Madras High Court
S.Sathiyaseelan vs / on 8 January, 2018
Author: G.Jayachandran
Bench: G.Jayachandran
IN THE HIGH COURT OF JUDICATURE AT MADRAS Reserved on : 12.12.2017 Pronounced on : 08.01.2018 Coram The Hon'ble Dr.Justice G.Jayachandran Crl.A.No.914 of 2005 S.Sathiyaseelan .. Appellant /versus/ State: rep.by The Inspector of Police, Special Police Establishment, Central Bureau of Investigation, Anti-Corruption Branch, 3rd Floor, Shastri Bhavan, Haddows Road, Nungambakkam, Chennai 600 006. R.C.No.7(A)/1994. .. Respondent Criminal Appeal is filed under Section 374(2) and 382 of the Code of Criminal Procedure praying to call for the records from the trial Court in C.C.No.44 of 1998 on the file of the Principal Special Judge for CBI Cases, Chennai-104, hear the counsel for the appellant, set aside the order of conviction and sentence passed in C.C.No.44 of 1998, dated 19.10.2005 by the Principal Special Judge for CBI Cases, Chennai 104. For Appellant : Mr.A.V.Somasundaram for M/s Lakshmipriya Associate For Respondent : Mr.K.Srinivasan, Special Public Prosecutor (CBI cases) ------- J U D G M E N T
The present appeal is filed against the judgment of the Special Court for CBI Cases, Chennai convicting the appellant for the offence under Section 420 IPC (6 counts) and sentence to undergo RI for 2 years and also to pay a fine of Rs.3,000/- in default, to undergo RI for 2 months; under Section 467 r/w 471 IPC (6 counts) and sentence to undergo RI for 1 year and also to pay a fine of Rs.1,000/- in default, to undergo RI for 2 months; and under Section 13(2) r/w 13(1)(d) of the Prevention of Corruption Act, 1988 and sentence to undergo RI for 2 years and also to pay a fine of Rs.3,000/- in default of to undergo RI for 2 months. The sentences of imprisonment imposed on the accused shall run concurrently.
2. The case of the prosecution is that Mr.S.Sathiyaseelan/appellant while was functioning as a Manager of Canara Bank, Sainapuram Branch, Arakonam Taluk, North Arcot District, Tamil Nadu during the year 1991, he entered into a criminal conspiracy with unknown persons and in pursuance to the said criminal conspiracy, he dishonestly and fraudulently by abusing his official position granted loans to 6 fictitious persons for purchase of sheep, based on the false and fabricated documents and also obtained signatures from the fictitious persons and based on the documents, which are forged and fabricated, used the same as genuine and sanctioned the loan thereby causing wrongful loss of Rs.61,000/- to the bank.
3. Based on the source information, CBI registered the case in R.C.No.7(A)/1994 and on completion of the investigation, final report filed alleging that the appellant along with the certain unknown persons entered into the conspiracy and pursuant to the said conspiracy, used certain documents as genuine in order to cheat the Canara Bank by obtaining signatures in the name of 6 non-existing persons viz.,(1) Shri Kalappan, (2)V.Gopal, (3)Kanniappan, (4)S.Purushothaman, (5)R.Muthu and (6) Thirunavukarasu. Knowing fully well that they are fictitious persons and the loan documents are forged and fabricated. Though the procedure for granting loan mandates that the loanees should be resident of service area and he should furnish No Due Certificate from the Bank or financial institution in the area in a specific format that he has no liability with any other bank or financial institution. Further, as Manager the appellant should have conducted pre-sanction verification about the credential of the loanees and thereafter, the bank accounts should be opened in the name of the loanees and also should have conducted post-sanction verification regarding the cattle purchased from the loan amount.
4. Whereas, the appellant has not obtained any No Due Certificate for the loan and he has sanctioned in the name of the fictitious persons. The bank accounts were opened without any introducer and after sanctioning the loan, credited the loan amount into the accounts of the fictitious loanees and the same have been withdrawn. Thus, without following the procedure, the loans were extended to 6 non-existing fictitious loanees and 3 loans to existing persons but, without following the procedure before sanctioning the loan.
5. The trial Court, after perusing the final report, had framed four charges against the appellant. To prove the charges, the prosecution has examined 11 witnesses and marked 155 exhibits.
6.The trial Court, after appreciating the evidence let in by the prosecution, has concluded that the charge of criminal conspiracy against the appellant that he with certain unknown persons known to him cheated the branch by sanctioning the loan to the fictitious persons, is not proved since the prosecution is unable to place the name of those unknown persons. Further, it has also not been established by the prosecution, how many persons, when, where and how, the accused had conspired with the unknown persons. However, the trial Court held that the prosecution has proved the guilty of the accused having committed the offence of cheating and used false documents as genuine and abused his official position and also sanctioned the loan to non-existing persons.
7. As far as the loan amount alleged to have been cheated by the accused persons is concerned, the trial Court has concluded that the total amount of cheating should be confined to the loan extended in the names of non-existing persons viz., Shri Kalappan Rs.10,000/- (two loans); V.Gopal Rs.5000/- ( one loan); Kanniappan Rs.10,000/- (two loans); S.Purushothaman Rs.5000/-(one loan); R.Muthu Rs.8,000/- (one loan) and Thirunavukarasu Rs.8,000/- (one loan) and in respect of existing persons viz., Krishnamoorthy (two loans), Kuppusamy (one loan). The trial Court has found that six loans have been advanced to existing persons. Therefore, it cannot be taken as amount of cheating. Thus, the trial Court has held the appellant guilty of cheating, forgery and using the forged documents as genuine besides found guilty for misconduct and making pecuniary advantage by mis-using his official position and sentenced him as stated supra.
8. The appellant has challenged the finding of the trial Court on the ground that the trial Court has failed to appreciate the evidence let in by the prosecution properly and has shifted the burden of proof upon the accused instead of satisfying itself about the credibility of the prosecution witnesses. The evidence of PW-9 [Mr.Balasubramania Nathan], Cashier has categorically deposed that the loanees came in-person and received the money. The evidence of PW-11 [Mr.C.G.Pram Anand], the investigating officer has deposed that he has enquired all the loanees during his investigation, despite a positive evidence elucidated during the prosecution witnesses that the loanees are existing persons and being villagers, cattle-grassers, floaters. They were not available at the time of enquiry by Village Administrative Officer and Post-Man, which does not lead to inference that they are fictitious persons. The trial Court has miserably failed to consider the faulty investigation made by the prosecution. The trial Court ought to have acquitted the appellant on the ground that for the alleged incident took place during the year 1991-1992, First Information Report was registered belatedly in the year 1994 and final report was filed after delaying of several years and taken on file by the trial Court in the year 1998. The unexplained delay in filing the final report, despite the investigation had been completed as early as 1995, should have waived the mind of the trial Court and adverse inference should have been drawn.
9. Per contra, the learned Special Public Prosecutor for CBI Cases submitted that the trial Court has rightly found that six loans advanced in the name of non-existing fictitious persons, based on fabricated documents and incomplete documents, is pursuant to the criminal intention of the appellant to cheat the bank. PW-1 [Mr.Nagarajan] has vividly stated in his deposition that the procedure has to be adopted, while sanctioning dairy/ sheep loan to the loanee. According to his evidence, the applicants/loanees must be resident of the service area.
10. As far as Sainapuram Branch of Canara Bank is concerned, nearly 10 to 12 villages falls within its service area. Subject loans was sanctioned by the appellant to fictitious persons, who are the residents of service area. Further, through documents it has been established that right from inception of loan applications till credit of the loan amounts into the accounts of the loanees, the appellant has not followed the procedure and guidelines. None of the document essential for sanctioning the loan contains the entire details as it requires.
11. The photograph of the applicants/borrowers, which is very much essential for identification has not been obtained by the appellant, since six loanees are fictitious persons. It is proved through the evidence of PW1[Mr.Nagarajan] that the search of six loanees ended in futile. Incomplete documentation of the loan papers coupled with the fact that non-traceable of the loanees strongly establishes the fact that six loans mentioned in the charge sheet were given to non-existing persons. The non-existence of loanees is proved through evidence of the Village Administrative Officers in their respect villages.
12. Further, the handwriting expert Mr.S.C.Lohia was examined as PW-10 has deposed that most of the documents pertaining to the loan applications are found to be written by the appellant. Though the opinion of the handwriting expert may be termed as secondary evidence, as contended by the learned counsel appearing for the appellant, the signatures and writings of the appellant found in the loan documents are not only proved through the opinion of the expert by scientific comparison, but also through PW-1[Mr.Nagarajan], PW-8[Mr.K.Selvamani] and PW-9[Mr.Balasubramania Nathan], who were the staff of Canara bank and persons acquainted with the writing and signature of the accused person. Therefore, the learned Special Public Prosecutor for CBI cases submitted that the appellant having extended the loan to non-existing fictitious persons has gone to the extent of opening the account in the name of those non-existing persons, even without introducer and photographs of the account-holders. Therefore, this appeal has to be dismissed and the judgment of the conviction ought to have been confirmed.
13. Heard the learned counsel appearing for the appellant and the learned Special Public Prosecutor for CBI cases and perused the materials available on record.
14. PW-1[Mr.Nagarajan] who is an officer of Canara Bank acquainted with the signature of the accused as well as the bank Guidelines, Manual of instruction and Circulars in respect of sanctioning the loan, has deposed that before advancing dairy/sheep loan, the bank should ascertain that the prospective borrower is the resident of service area or having land within the service area. No loan should be extended beyond the service area without the permission of the Divisional Office. Before sanctioning the loan, the Bank Manager has to ascertain whether the prospective borrowers have any due in any bank or financial institution for which no objection certificate from the concerned bank/financial institution is mandatory. The application forms should contain details such as name of the applicant, age, place of resident and any other liability. The annexure to the loan application should contain the details about the animal infrastructure facility available to rear, animals purchased out of the bank loan and security offered for the loan advanced. However, he also admits in his deposition that if the loan is up to Rs.10,000/-, no margin money shall be paid by the prospective borrower.
15. In the case in hand, since loan amount does not exceed Rs.10,000/- , non-furnish of margin amount may not attract any violation of bank guidelines, but has deposed by PW-1[Mr.Nagarajan] that in none of the loan application, he required details or furnished all the applications are incomplete without vital information about the borrower. In Ex.P4, which is the application for agricultural credit-short term/term loan in the name of N.Kalappan, his no due certificate is not enclosed. The photographs of the borrowers are not fixed. The entire applications and accompanying documents are written by the appellant and the same is identified by PW-1[Mr.Nagarajan]. They are marked as Ex.P4 to Ex.P10. After crediting Rs.5,000/- into the account opened in the name of N.Kalappan, the loan amount has been withdrawn through withdrawal slip Ex.P11. The signature found in the withdrawal slip has been cancelled by the accused to indicate that he has verified the signature of the account-holder with that of the signature found in the withdrawal slip.
16. The ledger sheets for agricultural term loan (Master Sheet) for the loan extended to N.Kalappan are marked as Ex.P12 and Ex.P13, which are filled up by the accused. While any cattle is purchased from the loan amount, it has to be ensured. As far as the case of N.Kalappan is concerned, where he was advanced the loan of Rs.5,000/- to bovine, jersey cross breed cow red colour with Brass ear tag No.NIAKPM A 13563, there is no entry for debiting insurance premium. One proof is that the cattle was duly insured. Thus, there is no evidence that the cattle was purchased from out of the loan extended by the bank. While the guidelines of the bank mandates that if the loan is extended for purchase of cattle money, the loan amount should be paid to the seller directly.
17. In this case, the money has been credited into the account of the borrower, who is not even the resident within the service area of Sainapuram Branch. Since the loan has been sanctioned to non-existing fictitious person, the falsification in the document could be easily found out by comparing Ex.P7 and Ex.P12 wherein the name of the borrower's father is mentioned as Namasivayam in Ex.P7 but in Ex.P12, his father's name has been mentioned as Subramaniam. In the name of Kalappan, the appellant has sanctioned two loans for Rs.5,000/-each. While for the second loan to be advanced, there must be regular payment to the satisfaction of the bank in respect of the first loan.
18. From the evidence of PW-1[Mr.Nagarajan], it could be seen that the appellant has sanctioned two loans to Kalappan within a period of 6 months, despite the fact that there was no repayment of the loan in between sanctioning of the first loan and sanctioning of the second loan (i.e. between 16.2.1991 and 03.08.1991). When there is no material to infer that there is a person living in Nemili village by name Kalappan, he had opened Saving Bank account bearing A/c No.2730 and he has withdrawn the loan amount for purchase of cattle. Contrarily, the documents against which the loan sanctioned were all written by the appellant and there can be no other view except the appellant had created the documents for sanctioning the loan and withdrawn the money through his aid unknown persons but known to the accused appellant.
19. Similar to the case of Kalappan, the loan in the name of Krishnamoorthy, s/o Perumal, Pinnavaram has also been sanctioned based on the incomplete documents such as account opening form Ex.P24, without the signature of the introducer. The comparison of documents Ex.P24 and Ex.P26 indicates the contradiction in the name of the loanee. While Ex.P24 refers the name of the loanee as Krishnamoorthy, S/o Perumal, Pinnavaram, Ex.P26 mentions the name of the loanee as P.Krishnamoorthy, S/o Palanivel, Nemili village. The pro-note alleged to have been obtained by Krishnamoorthy is found to be blank. The delivery letter-Ex.P29 is found to be incomplete. Ex.P29-agreement-cum-hypothecation is also blank except the signature of Krishnamoorthy. Immediately after crediting the loan amount of Rs.5,000/- into the account on 10.05.1991, it has been withdrawn through withdrawal slip. The appellant has authenticated the payment. This action re-enforced the charge of falsifying the records and cheating the bank. In this loan application also there is no photograph of Krishnamoorthy.
20. Similarly, in the loan sanctioned in the name of V.Gopal, the loan application Ex.P49 has been filled up by the appellant and the same has been identified by PW-1[Mr.Nagarajan]. The agreement-cum- hypothecation marked as Ex.P51 is found to be incomplete. While in the loan application, the name of the borrower has shown as V.Gopal, S/o Veeramani, No.13, Periya Theru, Sainapuram. But, pro-note Ex.P48 is shown as resident of Nemili. The loan amount of Rs.5,000/- is not directly given to the cattle seller but credited into the account of borrower and withdrawn it on the same day ie. on 27.05.1991. Both the credit slip as well as withdrawal slip had been prepared by the accused.
21. The case of Kanniappan, a non-existing borrower is that, his bank account has been opened in his name without any introducer. Without the signature of the account holder, the loan amount has been credited into his account. The application form does not carry photograph of the borrower. The application form marked as Ex.P53 is incomplete and blank without vital details. The entire documents pertaining to the loan was prepared by the accused/appellant and identified by PW-1[Mr.Nagarajan]. The withdrawal slip Ex.P17 has been written by the appellant and passed by the appellant. The cattle has not been insured as per the guidelines and no hypothecation of security furnished. Despite these lapses, second loan amount of Rs.5,000/- to Kanniappan has been advanced by the appellant within a period of three months from sanctioning the first loan, without any repayment for the first loan.
22. The prosecution through documents have established similar mode of operation, violation of regulation in sanctioning of loan without adequate document and security in the name of Kalappan, V.Gopal, Kanniappan, S.Purushothaman, R.Muthu and Thirunavukarasu. There is no convincing explanation forthcoming from the appellant for sanctioning the loan, even without obtaining photograph of the borrower, no objection certificate from the other financial institution, prior approval of the regional office for extending loan to persons residing outside the service area, failure to insure the cattle, failure to obtain the photograph of the cattle if the loanee has already purchased the cattle, failure to disburse the cattle cost to the seller if the borrower has not purchased the cattle. The sanctioning of the loan on incomplete and improper documentation, cumulatively, establishes that the commission of act by the appellant is not mere dereliction of duty but born out of criminal intention to cheat the bank by sanctioning the loan to non-existing persons and deposit the same in the new account opened without introducer and withdrew the same immediately through withdrawal slips.
23. One of the contention raised by the appellant is that for the occurrence which took place in the year 1991, the First Information Report was registered on 29.11.1994. Though the investigation has completed by 1995, final report was laid only in the year 1998. Therefore, unexplained delay has gravely prejudice to the appellant and for that reason, he must be acquitted. No doubt, there is a delay in prosecuting the case as pointed out by the learned counsel appearing for the appellant, but, that cannot be a ground to let free the appellant for crime committed by him, when he had been entrusted with the responsibility of handling the public money and to advance the loan to deserving agriculturists to purchase cattle and erk their livelihood. The act of the appellant has deprived both the expectation of the bank as well as the agriculturists.
24. The learned counsel appearing for the appellant citing the judgment of the Hon'ble Supreme Court in Murarilal v. State of M.P. reported in AIR 1980 SC 531, contended that the opinion of the hand writing expert cannot be relied upon to hold the appellant guilty of fabricating the document. In the said judgment, the Hon'ble Supreme Court has held as under:
4. 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 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 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'. (vide Lord President Cooper in Dacie v. Edinbeagh Magistrate : 1953 S. C. 34 quoted by Professor Cross in his Evidence).
25. As far as the facts of the case in hand is concerned, it is not only the handwriting expert opinion, who was spoken at lengthy about the similarity of admitted writing of the accused and the writing found in the bank documents pertaining to the loans sanctioned to fictitious persons, the evidence of the person, who are acquainted with the signature and handwriting of the accused/appellant, has been relied on by the trial Court. Therefore, it cannot be construed that the opinion of the expert is left uncorroborated by the prosecution.
26. Pointing out the delay in commencing the prosecution, the learned counsel appearing for the appellant submitted that the loanees are all agricultural labourers and cattle grassers. Therefore, it is impossible for him to trace after lapse of several years and prove their existence. In support of the above submission, he relied upon the judgment of the Hon'ble Supreme Court reported in Inderjit Singh and others v. State of Punjab and others [1995 Supp (3) Supreme Court 289], wherein the Hon'ble Supreme Court has held as under:
13. After giving our anxious consideration to the facts and circumstances of the case and the evidence adduced in the trials, it appears to us that simply on the basis of the reports of the Superintending Engineer that less work than what was stated in the records was done, the case of embezzlement by deliberately falsifying the records is not established. Until and unless by cogent and unimpeachable evidence about the factum of non payment to labourers of the amount drawn in their names can be established, the case of embezzlement by the government officers and misappropriation of government fund cannot be sustained. The Superintending Engineer may be responsible officer but it would not be safe to simply rely on his assessment of the work done and in our view, for basing the conviction, other convincing corroborative evidences about the quantum of work done is necessary. In the facts of the case, it will not be just and proper to accept the said report and deposition of Shri Saini to be conclusive about the quantum of work done. That apart, Mr.Jethamalani is justified in his contention that unless and until the factum of non payment to the workers is established, over payment to the workers on account of less work done cannot be held to be sufficient evidence to convict the accused for the offences alleged against them. Even if it is assumed that the local officers who were entrusted with the task of payment to the labourers were careless and did not actually ascertain the quantum of work executed by the labourers but made payments to the labourers on the basis of work as indicated in the bills, such local officers may be held guilty of dereliction of duty but they cannot be held to be guilty for the offences alleged against them. In the instant case, the chain of circumstantial evidence is far from being complete and the conviction, in our view, has been based more on surmise and conjecture than on the basis of convincing and unimpeachable evidences. We, therefore, have no hesitation to allow all the appeals and set aside the conviction and sentences passed against the appellants.
27. The facts of the case cited are entirely different from the facts of the case in hand. Payment of wage to the labour is a One Time affair. Whereas the sanctioning of loan by the bank is subject to certain guidelines and continuous affair from the date of sanctioning the loan till the date of discharge of the loan. While the fundamental condition for sanctioning loan is to ensure that the prospective borrower must be his resident within the service area or the person having land or holding within the service area, even without verifying the said fact, the loan has been sanctioned by the appellant. Further, even the photograph of the borrowers has not been obtained by the appellant. He has not obtained No Objection Certificate as required under the bank guidelines. When he has not ensured all these precautions while sanctioning the loan, he cannot take advantage of the delay in commencing the prosecution as reason for not tracing loanees.
28. Right from the inception of receiving the loan applications, there is no iota of evidence to show that these six loans were really sanctioned to the persons existing in blood and flesh. The evidence of PW-9 Cashier and PW-11 Investigating Officer, who has said about their enquiry about the loanees is of no avail to the appellant, since the documents relied on by the prosecution are overwhelming to show that there was no person in physical existence by name (1)Shri Kalappan, S/o Namasivayam, Nemili, Arakonam Taluk, North Arcot District. (2) V.Gopal, S/o Veeramani, No.13, Periya Theru, Nemili. (3) S.Kanniappan, S/o Sundaramoorthy, Pinnavaram, (4) R.Muthu, Pinnavaram village and (5) S.Purushothaman, S/o Sriramulu, Nemili.
29. The prejudice to an accused or failure of justice can be invoked, if the accused is able to show that the delay in prosecution has deprived him from establishing his innocence. The case in hand, as pointed out earlier, to incomplete loan applications and other documentations pertaining to sanction of loan, more particularly, the absence of photograph of the borrowers and the cattle which is alleged to have been purchased from out of the loan sanctioned, is singularly enough to hold the appellant to guilty of sanctioning six loans in the name of non-existing persons and cheated the bank to a tune of Rs.46,000/-.
30. This omission leading to criminal liability of cheating and fabrication cannot be effaced by alleging delay in prosecution. Though the loan was sanctioned in the year 1991, only after non-payment of due by the loanees for a period of more than 2 years and after the change of the guard, who was at the helm of affairs administering the branch, the crime has to come light and criminal law was set into motion in the year 1994. While to prosecute against the accused, sanction from the competent authority is required, and certain other formalities should bound to be followed, which has naturally lead to delay in filing of final report on completion of investigation. Delay in the said process has to be viewed independently to the facts and circumstances of each case. As far as this case is concerned, though there is a delay, this delay has not caused any serious prejudice to the accused, while comparing the gravity of economic offence committed by the accused.
31. For the aforesaid reasons, this Court holds that this appeal deserves to be dismissed. Accordingly, this Criminal Appeal is dismissed. The judgment of conviction against the appellant passed by the learned Principal Special Judge for CBI Cases, Chennai in C.C.No.44 of 1998 dated 19.10.2005 is hereby confirmed.
08.01.2018 Index:Yes/No Internet:Yes/No Speaking order/non speaking order ari To
1. The Principal Special Judge for CBI Cases, Chennai.
2.The Inspector of Police,Special Police Establishment, Central Bureau of Investigation,Anti-Corruption Branch, 3rd Floor, Shastri Bhavan,Haddows Road, Nungambakkam, Chennai 600 006.
3.The Special Public Prosecutor (CBI Cases), High Court, Madras.
Dr.G.Jayachandran,J.
ari Pre-delivery judgment made in Crl.A.No.914 of 2005 08.01.2018