criminal misconduct.
ii) The accused no.2 is alleged of conspiring with accused no.1 and others, has cheated the Oriental insurance Co. Ltd by withdrawing the commission amount form the account of accused no. 4 and 5 and shared with accused no.1, 3 and son of accused no.3.
iii) The accused no.3 is alleged of conspiring with accused no.1 and others, has diverted the policies already existing to show them as policies 25 taken through agents accused no.4 and 5 and received commission amount.
iv) The accused no. 4 and 5 are alleged of conspiring with accused no. 1 to 3 and allowed accused no. 1 to create agency and bank accounts in their names and though they did not do business, got the commission to their accounts and allowed accused no.2 to withdraw it and to be shared by accused no.1 and 3.
21. It is essential to note that in every criminal case the burden of proof rests completely on the prosecution and accused has the right to maintain silence. The degree of proof is beyond reasonable doubt. The prosecution has to prove the case with the help of relevant facts in issue and with support of relevant documents linking the crime alleged. The initial burden is solely on prosecution and once it establishes the case beyond reasonable doubt, then it is for accused either to contradict it in the cross-examination or by leading evidence independently. Considering these aspects to the present case on hand, in this case the prosecution must establish that the act of accused no.1 violated rules of Oriental Insurance Company Ltd as it is the base of allegation. If this is proved 26 then the the other aspects of cheating and forgery, criminal misconduct would have importance.
22. Before adverting to evidence, it is necessary to know what are the ingredients required to attract offenses alleged in this case. Firstly the accused are alleged of offence under section 120-B of IPC. The ingredients for the offence of criminal conspiracy under section 120-B IPC:
(i) an agreement between two or more persons;
(ii) an agreement must relate to doing or causing to be done either
(a) an illegal act;
(b) an act which is not illegal in itself but is done by illegal means.
(As explained in MIR NAGVI ASKARI Vs. C.B.I. 2009(15) SCC 643 )
23. For the offence under section 409 of IPC, the definition the expression 'criminal breach of trust' is defined under Section 405 IPC. Hence, to attract Section 405 IPC, the following ingredients must be satisfied:
(I) Entrusting any person with property or with any dominion over property;
(ii)That person has dishonestly misappropriated or converted that property to his own use;27
(iii) Or that person dishonestly using or disposing of that property or willfully suffering any other person so to do in violation of any direction of law or a legal contract.
If such criminal breach is caused by a public servant or a banker, merchant or agent,the said offence of criminal breach of trust is punishable under Section 409 IPC, for which it is essential to prove that:
(i)The accused must be a public servant or a banker, merchant or agent;
(ii)He/She must have been entrusted, in such capacity, with property; and
(iii)He/She must have committed breach of trust in respect of such property.
24. Ingredients necessary to prove a charge under Section 420 IPC:
(i) deception of any person,
(ii) fraudulently or dishonestly inducing that person to deliver any property to any person, and
(iii) mens rea of the accused at the time of making the inducement.
( As explained in the case of Sadupati Nageswara Rao v. State of Andhra Pradesh, (2012) 8 SCC 547) 28
25. Ingredients of IPC section 467 :
1. The forged document must claim to be a : valuable security, or, a will, or, an authority to adopt a son.
2. If the forged document gives authority to any person to make or transfer any valuable security, or, to receive any dividend or interest, or, to move or relocate money.
3. If the forged document purports to be an acquaintance receipt for :
acknowledging the payment of money, or, the delivery of any movable property
26. Ingredients to Attract offence under section 468 IPC :
i) that the accused has fabricated an instrument; and
(ii) it was done with the intention that the forged document would be used for the purpose of cheating.
27. Ingredients to attract offence under section 471 of IPC:
The accused made use of the forged document or electronic record as a genuine one.
The accused knew or had a reason to believe that such document or electronic record is a forged one.
The accused made use of the said document or electronic 29 record in spite of knowing it to be a forged one.
28. The section 13 (1) (c) and (d) of Prevention of Corruption Act reads as under:
"Section13: Criminal misconduct by a public servant - (1)a public servant is said to commit the offence of criminal misconduct,-
d) if he, i) by corrupt or illegal means,obtains for himself or for any other person any valuable thing or pecuniary advantage;or
(ii) by abusing his position as a public servant,obtains for himself or for any other person any valuable thing or pecuniary advantage;or
(iii) while holding office as a public servant,obtains for any persons any valuable thing or pecuniary advantage without any public interest.
29. In the instant case the prosecution has placed reliance on the evidence of PW.1 to PW.35 and Ex.P 1 to 391 documents and the gist of it is as under:
Sl. P.Ws Witness Name Nature of Exhibits
evidence
1 P.W.1 Shabana Afroz Khan Furnished Ex.P.1 to 6
documents
30
2 P.W.2 Revathi Chandra Furnished Ex.P.7 to 14
documents
3 P.W.3 Sheela Bharadwaj She spoke about Ex.P.16 & 17
A-4 and A-5 not
attending the
training and
producing
documents
4 P.W.4 Basavaraj Deposed that A-5 Ex.P.17 & 18
was recruited by
him as agent and
producing
documents.
5 P.W.5 Yogeet Adlakha Identified Ex.P12 -
andEx. P13
6 P.W.6 Saravanan.M Speaks about Ex.P.19 and Ex.P.20
commision
recived by A-4
and A-5 through
Ex.P19 and
Ex.P.20
7 P.W.7 R.Anantha Ramu Deposed that A-4 Ex.P.17(a)
and A-5 not
attended meeting
8 P.W.8 K.Bayya Reddy Deposed about -
not knowing A-5
and not done
business with
her.
9 P.W.9 Meena Kumari.J.N. Bank manager Ex.P.21 to 256
deposed about
producing Ex.P
21 to Ex.P. 256
10 P.W.10 K.Subramani Bank manager Ex.P.257 to 319
deposed about
31
producing Ex.P
257 to Ex.P. 319
11 P.W.11 Nagabhushan Bhat Bank manager Ex.P.320 to 330
deposed about
producing Ex.P
320 to Ex.P. 330
12 P.W.12 Shivanna K.B. Bank manager Ex.P.331 to 339
deposed about
account of
accused no.3
and producing
documents
related to the
account.
13 P.W.13 Kundan Kumar Bank manager Ex.P.340 to 346
deposed about
producing Ex.P
340 to Ex.P. 346
14 P.W.14 Shankar Vikas Depsoed about Ex.P.347 to 352
account
maintained by
Pw.15with their
bank and
producing
documents
concerned to.
15 P.W.15 Dhananjaya.B.C. Explains that he Ex.P.Ex.P.349(d) &
has obtained Ex.P.349(e)
loan from
Accused no.2
and it is not
related in any
manner with
accused no.3, his
father.
16 P.W.16 Deepak.S.Lulla Deposes about Ex.P.353 &
accused no.3 353(a)
being director of
32
his company
17 P.W.17 Malathi.A Turned hostile. Ex.P.354
18 P.W.18 Kumar.S Deposed that he Ex.P.355
worked under A-1
and as per her
instructions
withdrawn the
amount on behalf
of accused no.2
19 P.W.19 H.J.Nagaraj Husband of A- -
1and deposed of
withdrawing
amount on behalf
of A-2.
20 P.W.20 Lakshmana.B.K. Father of PW.34 -
deposed that
account of PW.34
was single when
they opened.
21 P.W.21 Sunita Gupta Deposed about Ex.P.356 & 357
handing over
documents.
22 P.W.22 Rohith Vadnere Witness to Ex.P.358 to 362
search conducted
at the house of
accused no.1.
23 P.W.23 Murthy.R.N. Witness to Ex.P.363 &
search conducted 363(a)
at the office of
accused no.1.
24 P.W.24 Eshwaran.A. Employee of Ex.P.364 and 365
Suprajith
Engineering Ltd
speaks about
taking policies
33
with OICL,
Turned hostile
partly.
25 P.W.25 Noshir Burjor Shroff Employee of Ex.P.367
Pharmed Ltd,
deposed about
taking policies
with OICL but do
not know A-5.
26 P.W.26 S.Subramanian Witnessed taking Ex.P.368
Specimen
Handwriting and
Signature of A-4.
27 P.W.27 K.L.Venkatareddy Witnessed taking Ex.P.369 to 372
Specimen
Handwriting and
Signature of A-5,
Kumar S, A-1
and HJ Nagraj.
28 P.W.28 V.Surendra Rao Witnessed taking Ex.P.373 &
Specimen 373(a)
Handwriting and
Signature of A-1
29 P.W.29 P.Govindarajulu Witnessed taking Ex.P.374 &
Specimen 374(a)
Handwriting and
Signature of A-1.
30 P.W.30 C.Rajesh Examined the Ex.P.375 to
specimen 377(a)
writings and
signatures of
accused and
other and
submitted report.
31 P.W.31 Navaneer Doda Accorded Ex.P.378 & 379
sanction to
prosecute A-1.
34
32 P.W.32 Anitha Abraham Speaks about -
payments made
to PW.34, A-4, A-
5
33 P.W.33 Balasubramanyam.K.S Employee of Ex.P.380
. Micron
Electricals,
depsoes about
taking policies
with OICL.
Turned partly
hostile.
34 P.W.34 Pavithra Lakshmana Deposes that she Ex.P.381 to 391
Belekal was agent but
moved abroad in
2009 and later
has not done
business with
OICL and has not
opened joint
account with A-2.
35 P.W.35 Dimple Dua Investigating -
officer.
30. Submissions made on prosecution behalf orally and in writing :
The Learned Public Prosecutor has vehemently argued that this is a case filed for violating the Oriental Insurance Company (Conduct, Discipline and Appeal) Rules 2014 . It is contended that, the accused No.1 being a public servant working in the Oriental Insurance Company has misused her position, abused the official position, violated the Rule 14 and 35 entered into private trading by allowing her family members and relatives into the Insurance Business.
31. The learned Public Prosecutor has further contended that on the basis of the source information, FIR was registered and though the accused No.1 was not permitted to obtain commission amount has received the commission amount by showing the accused Nos.4 and 5 as agents of the company and they are all the relatives of her and amount is withdrawn by the accused No.2, who is none other than the father of accused No.1 and accused No.3 has also colluded in this illegal claim received by accused No.1.
32. It is further argued that, as the accused No.1 is a public servant, they obtained sanction for prosecuting her and in this regard PW- 31 has given evidence and she has deposed that after going through the necessary papers found prima facie case to proceed against accused no.1 and in this regard Ex.P.378 is the sanction order and Ex.P.379 contains the chart showing PW-31 is the Competent Authority to remove accused No.1 from the office. As such, the sanction aspect is duly proved. Further, in the arguments, the learned Senior Public Prosecutor has contended that as per the Oriental Insurance Company (Conduct, Discipline and Appeal) 36 Rules 2014, private trading is prohibited , but this accused No.1 being an influential person in the Oriental Insurance Company, inducted her relatives, accused Nos.4 and 5 and one Pavitha Balikai-PW-34 as agents and got posted them in the same office where she was working and without their knowledge diverted the commission amount by opening a joint account of them with her father/accused No.2. It is the accused No.2, who has signed on the withdrawal memos and it is he who has withdrawn the amount and therefore there is conspiracy shared by accused Nos.1 ,2, 4 and 5 in causing loss to Oriental Insurance Company. PW-34 has left the India and has resigned from the post of agent, but even then her agency was misused and she was made scope goat.
33. It is further argued that, the witnesses have deposed that the accused Nos.4, 5 and PW-34 were inducted as agents on the say of accused No.1. Ex.P.125 and Ex.P.154 withdrawal slips are not signed either by PW-34 or other agents, but it is signed by accused No.2. All the accounts are opened jointly but the witness PW-34 stated that when she signed the application to open the bank account, it was a single account and none other have signed as joint account holder and it was now shown as joint account with accused No.2. No doubt, the accused Nos.4 and 5 have not signed the withdrawal slips but the amount is transferred to their 37 account and it shows conspiracy with accused Nos.1 and 2 and the role of accused No.3 is that, to him also some amount is transferred and at his instance companies have assigned agencies to accused Nos.4 and 5. He was also an ex-employee/agent of Oriental Insurance Company and well known to accused No.1 and thereby it clearly shows that they have all hatched a plan to commit the alleged offences.
34. Submissions made on Accused no.1 and 2 behalf orally and in writing:
The learned counsel for the Accused No.1 has argued that the agents were not transferred by accused No.1, but it was the order of Regional Office. The CBI has not examined the documents with regard to the Insurance Policies issued in favor of the persons who were not direct customers of Insurance Company and CBI has not produced at least one policy document to show that the persons were direct customers of the Oriental Insurance Company Limited. Ex.P.365 and Ex.D1 to 27 documents do establish that the policies were taken through agents and there is no direct business, this was not considered by CBI. The alleged dummy agents in this case do not fall under definition of family under the OICL CDA rules and they were not totally depending on accused no.1 to say that they are family and it bars private trading. It shows the conspiracy 38 theory itself ousted. The Ex.P.9 to 11 establish that Accused no.4,5 and PW.34 were duly recruited as agents and not dummy agents. PW2, 3 deposed agents need not attend meeting or training. For that reason they cannot be called as dummy agents. PW.4 and 7 agency managers evidence show that the accused no. 4 and 5 are identified as agents and Accused no.5 is recruited by Pw.4. Thus they cannot be dummy agents. Evidence of PW.17 show clearly that there was no direct business and clients approached through agents. PW.8, 12,24,25 have clearly deposed about policy taken through agents and they have done business through other agents as well. Evidence of PW.10, show there is no material to say that it is accused no.1 who has opened bank accounts. PW.34 evidence shows she in order to get rid of being prosecuted has deposed against to accused but she has admitted being inducted as agent through due process and doing business. She has not surrendered license immediately when she left to United States and not given complaint to any authority on being misuse of her license. It is only to escape from her being prosecuted false evidence is given. The transaction between accused no. 2 and PW.15 is totally personal but it is mis-linked. Documents seized from the house of accused no.1 there is no conclusive evidence. The investigation officer herself admits business is done through agents, agents are recruited duly and there is no evidence to show that there is any direct 39 business, would show no act of conspiracy is done by accused and no offences as alleged have been committed. Hence seeks to acquit the accused persons no. 1 and 2.
35. Submissions made on Accused no.3 behalf:
The learned counsel for the accused No.3 has argued that, earlier in the FIR, the name of this accused No.3 was not mentioned, but the Investigating Officer included the name of the accused No.3 in the charge sheet only on the ground that there was some amount which is transferred from the account of the accused No.2 to this accused No.3 and it is properly explained that son of accused no.3 borrowed money from accused no.2. Hence no offence is committed by this accused.
36. Submissions made on Accused no.4 behalf:
The learned counsel for accused No.4 has argued that the accused No.4 is alleged as dummy agent in the charge sheet and in 12 th column of the FIR which is marked as Ex.P.38, it is stated that on the basis of source information during the year 2018, it is revealed that this accused No.4 was appointed as Insurance Agent for the Oriental Insurance Company Limited, under license No.1454159 and posted to Regional Office, Govindarajnagara, Bengaluru and at that time, the accused No.1 was the 40 Divisional Manager of that branch and in the year 2013, this accused No.4 took transfer to Divisional Office at Mysore, where also this accused No.1 was working as Regional Officer and again in the year 2016, this accused No.1 was transferred to Govindarajanagar Branch, this accused No.4 also worked in the same office and as such, she was only dummy agent. It is accused No.1, who was procuring business to the company in the name of this accused no.4 and accused No.5. The accused Nos.4 and 2 maintained joint account at State Bank of India, Sampige Road Branch, Bengaluru and they received commission from the Oriental Insurance Company Limited, but it was signed and received by accused No.2. Therefore, alleged that she is also conspirator along with accused Nos.1 and 2 causing loss to the Oriental Insurance Company Limited. However, PW-34, who was also an agent of the Oriental Insurance Company Limited and being shown as accused in the FIR, but, in the charge sheet she is left out and in this regard when PW-35 Investigating Officer was cross examined, she has stated that PW-34 and accused No.4 stands on the same footing, in spite of it, accused No.4 is not left out from the charge sheet and it is not impartial investigation done by PW-35. The accused No.4 was not at all an agent and she is unaware of the fact and she has not shared hands with accused Nos.1, 2, 3 and 5. The important evidence is that of PW-10, wherein in the cross examination he has admitted that in 41 the account opened at their bank it was mentioned as self only operation by A.K.Rao/accused No.2. But, later it was changed to either or survivor mode of operation. He admits that all the cheques are signed by accused No.2 and cash collected by some person authorized by this accused No.2. None of the withdrawals are signed by this accused No.4. Such being the case, the role of accused No.4 is not at all established and thereby prayed to acquit the accused No.4.
37. Submissions made on Accused no.5 behalf:
The learned counsel for the accused No.5 has argued that, the allegations against the accused Nos.4 and 5 are one and the same by saying that they are the dummy agents. But, in fact they were not at all agents appointed by the Oriental Insurance Company Limited. The Bank Manager Kumudini was not examined by the prosecution, who has worked as Manager of the bank, when the alleged joint account of accused Nos.2 and 5 was opened. The introducer Vasu was also not examined and the joint account cannot be opened by a single person, the persons opening joint account must be present at the time, which is explained by the Bank Manager in the evidence. PW-35, Investigating Officer though admits in her cross examination that the statement of accused No.5 was recorded, but it is not produced along with the charge sheet, which is with an intention to 42 suppress the real fact. The report of handwriting expert shows that there is difference in the writings and signature which is not done by this accused No.5 and it is specifically denied by the accused No.5 and those writings and signatures on the account opening form and cheques does not belongs to her. The learned counsel for the accused No.5 has also highlighted the cross examination of PW-9 to establish the Rules for opening the account at the Bank that the presence of customer is must and necessary and in the presence of bank officials, the signature of the customers have to be taken. All these facts are not stated by the concerned official and the concerned Manager working at that point of time was not examined and it creates doubt as to presence of accused No.5 at the bank while opening the account. Even it is shown in Ex.P.22, the dates mentioned are not similar and that they are varying with the address shown in the correspondence belonging to accused No.2, etc. Further, the learned counsel for accused No.5 pointed out that the accused No.5 no doubt relative to accused No.1, but she was not at all an agent of the Oriental Insurance Company Limited and not involved in any of the alleged offfence and it is not within her knowledge. The witnesses have deposed that the accused No.5 never attended the meetings and training. Such being the case, it is impossible to believe that she was an agent of the 43 Oriental Insurance Company Limited and she has been falsely implicated in this case. Hence, prayed to acquit this accused No.5.
38. Analyzing the Evidence:
In the background of the submissions made and the allegations leveled when the evidence is assessed, as it is burden on prosecution to prove firstly that the accused no.1 has caused loss to Oriental Insurance Company ( herein after referred as OICL for brevity) by creating records in the names of Accused no. 4 and 5, PW.34 as agents and deceiving OICL to tender commission to agents. Thereby it is of primary importance that prosecution must prove there is violation of rules of OICL. The prosecution is alleging that Accused no.1 being employee of OICL has inducted his relatives as agents and they were dummy agents and through them she has done trading and obtained commission amount which is strictly violation of Oriental Insurance Company (Conduct, Discipline and Appeal) Rules 2014. The prosecution mainly highlights the definition of Family and Private trading in this rules to attribute offence against accused. Thus, it is necessary to go through these definitions. They are extracted from Ex.P379 as under:
2(h) "Family in relation to an employee includes:
(i) the wife or husband, as the case may be of the employee, whether residing with him or not but does not include a wife or husband, as the case may be, separated from the employee by a decree or order of a competent court:
(ii) sons or daughters or step-sons or step-daughters of the employee and wholly dependent on him, but 44 does not include a child or stepchild who is no longer in any way dependent on the employee or of whose custody the employee has been deprived by or under any law.
(iii) any other person related, whether by blood or marriage, to the employee or to such employee's wife or husband and wholly dependent on such employee.
From careful study of this provision, it says only blood relatives of employee, wholly dependent on the employees are barred from becoming an employee of OICL as per the Oriental Insurance Company (Conduct, Discipline and Appeal) Rules 2014. Further in the rules there is bar on private trading which reads as under:
Rule 14: Private Trading:
1. No employee shall act as an insurance agent, nor shall he allow any member of his family to act as an insurance agent.
2. No employee shall except with the previous sanction of the Company, engage directly or indirectly in any trade, business, or profession.
3. No employee shall canvass in support of any business, trade, commission agency etc., owned or managed by his spouse or any other member of his family.
4. No employee shall without the previous sanction of the Company except in the discharge of his official duties, take part in the registration, promotion or management of any bank or other company which is required to be registered under the Company's Act, 1956 or any other law for the time being in force or any Co-operative Society for commercial purposes.
Provided that an employee may take part in registration, promotion or management of a co-
45operative society, substantially for the benefit of employees, registered under the Co-operative Society's Act. 1912 or any other law for the time being in force or any non-commercial, non-profit making institution, organization or body of cultural, social educational or philanthropic nature.
39. Thus, prosecution must establish that these accused no.4,5 and Pw.34 are relatives in terms of rule 2(h) of OICL CDA rules,2014. PW.35 the Investigating officer in her cross-examination has deposed that" It is true to suggest that none of the three agents are blood relation to accused no.1, witness further clarifies that accused no.5 and Pavithra Balekayi are close relatives of accused no.1". Considering this, in comparison to rule 2(h) of CDA rules,2014 of OICL, if they are not blood relatives, they cannot be called as family and trading through them is not established to be illegal as it only bars trading by family members. Thus the very foundation of allegation that these accused no.4,5 and PW.34 were relatives and making them as agents and procuring business through them is illegal is not proved. It is right on part of counsel for accused no.1 and 2 to argue that they are not family and blood relatives and there is no violation of rules of CDA 2014, hence accused have not committed any offences. As the rule specifies bar of trade through family members, when prosecution fails to prove that Accused no.4,5 and PW.34 are family members as per definition in rule 2(h) of Oriental 46 Insurance Company Ltd( CDA), 2014, it is right on part of accused to say there is no violation of rules. In this regard the counsel for accused no.1 and 2 has placed reliance on judgment of Hon'ble High Court of Punjab and Haryana in the case of Amrish Kumar Gupta Vs CBI reported in 2024 SCC online P&H 6313, wherein the Hon'ble High Court considering the aspect of Oriental Insurance Co ltd obtaining tender for insurance providing to SGPC, though it was directly obtained through tender, but commission amount has been disbursed to agent. The allegation was that even though SGPC in the quotations has never referred to agency/agent, no mandate was given, no effort was made by any agent to procure business, but commission was paid to four agents which is impermissible. The Hon'ble High court while considering the application under section 227 of Cr.P.C has held that prosecution failed to produce any rule, regulation, or official circular prohibiting payment of commissions in tender obtained contracts and accused be entitled to discharge. Thus accused no.1 would plead she is also entitled to be acquitted as allegations made in this case are similar to the case referred above. I have gone through the judgment. It is noticed in that case the Hon'ble High court of Punjab and Haryana not only considered absence of any rule, regulation or circular prohibiting such act of passing commission to agents when business obtained was direct through tender, but also considered the 47 aspects of absence of personal gain or benefit and some other person was responsible for preparing quotations and authority to pay commission was different person who were not arraigned as accused and held that accused was entitled for discharge of allegations leveled. But in this case the facts are slightly different. There is allegation of personal gain by abusing official position, creation of records etc. but on the point that prosecution failed to prove violation rule, regulation or circular the judgment relied would help the accused no.1. However the entire evidence has to be appreciated as the facts being different.
40. The prosecution has also alleged that these accused no.4,5 and PW.34 were dummy agents and even from the defence of accused Nos.4 and 5, it could be assessed that they claim that they are not the agents. In this regard, the prosecution relies upon the evidence of PW-2, PW-3, PW-4, PW-5, PW-6, PW-7. On analyzing the evidence of PW-2- Revathi Chandra, the Manager of OICL, who had submitted the documents like IRDAI guidelines for appointing Insurance Agents as per Ex.P.8, Certified copy of screen shot to indicate that, the accused No.5 Credential in the company as per Ex.P.9, Appointment letter of accused No.5 as Insurance Agent vide Ex.P.10, Appointment letter of accused No.4 being agent of OICL and agent commission issued to PW-34 as per 48 Ex.P.12, the statement showing commission issued to accused Nos.4 and 5 as per Ex.P.13 and Ex.P.14. On perusal of these documents, it is clear that, they were duly inducted as agents as per the Rules of IRDAI. Even PW-2 in her cross examination do admit the same. On analyzing the evidence of PW-3, who has worked as Administrative officer in OICL and Assistant Manager, she was entrusted with the work of recruiting agents, giving training to them. She has explained that, for appointing agents, they collect applications, documents from the applicants and they have to clear examination, undergo training and then on successful completion, they will be issued with unique reference number and agent code. She has further deposed that, accused Nos.4 and 5 were transferred to their office from Mysore Division and these accused have not attended the meetings held on 30.01.2018, 07.02.2018, 08.03.2018 and 06.09.2018. However, in her cross examination she has admitted that, attending meeting was not mandatory.
41. PW-4 has deposed that, it is he who has recruited accused No.5 as agent, during his tenure in 2014. In the cross examination also, he has stick on to the facts that, it is he who recruited accused No.5 as agent and he has seen accused No.4 at the time of renewal of her agency when she was introduced by Divisional Manager. PW-5 is the Administrative 49 officer, who has deposed about the commission amount transferred to PW-34, accused No.4 and in the cross examination he has specifically stated that, accused No.4 was attached to agency Manager having code NZ0000000235.
42. PW-6 has deposed that, commission was transferred to the account of accused Nos.4 and 5 vide Ex.P.19 and Ex.P.20 and tax was also deducted. The cross examination shows that, he admits that, the accused Nos.4 and 5 were under the same Agency Manager. PW-7 has deposed that, he is the Agency Manager having code NZ0000000235 and he had disclosed that the accused Nos.4 and 5 are the agents of their company, but they have not attended the meeting. In the cross examination has deposed that, during February 2017 and November 2017, these accused Nos.4 and 5 were under his Agency code.
43. Even, PW-35 the Investigating officer in her cross examination has clearly admitted that, these accused Nos.4 and 5 were appointed as per the Rules and Regulations of the company. It is further admitted that, they applied for agency, appeared for exam, cleared exam, took training and then certificate was issued as per IRDAI Rules and Regulations. It is also admitted that, they got their licenses. Under such circumstances, the 50 fact that, they are dummy agents or not the agents is not acceptable. All the material witnesses have deposed that, accused Nos.4, 5 and PW-34 were duly appointed as agents of OICL and they were the agents having license, issued by the OICL. Hence the argument of counsel for accused no. 4 and 5 that they are not agents cannot be accepted. The Ex.P 9 to11 clearly establish that they were duly inducted, duly informed being appointed as agents. As such they cannot contend that they were not agents of OICL.
44. Now, with regard to the fact that, these agents were used as dummy agents, this is because the allegation of prosecution is that, they got the commissions for not doing the business, but taking advantage of already existing policies, diverted through them, by accused Nos.1 and 3. In this regard the learned counsel for accused No.1 argued that, there are mandates issued in favor of these agents and this show that business done is through agents and not directly with company. For appreciating this, the evidence of PW-12, PW-24 and PW-25 is important.
45. PW-12, CEO of Chartered Sahakari Bank, deposed in the chief examination that, in 2000 their company took policies from OICL for the purpose of theft, fire, staff medical Insurance and cash in safe and 51 transact. The accused No.3 was the consultant and he do not know the accused No.4, whatever policies they have taken the payment was made through cheques favoring OICL through agent accused No.3. In the cross examination, he has admitted that, one Mr.Pavate, who was the Development Officer of OICL, through him they purchased Insurance Policies and even accused No.3 was the consultant from 2015. Further, in the cross examination done by accused No.3, has admitted that, the policies taken by them were through agency of Jubilee Insurance Broking Services Private Limited and he was confronted with Ex.D1 to 25 documents which are the policy copies, wherein he admits that, these policies were taken by their company and he do not know to whom the commission was paid. By this it could be inferred that evidence of this witness show lack of knowledge and does not help prosecution case.
46. PW-24 is the Manager of Suprajith Engineering Limited and he has deposed that, accused No.3 was looking after their Insurance aspects and even after his retirement, continued the service and Ex.P.364 and365 documents are submitted by him to CBI which are containing letters addressed to OICL, Senior Divisional Manager and which shows that, in those letters they mentioned that the business credit be given to accused No.4 for servicing policies. However, he admits that, he has not 52 met the accused No.4 and not done business with her. But, clarified that, the accused No.3 has not given any instructions to give credit to accused No.4. Though he was cross examined by the prosecutor, no material elicited to show that, the accused No.3 is master behind it. In the cross examination done by the accused Nos.1 and 2, he admits that the company Board Management will take the decision of selecting the agents for taking policies and he do not know whether the accused No.4 met the Management for business. He admits that, after Board takes the decision, they issue letters by showing credit to agents. Further he admits in the cross examination done by accused No.3 that, the letters issued as copy to accused No.3 for following the process. Thereby his evidence is not helpful to prosecution as he has not stated that it is accused no.1 or accused no.3 insisted to give credit to the alleged dummy agents.
47. PW-25, who is the Director of Pharmed Company, has deposed that they run the other businesses like Pharmed Medicare, Bio Plus Life Sciences, VB Medicare. He further deposed that, Ex.P.367 are the letters issued by their company showing credits to be given to accused No.5. Though he stated that, he has not met her personally, but in cross examination, he admits that, as per the decision of the Management, the policies will be taken through agents and had conversation with agent 53 accused No.5 on the phone. Even he admits that, it is left to the management to select the agents and Ex.P.367 issued as per the decision of the management. Thus his evidence is not supporting prosecution case and it is more supporting the defence case.
48. On considering the evidence of these witnesses, it is clear that, the companies like M/s Suprajith Automotives, Suprajith Engineering Ltd, Pharmed LTD, Pharmed Medicare Ltd, M/s Bioplus Life Science Pvt Ltd, M/s VB Medicare Pvt Ltd, M/s Santech Engineering Pvt Ltd, M/s Techmark Engineering Pvt Ltd, have not done business directly with the OICL, but they have issued mandates in favor of accused Nos.4 and 5. In this regard the argument of the learned counsel for accused No.1 is acceptable. There is no material to say that, there is direct business and even then, it is diverted through these dummy agents. PW-35, Investigating Officer has also admitted that, she has not collected a single policy to say that, it is direct business and where as the policies alleged in this case are all done through agents. Thereby, when there is no evidence showing that the policies taken are diverted, the allegation that these agents are dummy agents cannot be accepted and in my opinion, the prosecution has failed to prove this point.
54
49. On the point of seizure of documents at the house of accused No.1, for proving the seizure, the prosecution has relied upon seizure mahazar witness PW-22 and he has deposed that, he is witness to Ex.P.358 search list, Ex.P.359 Inventory, documents seized as per Ex.P.360 to Ex.P.362. In his cross examination, he has deposed that, where the search was conducted, it was a house consisting of compound wall at ground floor. The evidence of PW-35 Investigating Officer in this regard is that, she has not seen the documents to say in whose name the house was standing and she do not remember whether it was stand alone building or multi storied building. Further, she cannot recollect whether she seized the documents from the ground floor or first floor. It was suggested that, the accused No.1 along with her husband and children lived in the first floor, she has answered that she cannot say. Considering this aspect, it is clear that, there is allegation that, the accused No.1 has been found in the possession of the ITR documents, IT refund advance, Passbooks pertaining to these accused No.4 and 5. As such, it is essential that, the prosecution must prove that these documents are seized from the house of the accused No.1. In this case, no documents are produced to show the fact that, the accused No.1 owns any building where the search was conducted. Further, it is the case that, the accused No.2 also resided in the same building and it is this accused, who has been alleged of 55 withdrawing amount from the joint accounts of the accused Nos.4 and 5. Thereby, it is important to establish from whose custody these documents were recovered.
50. On going through Ex.P.358, it shows the address as residential premises of Smt.Nalini Rao at No.101, East End "C" Main, 9 th Block, Jayanagar, Bengaluru - 560 069. In Ex,P.359 as well it is not mentioned whether it is the ground floor or the first floor. It is right on the part of the learned counsel for the accused Nos.1 and 2 to say that, the Investigating Officer has not conducted investigation properly, as PW-34 in her evidence has deposed that, "accused Nos.1 and 2 are residing in Jayanagar under one roof since from more than 20 years. The address of the accused Nos.1 and 2 is one and the same". This leads to doubt as to who was in custody of the documents seized at the time of search by PW-
35. Both the accused Nos.1 and 2 if reside under one roof, it is difficult to say who has collected those documents. In this case, it is the accused No.2 alone who has withdrawn the money from the accounts of accused Nos.4 and 5, the amount which is credited from OICL towards their commission. Moreover, the prosecution has alleged in the charge sheet that, a sum of Rs.1,20,000/- is transferred to Accused no.1 from the account of accused No.4 and 2, Rs.1,60.000/-, from the account of 56 accused Nos.5 and 2, there was a transfer of Rs.5000/- from the account of PW.34 and accused no.2 in favor of accused no.1, an amount of Rs. 1,55,000 transferred to accused No.3 from the account of Accused no.4 and 2, to the son of accused no.3 transfer of Rs. 8,70,000-00, from the account of Accused no.5 and 2 there is transfer of amount of Rs.23,90,000-00 to Accused no.3 and an amount of Rs. 3,25,000-00 to son of accused no.3. Except this, no other amount is transferred. But, the allegation against the accused Nos.1 to 5 is that they have caused loss of Rupees more than 2,62,92,665 to the OICL.
51. On going through Ex.P.23 the Account statement extract of Accused no.2 and Considering this aspect, it can be said that the prosecution is not able to establish that, the accused No.1 and 3 have received such heavy amount. All the bank officials who are examined have clearly deposed that, all the withdrawals are done by the accused No.2 and the person authorized by him. There is no evidence to link accused No.1 with this. Moreover, the evidence of PW-22 and PW-35 is not throwing light. They have deposed lacking the credibility and doubting the search at the house of accused No.1. Hence, in the opinion of this court, even though these documents seized, only on that ground the accused No.1 and 3 cannot be held guilty of the alleged offences. As per 57 explanation of Private trading in the CDA rules,2014, the evidence putforth by prosecution is totally lacking credibility and corroboration and hence it is to be held that prosecution failed to prove that there is any loss to OICL and accused no.1 has violated any rules.
52. Analyzing the evidence of expert In this case, PW-30 is the expert, who has compared the specimen signatures, specimen hand writings of the accused with that of admitted writings and signatures. He has given the report which is as per Ex.P.377. In the report, he has stated that:
1. The person who wrote the blue enclosed writings stamped and marked S1 to S10, A1, A2, A2(a) and A3 did not write the red enclosed writings similarly stamped and marked Q1, Q2, Q3 and Q4.
2. The person who wrote the blue enclosed writings stamped and marked A4 to A6 did not write the red enclosed writings similarly stamped and marked A51, Q53 and Q56.
3. The person who wrote the blue enclosed writings stamped and marked S11 to S36 and A7 to A12 did not write 58 the red enclosed writings similarly stamped and marked Q17, Q18, Q19 and Q20.
4. The person who wrote the blue enclosed writings stamped and marked S37 to S146 and A13 to A71 also wrote the red enclosed writings similarly stamped and marked Q1 to Q4, Q11,Q21, Q22, Q25, Q26, Q30, Q31, Q33, Q38 to Q42, Q44 to Q46, Q48, Q49, q54 and Q 93.
5. The person who wrote the blue enclosed writings stamped and marked S147 to S151 also wrote the ed enclosed signatures similarly stamped and marked Q57 to Q90.
6. The person who wrote the blue enclosed writings stamped and marked S152 to S158 also wrote the red enclosed signatures similarly stamped and marked Q91 and Q92.
7. It has not been possible to fix the authorship or other wise of the red enclosed writings stamped and marked Q5 to Q10, Q12 to Q20, Q23, Q24, Q27 to Q29, Q32, Q34 to Q37, Q47, Q50 to Q53, Q55 and Q56 in comparison with the blue 59 enclosed writings similarly stamped and marked S37 to S146 and A13 to A71.
53. During his cross examination, he has admitted that if a person is made to imitate writings of some person, some pictorial similarities will occur. This is the important point highlighted, because in the evidence of PW-27, who is the witness to the specimen writings and signatures of the accused Nos.1, 5, Kumar and Nagaraj, which are as per Ex.P.369 to Ex.P.372, in his cross examination, he admits that, he did not observe as to which document was given by Investigating Officer to accused No.1 for taking specimen writings. Further, he deposes that, accused No.1 was asked to put her specimen handwriting and signatures in terms of imitation made by Investigating Officer. So, this point highlights that the accused No.1 was made to imitate and not to write naturally how she writes in her day to day business. This leads to doubt, whether the investigation was properly done. No person can be compelled to imitate writing, for sending it to expert opinion and IO should have taken the specimen writings in the natural writing of accused. As PW-30 expert himself admits that, if imitation is done, there will be similarities and thereby the report cannot be said to be based on examination of genuine specimen writings obtained by Investigating Officer. Further, PW-27 has answered in such a fashion 60 that, his presence could be doubted. As he deposed that, he was not present when the signatures and hand writings of accused No.1 were taken by CBI officer, his signatures were taken subsequently, he answered that, he was not present at the time of taking all signatures and hand writings, but he was present when some signatures and writings were taken and his signature was taken subsequently. He has also deposed that, Investigating Officer has supplied documents which contained ABCD and numericals. When he was shown Ex.P.370, there was no numbers and alphabets. This indicates that, the investigation is doubtful and it is not done properly. Further, PW-30 in his report has stated that " it has not been possible to fix the authorship or otherwise of the red enclosed writings stamp and marked Q-5 to 10, Q-12 to 20, Q-23, 24, Q-27 to 29, Q-32, Q-34 to 37, Q-47, Q-50 to 53, Q-55 and Q-56 in comparison with blue enclosed writings similarly stamped and marked S- 37 to S-146 and A-13 to A-71". When he is unable to opine as to who has written the questioned documents supra, it becomes incomplete report. Further, he has stated that some of the writings like Q-1 to 4, Q-11, Q-21, Q-22,25, 26, 30, 31, 33, 38 to 42, 44 to 46, 48, 49,54 and 93 are written by the person who wrote S-37 to S- 146 and A-13 to A-71, it carries less evidentiary value as PW-27 has deposed that the specimen handwriting taken were not in his presence and there is inconsistency in the evidence 61 of PW-27. It leads to doubt the procedure adopted by the Investigating Officer in obtaining the specimen writings and signatures. Moreover, the opinion of the expert is only corroborative in nature and it is not substantial proof. It has to be viewed with caution.
The Hon'ble Supreme Court in the case of Ram Narain v. State Of Uttar Pradesh 1973(2) SCC 86 reiterated the principles established in previous judgments, emphasizing that:
Handwriting expert testimony is classified as opinion evidence under Sections 45 and 47 of the Indian Evidence Act.
Such evidence is not conclusive and must be corroborated by internal or external evidence.
The court itself must engage in a comparison of the disputed writing with admitted samples to appraise the expert's opinion.
54. Further Hon'ble Supreme Court in the case of Murari Lal Vs State of U.P 1980 AIR SC 531 has held that:
"We will first consider the argument, a stale argument often heard, particularly in criminal courts, that the opinion-evidence of a handwriting expert should not be acted upon without substantial corroboration. We shall presently point out how the argument cannot be justified on principle or precedent. We begin with observation that the expert is no accomplice.
There is no justification for condemning his opinion-evidence to the same 62 class of evidence as that of an accomplice and insist upon corroboration.
True, it has occasionally been said on very high authority that it would be hazardous to base a conviction solely on the opinion of a handwriting expert. But, the hazard in accepting the opinion of any expert, handwriting expert or any other kind of expert, is not because experts, in general, are unreliable witnesses-the quality of credibility or incredibility being one which an expert shares with all other witnesses-, but because all human judgment is fallible and an expert may go wrong because of some defect of observation, some error of premises or honest mistake of conclusion.
The more developed and the more perfect a science, the less the chance of an incorrect opinion and the converse if the science is less developed and imperfect. The science of identification of finger-prints has attained near perfection and the risk of an incorrect opinion is practically non-
existent. On the other hand, the science of identification of handwriting is not nearly so perfect and the risk is, therefore, higher. But that is a far cry from doubting the opinion of a handwriting expert as an invariable rule and insisting upon substantial corroboration in every case, howsoever the opinion may be backed by the soundest of reasons. It is hardly fair to an expert to view his opinion with an initial suspicion and to treat him as an inferior sort of witness. His opinion has to be tested by the acceptability of the reasons given by him. An expert deposes and not decides. His duty `is 63 to furnish the judge with the necessary scientific criteria for testing the accuracy of his conclusion, so as to enable the judge to form his own independent judgment by the application of these criteria to the facts proved in evidence.
We are firmly of the opinion that there is no rule of law, nor any rule of prudence which has crystalized into a rule of law, that opinion evidence of a handwriting expert must never be acted upon, unless substantially corroborated. But, having due regard to the imperfect nature of the science of identification of handwriting, the approach, as we indicated earlier, should be one of caution. Reasons for the opinion must be carefully probed and examined. All other relevant evidence must be considered. In appropriate cases, corroboration may be sought. In cases where the reasons for the opinion are convincing and there is no reliable evidence throwing a doubt, the uncorroborated testimony of an handwriting expert may be accepted. There cannot be any inflexible rule on a matter which, in the ultimate analysis, is no more than a question of testimonial weight. We have said so much because this is an argument frequently met with in subordinate courts and sentences torn out of context from the judgments of this Court are often flaunted. "64
55. Considering the ratio laid down by Hon'ble Apex Court, cited supra applying the same to this case, the Expert PW.30 has given evidence deposing that if a person made to imitate writing may write similar writing to some extent. P.W.27 has deposed in a manner doubting his presence when specimen handwriting were obtained. All this leads to point out that the evidence of expert required corroboration, unfortunately prosecution failed to back it up with the witnesses examined. Further the attempt of prosecution to prove the writings of accused no.1 with the help of person acquainted with her writings has also yielded no benefit. PW.17 who deposed that she had worked with accused no.1 for two periods for more than 5 years and acquainted with her writings and signature, turned hostile and failed to support the case of prosecution. Thereby it leads to doubt whether accused no.1 has created any documents saying it as forged, fabricated etc. Hence the evidence of PW.30 cannot be relied upon.
56. Further the evidence of PW-34 show that though she admits that she was an agent appointed duly and has undergone training, but submits that she has moved to US in the year 2010 and thereafter she has not done business. It is only in 2014, she had applied for cancellation of her agency and she had no idea till 2018, when the investigation started 65 that she was cheated. She came to know that, during the year 2009 to 2013, business took place in her name as agent of OICL. This would only lead to show that she was negligent in not canceling her license. She has further deposed that 2 cheques were received by accused no.1 from her father when she was out of country, surprisingly this version is not corroborated by her father who has given evidence as Pw.20 in this case. Further, as discussed above, there is no clear evidence of involvement of accused No.1 in procuring business in the name of this PW-34 or accused Nos.4 and 5. Hence, it is she who was responsible for not canceling her license immediately when she left to US. She has not given any complaint in this regard. On the allegation that, she was not aware of joint account with accused No.2, it is suggested in the cross examination that, for opening account she has given copy of passport, but claims that she has not given when she signed the account opening form. This would only show that, she was not diligent in this aspect.
57. The evidence of PW-35 would show that, being Investigating Officer, she has failed to investigate properly. She clearly admitted in the cross-examination that, she has not collected the documents of house where the accused Nos.1 and 2 were resided to cast the liability of possessing documents seized. Further, she has clearly admitted that, the 66 accused Nos.4, 5 and PW-34 were duly appointed as agents and got their licenses which destroys the case of the prosecution in saying that they were dummy agents. Further, it adds to destroy the case as she admits that, in this case, all the polices obtained are not direct polices, but policies taken through agents. She has not examined the bank Manager, who was working when joint accounts are opened in the name of accused Nos.2, 4 and 5. This is because Manager would be the proper person to explain, who opened these accounts as accused Nos.4,5 and PW-34 denies opening joint account. She is suggested with the question that, the accused No.1 was also facing a case under section 13(1)(e) of PC Act for disproportionate Assets and in that case B-report was filed. To this, she feigned ignorance and it is not expected from the Investigating Officer as all material aspect to be investigated as a responsible Investigating Officer. It is noticed that the accused counsel has filed copy of the order of the court in case No.R.C.No.9(A)/2018, along with the statement u/S 313 (5) of Cr.P.C., which shows that the CBI had filed B Report and it was accepted by this court. Thereby it clarifies that the investigating officer has failed to take note of it. Further P.W.35 also admits that, there are no records showing that there is direct business and accused No.3 is only arraigned, as some amount was transferred to his account. Mere transfer of amount would not be a ground to say that he is also a culprit. 67
58. It is trite to note that there is investigation lapse. The accused have elicited more material to doubt the case of prosecution. To summarize, it can be said that when the OICL CDA rules have not been violated, where is the loss caused to OICL. Even otherwise the OICL was bound to pass over commission amount if business is done through agents. In this case as discussed above the companies who brought policies have clearly admitted that they have taken policies through agents and issued mandates to give credit to the agents. Thereby the foundation of allegation by prosecution that the accused have done business through dummy agents is falsified as Ex.P 9 to 11 show that accused no.4, 5 and PW.34 were duly recruited as agents. Further to say that accused no.1 has created, forged documents of accused no.4,5 and PW.34 and the documents seized at the residence of accused no.1, as discussed above the specimen writings and signatures obtained is not free from suspicion, report of expert is not reliable, person acquainted with writings of accused no.1 has not supported the case of prosecution and moreover Investigating Officer was not able to recollect, from which place she seized the documents, whether from first floor or ground floor. The investigation is doubtful as the Investigating officer though had conducted searches at the residence of Accused no.4 and 5, but has not produced the 68 articles/documents seized from their house. As the search list marked at Ex.P382 is pertaining to Accused no.4, wherein 2 documents were seized, they are;
1. One laminated Form IRDA - Agent-VB of IRDA pertaining to License no.1454159 issued to smt Asha N.R/Accused no.4 on 30.10.2003.
2. One photocopy of Form IRDA pertaining to License no. 1454159 issued to Smt Asha N.R on 17-09-2009.
The search list pertaining to accused no.5 is marked as Ex.P383 under which they seized:
1. one bunch of 7 sheets I,e Adhar card of Accused no.5, Form 26-As and ITR-V.
59. Though these documents were seized, but prosecution has not produced them during evidence for the reasons best known to them.
The Investigation officer had sought permission to retain them and it was allowed. If the prosecution is alleging that they are dummy agents, then how did these documents found at the house of accused no.4 and 5 and prosecution relies only on documents said to be seized from the house of accused no.1. Therefore they cannot select and putforth and it has to be fair trial. Further on this count the accused no. 4 and 5 arguing that they were not agents of OICL cannot be accepted as the documents seized 69 from their house would definitely show they were agents of OICL and having knowledge of the business done.
60. The Learned Public prosecutor in the written arguments has contended that in the family details accused no.1 has disclosed that her father who is accused no.2 in this case, is dependent on her and Ex.P3 depict the same, and as per rule H family definition he is included and has done business through him which is illegal and violation of rule. To counter this counsel for accused no.1 and 2 contended that the allegation is that accused no.1 has used accused no.4 and 5 as dummy agents being relatives. But in this case the same is proved to be wrong they were not dummy agents and not covered under definition of family. It is true that from the discussion made above wherein the definition of family and private trading are considered, firstly the accused no.4 and 5 do not fit under the definition of family and business done through them would not be private trading. Hence on this count the argument of prosecution fails. Further the involvement of accused no.2 is concerned from the discussions made above, it is clear that prosecution failed to show this accused no.2 is related to OICL in any manner and also failed to show the amount of Rs.2,62,92,665 is the amount received by accused no.1,3 to 5. there is no recovery of such amount from accused no. 1, 3 to 5. Further 70 when the act of getting business through dummy agents as alleged is not proved to be illegal or violation of any law or rules, there would be no loss caused to the Oriental Insurance Company Ltd. The business providers, representatives examined in this case have deposed that mandate is given to agents and there was no interference or influence either by accused no.1 or accused no.3 in this regard. Such being the case the argument of prosecution that there is violation of OICL CDA rules is held not proved.
61. On the point of criminal breach of trust is concerned, Criminal breach of trust involves dishonestly misappropriating or using property entrusted to someone, or violating the terms of an agreement or trust related to that property. The property must be entrusted to the accused, meaning they have been given possession or dominion over it. In this case prosecution failed to produce any sort of evidence showing what is the nature of entrustment with accused no.1 and what is breached. They have failed to prove whether accused no.1 was having control or dominion over entire business administration of the unit she was handling. The accused no.1 has elicited from the mouth of witnesses examined by prosecution saying that transfer of agents from one division to another is dealt by regional office. PW.2 and 31 do admit the same. 71 Under such circumstances when there is no evidence to show that accused no.1 had any control over assigning commission and transfer of agents, the allegation of criminal breach of trust and cheating said to be not proved by prosecution. When there is no loss caused to OICL it cannot be said there is any breach of trust.
62. On the point of Cheating, while both cheating and criminal breach of trust involve dishonest acts, the key difference is that cheating involves deceiving someone to induce them to give up property, while criminal breach of trust involves violating a trust or agreement about property that has already been entrusted. The prosecution must establish that the accused must have misappropriated, converted, or disposed of the property for personal use or for someone else's benefit, violating the terms of the trust and the key elements to prove in a Section 420 case are dishonest inducement and the delivery of property as a result of that inducement. The prosecution must demonstrate that the accused had a dishonest or fraudulent intent from the beginning of the transaction. Unfortunately in this case the it is noted that business obtained is through agents and there are documents confirming it, even when accused no.1 was on leave business took place through these alleged dummy agents and amount is transferred to the accounts of agents, such being the case 72 it cannot be said that there is deception caused to OICL to tender commission to agents. Hence in the considered opinion of this court, prosecution failed to prove the offenses under section 409, 420 of IPC.
63. On the point of forgery of documents and using them as genuine, the learned public prosecutor addressed arguments contending that seizure of Pass books , ITR returns and refund advances pertaining to accused no.4 and 5 at the house of accused no.1 and forging documents to open joint accounts at bank and drawing money through accused no.2 would itself depict that accused no.1 has forged documents and it is supported by PW.30 the scientific analyst. To counter it the counsel for accused argued that there is no valuable security forged and PW.30 evidence is not trust worthy. It is to note here that PW.35, the investigating officer has not deposed confidently as to from which floor whether first floor or ground floor the documents were seized. As there is suggestion put to her in this regard in her cross-examination and she has not deposed positively and gave vague answer saying she cannot recollect. P.W.22 deposed that search was conducted in a building which is a ground floor having compound wall. When PW.34 deposed that both accused no.1 and 2 reside in the same house it is difficult to say who has collected those documents and ambiguity is not cleared by Investigating officer. Further 73 PW.30 has deposed that if person made to imitate writing, similarities may occur and he has not given opinion on some of the documents sent to him. Thus his opinion is not conclusive and cannot be relied upon solely to say that it is accused no.1 who has forged documents. The bank officials examined in this case have deposed that to open account customer must be physically present in the bank and should give specimen signature. If that is so the the contention of accused no. 4,5 and PW.34 that they were unaware of opening accounts is not acceptable. The KYC documents found would lead to raise question how did they reach to bank. This would have been answered by accused no.4,5 and PW.34, but no plausible explanation is brought on record form their side. Thereby, it could be said that prosecution has failed to prove the allegation of forgery and using the forged document as genuine.
64. On the point of criminal misconduct, the learned public prosecutor would argue that the creation of agency in the names of accused no.4, 5 and PW.34 and getting business through them which were already existing business and getting commission to their accounts by forging bank documents, making accused no.2 as joint account holder of all the three accounts of Accused no.4,5 and PW.34, drawing money through accused no.2 and sharing for herself and with accused no.3, 4,5 74 would point out that she has done these acts only to gulp the commission amount which she could not have taken legally and it is against to CDA rules of OICL, thereby this amounts to misconduct. On the other hand counsel for accused no.1 and 2 countered this argument contending that when prosecution failed to prove business through dummy agents, forgery, criminal breach of trust, cheating, then it is not proper to say that any act of accused no.1 would amount to criminal misconduct.
65. After analyzing entire evidence putforth by prosecution, the effort of them to prove that accused no.1 used accused no.4,5 and PW.34 as dummy agents and diverted direct business through them to get the commission amount has not been successful. There is no evidence to show this kind of act is illegal or violation of CDA rules of OICL. Further no evidence brought to show accused no.1 had any control over it. Even PW.35 investigating officer admitted in her evidence that she has not collected any document showing direct business and all alleged business in this case is done through agents. Thus when business is done through agents commission has to be credited to agents. For this, business providers have deposed mandate is given in favor of these agents and it is corroborated from the documents produced by accused along with statement under section 313(5) of CR.P.C and few exhibits marked on 75 their side I.e, Ex.D.1 to D.27. Thus considering these aspects it cannot be said that there is any misconduct shown by accused no.1.Further on the point of money recived by accused no.1 from the joint accounts of accused no.4,5 with accused no.2, it could be noticed that accused no.1 account has not received credit of Rs.2 crore and odd what is alleged and it is only amounting to 1 lakh and odd amount as discussed in the preceding paras. There is no connectivity brought to link the offenses alleged. If the amount is received it is for accused no.4,5 and PW.34 to complain that the amount from their account is mis-utilized. Unfortunately they have not done so. There is no evidence showing that accused no.1 dishonestly or fraudulently used property entrusted to her or under her control for personal gain or accepted or attempted to obtain something from others, or using the position to gain an unfair advantage for herself or others to say that there is any act of criminal misconduct. Prosecution failed to show that she has received amount of Rs. 2 crore and odd as alleged. The account extract shows some amount has been transferred to her account from the joint accounts of other accused, but that is not sufficient to link with the allegation of wrongful gain to the extent of loss as alleged. Therefore in my considered opinion prosecution failed to prove any wrongful gain for herself as alleged in the charge sheet in this case. Hence the prosecution failed to prove the criminal misconduct on the part of accused no.1. In this 76 regard the role of accused no.3 is also not found to be proved beyond reasonable doubt. As P.w.35 the investigating officer deposed saying that accused no.3 was also part of conspiracy and it is he who has diverted existing policies through dummy agents and received amount from accounts of dummy agents to himself and to his son's account. It is to be noticed that all the companies representatives examined in this case have admitted that this accused no.3 was consultant for their companies in respect of insurance but he has not influenced them to give credit to the these alleged agents. There is no direct evidence showing that this accused has caused any overt act, to benefit these agents in violation of any of the rules. Further for the amount received to his account and his son's account, his son examined as P.W.15 has deposed that he has obtained loan from accused no.2. the said explanation was not defeated by prosecution prudently. Further even if it is considered that he has received amount, it shall be proved that it is received as commission, but no such direct evidence is available on the side of prosecution and it is only inference of the prosecution that it is the same amount. Further as discussed above when the policy taken through agents, credit given to agents is established, this allegation becomes unacceptable. 77
66. On the point of criminal conspiracy, to assess criminal conspiracy, it involves establishing that two or more individuals have a meeting of the minds to commit a crime, sharing a common intent, and having a plan or scheme to execute that crime. All conspirators must share a common intention to commit the illegal act. Each conspirator doesn't have to perform the same role or act, but they must all intend to achieve the same illegal objective. Conspiracy is hatched in private or in secrecy. It is rarely possible to establish a conspiracy by direct evidence. Usually, the existence of the conspiracy and its objects have to be inferred from the circumstances and the conduct of the accused. Where in pursuance of the agreement, the conspirators commit offenses individually or adopt illegal means to do a legal act that has a nexus to the object of the conspiracy, all of them will be liable for such offences even if some of them have not actively participated in the commission of those offences. But in this case as discussed above, the act of obtaining commision for the policies taken through agents is not proved to be illegal and it is not established, it violates CDA rules 2014. Further commission amount is deposited to the account of agents. No doubt it is withdrawn by accused no.2 and has transferred some amount to accused no.1, 3 and son of accused no.3. When there is no loss caused to OICL, it cannot be said as illegal. It has to 78 be complained by accused no.4 and 5 whose accounts were misused by accused no.2.
67. Considering all these aspects this court is of the considered opinion that prosecution failed to prove the allegations leveled against accused persons. The evidence putforth by them is not cogent and convincing to hold the accused as guilty. No doubt as per section 106 of Indian Evidence Act the burden is on accused to explain certain facts which are within their knowledge like in this case, how did the KYC documents of accused no.4,5 reached the bank authority, how did the ITR returns, IT refund advances, Passbooks of accused no.4 and 5 found at the house of accused no.1 and 2 and why accused no.2 was made as joint account holder and why he alone was permitted to withdraw amount. However, the accused can explain it either by leading evidence independently or by eliciting contrary material from the mouth of witnesses examined by prosecution during cross-examination. In this case as could be seen, the accused have brought out investigation lapses, point in that business is done through agents, agents are duly recruited, expert report is incomplete and not believable, Investigating officer admitting that the agents are duly recruited, no direct business done, has not stated what are special factors considered for not showing PW.34 as accused when her 79 case is similar to that of accused no.4 and 5, all goes to show there is sufficient material elicited to believe that the allegation leveled is not proved beyond reasonable doubt. It is only when prosecution proves the case beyond reasonable doubt, the burden shifts to accused to explain as required under section 106 of Evidence Act. However in this case as held above prosecution failed to prove the case beyond reasonable doubt, hence the explanation not given by accused, does not affect the case.
68. From the points discussed above, it is clear that the claim of prosecution that accused no.1 conspiring with accused no. 2 to 5 committed act of criminal breach of trust, cheating and forgery of documents, committed criminal misconduct, cannot be accepted as it lacks definite positive evidence to show overt act by accused persons. The accused no.4 and 5 cannot take defence of innocence in saying that they have not opened bank accounts in joint with accused no.2, as no ordinary prudent man would part with, identity documents without any reason. If that is so it was incumbent upon the accused to explain why and how they were misused. But no such explanation is offered by the accused in this case. So it has to be held that they were having knowledge of opening bank accounts in their names.
80
69. Considering the same, if the evidence is assessed the prosecution has failed to show that accused no.4 and 5 are dummy agents, the policies obtained by different companies were direct policies but diverted through agents, it is violation of any of the OICL CCD rules. Thereby when the act alleged is not proved to be illegal, criminal conspiracy cannot be attributed to any of the accused. The further act of accused in opening joint bank accounts and withdrawal by accused no.2 and shared by accused no. 1and 3 would not amount to any loss to OICL as alleged by prosecution as OICL was expected to disburse commission amount to agents who brought business and in this case there is evidence to show that policies obtained through agents. Thus, the prosecution failed to prove criminal conspiracy as alleged.
70. When the act of accused is not proved to be any overt act, the allegation of cheating to OICL and criminal breach of trust, misconduct by accused no.1 by abusing her position for personal gain have to be held as not proved. To support this there is evidence elicited saying that when accused no.1 was on medical leave for eight months even in her absence also, the accused no. 4 and 5 got commission amount. This would show that prosecution failed to prove these allegations. The act of accused no.2 having joint account with accused no. 4,5 and PW.34 and drawing money 81 from the joint account is against to the interest of accused no.4 and 5 and PW.34 but they have not complained to any authority for taking action. Considering all these aspects it can be held that the prosecution has failed to prove the allegations leveled against the accused persons. The lacuna's pointed out in the discussion supra would lead to doubt the proper investigation by Investigating Officer. Hence when act of accused in obtaining commission through agents though the policies were not new, is not said to be offence or violation of any rule, the further allegation of withdrawing the money and sharing, is not helpful for prosecution case.
71. Even the investigating officer who had seized the documents at the house of accused no.4 and 5 has not produced them before the court, as it contained documents like License issued for agents, ITR forms etc, would lead to show that accused no.4 and 5 were agents duly recruited. Further there is allegation that amount is transferred by accused no.1 to the account of accused no.4 which can be viewed in two angles, one is that accused no.4 was aware of the commission amount received to her account, withdrawn by accused no.2 and then shared to accused no.1 and it is shared to her. The other angle would be there is no proof to show that whatever the amount transferred by accused no.1 to accused no.4 is the amount of commission. Under such circumstances it can only be 82 presumed and assumed and it is settled law that no conviction can be based on surmises and conjectures. Thus in my opinion prosecution case is not clear enough to hold the accused as guilty of the offences alleged. To add further there is evidence elicited saying that even when accused no.1 was on medical leave, the polices have been taken through agents accused no.4 and 5 and commission has been sanctioned. Further whenever the commission goes to the agents, the agency manager under whom they will be working they will also get the commission. Such being the case why all these persons have been left out is unanswered. This would show that accused no.1 had no control over it.
72. In a criminal trial, the prosecution must prove the accused's guilt beyond reasonable doubt. This means the prosecution must provide evidence that establishes the accused's guilt with a high degree of certainty, leaving no other plausible explanation for the events. If the evidence presented by the prosecution raises reasonable doubt about the accused's guilt, the accused is entitled to the benefit of that doubt, and a conviction cannot be sustained. In this case from the discussion made supra, it is held that the prosecution failed to prove any violation of rule or regulation as alleged by them, thus the very foundation of allegation leveled against accused not proved. Under such circumstances the 83 allegation leveled against these accused persons cannot be said to be proved beyond reasonable doubt. Thus, in my opinion benefit of doubt should go to accused. Thereby, this court is of the considered opinion that the accused no.1 to 5 not found guilty and prosecution failed to prove the case. As such points no.2 to 7 are answered in the Negative.
73. POINT NO.8: In view of the answers to point Nos.1 to 7 as above, the accused Nos.1 to 5 are not found guilty and they are entitled for acquittal. Hence, I proceed to pass the following:
ORDER Acting under section 235(1) of Cr.P.C, the accused No.1-Nalini Rao, Accused No.2-K.M.Rao, Accused No.3-Channabasavaiah B.C, accused No.4- Asha N.R. and Accused No.5-Geetha Suvarna are acquitted for the offences punishable Under Sections 120-B R/w Sections 420, 409, 467, 468 and 471 of I.P.C. and Sections 13(2) R/w Sec.13(1)(d) of the Prevention of Corruption Act, 1988.
The bail bond executed by accused and bond executed by sureties in compliance of section 437-A 84 of Cr.P.C shall be in force till the expiration of appeal period.
(Dictated to the Stenographer-II on computer partly, transcribed by her, partly dictated directly on the computer system, typed by her, corrected and then pronounced by me in the open court on this the 21st day of April 2025) (SANTOSH S. PALLEDH) XLVI Addl. City Civil and Sessions Judge and Special Judge for C.B.I. Cases, Bengaluru.
ANNEXURES LIST OF WITNESSES EXAMINED ON BEHALF OF PROSECUTION SIDE:-
P.Ws. WITNESS NAME C.Ws. P.W.1 Shabana Afroz Khan C.W.1 P.W.2 Revathi Chandra C.W.2 P.W.3 Sheela Bharadwaj C.W.7 P.W.4 Basavaraj C.W.8 P.W.5 Yogeet Adlakha C.W.3 P.W.6 Saravanan.M C.W.5 P.W.7 R.Anantha Ramu C.W.6 P.W.8 K.Bayya Reddy C.W.12 P.W.9 Meena Kumari.J.N. C.W.13 85 P.W.10 K.Subramani C.W.14 P.W.11 Nagabhushan Bhat C.W.15 P.W.12 Shivanna K.B. C.W.16 P.W.13 Kundan Kumar C.W.17 P.W.14 Shankar Vikas C.W.18 P.W.15 Dhananjaya.B.C. C.W.21 P.W.16 Deepak.S.Lulla C.W.20 P.W.17 Malathi.A C.W.19 P.W.18 Kumar.S C.W.22 P.W.19 H.J.Nagaraj C.W.23 P.W.20 Lakshmana.B.K. C.W.24 P.W.21 Sunita Gupta C.W.26 P.W.22 Rohith Vadnere C.W.27 P.W.23 Murthy.R.N. C.W.29 P.W.24 Eshwaran.A. C.W.9 P.W.25 Noshir Burjor Shroff C.W.10 P.W.26 S.Subramanian C.W.30 P.W.27 K.L.Venkatareddy C.W.31 P.W.28 V.Surendra Rao C.W.32 P.W.29 P.Govindarajulu C.W.33 P.W.30 C.Rajesh C.W.30 P.W.31 Navaneer Doda C.W.36 P.W.32 Anitha Abraham C.W.4 P.W.33 Balasubramanyam.K.S. C.W.11 P.W.34 Pavithra Lakshmana Belekal C.W.25 P.W.35 Dimple Dua C.W.35 86
LIST OF WITNESSES EXAMINED ON BEHALF OF DEFENCE SIDE:-
NIL LIST OF DOCUMENTS EXHIBITED ON BEHALF OF PROSECUTION:-
EXHIBITS PARTICULARS
Ex.P-1 Covering letter
Ex.P-1 (a) Signature of PW-1
Ex.P-2 Covering letter Dt.10.09.2018
Ex.P-3 Certified copy of Employees profile of HRMS
Ex.P-4 Certified copy of Oriental Insurance Co.,Rules
Ex.P-5 Covering letter dated 25.09.2018
Ex.P-5(a) Signature of PW-2
Ex.P.6 Production memo
Ex.P-7 Production memo dated 06.09.2018
Ex.P.7(a) Signature of PW-2
Ex.P-8 Guidelines for appoint of Insurance agents
Ex.P-9 Certified copy of screen shot to indicate A-5
Ex.P-10 Appointment letter pertaining to A-5
Ex.P-11 Appointment letter pertaining to A-4
Ex.P-12 Agent commission issued in favour of Pavithra Balekai
Ex.P-13 Statement of agent commission details of A-4
Ex.P-14 Certified copy of agent commission
Ex.P-15 Production memo
Ex.P-16 Agents meeting register
Ex.P.17 Production memo
Ex.P.17(a) Signature of PW-3
Ex.P-18 Agent meeting register
Ex.P.19 Agent commission bill of A-4
Ex.P-20 Agent commission bill of A-4
Ex.P-21 Production memo
Ex.P.21(a) Signature of PW-9
Ex.P-22 Account opening form of A-1 and 5
Ex.P-22(a) Attested copy
Ex.P.22(b) Attested copy
Ex.P-22(c) Signature of A-5
87
Ex.P-22(d) Signature of A-2
Ex.P-23 Statement of account pertaining to A-5
Ex.P.24 to 112 Documents D-101 to 189 are marked
Ex.P-113 Seizure mahazar
Ex.P-114 Original Credit slip dated 14.03.2016
Ex.P-115 Original Credit slip dated 19.04.2016
Ex.P.116 & Two cheques
Ex.P.117
Ex.P.116(a) & Signatures of A-5
Ex.P.117(a)
Ex.P.118 Seizure memo dated 01.10.2018
Ex.P-118(a) Signature of PW-9
Ex.P-119 Account opening form of A-2
Ex.P-119(a & b) Signature s of A-2
Ex.P-119(c & d) Signatures of Pavithra Balekai Ex.P-120 Statement of account pertaining to A-2 Ex.P-121 Certificate under section 65(2) Ex.P-122 & Two cheques issued by Income Tax Department Ex.P.123 Ex.P-124 to Documents D-196 to D-226 and D-229 to D-338 Ex.P.256 Ex.P-257 Seizure memo dated 12.09.2018 Ex.P-257(a) Signature of PW-10 Ex.P-258 Covering letter dated 12.09.2018 Ex.P-258(a) Signature of PW-10 Ex.P-259 Account opening form of K.Krishnamurthy Ex.P-260 & Statement of account for the period from 08.09.2015 to Ex.P.261 24.08.2015 along with certificate Ex.P-261(a) Signature of PW-10 Ex.P-262 Seizure memo Ex.P-262(a) Signature of PW-10 Ex.P.263 to 49 cheques Ex.P.311 Ex.P.312 to 8 pay-in- silps Ex.P.319 Ex.P-320 Seizure memo dated 26.09.2018 Ex.P-320(a) Signature of PW-11 Ex.P-321 Account opening form, KYC, Specimen signature card of Sheshadri.K.S. Ex.P-322 Request letter of Asha 88 Ex.P-323 Statement of account Ex.P-324 Certificate Ex.P-324(a) Signature of PW-11 Ex.P-325 Seizure memo dated 29.09.2018 Ex.P-325(a) Signature of PW-11 Ex.P-326 to Five cheques Ex.P.330 Ex.P-331 Seizure memo dated 26.09.2018 Ex.P-331(a) Signature of PW-12 Ex.P-332 Statement of account of B.C.Channabasavaiah Ex.P-333 Statement of account Ex.P-334 Certificate for period 12.09.12 to 15.09.18 Ex.P-334(a) Signature of PW-12 Ex.P-335 Statement regarding clearing of cheques Ex.P-336 Seizure memo dated 26.09.2018 Ex.P-337 to Three original cheques Ex.P.339 Ex.P-340 Seizure memo dated 12.10.2018 Ex.P-340(a) Signature of PW-13 Ex.P-341 Account opening form of Channabasavaiah Ex.P-342 Statement of account Ex.P-343 Cheque dated 03.12.2016 for Rs.40,000/-
Ex.P-344 Deposit challen
Ex.P-345 Cheque dated 08.02.2017 for Rs.1,70,000/-
Ex.P-346 Deposit challen
Ex.P-347 Seizure memo
Ex.P-347(a) Signature of PW-14
Ex.P-347(b) Covering letter
Ex.P-348 Attested copy of account opening form
Ex.P-349 Statement of account of B.C.Dhananjaya
along with 65-B certificate
Ex.P.349(a) Signature of PW-14
Ex.P.350 Covering letter
Ex.P.350(a) Signature of PW-14
Ex.P.351 Deposit challan dt.09.09.2017
Ex.P.352 Cheque
Ex.P.353 Production cum seizure memo dated 20.09.2018
Ex.P.353(a) Signature of PW-16
Ex.P.354 Portion of statement dated 9.10.2018
Ex.P.355 Portion of statement dated 26.10.2018
89
Ex.P.356 Leave application form
Ex.P.357 Letter dated 19.11.2018
Ex.P.357(a) Signature of PW-21
Ex.P.358 Search list
Ex.P.358(a) Signature of PW-22
Ex.P.359 Inventry
Ex.P.359(a) Signature of PW-22
Ex.P.360 Item No.15 of search list
Ex.P.360(a) Signature of PW-22
Ex.P.361 Pass book
Ex.P.362 Pass book
Ex.P.363 Search list
Ex.P.363(a) Signature of PW-23
Ex.P.364 Production memo
Ex.P.364(a) Signature of PW-24
Ex.P.365 Letter dt 15.03.2016 and 16.03.2018
Ex.P.366 Portion of 161 statement of PW-24
Ex.P.367 Letter annexed to CBI
Ex.P.368 Specimen signature of letters
Ex.P.368(a) Signature of PW-26
Ex.P.369 Specimen signature of PW-27
Ex.P.369(a) Signature of PW-27
Ex.P.370 Documents of accused No.1 (D-380)
Ex.P.370(a) Signature of PW-27
Ex.P.371 Documents of Kumara.S.
Ex.P.371(a) Signature of PW-27
Ex.P.372 Documents pertaining to H.J.Nagaraj
Ex.P.372(a) Signature of PW-27
Ex.P.373 Handwriting and Signatures
Ex.P.373(a) Signature of PW-28
Ex.P.374 Handwriting and Signatures
Ex.P.374(a) Signature of PW-29
Ex.P.375 Cheque dated 12.05.2015
Ex.P.376 Letter dated 25.06.2013
Ex.P.377 Report dated 26.05.2020
Ex.P.377(a) Signature of PW-30
Ex.P.378 Sanction order
Ex.P.378(a) Signature of PW-31
Ex.P.379 Oriental Insurance Company letter
Ex.P.380 Statement of PW-33
90
Ex.P.381 Original FIR in RC.8/2018
Ex.P.382 Original search list dated 08.06.2018
Ex.P.383 Search conducted in the residence of
A-4 at Mysore
Ex.P.384 Covering letter
Ex.P.384(a) Signature of PW-35
Ex.P.385 Original policy
Ex.P.386 Guidelines copy dated 16.03.2015
Ex.P.387 Extract of cheque disbursement register
Ex.P.387(a) 65-B Certificate
Ex.P.388 Agent Commission bill
Ex.P.389 & Credit slips
Ex.P.390
Ex.P.391 Circular dated 15.04.2015
LIST OF EXHIBITS MARKED THROUGH DEFENCE SIDE:-
EXHIBITS PARTICULARS
Ex.D.1 to 7 Photo stat copies of 6 polices
Ex.D.8 to 12 Photo stat copies of 6 polices
Ex.D.13 to 18 Photo stat co pies of 6 polices
Ex.D.19 to 24 Photo stat copies of 6 polices
Ex.D.25 Polices
Ex.D.26 Policy details
Ex.D.27 Letter dated 17.03.2014
(SANTOSH S. PALLEDH)
XLVI Addl. City Civil and Sessions Judge
and Special Judge for C.B.I. Cases,
Bengaluru.
91